2020 Universal registration document and annual financial report - BNP PARIBAS 125
32020 review of oPerations
3
Core Business results
DOMESTIC MARKETS
In millions of euros 2020 2019 2020/2019
Revenues 15,477 15,814 -2.1%
Operating Expenses and Dep. (10,568) (10,741) -1.6%
Gross Operating Income 4,909 5,073 -3.2%
Cost of Risk (1,456) (1,021) +42.6%
Operating Income 3,453 4,052 -14.8%
Share of Earnings of Equity-Method Entities 5 1 n.s.
Other Non Operating Items 50 1 n.s.
Pre-Tax Income 3,508 4,054 -13.5%
Income Attributable to Wealth and Asset Management (237) (256) -7.4%
Pre-Tax Income of Domestic Markets 3,271 3,798 -13.9%
Cost/Income 68.3% 67.9% +0.4 pt
Allocated Equity ( bn) 26.2 25.7 +1.7%
Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg for the Revenues to Pre-tax income line items.
For the whole of 2020, and in a context marked by the health crisis, Domestic Markets business provided strong support for the economy, while at the same time achieving operational efficiency gains. The division mobilised throughout the year to support customers, with in particular the implementation of state-guaranteed loans, notably in France and Italy. Loans outstanding rose by 5.4% compared to 2019, up in all businesses, with good growth in the production of loans to corporate and individual customers (in particular in mortgages). Deposits rose by 11.6% compared to 2019, due to the effects of the health crisis. Private Banking reported strong net asset inflows of 6.1 billion euros, including 4.9 billion euros of external inflows.
Lastly, the use of digital tools continued to accelerate, with more than 6.1 million active customers on mobile apps(1) and an increase of 41.5% compared to the fourth quarter 2019 in the number of daily connections (almost 4.6 million). The division rapidly expanded its digital offering, with increases of +27% in accounts opened at Nickel and 30% in customer numbers in the electronic portfolio Lyf Pay in one year.
The evolution in customer behaviours and the deployment of innovative digital solutions helped improve customer service and adapt branch set- ups (618 branches closed since the end of 2016 in France, Belgium and Italy).
Revenues(2), at 15,477 million euros, were down by 2.1% compared to 2019: the impact of low interest rates in the networks was partly offset by higher loan volumes; the specialised businesses achieved a good performance, in particular at Personal Investors (+36.0% compared to 2019 with a strong rise at Consorsbank in Germany).
Operating expenses(2), at 10,568 million euros, were down by 1.6% compared to 2019, with a more pronounced decline in networks(3) (-2.7%), mitigated by a 3.4% increase in the specialised businesses, in connection with their growth.
Gross operating income(2), at 4,909 million euros, was down by 3.2% compared to 2019.
The cost of risk(2) rose to 1,456 million euros (1,021 million euros in 2019), due to the effect of the health crisis.
Thus, after allocating one-third of Private Banking s net income to Wealth Management (International Financial Services division), the division s pre-tax income(4) came to 3,271 million euros, down by 13.9% compared to 2019.
(1) Customers with at least one connection to the mobile apps per month (on average in 4Q20) scope: individual, small business and Private Banking customers of DM networks or digital banks (including Germany, Austria and Nickel).
(2) Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg.
(3) FRB, BNL bc and BRB.
(4) Excluding PEL/CEL effects of +3 million euros compared to +12 million euros in 2019.
