2020 Universal registration document and annual financial report - BNP PARIBAS126
3 2020 review of oPerations
3
Core Business results
FRENCH RETAIL BANKING (FRB)
In millions of euros 2020 2019 2020/2019
Revenues 5,944 6,328 -6.1%
Incl. Net Interest Income 3,303 3,591 -8.0%
Incl. Commissions 2,641 2,737 -3.5%
Operating Expenses and Dep. (4,490) (4,602) -2.4%
Gross Operating Income 1,454 1,726 -15.8%
Cost of Risk (496) (329) +50.8%
Operating Income 958 1,397 -31.5%
Non Operating Items 38 7 n.s.
Pre-Tax Income 995 1,404 -29.1%
Income Attributable to Wealth and Asset Management (133) (143) -7.0%
Pre-Tax Income 862 1,261 -31.6%
Cost/Income 75.5% 72.7% +2.8 pt
Allocated Equity ( bn) 11.0 10.1 +8.3%
Including 100% of French Private Banking for the Revenues to Pre-tax income line items (excluding PEL/CEL effects).
For the whole of 2020, the business strongly mobilised to serve clients. More than 69,000 state-guaranteed loans were granted for a total of almost 17.9 billion euros as at 31 December 2020. The equity investment package was doubled to 4 billion euros to support the development of French small and mid-sized businesses between now and 2024.
FRB s level of activity was therefore good despite the health crisis context. The business drive was strong. Loans outstanding rose by 8.8% compared to 2019, driven by the increase in loans to individual customers with the acceleration in mortgage loan production with higher margins, as well as by the increase in corporate loans. Deposits were up by 16.5% compared to 2019, due to the effects of the health crisis. Financial savings grew with net asset inflows of 1.5 billion euros in Private Banking and very sustained activity in responsible savings (8.2 billion euros in assets under management, twice as much as at 31 December 2019).
In addition, the strong increase in the use of digital tools continued, with 2.8 million active customers on mobile apps(1) (+18% compared to 31 December 2019). Remote interactions with individual and small business customers rose strongly and accounted for over 75% of appointments.
Revenues(2) totalled 5,944 million euros, down by 6.1% compared to 2019. Net interest income(2) was down by 8.0%, as the increase in loan volumes only partially offset the impact of the low-interest-rate environment and the lower contribution of specialised subsidiaries, despite the late-year recovery. Fees(2) were down by 3.5%, as the increase in financial fees was offset by the effects of the health crisis on other fees.
Operating expenses(2), at 4,490 million euros, were down by 2.4% compared to 2019, with the ongoing effect of cost-optimisation measures.
Gross operating income(2) thus came to 1,454 million euros, down by 15.8% compared to 2019.
The cost of risk(2) was 496 million euros, reflecting a contained increase compared to 2019 (+167 million euros). It stood at 25 basis points of outstanding customer loans.
Thus, after allocating one-third of French Private Banking s net income to Wealth Management (International Financial Services division), FRB posted pre-tax income(3) of 862 million euros, down by 31.6% compared to 2019.
(1) Individual (including at Hello bank!), small business and Private Banking customers with at least one connection to the mobile apps per month (on average in 4Q20).
(2) Including 100% of Private Banking in France (excluding PEL/CEL effects).
(3) Excluding PEL/CEL effects of +3 million euros compared to +12 million euros in 2019.
