2020 Universal registration document and annual financial report - BNP PARIBAS 127
32020 review of oPerations
3
Core Business results
BNL BANCA COMMERCIALE (BNL BC)
In millions of euros 2020 2019 2020/2019
Revenues 2,671 2,778 -3.8%
Operating Expenses and Dep. (1,746) (1,800) -3.0%
Gross Operating Income 925 978 -5.4%
Cost of Risk (525) (490) +7.2%
Operating Income 400 488 -18.1%
Non Operating Items (2) (5) -62.8%
Pre-Tax Income 398 483 -17.6%
Income Attributable to Wealth and Asset Management (35) (41) -13.7%
Pre-Tax Income of BNL bc 363 443 -18.0%
Cost/Income 65.4% 64.8% +0.6 pt
Allocated Equity ( bn) 5.3 5.3 -0.2%
Including 100% of Italian Private Banking for the Revenues to Pre-tax income line items.
For the whole of 2020, the business strongly mobilised to help customers cope with the health crisis. As at 31 December 2020, it had granted to more than 26,000 corporates a total amount of 4.1 billion euros in loans guaranteed by the Italian state and SACE(1).
In this context marked by the health crisis, BNL s business activity grew. Loans outstanding were up by 1.0%(2) compared to 2019 (+5% excluding non-performing loans). BNL bc raised its market share in corporate clients compared to 2019, while maintaining a prudent risk profile. Deposits were up by 15.6% compared to 2019. The private bank achieved good net asset inflows of almost 1 billion euros in 2020, and life insurance outstandings were up by 4.5% compared to 31 December 2019.
In addition, digital usage continued to rise, with more than 800,000 active customers on mobile apps(3) (+12.4% compared to 31 December 2019).
Revenues(4) were nonetheless down by 3.8% compared to 2019, at 2,671 million euros. In 2019, they had included a positive non-recurring item. Net interest income(4) was down by 4.2%, due to the impact of the low-interest-rate environment which was partly offset by higher loan volumes. Fees(4) were down by 3.2% compared to 2019, due to the effect
of the health crisis and the decrease in financial fees, caused by lower transaction volumes.
Operating expenses(4), at 1,746 million euros, were down by 3.0% compared to 2019. They reflected the effect of cost savings and adaptation measures ( Quota 100 retirement plan). The jaws effect was very positive when excluding the impact of a non-recurring positive element in 2019.
Gross operating income(4) thus came to 925 million euros, down by 5.4% compared to 2019.
The cost of risk(4), at 525 million euros, or 69 basis points of outstanding customer loans, rose by 7.2% compared to 2019, due to the provisioning of performing loans (stages 1 and 2), while the cost of risk on non- performing loans (stage 3) continued to decrease.
Thus, after allocating one-third of Italian Private Banking s net income to Wealth Management business (International Financial Services division), BNL bc posted pre-tax income of 363 million euros, down by 18.0% compared to 2019.
(1) SACE: Servizi Assicurativi del Commercio Estero, the Italian export credit agency.
(2) Loan volumes based on a daily average.
(3) Customers with at least one connection to the mobile apps per month (on average in 4Q20), scope: individual, small business and Private Banking customers (BNP Paribas and Hello bank!).
(4) Including 100% of Private Banking in Italy.
