2020 Universal registration document and annual financial report - BNP PARIBAS 131

32020 review of oPerations

3

Core Business results

PERSONAL FINANCE

In millions of euros 2020 2019 2020/2019

Revenues 5,485 5,796 -5.4%

Operating Expenses and Dep. (2,756) (2,857) -3.5%

Gross Operating Income 2,729 2,939 -7.1%

Cost of Risk (1,997) (1,354) +47.4%

Operating Income 732 1,585 -53.8%

Share of Earnings of Equity-Method Entities 6 41 -84.5%

Other Non Operating Items (67) (23) n.s.

Pre-Tax Income 672 1,602 -58.1%

Cost/Income 50.2% 49.3% +0.9 pt

Allocated Equity ( bn) 7.9 7.9 -0.1%

For the whole of 2020, Personal Finance confirmed its resilience, on the back of a diversified business profile. Cost-adaptation efforts remained sustained and amplified with the health crisis. After experiencing a decrease in business activity, due to the closing of points of sales, in particular in the first half of 2020, the business achieved a return to growth in outstandings after the low point reached in the third quarter 2020. Public health measures late in the year had less of an impact than in the first half on production, and, hence, on average loans outstanding. As a result, the level of average loans outstanding for the year decreased by only 0.7% compared to 2019 at historical scope and exchange rates and rose by 0.9% at constant scope and exchange rates.

Personal Finance s risk profile benefits from its portfolio diversification and from proactive and efficient risk management. Personal Finance s portfolio is thus concentrated in continental Europe (89% as at 31 December 2020) and auto loans portfolio share rose from 20% to 38% between the end of 2016 and the end of 2020.Personal Finance loans that had been under moratorium were processed efficiently through proactive support for customers and specific reinforcement of resources to optimise back-to-payment levels. The back-to-payment levels were satisfactory and were as anticipated.

Personal Finance s revenues, at 5,485 million euros, were down by 5.4%(1) compared to 2019 due in particular to lower loan production in 2020.

Operating expenses, at 2,756 million euros, were down by 3.5%(2) compared to 2019 thanks to sustained cost-reduction efforts, which were amplified with the health crisis.

Gross operating income thus came to 2,729 million euros, down by 7.1% compared to 2019.

The cost of risk came to 1,997 million euros, or 212 basis points. It was up by 642 million euros compared to 2019, due in particular to the provisioning of performing loans (stages 1 and 2). The impact of the regulatory change for the definition of default(3) was taken into account as of the fourth quarter of 2020.

Personal Finance s pre-tax income thus came to 672 million euros, down by 58.1% compared to 2019, at historical scope and exchange rates and down by 53.3% at constant scope and exchange rates.

(1) -2.5% at constant scope and exchange rates.

(2) -1.4% at constant scope and exchange rates.

(3) Regulatory effective date: 01/01/21.