2020 Universal registration document and annual financial report - BNP PARIBAS 139

32020 review of oPerations

3

Balance sheet

3.3 Balance sheet

ASSETS

OVERVIEW As at 31 December 2020, the total consolidated balance sheet of the BNP Paribas Group amounted to EUR 2,488.5 billion, up by 15% from 31 December 2019 (EUR 2,164.7 billion). The Group s main assets include cash and balances at central banks, financial instruments at fair value through profit or loss, loans and advances to customers, debt securities at amortised cost or at fair value through equity, financial investments of insurance activities and accrued income and other assets, which, together, account for 96% of total assets at 31 December 2020 (96% at 31 December 2019). The 15% increase in assets is mainly due to the increase of:

■ cash and balances at central banks which increase by EUR 153.6 billion, or +99%;

■ financial instruments at fair value through profit or loss, which increase by EUR 113.4 billion, or +20%, mainly as a result of the increase in reverse repurchase agreement operations and securities;

■ accrued income and other assets which increase by EUR 27.4 billion, or +24%.

CASH AND BALANCES AT CENTRAL BANKS Cash and central banks account for EUR 308.7 billion at 31 December 2020, up 99% from 31 December 2019 (EUR 155.1 billion).

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets recognised at market or model value through profit or loss are composed of trading portfolios, of financial derivatives and certain assets not held for trading purposes which characteristics do not permit recognition at amortised cost or at fair value through equity. Financial assets in the trading portfolio include securities, loans and repurchase agreements.

These assets are measured at market or model value at each balance sheet date.

Total financial instruments at market value by profit and loss increased by 20% (+EUR 113.4 billion) compared to 31 December 2019.

This increase is mainly due to a 27% rise in securities (+EUR 36.0 billion to EUR 167.9 billion at 31 December 2020), as well as to an increase in loans and repo operations by 24% (+EUR 48.0 billion to EUR 244.9 billion at 31 December 2020), and to an increase in derivative financial instruments by 12% (+EUR 29.5 billion to EUR 276.8 billion at 31 December 2020).

LOANS AND ADVANCES TO CUSTOMERS Loans and advances to customers are divided into ordinary accounts, loans to customers, reverse repurchase agreements and finance leases.

Loans and advances to customers (net of impairment) amounted to EUR 809.5 billion as at 31 December 2020, compared to EUR 805.8 billion as at 31 December 2019, increasing by 0.5%. This is due to the increase in loans to customers (+0.2%, i.e. EUR 735.9 billion as at 31 December 2020, compared to EUR 734.2 billion as at 31 December 2019, as well as the increase in finance leases, which amount to EUR 38.1 billion as at 31 December 2020, increasing by 10% compared to 2019. Impairment provisions were up to EUR 21.4 billion as at 31 December 2020, compared to EUR 21.2 billion as at 31 December 2019.

DEBT SECURITIES AT AMORTISED COST OR AT MARKET OR MODEL VALUE THROUGH EQUITY Debt securities that are not held for trading purposes and which meet the cash flow criterion established by IFRS 9 are recognised:

■ at amortised cost if managed to collect cash flows by collecting contractual payments over the life of the instrument; or

■ at fair value through equity if held in a business model whose objective is achieved through both the collection of contractual cash flows and the sale of financial assets.

Debt securities at amortised cost

Debt securities at amortised cost are measured using the effective interest rate method. They totalled EUR 118.3 billion at 31 December 2020 (net of impairment), compared with EUR 108.5 billion at 31 December 2019, thus increasing by 9%.

Debt securities at fair value through equity

These assets are measured at market or model value through equity at each balance sheet date. They increase by EUR 5.6 billion between 31 December 2019 and 31 December 2020, amounting to EUR 56 billion.

Debt securities at fair value through equity posted an unrealised gain of EUR 0.6 billion at 31 December 2020, compared with EUR 0.2 billion at 31 December 2019, an increase of EUR 0.4 billion.