2020 Universal registration document and annual financial report - BNP PARIBAS144
3 2020 review of oPerations
3
Profit and loss account
OPERATING EXPENSES, DEPRECIATION AND AMORTISATION
In millions of euros Year to 31 Dec.
2020 Year to 31 Dec.
2019 Change
(2020/2019)
Salary and employee benefit expense (16,946) (17,553) -3%
Other operating expenses (10,809) (11,339) -5%
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets (2,439) (2,445) 0%
TOTAL OPERATING EXPENSES, DEPRECIATION, AND AMORTISATION (30,194) (31,337) -4%
Operating expenses, depreciation and amortisation are decreasing by 4%, from EUR 31,337 million in 2019 to EUR 30,194 million in 2020.
GROSS OPERATING INCOME
The Group s gross operating income rose by 6% to EUR 14,081 million for the year ended 31 December 2020 (compared with EUR 13,260 million for the year ended 31 December 2019), mainly due to the 4% decline in general operating expenses, amortisation and provisions.
COST OF RISK
In millions of euros Year to 31 Dec.
2020 Year to 31 Dec.
2019 Change
(2020/2019)
Net allowances to impairment (5,358) (2,649) x2
Recoveries on loans and receivables previously written off 457 429 6%
Irrecoverable loans and receivables not covered by impairment provisions (816) (983) -17%
TOTAL COST OF RISK FOR THE PERIOD (5,717) (3,203) 78%
This line item represents the net amount of impairment losses recognised for credit risks inherent in the Group s intermediation activities, as well as any impairment loss relating to counterparty risks on over-the-counter derivative instruments.
The Group s cost of risk amounts to EUR 5,717 million, an increase of 78% compared to 2019.
The increase in cost of risk in 2020 is mainly due to the increase of EUR 1,441 million in cost of risk related to assets and commitments classified in stage 1 and 2 and an increase of EUR 1,073 million in cost of risk related to impaired assets and commitments (stage 3).
As at 31 December 2020, the total amount of doubtful loans, securities and commitments, net of collateral, amounts to EUR 23.3 billion (compared to EUR 23.1 billion as at 31 December 2019), and the related impairment amounts to EUR 16.7 billion, compared to EUR 17.1 billion as at 31 December 2019. The coverage ratio is at 71% at 31 December 2020, compared to 74% at 31 December 2019.
More detailed information on the cost of risk per business line is available in chapter 4, note 3. Segment Information, paragraph Income by business segment.
