2020 Universal registration document and annual financial report - BNP PARIBAS282

5 risks and CaPital adequaCy Pillar 3

5

Annual risk survey

5.1 Annual risk survey

KEY FIGURES

REGULATORY RATIOS The Group s balance sheet is very solid. The CET1 ratio stands at 12.8% as at 31 December 2020, with an increase of 70 basis point compared to 31 December 2019. This is explained by:

■ the placing into reserves of 2020 net income after taking into account a 50% dividend pay-out ratio (+50 bp);

■ the organic increase of risk-weighted assets at constant exchange rates (-50 bp);

■ the impact of placing the 2019 dividend into reserves (+60 bp);

■ the impact of other effects (of which prudential treatment of software) (+10 bp).

The Group s CET1 ratio is significantly higher than the requirement notified by the European Central Bank at 9.22% at 31 December 2020 (see Table 21: Overall Capital requirements) and above the 2020 plan objective (12.0%).

Since 31 March 2020, the Group has applied the transitional measures relating to the introduction of IFRS 9 in accordance with the recommendations of the European Central Bank(1).

(1) The impact of these transitional measures on regulatory capital and regulatory ratios is presented under Regulatory capital in the section Capital management and capital adequacy .

(2) Subject to the approval of the Annual General Meeting on 18 May 2021: detached on 24 May 2021 and paid out on 26 May 2021.

(3) [...] Until 30 September 2021 [ ] the ECB expects dividends and share buy-backs to remain below 15% of the cumulated profit for 2019-2020 and not higher than 20 basis points of the CET1 ratio .

(4) Subject to the European Central Bank approval.

(5) Subject to the European Central Bank and the Annual General Meeting approval.

➤ TABLE 1: CAPITAL RATIOS

In millions of euros 31 December 2020(*) 31 December 2019(**)

COMMON EQUITY TIER 1 (CET1) CAPITAL 88,767 81,204

TIER 1 CAPITAL 98,806 89,962

TOTAL CAPITAL 113,830 103,716

RISK-WEIGHTED ASSETS 695,523 668,828

RATIOS

Common Equity Tier 1 (CET1) capital 12.8% 12.1%

Tier 1 capital 14.2% 13.5%

Total capital 16.4% 15.5%

(*) In accordance with the transitional arrangements on the introduction of the IFRS 9 accounting standards (article 473a of Regulation (EU) No. 2017/2395 and Regulation (EU) No. 2020/873).

(**) Data as at 31 December 2019 take into account in deduction of regulatory capital the dividend distribution initially anticipated in relation to 2019 income, eventually retained in reserves in 2020.

Regulatory capital and capital ratios take into account a 50% pay-out ratio of 2020 net income. The Board of directors will propose to the shareholders Annual General Meeting to pay-out a dividend of EUR 1.11 per share in May 2021 in cash(2), equivalent to 21% of 2020 net income, maximum amount based on the European Central Bank recommendation of 15 December 2020(3). The additional restitution of 29% of the 2020 results is intended after the end of September 2021 in the form of a share buy-backs(4) or distribution of reserves(5) as soon as the European Central Bank repeals its recommendation, which it is expected to do by the end of September 2021 in the absence of clearly unfavourable changes .