2020 Universal registration document and annual financial report - BNP PARIBAS 285
5risks and CaPital adequaCy Pillar 3
5
Annual risk survey
➤ TABLE 5: DOUBTFUL LOANS ON GROSS OUTSTANDINGS RATIO
31 December 2020 31 December 2019
DOUBTFUL LOANS(*) / LOANS(**) 2.1% 2.2%
(*) Impaired loans (stage 3) to customers and credit institutions, not netted of guarantees, including on-balance sheet and off-balance sheet and debt securities measured at amortised costs or at fair value through shareholders equity (excluding insurance).
(**) Gross loans outstanding to customers and credit institutions, on-balance sheet and off-balance sheet and including debt securities measured at amortised costs or at fair value through shareholders equity (excluding insurance).
➤ TABLE 6: STAGE 3 COVERAGE RATIO
In billions of euros 31 December 2020 31 December 2019
Stage 3 provisions 16.7 17.1
Doubtful loans(*) 23.3 23.1
STAGE 3 COVERAGE RATIO 71.5% 74.0%
(*) Impaired loans (stage 3) to customers and credit institutions, on-balance sheet and off-balance sheet, netted of guarantees received, including debt securities measured at amortised costs or at fair value through shareholders equity (excluding insurance).
➤ TABLE 7: COST OF RISK ON OUTSTANDINGS
In annualised basis point 31 December 2020 31 December 2019
COST OF RISK/CUSTOMER LOANS 66 39
(*) Cost of risk divided by customer loans at the begining of the period (see section 3.8 Alternative performance measures (APM) Article 223-1 of the AMF s General Regulation in chapter 3).
➤ TABLE 8: IMMEDIATELY AVAILABLE LIQUIDITY RESERVE
In billions of euros 31 December 2020 31 December 2019
IMMEDIATELY AVAILABLE LIQUIDITY RESERVE (COUNTERBALANCING CAPACITY)(*) 432 309
(*) Liquid market assets or eligible to central banks taking into account prudential standards, notably US standards, minus intra-day payment systems needs.
TOP AND EMERGING RISKS
The identification and monitoring of top and emerging risks are central to BNP Paribas approach to risk management.
These risks are identified, analysed and managed thanks to different works and analyses carried out by the RISK Function, the divisions and the businesses, and through several committees which give rise to actions and decisions:
■ a close follow-up of macroeconomic and financial conditions with the objective of organising them into a hierarchy with regard to the consequences for BNP Paribas portfolio, and designing adverse scenarios. This close monitoring is delivered quarterly to the General Management as well as to the Internal Control, Risk Management and Compliance Committee (CCIRC) through a dashboard presented by RISK;
■ a close monitoring of the risk profile in accordance with the directives and thresholds approved by the Board of directors;
■ cross-functional policies on concentration or corporate social responsibility among others;
■ market and liquidity risk decisions made by Group ALM Treasury Committee (or Group ALCo, see Governance in section 5.3 Risk management) and the Capital Markets Risk Committee (CMRC);
■ key decisions made by committees with respect to specific transactions at the highest level;
■ proposals for new activities or new products;
■ portfolio and businesses reviews by Risk & Development Policy Committees, on topics selected by the Group s Executive Management through the Risk Forum for the upcoming year;
