2020 Universal registration document and annual financial report - BNP PARIBAS396

5 risks and CaPital adequaCy Pillar 3

5

Credit risk

RESTRUCTURED LOANS [Audited]

When a borrower is bordering on or in financial difficulties, he may receive a concession from the bank that would otherwise not have been granted had the borrower not met with financial difficulty. The concession may be:

■ a change to the contract terms and conditions;

■ partial or total refinancing of the debt.

The loan is then said to be restructured . It must retain the status of restructured during a period of observation, known as a probation period, for at least two years. The concept of restructuring is described in the accounting principles (note 1.e.5 to the consolidated financial statements).

According to the principles for identifying the restructured exposure amounts for the Group as a whole, for the non-retail business, exposures are identified individually during the loan process, notably during Committees. As for restructured exposures for retail customers, they are usually identified via a systematic process requiring the use of algorithms whose parameters are validated by the RISK and Finance Functions.

Information on restructured loans is reported to the supervisory authority on a quarterly basis.

The following table shows the gross value and impairment amounts of performing and non-performing loans that have been restructured.

➤ TABLE 50: CREDIT QUALITY OF RESTRUCTURED LOANS (EU NPL1) [Audited]

In millions of euros

31 December 2020

Gross carrying value

Accumulated impairment, accumulated negative changes

in fair value due to credit risk and provisions

Performing exposures

Non-performing exposures

Performing exposures

Non- performing exposures

of which defaulted

Loans and advances 8,001 9,313 7,238 (483) (3,505)

General governments 1 9 8 - (8)

Credit institutions - 1 1 - (1)

Other financial corporations 225 201 201 (7) (150)

Non-financial corporations 5,162 4,316 4,127 (303) (1,665)

Households 2,613 4,786 2,901 (173) (1,681)

Debt securities - 205 205 - (62)

Off-balance-sheet exposures 931 160 157 (10) (24)

TOTAL 8,932 9,678 7,600 (493) (3,591)

RESTRUCTURED LOANS