2020 Universal registration document and annual financial report - BNP PARIBAS446

5 risks and CaPital adequaCy Pillar 3

5

Liquidity risk

WHOLESALE FUNDING AND LIQUIDITY RESERVE MONITORING INDICATORS [Audited]

Sources of wholesale funding

The Group adopted a broad definition of wholesale funding, covering all funds excluding those provided by:

■ retail customers, professionals and corporates;

■ institutional clients for their operating needs (e.g. portion needed for custody management);

■ monetary policy and funding secured by market assets.

This definition is broader than market funding. For example, it includes medium- to long-term debt placed in funds for individuals and, in the short-term portion, non-operating deposits in the Securities Services business.

The Group has a conservative policy for the management of its wholesale funding by ensuring that it does not depend on very short-term funding and diversifying these funding sources.

Thus, wholesale funding with an original maturity of less than one month, so-called very short-term wholesale funding, is systematically sterilised by being placed in immediately-available deposits in central banks so that they are not used to fund the Group s business.

The Group ensures that short-term wholesale funding (with original maturity of between one month and one year) is diversified in terms of counterparty, industry and residual maturity. Any excess concentration on one of these criteria is systematically sterilised and placed in central bank deposits.

Medium- to long-term wholesale market funding (with original maturity over one year) is diversified in terms of investor type, distribution network, funding programme (secured or unsecured), and by geographical area to ensure diversification. Furthermore, the Group aims to optimise the term structure of its funding operations.

At end-2020, sterilised very short-term wholesale funding totalled EUR 75.8 billion (leading to the sterilisation of an equivalent amount in the Group s liquidity reserve), diversified short-term wholesale funding totalled EUR 114.5 billion and diversified medium-to long-term wholesale funding totalled EUR 181.1 billion.

➤ TABLE 92: BREAKDOWN OF THE WHOLESALE FUNDING BY CURRENCY [Audited]

The breakdown of funding by currency corresponds to the Group s needs and to a diversification objective.

In millions of euros

31 December 2019

EUR USD Other Total

Sterilised very short-term wholesale funding 41,132 17,600 13,637 72,369

Short-term wholesale funding 49,123 53,101 37,949 140,173

Medium- to long-term wholesale funding 95,180 51,855 29,301 176,336

TOTAL WHOLESALE 185,435 122,556 80,887 388,878

In millions of euros

31 December 2020

EUR USD Other Total

Sterilised very short-term wholesale funding 44,551 19,672 11,585 75,808

Short-term wholesale funding 41,018 39,750 33,760 114,528

Medium- to long-term wholesale funding 98,123 52,988 29,996 181,108

TOTAL WHOLESALE 183,691 112,411 75,341 371,443