1172019 Universal registration document and annual financial report - BNP PARIBAS

32019 review of oPerations

3

Core Business results

FRENCH RETAIL BANKING (FRB)

In millions of euros 2019 2018 2019/2018

Revenues 6,328 6,311 +0.3%

Incl. Net Interest Income 3,591 3,548 +1.2%

Incl. Commissions 2,737 2,763 -1.0%

Operating Expenses and Dep. (4,602) (4,609) -0.2%

Gross Operating Income 1,726 1,701 +1.5%

Cost of Risk (329) (288) +14.1%

Operating Income 1,397 1,413 -1.1%

Other Non Operating Items 7 (-1) n.s.

Pre-Tax Income 1,404 1,412 -0.5%

Income Attributable to Wealth and Asset Management (143) (148) -3.4%

Pre-Tax Income of FRB 1,261 1,263 -0.2%

Cost/Income 72.7% 73.0% -0.3pt

Allocated Equity ( bn) 10.1 9.6 +5.8%

Including 100% of French Private Banking for the Revenues to Pre-tax income line items (excluding PEL/CEL effects).

digital customers. As at 31 December 2019, the digital bank Hello bank! was gaining momentum in France, Belgium and Italy on the youth client segment, reaching 506,000 customers in Belgium, 520,000 customers in France and over 1.5 million customers in Germany. For its part, the Nickel neobank exceeded 1.5 million accounts opened as at 31 December 2019 (+33% compared to 31 December 2018). With 5,550 points of sale in France, Nickel has become the third largest distribution network in France, confirming its leadership in the neobank market in France and ranked in the top 5 in Europe.

The Domestic Markets division confirms the strength of its growth- generating corporate and Private Banking franchises within the integrated model. A comprehensive and broad approach to customer needs with all the Group s businesses combined with strong businesses such as Trade Finance (No. 1 in France and Belgium) and Cash Management (No. 1 in France and Belgium, No. 3 in Italy) has forged a leading position in a dynamic corporate market. The division also reports strong positions in Private Banking (No. 1 in France and Belgium, No. 5 in Italy) with 8.1% growth in assets under management compared to 2018 and a positive cooperation drive with the Corporate business line (at the source of gross asset inflows close to EUR 3 billion as at 31 December 2019).

Finally, the Domestic Markets division continues its digital transformation and strengthens its model. It rolled out expanded customer knowledge tools in all countries leveraging shared digital assets. It continues to enhance operating efficiency and customer satisfaction with end-to-end digitalisation of the main customer journeys (onboarding, mortgages and investment products) in France, Italy and Belgium and to automate processes (over 700,000 transactions a month processed by robots

in the networks in the fourth quarter 2019). Moreover, the operating division supports its customers beyond banking service with, for example, the development of Lyf Pay, a universal mobile payment solution that has already recorded 2.7 million downloads since it was launched in May 2017 and the roll-out of Telepass, a mobility offering for corporates and individuals in Italy (7,600 corporate customers and 66,800 individual users as at 31 December 2019).

Revenues(1), at EUR 15,814 million, were up 0.8% compared to 2018. Growth in loan volumes and the strong increase in the specialised businesses were almost entirely offset by the low interest rate environment in the networks.

Operating expenses(1) (EUR 10,741 million) rose just 0.3% compared to 2018. They were down in the networks (-0.5%(2) but up in the specialised businesses as regards to business growth (with a positive jaws effect). The jaws effect for the operating division was positive (+0.5 point).

Gross operating income(1) was up 1.9%, at EUR 5,073 million, compared to 2018.

The cost of risk was low, at EUR 1,021 million (-EUR 26 million compared to 2018). It continued its decrease at BNL bc.

Thus, after allocating one-third of Domestic Markets Private Banking s net income to the Wealth Management business (International Financial Services division), the division reported EUR 3,798 million in pre-tax income(3), up 3.7% compared to 2018.

(1) Including 100% of Private Banking in France (excluding PEL/CEL effects), Italy, Belgium and Luxembourg.

(2) FRB, BNL bc and BRB.

(3) Excluding PEL/CEL effects of +EUR 12 million compared to +EUR 20 million in 2018.