1272019 Universal registration document and annual financial report - BNP PARIBAS
32019 review of oPerations
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Core Business results
The division s revenues, at EUR 12,080 million, rose by 11.6% compared to 2018 with growth in the three businesses and very good performances by Global Markets and Corporate Banking.
Global Markets revenues, at EUR 5,571 million, were up 17.9% compared to 2018 and 20.7% excluding the effect of the creation of the new Capital Markets platform(1). The business reported very sustained business growth based on market share gains in particular in FICC(2).
The VaR, which measures the level of market risks, was still at a very low level (EUR 26 million).
FICC s revenues(2), at EUR 3,563 million, were up 31.1% (+36.0% excluding the effect of the creation of the new Capital Markets platform(1)) compared to 2018, due to a sharp rise in primary markets and credit, a strong rebound in forex and emerging markets and a very good performance in rates.
Equity and Prime Services revenues, at EUR 2,007 million, were stable compared to 2018, with a gradual recovery in 2019 from a low point at the end of 2018 and a good performance on equity derivatives, in particular on structured products.
Global Markets confirmed its strong positions on bond issues (number 1 in the EMEA region, number 1 for all bond issues in euro, and number 8 for all international issues) and on multi-dealer platforms (top 3 on euro credit derivatives and emerging market bonds in local currencies and top 5 on swaps and euro bonds). The expertise of the business was recognised: BNP Paribas was named Currency Derivatives House of the Year and Eurobond House of the Year (Risk Award 2019).
Securities Services revenues, at EUR 2,198 million, were up 0.9% compared to 2018 (+3.0% excluding non-recurring items) as a result of asset growth (+8.2% on average compared to 2018), transactions up (+2.3% on average) and strong growth in the Asia region (+18% compared
to 2018). Assets under custody and administration were up sharply 12.2% compared to 31 December 2018 due in particular to the integration of Janus Henderson s assets in the United States since the end of March. Furthermore, the expertise of the business was widely recognised as Transaction Bank of the Year for securities service activities according to The Banker magazine and Custodian of the Year according to AsiaRisk magazine.
Corporate Banking s revenues, at EUR 4,312 million, rose by 9.9% compared to 2018 (+6.5% excluding the effect of the creation of the Capital Markets platform(1)). The strong development of the business was driven in particular by the very good business development in Europe in connection with the use of the Capital Markets platform by clients (+12.8% compared to 2018) ramping up, the strong rise in fees (+7.2% compared to 2018) and the 7.5%(3) increase in outstanding loans to EUR 146 billion. The business is the leading European player in Investment Banking in the Europe, Middle East & Africa region, number 1 in Europe for large companies in Corporate Banking, cash management and trade finance.
CIB s operating expenses, at EUR 8,663 million, rose by 6.1% compared to 2018, a rise linked to the strong business growth, nevertheless contained by the effect of cost saving measures (development of mutualised platforms, optimisation of processes, etc.). The jaws effect was largely positive (+5.5 points).
CIB s gross operating income was thus up 28.2%, at EUR 3,417 million.
The cost of risk for CIB was still low, at EUR 218 million. It rose by EUR 175 million compared to 2018, which had benefited from many provision write-backs.
CIB thus generated EUR 3,207 million in pre-tax income, sharply up 19.6%, reflecting the solid growth in business combined with the success of its transformation.
(1) Global Markets and Corporate Banking shared platform for corporate finance introduced in the first quarter 2019 (transfer of 136m of revenues from Global Markets to Corporate Banking in 2018).
(2) Fixed Income, Currencies and Commodities.
(3) Average outstandings at constant scope and exchange rates.
