1292019 Universal registration document and annual financial report - BNP PARIBAS

32019 review of oPerations

3

Balance sheet

3.3 Balance sheet

ASSETS

OVERVIEW As at 31 December 2019, the total consolidated balance sheet of the BNP Paribas Group amounted to EUR 2,164.7 billion, up 6% from 31 December 2018 (EUR 2,040.8 billion). The Group s main assets include cash and balances at central banks, financial instruments at fair value through profit or loss, loans and advances to customers, debt securities at amortised cost or at fair value through equity, financial investments of insurance activities and accrued income and other assets, which, together, account for 95% of total assets at 31 December 2019 (96% at 31 December 2018). The 6% increase in assets is mainly due to the increase of:

■ financial instruments at fair value through profit or loss, which increase by EUR 37.6 billion, or 7%, mainly as a result of the increase in reverse repurchase agreement operations and derivative financial instruments;

■ financial assets at amortised cost which increase by EUR 75.4 billion, or 9%, mainly as a result of the increase of loans and advances to customers by 5% (+ EUR 39.9 billion to reach EUR 805.8 billion as 31 December 2019) and the increase of debt securities by 44% (+ EUR 33.4 billion to reach EUR 108.5 billion as 31 December 2019).

CASH AND BALANCES AT CENTRAL BANKS Cash and central banks account for EUR 155.1 billion at 31 December 2019, down 16.2% from 31 December 2018 (EUR 185.1 billion).

FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets recognised at market or model value through profit or loss are composed of trading portfolios, of financial derivatives and certain assets not held for trading purposes which characteristics do not permit recognition at amortised cost or at fair value through equity. Financial assets in the trading portfolio include securities, loans and repurchase agreements.

These assets are measured at market or model value at each balance sheet date.

Total financial instruments at market value by profit and loss increased by 7% (+EUR 37.6 billion) compared to 31 December 2018.

This increase is mainly due to the 8% increase in securities portfolio (EUR +9.9 billion to EUR 131.9 billion at 31 December 2019), as well as the increase in loans and repo operations by 7% (EUR +13.2 billion to EUR 196.9 billion at 31 December 2019), and the rise in derivative financial instruments by 6% (EUR +14.3 billion to EUR 247.2 billion at 31 December 2019).

LOANS AND ADVANCES TO CUSTOMERS Loans and advances to customers are divided into ordinary accounts, customer loans, reverse repurchase agreements and finance leases.

Loans and advances to customers (net of impairment) amounted to EUR 805.8 billion as at 31 December 2019, compared to EUR 765.9 billion as at 31 December 2018, increasing by 5%. This is due to the increase in loans to customers (+6%, i.e. EUR 734.2 billion as at 31 December 2019, compared to EUR 695.6 billion as at 31 December 2018, as well as the increase in finance leases, which amount to EUR 34.5 billion as at 31 December 2019, increasing by 7% compared to 31 December 2018. Impairment provisions were down to EUR 21.2 billion as at 31 December 2019, compared to EUR 24.1 billion as at 31 December 2018.

DEBT SECURITIES AT AMORTISED COST OR AT MARKET OR MODEL VALUE THROUGH EQUITY Debt securities that are not held for trading purposes and which meet the cash flow criterion established by IFRS 9 are recognised:

■ at amortised cost if managed to collect cash flows by collecting contractual payments over the life of the instrument; or

■ at fair value through equity if held in a business model whose objective is achieved through both the collection of contractual cash flows and the sale of financial assets.

Debt securities at amortised cost

Debt securities at amortised cost are measured using the effective interest rate method. They totalled EUR 108.5 billion at 31 December 2019 (net of impairment), compared with EUR 75.1 billion at 31 December 2018, thus increasing by 44%.

Debt securities at fair value through equity

These assets are measured at market or model value through equity at each balance sheet date. They decreased by EUR 3.4 billion between 31 December 2018 and 31 December 2019, amounting to EUR 50.4 billion.

Debt securities at fair value through equity posted an unrealised gain of EUR 0.2 billion at 31 December 2019, compared with EUR 0.1 billion at 31 December 2018, an increase of EUR 0.1 billion.