138 2019 Universal registration document and annual financial report - BNP PARIBAS
3 2019 review of oPerations
3
Financial structure
On this basis, the return on tangible equity (ROTE) is expected to stand at 10% with a 50% dividend pay-out ratio in cash(1).
BNP Paribas is likely to continue to confirm the strength of its model and its long-term capacity to create value in fast-changing economic, technological, regulatory, societal and environmental climates.
(1) Subject to shareholder approval at the Annual General Meeting.
(2) Calculated according to the delegated act of the European Commission dated 10 October 2014.
TREND INFORMATION
Trend information (Macroeconomic environment and Laws and regulations applicable to financial institutions) is described in the Top and emerging risks sub-section, in the Risks and capital adequacy chapter.
3.7 Financial structure
The Group has a very solid balance sheet.
The common equity Tier 1 ratio came in at 12.1% as at 31 December 2019, up 40 basis points from 1 January 2019 (down itself by 10 basis points compared to 31 December 2018 due to the impact of the new IFRS 16 accounting standard). The 40 basis point increase primarily broke down between: the 2019 net income excluding exceptional non-operating items and after taking into account a 50% pay-out ratio (+60 bps), the increase in risk-weighted assets at constant change net of the impact of securitisations (-40 bps), the net impact of the sales and acquisitions (SBI Life, the deconsolidation of the residual stake in this subsidiary and the impact of the agreement on Deutsche Bank s Prime Brokerage) as
well as the partial impairment of BancWest s goodwill (+20 bps). The impact of other effects, including the change effect, on the ratio was on the whole limited.
The leverage ratio(2) stood at 4.6% as at 31 December 2019.
The immediately available liquidity reserves totalled EUR 309 billion, which is equivalent to more than one year of room to manoeuvre in terms of wholesale funding.
The evolution of these ratios illustrates the Group s ability to continuously adapt to regulatory changes and its exceptionally solid balance sheet.
