2019 Universal registration document and annual financial report - BNP PARIBAS238

4 Consolidated finanCial statements for the year ended 31 deCemBer 2019

4

Notes to the financial statements

8.c BUSINESS COMBINATIONS AND LOSS OF CONTROL OR SIGNIFICANT INFLUENCE

State Bank of India Life Insurance Co Ltd

During the first half of 2019, three consecutive disposals of 9.2%, 5.1% and 2.5% of the capital of State Bank of India Life Insurance Co Ltd (SBI life) took place on the Indian Market.

On 30 June 2019, the Group ceased to exercise a significant influence on SBI Life.

The residual stake of 5.2% held by BNP Paribas Cardif Holding, is henceforth recorded in the available-for-sale financial assets.

These operations generated an overall gain of EUR 1,450 million before tax, recognised in Net gain on non-current assets .

First Hawaiian Inc

On 4 August 2016, BNP Paribas Group launched an initial public offering on its First Hawaiian Inc (FHI) subsidiary on the US market.

Subsequently, five partial sales were made.

The first three operations resulted in an increase in the Group s retained earnings of EUR 422 million and in minority interests of EUR 1,363 million.

As at 30 June 2018, the Group considered the loss of control within one year to be highly probable and applied the provisions of IFRS 5 on groups of assets and liabilities held for sale.

The application of IFRS 5 had the effect of splitting the BancWest cash- generating units and, as a result, the related goodwill (i.e. EUR 4.3 billion) between Bank of the West (BoW) and FHI. This split was determined based on the recoverable amounts of the First Hawaiian Bank and BoW activities, and led to the allocation of a EUR 1.3 billion goodwill to FHI.

In addition, assets and liabilities have been reclassified respectively as non-current assets held for sale and liabilities related to non-current assets held for sale.

Following the sale realized on 31 July 2018, the Group ceased to exercise exclusive control over FHI but retained a significant influence. This loss of control resulted in a decrease of EUR 17.4 billion in the Group s balance sheet and a decrease in retained earnings attributable to minority shareholders of EUR -1,473 million.

This operation and the last partial sale generated an overall gain of EUR 286 million before tax, recognised in the profit and loss acount.

As at 31 December 2018, the Group continues to apply the provisions of IFRS 5.

The effect of IFRS 5 is to assess the equity-method value at the balance sheet date at the lowest value between the book value and the market value. At 31 December 2018, this method resulted in the recognition of a EUR -125 million impairment.

On 29 January 2019, the Group launched a secondary offering for 24.9 million ordinary shares of First Hawaiian Inc (FHI). As a result of this transaction, the BNP Paribas Group has sold its entire 18.4% stake in FHI.

This operation generated an overall gain of EUR 82 million before tax, recognised in the profit and loss account.

ABN Amro Bank Luxembourg

On 3 September 2018, BGL BNP Paribas acquired 100% of ABN Amro Bank Luxembourg (Private Banking activity) and its subsidiary ABN Amro Life SA (insurance activity). As a result of this transaction, the BNP Paribas Group fully consolidates these activities.

The result of this acquisition is to increase the Group s balance sheet at acquisition date by EUR 5.1 billion, including loans and advances to customers for EUR 1.6 billion and financial investments of insurance activities for EUR 2.7 billion.

The goodwill linked to this operation amounts to EUR 37 million.

As at 31 December 2018, ABN Amro Bank Luxembourg merged into BGL BNP Paribas.

Raiffeisen Bank Polska

On 31 October 2018, Bank BGZ BNP Paribas bought the Core banking activities of Raiffeisen Bank Polska from Raiffeisen Bank International.

This acquisition resulted in an increase in the Group s balance sheet at acquisition date of EUR 9.5 billion, including loans and advances to customers for EUR 4.3 billion and amortised-cost debt securities for EUR 3.9 billion.

The negative goodwill associated with this operation amounts to EUR 68 million.

Date Transaction Interest sold Residual interest Control / Significant influence

4 August 2016 Initial offering 17.4% 82.6% Control

6 February 2017 1st secondary offering 20.6% 62.0% Control

8 May 2018 2nd secondary offering 13.2% 48.8% Control

31 July 2018 3rd secondary offering 15.5% 33.3% Significant influence

5 September 2018 4th secondary offering 14.9% 18.4% Significant influence

29 January 2019 5th secondary offering 18.4% 0% Significant influence

31 DÉCEMBRE 2019 100% 0%