2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS 117

32018 REVIEW OF OPERATIONS

Core business results

leading bank in terms of mobile functionalities according to D-rating(1), and recorded a signifi cant increase in the number of contacts via mobile app in the networks (+28% compared to December 2017). It continues adapting its offerings to new banking uses with the development of LyfPay, a universal mobile payment solution, which has already recorded over 1.3 million downloads since it was launched in May 2017. The operating division also continued the transformation of its operating model by streamlining and digitalising end-to-end its main customer journeys and automating its processes (280 robots in production at the end of 2018).

It is streamlining and optimising the local commercial network in order to enhance customer service and reduce costs (262 branches closed since 2016 in France, Belgium and Italy and removed in 2018 a regional management level in the network in France).

Revenues(2), at EUR 15,683 million, were down by 0.2% compared to 2017, as the impact of low interest rates was not fully offset by increased business and growth in the specialised businesses.

Operating expenses(2) (EUR 10,707 million) were up by 0.8% compared to 2017, with an increase in the specialised businesses due to their development but a 0.9% decrease in the retail networks costs.

Gross operating income(2) was down by 2.4%, at EUR 4,977 million, compared to last year.

The cost of risk was down by 22.8% compared to 2017. It was down in all the networks and continued to 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 3,663 million in pre-tax income(3), up by 3.4% compared to 2017.

FRENCH RETAIL BANKING (FRB)

In millions of euros 2018 2017 2018/2017

Revenues 6,311 6,352 -0.7%

Incl. Net Interest Income 3,548 3,569 -0.6%

Incl. Commissions 2,763 2,783 -0.7%

Operating Expenses and Dep. (4,609) (4,657) -1.0%

Gross Operating Income 1,701 1,695 +0.4%

Cost of Risk (288) (331) -12.8%

Operating Income 1,413 1,365 +3.6%

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

Pre-Tax Income 1,412 1,366 +3.4%

Income Attributable to Wealth and Asset Management (148) (153) -2.8%

Pre-Tax Income of French Retail Banking 1,263 1,213 +4.2%

Cost/Income 73.0% 73.3% -0.3 pt

Allocated Equity ( bn) 9.6 9.4 +1.6%

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

For the whole of 2018, FRB continued its good business drive in the context of economic growth in France. Outstanding loans rose by 5.4% compared to 2017 with sustained growth in loans to both individual and corporate clients and, for mortgage loans, the confi rmation of the return to normal of renegotiations and early repayments. Deposits were up by 5.3%, driven by strong growth in current accounts and Private Banking in France reported strong net asset infl ows (EUR 3.3 billion).

The new property and casualty offering launched in May as part of the partnership between BNP Paribas Cardif and Matmut (Cardif IARD) is a success with already 100,000 contracts sold as at 31 December 2018. The goal is to multiply by three by 2020 sales of property and casualty contracts and to grow the customer penetration rate from 8% to 12%.

(1) Agency specialised in digital performance analysis.

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

(3) Excluding PEL/CEL effects of +EUR 20 million compared to +EUR 19 million in 2017.