2018 Registration document and annual fi nancial report - BNP PARIBAS120

3 2018 REVIEW OF OPERATIONS

3

Core business results

For the whole of 2018, Domestic Markets specialised businesses continued their strong growth: the fi nanced fl eet of Arval grew by 7.7% and the fi nancing outstandings of Leasing Solutions were up by 8.7%(1) compared to 2017; Personal Investors reported increased orders from individual customers (+8.9% compared to 2017) and Nickel continued its very strong growth with already over 1.1 million accounts opened (+347,000 in 2018). Nickel s target is to reach 2 million accounts opened by 2020. To this end, Nickel is growing its point of sales network (4,300 buralistes as at 31 December 2018, +48% compared to 31 December 2017) with a target of 10,000 by 2020.

The outstanding loans of Luxembourg Retail Banking (LRB) rose by 7.9% compared to 2017, with good growth in mortgage and corporate loans. Deposits were up by 11.8% with very good infl ows in particular in the corporate segment.

The digital development continued with the growing use of e-signature at Leasing Solutions and Arval as well as the rollout by Arval in Europe

of an offering to individuals, already operational in the Netherlands, to rent cars online (Private Lease).

The revenues(2) of the fi ve businesses, which totalled EUR 2,986 million, were up on the whole by 7.3% compared to 2017 due to scope effects and good business development.

Operating expenses(2) rose by 10.6% compared to 2017, to EUR 1,779 million, as a result of scope effects and development of the businesses as well as the costs to launch new digital services.

The cost of risk(2), at EUR 123 million, was up by EUR 34 million compared to 2017.

Thus, the pre-tax income of these fi ve business units, after allocating one-third of Luxembourg Private Banking s net income to the Wealth Management business (International Financial Services division), was EUR 1,064 million (-5.4% compared to 2017).

(1) At constant scope and exchange rates.

(2) Including 100% of Private Banking in Luxembourg.

INTERNATIONAL FINANCIAL SERVICES

In millions of euros 2018 2017 2018/2017

Revenues 16,434 15,899 +3.4%

Operating Expenses and Dep. (10,242) (9,722) +5.4%

Gross Operating Income 6,192 6,177 +0.2%

Cost of Risk (1,579) (1,351) +16.9%

Operating Income 4,613 4,826 -4.4%

Share of Earnings of Equity-Method Entities 489 561 -12.8%

Other Non Operating Items 208 433 -52.0%

Pre-Tax Income 5,310 5,820 -8.8%

Cost/Income 62.3% 61.1% +1.2 pt

Allocated Equity ( bn) 28.1 26.8 +5.0%

For the whole of 2018, International Financial Services continued its growth and reported a sustained business activity: outstanding loans were up by 3.8% compared to 2017 (+7.1% at constant scope and exchange rates) and the operating division reported good net asset infl ows (EUR 13.4 billion). The assets under management of the savings and insurance businesses were down slightly, at EUR 1,028 billion (-2.2% compared to 31 December 2017), due to the sharp fall in valuations at the end of the year.

The operating division actively implemented digital transformation and new technologies across all its businesses. The e-signature is now widely available with already 50% of contracts signed electronically at Personal Finance and 35 processes that use e-signatures in the

international retail networks. It digitalised client journeys at Personal Finance with a completely digital application process for consumer loans already rolled out in 7 countries and put in place in Insurance in France an online questionnaire enabling over 80% of clients to get immediate approval for creditor protection insurance (150,000 contracts as at the end of 2018). It expanded the features available on mobile at Wealth Management with My Biopass which allows client identifi cation and validation of transactions using biometrics and continued to expand its digital banks with already 665,000 customers for Cepteteb in Turkey and 223,000 customers for BGZ Optima in Poland. The operating division is developing new technologies and artifi cial intelligence with already 130 robots (automation of controls, reporting and data processing) and 17 chatbots already operational.