2018 Registration document and annual fi nancial report - BNP PARIBAS138

3 2018 REVIEW OF OPERATIONS

3

Financial structure

TREND INFORMATION

Trend information (Macroeconomic environment and Laws and regulations applicable to fi nancial institutions) is described in the Top and emerging risks sub-section, in the Risks and capital adequacy chapter.

3.7 Financial structure

The Group s balance sheet is very solid.

The impacts of the fi rst time application of the new IFRS 9 accounting standard were fully taken into account as of 1 January 2018: -EUR 2.5 billion impact on revaluated shareholders equity(1) and -10 bp on the fully loaded Basel 3 common equity Tier 1 ratio(2). This ratio also recorded as at 1 January 2018 the impact of -10 bp of the supervisor s new general requirement to deduct irrevocable payment commitments from the prudential capital and thus came to 11.6% pro forma as at 1 January 2018.

It rose back to 11.8% as at 31 December 2018, or an increase of 20 bp compared to 1 January 2018 which breaks down between:

■ the net income for the year (excluding capital gain on the sale of 43.6% of First Hawaiian Bank) after taking into account dividend payment (+50 bp);

■ the increase in risk weighted assets, in particular in Domestic Markets and Personal Finance, excluding foreign exchange effect and operational risk (-20 bp);

■ the risk-weighted assets related to operational risk brought to the standard method level (-10 bp);

■ the other effects which have a negligible impact on the ratio overall (including the effects of the acquisitions and sales of the year).

The Basel 3 fully loaded leverage ratio(3), calculated on total Tier 1 capital, totalled 4.5% as at 31 December 2018.

The Liquidity Coverage Ratio stood at 132% as at 31 December 2018.

The Group s liquid and asset reserve immediately available totalled EUR 308 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 generate capital regularly and manage its balance sheet in a disciplined manner within a more demanding regulatory framework.

(1) Shareholders equity including valuation reserves.

(2) Taking into account all the rules of the CRD4 directives with no transitory provisions. Subject to the provisions of article 26.2 of Regulation (EU) No. 575/2013.

(3) Taking into account all the rules of the CRD4 directives in 2019 with no transitory provisions, calculated according to the delegated act of the European Commission dated 10 October 2014.