2018 Registration document and annual fi nancial report - BNP PARIBAS196
4 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
4
Notes to the fi nancial statements
Note 4 SEGMENT INFORMATION
The Group is composed of two operating divisions:
■ Retail Banking and Services, which covers Domestic Markets and International Financial Services. Domestic Markets include r etail b anking n etworks in France (FRB), Italy (BNL banca commerciale), Belgium (BRB), and Luxembourg (LRB), as well as certain specialised r etail b anking divisions (Personal Investors, Leasing Solutions, Arval and New Digital Businesses). International Financial Services is composed of all BNP Paribas Group Retail Banking businesses out of the Eurozone, split between Europe Mediterranean and BancWest in the United States, as well as Personal Finance and the Insurance and Wealth and Asset Management activities (Wealth Management, Asset Management and Real Estate);
■ Corporate and Institutional Banking (CIB), which includes Corporate Banking (Europe, Middle East, Africa, Asia, Americas, and Corporate Finance activities), Global Markets (Fixed Income, Currency and Commodities, as well as Equity and Prime Services), and Securities Services to management companies, fi nancial institutions and other corporations.
Other activities mainly include Principal Investments, activities related to the Group s central treasury function, some costs related to cross- business projects, the residential mortgage lending business of Personal
Finance (a signifi cant part of which is managed in run-off), and certain investments.
They also include non-recurring items resulting from applying the rules on business combinations. In order to provide consistent and relevant economic information for each core business, the impact of amortising fair value adjustments recognised in the net equity of entities acquired and restructuring costs incurred in respect to the integration of entities, have been allocated to the Other Activities segment. The same applies to transformation costs relating to the Group s cross-business savings programmes.
Inter-segment transactions are conducted at arm s length. The segment information presented comprises agreed inter-segment transfer prices.
The capital allocation is carried out on the basis of risk exposure, taking into account various conventions relating primarily to the capital requirement of the business as derived from the risk-weighted asset calculations required under capital adequacy rules. Normalised equity income by segment is determined by attributing to each segment the income of its allocated equity. The equity allocation to segments is based on 11% of weighted assets. The breakdown of balance sheet by core business follows the same rules as the breakdown of the profi t or loss by core business.
