2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS 219

4CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

Notes to the fi nancial statements

5.i FINANCIAL INVESTMENTS OF INSURANCE ACTIVITIES

In millions of euros

31 December 2018 1 January 2018

Assets not representative

of unit-linked insurance contracts

Assets representative

of unit-linked insurance contracts

(ﬁ nancial risk supported by

policyholders) Total

Assets not representative

of unit-linked insurance contracts

Assets representative

of unit-linked insurance contracts

(ﬁ nancial risk supported by

policyholders) Total

Financial instruments designated as at fair value through profi t or loss 41,154 61,793 102,947 35,951 60,287 96,238

Derivative fi nancial instruments 907 907 366 366

Available-for-sale fi nancial assets 112,041 112,041 114,166 114,166

Held-to-maturity fi nancial assets 3,720 3,720 4,231 4,231

Loans and receivables 3,605 3,605 3,110 3,110

Equity-method investments 363 - 363 386 - 386

Investment property 2,982 2,872 5,854 3,107 3,106 6,213

TOTAL 164,772 64,665 229,437 161,317 63,393 224,710

Reinsurers share of technical reserves 2,871 - 2,871 3,002 - 3,002

FINANCIAL INVESTMENTS OF INSURANCE ACTIVITIES 167,643 64,665 232,308 164,319 63,393 227,712

Investments in fi nancial instruments of insurance activities are accounted for according to IAS 39 principles.

The fair value of financial assets with contractual cash-flows corresponding only to payments of principal and interest on principal amounts to EUR 107.8 billion as at 31 December 2018. It amounted to EUR 108.0 billion as at 1 January 2018, which represents a variation of EUR -0.2 billion over the period.

The fair value of other fi nancial assets amounts to EUR 121.7 billion, and corresponds to all fi nancial instruments that do not meet the previously mentioned criteria, derivatives and fi nancial assets managed on a market value basis. It amounted to EUR 116.6 billion as at 1 January 2018, which represents a variation of EUR +5.1 billion over the period.

The fair value of investment properties accounted for at amortised cost amounts to EUR 4.0 billion as at 31 December 2018, compared with EUR 3.3 billion as at 1 January 2018.

➤ MEASUREMENT OF THE FAIR VALUE OF FINANCIAL INSTRUMENTS

The criteria for allocating instruments to the levels of the fair value hierarchy, the corresponding valuation methodologies and the principles of transfer between the levels of the hierarchy for insurance investments are similar to those applied for the Group s other fi nancial instruments (note 5.d).

In millions of euros

31 December 2018 1 January 2018

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Available-for-sale fi nancial assets 95,086 16,679 276 112,041 98,206 14,828 1,132 114,166

Equity instruments 4,741 1,093 234 6,068 5,063 1,193 1,091 7,347

Debt securities 90,345 15,586 42 105,973 93,143 13,635 41 106,819

Financial instruments designated as at fair value through profi t or loss 80,097 16,315 6,535 102,947 78,444 12,213 5,581 96,238

Equity instruments 77,989 11,131 6,458 95,578 76,112 7,513 5,434 89,059

Debt securities 2,108 5,184 77 7,369 2,332 4,700 147 7,179

Derivative fi nancial instruments - 622 285 907 11 355 - 366

FINANCIAL ASSETS MEASURED AT FAIR VALUE 175,183 33,616 7,096 215,895 176,661 27,396 6,713 210,770

Level 1: this level comprises equities and liquid bonds, derivative instruments traded on organised markets (futures, options, etc.), units of funds and UCITS for which the net asset value is calculated on a daily basis.