2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS 227

4CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

Notes to the fi nancial statements

also on the phone and face-to-face. In addition to its activities destined to private clients, Personal Investors offers its services and IT platform to independent fi nancial consultants, asset managers and FinTechs.

Asset Management: BNP Paribas Asset Management is the dedicated asset management business line of the BNP Paribas Group and offers services to individual investors (through internal distributors BNP Paribas Private and Retail Banking and external distributors), to corporates and to institutional investors (insurance companies, retirement funds, offi cial institutions, consultants). Its aim is to offer an added value based on a broad range of expertise throughout its active management of equities and bonds, its activity of private debt and real assets management and its multi-asset, quantitative and solutions division.

Insurance: BNP Paribas Cardif, a world leader in personal insurance, has designed, developed and marketed savings and protection products and services to protect individuals, their projects and their assets.

BNP Paribas Cardif has developed new forms of insurance and extended its offer of protection to health insurance, budget insurance, revenue and means of payment insurance, unexpected event protection (unemployment, accident, death, theft or breakage) or the protection of private digital data to meet the evolution of customers needs.

In 2017, BNP Paribas Cardif and State Bank of India launched an Initial Public Offer on their joint venture, SBI Life, selling 4% of this life insurer in India. BNP Paribas Cardif holds a 22% interest in SBI Life at 31 December 2018.

BancWest: In the United States, the Retail Banking business is henceforth conducted through Bank of the West, which markets a very broad range of Retail Banking products and services to individuals, small businesses and corporate clients, through branches and offi ces in 23 States, mainly in western and mid-western America. It also has strong positions across the USA in several specialized lending activities, such as marine, recreational vehicles, church lending and agribusiness, and develops its commercial set up particularly in Corporate Banking, Wealth Management and Small and Medium Enterprise businesses.

Personal Finance: BNP Paribas Personal Finance is the Group s consumer credit specialist. Through its brands such as Cetelem, Cofinoga, Findomestic or AlphaCredit, Personal Finance provides a full range of consumer loans at point of sale (retail stores and car dealerships) or through its customer relation centres and online. The consumer credit business also operates within the Group s Retail Banking network in some countries, through the PF Inside set-up. Personal Finance offers insurance products tailored to local needs and practices in each of the countries where it operates. In Germany, Bulgaria, France, Hungary and Italy, the lending and insurance offer of Personal Finance has been complemented by savings products.

In 2017, BNP Paribas Personal Finance acquired the automotive fi nance activity of General Motors in Europe (Opel Vauxhall) with Banque PSA Finance (PSA group) and of 100% of SevenDay Finans AB, consumer credit specialist in Sweden.

Real Estate: BNP Paribas Real Estate serves the needs of its clients, whether institutional investors, corporates, public entities or individuals, at all stages of the life cycle of their property (from the conception of a construction project to its daily management).

In 2017, BNP Paribas Real Estate reinforced its transaction activity with the acquisition of Strutt&Parker, one of UK s largest independent property actors.

Turk Ekonomi Bankasi: Present mostly in Turkey, Turk Ekonomi Bankasi offers its customers (Retail, Corporate and SME) a wide array of fi nancial products and services, including Retail and Private Banking, treasury and capital markets services, and fi nancing.

Wealth Management: Wealth Management encompasses the Private Banking activities of BNP Paribas and serves a clientele of wealthy individuals, shareholder families and entrepreneurs seeking a one-stop shop for all their wealth management and fi nancial needs.

In 2018, BNP Paribas Wealth Management purchased the Private Banking activities of ABN Amro in Luxembourg.

Corporate Banking: Corporate Banking combines fi nancing solutions to corporates, all transaction banking products, corporate fi nance advisory services in mergers and acquisitions and primary equity activities.

Global Markets: Global Markets provides investment, hedging, fi nancing and research services across asset classes, to corporate and institutional clients as well as private and Retail Banking networks. The sustainable, long-term business model of Global Markets connects clients to capital markets throughout EMEA (Europe, Middle East & Africa), Asia Pacifi c and the Americas, with innovative solutions and digital platforms. Global Markets includes activities of Fixed Income, Currencies & Commodities and Equity & Prime Services.

Securities Services: BNP Paribas Securities Services is one of the major global players in securities services and provides integrated solutions for all actors involved in the investment cycle, sell side, buy side and issuers.

In 2018, BNP Paribas Securities Services partnered with Janus Henderson for the acquisition of middle and back-offi ce activities of Janus Henderson in the USA.

Goodwill impairment tests are based on three different methods: observation of transactions related to comparable businesses, share price data for listed companies with comparable businesses, and discounted future cash fl ows (DCF).

If one of the two comparables-based methods indicates the need for impairment, the DCF method is used to validate the results and determine the amount of impairment required.

The DCF method is based on a number of assumptions in terms of future revenues, expenses and cost of risk (cash fl ows) based on medium-term business plans over a period of fi ve years. Cash fl ow projections beyond the 5-year forecast period are based on a growth rate to perpetuity and are normalised when the short-term environment does not refl ect the normal conditions of the economic cycle.