2018 Registration document and annual fi nancial report - BNP PARIBAS254
4 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
4
Notes to the fi nancial statements
8.e SIGNIFICANT RESTRICTIONS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
Significant restrictions related to the ability of entities to transfer cash to the Group
The ability of entities to pay dividends or to repay loans and advances depends, inter alia, on local regulatory requirements for capitalisation and legal reserves, as well as the entities financial and operating performance. During 2017 and 2018, no BNP Paribas Group entity was subject to signifi cant restrictions other than those related to regulatory requirements.
Significant restrictions relative to the Group s ability to use the assets lodged in consolidated structured entities
Access to the assets of consolidated structured entities in which third- party investors have invested is limited inasmuch as these entities assets are reserved for the holders of units or securities. These assets total EUR 31 billion as at 31 December 2018 (EUR 24 billion as at 1 January 2018).
Significant restrictions related to the Group s ability to use assets pledged as collateral or under repurchase agreements
The fi nancial instruments pledged by the BNP Paribas Group as collateral or under repurchase agreements are presented in notes 5.r and 6.d.
Significant restrictions related to liquidity reserves
Signifi cant restrictions related to liquidity reserves correspond to the mandatory deposits placed with central banks presented in chapter 5 of the Registration document under Liquidity risk .
Assets representative of unit-linked insurance contracts
Financial assets representative of unit-linked insurance contracts designated as at fair value through profi t or loss, which amount to EUR 62 billion as at 31 December 2018 (compared with EUR 60 billion as at 1 January 2018), are held for the benefi t of the holders of these contracts.
8.f STRUCTURED ENTITIES The BNP Paribas Group is engaged in transactions with sponsored structured entities mainly through its activities of securitisation of fi nancial assets as either originator or sponsor -, fund management and specialised asset fi nancing.
In addition, the BNP Paribas Group is also engaged in transactions with structured entities that it has not sponsored, notably in the form of investments in funds or securitisation vehicles.
The method for assessing control for structured entities is detailed in note 1.b.2. Consolidation methods .
Consolidated structured entities
The main categories of consolidated structured entities are:
ABCP (Asset-Backed Commercial Paper) conduits: the ABCP securitisation conduits Starbird, Matchpoint and Scaldis fund securitisation transactions managed by the BNP Paribas Group on behalf of its customers. Details on how these are fi nanced and the Group s risk exposure are presented in chapter 5 of the Registration document under Securitisation as sponsor on behalf of clients/Short-term refi nancing .
Proprietary securitisation: proprietary securitisation positions originated and held by the BNP Paribas Group are detailed in chapter 5 of the Registration document under Proprietary securitisation activities (originator) .
Funds managed by the Group: the BNP Paribas Group structures different types of funds for which it may act as fund manager, investor, custodian or guarantor. These funds are consolidated when the Group is both the manager and a signifi cant investor, and is therefore exposed to variable returns.
Unconsolidated structured entities
The BNP Paribas Group has entered into relations with unconsolidated structured entities in the course of its business activities to meet the needs of its customers.
Information relative to interests in sponsored structured entities
The main categories of unconsolidated sponsored structured entities are as follows:
Securitisation: the BNP Paribas Group structures securitisation vehicles for the purposes of offering customers fi nancing solutions for their assets, either directly or through consolidated ABCP conduits. Each vehicle fi nances the purchase of customers assets (receivables, bonds, etc.) primarily by issuing bonds backed by these assets and whose redemption is linked to their performance.
Funds: the Group structures and manages funds to offer investment opportunities to its customers. Dedicated or public funds are offered to institutional and individual customers, and are distributed and commercially monitored by the BNP Paribas Group. The entities of the BNP Paribas Group responsible for managing these funds may receive management fees and performance commission. The BNP Paribas Group may hold units in these funds, as well as units in funds dedicated to the insurance activity not managed by the BNP Paribas Group.
Asset financing: the BNP Paribas Group establishes and finances structured entities that acquire assets (aircraft, ships, etc.) intended for lease, and the lease payments received by the structured entity are used to repay the fi nancing, which is guaranteed by the asset held by the structured entity. The scope of entities included in this category was refi ned in 2018.
Other: on behalf of its customers, the Group may also structure entities which invest in assets or are involved in debt restructuring.
An interest in an unconsolidated structured entity is a contractual or non-contractual link that exposes the BNP Paribas Group to variable returns from the performance of the entity.
