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selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 31 décembre 2022 retraité selon IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 1er janvier 2022 IAS 29, IFRS 17 et 9 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IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 retraité selon IFRS 17 et 9 Exercice 2022 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The bank
for a changing
world
UNIVERSAL REGISTRATION
DOCUMENT AND ANNUAL
FINANCIAL REPORT 2023
1
3
7
2
5
6
9
PRESENTATION OF THE BNP PARIBAS GROUP
3
1.1 Group presentation
4
1.2 Key figures
1.3 History
1.4 Presentation of operating divisions and business lines
7
1.5 BNP Paribas and its shareholders
20
CORPORATE GOVERNANCE
AND INTERNAL CONTROL
33
2.1 Report on Corporate governance
34
2.2 Statutory Auditors' report
111
2.3 The Executive Committee
111
2.4 Internal control
112
2023 REVIEW OF OPERATIONS
127
3.1 BNP Paribas consolidated results
128
3.2 Results by division/business line
131
3.3 Balance sheet
145
3.4 Profit and loss account
149
3.5 Recent events
153
3.6 Outlook
154
3.7 Financial structure
157
3.8 Alternative Performance Measures (APM) –
Article 223-1 of the AMF's General regulation
158
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
171
4.1 Profit and loss account for the year ended
31 December 2023
174
4.2 Statement of net income and changes in assets
and liabilities recognised directly in equity
175
4.3 Balance sheet at 31 December 2023
176
4.4 Cash flow statement for the year ended
31 December 2023
177
4.5 Statement of changes in shareholders' equity
between 1 January 2022 and 31 December 2023
178
4.6 Notes to the financial statements prepared
in accordance with IFRS as adopted
by the European Union
180
4.7 Statutory Auditors' report on the consolidated
8
financial statements
297
RISKS AND CAPITAL ADEQUACY – PILLAR 3
303
5.1 Annual risk survey
307
5.2 Capital management and capital adequacy
329
5.3 Risk management
363
5.4 Credit risk
372
5.5 Securitisation in the banking book
452
5.6 Counterparty credit risk
465
5.7 Market risk
478
5.8 Liquidity risk
497
5.9 Operational risk
515
5.10 Insurance risks]
522
5.11 Environmental,social and governance risk
526
Appendix 1: Sovereign exposures
557
Appendix 2: Regulatory capital – Detail
559
Appendix 3: Countercyclical capital buffer
and G-SIB buffer
564
Appendix 4: Capital requirements of significant
subsidiaries
567
Appendix 5: Environmental, social
and governance risk
571
Appendix 6: List of tables and figures
576
Appendix 7: Acronyms
579
INFORMATION ON THE PARENT
COMPANY FINANCIAL STATEMENTS
5
31 DECEMBER 2023
583
6
6.1 BNP Paribas SA financial statements
584
Notes to the parent company financial statements
586
6.2 Appropriation of income for the year ended
31 December 2023 and dividend distribution
612
6.3 BNP Paribas SA five-year financial summary
613
6.4 Main subsidiaries and associates of BNP Paribas SA
614
6.5 Disclosures of investments of BNP Paribas SA
in 2023 affecting at least 5% of share capital of
french companies
624
6.6 Statutory Auditors' report
on the financial statements
625
A COMMITTED BANK: INFORMATION
CONCERNING THE ECONOMIC,
SOCIAL, CIVIC AND ENVIRONMENTAL
RESPONSIBILITY OF BNP PARIBAS
631
BNP Paribas' company purpose
633
Summary
634
7.1 Strategy
638
7.2 Our economic responsibility: financing
the economy in an ethical manner
645
7.3 Our social responsibility: supporting
our employees by offering them an environment
and pathways adapted to their expectations
659
4
7.4 Our civic responsibility: being a positive agent for
change
681
7.5 Our environmental responsibility: accelerating the
ecological and energy transition
687
7.6 Extra-financial performance statement
698
7.7 Vigilance plan
704
7.8 Statement on modern slavery and human trafficking
720
7.9 Aligned activities within the meaning
of the european taxonomy
724
7.10 Cross-reference tables
761
7.11 Report of one of the Statutory Auditors, appointed
as independent third party, on the verification
of the consolidated non-financial performance
statement
766
GENERAL INFORMATION
769
8.1 Documents on display
770
8.2 Material contracts
770
8.3 Dependence on external parties
770
8.4 Significant changes
771
8.5 Investments
771
8.6 Information on locations and businesses in 2023
772
8.7 Founding documents and Articles of Association
779
8.8 Statutory Auditors' special report on related party
agreements
784
8.9 Person responsible for auditing the financial
statements
786
8.10 Person responsible for the Universal registration
document
787
TABLES OF CONCORDANCE
789
Universal registration document and annual financial report - BNP PARIBAS
1
2023 Universal registration
document and annual financial report
The English version of the Universal registration document was filed on 22 March 2024 with the AM F, a s competent authority under regulation
(EU) 2017/1129, without prior approval pursuant to Article 9 of the said Regulation.
The Universal registration document may be used for the purposes of an offer to the public of securities or admission of securities to trading on
a regulated market if completed by a securities note and, if applicable, a summary and any amendments to the Universal registration document.
The whole is approved by the AMF in accordance with Regulation (EU) 2017/1129.
The Universal Registration Document may form part of a prospectus of the issuer consisting
of separate documents within the meaning of the Prospectus Regulation.
Universal registration document and annual financial report - BNP PARIBAS
2
1
Universal registration document and annual financial report - BNP PARIBAS
3
PRESENTATION OF THE
BNP PARIBAS GROUP
1.1
Group presentation
4
1.2
Key figures
5
Results
5
Capitalisation
5
Long-term and short-term ratings
5
1.3
History
6
1.4
Presentation of operating divisions and business lines
7
Corporate and Institutional Banking
7
Commercial, Personal Banking and Services
10
Investment and Protection services
16
Corporate centre
19
1.5
BNP Paribas and its shareholders
20
Share capital
20
Changes in share ownership
20
Listing information
22
Shareholder dashboard
24
Creating value for shareholders
25
Communication with shareholders
26
Shareholder Liaison Committee
27
Dividend
27
BNP Paribas registered shares
28
Shareholders' Annual General Meeting
29
Disclosure thresholds
31
Universal registration document and annual financial report - BNP PARIBAS
4
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
Group presentation
1.1 Group presentation
With its integrated and diversified model, BNP Paribas is a leader in
banking and financial services in Europe. The Group leverages strong
customer franchises and business lines with strong positions in Europe
and favourable positions internationally, strategically aligned to better
serve customers and long-term partners.
It operates in 63 countries and has almost 183,000 employees(1), over
145,000 in Europe. The Group's activities are diversified and integrated
within a distinctive model combining Commercial & Personal Banking
activities in Europe and abroad, Specialised Businesses (consumer credit,
mobility and leasing services, and new digital business lines), insurance,
Private Banking and asset management, and Corporate and Institutional
Banking.
BNP Paribas' organisation is based on three operating divisions:
Corporate and Institutional Banking
(CIB), Commercial,
Personal Banking and Services (CPBS) and Investment and Protection
Services (IPS). These divisions include the following businesses.
■ Corporate and Institutional Banking division, combines:
Global Banking;
■
Global Markets; and
■
Securities Services.
■ Commercial, Personal Banking & Services division, covers:
■
Commercial & Personal Banking in the Euro-zone:
■
Commercial & Personal Banking in France (CPBF),
■
BNL banca commerciale (BNL bc), Italian Commercial & Personal
Banking,
■
Commercial & Personal Banking in Belgium (CPBB),
■
Commercial & Personal Banking in Luxembourg (CPBL);
■
Commercial & Personal Banking outside the Euro-zone, organised
around Europe-Mediterranean, covering Commercial & Personal
Banking outside the Euro-zone, in particular in Central and Eastern
Europe, Türkiye and Africa;
■
Specialised Businesses:
■
BNP Paribas Personal Finance,
■
Arval and BNP Paribas Leasing Solutions,
■
New Digital Businesses (in particular Nickel, Floa, Lyf) and
BNP Paribas Personal Investors.
■ Investment and Protection Services division, combines:
■
Insurance (BNP Paribas Cardi f);
■
■
Wealth and Asset Management: BNP Paribas Asset Management,
BNP Paribas Real Estate, the management of the BNP Paribas
Group's portfolio of unlisted and listed industrial and commercial
investments (BNP Paribas Principal Investments) and BNP Paribas
Wealth Management.
BNP Paribas SA is the parent company of the BNP Paribas Group.
(1) Based on HR managed worforce standard also applied in chapter 1.4 of the presentation of divisions and business lines.
Universal registration document and annual financial report - BNP PARIBAS
5
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
Key figures
1.2 Key figures
RESU L T S
2023
distributable (***)
2022
Restated
2023 according to
reported IFRS 17 and IFRS 9
2021
reported
Revenues (in millions of euros)
46,927
45,874
45,430
46,235
Gross operating income (in millions of euros)
17,347
14,918
15,566
15,124
Net income Group share (in millions of euros)
11,232
10,975
9,848
9,488
Earnings per share (in euros)(*)
9.21
8.58
7.52
7.26
Return on tangible equity(**)
11.0%
10.7%
10.2%(****)
10.0%
(*) Based on net income Group share adjusted for interest on Undated super subordinated notes deemed equivalent to preferred shares issued by
BNP Paribas SA and treated as a dividend for accounting purposes.
(**) Return on tangible equity is calculated by dividing net income attributable to equity holders (adjusted for interest on Undated super subordinated notes
issued by BNP Paribas SA, treated as a dividend for accounting purposes and adjusted for the foreign exchange effect on redeemed Undated super
subordinated notes) by average tangible permanent shareholders' equity, not revalued, between the beginning of the year and the end of the year
(shareholders' equity attributable to equity holders adjusted for changes in assets and liabilities recognised directly in equity, Undated super subordinated
notes, remuneration net of tax payable to holders of Undated super subordinated notes, the distribution project, intangible assets and goodwill).
(***)R esults serving as a basis for calculating the distribution in 2023 and reflecting the Group's intrinsic performance post Bank of the West sale and post
ramp-up of the Single Resolution Fund (SRF), excluding extraordinary items; earnings per share calculated on the number of shares outstanding at the
end of the period.
(****) 2022 return on tangible equity calculated on the basis of reported 2022 results, i.e. net income, Group share of EUR 10,196 million.
CAPITALISATION
31/12/2023
31/12/2022
31/12/2021
Market capitalisation (in billions of euros)
71.8
65.7
75.0
Source: Bloomberg.
LONG-TERM AND SHORT-TERM RATINGS
Long-term and short-term
ratings as at 13 March 2023
ratings as at 22 March 2024
Long-term and short-term
Outlook
Date of last review
Standard & Poor's
A+/A-1
A+/A-1
Stable
24 April 2023
Fitch
AA-/F1+
AA-/F1+
Stable
3 July 2023
Moody's
Aa3/Prime-1
Aa3/Prime-1
Stable
15 February 2024
DBRS
AA (low)/R-1 (middle)
AA (low)/R-1 (middle)
Stable
21 June 2023
On 24 April 2023, Standard & Poor's confirmed the long-term rating of
BNP Paribas at A+, with a stable outlook.
On 3 July 2023, Fitch confirmed the long-term rating of BNP Paribas at
AA-, with a stable outlook.
On 15 February 2024, Moody's confirmed the long-term rating of
BNP Paribas at Aa3 with a stable outlook.
On 21 June 2023, DBRS confirmed the long-term rating of BNP Paribas
at AA (low) with a stable outlook.
Universal registration document and annual financial report - BNP PARIBAS
6
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
History
1.3 History
1966: Creation of BNP
The merger of BNCI and CNEP to form BNP represented the largest
restructuring operation in the French banking sector since the end of
the Second World Wa r.
1968: Creation of Compagnie Financière de Paris
et des Pays-Bas
1982: Nationalisation of BNP and Compagnie
Financière de Paris et des Pays-Bas at the time
of the nationalisation of all French banks
In the 1980s, deregulation of the banking sector and the growing tendency
of borrowers to raise funds directly on the financial market transformed
the banking business in France and worldwide.
1987: Privatisation of Compagnie Financière
de Paribas
With 3.8 million individual shareholders, Compagnie Financière de
Paribas had more shareholders than any other company in the world.
Compagnie Financière de Paribas owned 48% of the capital of Compagnie
Bancaire.
1993: Privatisation of BNP
BNP's return to the private sector represented a new start. The
1990s were marked by a change in the level of profitability of the Bank,
which had the highest return on equity of any major French institution
in 1998. This period was marked by the launch of new banking products
and services, the development of activities on the financial markets,
expansion in France and at the international level, and preparation for
the advent of the euro.
1998: Creation of Paribas
On 12 May 1998, the merger between Compagnie Financière de Paribas,
Banque Paribas and Compagnie Bancaire was approved.
1999: A momentous year for the Group
Following an unprecedented double tender offer and a stock market battle
waged over six months, BNP was in a position to carry out a merger of
equals with Paribas. For both groups, this was the most important event
since their privatisation. It gave rise to a new Group with tremendous
prospects. At a time of economic globalisation, the merger created a
leading player in the European banking secto r.
2000: Creation of BNP Paribas
BNP and Paribas merged on 23 May 2000.
The new Group derived its strength from the two major financial and
banking lines from which it descends. It has two goals: to create value for
shareholders, clients and employees by building the bank of the future,
and to become a leading global playe r.
2006: Acquisition of BNL in Italy
BNP Paribas acquired BNL, Italy's 6th-largest bank. This acquisition
transformed BNP Paribas, providing it with access to a second domestic
Market in Europe. In both Italy and France, all of the Group's business
lines can now develop their activities by leveraging a nationwide banking
network.
2009: Merger with the Fortis group
BNP Paribas took control of Fortis Bank and BGL (Banque Générale du
Luxembourg).
2012: Launch of Hello bank!
2015: Acquisition of BGZ Polska in Poland, which will become
BNP Paribas Bank Polska
2017: Acquisition of Nickel, which offers payment solutions
that are accessible to all, directly online or at
tobacconists, without conditions of resources
2020: Agreement with Deutsche Bank for the takeover of its
Prime Brokerage business
2023: Closing of the sale of Bank of the West
to BMO Financial Group
Universal registration document and annual financial report - BNP PARIBAS
7
PRESENTATION OF THE BNP PARIBAS GROUP
1
Presentation of operating divisions and business lines
1.4 Presentation of operating divisions
and business lines
1
CORPORATE AND INSTITUTIONAL BANKING
With close to 40,000 people in 53 countries, Corporate and Institutional
Banking (CIB) serves two types of clients – corporates and institutionals
(Banks, Insurance Companies, Asset Managers, etc.) – offering them
tailored solutions in Capital Markets, Securities Services, Financing, Risk
Management, Cash Management and Financial Advice.
Acting as a bridge between corporate and institutional clients, CIB aims to
connect the financing needs of our corporate clients with the investment
needs of our institutional clientele.
In 2023, 34% of BNP Paribas' revenues from operating divisions were
generated by CIB. CIB's streamlined and efficient structure is designed
to meet the needs of BNP Paribas' corporate and institutional clients.
CIB is thus organised around three main global business lines and three
major regions:
Business lines:
■ Global Banking, a global organisation since 2023;
■ Global Markets, grouping together all capital market activities; and
■ Securities Services, one of the main global players in securities services.
Regions:
■ EMEA (Europe, Middle East, Africa);
■ Americas;
■ APAC (Asia Pacific).
2023 awards
■ Euromoney Awards for Excellence 2023
■
World's Best Bank 2023: Cautiously bold – How BNP Paribas combines
vision with prudence,
■
World's Best Bank for Sustainable Finance,
■
Latin America's Best Bank for Sustainable Finance,
■
Western Europe's Best Bank,
■
Best Bank in France,
■
Best Investment Bank in France,
■
Best Investment Bank in Portugal,
■
Western Europe's Best Bank for Wealth Management,
■
Best Investment Bank in Belgium (BNP Paribas Fortis),
■
Best Bank in Luxembourg (Banque BGL BNP Paribas).
■ International Finance Review Awards 2022: IFR recognises 200 years of
BNP Paribas' banking expertise – BNP Paribas CIB (ifre.com):
■
Bank of the Yea r,
■
Bank for Sustainability,
■
Asia Pacific ESG Financing House of the Yea r,
■
EMEA Structured Equity House EMEA.
■ Environmental Finance Bond Awards 2023: BNP Paribas wins five
Environmental Finance Bond Awards 2023 – BNP Paribas CIB:
■
Lead manager of the yea r, g reen bonds – financial institution,
■
Lead manager of the yea r, g reen bonds – supranational, sub-
sovereign and agency (SSA),
■
Lead manager of the yea r, s ocial bonds – corporate,
■
Lead manager of the yea r, s ustainability-linked bonds,
■
Loan structurer/arranger/coordinator of the yea r.
GLOBAL BANKING
The Global Banking business is structured around two axes. On the one
hand, the commercial support of around 4,600 large corporate clients
of BNP Paribas to meet their banking needs via all the solutions offered
by the Group. On the other hand, global product and service platforms,
including:
■ loan financing solutions (traditional loans and specialised financing,
including export financing and financing of projects, acquisitions
and Leveraged Finance) or securitisation in connection with Global
Markets;
■ advisory on mergers and acquisitions (advisory mandates for
acquisitions or disposals, strategic financial advice, privatisation
advice, etc.);
■ primary activities on the bond and equity markets (IPOs, capital
increases, convertible and exchangeable bond issues, etc.);
■ transaction banking solutions (liquidity management, cash
management deposit collection, trade finance and supply chain
management as well as the associated foreign exchange risk hedging
services in collaboration with Global Markets).
Since February 2023, Global Banking, previously organised around three
independent regional platforms, has gone global with the aim of ensuring
better commercial and operational coordination of teams and enabling
better support for clients on an international scale.
This system reinforces the Group's One Bank approach, offering any client
entering a corporate business centre access to an international Global
Banking platform and ensuring they benefit from the expertise of all other
business centres for their activities.
In EMEA (Europe, Middle East, Africa), Global Banking activities are
present in 32 countries. This set-up reinforces the One Bank for Corporates
approach developed in close cooperation with the Group's Commercial
& Personal Banking and includes a network of 78 trade centres in 2023.
In Asia-Pacific, Global Banking covers more than 1,200 Asian companies
and more than 900 multinational clients with a presence in 12 countries.
Universal registration document and annual financial report - BNP PARIBAS
8
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
Presentation of operating divisions and business lines
In the Americas, Global Banking serves around 700 companies and
500 multinational clients in the United States, Canada and six Latin
American countries.
2023 awards
■ Euromoney Awards 2023:
■
Western Europe's Best Investment Bank;
■
Western Europe's Best Bank for Sustainable Finance.
■ International Finance Review Awards IFR 2023:
■
EMEA Loan House;
■
Euro Bond House;
■
Bank for Sustainability.
■ Environmental Finance Bond Awards 2023:
■
Lead Manager of the Yea r, s ocial bonds – corporate;
■
Lead Manager of the Yea r, s ustainability-linked bonds;
■
Loan Structurer/Arranger/Coordinator of the Yea r.
■ Global Finance Magazine 2023:
■
World Best Investment Banks 2023: Debt Western Europe.
2023 Rankings
■ No. 1 in Overall Market Penetration with Large Corporate Clients in
Europe(1);
■ No. 1 for all bonds issued in EMEA(2);
■ No. 1 in syndicated loans in EMEA(2);
■ No. 1 in securitisation transactions in EMEA(2);
■ No. 1 in sustainable bonds(3).
GLOBAL MARKETS
Global Markets (GM) serves a wide range of corporate and institutional
customers (companies, institutions, private banks, distributors, etc.)
with investment, hedging, financing, research and market intelligence
products and services across all asset classes.
As an industry leader with significant market share on global financial
markets and regularly ranked as one of the leading providers, GM offers a
wide range of financial products and services on the equity, interest rate,
foreign exchange, local and credit markets. With over 4,400 employees,
GM has global coverage, operating in over 30 markets worldwide
including a number of large scale business centres, in particular London,
Paris, Brussels, New York, Hong Kong, Singapore and Tokyo.
The business comprises three global business lines, across two core
activities:
■ Fixed Income, Currencies & Commodities:
■
Global Macro: foreign exchange, Global Rates, Local Markets,
Commodity Derivatives,
■
Global Credit: DCM Bonds, Credit, Securitisation;
■ Equity & Prime Services:
■
Global Equities: Equity Derivatives, Cash Equities, Prime Services.
Global Markets also offers a long-established foreign exchange Prime
Brokerage, and a leading global Derivatives Execution and Clearing
service, under the umbrella of its Technology Platforms business.
BNP Paribas is delivering on its strategy to become the leading European
markets house on the world stage. Through both investment and organic
growth, the bank has built a comprehensive markets offering across its
three business lines.
This year the global integration of equity broker Exane into BNP Paribas
was completed. Together with the launch of BNP Paribas' Prime Services
business in 2022 and coupled with the bank's longstanding expertise in
Equity Derivatives, this announcement signifies the completion of the
bank's Global Equities offering.
It also marks a new phase in Global Markets' ambitious growth strategy,
which sees it targeting a position as the number one European markets
house on the world stage.
In the face of ongoing uncertainty in the macro environment, including
the persistent inflationary trend, Global Markets has continued to offer
consistently excellent service across its comprehensive product range,
acting as a strong, reliable European partner for global clients.
It also aims to facilitate the emergence of a carbon neutral economy
and a socially responsible world, innovating new ways to help clients
integrate ESG into all their markets activities, and scaling up sustainable
finance markets solutions.
2023 awards
■ Energy Risk Awards 2023 – OTC Trading Platform of the Year;
■ Global Capital Derivatives Awards 2023 – Global Derivatives House
of the Yea r, D erivatives House of the Year – Europe, Asia, Equity
Derivatives House of the Year – Europe, Asia;
■ Risk Awards 2023 – Inflation Derivatives House of the Year;
■ Environmental Finance Bond Awards 2023 – Lead Manager of the
Year Social Bonds – Corporate, Lead Manager of the Year Green Bonds
– Financial Institution, Lead Manager of the Year Green Bonds – SSA,
Lead Manager of the Year Sustainability-Linked Bond;
■ Institutional Investor Devel;oped Europe Rankings 2023 – #1 Industry
Research Provider for Developed Europe, joint #1 Overall Research
Provide r, #1 for individually ranked Analysts, #1 Specialist Sales,
#1 Sales;
■ FX Markets eFX Awards 2023 – Best Algo Provider of the Year;
■ SRP Europe Awards 2023 – Best Structured Product Technological
Solution, Best House Autocall, Best House Nordics, Best House Eastern
Europe, Best Performance Germany, Best Performance Italy;
(1) Source:Coalition Greenwich 2023, Europe Large Corporate Banking and Europe Large Corporate Cash Management Studies (European Large Corporate Banking Market Penetration).
(2) Source: Dealogic at 31 December 2023.
(3) Source: Bloomberg at 31 December 2023.
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PRESENTATION OF THE BNP PARIBAS GROUP
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1
Presentation of operating divisions and business lines
■ Global Capital Bond Awards 2023 – Most Impressive SSA House
in Euros, Most Impressive ESG Investment Banker for SSAs, Most
Impressive FIG House in Euros, Most Impressive Corporate Bond House
in Euros, Most Impressive Syndicate Team for Corporate Bonds, Most
Impressive Bank for Corporate Swaps and Other Derivatives, Most
Impressive ESG Investment Banker for Corporate and FIG Borrowers,
Most Impressive Bank for Central and Eastern European Bonds, Most
Impressive Bank for ESG Capital Markets in CEEMEA, Most Impressive
CEEMEA Bond Origination Banke r, R ising Star Emerging Markets Bond
Banker;
■ The Trade 2023 – Algorithmic Trading Survey – Long Only;
■ IFR Awards 2023 – Bond House of the Yea r, E urope Investment Grade
Corporate Bond House of the Yea r, I nterest Rate Derivatives House of
the Year;
■ T reasury Management International Technology Innovation Awards
2023 – Best Risk Management Solution, Kantox;
■ Gestion de Fortune 2023 – Best Structured Products Provider;
■ Global Capital European Securitization Awards 2023 – ABS Bank of
the Yea r, S peciality Finance Bank of the Year;
■ Euromoney foreign exchange Awards 2023 – Best FX Bank for
Innovation, Best Bank for e-FX Trading, Best FX Market Innovato r, B est
FX Bank for Trading Technology.
2023 Rankings
■ Number 1 ranked EMEA DCM volume by book runner – FY 2023;
■ Number 1 ranked EUR denominated DCM volume by book runner
– FY 2023(1).
SECURITIES SERVICES
Securities Services is one of the major global players in securities services
with EUR 12,382 billion in assets under custody and EUR 2,468 billion in
assets under administration. With a global reach covering more than 90
2023);
markets, Securities Services' custody network is one of the most extensive
in the industry.
As part of its full range of tools and resources developed to support
institutional investors in their ESG transition journey, Securities Services
enhanced in 2023 its investment compliance screening capabilities to
include customisable and flexible ESG criteria, enabling a responsible
monitoring of their portfolios.
Securities Services offers solutions to all participants across the
investment cycle:
■ investment banks, broker-dealers, banks and market infrastructures
(sell-side operators) are offered solutions in execution services,
derivatives clearing, local and global clearing, settlement and custody
for all asset classes worldwide. Outsourcing solutions for middle and
back-office activities are also provided;
■ institutional investors – asset managers, hedge funds, private equity
funds, real estate and sovereign wealth funds, insurance companies,
pension funds, fund distributors and promoters (buy-side operators)
– enjoy a wide range of services: global custody, depositary bank
and trustee services, transfer agent and fund distribution support,
fund administration and middle-office outsourcing, investment, risk
assessment and performance reporting;
■ issuers (originators, arrangers and corporates) have access to a wide
range of management services: securitisation and structured finance
services, debt agency services;
■ market and financing services are offered to all market participants:
securities lending and borrowing, foreign exchange, credit and
collateral management, triparty collateral management, trading
service and financing.
2023 awards
■ Transaction Bank of the Year for Securities Services (The Banker
Transaction banking Awards 2023);
■ European Custodian of the Year (Funds Europe Awards 2023);
■ Global Custodian of the Yea r, E uropean Custodian of the Yea r, A sia
Pacific Fund Administrator of the Year (Asset Servicing Times Industry
Excellence Awards 2023);
■ Best Global Custodian in Asia-Pacific (Asia Asset Management Best of
the Best Awards 2023);
■ Custodian Bank of the Year (GlobalCapital Global Derivatives Awards
■ ESG Services (Central banking Awards 2023);
■ Custodian of the Year (European Pensions Awards 2023).
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PRESENTATION OF THE BNP PARIBAS GROUP
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Presentation of operating divisions and business lines
COMMERCIAL, PERSONAL BANKING AND SERVICES
COMMERCIAL, PERSONAL BANKING
& SERVICES (CPBS)
Commercial, Personal Banking & Services includes the Group's Commercial
& Personal Banking networks and certain specialised businesses.
Employing more than 100,000 people, Commercial, Personal Banking &
Services generated 54% of the revenue of BNP Paribas' operating divisions
in 2023 (61% for Commercial & Personal Banking and 39% for Specialised
Businesses).
Commercial, Personal Banking & Services includes BNP Paribas'
Commercial & Personal Banking:
■ in the Eurozone countries including France (CPBF), Italy (BNL bc),
Belgium (CPBB operating under the BNP Paribas Fortis brand) and
Luxembourg (CPBL operating under the BGL BNP Paribas brand);
■ in countries "outside the Eurozone", and in particular in Ukraine,
Poland, Türkiye, Kosovo, Morocco and Algeria and through an equity
interest in China.
The CPBS division also includes specialised business lines:
■ Arval: one of the European leaders in multi-brand full-service leasing
and a specialist in sustainable mobility solutions with over 1.7 million
vehicles leased;
■ BNP Paribas Leasing Solutions: a European leader in professional
equipment financing that supports its partners and clients in their
energy transformation and transition;
■ BNP Paribas Personal Finance: one of the major players in the financing
of individuals in Europe with nearly 40% of outstandings dedicated to
the automotive market;
■ BNP Paribas Personal Investors: a leading digital bank in Germany
and an online broker in India, with a broad retail offering focused on
savings and investment for 4.5 million clients, across three brands
in Germany (Consorsbank, DAB and Wealth Management Private
Banking) and a brand in India (Sharekhan by BNP Paribas);
■ New Digital Business lines such as Nickel (alternative banking services)
that has opened over 3.7 million accounts in France since its creation
and continues to grow in Europe, with a launch in Spain in 2021,
Belgium and Portugal in 2022, and Germany in 2023, or Floa (the
French leader in Buy Now Pay Later that joined the BNP Paribas Group
in February 2022 and has more than 4 million customers in Spain,
Belgium, Italy, Portugal and France).
The Cash Management activities (No. 1 in Europe for large corporate
clients(1)), Trade Finance (No. 1 in Europe(1)) and Factoring (No. 1 in
Europe(2)), in synergy with the CIB division's Global Banking business
complete the offer to the Commercial & Personal Banking corporate
clients around the One Bank for Corporates approach.
The Wealth Management activity is developing its Private Banking model
within Commercial & Personal Banking. A cross-functional team, Partners
in Action for Customer Experience (PACE), aims to help Commercial &
Personal Banking activities offer a better customer experience. Hello
bank!, the Group's main digital bank in France, Belgium and Germany,
had 3.4 million customers at the end of December 2023. The Bank thus
offers a full set of solutions adapted to the needs of its various customer
bases (individuals, professionals, small businesses, corporates).
COMMERCIAL & PERSONAL BANKING
IN FRANCE (CPBF)
With over 23,000 employees, Commercial & Personal Banking in France
(CPBF) supports its customers in all their projects. CPBF offers innovative
solutions in financing, payment, wealth & asset management, and
insurance to 7.2 million individual customers, 729,000 professionals and
very small enterprises, over 32,800 corporate clients (SMEs, mid-sized
and large corporates) and 54,000 associations.
CPBF thus occupies leading positions in Private Banking and Corporate
Banking as well as strong positions in retail and professional banking.
Combining the best in digital and human interaction, it provides its
customers with broad interface capabilities, ranging from essential
banking services, through a self-care solution, to customised guidance
using dedicated teams and experts.
CPBF is structured around 10 regions covering 142 territories, making it
possible to provide all customer bases with the right level of proximity
whilst maintaining synergies between business lines.
All customer bases have dedicated areas appropriate to their needs:
■ for individual and professional customers: 1,599 branches and 4,193
ATMs operating under the BNP Paribas and BNP Paribas – Banque de
Bretagne brands(3).
CPBF also provides its customers with a full online relationship
capability, based on:
■
a mabanque.bnpparibas website and a "My Accounts" mobile
app offering services used by more than 4 million unique digital
customers (who authenticated at least once on the site or app
during the quarter), of which 3.3 million customers via mobile(4),
■
Hello bank! is BNP Paribas' digital bank. No. 1 in digital
customer relations for four years, Hello bank! offers more than
800,000 individual customers a comprehensive range of products
and services: everyday banking, credit solutions, savings, insurance
and stock market investment solutions. Hello bank!, which
celebrated its 10th anniversary in 2023, is the only digital bank to
serve both individual and small businesses, with Hello bank! Pro,
■
9 customer service centres located in the regions, handling requests
received by email, telephone, chat or secure messaging;
(1) Banking 2023 and Coalition Greenwich Voice of Client, 2023 European Large Corporate Cash Management and 2023 European Large Corporate T r ade Finance studies.
(2) Overview of our members in the world | FCI.
(3) At 10 November 2023.
(4) Source : Digital Monthly Monitoring – TDMC (Digital T r ansformation and Customer Marketing), BNP Paribas, December 2023.
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PRESENTATION OF THE BNP PARIBAS GROUP
1
1
Presentation of operating divisions and business lines
■ for small business customers, a dedicated and unique system of
43 Entrepreneur Spaces bringing together 200 locations, combining
proximity and expertise;
■ for Private Banking customers, Private Banking centres located
throughout France (for customers with more than EUR 250,000 in
financial assets) and 14 Wealth Management offices (for customers
with more than EUR 5 million in financial assets), making BNP Paribas
Private Bank the leading private bank in France for Wealth
Management(1);
■ for corporate clients, a sizeable organisation that brings together
multiple skills and dedicated teams:
■
39 business centres for SME, mid-cap and key account customers,
including 6 specialised divisions (Innovation, Real Estate, Images
& Media, Green Desk, Non-profit Organisations & Social Impact,
banking & Financial Services) and one skills and advice centre
dedicated to the social and environmental transition, offer
customised solutions that meet the specific needs of clients,
■
unique Investment Banking capabilities for our SME/mid-cap
customers with a team of advisory bankers and synergies between
the business lines and subsidiaries (M&A, Structured Finance,
Private Equity, stock market and wealth optimisation),
■
25 trade centres and 6 trading rooms,
■
a business support service (Client Service), a Cash Customer Service
(CCS) and specific customer support centres,
■
65 WAI hubs(2) supporting start-ups and innovative companies and
one dedicated innovation hub: WAI Paris, spaces for acceleration
and connection with the ecosystem. BNP Paribas, through the
hundred or so WAI bankers across France, now supports over
4,000 companies, including 88% of Next40 companies, 78% of FT120
companies and 80% of the FrenchTech 2030(3);
■ specialised subsidiaries: BNP Paribas Facto r, o ne of the European
leaders in factoring, which offers management solutions for trade
receivables and suppliers; BNP Paribas Développement, a capital
investment company and Portzamparc that allows private customers
and SMEs to invest or obtain financing on the stock market; Copartis,
a company specialising in the outsourcing of banking products, and
Cofiloisirs, a major player in film and audiovisual financing whose main
activity is the structuring of production loans;
■ for customers in the French Overseas Departments and Collectivities,
four regional subsidiaries, several teams and an economic interest
group (GIE) in mainland France dedicated to individual, professional,
Private Banking and Corporate customers (including two WAI divisions
- Reunion/Antilles Guyana - and two Green Desks - Reunion/Antilles
Guyana);
■ lastly, 44 production and sales support branches, back offices that
handle all transaction and collection processing.
Three independent studies(4) conducted in the second half of 2023 confirm
CPBF's digital leadership on the BNP Paribas and Hello bank! brands:
■ for Advents, BNP Paribas' two banking applications, My Accounts and
Hello bank!, stand out as the best banking applications in 2023;
■ for Sia Partners, BNP Paribas is ranked first among branch network
banks in France for its mobile application;
■ for Deloitte, BNP Paribas and Hello bank! have the best digital
customer service.
For Mindfintech, the Hello bank! application is ranked in 2023 as the
most innovative in the online banking market.
BNP Paribas Private Banking was voted "best private bank in France"
in 2024 by Euromoney, as well as in 2023 by The Digital Banke r, G lobal
Finance and World Finance. It was also named "best advisor network of
the year" by Citywire in 2023.
BNL BANCA COMMERCIALE
BNL bc is Italy's 6th largest Commercial and Personal bank in terms of
total assets and 6th for customer loans(5).
With about 10,000 employees, BNL bc widely supports its customers.
It provides a comprehensive range of banking, financial and insurance
products and services to roughly 2.5 million individual customers(6),
54,000 Private Banking clients(6), 117,000 small businesses(6)
,
9,000 medium and large corporates(6) and 3,200 local authorities and
non-profit organisations(6). This range of products and services are based
on the Group's extensive expertise and its integrated model by developing
business line cooperation.
BNL bc has innovative and client-tailored offer models, leveraging on a
multi-channel distribution network, organised in 5 regions ("direzioni
territoriali") and 1 transversal direct banking area, integrating products
and services for Retail Banking (including a network of more than 700 life
bankers and 300 financial advisors), Private Banking and Corporate
Banking. This organisation, named Rete Unica, aims at extending and
strengthening the cross-selling approach to the whole distribution
network, which includes:
■ for individuals and professional customers, 610 branches, with Open
BNL multi-channel branches (50) serving customers 24/7;
■ for Private Banking customers, 27 Private Banking centres located
throughout Italy;
■ for Corporate clients and entrepreneurs, a diversified organisation:
■
39 corporate and small-medium enterprises centres,
(1) According to Euromoney 2024 ranking, and the Assets under management criterion.
(2) WAI: We Are Innovation.
(3) Source: WAI, December 2023.
(4) 2023 studies carried out by the consulting firms Advents, Sia Partners and Deloitte, which compare the applications of retail banks, online banks and fintechs on the French market.
(5) Source: annual and periodic reports of BNL and its competitors.
(6) Source: internal customer data.
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1
PRESENTATION OF THE BNP PARIBAS GROUP
1
Presentation of operating divisions and business lines
■
8 centres for local authorities and public sector organisations,
■
1 trade centre for clients' cross-border activities,
■
2 Italian desks to assist Italian companies abroad and multinational
companies with direct investments in Italy.
The distribution network is completed by:
■ 2 specialised networks: Large Corporate network with 7 centres and
Wealth Management network with 2 hubs;
■ a sizeable number of ATMs (1,400) as well as by a growing range of
cutting-edge digital, on-line and mobile banking solutions.
As a result of this set-up, BNL bc has a significant position in lending to
households, especially residential mortgages (market share of 6.5%(1))
and has a deposit base (3.6%(1) of household current accounts) above
the market penetration rate (3.1%(2) in terms of number of branches).
BNL bc is also well established in the corporate markets (4.4%(1) of loans
market share) and local authority, with a recognised expertise in cash
management, cross-border payments, project finance, structured finance
and factoring, via its subsidiary Ifitalia (ranked 3rd in Italy(3)).
COMMERCIAL & PERSONAL BANKING
IN BELGIUM (CPBB)
BNP Paribas Fortis is the No. 1 bank for retail customers in terms of
market share(4) and has strong positions in the corporate and small
business sector in Belgium. BNP Paribas Fortis is also the leading Private
Bank in Belgium. BNP Paribas Fortis is also No. 1 in Belgium for Corporate
Banking(5) and offers a full range of financial services to corporate clients,
public sector entities and local authorities. On the strength of its teams'
commitment, the bank aims to finance the specific needs of its customers,
actively contribute to the development of the Belgian economy, and
support the sustainable and energy transition, while affirming a deep
commitment to society.
Since 1 January 2023, BNP Paribas Fortis has a new commercial
organisation revised to better meet customer expectations:
■ Retail Banking, with 2.9 million active customers(6), serves individual,
independent and small business customers through a multidisciplinary
team;
■ Affluent & Private Banking with 0.37 million active customers, serves
individual customers with assets of more than EUR 85,000 and
independent customers and companies active in the liberal professions
through a dedicated relationship manage r. P rivate Banking services are
aimed at individual customers with invested assets of more than EUR
250,000. The Wealth Management Department within Private Banking
caters to customers with invested assets of more than EUR 5 million;
■ Corporate Banking, with 87,000 active customers, serves corporate
clients with more complex needs through a dedicated relationship
manager (Enterprises for small and medium-sized enterprises, and
Corporate Coverage for large companies and public and institutional
clients).
BNP Paribas Fortis serves customers through its various integrated
networks, as part of a hybrid banking strategy combining physical
networks and digital channels:
■ 308 branches (including 132 independent branches) organised into
four regions to serve individual, self-employed and small business
customers. This set-up is supplemented by 193 franchises under the
Fintro(7) brand and 656 points of sale of bpost bank (wholly owned)
in partnership with bpost;
■ 31 dedicated Private Banking centres, including one remote centre and
two Wealth Management centres;
■ teams dedicated to large companies and public companies and
institutional clients centralised in Brussels supplemented by a network
of 14 Business Centres across Belgium for medium-sized companies
and dedicated relationship managers present in the branch network
for small companies within Corporate Banking;
■ a digital platform completes the system with Banking services
via the internet (Easy Banking Web) and the Easy Banking App
application (2.75 million cumulative active users, including Fintro).
Easy Banking Business is the online banking platform for companies
and the self-employed. PaxFamilia, a secure platform with tools to
support the management, monitoring and transmission of assets, has
29,700 contracts. The digital offer is supplemented by the Hello bank!
digital bank which has more than 537,000 customers(8). These digital
platforms are enriched by active collaboration with fintechs such as
TINK for the development of an effective budget management tool;
■ a network of 608 ATMs (including Fintro) supplemented by 973 ATMs
of Batopin, a joint venture of BNP Paribas Fortis, KBC, ING and Belfius,
each holding a 25% stake. Batopin is installing neutral CASH points
throughout Belgium in places with high customer flows;
■ the bank is also available for customers thanks to the Easy Banking
Centre which handles up to 60,000 calls per week.
BNP Paribas Fortis continued its digital development and customer
experience improvement, in particular with the development of remote
Easy Banking services with new features and improved performance. The
customer service centre building on robotics and artificial intelligence is
fully deployed, allowing optimised processing of an increasing number
of questions from customers and employees.
BNP Paribas Fortis received several awards for its quality of service to its
customers in 2023. The bank was voted "Best bank for digital solutions
(1) Source: Bank of Italy, November 2023.
(2) Source: Bank of Italy, data as at 31.12.2023.
(3) Source: Assifact, ranking by turnove r.
(4) Source: Financial Market Data Monitor 2023 (Market survey on a representative sample of 2,000 households in December 2023).
(5) Source: Greenwich 2022, in terms of market penetration of strategic companies (medium and large).
(6) Excluding the 600,000 active customers of bpost bank and Fintro customers.
(7) In December 2023, Fintro, active in the bancassurance business, had 193 branches, 909 employees and EUR 14.57 billion in assets under management (excluding insurance business)
for 361,874 active clients.
(8) Including 5,483 Hello Pro customers.
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PRESENTATION OF THE BNP PARIBAS GROUP
1
1
Presentation of operating divisions and business lines
in Belgium" and "Best investment bank in Belgium" by Euromoney, "Bank
of the year in Belgium" by The Banke r, "Best private bank in Belgium" by
PWM-T he Banker and "Best bank in Belgium" by Global Finance.
In 2022, BNP Paribas Fortis became a 100% shareholder of bpost
bank after the acquisition of the 50% stake held by bpost. An exclusive
seven-year commercial agreement was also signed between bpost and
BNP Paribas Fortis. As part of this agreement, bpost offers BNP Paribas
Fortis services and products in its network of post offices. From 22 January
2024, bpost bank will be integrated into BNP Paribas Fortis and bpost
bank customers will join BNP Paribas Fortis. The bpost bank brand will
disappear from post offices and will be replaced by the BNP Paribas
Fortis brand and logo.
COMMERCIAL & PERSONAL BANKING
IN LUXEMBOURG (CPBL)
With a 16.5%(1) market share of the Retail Banking market and 22%(2) of
the SME market, BGL BNP Paribas is the No. 2 commercial & personal
bank in Luxembourg.
The three business lines, Luxembourg Retail Banking (LRB), Banque des
Entreprises in Luxembourg (BEL) and Private Banking in Luxembourg
(PBL), actively support the financing of the economy and adapt their
strategy and network to changes in customer behaviour and new
consumption patterns with a focus on digitisation.
With the expertise of their employees, they support their customers to
bring their plan to fruition, with:
■ a Retail Banking network supporting more than 180,000 customers on
a daily basis, based on:
■
28 branches throughout the country and 77 ATMs for individual and
corporate customers,
■
a comprehensive and diverse range of products and services offered
through an innovative multi-channel presence, encompassing a
branch network as well as online, phone and mobile banking,
■
teams of savings and investment specialists assisting customers in
the management of their portfolios, teams of mortgage specialists
advising customers on loans for their acquisition and construction
projects, as well as specialists for professionals and liberal
professions;
■ a corporate bank dedicated to a broad and diversified corporate client
base:
■
its system of 140 employees supports large companies and
SMEs, the public sector and institutional investors, real estate
professionals, social organisations and start-ups,
■
each customer segment benefits from tailor-made support, with
specialised asset managers for each segment and a range of
adapted solutions, including financing, trade, cash management,
interest rate or foreign exchange risk hedging, and the escrow
account, etc.,
■
support for corporate clients includes access to the BNP Paribas
Group's specialised business lines as well as privileged access to
the BNP Paribas' One Bank for Corporates international network;
■ a private bank organised around 5 centres serving nearly 3,900
customers and offering tailored financial and wealth management
solutions.
EUROPE-MEDITERRANEAN
Within the CPBS division, Europe-Mediterranean (EM) brings together
BNP Paribas' commercial banking activities for individuals, professionals
and companies outside the Eurozone. EM offers a full range of financial
and extra-financial services, leveraging inter-business cooperation and
the Group's approach to risk diversification.
Since 29 April 2023, EM is present in six countries: Poland (BNP Paribas
Bank Polska), Ukraine (UKRSIBBANK), Türkiye (TEB A.S.), Kosovo (TEB
Sh.A), Morocco (BMCI) and Algeria (BNP Paribas El Djazaïr) with a
minority stake in China (Bank of Nanjing).
With around 23,000 employees, EM supports its customers through three
main business lines:
■ Commercial & Personal Banking, whose multi-channel and local
network serves more than 15 million customers through a network
of over 1,400 branches;
■ Private Banking, which builds on the deployment of global Wealth
Management activities in conjunction with the Group's IPS division;
■ Corporate Banking, with a network of 42 business centres, 11 Trade
Centres and 5 desks covering Multinationals.
In 2023, EM showed solidarity with Türkiye and Morocco after the
earthquakes in these countries, in particular with the Rescue & Recover
Fund mobilised by the Group(3). In the context of the invasion(4), EM
continued to provide its support to Ukraine.
(1) Source: TNS ILRES – Bank Survey December 2022.
(2) Source: TNS ILRES – SME Bank Survey 2022.
(3) Home P age EN – Rescue & Recover Fund (urgenceetdeveloppement.bnpparibas) BNP Paribas – Rescue & Recover Fund.
(4) https://ukrsibbank.com/en/news-post/ukrsibbank-consolidated-report/.
Universal registration document and annual financial report - BNP PARIBAS
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PRESENTATION OF THE BNP PARIBAS GROUP
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Presentation of operating divisions and business lines
EM banks continued to implement the Group's strategy in 2023. In terms
of ESG, BNP Paribas Bank Polska, for example, launched its carbon
footprint calculator via the Agronomist.pl platform(1) and BNP Paribas
El Djazaï r, i ts "Circular Economy" community(2) co-built with strategic
customers. UKRSIBBANK and TEB A.S. continued to support women
entrepreneurs with the Smart Lady offer(3) and the first female variable
fund in Türkiye with TEB Portfolio Women First Variable Fund(4). In
addition, BMCI launched the BMCI Connect Enterprises by Centric
solution(5) to facilitate cash management for companies and BNP Paribas
Bank Polska launched the mamGo platform(6) by offering a customer
journey to identify, locate and finance a ca r. I n 2023, TEB A.S., BNP Paribas
Bank Polska and for the first time, BNP Paribas Djazaï r, w ere certified Top
Employers(7). BNP Paribas Bank Polska was also selected as the best bank
for Corporate and ESG customers in Poland by Euromoney magazine.
BNP PARIBAS PERSONAL FINANCE
BNP Paribas Personal Finance is a major player in the financing of
individuals in Europe, operating in around twenty countries, under several
trademarks such as Cetelem, Findomestic, AlphaCredit, Cpay with almost
17,000 employees for over 23 million customers.
In 2023, BNP Paribas Personal Finance built a strategic transformation
project to drive growth and profitability, which includes a reorganisation
of its operating model as well as a refocusing of its activities in Europe
and the United Kingdom.
BNP Paribas Personal Finance is the daily financial partner for its
customers, giving them the means to carry out their home and personal
equipment, home renovation and mobility projects and supporting their
budget management needs. BNP Paribas Personal Finance also offers its
wholesale, retail and mobility partners, looking for a financial partne r, a
wide range of services to ensure the promotion, sale and management
of financing solutions.
BNP Paribas Personal Finance strengthened its ambition in the
mobility business and continued to structure partnerships with major
manufacturers such as Stellantis and Jaguar Land Rove r. A t 31 December
2023, the weight of automotive outstandings represents 41%, with the
objective of reaching 50% by 2025.
Since 2020, BNP Paribas Personal Finance's purpose is to: "Promote
access to more responsible and sustainable consumption to support our
customers and our partners", demonstrating the willingness for the long-
term transformation of the Company and its activities, and supporting
the BNP Paribas Group's ambition to become the leader in sustainable
finance.
By positioning this purpose as the reference framework for its
2025 strategic plan, BNP Paribas Personal Finance expresses its ambition
to integrate sustainable development as a key element of its performance
in a sector particularly impacted by the transformation of lifestyles
and consumption. BNP Paribas Personal Finance has set an ambition
in sustainable finance, with sustained efforts in four areas: financial
inclusion, the energy transition of housing, sustainable mobility and the
circular economy.
At the end of 2023, sustainable finance outstandings reached EUR
8.9 billion, i.e. 8% of total outstandings. This includes the financing of
the energy transition of housing for EUR 4 billion.
In France, the Cetelem Foundation for Inclusion through Digital Sharing
has set itself the goal of helping French people in situations of economic
precariousness appropriate online consumption.
BNP Paribas Personal Finance supports households while promoting
the development of controlled consumption with systems to detect and
support customers in vulnerable situations in all its regions. BNP Paribas
Personal Finance is developing a smooth, instant and secure customer
experience and inclusive financing products, along with payment methods
adapted to the consumer expectations and new needs.
To meet all of these challenges, BNP Paribas Personal Finance is pursuing
a collaborative and structured innovation approach, responding to new
consumer requirements by inventing value-added solutions for its
customers and partners.
ARVAL
Arval is a major player in long-term vehicle leasing and a specialist
in mobility solutions. As a specialised business line belonging to the
Commercial, Personal Banking & Services division of BNP Paribas,
Arval is positioned at the heart of the Group's integrated model.
Arval offers corporate clients (from large multinationals to small and
medium enterprises), its partners, their employees and also individuals,
customised solutions to optimise their mobility.
At the end of 2023, Arval had 8,400 employees in the 29 countries
where the Company operates, leased over 1.7 million vehicles to its
over 300,000 customers, and had nearly 20,000 users of solutions for
alternative mobility to private cars such as car-sharing, mobility cards
and bicycle rentals worldwide. Arval is No. 2 in the full-service multi-
brand vehicle leasing sector in Europe, ranking No. 1 in Poland, No. 2 in
France, Spain, Italy and Belgium and No. 3 in the Netherlands(8). Arval
relies, in addition, on strategic partnerships, thanks to the Element-Arval
Global Alliance, the world leader in the secto r, w ith a total of more than
4.4 million vehicles in 56 countries.
(1) Bank BNP Paribas launches a carbon footprint calculator for a pig production – Agronomist.
(2) BNP Paribas El Djazaïr : Commitment to "responsible finance" - Le Jeune Indépendant (jeune-independant.net).
(3) "Smart Lady" – special offer for businesswomen at UKRSIBBANK | Новини банку UKRSIBBANK.
(4) Borsa İstanbul's Opening Bell Rang For TEB Portfolio Women First Variable Fund (mondovisione.com).
(5) BMCI launches the new e-banking solution "BMCI Connect Entreprise by Centric" - Le Matin.ma.
(6) https://www.teamfrance-export.fr/infos-sectorielles/28328/28328-bnp-paribas-pologne-lance-mamgo-une-nouvelle-plateforme-tout-en-un-pour-lachat-de-voitures.
(7) https://www.bnpparibas.dz/top-employe.
(8) Source Frost & Sullivan at the end of December 2022, taking into account the merger of ALD and LeasePlan which was finalised in 2023.
Universal registration document and annual financial report - BNP PARIBAS
15
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
Presentation of operating divisions and business lines
Arval aims to have 350,000 fully electric vehicles leased by 2025, to
reduce the accident rate of its leased fleet, and to accelerate more
generally virtuous behaviour and the energy transition in the markets
in which it operates.
BNP PARIBAS LEASING SOLUTIONS
BNP Paribas Leasing Solutions supports the development of its customers
and industrial partners by offering them leasing and financing solutions
with services to preserve their working capital.
At the heart of financing the real economy, BNP Paribas Leasing Solutions
provides corporate clients with the flexibility they need to remain
competitive and develop in a responsible and sustainable manner
in their markets (agriculture, construction, I T, t elecommunications,
transportation, medical, real estate, food, materials handling, mobility
infrastructure, etc.).
BNP Paribas Leasing Solutions supports its partners (manufacturers,
distributors or resellers) in developing profitable business models based
on the concept of use or "as a service".
With 3,700 employees, the company operates in 20 countries in Europe,
China, the United States and Canada.
BNP Paribas Leasing Solutions' team of experts support:
■ equipment manufacturers and professional software publishers with
comprehensive retail financing solutions aimed at stimulating and
supporting the sales of their distribution networks and resellers;
■ distributors, dealers, resellers and integrators of professional
equipment with a wide range of leasing products and services to meet
the needs of their customers;
■ corporate clients, local authorities and professionals with solutions to
finance their investments.
In 2023, BNP Paribas Leasing Solutions financed more than
330,000 projects for a total volume of EUR 15.5 billion. The total amount
of assets under management at the end of December 2023 was EUR
39.6 billion.
In 2023, BNP Paribas Leasing Solutions was recognised as "Vendor
Finance Provider of the Year" and awarded "Best Energy Transition
Financing Program" by Leasing Life, a magazine dedicated to leasing in
Europe. (Source: 21st Annual Leasing Life Conference & Awards 2024 –
Arena International (arena-international.com)).
In a world undergoing climate and environmental change, BNP Paribas
Leasing Solutions supports the environmental transition of its partners
and clients by financing low-carbon equipment (for example EV chargers,
industrial electric vehicles, etc.) and remains committed to further
developing its diversity, equality and inclusion roadmap.
BNP PARIBAS PERSONAL INVESTORS
BNP Paribas Personal Investors is a digital banking and investment
services specialist. It offers a broad range of banking, credit, savings and
short- to long-term investment services to 5.3 million customers (out of
which 2.0 million customers in Germany at December 2023), on mobile
applications, online, by phone or face-to-face. It provides decision-making
tools, advice and analyses.
BNP Paribas Personal Investors also provides services and its IT platform
to independent financial advisors, asset managers and fintechs. Services
include market access, transactions, account management and custody
services.
Covering Germany and India(1), BNP Paribas Personal Investors today
has ~3,700 employees (out of which ~1,100 employees in Germany at
December 2023(2)):
■ in Germany, BNP Paribas Personal Investors operates under three
brand names: Consorsbank for individual customers, DAB BNP Paribas
for B2B partners and BNP Paribas Wealth Management Private Banking
for wealthy individual customers. Consorsbank is a full-service direct
bank and one of the pioneers in digital banking in Germany celebrating
its 30th birthday in 2024. It was awarded best online broker by finance
magazine Focus-Money in 2023(3). DAB BNP Paribas is a platform
for financial portfolio managers and service provider for fintechs.
BNP Paribas Wealth Management Private Banking offers banking
services for customers with investable assets above EUR 250,000;
■ in India, Sharekhan is one of the largest online broker(4). Its footprint
extends to 541 across 28 states through a network of 130 branches and
over 4,000 business partners, serving almost 3.2 million customers.
NICKEL
With the acquisition of Nickel in 2017, BNP Paribas responded to
customers' need to pay, and be paid, via a simple and handy service.
With over 10,000 tobacconists and Nickel Points in Europe, Nickel has a
strong position in its market as notably the leading distributor of current
accounts in France. Thanks to its digital model and a distribution method
that is present throughout the country, Nickel maintained a sustained
rate of customer acquisition throughout the year and even reached a
record number of new accounts opening in France in September 2023
with more than 57,500 openings during the month. Nickel had nearly
3.7 million accounts opened at 31 December 2023 in Europe. In Europe,
Nickel is growing rapidly in Spain, Belgium and Portugal and launched
its activity in Germany in September 2023, always with the same model
combining digital with physical point of sale networks.
(1) FTE excluding Integrated functions employees.
(2) Since 13 December 2023, the Group has signed with the Mirae Group the sale of 100% of its Indian activity. The final closing is subject to obtaining all the necessary regulatory
approvals.
(3) BÖRSENHANDEL: Guter Deal – FOCUS online.
(4) Ranking based on data communicated by the National Stock Exchange in India.
Universal registration document and annual financial report - BNP PARIBAS
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1
PRESENTATION OF THE BNP PARIBAS GROUP
1
Presentation of operating divisions and business lines
FLOA
A pioneer in payment facilities, Floa offers split payment solutions, loans
and bank cards. Floa is a partner of major e-retailers, key travel players
and fintechs for which it develops adapted services. Floa's products and
services stand out for their ease of use for customers and their speed
of integration for partners. Floa has more than 4 million customers and
finances more than EUR 2.5 billion in goods and services each yea r. F loa
employs nearly 500 people based in France and Europe who work daily
to offer innovative financial services with a successful cross-channel
user experience, capitalising on new digital technologies and data. Floa
places the customer experience at the heart of its strategy and has been
rewarded with numerous awards in the field of user experience and
customer relations (CX Award by Contentsquare, Cas d'Or du Digital).
Floa was also voted Customer Service of the Year for 2024, for the fourth
consecutive year in the credit institution category and for the second
year in the payment solution category. Leader in France, and present in
Spain, Belgium, Italy and Portugal, Floa joined the BNP Paribas Group
in February 2022.
INVESTMENT AND PROTECTION SERVICES
The Investment and Protection Services (IPS) division brings together the
Group's activities dedicated to protection, savings, investment and real
estate services. It strives to design innovative and sustainable products
to support individuals, professionals, corporate clients and institutions
in their projects and in their desire to have a positive impact:
■ BNP Paribas Cardif (over 8,000 employees, present in over 30 countries,
EUR 255 billion in assets under management) designs, develops and
markets savings and protection offers with over 500 distributor
partners to insure people, their projects and their property;
■ BNP Paribas Wealth Management (more than 7,000 employees
(including commercial banks), 19 countries, EUR 415 billion in assets
under management) meets the wealth and financial needs of wealthy
individual customers, family offices and entrepreneurs. BNP Paribas
Wealth Management is the leading private bank in the Eurozone(1);
■ BNP Paribas Asset Management (nearly 2,100 employees, 34 countries,
EUR 540 billion in assets under management) offers investment
solutions to individual savers, corporate clients and institutional
investors, with specific expertise: active conviction-based strategies,
liquidity solutions, emerging markets, multi-asset investments,
systematic investments, quantitative & index-based and private assets;
In January 2023, the private asset management activities of the IPS
division were grouped into a dedicated business unit, "Private Assets",
integrated into BNP Paribas Asset Management;
■ BNP Paribas Principal Investments is responsible for managing
BNP Paribas' portfolio of unlisted and listed industrial and commercial
investments.
■ BNP Paribas Real Estate (nearly 4,400 employees, 14 countries
(24 with its Alliances), EUR 26.1 billion in assets under management)
supports its clients – institutional investors, owners, corporate clients,
local authorities, individuals, etc. – during all stages of the property
life cycle: Development, Transaction, Consulting, Valuation, Investment
Management and Property Management;
IPS employs nearly 19,000 people in 48 countries and holds strong
positions in the Group's key growth regions, Asia-Pacific and Latin
America. The division works closely with CPBS to anticipate clients'
savings and investment needs (offers, technologies, quality of the client
experience, quality of advice) and with CIB to co-construct the best
investment solutions for institutional clients and large companies.
By integrating environmental, social and governance criteria into all its
operational processes, the IPS division aims to contribute to positioning
BNP Paribas as one of the world leaders in sustainable finance.
BNP PARIBAS CARDIF
Operating in over 30 countries, BNP Paribas Cardif designs, develops and
markets savings and protection offers to insure people and their assets
throughout their lives. A world leader in bancassurance partnerships, BNP
Paribas Cardif is a major player in the financing of the economy and the
world leader in creditor protection insurance (CPI)(2).
BNP Paribas Cardif provides its more than 80 million insured customers
with savings solutions to build and grow capital and prepare for the
future, thanks to products adapted to individual customers' needs and
projects. It also offers products in non-life insurance, health insurance,
budget insurance, revenue and means of payment insurance, unexpected
event protection (unemployment, accident, death) or the protection of
private digital data to meet the evolution of customers' needs. Over
8,000 employees worldwide contributed to generating gross written
premiums of EUR 30.3 billion in 2023.
BNP Paribas Cardif builds notably on a unique partnership approach, which
relies on more than 500 partners. This network of diversified distributors
comprises financial institutions, credit organisations, automotive sector
companies, retailers, telecommunications companies, as well as financial
advisors and brokers. The insurer supports its partners by developing
with them the insurance solutions best suited to their needs and those
(1) Source: Assets under management as published by the main banks in the Eurozone at 30/09/2023.
(2) Finaccord 2023.
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PRESENTATION OF THE BNP PARIBAS GROUP
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1
Presentation of operating divisions and business lines
of their customers: products that are increasingly easy to understand,
accessible and inclusive thanks to digital and multi-channel customer
journeys, as well as integrated service ecosystems articulated around
various themes: retirement, employability, housing, well-being, old age or
automotive services (warranties and car maintenance contracts).
Resolutely focused on the future, BNP Paribas Cardif continued its
transformation in 2023, intensifying its partnerships with digital
distribution platforms and digital players. Committed toward its
employees, its partners and their customers, BNP Paribas Cardif wishes
to have a positive impact on society, notably through its core mission of
making insurance more accessible. Concerned about its environmental
impact, BNP Paribas Cardif has strengthened its commitments for the
climate. As an investo r, i t contributes to give meaning to its policyholders'
investments and has set itself the target of investing EUR 1 billion per
year on average by 2025 to positive impact investments. BNP Paribas
Cardif has also committed to aligning its portfolios with a carbon
neutrality trajectory by 2050, to reducing the carbon intensity of its
investment portfolios related to electricity producers and has joined the
Net-Zero Asset Owner Alliance.
BNP PARIBAS WEA L T H MANAGEMENT
BNP Paribas Wealth Management develops its Private Banking model
across 17 countries around the world, serving a client base of small
businesses, family offices and high-net-worth individuals.
With EUR 415 billion in assets under management in 2023, over
7,000 employees (including commercial banks) and offices in Europe,
Asia and the Middle East, BNP Paribas Wealth Management is a major
global Private Bank and the leading Private Bank in the Eurozone(1).
Building on BNP Paribas' integrated model, BNP Paribas Wealth
Management offers its clients a network of private bankers and dedicated
experts. In Europe, the Private Banking business is promoted by the
commercial networks of BNP Paribas. In Asia, the Private Bank benefits
from the Group's established presence in the markets and Corporate
and Institutional Banking's expertise to cater to the most sophisticated
needs of its clients.
A global benchmark in its industry through its experience, reputation
and know-how, BNP Paribas Wealth Management offers its clients a
wide range of products and services by mobilising its large network of
experts: financial experts, wealth management engineers, discretionary
managers, financial analysts, private bankers specialising in family
ownership, experts in credit structuring, real estate specialists, advice
on rural land, art, philanthropy, etc. as well as privileged access to all of
the BNP Paribas Group's expertise.
BNP Paribas Wealth Management stands out for its proximity to
"Entrepreneur and Family" customers, able to meet all their needs in
order to support them in the construction, development and preservation
of their business and personal assets, by leveraging all of the Group's
capabilities.
For many years, sustainable investment and responsible innovation have
been at the heart of BNP Paribas Wealth Management's business culture.
The Responsible Investment offering was launched in 2006 to respond
to the emerging desire of investors to combine financial performance
with a social and environmental dimension, and it is based on in-
depth expertise and clients' personal convictions. BNP Paribas Wealth
Management gradually continued its roll-out, notably by extending its
range of sustainable products and services.
Lastly, with a constant focus on innovation, BNP Paribas Wealth
Management's range of digital solutions continues to expand in order to
offer a unique client journeys. In 2023, BNP Paribas Wealth Management
continued to enrich its customer experience. For example, the Private
Assets Investor Portal enables clients to monitor their investments in
private investment funds. Use cases based on artificial intelligence were
also launched at the various sites to improve the customer experience,
operational efficiency and risk management.
BNP Paribas Wealth Management won over 70 awards in 2023 including:
■ Best private bank in Europe, best digital private bank in Europe, best
DPM offer in Europe: Euromoney Global Private Banking Awards 2023
(wealthmanagement.bnpparibas) – a total of 16 prestigious prizes
awarded by Euromoney;
■ Best private bank in France, best private bank in the Middle East, best
innovative private bank at the GLOBAL Private Banking INNOVATION
AWARDS: Global Private Banking Innovation Awards – The Digital
Banker;
■ Best private bank for entrepreneurs, best private bank in Belgium and
best private bank in Hong Kong by PWM – THE BANKER: PWM / The
Banker Private Banking Awards 2023 – The Banker;
■ Best SRI and impact offering by WEALTHBRIEFING at the "WEALTH FOR
GOOD AWARDS 2023";
■ Best private bank for its digital services and customer paths by
Wealthbriefing at the European Awards.
BNP PARIBAS ASSET MANAGEMENT
BNP Paribas Asset Management (BNPP AM) is the BNP Paribas Group's
dedicated asset management business, employing almost 2,100 people in
34 countries(2) with a significant commercial presence in Europe and the
Asia-Pacific region. Through the BNP Paribas integrated model, BNPP AM
serves a large international client base and has close relationships with
the distribution networks within BNP Paribas' commercial banks. Ranked
the 10th largest asset manager in Europe(3), BNPP AM manages assets
totalling EUR 540 billion(2) and employs 525 investment professionals(2).
BNPP AM offers investment solutions for individual investors (through
internal distributors – private banks and Commercial & Personal
Banking within BNP Paribas – and external distributors), corporates
and institutional investors (insurance companies, pension funds, official
institutions). BNPP AM develops specific expertise: active, conviction-
based strategies, liquidity solutions, emerging markets, multi-assets,
systematic, quantitative & index and private assets.
BNPP AM's priority is to achieve long-term sustainable returns for its
clients by placing sustainability at the heart of its investment strategy and
philosophy. In this sense, in 2023, BNPP AM completed the acquisition of a
majority stake in leading Danish natural resources specialist International
Woodland Company. This acquisition demonstrates its forward-looking
approach to sustainability-related investment strategies, particularly in
private markets. It also contributes to BNPP AM's commitments within
the framework of its Net Zero and Biodiversity roadmaps.
(1) Assets under management as published by the main banks in the Eurozone at 30/09/2023.
(2) Source: BNP Paribas and BNP Paribas Asset Management, as at 31 December 2023.
(3) Source: IPE T o p 500 Asset Managers 2023.
Universal registration document and annual financial report - BNP PARIBAS
18
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
Presentation of operating divisions and business lines
BNPP AM is an important sustainability(1) playe r. 9 0%(2) of assets under
management of its European-based open-ended funds, representing
EUR 254.2 billion(2), are classified Article 8 (promoting environmental and/
or social characteristics) or Article 9 (having a sustainable investment
objective) of the European SFDR regulation(3) – which identifies funds
according to their sustainability potential. This positioning is supported by
its 171(2) labelled funds(4) in France and Belgium, representing
EUR 139.5 billion in assets(2). BNPP AM has the largest labelled ETF &
Index funds range(5) in Europe(6).
BNPP AM also uses its ability to engage with companies and public
authorities to promote a business model that incorporates a successful
energy transition, healthy ecosystems and greater equality in our
societies. Its best responsible investment practices were recognised by
ShareAction, with BNPP AM retaining the second place for the second
time in a row in its Point of No Returns 2023: Part I – Ranking and General
Findings(7) report.
For the fourth successive yea r, B NPP AM also won the Best ESG(8) Manager
award in Asia during the Best of the Best Awards 2023 and the global ESG
Services prize during the Central banking Awards 2023(9).
BNP PARIBAS REAL ESTATE
With its extensive range of services, and its nearly 4,400 employees,
BNP Paribas Real Estate supports its clients across all stages of the
property life cycle, from building design to everyday management,
through its business lines: Property Development, Transaction, Consulting,
Valuation, Investment Management and Property Management.
This multi-sector offering covers all asset classes: offices, homes,
warehouses, logistics platforms, retail, hotels, serviced residences,
land, etc.
It is proposed based on the needs of clients, whether they are institutional
investors, owners, corporate clients (SMEs, large corporate groups),
public entities, local authorities or individuals.
In commercial real estate, BNP Paribas Real Estate is present in
24 countries, with:
■ its direct offices in eleven European countries, a continent where the
Company is one of the leaders and where its main markets are France,
Germany and the United Kingdom. It is also present in Belgium, Spain,
Ireland, Italy, Luxembourg, the Netherlands, Poland and Portugal;
■ its platforms in Hong Kong (SAR China), Dubai and Singapore to support
local investors in their real estate strategies in Europe;
■ its network of commercial Alliances with local partners in the following
countries (Austria, Greece, Hungary, Jersey, Northern Ireland, Portugal,
Czech Republic, Romania, Slovakia, Switzerland and the United States).
In residential and office property development, BNP Paribas Real Estate
mainly operates in the Paris region and in several major regional cities
such as Bordeaux, Lyon, Marseille and Nice. Internationally, the Company
is present in property development, in Germany, the UK and the Iberian
Peninsula.
In order to constantly improve its services, in 2023, BNP Paribas Real
Estate launched a data visualisation solution – an online platform
that allows customers to explore a 3D map of Europe, using Google's
Photorealistic 3D Tiles technology, enriched with their own real estate
and public data. The power of the solution lies in the cross-referencing
of data which makes it possible to review past changes in cities and
anticipate future changes at the level of a neighbourhood, a city or a
country.
(1) 2nd in Europe for sustainable thematic strategies, according to an analysis made by BNP Paribas Asset Management based on Morningstar data at 31/12/23.
(1) Source: BNP Paribas Asset Management, as at 31 December 2023.
(3) SFDR: Sustainable Finance Disclosure Regulation.
(4) BNP Paribas Asset Management aims to align its current range of labelled funds with the new SRI label specifications.
(5) ETF: Exchange T r aded Fund.
(6) Source: According to an analysis made by BNP Paribas Asset Management based on lists of funds provided by www.lelabelis r.f r, www.towardssustainability.be and Morningstar
data at end of August 2023.
(7) Source: https://shareaction.org/reports/point-of-no-returns-2023-part-i-ranking-and-general-findings.
(8) ESG: Environment, Social, Governance.
(9) https://www.centralbanking.com/awards/7954723/esg-services-bnp-paribas.
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PRESENTATION OF THE BNP PARIBAS GROUP
1
1
Presentation of operating divisions and business lines
In 2023, BNP Paribas Real Estate received several awards, including:
■ four awards for the METAL 57 office building in Boulogne-Billancourt,
notably:
■
the MIPIM Awards category "Best refurbished building" (source:
MIPIM), and
■
the "Tertiary renovation" developer ranking award (source:
Innovapresse);
■ development - 2 silver pyramids for two housing programmes in Lyon
(source: Fédération des Promoteurs);
■ REIM – Prix Victoires des SCPIs pour Access Valeur Pierre, winner in
the Offices category (source: Le Particulier);
■ REIM – Access Valeur Pierre SCPI was ranked 3rd place on the podium
of best SCPI predominantly offices (source: Mieux Vivre Votre Argent);
■ HR: Top Employer France 2023 certification (source: Top Employers
Institute);
■ CSR: Carbon Challenge Trophy (source: CSR News and CSR Challenge
Trophies).
CORPORATE CENTRE
PERSONAL FINANCE'S MORTGAGE BUSINESS
In the context of the Group's 2014-2016 business development plan, Personal Finance's Mortgage Business, a significant portion of which is managed
in run-off, was transferred to "Corporate Centre" as at 1 January 2014.
Universal registration document and annual financial report - BNP PARIBAS
20
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
1.5 BNP Paribas and its shareholders
SHARE CAPITAL
At 31 December 2022, BNP Paribas SA's share capital stood at EUR
2,468,663,292 divided into 1,234,331,646 shares. Details of historical
changes in share capital are provided in chapter 6, note 6a T r ansactions
in share capital.
In 2023, the number of shares comprising the share capital was affected
by the cancellation of 86,854,237 shares following market buybacks:
thus, at 31 December 2023, the share capital of BNP Paribas stood at
EUR 2,294,954,818, divided into 1,147,477,409 shares with a par value
of EUR 2 each.
The shares are all fully paid-up and are held in registered or bearer form
at the choice of their holders, subject to compliance with the relevant
legal provisions. None of the Bank's shares entitles their holders to
an increased dividend or double voting rights or limit the exercise of
voting rights.
CHANGES IN SHARE OWNERSHIP
➤
CHANGES IN THE BANK'S OWNERSHIP STRUCTURE OVER THE LAST TWO YEARS
Dates
31/12/2021
31/12/2022
31/12/2023
Shareholders
Number
of shares
(in millions)
% of
share voting
capital rights
% of
Number
of shares
(in millions)
% of
share voting
capital
% of
rights
Number of
shares
(in millions)
% of
share voting
capital rights
% of
SFPI(1)
96.55(2)
7.8%
7.8%
96.55(2)
7.8%
7.8%
63.22(3)
5.5%
5.5%
Amundi
74.48(4)
6.0%
6.0%
74.00(5)
6.0%
6.0%
61.33(6)
5.4%
5.4%
BlackRock Inc.
74.96(7)
6.1%
6.1%
74.46(8)
6.0%
6.0%
79.34(9)
6.9%
6.9%
Grand Duchy of Luxembourg
12.87
1.0%
1.0%
12.87
1.0%
1.0%
12.87
1.1%
1.1%
Employees
51.32
4.2%
4.2%
52.73
4.3%
4.3%
57.65
5.0%
5.0%
■ of which Group FCPE(10)
39.18
3.2%
3.2%
40.78
3.3%
3.3%
40.83
3.5%
3.5%
■ of which directly held
12.14
1.0%(*)
1.0%(*)
11.95
1.0%(*)
1.0%(*)
16.82
1.5%(*)
1.5%(*)
Corporate officers
0.30
NS
NS
0.30
NS
NS
0.30
NS
NS
Treasury shares(11)
1.28
0.1%
-
1.40
0.1%
-
1.49
0.1%
-
Individual shareholders(12)
48.75
4.0%
4.0%
68.60
5.6%
5.6%
66.52
5.8%
5.9%
Institutional investors(12)
836.26
67.8%
67.9%
853.42
69.2%
69.3%
804.76
70.2%
70.2%
■ European
437.14
35.4%
35.5%
464.59
37.7%
37.7%
431.87
37.7%
37.7%
■ Non-European
399.12
32.4%
32.4%
388.83
31.5%
31.6%
372.89
32.5%
32.5%
Other and unidentified(12)
37.56
3.0%
3.0%
-
-
-
-
-
-
TOTAL
1,234.33
100%
100%
1,234.33
100.0%
100.0%
1,147.48
100.0%
100.0%
(1) Société Fédérale de Participations et d'Investissement: a public-interest limited company (société anonyme) acting on behalf of the Belgian State.
(2) According to the statement by SFPI, AMF Document No. 217C1156 dated 6 June 2017.
(3) According to the statement by SFPI dated 25 May 2023.
(4) According to the statement by Amundi, A.M.F. D ocument No. 222C0046 dated 6 January 2022.
(5) According to the statement by Amundi dated 16 November 2022.
(6) According to the statement by Amundi dated 19 May 2023.
(7) According to the statement by BlackRock dated 30 November 2021.
(8) According to the statement by BlackRock dated 13 September 2022.
(9) According to the statement by BlackRock dated 19 July 2023.
(10) The voting rights of the FCPE (profit-sharing scheme) are exercised, after the decision is taken by the Supervisory Board, by its Chairman.
(11) Excluding trading desks' inventory positions.
(12) Based on analyses from the TPI survey in 2021 and SRD2 surveys in 2022 and 202 3–I nstitutional investors excluding BlackRock and Amundi.
(*) Of which 0.4% for the shares referred to in article L.225-102 of the French Commercial Code to determine the threshold above which the appointment
of a director representing employee shareholders must be proposed.
Universal registration document and annual financial report - BNP PARIBAS
21
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
➤
BNP PARIBAS SHAREHOLDING STRUCTURE
AT 31 DECEMBER 2023 (IN% OF VOTING RIGHTS)
32.5%
Non-European
European
institutional
institutional
investors
investors
5.4%
Amundi
5.5%
1.1%
6.9%
BlackRock
5.9%
Individual shareholders
SFPI
Grand Duchy of Luxembourg
3.5%
Group FCPE
1.5%
Directly held
by employees
37.7%
To the Company's knowledge, there are no shareholders, other than SFPI,
Amundi and BlackRock Inc., who held more than 5% of the share capital
or voting rights as at 31 December 2023.
The Société Fédérale de Participations et d'Investissement (SFPI) became
a shareholder of BNP Paribas on the occasion of the merger with the
Fortis group, which took place in 2009; during the same yea r, i t made two
declarations of threshold crossing to the Autorité des Marchés Financiers
(AMF):
■ on 19 May 2009 (AMF Disclosure No. 209C0702), SFPI disclosed
that its interest in BNP Paribas' capital and voting rights had risen
above the 5% and 10% disclosure thresholds following its transfer
of a 74.94% stake in Fortis Bank SA/NV in return for the issue of
121,218,054 BNP Paribas shares, which at the time represented
9.83% of BNP Paribas' share capital and 11.59% of its voting rights.
The disclosure stated in particular that neither the Belgian government
nor SFPI were considering taking control of BNP Paribas.
At the same time, BNP Paribas notified the AMF (AMF Disclosure
No. 209C0724) that an agreement had been reached between the
Belgian government, SFPI and Fortis SA/NV (renamed Ageas SA/NV at
1
end-April 2010), giving Fortis SA/NV an option to buy the 121,218,054
BNP Paribas shares issued as consideration for SFPI's transfer of its
shares in Fortis Bank, with BNP Paribas having a right of subrogation
regarding the shares concerned;
■ on 4 December 2009 (AMF Disclosure No. 209C1459), SFPI disclosed
that it owned 10.8% of BNP Paribas' share capital and voting rights.
This change resulted mainly from:
■
BNP Paribas' capital increase through the issuance of ordinary
shares in 2009,
■
the capital decrease by the Bank through the cancellation, on
26 November 2009, of preferred shares issued on 31 March 2009
to Société de Prise de Participation de l'État.
On 27 April 2013, the Belgian government announced the buy-back via
SFPI of the purchase option that had been granted to Ageas.
On 6 June 2017 (AMF Disclosure No. 217C1156), SFPI disclosed that it
owned 7.74% of the share capital and voting rights of BNP Paribas; this
drop below the 10% capital and voting rights thresholds resulted from the
sale of shares on the market. Since that date, SFPI has disclosed statutory
threshold crossings without crossing legal thresholds.
On 9 May 2017 (AMF Disclosure No. 217C0939), BlackRock Inc. disclosed
that its interest in BNP Paribas' capital and voting rights had risen,
as at 8 May 2017 above the 5% disclosure thresholds. On this date,
BlackRock Inc. held 63,223,149 BNP Paribas shares on behalf of its clients
and the funds it manages.
On 18 June 2019 (AMF Disclosure No. 219C0988), BlackRock Inc. stated
that it held 62,764,366 BNP Paribas shares. Since that date, BlackRock Inc.
has disclosed statutory threshold crossings without crossing legal
thresholds.
On 6 January 2022 (AMF Disclosure No. 222C0046), Amundi, acting on
behalf of the funds it manages, disclosed that its interest in BNP Paribas'
capital and voting rights had risen above the 5% legal thresholds on
31 December 2021 and that it held 74,482,498 BNP Paribas shares. Since
that date, Amundi has disclosed statutory threshold crossings without
crossing legal thresholds.
Universal registration document and annual financial report - BNP PARIBAS
22
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
LISTING INFORMATION
When the shareholders of BNP and Paribas approved the merger between
the two banks at the Shareholders' Combined General Meeting of 23 May
2000, BNP shares became BNP Paribas shares. The Euroclear-France
code for BNP Paribas is the same as the previous BNP code (13110).
Since 30 June 2003, BNP Paribas shares have been registered under ISIN
code FR0000131104. To help increase the number of shares held by
individual shareholders, BNP Paribas carried out a two-for-one share
split on 20 February 2002, reducing the par value of the shares to EUR 2.
BNP shares were first listed on the Cash Settlement Market of the Paris
Stock Exchange on 18 October 1993, following privatisation, before
being transferred to the Monthly Settlement Market on 25 October of
that yea r. W hen the monthly settlement system was discontinued on
25 September 2000, BNP Paribas shares became eligible for Euronext's
Deferred Settlement Service (SRD).
Since privatisation, a Level 1 144A ADR (American Depositary Receipt)
programme has been active in the United States, where JP Morgan Chase
is the depositary bank (two ADRs correspond to one BNP Paribas share).
The ADRs have been traded on OTCQX International Premier since 14 July
2010 in order to provide better liquidity and visibility to US investors.
BNP Paribas has been part of the CAC 40 index since 17 November
1993 and became part of the EURO STOXX 50 index on 1 November
1999. Since 18 September 2000, it has been part of the STOXX 50 index.
BNP Paribas also joined the DJ Banks Titans 30 Index, an index comprising
the 30 largest banks worldwide. It is also included in the EURO STOXX
Banks and STOXX Banks indices. BNP Paribas shares are also included in
the main Sustainable Development benchmarks (see chapter 7), including
Vigeo Euronext indices (World 120, Europe 120, Euro 120 and France 20),
FTSE4Good Index Series, Dow Jones Sustainability World & Europe Indices
and STOXX Global ESG Leaders Index.
All of these elements foster liquidity and share price appreciation, as the
BNP Paribas share is necessarily a component of every portfolio and fund
that tracks the performance of these indexes.
➤
BNP PARIBAS SHARE PRICE PERFORMANCE BETWEEN 31 DECEMBER 2020 AND 31 DECEMBER 2023
➤ Comparison with the EURO STOXX Banks, STOXX Banks and CAC 40 indexes (rebased on share price)
Euros
30
40
50
60
70
BNP PARIBAS
STOXX BANKS
CAC 40
EURO STOXX BANKS
Source: Bloomberg
In the three-year period from 31 December 2020 to 31 December 2023,
BNP Paribas' share price increased by 45.2% from EUR 43.11 to EUR 62.59,
outperforming the CAC 40 (+35.9%), but underperforming Eurozone banks
(Euro STOXX Banks: +60.4%) and European banks (STOXX Banks: +56.1%).
Over this period, European banking stocks were initially supported by
the good performance of banking institutions and the outlook for a post-
covid-19 economic recovery. This dynamic was halted from the end of
February 2022 by the consequences of the invasion of Ukraine. Eurozone
institutions subsequently benefited from the interest rate hike, but the
rise in equity prices was contained by central bank actions against
inflation and fears of an economic slowdown; the influence of these
factors eased at the end of 2023.
Universal registration document and annual financial report - BNP PARIBAS
23
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
BNP Paribas and its shareholders
➤
BNP PARIBAS MONTHLY AVERAGES AND HIGH AND LOW MONTHLY CLOSING PRICES SINCE JANUARY 2022
63.99
62.15
59.57
50.95
49.73
52.02
49.22
44.02
47.83
47.35
45.29
51.67
52.98
56.94
57.92
57.32
56.32
57.57
58.90
60.16
57.42
56.34
61.55
60
70
63.99
80
Highest
Lowest
50
40
30
22
10
0
Average
Source: Bloomberg.
■ At 31 December 2023, BNP Paribas' market capitalisation was EUR 71.82 billion, ranking the Enterprise 10th among CAC 40 stocks; BNP Paribas' free
float also put the bank in 9th place on the Paris market index and in 14th place in the EURO STOXX 50 index.
■ Daily trading volume on Euronext Paris averaged 3,257,629 shares in 2023, down 10.6% from the previous year (3,642,664 shares per trading session
in 2022). Including the volumes traded on multilateral trading facilities (MTFs), daily trading volume in 2023 averaged 7,562,994 shares, down 5.0%
(7,961,426 shares traded daily in 2022).
➤
TRADING VOLUME ON EURONEXT PARIS IN 2023 (DAILY AVERAGE)
155.7
160.8
189.9
198.0
345.5
215.1
192.0
157.9
180.1
170.9
123.0
171.3
Source: Euronext.
In millions of euros
In thousands of shares
January
February
March
April
May
June
July
August
September
October
November December
Universal registration document and annual financial report - BNP PARIBAS
24
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
➤
TOTAL TRADING VOLUME ON EURONEXT PARIS AND MTFS IN 2023 (DAILY AVERAGE)
352.8
424.0
936.2
479.9
605.3
449.7
339.3
305.2
287.3
366.1
384.2
368.3
In millions of euros
In thousands of shares
January
February
March
April
May
June
July
August
September
October
November December
Source: Bloomberg Composite EU Quote BNP P.
SHAREHOLDER DASHBOARD
(in euros)
2019
2020
2021
2022
2023
Net income attributable to the shareholders per share(1)
6.21
5.31
7.26
7.80
9.21
Net book value per share(2)
79.0
82.3
88.0
89.0
96.0
Net dividend per share
0.0(3)
2.66(4)
3.67(6)
3.90(7)
4.60(8)
Cash pay-out ratio (%)(9)
0.0(3)
50.00(5)
50.00(6)
50.00(7)
50.00(8)
Share price
Highest(10)
53.81
54.22
62.55
68.07
67.02
Lowest(10)
38.14
24.51
39.71
40.67
47.02
Year-end
52.83
43.105
60.77
53.25
62.59
CAC 40 index on 31 December
5,978.06
5,551.41
7,153.03
6,473.76
7,543.18
(1) Based on the average number of shares outstanding during the yea r. C alculated in 2023 on the basis of the distributable 2023 earnings and the
number of shares outstanding at year-end.
(2) Before distribution. Revalued net book value based on the number of shares outstanding at year-end 2023, net earnings per share calculated on a
number of shares outstanding at year-end.
(3) Following ECB/2020/19 recommendation of the European Central Bank of 27 March 2020 on dividend distribution policies during the Covid-19 pandemic,
the distribution of EUR 3.10 per share initially proposed to the Annual General Meeting of 19 May 2020, was appropriated to "Other reserves".
(4) EUR 1.11 distributed following the approval of the Shareholders' Combined General Meeting of 18 May 2021, plus EUR 1.55 distributed following the
approval of the Ordinary Annual General Meeting of 24 September 2021; taking into account only the distribution of the 2020 dividend.
(5) T a king into account only the distribution of the 2020 dividend.
(6) T a king into account only the distribution of the 2021 dividend and not taking into account the EUR 900 million share buyback programme, executed
between 1 November 2021 and 6 December 2021.
(7) T a king into account only the distribution of the 2022 dividend and not taking into account the EUR 962 million share buyback programme in respect of
the so-called "ordinary" distribution.
(8) Subject to approval by the Annual General Meeting of 14 May 2024 and not taking into account the EUR 1.05 billion share buyback programme
planned for 2024.
(9) Cash dividend distribution recommended at the Annual General Meeting expressed as a percentage of distributable net income attributable to
shareholders.
(10) Recorded intra-day during trading session.
Universal registration document and annual financial report - BNP PARIBAS
25
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
BNP Paribas and its shareholders
CREATING VALUE FOR SHAREHOLDERS
TOTAL SHAREHOLDER RETURN (TSR)
Calculation parameters
■ Dividends are reinvested in BNP shares then in BNP Paribas shares;
50% tax credit was included until this system was abolished at the
beginning of 2005.
■ Exercise of preferential subscription rights during the rights issues of
March 2006 and October 2009.
■ Returns stated are gross, i.e. before any tax payments or brokerage
fees.
Calculation results
The following table indicates, for various periods ending on 31 December
2023, the total return on a BNP share, then on a BNP Paribas share, as
well as the effective annual rate of return.
Holding period
Investment date
Share price at the
investment date
(in euros)
Number of shares
at the end of the
calculation period
Initial
multiplied by
investment Effective annual rate
of return
Since privatisation of BNP
18/10/1993
36.59
6.8229
11.6710
8.47%
30 years
03/01/1994
43.31
6.2129
8.9786
7.59%
25 years
04/01/1999
73.05
5.5023
4.7144
6.40%
Since the creation of BNP Paribas
01/09/1999
72.70
5.3533
4.6088
6.48%
21 years
02/01/2003
39.41
2.4382
3.8722
6.66%
20 years
02/01/2004
49.70
2.3450
2.9532
5.56%
18 years
02/01/2006
68.45
2.1686
1.9829
3.88%
15 years
02/01/2009
30.50
1.9106
3.9209
9.53%
12 years
02/01/2012
30.45
1.6976
3.4894
10.97%
10 years
02/01/2014
56.70
1.5738
1.7373
5.68%
7 years
02/01/2017
60.12
1.4202
1.4785
5.75%
6 years
02/01/2018
62.68
1.3626
1.3606
5.27%
5 years
02/01/2019
38.73
1.2913
2.0868
15.86%
4 years
02/01/2020
53.20
1.2019
1.4140
9.05%
3 years
04/01/2021
43.86
1.2019
1.7151
19.78%
2 years
03/01/2022
61.11
1.1451
1.1728
8.33%
1 year
02/01/2023
53.91
1.0696
1.2418
24.33%
Universal registration document and annual financial report - BNP PARIBAS
26
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
COMMUNICATION WITH SHAREHOLDERS
BNP Paribas endeavours to provide all shareholders with clea r, c onsistent,
high-quality information at regular intervals, in accordance with best
market practice and the recommendations of stock market authorities.
The Investor Relations team informs institutional investors and financial
analysts about the Group's strategy, major events concerning the Group's
business and the Group's quarterly results.
In 2024, the timetable is as follows(1):
:
■ 1 February 2024: publication of 2023 full-year results;
■ 25 April 2024: publication of the first quarter 2024 results;
■ 24 July 2024: publication of the second quarter and first half 2024
results;
■ 31 October 2024: publication of the third quarter and the first nine
months 2024 results.
Informative briefings are organised several times a year for all market
participants, in particular when the annual and half-year results are
released, or on specific topics, providing General Management with an
opportunity to present the BNP Paribas Group and its strategy. More
specifically, an Investor Relations Officer is responsible for liaising with
managers of ethical and socially responsible funds.
The Shareholder Relations team provides information and deals with
queries from the Bank's 301,200 individual shareholders (internal sources
and SRD2 Survey at 31 December 2023). Twice a yea r, s hareholders
receive a financial newsletter outlining the Group's main developments,
and the minutes of the Annual General Meeting are sent in early July.
During the yea r, s hareholders are invited to meetings in various French
cities where the Company's achievements and strategy are presented
by Executive Management (in 2023, for example, in Bordeaux on 31 May
and Marseille on 12 September). Lastly, BNP Paribas representatives
were able to interact directly with nearly 400 people during the "Investir
Day" fair held in Paris on 28 November 2023.
The members of the Cercle des actionnaires de BNP Paribas (BNP Paribas
Shareholders' Club), set up in 1995, are the 57,700 shareholders holding
at least 200 shares. They receive the financial newsletters each half-year
and the minutes of the Annual General Meeting. They also receive regular
e-mails informing them of new events on the Cercle des actionnaires
(Shareholders' Club) website (www.cercle-actionnaires.bnpparibas),
which also features all the available propositions. Each Club member
has a personal and secure access to manage his/her registrations and
retrieve his/her invitations.
In 2023, the Club offered more than 300 face-to-face event s–g uided
tours, concerts, performing arts shows, film screenings, etc. –a nd
videoconferences, podcasts (interviews with historians, speakers, artists,
etc.). In addition, the site's Magazine pages contain articles related to the
programming and BNP Paribas Group's commitments.
A French toll-free phone number has also been made available,
0800 666 777; it provides the market price and allows members to leave
a voice message for the Club team. Messages can also be sent by email
to cercle.actionnaires@bnpparibas.com.
The BNP P aribas website (https://invest.bnpparibas/), available in French
and English, offers users access to all information on the BNP Paribas
Group (including press releases, key figures, coverage of the main events,
etc.). All documents such as Integrated reports and Reference documents
or Universal registration documents, can also be viewed and downloaded.
The financial calendar gives the dates of important forthcoming
events, such as the Annual General Meeting, results announcements
and shareholder seminars. The website also features the latest share
performance data and comparisons with major indexes, as well as a tool
for calculating performance.
Reports and presentations relating to BNP Paribas' business and
strategy aimed at all audiences (institutional investors, asset managers
and financial analysts) are also available. The Individual shareholder
section shows information and features specifically designed for retail
shareholders, in particula r, a ccess to information such as proposed
events.
A section dedicated to Social and Environmental Responsibility describes
the Bank's goals, the policy followed and the main achievements in this
area.
In addition, there is a specific section dedicated to the Annual General
Meeting which includes information regarding attendance at the meeting,
ways to vote and practical matters, as well as a presentation of the
resolutions and the complete text of all speeches made by corporate
officers. Webcasts of the Annual General Meeting can be viewed on the
Bank's website.
In response to the expectations of individual shareholders and investors,
and to meet strict regulatory transparency and disclosure requirements,
BNP Paribas regularly adds sections to its website and improves existing
sections with enhanced content and new functions.
(1) Subject to change at a later date.
Universal registration document and annual financial report - BNP PARIBAS
27
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
BNP Paribas and its shareholders
SHAREHOLDER LIAISON COMMITTEE
After its formation in 2000, BNP Paribas decided to create a Shareholder
Liaison Committee to help the Group improve communications with its
retail shareholders. At the Annual General Meeting that approved the
merger between BNP and Paribas, the Chairman of BNP Paribas initiated
the process of appointing members to this Committee, which was fully
established in late 2000.
Chaired by Jean Lemierre, it includes ten shareholders who are
both geographically and socio-professionally representative of the
retail shareholder population, along with two employees or former
employees. Each member serves a three-year term. When their terms
expire, announcements are published in the Group's various financial
publications; any shareholder may apply.
At end 2023, the Liaison Committee was composed of:
■ Mr Jean Lemierre, Chairman;
■ Mr Jean-Louis Busière, residing in the Moselle Department;
■ Mr Michel Cassou, residing in the T a rn Department;
■ Mr Jean-Marc Cornie r, r esiding in Meudon;
■ Mr Patrick Cunin, residing in the Essonne Department;
■ Ms Catherine Drolc, residing in Montpellier;
■ Ms Anne Doris Dupuy, residing in the Gironde Department;
■ Mr Jean-Marie Lapoirie, residing in the Rhône Department;
■ Mr Jacques Martin, residing in the Alpes-Maritimes Department;
■ Ms Françoise Rey, residing in Paris;
■ Mr Jean-Jacques Richard, residing in Toulon;
■ Mr Ugo Cuccagna, BNP Paribas employee;
■ Ms Christine Valence, BNP Paribas employee.
In accordance with the provisions of the Charte r, t o which all participants
have adhered and which serves as the Internal Rules, the members of
the Committee met twice in 2023, on 16 May (after the Annual General
Meeting) and 22 Septembe r.
The main topics of discussion in 2023 included:
■ BNP Paribas' capital structure and changes therein, particularly among
"retail shareholders";
■ the draft 2022 Universal registration document, and specifically, the
chapters on Shareholder Relations, Corporate governance and Social
and Environmental Responsibility;
■ the Integrated Report;
■ the quarterly, half-yearly and annual results;
■ the initiatives taken in preparation for the Annual General Meeting,
including its organisation;
■ proposals for resolutions at the AGM;
■ the presentation of the economic outlook and environment;
■ the geopolitical situation;
■ presentation of ALM (Asset & Liability Management) Treasury activities.
DIVIDEND
At the Annual General Meeting of 14 May 2024, the Board of directors
will propose a dividend of EUR 4.60 per share (up by 17.9% compared
to EUR 3.90 distributed in 2023). The ex-dividend date and the payment
of the coupon would then take place on 21 May and 23 May 2024
respectively in the event of a positive vote by the AGM.
The total amount of the proposed cash distribution amounts to
EUR 5,278 million, compared to a total of EUR 4,814 million in cash
distributed in 2023.
Universal registration document and annual financial report - BNP PARIBAS
28
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
➤
CHANGE IN DIVIDEND (in euros per share)
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2.10
1.20
1.50
1.50
1.50
1.50
2.31
2.70
2.66
3.02
3.02
3.10
0.00*
3.67
3.90
4.60**
(*) Following the recommendation BCE/2020/19 of the European Central Bank of 27 March 2020 on dividend distribution policies during the Covid-19
pandemic, the amounts corresponding to the dividend distribution initially proposed to the Annual General Meeting of 19 May 2020, of a dividend of
EUR 3.10 per share, were allocated to the "Other reserves" item.
(**) Subject to approval at the Annual General Meeting of 14 May 2024.
Limitation period for dividends: any dividend unclaimed five years after its due date is forfeited, as provided by law. Dividends for which payment has
not been sought are paid to the Public Treasury.
BNP PARIBAS REGISTERED SHARES
At 31 December 2023, 23,370 shareholders held BNP Paribas registered
shares.
REGISTERED SHARES HELD DIRECT L Y W ITH
BNP PARIBAS
Shareholders who hold registered shares directly with BNP Paribas:
■ automatically receive all documents regarding the Bank that are sent
to shareholders;
■ can call a French toll-free phone number: 0800 600 700 to place buy
and sell orders(1) and to obtain any information;
■ benefit from preferential brokerage rates;
■ have access to "Planetshares" (planetshares.uptevia.pro.fr), a fully
secure dedicated web serve r, a llowing them to view their BNP Paribas
registered share accounts and account movements, as well as place
and track orders(1); this server is also available on tablets and
smartphones;
■ are automatically invited to Annual General Meetings without the need
for an ownership certificate;
■ may receive notice of Annual General Meetings online;
■ pay no custody fees.
Registered shares held directly with BNP Paribas cannot be registered
in a PEA (Share Savings Plan), given the regulations and procedures
applicable to this vehicle. Investors whose shares are held in a PEA and
who want to hold them in "registered" form can opt to hold them in an
administered account (see below).
REGISTERED SHARES HELD IN AN
ADMINISTERED ACCOUNT
BNP Paribas is also extending its administered share account services
to institutional shareholders. For institutional shareholders, this type of
account combines the main benefits of holding shares in bearer form with
those of holding registered shares directly with BNP Paribas:
■ shares can be traded at any time, through the shareholder's usual
broker;
■ the shareholder can have a single share account, combined with a
cash account;
■ the shareholder is automatically invited to attend and vote at Annual
General Meetings, without the invitation being sent through a third
party;
■ shareholders may receive notice of meetings and vote at Annual
General Meetings online.
(1) Subject to prior signature of a "brokerage services agreement" (free of charge).
Universal registration document and annual financial report - BNP PARIBAS
29
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
BNP Paribas and its shareholders
SHAREHOLDERS' ANNUAL GENERAL MEETING
The procedures for BNP Paribas' Annual General Meetings are defined in
article 18 of the Bank's Articles of association.
The Board of directors calls an Ordinary General Meeting at least once
a year to vote on the agenda set by the Board.
The Board may call Extraordinary General Meeting for the purpose of
amending the Articles of association, and especially to increase the
Bank's share capital. Resolutions are adopted by a two-third majority of
shareholders present or represented.
The Shareholders' Combined General Meeting may be called in a single
notice of meeting and held on the same date.
The Bank's last Shareholders' Combined General Meeting took place on
16 May 2023 on first notice. The text of the resolutions and the video
of the meeting can be viewed on the BNP Paribas website, where the
original live webcast was shown. The composition of the quorum and
the results of the votes cast on resolutions were posted online the day
after the meeting. A specific letter to shareholders included the minutes
of this meeting.
The quorum broke down as follows:
➤
BREAKDOWN OF QUORUM
Number of
shareholders
(%)
Equities
(%)
Present
889
4.64%
675,675
0.08%
Appointment of proxy
515
2.69%
12,998,276
1.46%
Proxy given to Chairman
7,364
38.40%
3,087,645
0.35%
Postal votes
10,408
54.28%
876,106,194
98.12%
TOTAL
19,176
100.00%
892,867,790
100.00%
of which online
17,349
90.47%
741,454,677
83.04%
Quorum
Number of ordinary shares (excluding treasury stock)
1,218,504,698
73.28%
Of the 17,349 shareholders who took part in our last Shareholders' Combined General Meeting online:
■ 565 had requested an admission card;
■ 6,441 had given the Chairman a proxy;
■ 508 had given a proxy to a third party (who legally must also be a shareholder);
■ 9,835 had voted by post.
All resolutions proposed to the shareholders were approved.
Universal registration document and annual financial report - BNP PARIBAS
30
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
BNP Paribas and its shareholders
➤
SHAREHOLDERS' COMBINED GENERAL MEETING OF 16 MAY 2023
Results
Rate of
approval
ORDINARY MEETING
First resolution: approval of the parent company financial statements for 2022
99.87%
Second resolution: approval of the consolidated financial statements for 2022
99.95%
Third resolution: appropriation of net income for the 2022 financial year and distribution of dividends
99.92%
Fourth resolution: agreements and commitments referred to in articles L.225-38 et seq.of the French Commercial Code
99.48%
Fifth resolution: authorisation for BNP Paribas to buy back its own shares
98.77%
Sixth resolution: renewal of the term of office of Mr Jean Lemierre as a director
97.27%
Seventh resolution: renewal of the term of office of Mr Jacques Aschenbroich as a director
97.14%
Eighth resolution: renewal of the term of office of Ms Monique Cohen as a director
97.91%
Ninth resolution: renewal of the term of office of Ms Daniela Schwarzer as a director
99.43%
Tenth resolution: vote on the components of the compensation policy attributable to directors
99.75%
Eleventh resolution: vote on the components of the compensation policy attributable to the Chairman of the Board of directors
96.71%
Twelfth resolution: vote on the components of the compensation policy attributable to the Chief Executive Officer and to the Chief
Operating Officers
87.75%
Thirteenth resolution: vote on disclosures relating to compensation paid in 2022 or awarded in respect of 2022 to all directors
and corporate officers
96.96%
Fourteenth resolution: vote on the components of the compensation paid or granted in respect of 2022 to Mr Jean Lemierre,
Chairman of the Board of directors
96.86%
Fifteenth resolution: vote on the components of the compensation paid or granted in respect of 2022 to Mr Jean-Laurent Bonnafé,
Chief Executive Officer
90.63%
Sixteenth resolution: vote on the components of the compensation paid or granted in respect of 2022 to Mr Yann Gérardin, Chief
Operating Officer
94.60%
Seventeenth resolution: vote on the components of remuneration paid or granted in 2022 to Mr Thierry Laborde, Chief Operating
Officer
96.20%
Eighteenth resolution: advisory vote on the overall amount of compensation of any kind paid during 2022 to Executive Officers
and certain categories of staff
99.29%
EXTRAORDINARY MEETING
Nineteenth resolution: Delegation to be granted to the Board of directors to increase the share capital without preferential
subscription rights, through the issue of super-subordinated contingent convertible bonds that would not be converted into
shares, up to a limit of 10% of the share capital, if the CET1 ratio becomes equal to or falls below 5.125%
97.06%
Twentieth resolution: transactions reserved for members of the BNP Paribas Group Company Savings Plan, with cancellation
of preferential subscription rights
98.86%
Twenty-first resolution: authorisation to reduce the share capital by cancelling shares
99.78%
Twenty-second resolution: amendment of the Articles of association relating to the age limit of the Chairman
97.82%
Twenty-third resolution: powers for formalities
99.99%
Universal registration document and annual financial report - BNP PARIBAS
31
PRESENTATION OF THE BNP PARIBAS GROUP
1
1
BNP Paribas and its shareholders
NOTICES OF MEETING
BNP Paribas will hold its next shareholders' Combined General Meeting
on 14 May 2024(1).
The meeting notices and invitations are available on the
invest.bnpparibas.com website in French and English from the
time of their publication in the French Bulletin of Compulsory Legal
Announcements (BALO). Staff at all BNP Paribas branches are specifically
trained to provide the necessary assistance and carry out the required
formalities.
Holders of registered shares are automatically notified, regardless of the
number of shares held, with a complete notice of meeting containing
in particular the agenda, the draft resolutions and a voting form.
A significant and fast-growing proportion (20.4% for the AGM of 16 May
2023, compared to 19.6% for the AGM of 2022) of notices of meeting to
registered shareholders were sent via the internet after the shareholders
concerned had given their prior agreement to this information procedure.
BNP Paribas informs holders of bearer shares via the internet regardless
of the number of shares held, subject to their custodians being part of
the market system known as Votaccess. Shareholders notified of the
Annual General Meeting may take part quickly and easily. The Bank also
provides custodians with notices of meetings and printed postal voting
forms, which can then be sent to those shareholders who request them.
ATTENDANCE AT MEETINGS
Holders of shares may gain admittance to a General Meeting provided
these shares are recorded in their accounts two trading days before the
Meeting. Holders of bearer shares must also present an entry card or
certificate proving their ownership of the shares.
VOTING
Using the internet voting platform gives shareholders access to the notice
of the Annual General Meeting. They can then either vote or appoint a
proxy, or print their admission card if they wish to attend the Annual
General Meeting in person.
More than 90% of shareholders who took part in the vote in May 2023
used the platform set up, a proportion that has risen sharply compared
to the nearly 85% recorded in 2022.
Shareholders not using the online platform return the printed form
enclosed with the notice of meeting to BNP Paribas. Before the Annual
General Meeting, this document may be used to:
■ request an admission card;
■ vote by post;
■ give proxy to another individual or legal entity; or
■ give proxy to the Chairman of the meeting.
(1) Subject to change at a later date.
DISCLOSURE THRESHOLDS
In addition to the legal thresholds, and in accordance with article 5 of
the Articles of association, any shareholde r, w hether acting alone or
in concert, who owns or may hold directly or indirectly at least 0.5%
of the capital or voting rights of BNP Paribas, or any multiple of that
percentage up to 5%, is required to notify BNP Paribas by registered
letter with return receipt.
Once the 5% threshold is reached, shareholders are required to disclose
any increase in their interest representing a multiple of 1% of the share
capital or voting rights of BNP Paribas.
The disclosures described in the previous two paragraphs shall also apply
when the shareholding falls below the above-mentioned thresholds.
In the case of failure to comply with these disclosure requirements, either
legal or statutory, the undisclosed shares will be stripped of voting rights
at the request of one or more shareholders who hold a combined interest
of at least 2% of the share capital or voting rights of BNP Paribas.
Universal registration document and annual financial report - BNP PARIBAS
32
1
PRESENTATION OF THE BNP PARIBAS GROUP
1
2
2023 Universal registration document and annual financial report - BNP PARIBAS
33
CORPORATE GOVERNANCE
AND INTERNAL CONTROL
2.1
Report on Corporate governance
34
2.1.1 Presentation of directors and corporate officers
35
Schedule of the terms of the directorships of company directors
47
Other corporate officers
48
2.1.2 BNP Paribas Corporate governance
49
Internal Rules of the Board of directors
65
Guidelines on the assessment of the suitability of Members of the management body
and Key function holders
73
Description of the implementation procedure for conflicts of interest in relation to
loans and other transactions granted to the members of the management body and
their related parties
78
2.1.3 Compensation and benefits awarded to the Group's directors and corporate officers 79
2.1.4 Other information
107
2.2
Statutory Auditors' report
111
2.3
The Executive Committee
111
2.4
Internal control
112
Internal control procedures relating to the preparation and processing of financial
information
122
2023 Universal registration document and annual financial report - BNP PARIBAS
34
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
Report on Corporate governance
2.1 Report on Corporate governance
This Corporate governance report was prepared by the Board of directors
in accordance with the last paragraph of article L.225-37 of the French
Commercial Code.
The information contained herein notably takes into account annex 1
of the Commission Delegated Regulation (EU) 2019/980 of 14 March
2
2019, AMF Recommendation No. 2012-02(1) amended on 28 July 2023,
the 2023 AMF(2) report and the November 2023 Annual Report of the High
Committee for Corporate governance (Haut Comité de Gouvernement
d'Entreprise – HCGE).
(1) AMF recommendation No. 2012-02 – Corporate governance and executive compensation in companies referring to the Corporate Governance Code of Listed Companies (Afep-MEDEF
Code) – Consolidated presentation of the recommendations contained in the Annual Reports of the AM F.
(2) 2023 AMF report on Corporate governance and executive compensation of listed companies (December 2023).
2023 Universal registration document and annual financial report - BNP PARIBAS
35
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
2.1.1 PRESENTATION OF DIRECTORS AND CORPORATE OFFICERS
➤
COMPOSITION OF THE BOARD OF DIRECTORS IN 2023
Jean LEMIERRE
Principal function: Chairman of the Board of directors of BNP Paribas
2
Date of birth: 6 June 1950
Nationality: French
T e rm start and end dates: 16 May 2023 – 2026 AGM
Date first appointed to the Board of directors: 1 December 2014 ratified
by the Annual General Meeting of 13 May 2015
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*) Chairman of the Board of directors
TEB Holding AS, director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
TotalEnergies(*), director
Participation(1) in specialised committees of French or foreign companies
TotalEnergies, member of the Corporate Governance and Ethics
Committee and member of the Strategy & CSR Committee
Others(1)
Centre d'Études Prospectives et d'Informations Internationales
(CEPII), Chairman
Paris Europlace, Vice-Chairman
Association française des entreprises privées (Afep), member of the
Board of directors
Institut de la Finance durable (IFD), member of the Board of directors
Institute of International Finance (IIF), member
International Advisory Council of China Development Bank (CDB),
member
International Advisory Council of China Investment Corporation (CIC),
member
International Advisory Panel (IAP) of the Monetary Authority
of Singapore (MAS), member
Number of BNP Paribas shares held(1): 41,341(2)
Business address: 16 boulevard des Italiens
75009 PARIS
FRANCE
Education
Graduate of the Institut d'Études Politiques de Paris
Graduate of École Nationale d'A dministration
Law degree
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chairman of the Board of
directors: BNP Paribas
Director: TEB Holding AS,
TotalEnergies SA
Chairman: Centre d'Études
Prospectives et d'Informations
Internationales (CEPII)
Vice-Chairman: Paris Europlace
Member:Board of directors of
the Association française des
entreprises privées (Afep), Board
of directors of the Institut de la
Financial durable (IFD), Institute
of International Finance (IIF),
International Advisory Council of
China Development Bank (CDB),
International Advisory Council
of China Investment Corporation
(CIC), International Advisory Panel
(IAP) of the Monetary Authority of
Singapore (MAS)
Chairman of the Board of
directors: BNP Paribas
Director:TEB Holding AS,
TotalEnergies SA
Chairman: Centre d'Études
Prospectives et d'Informations
Internationales (CEPII)
Vice-Chairman: Paris Europlace
Member:Board of directors
of the Association française
des entreprises privées (Afep),
Institute of International
Finance (IIF), Orange
International Advisory Board,
International Advisory Council
of China Development Bank
(CDB), International Advisory
Council of China Investment
Corporation (CIC), International
Advisory Panel (IAP) of
the Monetary Authority of
Singapore (MAS)
2020:
Chairman of the Board of
directors: BNP Paribas
Director:TEB Holding AS,
Total SA
Chairman: Centre d'Études
Prospectives et d'Informations
Internationales (CEPII)
Vice-Chairman: Paris Europlace
Member:Board of directors
of the Association française
des entreprises privées (Afep),
Institute of International
Finance (IIF), Orange
International Advisory Board,
International Advisory Council
of China Development Bank
(CDB), International Advisory
Council of China Investment
Corporation (CIC), International
Advisory Panel (IAP) of
the Monetary Authority of
Singapore (MAS)
2019:
Chairman of the Board of
directors: BNP Paribas
Director:TEB Holding AS,
Total SA
Chairman: Centre d'Études
Prospectives et d'Informations
Internationales (CEPII)
Vice-Chairman: Paris Europlace
Member:Board of directors
of the Association française
des entreprises privées (Afep),
Institute of International
Finance (IIF), Orange
International Advisory Board,
International Advisory Council
of China Development Bank
(CDB), International Advisory
Council of China Investment
Corporation (CIC), International
Advisory Panel (IAP) of
the Monetary Authority of
Singapore (MAS)
(1) At 31 December 2023.
(2) Including 1,515 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
36
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Jean-Laurent BONNAFÉ
Principal function: Director and Chief Executive Officer of BNP Paribas
Date of birth: 14 July 1961
Nationality: French
T e rm start and end dates: 17 May 2022 – 2025 AGM
Date first appointed to the Board of directors: 12 May 2010
Offices(1) held in listed or unlisted companies of the BNP Paribas Group, in
France or abroad
BNP Paribas(*), Director and Chief Executive Officer
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
Pierre Fabre Group:
Pierre Fabre SA, director
Pierre Fabre Participations, director
Participation(1) in specialised committees of French or foreign companies
Pierre Fabre SA, member of the Strategic Committee
Others(1)
Association Française des Banques (AFB), Chairman
Fédération Bancaire Française (FBF), member of the Executive
Committee
Association pour le Rayonnement de l'Opéra de Paris, Chairman
Entreprises pour l'Environnement, Vice-Chairman
La France S'engage Foundation, member of the Board of directors
Number of BNP Paribas shares held(1): 111,588(2)
Business address: 16 boulevard des Italiens
75009 PARIS
FRANCE
Education
Graduate of the École Polytechnique
Ingénieur en chef des Mines
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director and Chief Executive
Officer:BNP Paribas
Chairman: Association Française
des Banques (AFB), Association
pour le Rayonnement de l'Opéra
de Paris
Vice-Chairman: Entreprises pour
l'Environnement
Director:
Pierre Fabre Group
Member:Executive Committee
of the Fédération Bancaire
Française (FBF), Board of
directors of the Bank Policy
Institute, Board of directors of La
France S'engage Foundation
Director and Chief Executive
Officer:BNP Paribas
Chairman: Association pour
le Rayonnement de l'Opéra
de Paris, Entreprise pour
l'Environnement
Director:
Pierre Fabre SA
Vice-Chairman of the
Executive Committee:
Fédération Bancaire Française
(FBF)
Member:Board of directors of
La France S'engage Foundation
2020:
Director and Chief Executive
Officer:BNP Paribas
Chairman: Association pour
le Rayonnement de l'Opéra
de Paris, Entreprise pour
l'Environnement
Director:
Pierre Fabre SA
Member of the Executive
Committee: Fédération Bancaire
Française (FBF)
Member:Board of directors of La
France S'engage Foundation
2019:
Director and Chief Executive
Officer:BNP Paribas
Chairman: Association pour
le Rayonnement de l'Opéra
de Paris, Entreprise pour
l'Environnement
Director:Carrefou r, P ierre
Fabre SA
Member of the Executive
Committee: Fédération
Bancaire Française (FBF)
Member:Board of directors of
La France S'engage Foundation
(1) At 31 December 2023.
(2) Includes 30,213 BNP Paribas shares held as units in the shareholders' fund under the Company Savings Plan.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
37
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
Jacques ASCHENBROICH
Principal function: Chairman of the Board of directors of Orange
Date of birth: 3 June 1954
Nationality: French
T e rm start and end dates: 16 May 2023 – 2026 AGM
Date first appointed to the Board of directors: 23 May 2017
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held under the principal function
Orange(*), Chairman of the Board of directors
Other offices(1) held in listed or unlisted companies outside the
BNP Paribas Group, in France or abroad
TotalEnergies(*), lead director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, Chairman of the Corporate Governance, Ethics,
Nominations and CSR Committee and member of the Financial
Statements Committee
TotalEnergies, Chairman of the Corporate Governance and Ethics
Committee and member of the Remuneration Committee and Strategy
& CSR Committee
Others(1)
École Nationale Supérieure Mines ParisTech, Chairman of the Board
of directors
Club d'affaires franco-japonais, Co-Chairman
Institut de la Finance durable (IFD), Vice-Chairman
Number of BNP Paribas shares held(1): 1,000
Business address: 111 quai du Président-Roosevelt
92130 ISSY-LES-MOULINEAUX
FRANCE
Education
Graduate of the École des Mines
Corps des Mines
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chairman of the Board of
directors: Orange
Director: BNP Paribas,
TotalEnergies
Chairman: École Nationale
Supérieure Mines ParisTech
Co-Chairman: Club d'affaires
franco-japonais
Member:Board of directors of
the Association française des
entreprises privées (Afep)
Chairman and Chief Executive
Officer:Valeo Group
Director:BNP Paribas,
TotalEnergies
Chairman: École Nationale
Supérieure Mines ParisTech
Co-Chairman: Club d'affaires
franco-japonais
Member:Board of directors of
the Association française des
entreprises privées (Afep)
2020:
Chairman and Chief Executive
Officer:Valeo Group
Director:BNP Paribas, Veolia
Environnement
Chairman: École Nationale
Supérieure Mines ParisTech
Co-Chairman: Club d'affaires
franco-japonais
Member:Board of directors of
the Association française des
entreprises privées (Afep)
2019:
Chairman and Chief Executive
Officer:Valeo Group
Director:BNP Paribas, Veolia
Environnement
Chairman: École Nationale
Supérieure Mines ParisTech
Co-Chairman: Club d'affaires
franco-japonais
Member:Board of directors of
the Association française des
entreprises privées (Afep)
(1) At 31 December 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
38
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Juliette BRISAC
Principal function: Chief Operating Officer of the BNP Paribas Group Company Engagement
Date of birth: 22 May 1964
Nationality: French
T e rm start and end dates: 18 May 2021 – 2024 AGM
Date first appointed to the Board of directors: 18 May 2021
Offices(1) held in listed or unlisted companies of the BNP Paribas Group, in
France or abroad
BNP Paribas(*), director representing employee shareholders
Supervisory Board of the Group profit sharing scheme mutual fund
"BNP Paribas Actionnariat Monde", Chairwoman
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Financial Statements Committee
Number of BNP Paribas shares held(1): 10,469(2)
Business address: Millénaire 4
35 rue de la Gare
75019 PARIS
FRANCE
Education
Master's degree in Economics and DESS in Banking & Finance from
the University of Paris I Panthéon Sorbonne
Graduate of the Institut français des administrateurs (IFA)
Certified auditor of the Cycle des hautes études pour le
développement économique (CHEDE)
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas
Chairwoman: Supervisory
Board of the Group profit
sharing scheme mutual fund
"BNP Paribas Actionnariat
Monde"
Director:BNP Paribas
Chairwoman: Supervisory
Board of the Group profit
sharing scheme mutual fund
"BNP Paribas Actionnariat
Monde"
(1) At 31 December 2023.
(2) Including 5,269 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
39
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
Pierre André de CHALENDAR
Principal function: Chairman of the Board of directors of Compagnie de Saint-Gobain
Date of birth: 12 April 1958
Nationality: French
T e rm start and end dates: 18 May 2021 – 2024 AGM
Date first appointed to the Board of directors: 23 May 2012
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held under the principal function
Compagnie de Saint-Gobain(*), Chairman of the Board of directors
Saint-Gobain Corporation, director
Other offices(1) held in listed or unlisted companies outside the
BNP Paribas Group, in France or abroad
Veolia Environnement(*), director
Bpifrance, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, Chairman of the Remuneration Committee and member
of the Corporate Governance, Ethics, Nominations and CSR Committee
Veolia Environnement, Chairman of the Nominations Committee,
member of the Remuneration Committee and member of the
Corporate Purpose Committee
Bpifrance, Chairman of the Remuneration Committee, Chairman of the
Climate Committee
Others(1)
Institut de l'entreprise, Chairman
Essec, Chairman of the Supervisory Board
La Fabrique de l'Industrie, Co-Chairman
Association française des entreprises privées (Afep), member of the
Board of directors
Number of BNP Paribas shares held(1): 7,000
Business address: Tour Saint-Gobain
12 place de l'Iris
92400 COURBEVOIE
FRANCE
Education
Graduate of École Supérieure des Sciences Économiques
et Commerciales ("Essec")
Graduate of École Nationale d'A dministration
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chairman of the Board of
directors: Compagnie de Saint-
Gobain
Director: BNP Paribas, Veolia
Environnement, Saint-Gobain
Corporation
Chairman: Board of overseers of
Essec
Co-Chairman: La Fabrique de
l'Industrie
Member:Board of directors of
the Association française des
entreprises privées (Afep)
Chairman of the Board of
directors: Compagnie de Saint-
Gobain
Director:BNP Paribas, Veolia
Environnement, Saint-Gobain
Corporation
Chairman: Board of overseers
of Essec
Co-Chairman: La Fabrique de
l'Industrie
Member:Board of directors of
the Association française des
entreprises privées (Afep)
2020:
Chairman and Chief Executive
Officer:Compagnie de Saint-
Gobain
Director:BNP Paribas, Saint-
Gobain Corporation
Chairman: Board of overseers
of Essec
Co-Chairman: La Fabrique de
l'Industrie
Member:Board of directors of
the Association française des
entreprises privées (Afep)
2019:
Chairman and Chief Executive
Officer:Compagnie de Saint-
Gobain
Director:BNP Paribas, Saint-
Gobain Corporation
Chairman: Board of overseers
of Essec
Co-Chairman: La Fabrique de
l'Industrie
Member:Board of directors of
the Association française des
entreprises privées (Afep)
(1) At 31 December 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
40
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Monique COHEN
Principal function: Senior Advisor of Seven2
Date of birth: 28 January 1956
Nationality: French
T e rm start and end dates: 16 May 2023 – 2026 AGM
Date first appointed to the Board of directors: 12 February 2014, ratified
by the Annual General Meeting of 14 May 2014
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held under the principal function
Proxima Investissement SA, Chairwoman of the Board of directors
Fides Holdings, Chairwoman of the Board of directors
Fides Acquisitions, member of the Supervisory Board
Other offices(1) held in listed or unlisted companies outside
the BNP Paribas Group, in France or abroad
Hermès International(*), Vice-Chairwoman of the Supervisory Board
Safran(*), lead director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, Chairwoman of the Internal Control, Risk Management
and Compliance Committee and member of the Corporate
Governance, Ethics, Nominations and CSR Committee
Hermès International, Chairwoman of the Audit and Risks Committee
Safran, Chairwoman of the Nominations and Remuneration
Committee
Number of BNP Paribas shares held(1): 9,620
Business address: 1 rue Paul-Cézanne
75008 PARIS
FRANCE
Education
Graduate of the École Polytechnique
Master's degree in Mathematics
Master's degree in Business Law
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chairwoman of the Board
of directors: Proxima
Investissement SA, Fides Holdings
Vice-Chairwoman: Supervisory
Board of Hermès International
Director: BNP Paribas, Safran
Member:Supervisory Board of
Fides Acquisitions
Chairwoman of the Board
of directors: Proxima
Investissement SA, Fides Holdings
Vice-Chairwoman: Supervisory
Board of Hermès International
Director:BNP Paribas, Safran
Member: Supervisory Board of
Fides Acquisitions
2020:
Chairwoman of the Board
of directors: Proxima
Investissement SA, Fides Holdings
Vice-Chairwoman: Supervisory
Board of Hermès International
Director:BNP Paribas, Safran
Member: Supervisory Board of
Fides Acquisitions
2019:
Chairwoman of the Board
of directors: Proxima
Investissement SA, Fides Holdings
Vice-Chairwoman: Supervisory
Board of Hermès International
Director:BNP Paribas, Safran,
Apax Partners SAS
Member: Supervisory Board of
Fides Acquisitions
(1) At 31 December 2023.
(*) Listed company.
Hugues EPAILLARD
Principal function: BNP Paribas Real Estate Business Manager
Date of birth: 22 June 1966
Nationality: French
T e rm start and end dates: elected by BNP Paribas executive employees
for three years from 16 February 2024 – 15 February 2027
Date first appointed to the Board of directors: 16 February 2018
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Other offices(1) held in listed or unlisted companies outside
the BNP Paribas Group, in France or abroad
Action Logement Services, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Internal Control, Risk Management and
Compliance Committee and of the Remuneration Committee
Action Logement Services, Chairman of the Risk Committee
Others(1)
Institut français des administrateurs (IFA), Co-Chairman of the Club of
directors representing employees
Judge at the Marseille Employment Tribunal, Management section
Commission paritaire de la Banque (AFB – Recourse Commission),
member
Number of BNP Paribas shares held(1): 502(2)
Business address: 59 rue Saint Ferréol
13001 MARSEILLE
FRANCE
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas, Action
Logement Services
Director: BNP Paribas
2020:
Director: BNP Paribas
2019:
Director: BNP Paribas
(1) At 31 December 2023.
(2) Including 473 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
41
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
Rajna GIBSON-BRANDON (until 10 September 2023)(1)
Principal function: Professor in Finance at the University of Geneva
Date of birth: 20 December 1962
Nationality: Swiss
T e rm start and end dates: 18 May 2021 – 2024 AGM
Date first appointed to the Board of directors: 28 November 2018,
ratified by the Annual General Meeting of 23 May 2019
Offices(2) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(2) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
Swiss National Bank, member of the Bank Council
Swisox, director
Participation(2) in specialised committees of French or foreign companies
BNP Paribas, member of the Internal Control, Risk Management and
Compliance Committee
Geneva Institute for Wealth Management Foundation, director and
Chairwoman
Geneva Finance Research Institute, Deputy director
Strategic Committee and Sustainable Finance Supervisory Committee
in Geneva, member
RepRisk, member of the academic advisory board
Number of BNP Paribas shares held(2): 1,000
Business address: 40 Boulevard Pont d'A rve
CH-1211 GENEVA 4
SWITZERLAND
Education
Others(2)
Doctorate in Social & Economic Sciences (Specialisation in Finance),
University of Geneva
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director:
BNP Paribas, Swisox
Chairwoman: Bülach Investment
Professionals' Scientific and
Training Board
Director and Chairwoman:
Geneva Institute for Wealth
Management Foundation
Deputy Director: Geneva Finance
Research Institute
Member:Bank Council of the
Swiss National Bank, Strategic
Committee and Sustainable
Finance Supervisory Committee
in Geneva, RepRisk academic
advisory board
Director:BNP Paribas
Chairwoman: Bülach
Investment Professionals'
Scientific and Training Board
Director and Chairwoman:
Geneva Institute for Wealth
Management Foundation
Deputy Director: Geneva
Finance Research Institute
Member:Strategic Committee
and Sustainable Finance
Supervisory Committee in
Geneva, RepRisk academic
advisory board
2020:
Director:BNP Paribas
Chairwoman: Bülach
Investment Professionals'
Scientific and Training Board
Director:Geneva Institute
for Wealth Management
Foundation
Deputy Director: Geneva
Finance Research Institute
Member:Strategic Committee
and Sustainable Finance
Supervisory Committee in
Geneva
2019:
Director:BNP Paribas,
Applic8 SA
Chairwoman: Bülach
Investment Professionals'
Scientific and Training Board
Director:Geneva Institute
for Wealth Management
Foundation
Deputy Director: Geneva
Finance Research Institute
Member:Strategic Committee
and Sustainable Finance
Supervisory Committee in
Geneva
(1) Ms. Rajna Gibson-Brandon resigned from her directorship due to family constraints.
(2) At 10 September 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
42
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Marion GUILLOU
Principal function: Independent Director
Date of birth: 17 September 1954
Nationality: French
T e rm start and end dates: 17 May 2022 – 2025 AGM
Date first appointed to the Board of directors: 15 May 2013
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
Veolia Environnement(*), director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Corporate Governance, Ethics,
Nominations and CSR Committee and of the Remuneration Committee
Veolia Environnement, member of the Research, Innovation and
Sustainable Development Committee and the Remuneration
Committee
Fonds de dotation pour la préservation de la biodiversité des espèces
cultivées et de leurs apparentées sauvages, Chairwoman
Académie d'A griculture de France, Vice-Chairwoman
Care – France (NGO), Vice-Chairwoman
Africa Europe Foundation, Co-Chairwoman of the food systems
strategic group
Bioversity International, member of the Board of directors
International Centre for Tropical Agriculture (CIAT), member of the
Board of directors
Bioversity International – CIAT Alliance, member of the Board of
directors and Chairwoman of the Strategic Committee (ASPAC)
Accelerating Impacts of CGIAR Climate Research for Africa (AICCRA),
member of the Independent Steering Committee (ISC)
Institut français des relations internationales (IFRI), member of the
Board of directors
Haut Conseil pour le climat, member
Number of BNP Paribas shares held(1): 1,000
Business address: 42 rue Scheffer
75116 PARIS
FRANCE
Education
Graduate of the École Polytechnique
Graduate of the École du Génie rural, des Eaux et des Forêts
Doctor of Food Sciences
Others(1)
Graduate of the Institut français des administrateurs (IFA)
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas, Veolia
Environnement
Chairwoman: Fonds de dotation
pour la préservation de la
biodiversité des espèces cultivées
et de leurs apparentées sauvages
Vice-Chairwoman:
Care – France (NGO)
Member:Board of directors of
Bioversity International, Board
of directors of the International
Centre for Tropical Agriculture
(CIAT), Board of directors of
Bioversity – CIAT Alliance, Board
of directors of IFRI, Haut Conseil
pour le climat
Director:BNP Paribas, Veolia
Environnement
Chairwoman: Fonds de
dotation pour la préservation
de la biodiversité des
espèces cultivées et de leurs
apparentées sauvages
Vice-Chairwoman:
Care – France (NGO)
Member:Board of directors of
Bioversity International, Board
of directors of the International
Centre for Tropical Agriculture
(CIAT), Board of directors of
Bioversity – CIAT Alliance,
Board of directors of IFRI, Haut
Conseil pour le climat
2020:
Director:BNP Paribas, Veolia
Environnement
Vice-Chairwoman:
Care – France (NGO)
Member:Board of directors of
Bioversity International, Board
of directors of the International
Centre for Tropical Agriculture
(CIAT), Board of directors of
Bioversity – CIAT Alliance,
Board of directors of IFRI
2019:
Director:BNP Paribas, Imerys,
Veolia Environnement
Vice-Chairwoman:
Care – France (NGO)
Member:Board of directors
of Universcience, Board
of directors of Bioversity
International, Board of
directors of the International
Centre for Tropical Agriculture
(CIAT), Board of directors of
Bioversity – CIAT Alliance,
Board of directors of IFRI
(1) At 31 December 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
43
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
Lieve LOGGHE
Principal function: Senior Advisor of Euronav NV
Date of birth: 11 July 1968
Nationality: Belgian
T e rm start and end dates: 17 May 2022 – 2025 AGM
Date first appointed to the Board of directors: 17 May 2022
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
TINCC BV, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Financial Statements Committee
Others(1)
ODISEE, member of the Board of directors and member of the Audit
Committee
Number of BNP Paribas shares held(1): 1,000
Business address: 20 De Gerlachekaai
2000 ANTWERP
BELGIUM
Education
Master's degree in economics from the University of Brussels, Master's
degree in accounting from the Vlerick School for Management,
Master's degree in taxation from the EHSAL Management School
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
Director: BNP Paribas, TINCC BV
Member:Board of directors of
ODISEE
(1) At 31 December 2023.
(*) Listed company.
Christian NOYER
Principal function: Director of companies
Date of birth: 6 October 1950
Nationality: French
T e rm start and end dates: 18 May 2021 – 2024 AGM
Date first appointed to the Board of directors: 18 May 2021
(Mr Christian Noyer served as non-voting director [censeur] of
BNP Paribas from 1 May 2019 to 17 May 2021)
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
Power Corporation of Canada(*), director
Setl Ltd, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, Chairman of the Financial Statements Committee and
member of the Internal Control, Risk Management and Compliance
Committee
Power Corporation of Canada, member of the Governance and
Nominating Committee and the Related Party and Conduct Review
Committee
Institut pour l'Education Financière du Public (IEFP), Chairman
Institut Français des Relations Internationales (IFRI) Foundation,
member of the Board of directors
Group of Thirty (G30), member
Number of BNP Paribas shares held(1): 2,000
Business address: 53 rue Geoffreoy Saint-Hilaire
75005 PARIS
FRANCE
Education
Graduate of École Nationale d'A dministration
Graduate of the Institut d'Études Politiques de Paris
Masters in Law from the University of Paris
Others(1)
Master's Degree from the University of Rennes
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director:
BNP Paribas, Power Corporation
of Canada,
Setl Ltd
Chairman:
Institut pour l'Education
Financière du Public (IEFP)
Member:
Institut Français des Relations
Internationales (IFRI) Foundation,
Group of Thirty (G30)
Director:
BNP Paribas, Power
Corporation of Canada,
NSIA Banque Group, Setl Ltd
Chairman:
Institut pour l'Education
Financière du Public (IEFP)
Member:
Institut Français des Relations
Internationales (IFRI),
Group of Thirty (G30)
2020:
Director:
Power Corporation of Canada,
NSIA Banque Group,
Lloyd's of London, Setl Ltd
2019:
Director:
Power Corporation of Canada,
NSIA Banque Group,
Lloyd's of London, Setl Ltd
(1) At 31 December 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
44
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Daniela SCHWARZER
Principal function: Member of the Executive Board of the Bertelsmann Foundation
Date of birth: 19 July 1973
Nationality: German
T e rm start and end dates: 16 May 2023 – 2026 AGM
Date first appointed to the Board of directors: 14 May 2014
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
Covivio(*), director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Corporate Governance, Ethics,
Nominations and CSR Committee, member of the Internal Control,
Risk Management and Compliance Committee and member of the
Financial Statements Committee
Institut Jacques-Delors, member of the Board of directors
Deutsche Gesellschaft für Auswärtige Politik, member of the Board of
directors
Institut Jean Monnet, member of the Board of directors
Number of BNP Paribas shares held(1): 1,000
Business address: Werderscher Markt 6
10117 BERLIN
GERMANY
Education
Doctorate in Economics from the Free University of Berlin
Master's degree in Political Science and in Linguistics, University of
Others(1)
Tübingen
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas, Covivio
Executive Director: Open Society
Foundation for Europe and
Central Asia
Member:Board of directors of
the Institut Jacques-Delors, Board
of directors of the United Europe
Foundation
Board of directors of Deutsche
Gesellschaft für Auswärtige
Politik,
Board of directors of the Institut
Jean Monnet
Director:BNP Paribas
Executive Director: Open
Society Foundation for Europe
and Central Asia
Member:Board of directors
of the Institut Jacques-Delors,
Board of directors of the United
Europe Foundation, Advisory
Committee of the Open Society
Foundation
Board of directors of Deutsche
Gesellschaft für Auswärtige
Politik,
Board of directors of the
Institut Jean Monnet
2020:
Director: BNP Paribas,
Deutsche Gesellschaft für
Auswärtige Politik
Member:Board of directors
of the Institut Jacques-Delors,
Board of directors of the United
Europe Foundation, Advisory
Committee of the Open Society
Foundation, Federal Security
Academy, Advisory Committee
2019:
Director: BNP Paribas,
Deutsche Gesellschaft für
Auswärtige Politik
Member:Board of directors
of the Institut Jacques-Delors,
Board of directors of the United
Europe Foundation, Advisory
Committee of the Open Society
Foundation, Federal Security
Academy, Advisory Committee
(1) At 31 December 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
45
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Michel TILMANT
Principal function: Director of companies
Date of birth: 21 July 1952
Nationality: Belgian
T e rm start and end dates: 17 May 2022 – 2025 AGM
Date first appointed to the Board of directors: 12 May 2010
(Mr Michel Tilmant served as non-voting director [censeur] of
BNP Paribas from 4 November 2009 to 11 May 2010)
2
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held under the principal function
Strafin sprl, manager
Other offices(1) held in listed or unlisted companies outside the
BNP Paribas Group, in France or abroad
Groupe Lhoist SA, director
Foyer Finance SA, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Internal Control, Risk Management and
Compliance Committee
Groupe Lhoist SA, Chairman of the Audit Committee
Others(1)
Royal Automobile Club of Belgium, member of the Board of directors
Zoute Automobile Club, member of the Board of directors
Number of BNP Paribas shares held(1): 1,000
Business address: Rue du Moulin 10
B-1310 LA HULPE
BELGIUM
Education
Graduate of the University of Louvain
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chairman of the Board of
directors: CapitalatWork Foyer
Group SA
Director: BNP Paribas,
Foyer SA, Foyer Finance SA,
Groupe Lhoist SA
Manager: Strafin sprl
Member:Board of directors of
Royal Automobile Club of Belgium,
Board of directors of Zoute
Automobile Club
Chairman of the Board of
directors: CapitalatWork Foyer
Group SA
Director:BNP Paribas,
Foyer SA, Foyer Finance SA,
Groupe Lhoist SA, Sofina SA
Manager: Strafin sprl
Member:Board of directors of
Royal Automobile Club of
Belgium, Board of directors of
Zoute Automobile Club
2020:
Chairman of the Board of
directors: CapitalatWork Foyer
Group SA
Director:BNP Paribas,
Foyer SA, Foyer Finance SA,
Groupe Lhoist SA, Sofina SA
Manager: Strafin sprl
Member:Board of directors of
Royal Automobile Club of
Belgium, Board of directors
of the Zoute Automobile Club,
Board of directors of Université
Catholique de Louvain
2019:
Chairman of the Board of
directors: CapitalatWork Foyer
Group SA
Director:BNP Paribas,
Foyer SA, Foyer Finance SA,
Groupe Lhoist SA, Sofina SA
Manager: Strafin sprl
Member:Board of directors of
Royal Automobile Club of
Belgium, Board of directors
of the Zoute Automobile Club,
Board of directors of Université
Catholique de Louvain
Senior advisor: Cinven Ltd
(1) At 31 December 2023.
(*) Listed company.
Sandrine VERRIER
Principal function: BNP Paribas Production and Sales Support Assistant
Date of birth: 9 April 1979
Nationality: French
T e rm start and end dates: elected by BNP Paribas technician employees for
three years from 16 February 2021 – 15 February 2024
Date first appointed to the Board of directors: 16 February 2015
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Other offices(1) held in listed or unlisted companies outside the
BNP Paribas Group, in France or abroad
Action Logement Services, director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Financial Statements Committee
Action Logement Services, member of the Tender Committee
Others(1)
Conseil Économique, Social et Environnemental Régional d'Île-de-
France, advisor
Number of BNP Paribas shares held(1): 79(2)
Business address: 150 rue du Faubourg-Poissonnière
75010 PARIS
FRANCE
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas
Director:BNP Paribas
2020:
Director:BNP Paribas
2019:
Director: BNP Paribas
(1) At 31 December 2023.
(2) Including 59 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
46
2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
Fields WICKER-MIURIN (until 16 May 2023)
Principal function: Director of companies
Date of birth: 30 July 1958
Nationalities: British and American
T e rm start and end dates: 19 May 2020 – 2023 AGM
Date first appointed to the Board of directors: 11 May 2011
Offices(1) held in listed or unlisted companies of the BNP Paribas Group,
in France or abroad
BNP Paribas(*), director
Offices(1) held in listed or unlisted companies outside the BNP Paribas
Group, in France or abroad
SCOR SE(*), director
Aquis Exchange Plc(*), lead director
Participation(1) in specialised committees of French or foreign companies
BNP Paribas, member of the Financial Statements Committee, the
Remuneration Committee and the Internal Control, Risk Management
and Compliance Committee
SCOR SE, member of the Strategic Committee, member of the Risk
Committee, member of the Nominations Committee, member of
the Crisis Management Committee, member of the Sustainable
Development Committee and Chairwoman of the Remuneration
Committee
Aquis Exchange Plc, Chairwoman of the Nomination and
Remuneration Committee
Others(1)
Leaders' Quest, Co-founder and Partner
Board of the Royal College of Art, Vice-Chairwoman and Chair of the
Planning and Resources Committee
Number of BNP Paribas shares held(1): 1,000
Business address: 63 Queen Victoria Street
LONDON EC4N 4UA
UNITED KINGDOM
Education
Graduate of the Institut d'Études Politiques de Paris
Master's degree from the School of Advanced International Studies,
Johns Hopkins University
Bachelor of Arts (BA), University of Virginia
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Director: BNP Paribas, SCOR SE,
Acquis Exchange Plc
Co-founder and Partner: Leaders'
Quest
Vice-Chairwoman:
Board of the Royal College of Art
Director:BNP Paribas,
Prudential Plc, SCOR SE
Co-founder and Partner:
Leaders' Quest
Vice-Chairwoman:
Board of the Royal College of Art
2020:
Director:BNP Paribas,
Prudential Plc, SCOR SE
Co-founder and Partner:
Leaders' Quest
2019:
Director: BNP Paribas,
Prudential Plc, SCOR SE
Co-founder and Partner:
Leaders' Quest
Independent member of
the Ministry Council and
Chairwoman of the Audit
and Risks Committee: UK
Department of Digital, Culture,
Media and Sports
(1) At 16 May 2023.
(*) Listed company.
2023 Universal registration document and annual financial report - BNP PARIBAS
47
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
SCHEDULE OF THE TERMS OF THE DIRECTORSHIPS OF COMPANY DIRECTORS
On the Board's proposal, the Shareholders' Annual General Meeting of 23 May 2000 decided to limit the term of office of new directors to three years.
Directors
2024
2025
(AGM called to approve
the 2023 financial
statements)
(AGM called to approve
the 2024 financial
statements)
2026
(AGM called to approve
the 2025 financial
statements)
J. Lemierre
✓
J.-L. Bonnafé
✓
J. Aschenbroich
✓
J. Brisac(i)
✓
P.A. de Chalendar
✓
M. Cohen
✓
H. Epaillard(Ii)
✓
R. Gibson-Brandon(iii)
✓
M. Guillou
✓
L. Logghe
✓
C. Noyer
✓
D. Schwarzer
✓
M. Tilmant
✓
S. Verrier(iv)
✓
(i) Director representing employee shareholders.
(Ii) Director elected by executive employees – Start and end dates of previous term: 16 February 2021 – 15 February 2024. Re-elected by executive
employees in the first round of voting on 17 November 2023 (effective 16 February 2024).
(iii) Ms Rajna Gibson-Brandon resigned from her directorship as of 11 September 2023 due to family constraints. She was replaced by Ms Marie-Christine
Lombard, who was co-opted by the Board of directors on 20 December 2023 effective 10 January 2024, for the remaining term of the initial term of office.
(iv) Director elected by technician employees – Start and end dates of previous term: 16 February 2021 – 15 February 2024. Election of Ms Vanessa
Lepoultier as director elected by the technician employees in the second round of voting on 8 December 2023 (effective on 16 February 2024).
2023 Universal registration document and annual financial report - BNP PARIBAS
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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Report on Corporate governance
OTHER CORPORATE OFFICERS
Yann GÉRARDIN
Principal function: Chief Operating Officer of BNP Paribas
Date of birth: 11 November 1961
Nationality: French
Number of BNP Paribas shares held(1): 164,344(2)
Business address: 16 boulevard des Italiens
75009 PARIS
FRANCE
Offices(1) held under the principal function
BNP Paribas(*), Chief Operating Office r, H ead of Corporate and
Institutional Banking
Others(1)
N/A.
Education
Degree in Economic Science
Institut d'Études Politiques de Paris
HEC Paris
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chief Operating Officer:
BNP Paribas
Chief Operating Officer:
BNP Paribas
(1) At 31 December 2023.
(2) Including 30,744 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
Thierry LABORDE
Principal function: Chief Operating Officer of BNP Paribas
Date of birth: 17 December 1960
Nationality: French
Number of BNP Paribas shares held(1): 20,170(2)
Business address: 16 boulevard des Italiens
75009 PARIS
FRANCE
Offices(1) held under the principal function
BNP Paribas(*), Chief Operating Office r, H ead of Commercial, Personal
Banking & Services
BNP Paribas Personal Finance, Chairman of the Board of directors
BNL SpA, director
Arval Service Lease, director
BNP Paribas Leasing Solutions, director
BNP Paribas Lease Group, director
Others(1)
European Payments Initiative, director
Education
Master's degree in Economic Science
Offices held at 31 December in previous financial years
(the companies mentioned are the parent companies of the groups in which the functions were carried out)
2022:
2021:
Chief Operating Officer:
BNP Paribas
Chairman of the Board of
directors:
BNP Paribas Personal Finance
Director:
BNL SpA, Arval Service Lease,
BNP Paribas Leasing Solutions,
BNP Paribas Lease Group,
European Payments Initiative
Chief Operating Officer:
BNP Paribas
Chairman of the Board of
directors:
BNP Paribas Personal Finance
Director:
BNL SpA, Arval Service Lease,
BNP Paribas Leasing Solutions,
BNP Paribas Lease Group,
European Payments Initiative
(1) At 31 December 2023.
(2) Including 2,354 BNP Paribas shares held under the Company Savings Plan.
(*) Listed company.
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2.1.2 BNP PARIBAS CORPORATE GOVERNANCE
The Corporate Governance Code that BNP Paribas refers to on a voluntary
basis in this report is the Corporate Governance Code of Listed Companies,
published by the French employers' organisations, Association Française
des Entreprises Privées (Afep) and the Mouvement des Entreprises de
France (MEDEF). BNP Paribas declares that it complies with all of the
recommendations of this Code, hereinafter referred to as the Corporate
Governance Code or Afep-MEDEF Code, which can be viewed on the
BNP P aribas website (http://invest.bnpparibas.com/en), the Afep website
(http://www.afep.com/en) and the MEDEF website (http://www.MEDE F.
com/en).
The detailed rules on the participation of shareholders at the
Shareholders' Annual General Meeting are laid out in article 18, Title V
"Shareholders' Meetings", of BNP Paribas' Articles of association
published in the Universal registration document in the section entitled
Founding documents and Articles of association. Moreove r, a s ummary
of these rules and a report on the organisation and running of the
Shareholders' Combined General Meeting of 16 May 2023 are provided
in the section entitled BNP Paribas and its shareholders of said document.
In addition to the above, BNP Paribas is governed in accordance with
French and European banking regulations, and the guidelines issued
by the European Banking Authority (EBA) and is subject to permanent
supervision of the European Central Bank (ECB) pursuant to the Single
Supervisory Mechanism (SSM).
1. PRINCIPLES OF GOVERNANCE
The Internal Rules adopted by the Board of directors define the duties of
the Board and of its specialised committees. They are updated periodically
to comply with current laws, regulations and market guidelines, and to
keep pace with best practice in the area of Corporate governance.
The Internal Rules were extensively revised in 2015 to reflect the
provisions of Directive 2013/36/EU on access to the activity of credit
institutions and the prudential supervision of credit institutions and
investment firms (hereinafter "CRD 5") then amended on various
occasions to take into account changes in regulations. In respect of
these changes, two procedures were added to the Internal Rules: a
Policy on the suitability of Members of the management body and Key
function holders, hereinafter referred to as the "Suitability policy", and
the "Implementation procedure for conflicts of interest in respect to loans
and other transactions granted to the Members of the management body
and their related parties".
The Group Code of conduct, approved by the Board of directors, was
introduced in 2016. The latter as well as the addendum on anti-
corruption were the subject of an update in December 2021, approved
by the Board of directors.
Code of conduct (article 1.2 of the Internal Rules)
The Code of conduct is the result of BNP Paribas' Board of directors
and Executive Management's shared conviction that the success
of the Bank depends on the behaviour of each employee. The Code
of conduct "sets out the rules to uphold our values and perform
the Bank's missions. This Code, which shall be integrated by each
business line and each employee, governs the actions of each
employee, and guides the decisions at every level of the organisation.
For this purpose, the Board ensures the Executive Management
implements this Code in business lines, countries and regions."
Note that the Internal Rules emphasise the collegial nature of the Board
of directors, which jointly represents all shareholders and must act in the
Company's best interest at all times. It details the Board responsibilities
(article 1).
The Board of directors is backed by four specialised committees (the
Financial Statements Committee, the Internal Control, Risk Management
and Compliance Committee, the Corporate Governance, Ethics,
Nominations and CSR Committee, and the Remuneration Committee)
as well as any ad hoc committees. The Internal Rules detail each
committee's missions, in line with the provisions of the CRD 5 and
EBA Guidelines. They provide for joint meetings between the Financial
Statements Committee and the Internal Control, Risk and Compliance
Committee whenever required.
Neither the members of the Executive Management nor the Chairman of
the Board of directors have been members of any committee since 1997.
As far as the Board is aware, no agreement has been entered into, directly,
or through an intermediary, between on the one hand, one of BNP Paribas'
directors and corporate officers and, on the othe r, a nother company in
which BNP Paribas owns, directly or indirectly, over half of the share
capital (articles L.22-10-10 and L.225-37-4 paragraph two of the French
Commercial Code), without prejudice to any agreements relating to
current operations concluded under normal conditions.
The Internal Rules and Suitability policy mentioned above have been
adopted by the Board of directors and are included in this report.
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The Board of directors (on 31 December 2023)
Chairman: Jean Lemierre
Missions and controls in the following areas:
Financial Statements
Committee (CdC)
Comité des comptes
Members
Internal Control,
Risk Management and
Compliance Committee (CCIRC)
Corporate Governance,
Ethics, Nominations
and CSR Committee (CGEN)
Remuneration Committee
(CR)
Members
Members
Members
Christian Noy(e C r d(C C(i)
Jacques Aschenbroich (i)
Juliette Brisac (iii)
Lieve Logghe (i)
Daniela Schwarzer (i)
Daniela Schwarzer (i)
Sandrine Verrier (ii)
Joint sessions of the CdC and CCIRC
Chairman: Christian Noyer (i)
Comité des comptes
(CdC)
Missions
Examining the audit plan of the Statutory Auditors and preparing the
work of the Board on the assessment of the risk policies and risk
management measures.
Dealing with the common issues relating to the risk policies and their
'nancial impacts.
Monique Cohen (C) (i)
Hugues Epaillard (ii)
Hugues Epaillard (ii)
Christian Noyer (i)
Daniela Schwarzer (i)
Michel Tilmant
Jacques Aschenbroich (C) (i)
Pierre André de Chalendar (i)
Monique Cohen (i)
Marion Guillou (i)
Pierre André de Chalendar (C) (i)
Marion Guillou (i)
Missions
Missions
Missions
Missions
Monitoring the preparation of
the 'nancial information
Monitoring of the ef'ciency of
the internal control systems and
of risk management systems
concerning accounting and
'nancial matters
Monitoring of the statutory
auditing of the annual 'nancial
statements and of the consolidated
'nancial statements by the
Statutory Auditors as well as of
the independence of the Statutory
Auditors
Reviewing the global strategy
concerning risks
Monitoring the remuneration
principles in relation to risks
Reviewing issues relating to
internal control and compliance
Reviewing the prices of products
and services in relation to the risk
strategy
Oversight and monitoring of
the compliance of governance
principles with changes in
regulations and best practice in
the area of corporate governance
Identi'cation of, selection of,
and succession plan for directors
and committee members
Assessment of the Board of
directors
Periodic review of the selection of,
appointment of and succession
process for corporate of'cers
Monitoring the implementation by
the Executive Management of the
Suitability policy for Key function
holders provided by EBA
guidelines
Assessment of corporate of'cers
Appraising the independence of
the directors
Maintaining the general balance
of the Board of directors
Regular monitoring of updates to
the Code of conduct
Monitoring CSR issues (Group's
contribution to economic,
sustainable, and responsible
development) and inclusion of the
CSR aspect in carrying out its
missions
Annual review of the principles
that underpin the Group's
remuneration policy
Annual review of the remuneration,
allowances and bene'ts in kind
granted to the directors and
corporate of'cers of the Company
and of the Group's major French
subsidiaries
Annual review of the remuneration
of the Group's regulated staff
categories
Control of the remuneration of
the Head of the risk management
function and Head of Compliance
(C) Chairperson.
(i) Independent director according
to the provisions of the Afep-MEDEF Code.
(ii) Director elected by employees.
(iii) Director representing employee
shareholders.
Orientations and strategic operations
Promotion of CSR
Governance, internal control and 'nancial statements
Risk management oversight
Financial communication
Remuneration
Preventive recovery plan
Monitoring the application of the Code of conduct
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Each committee is composed of members with expertise in the relevant
areas and complies with the provisions of the French Monetary and
Financial Code and the recommendations of the Afep-MEDEF Code. Thus,
■ the Financial Statements Committee has independent members as
well as a director representing employees and a director representing
employee shareholders. Most of the members of the Financial
Statements Committee have qualifications and experience in corporate
financial management, accounting and financial information. Its
Chairman brings to the Committee financial skills strengthened by his
professional caree r, i n particular as a former Governor of the Banque
de France;
■ the Internal Control, Risk Management and Compliance Committee has
three independent members out of a total of five members. Most of the
members of the Internal Control, Risk Management and Compliance
Committee have particular expertise in financial matters and in the
area of risk through their training or experience. Its Chairwoman brings
to the Committee her experience in financial regulation and supervision
acquired as a former member of the Board of the French Financial
Markets Authority (Autorité des Marchés Financiers - AMF). One of
its members has experience in the supervision of banking institutions
as former Chairman of the Autorité de contrôle prudentiel et de
résolution (ACPR) and another has international experience in banking
management as well as in terms of financial risks. In addition, two
members of the Internal Control, Risk Management and Compliance
Committee are also members of the Financial Statements Committee
in order to promote the work of the Committees on the appropriateness
of the risks and provisions recorded by the Bank;
■ the members of the Corporate Governance, Ethics, Nominations and
CSR Committee are independent directors who have expertise in
Corporate governance and in putting together management teams in
international companies and in CSR. It is chaired by the Chairman of
the Board of directors of a major telecommunications group that has
made social and environmental commitments. One of its members
has also been a member of the High Committee for the Climate since
its creation in 2018, another is Chairman of an international group
involved in energy renovation and yet, another member is a member
of the management board of a leading independent foundation that
participates in the research and financing of projects, in particular in
the fields of education, climate and digital transformation, and themes
related to Europe and democracy;
■ the Remuneration Committee is made up of independent members
who have experience of remuneration systems and market practices
in this area and a director elected by employees. A member of the
Remuneration Committee is also a member of the Internal Control, Risk
Management and Compliance Committee. This composition facilitates
the Board of directors' work on the appropriateness of BNP Paribas'
remuneration principles with the risk policy.
The Chairman of the Board of directors attends the meetings of the
committees but is not a member of any of them and may add any subject
he considers relevant to the agenda.
European and French regulations applicable to BNP Paribas require
members of the Board of directors and executive corporate officers to
demonstrate integrity at all times, and to have the knowledge skills,
experience and time needed to perform their duties. The ECB is notified
of their appointment or re-appointment so that it can assess them on
the basis of these criteria.
In addition, the ECB did not issue any objections as regards the
composition of the Board of directors or its specialised committees.
1.a Separation of the functions of Chairman
and Chief Executive Officer
At 11 June 2003, BNP Paribas dissociated the offices of Chairman of
the Board and Chief Executive Office r. T his decision is in line with the
obligations imposed on credit institutions since 2014 by the French law
transposing Directive 2013/36/EU on access to the activity of credit
institutions and the prudential supervision of credit institutions and
investment firms.
The duties of the Chairman
They are described in article 3.1 of the Internal Rules.
The Chairman is responsible for ensuring that the quality of the
relationship with shareholders is maintained, coordinating closely with
any steps taken by Executive Management in this area. In this connection,
the Chairman chairs the Shareholder Liaison Committee, whose task is
to assist the Bank in its communications with individual shareholders;
several times a yea r, h e invites the shareholders to meetings where the
Company's strategy is explained. He reports on his duties to the Board
of directors.
The Chairman maintains a close and trusting relationship with Executive
Management and provides the team with assistance and advice while
respecting its executive responsibilities. The Chairman organises his
activities so as to ensure his availability and put his experience to the
Group's service. His duties are contributory in nature and do not confer
any executive power on him. They do not in any way restrict the powers
of the Chief Executive Office r, w ho has sole operational responsibility
for the Group.
Coordinating closely with Executive Management, the Chairman can
represent the Group in its high-level relationships, particularly with
major clients, public authorities and institutions, at national, European
and international levels. He plays an active part in discussions concerning
regulatory developments and public policies affecting BNP Paribas, and,
more generally, the financial services secto r.
The Chairman contributes to promoting the values and image of
BNP Paribas, both within the Group and externally. He expresses his
views on the principles of action governing BNP Paribas, in particular in
the field of professional ethics. He contributes to enhancing the Group's
image through the responsibilities he exercises personally in national or
international public bodies.
At the request of the Chief Executive Office r, h e can take part in any
internal meeting on subjects relating to strategy, organisation, investment
or disinvestment projects, risks and financial information. He expresses
his opinions without prejudice to the remit of the Board of directors; he
provides support to the teams responsible for covering major companies
and international financial institutions; he also contributes to the
development of BNP Paribas' advisory activities, particularly by assisting
in the completion of major corporate finance transactions.
He ensures that principles of Corporate governance are defined and
implemented.
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The Chairman is the custodian of the proper functioning of the Board of
directors of BNP Paribas. As such:
■ with the support of the Corporate Governance, Ethics, Nominations
and CSR Committee, with the approval of the Board of directors and
of the Shareholders' Annual General Meeting, where appropriate, he
endeavours to build an efficient and balanced Board, and to manage,
both in the short- and long-term, the replacement and succession
processes related to the Board of directors and nominations which
will acknowledge the Company's strategic ambitions;
■ on the basis of the dissociation of the functions of Chairman and Chief
Executive Office r, h is role is to ensure directors' independence and
freedom of speech;
■ he ensures that the directors have the documentation and information
necessary to carry out their duties in a timely manner and in a clear
and appropriate form.
The powers of the Chief Executive Officer
The Chief Executive Officer has the broadest powers to act in all
circumstances on behalf of BNP Paribas, and to represent the Bank in
its relations with third parties. He is responsible for the organisation
of internal control procedures and for all the information required by
regulations in that regard.
He exercises his powers within the limitations of the corporate object, and
subject to any powers expressly attributed by law to the Shareholders'
Annual General Meeting and Board of directors.
The Internal Rules of the Board of directors provide that the Chief Executive
Officer shall request its prior approval for all investment or disinvestment
decisions (other than portfolio transactions) in excess of EUR 250 million,
and for any proposal to acquire or dispose of shareholdings in excess
of that threshold (other than portfolio transactions) (article 1.1). The
Chief Executive Officer must also ask the Board's Financial Statements
Committee for prior approval of any non-audit related assignment
involving fees in an amount of over EUR 1 million (excluding taxes)
(article 7.1.3).
1.b Composition of the Board – Independence of directors
Composition of the Board of directors: a collegial body with collective competence
On the proposal of the Board of directors, the Shareholders' Annual General Meeting of 16 May 2023 renewed the terms of office as directors of
Messrs Jean Lemierre and Jacques Aschenbroich and Mses Monique Cohen and Daniela Schwarze r.
At 31 December 2023:
Number of Board
members
Of which Director
elected by
employees
Nationalities
Of which Director
representing employee
shareholders
Percentage
of women
Independence
13
2
1
3
40%
> 50%
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Independence of directors (as of 31 December 2023)
The table below shows the position of each director with regard to the independence criteria provided by the Afep-MEDEF Code to define an independent
director:
Criteria
1
Not be, or have been, in the last five years
(i) an employee or corporate officer of the
Company or of a consolidated subsidiary of
the Company; (ii) a director of a consolidated
subsidiary
0
0
0
0
0
2
Whether or not corporate offices are held
in another company
3
Whether or not significant business
relationships exist
4
Whether or not there are close family ties
to a corporate officer
5
Not have been a Statutory Auditor of
the Company in the previous five years
6
Not have been a director of the Company for
more than twelve years
0
0
7
No variable remuneration for non-executive
corporate officers
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8
Major shareholder status
represents an independence criterion of the Afep-MEDEF Code that is met.
0
represents an independence criterion of the Afep-MEDEF Code that is not met.
■ The following directors meet the independence criteria contained in the
Corporate Governance Code and reviewed by the Board of directors(1):
Mses Monique Cohen, Marion Guillou, Lieve Logghe, Daniela Schwarze r,
Messrs Jacques Aschenbroich, Pierre André de Chalenda r, C hristian
Noye r. A s far as the Board is aware, there are no potential conflicts of
interests between BNP Paribas and any of the directors.
■ The two directors elected by the employees, Ms Sandrine Verrier and
Mr Hugues Epaillard, as well as the director representing employee
shareholders, Ms Juliette Brisac are not taken into account for the
calculation of independence according to the criteria of the Afep-
MEDEF Code despite their status and their method of election, which
guarantee their independence.
■ Three directors appointed by the shareholders – the Chairman of
the Board of directors, Mr Jean Lemierre, the Chief Executive Office r,
Mr Jean-Laurent Bonnafé, and Mr Michel Tilmant – do not fulfil the
independence criteria laid down by the Corporate Governance Code
of Listed Companies defining an independent directo r..
Over half of the directors of BNP Paribas are therefore independent in
terms of the criteria for independence contained in the Afep-MEDEF Code
and the Board of directors' assessment.
Directors' knowledge, skills and experience –
Diversity and complementarity
When the Corporate Governance, Ethics, Nominations and CSR Committee
(CGEN) reviews the skills and experience of potential directors, it is
careful to maintain the diversity and collective skills of the Board of
directors in light of changes to the Bank's strategy and in accordance
with the Suitability policy. Thus, the Board brings together expertise in
banking and financial matters, risk management, international digital
transformation, banking regulation and compliance, particularly as
regards anti-money laundering and combating the financing of terrorism
(AML/CFT) and in CSR as well as experience in Executive Management
of large corporate groups.
These candidates are identified and recommended by the committee on
the basis of criteria that combine personal and collective skills, according
to the procedures in the Internal Rules (article 4.2.1) and by the Suitability
policy (section II "Identification of selection of and succession plan for
Members of the management body and Key function holders"), which
ensure their independence of mind; these include:
■ competence, based on experience and the ability to understand the
issues and risks, enabling the directors to make informed and effective
decisions;
(1) Ms Rajna Gibson-Brandon and Ms Fields Wicker-Miurin also met the independence criteria on the date each of their terms of office ended.
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■ courage, in particular to express opinions and make judgements,
enabling the directors to remain objective;
■ availability and assiduity, which allow for the necessary detachment
and promote the directors' commitment and sense of responsibility
regarding the exercise of their office;
■ loyalty, which fosters directors' commitment to the Company and
to their duties within the Board, which collectively represents the
shareholders;
■ directors' proper understanding of the Company's culture and ethics.
Directors all have a range of skills and experience that they have
acquired during their professional careers. The table below aims to
reflect this diversity within the Board of directors and lists more specific
contributions made by each of the directors.
Director
Age(1) Gender Nationality Areas of expertise
End of term of
office
Jean LEMIERRE
(Chairman)
73
M
French Banking/Finance
Risks/Regulation monitoring
International business operations
AML/CFT
2026
Jean-Laurent BONNAFÉ
(Director and Chief Executive Officer)
62
M
French Banking/Finance
International business operations
CSR
AML/CFT
2025
Jacques ASCHENBROICH
69
M
French International business operations
Transformation
CSR
Digital/Cybersecurity
2026
Juliette BRISAC
59
F
French Employee shareholders representation
2024
Pierre André de CHALENDAR
65
M
French International business operations
Transformation
CSR
2024
Monique COHEN
67
F
French Banking/Finance
Risks/Regulation monitoring
CSR
AML/CFT
2026
Lieve LOGGHE
55
F
Belgian Banking/Finance
International business operations
Transformation
2025
Hugues EPAILLARD
(Director representing employees)
57
M
French Organisation representing employees
2027
Marion GUILLOU
69
F
French Risks/Regulation monitoring
CSR
Technology
2025
Christian NOYER
73
M
French Banking/Finance
International business operations
Risks/Regulation monitoring
AML/CFT
2024
Daniela SCHWARZER
50
F
German Money markets
Geopolitics
CSR
2026
Michel TILMANT
71
M
Belgian Banking/Finance
Risks/Regulation monitoring
International business operations
AML/CFT
2025
Sandrine VERRIER
(Director representing employees)
44
F
French Organisation representing employees
2024
(1) At 31 December 2023.
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Furthermore, the additional information referred to in article L.22-10-
10 of the French Commercial Code relating to employees is shown in
sections 7.3 Outstanding actions in the area of gender equality and 7.7
The system concerning Group employees of this document(1).
1.c Directors'ethical conduct
As far as the Board is aware, there are no potential conflicts of interests
between BNP Paribas and any of the directors. The Suitability policy
requires directors to report any situation likely to constitute a conflict of
interest to the Chairman, the Board of directors may then ask the director
in question to refrain from taking part in voting on the relevant issues.
As far as the Board is aware, none of the Board members has been
found guilty of fraud or been associated, as member of an administrative,
management or supervisory body, or as Chief Executive Office r, w ith any
insolvency, receivership or liquidation proceedings during at least the
last five years.
As far as the Board is aware, no member of the Board of directors is
subject to any official public accusation and/or penalty. No director has
been prohibited from acting in an official capacity during at least the
last five years.
There are no arrangements or agreements with key shareholders,
customers, suppliers or other persons that involve the selection of any
member of the Board of directors.
The directors must carry out their duties in a responsible manne r,
particularly as regards the regulations relating to insider dealing. They
are notably required to comply with legal requirements relating to being
in possession of insider information. Under the terms of the Internal
Rules, they must also refrain from carrying out any transactions in
BNP Paribas shares that could be regarded as speculative (article 4.3.1
of the Internal Rules). They are informed of the periods during which
they may, except in special circumstances, carry out any transactions in
BNP Paribas shares (article 4.3.1 of the Internal Rules).
1.d Directors'training and information
Pursuant to the Internal Rules, every director can ask the Chairman
or the Chief Executive Officer to provide them with all the documents
and information required to enable them to carry out their duties, to
participate effectively in the meetings of the Board of directors and to
make informed decisions, provided that such documents are necessary
to the decisions to be taken and connected with the Board's powers
(article 3.4.1 of the Internal Rules).
The directors have unrestricted and continuous access to the minutes of
meetings of the Board's specialised committees and the minutes of Board
meetings using a special digital tool. This system also provides directors
with a range of useful information in a secure and timely manner to
facilitate them in their work. Since 2017, it has been possible to use this
system to deliver e-learning training modules to directors.
Committee meetings provide an opportunity to update the directors on
the topical issues on the agenda. In addition, the Board is kept informed
of changes in the banking regulations and reference texts concerning
governance and can be trained on such occasions.
During three training days (March, June and September 2023), the
directors received training on (i) securitisation, (ii) adapting the Bank to
the new solvency framework, (iii) overview of Global Markets activities,
(iv) Global Markets partnerships and investments within fintechs,
(v) liquidity risk management and (vi) financial security (sanctions
and embargoes, anti-money laundering and combating the financing
of terrorism, fight against corruption and influence peddling). It was
also the opportunity for directors to meet with the relevant managers
in the Group.
In respect of 2023, one of the directors representing employees completed
her training leading to a diploma at the Institut T e chnique de Banque
and the other director representing employees attended a CSR training
course provided by an external organisation. The directors representing
employees and the director representing employee shareholders also
benefit, like any other directo r, f rom trainings provided by BNP Paribas
as described above, in addition to their external training.
(1) This information supplements the description of the diversity policy applied to members of the Board of directors.
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1.e Directors'attendance at Board and Committee meetings in 2023
Director
Board of directors
Specialised Individual
committees attendance rates
J. LEMIERRE
100%
100%
J.-L. BONNAFÉ
100%
100%
J. ASCHENBROICH
100%
100%
100%
J. BRISAC
100%
100%
100%
P. A. de CHALENDAR
100%
100%
100%
M. COHEN
100%
100%
100%
H. EPAILLARD
100%
100%
100%
R. GIBSON-BRANDON(1)
71%
75%
73%
M. GUILLOU
100%
100%
100%
L. LOGGHE
91%
100%
94%
C. NOYER
100%
83%
91%
D. SCHWARZER
100%
100%
100%
M. TILMANT
100%
100%
100%
S. VERRIER
100%
86%
94%
F. W ICKER-MIURIN(2)
100%
100%
100%
Average
97%
96%
(1) Ms Rajna Gibson-Brandon's term of office ended on 10 September 2023.
(2) Ms Fields Wicker-Miurin's term of office ended at the Shareholders' Annual General Meeting of 16 May 2023.
2. THE WORK OF THE BOARD AND COMMITTEES IN 2023
2.a The work of the Board in 2023
Meetings
Including extraordinary
meetings
Average attendance
rate
Strategy
seminar
Executive
sessions
11
1
97%
1
4
The Board of directors, which determines BNP Paribas' strategy and
overall business objectives based on proposals submitted by Executive
Management and with the aim of promoting long-term value creation
in the light of social and environmental issues:
■ monitored the Group's results for the first nine months of 2023, which
demonstrate both the strength of its diversified and integrated model
and the growth potential of BNP Paribas;
■ proposed to the Shareholders' Annual General Meeting of 16 May 2023,
the payment of a cash dividend of EUR 3.90 in respect of 2022, i.e. a
distribution of 50% of the distributable income for 2022 increased to
60% with the launch of a share buyback programme;
■ approved the launch of a EUR 5 billion share buyback programme (in
two tranches of EUR 2.5 billion) of which (i) EUR 4.04 billion with the
intention of offsetting the effect of the dilution of the net earnings per
share related to the sale of Bank of the West on 1 February 2023 and
(ii) EUR 962 million corresponding to 10% of the distributable profit
for 2022 (see previous point), the execution of which was monitored
during 2023;
■ decided to decrease the share capital by cancelling in several
instalments the shares bought back under the share buyback
programme for both the first and second tranches and delegated the
powers necessary for the material completion of the capital decrease
and in particular the corresponding amendments to the Articles of
association;
■ reviewed the issuance amounts of debt securities in the form of senior
debt and subordinated and hybrid debt;
■ sub-delegated the power to decide on the issue of deeply subordinated
bonds convertible into shares with cancellation of preferential
subscription rights (AT1 bonds);
■ heard the Chief Executive Officer's report on the issue of
super-subordinated bonds convertible into shares with cancellation
of preferential subscription rights (AT1 bonds) and approved the terms
of the additional report made available to shareholders and which will
be brought to the attention of the shareholders at the Annual General
Meeting of 14 May 2024;
■ renewed the delegations of authority for the issuance of debt securities,
particularly for bonds and similar securities;
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■ renewed the Group's American Depositary Receipt programme;
■ approved the management report for 2022;
■ received the Executive Management's comments on the net margin
generated on new lending in 2022 and in the first half of 2023;
■ reviewed the provisional results of the Supervisory Review and
Evaluation Process led by the ECB;
■ reviewed the Bank's relative performance and regulatory ratios in 2023
2
compared with its competitors;
■ monitored changes in the shareholding structure and share price;
■ reviewed the reaction of analysts and investors to the 2022 annual
results and the results of the first half-year 2023;
■ reviewed and approved the answers to written questions submitted by
shareholders at the Annual General Meeting of 16 May 2023;
■ reviewed the Group's budget for 2024;
■ approved the acquisition by BNP Paribas Cardif of 5.01% of the share
capital of SCOR;
■ approved the acquisition by BNP Paribas Cardif of 70% of the share
capital of BCC Vita;
■ approved the sale of Cetelem Mexico;
■ approved the sale of Sharekhan;
■ approved the merger of Exane SA into BNP Paribas (SA);
■ was informed of the evolution of the Group's payments ecosystem and
strategy as part of the transversal "Payments and Flows" initiative of
the GTS 2025 Plan;
■ monitored the implementation of the Group's IT and information
systems strategy;
■ duly noted the Group's residual direct and indirect exposure to clients
established in the Russian Federation and validated the exit strategy
for the Russian Federation approved by Executive Management as well
as the management and monitoring of residual activities of entities
that cannot be sold and monitored the implementation of the strategy;
6
■ reviewed the situation in Türkiye following the earthquake on
6 February 2023 and in Morocco following the earthquake on
8 September 2023, as well as on the efforts undertaken by the Turkish
subsidiary TEB and the Moroccan subsidiary BMCI to help employees
and their families;
■ took note of the highlights of 2022 and the outlook for 2023 in terms
of the Group CSR policy, in terms of economic, social, civic and
environmental responsibility;
■ reviewed the Group's announcements on its commitments and
trajectory in terms of financing the energy transition, including the
update of the "oil and gas" sectoral policy and the publication of new
objectives for the steel, aluminium and cement sectors;
■ was informed of the opinion of the Central Social and Economic
Committee on the Group's economic and financial situation as well
as the elements of a response to the observations made on the one-
year report of the GTS 2025 Plan;
■ was informed of the results of targeted surveys of employees measuring
their satisfaction and quality of life at work;
■ was informed of the status of gender equality within BNP Paribas in
2023;
■ reviewed the related-party agreements entered into and authorised
in previous years but still in force in the past year;
■ renewed the authorisation relating to the delegation of responsibility
for internal control by regulated subsidiaries;
■ was informed of the ECB's preliminary analysis on internal governance.
As in previous years, Single Supervisory Mechanism (SSM) representatives
from the ECB and representatives of the French Autorité de contrôle
prudentiel et de résolution (ACPR) attended the Board of directors'
meeting of 22 February 2023. They outlined their priorities for banking
supervision for 2023, which were followed by an exchange of views with
the members of the Board.
The Board of directors met on 19 December 2023 for a strategic seminar
devoted, among other things, to the execution of the GTS 2025 Plan
and the issues faced by the business lines within Commercial, Personal
Banking & Services, Corporate and Institutional Banking and Investment
and Protection Services.
Executive sessions
In addition to the assessments of the performance and compensation
of the executive corporate officers, which were discussed outside their
presence, four meetings of directors were held in the form of "executive
sessions" on the Group's challenges and operations of which three as a
follow-up to the training sessions provided during the yea r. D uring these
three sessions, the directors had the opportunity to interact with the
operational managers concerned.
Finally, the Chairman and the non-executive directors had discussions
both on strategy and on their perception of interactions between the
Board of directors and the Group's Executive Management.
2.b Work performed by the Financial Statements
Committee and work approved by the Board
of directors in 2023
4
96%
Meetings
Number
of members
Attendance
rate
Examination of the financial statements and financial
information
The Financial Statements Committee:
■ conducted quarterly reviews of the financial statements based on the
documents and information provided by Executive Management and
the work carried out by the Statutory Auditors;
■ each quarte r, a nalysed summary reports of the consolidated results
and annualised return on equity, as well as results and profitability
by business area;
■ reviewed the Group's consolidated balance sheet and changes thereto
on a quarterly basis. On this occasion, it was informed of changes in
off-balance sheet commitments;
■ each quarte r, r eviewed the report on internal audit control points
flagged by Group entities in the context of the certification of their
financial statements. It analysed the change in the risk level observed
for each of the major accounting controls;
■ reviewed changes in equity and the capital adequacy ratio with regard
to the new prudential solvency regulations and new requirements
imposed by the regulator;
■ reviewed trends in revenues and the cost/income ratio by business
for each quarter;
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■ kept track of the changes in prudential requirements and reviewed
changes in risk-weighted assets;
■ reviewed the provisions for litigation;
■ reviewed goodwill;
■ analysed the composition and changes in the Group's balance sheet;
■ acknowledged, each quarte r, t he adjustments made to the Credit
Valuation Adjustment (CVA), the Debt Valuation Adjustment (DVA) and
the Funding Valuation Adjustment (FVA);
■ monitored, on a semi-annual basis, the implementation of the
recommendations of the General Inspection on accounting and
financial risk, the Statutory Auditors on internal control and the ECB;
■ was informed of the restatements made to arrive at a pro forma result
as of 31 March 2022, due to the application from 1 January 2023 of
the accounting standard IFRS 17 (for insurance contracts) as well as
the effects of IFRS 5 (assets and liabilities held for sale) and IAS 29
(financial reporting in hyper-inflationary economies);
■ reviewed the resolutions relating to the approval of the parent
company and consolidated financial statements for 2022, the
allocation of income for the year ended 31 December 2022 and the
payment of the dividend;
■ took note of the transfer to the U.S. SEC and U.S. CFTC of the simplified
quarterly reporting based on 31 December 2022;
■ took note of the change in the accounting risk anticipation and
summary system, aimed at anticipating the risk anticipation process
of the accounting closing as part of the improvement of the permanent
control system;
■ was informed of the proposed updates to the Independence Policy
applicable to the Group's Statutory Auditors;
■ reviewed the draft press release on the Group's results each quarte r.
Each quarte r, w hen reviewing the results, the Financial Statements
Committee:
■ heard the Group's Chief Financial Office r, h is deputy and the person
responsible for accounting and financial reporting;
■ interviewed the Group's Chief Financial Officer and asked the
questions it considered necessary, without the presence of Executive
Management or the Statutory Auditors;
■ heard the Statutory Auditors' comments and conclusions on the
quarterly and annual financial statements;
■ asked the Statutory Auditors the questions it considered necessary,
without the presence of the Group's Executive Management or the
Group Chief Financial Officer;
■ reviewed the accounting certification mechanisms as part of the
internal control procedures.
It reviewed the section of the management report concerning the
internal control procedures relating to the preparation and processing of
accounting and financial information in respect of 2022; it recommended
its approval by the Board of directors.
The Board:
■
was informed of all the work of the Financial Statements
Committee and the findings of the Statutory Auditors at the
end of each reporting period;
■
reviewed the results of the fourth quarter of 2022, full-year
2022 and the first three quarters of 2023;
■
approved the annual company and consolidated financial
statements for 2022, the allocation of income for the year
ended 31 December 2022 and the payment of the dividend;
■
approved draft press releases at each meeting held to discuss
the results;
■
acknowledged the report of the discussions held by the
Financial Statements Committee with the Statutory Auditors
and the Chief Financial Office r, w ithout the presence of the
Executive Management;
■
approved the section of the management report on the
preparation and processing of accounting and financial
information in respect of 2022.
Relations with the Statutory Auditors
The Financial Statements Committee received their annual certificate of
independence from the Statutory Auditors.
It took note of the draft engagement letter of the Statutory Auditors for
the year ended 31 December 2023.
In respect of the fourth quarter 2022, it approved a non-prohibited service
from one of the Statutory Auditors.
In the absence of the Statutory Auditors, the Financial Statements
Committee:
■ reviewed the document relating to the identification and publication
of the Statutory Auditors' fees for 2022;
■ gave its prior authorisation for a recurring assignment by one of
the Statutory Auditors, for which the amount of fees (excluding tax)
exceeded EUR 1 million;
■ took note of the distribution of the mandates envisaged in respect of
the statutory audit for the period 2024-2029; validated the organisation
and timetable of the call for tenders with a view to the appointment
of one or more auditors on sustainability information in accordance
with the provisions of the Corporate Sustainability Reporting Directive
(CSRD).
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2.c Work performed by the Financial Statements
Committee and the Internal Control, Risk
Management and Compliance Committee
in their joint meetings, and work approved
by the Board of directors in 2023
Meetings
Number
of members
Attendance
rate
9
3
93%
The committees:
■ reviewed the findings of the Internal Capital Adequacy Assessment
Process testifying to the Group's ability to continue its activities
while maintaining an adequate level of capitalisation and effectively
managing its risks and took note of the draft Capital Adequacy
Statement;
■ took note of the results of the stress tests conducted in 2023 by the
EBA and internally by the Bank;
■ took note of the Statutory Auditors' audit plan for 2023;
■ discussed whether the prices of the products and services proposed to
customers are compatible with the risk strategy (in accordance with
the provisions of CRD 5);
■ reviewed the main disputes and ongoing proceedings giving rise or
likely to give rise to provisions;
■ reviewed the economic assumptions used to prepare the budget for
2024;
■ reviewed the ACPR letter notifying the Group's Global Systemically
Important Bank score.
The Board:
■
was informed of all the work performed jointly by the
Financial Statements Committee and the Internal Control,
Risk Management and Compliance Committee;
■
approved the process conducted by Executive Management
to assess the internal capital adequacy and its conclusions.
2.d Work performed by the Internal Control,
Risk Management and Compliance Committee
and work approved by the Board of directors
findings.
in 2023
5
9
96%
Meetings
Number
of members
Attendance
rate
Since 19 May 2020, the Internal Control, Risk Management and
Compliance Committee and the Financial Statements Committee have
at least one joint member to support the work of the committees on
the appropriateness of the risks and provisions recognised by the Bank.
Risks
The Internal Control, Risk Management and Compliance Committee:
■ took note of the annual internal control report for 2022 in its permanent
control and operational risk component, including the assessment by
the RISK Function of the management of operational risk in terms of
information technology and communication, outsourcing and fraud;
■ reviewed the Risk Appetite Statement (RAS), the overall risk limits
and those applicable by division as well as the proposals for the
introduction of new risk indicators or new thresholds for limits, notably
in terms of environmental, social and governance (ESG) risks;
■ reviewed the renewal of risk limits for specific sectors and activities;
■ was informed that the risk limits had not been exceeded;
■ took note of the report on the Bank's Internal Liquidity Adequacy
Assessment Process and of the draft Liquidity Adequacy Statement;
■ reviewed the report prepared for 2022 on the Assessment and
Monitoring of Risks, in accordance with the provisions of the order
of 3 November 2014 on the internal control of companies in the
banking, payment services and investment services sectors subject
to the control of the ACPR;
■ monitored the deployment plan of the cybersecurity programme within
the Group, its action plan, the priority topics and the related budget
on a semi-annual basis. It was informed of regulatory changes and
the expected impacts of the Digital Operational Resilience Act. It noted
that no major incident had been detrimental to the Group during the
first half-year 2023;
■ reviewed the dashboard presented quarterly by the Head of RISK and
reviewed the evolution of market risks, credit and counterparty risks,
operational risk, liquidity risk, interest rate risk and equity risk in the
banking book, insurance risk, model risk as well as ESG indicators;
■ was informed of the governance of liquidity risk management, the
impacts of changes in the ECB's monetary policy, the diversified
management of the Bank's deposit base as well as the analysis of the
balance sheet in terms of liquidity;
■ was informed of the management of interest rate risk in the banking
book in a context of rapid and significant increase in interest rates;
■ reviewed the adequacy of the Group's compensation policy and
practices to its risk profile;
■ ensured the independence of the Head of RISK and the Head of Group
Compliance and reported to the Remuneration Committee on its
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The Board:
■
was informed of all the committee's work on the Group's risks
and liquidity;
■
approved the forwarding to the ACPR of the operational risk and
permanent control components of the internal control report;
■
approved changes to the Group's RAS;
■
approved the liquidity risk tolerance level and the policies,
procedures and internal systems relating to liquidity risk;
■
approved the forwarding of the risk measurement and
monitoring report to the ACPR;
■
approved the renewal of the sector budgets.
Ad hoc work
The Internal Control, Risk Management and Compliance Committee:
■ was informed, during each of its meetings, of risks related to current
events, such as the situation of employees and their families in Ukraine
in a context of ongoing conflict with Russia as well as in Türkiye and
Morocco after the earthquakes that struck these two countries and
the change in the cost of risk;
■ was informed of the exposure to the real estate sector in a context of
rising interest rates;
■ was informed of the preliminary analyses of the corporate loan
portfolio with regard to CSR risk factors;
■ took note of the letter from the ECB following the control carried out
on electronic and algorithmic trading, as well as the elements of a
response;
■ took note of the ECB's letter on the risk management framework
applicable to leveraged finance, as well as the elements of response.
The Internal Control, Risk Management and Compliance Committee and
the Corporate Governance, Ethics, Nominations and CSR Committee,
at a joint meeting, also examined the progress made in terms of the
integration of CSR topics, including climate-related risk factors, as part
of the Bank's risk management framework.
The Board was informed of all the ad hoc work of the Committee
on risks and liquidity.
Compliance, internal control, litigation
and periodic control
The Internal Control, Risk Management and Compliance Committee:
■ reviewed the draft Annual Report on internal control for 2022
presenting the internal control system and the highlights of 2022 for
each of the control functions (Compliance, LEGAL, RISK and General
Inspection) in terms of organisation and activity;
■ reviewed the draft annual internal control report for 2022 in its
compliance component, including the assessment by the Compliance
Function of the risks of non-compliance in terms of financial security,
market integrity, protection of customers' interests and corruption;
■ reviewed the draft annual periodic control report for 2022, including
notably the activity report of the General Inspection in respect of the
2022 audit plan;
■ reviewed the Annual Reports on the organisation of internal control
systems in terms of anti-money laundering, combating financing of
terrorism and BNP Paribas (SA)'s freezing of assets on a standalone
and consolidated basis;
■ reviewed the classification of the Group and BNP Paribas (SA)'s risks
in terms of anti-money laundering and combating the financing of
terrorism in accordance with the order relating to the system and
internal control on anti-money laundering and combatting the
financing of terrorism, the freezing of assets, ban on the provision or
use of funds or economic resources;
■ reviewed the MiFID II systems put in place within BNP Paribas (SA)
and the measures in progress to complete the implementation and
remedy the malfunctions identified, the results of the controls carried
out in 2022 by the business lines and Compliance on the compliance of
systems in place to meet MiFID II requirements as well as the system
in place in terms of product governance and employee knowledge
and skills;
■ reviewed the Annual Report on conflicts of interest relating to the
system put in place under MiFID II to prevent and manage conflicts
of interest that may arise in the provision of an investment or related
service, regarding transactional and non-transactional conflicts of
interest;
■ reviewed the results of the annual assessment of corruption risks
for 2022;
■ took note of the analysis of the Bank's 2022 recovery plan carried
out by the ECB and examined the 2023 recovery plan as well as the
various recovery options;
■ reviewed the European regulatory developments in terms of resolution
and was informed of the Group's Minimum Requirement for own funds
and Eligible Liabilities (MREL) to be reached by the first quarter 2024
set by the Single Resolution Board as well as appeals exercised by
the Group;
■ reviewed the implementation of the Group's outsourcing policy;
■ regularly reviewed the main disputes and ongoing proceedings and
the progress of the main cases;
■ reviewed the completeness and evolution of the results of the periodic
control in 2022;
■ reviewed the General Inspection's half-year report;
■ reviewed the Compliance Function's half-year report;
■ regularly monitored the deployment of the 2023 audit plan and the
results of the General Inspection missions;
■ reviewed the remediation plan and its implementation following the
ECB's mission on the General Inspection;
■ took note of the follow-up letter to the Banque de France's control
report on the cheque stream, as well as the response elements;
■ took note of the follow-up letter to the ACPR control report on the
system for implementing the free choice of borrower insurance, as
well as the elements of response;
■ took note of the follow-up letter to the AMF control report on the
activity of BNP Paribas Épargne & Retraites Entreprises acting as
custodian of accounts within the framework of an employee savings
scheme, as well as the elements of response;
■ regularly took note of the fines imposed on the Bank by supervisors.
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The Board:
■
was informed of all the Committee's work on internal control,
risks and compliance;
approved the forwarding to the ACPR of the annual internal
control report in its compliance and permanent control
component;
■
approved the forwarding to the ACPR and the ECB of the
annual periodic control report;
■
approved the forwarding to the ACPR of reports on the
organisation of internal control systems on anti-money
laundering and combating the financing of terrorism, as well
as on asset freezing;
■
took note of the state of play and the measures underway
concerning the implementation of the MiFID II regulation;
■
approved the 2023 recovery plan.
The committee interviewed the Heads of the RISK, Compliance, LEGAL
and General Inspection Functions, without the presence of Executive
Management.
The Board heard the reports of the interviews.
2.e Work performed by the Corporate
Governance, Ethics, Nominations and CSR
Committee and work approved by the Board
of directors in 2023
5
7
100%
Meetings
Number
of members
Attendance
rate
Changes in the membership of the Board
and its specialised committees
The Corporate Governance, Ethics, Nominations and CSR Committee:
■ reviewed the expiry dates of the directors' terms of office and proposed
that the Board of directors submit to the vote of the Shareholders'
Annual General Meeting the renewal of the terms of office expiring
in 2023, namely those of Mr Jean Lemierre, Ms Monique Cohen,
Ms Daniela Schwarzer and Mr Jacques Aschenbroich. It was not
proposed to renew the term of office of Ms Fields Wicker-Miurin, due
to her 12-year mandate at BNP Paribas, as she would no longer meet
the criteria of the Corporate Governance Code defining an independent
director;
■ reviewed the situation of each of the directors and decided to propose
to the Board of directors to appoint, in addition to their respective
presence for one on the Corporate Governance, Ethics, Nominations
and CSR Committee and for the other on the Financial Statements
Committee:
■
Ms Daniela Schwarze r, a s member of the Financial Statements
Committee and member of the Internal Control, Risk Management
and Compliance Committee as of the Shareholders' Annual General
Meeting of 16 May 2023,
■
Mr Christian Noye r, a s member of the Internal Control, Risk
Management and Compliance Committee as of the Shareholders'
Annual General Meeting of 16 May 2023;
■ reviewed the situation of directors asked to take up corporate offices
outside the Group, as provided for in the Suitability policy;
■
■ continued its review of changes to the composition of the Board
of directors and appointed an external firm to identify candidate
independent directors on an ongoing basis;
■ was informed that following the elections of the directors representing
employees to the Board of directors of BNP Paribas (SA), Mr Hugues
Epaillard was re-elected the executives employees (for a period of
three years from 16 February 2024) and Ms Vanessa Lepoultier was
elected by the technicians employees (for a term of three years from
16 February 2024);
■ took note of the resignation of Ms Rajna Gibson-Brandon from her
directorship due to family constraints, as of 11 September 2023;
■ selected, to replace Ms Rajna Gibson-Brandon, several candidates
interviewed by the Chairman of the Committee, then proposed to the
Board of directors the co-option of Ms Marie-Christine Lombard from
10 January 2024, her appointment being subject to ratification by the
Shareholders' Annual General Meeting of 14 May 2024.
The Board:
■
proposed that the Shareholders' Annual General Meeting of
16 May 2023 renews the terms of office of the directors in
question;
■
appointed with immediate effect after the Shareholders' Annual
General Meeting of 16 May 2023, Ms Daniela Schwarzer as
member of the Financial Statements Committee and member
of the Internal Control, Risk Management and Compliance
Committee and Mr Christian Noye r, a s member of the Internal
Control, Risk Management and Compliance Committee;
■
co-opted Ms Marie-Christine Lombard to replace Ms Rajna
Gibson-Brandon, from 10 January 2024, this decision being
subject to ratification by the Shareholders' Annual General
Meeting of 14 May 2024.
Governance
The Corporate Governance, Ethics, Nominations and CSR Committee:
■ reviewed the updated pool of potential independent directors;
■ carried out the annual review of the potential successor(s) for the
Chairman of the Board of directors and the Chief Executive Officer who
could be proposed to the Board of directors in the event of temporary
or permanent disability or death of the position holder;
■ examined the proposed amendments to the Board of directors' Internal
Rules to implement the ECB's recommendations following its mission
on the General Inspection;
■ proposed an amendment to the Articles of association to the Board of
directors for submission to the Shareholders' Annual General Meeting
of 16 May 2023, in order to extend the age limit of the Chairman of
the Board of directors to 75 years, with the option for the Board of
directors to extend it for one year;
■ reviewed the report on the current agreements entered into between
BNP Paribas (SA) or one of its subsidiaries and the directors, the Chief
Executive Officer and the Chief Operating Officers, in accordance with
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the Procedure for current agreements entered into under normal
conditions;
■ ascertained the assessment of Key function holders by the Human
Resources Department;
■ was informed of the implementation and outcome of the controls
related to the Corporate governance Policy applicable to all subsidiaries
within BNP Paribas' prudential scope of consolidation;
■ was informed of the content of exchanges between the Chairman of
the Board of directors and investors about the Bank's governance;
■ reviewed the draft Corporate governance report for 2022.
The Board:
■
approved the amendments to the Internal Rules of the Board
of directors;
■
approved the amendment to the Articles of association
submitted to the vote of the Shareholders' Annual General
Meeting of 16 May 2023;
■
concluded that all the agreements between BNP Paribas
(SA) or one of its subsidiaries and the directors, the Chief
Executive Officer and the Chief Operating Officers that were
examined were ordinary agreements entered into under normal
conditions;
■
approved the Corporate governance report for 2022.
Assessment of the Board of directors
The committee:
■ acknowledged the results of the assessment of the Board of directors
conducted by the Board of directors Secretariat (SCA), for 2022. The
assessment confirmed the directors' satisfaction with the functioning
of the Board of directors, which continues to make progress, underlined
the complementarity of its members, the quality of the discussions
and the attentiveness and mutual respect. It noted the fluidity of
discussions with Executive Management and the quality of the
interventions of the Heads of the operational departments;
■ monitored the implementation of the action plan resulting from
the assessment carried out in 2022, which resulted in progress in
addressing CSR issues;
■ proposed to the Board of directors an action plan including in particular
the strengthening of the skills represented on the Board of directors.
The Board approved the action plan following the 2022
assessment.
In addition, in accordance with Article 9.4. of the Internal Rules of the
Board of directors and the recommendations of the Afep-MEDEF Code
stipulating that the assessment of the Board of directors must be carried
out every three years by an external firm, the Committee pre-selected the
firm for the 2023 assessment, following a call for tenders.
The Board approved the choice of an external firm for the 2023
assessment.
Monitoring of the Conduct framework
The Corporate Governance, Ethics, Nominations and CSR Committee, in
accordance with its powers, devoted one meeting to reviewing the main
actions taken during the past year to strengthen the Conduct framework
within the Group. In particula r, i t reviewed the results of the various
Conduct indicators, including those related to respect for people and
customer perception, as well as the results of the survey launched in 2023
among the Group's employees to collect their opinions on the Conduct
issues.
Directors' compensation
Prior to the Board of director's approval of the allocation of compensation
to each director for 2023, the Corporate Governance, Ethics, Nominations
and CSR Committee reviewed the actual attendance of each director at
the Board and Committee meetings.
Social and Environmental Responsibility
As part of its powers, the Corporate Governance, Ethics, Nominations
and CSR Committee reviewed the report on the Group's social and
environmental responsibility and proposed some amendments and
modifications.
The Committee:
■ reviewed the Group's social and environmental responsibility report
and took note of the Group's main progress and achievements in 2022
in the area of economic, social, civic and environmental responsibility;
■ was informed of (i) the strengthening of the Bank's Vigilance plan
in order to align it with best practices and to set out in more detail
its approach in this area and (ii) the results for 2022 of each of the
ten 2022–2025 CSR dashboard indicators covering the Bank's four
CSR pillars (economic, social, civic and environmental responsibility);
■ was informed of the quantitative and qualitative information describing
the environmental, social and governance risk factors that may
indirectly affect the Bank's accounting balance sheet through their
impact on its customers;
■ reviewed the statement made on behalf of the Group's entities under
the UK and Australian Modern Slavery Acts ("Modern Slavery Act 2015"
in the United Kingdom and "Modern Slavery Act 2018" in Australia) to
ensure that their activities are free from human trafficking and slavery.
This statement is included in the Group's social and environmental
responsibility report;
■ was informed of the Group's policy on diversity, equality and inclusion,
particularly in terms of gender balance in management bodies and
strategic priorities.
The Corporate Governance, Ethics, Nominations and CSR Committee
also took note of comparative analyses published by non-governmental
associations on the commitments of the largest international and
European banking institutions in terms of financing the energy transition.
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It was also informed of BNP Paribas Asset Management's CSR voting
policy at Shareholders' Meetings.
The Corporate Governance, Ethics, Nominations and CSR Committee
and the Internal Control, Risk Management and Compliance Committee,
meeting jointly, reviewed the progress made in terms of the integration
of CSR topics, including climate-related risk factors, as part of the Bank's
risk management framework.
The Board:
■
approved the Group's social and environmental responsibility
■
report, including the sections on the Vigilance plan and the
Extra-Financial Performance Statement, with the amendments
proposed by the committee;
■
approved the statement made on behalf of the Group's entities
on the United Kingdom's "Modern Slavery Act 2015" and
Australia's "Modern Slavery Act 2018".
2.f Work performed by the Remuneration
Committee and work approved by the Board
of directors in 2023
3
5
100%
Meetings
Number
of members
Attendance
rate
One member of the Remuneration Committee is also a member of
the Internal Control, Risk Management and Compliance Committee,
promoting thereby the work of the Committee on the appropriateness of
BNP Paribas' compensation principles and risk policy, thus meeting the
requirements of the French Monetary and Financial Code.
The Remuneration Committee:
In respect of the year 2022
■ With regard to the principles of the compensation policy:
carried out an annual review of the principles of the compensation
■
policy, and of the compensation, indemnities and benefits of any
kind granted in respect of the 2022 performance year to the
corporate officers of the Group's significant subsidiaries in France
falling within the set threshold by law and having delegated these
missions to the Committee,
■
was informed of the provisional results for 2022 of the
■
implementation of the reviews of compliance with the Code of
conduct, rules and regulations and the assessment and control
of risks for the Group's Senior Management Position (SMP) and
material risk takers populations,
■
was informed of the summary of the General Inspection report
concerning the implementation of the review of Group material
risk takers' compensation in respect of 2022,
■
was informed of the follow-up to the recommendations issued by
the ECB as part of one of its missions carried out in 2020.
■ With regard to specific categories of personnel, in particular employees
whose professional activities have a significant impact on the Group's
risk profile:
■
after receiving detailed information on Group employees whose
responsibilities within the Bank have a significant impact on the
Group's risk profile ("material risk takers"):
■
reviewed the issues relating to their remuneration,
■
acknowledged the final scope of the Group's material risk takers,
■
reviewed the 2023 published report on compensation paid to the
Group's material risk takers for 2022;
■
reviewed the resolution on compensation paid in 2022 to the Group's
material risk takers that is subject to an annual advisory vote at the
Shareholders' Annual General Meeting of 16 May 2023,
2
■
audited the 2022 remuneration of the Group's Head of RISK and
Head of Compliance,
was informed of the remuneration of Key function holders for 2022,
■
took note of the list of the highest paid employees in 2022,
■
reviewed the final parameters for determining the variable
compensation package for the Global Markets business line in
respect of 2022 performance and was informed of the final package
awarded and the way in which individual awards were made for
this business line.
■ Concerning the corporate officers:
■
reviewed, without the presence of the Executive Management,
the quantitative and qualitative performance criteria related to
the annual variable compensation of the corporate officers and
proposed to the Board to approve their variable compensation for
the 2022 performance yea r,
■
approved the information relating to the total compensation and
benefits of any kind awarded in respect of 2022 or paid during the
same year ("Say on pay") to directors and corporate officers of
BNP Paribas (SA).
■ Concerning the directors:
■
was informed of the final amount of the compensation allocated to
the directors for 2022.
In respect of the year 2023
■ With regard to the principles of the compensation policy:
■
reviewed the proposed changes to the Group's compensation policy
in order to take into account an extension of the retention period
for the portion of variable compensation paid in instruments to
material risk-takers, as well as certain proposals to adapt the policy,
■
reviewed the rules on deferred compensation and the variable
compensation payment terms applicable to the Group's material
risk takers in 2023,
■
was informed of the actions carried out by the Group with regard
to the gender neutrality of the compensation policy,
was informed of future regulatory changes.
■ Regarding specific categories of personnel:
■
took note of the scope of the Group's material risk takers identified
as an initial estimate in respect of 2023,
■
reviewed the initial parameters used to determine the variable
compensation package for Global Markets' employees for the 2023
performance yea r.
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■ Concerning directors and corporate officers:
■
reviewed the compensation policy for directors and corporate
officers applicable from the 2023 performance yea r,
■
examined the proposed amendments to the Board of directors'
Internal Rules to implement the ECB's recommendations following
its mission on the General Inspection,
■
reviewed the provisional distribution of the compensation allocated
to the directors in respect of 2023 on the basis of their actual
attendance at Board and Committee meetings.
In respect of the year 2024
■ Concerning the corporate officers:
■
reviewed the level and structure of the compensation of corporate
officers based on benchmarks with a panel of comparable European
banks.
■ Concerning the directors:
■
reviewed the level of the compensation package allocated to
directors.
With regard to the votes on the resolutions relating to the compensation
of directors and corporate officers at the Shareholders' Annual General
Meeting of 16 May 2023, the Committee noted that all the resolutions had
received an approval rate significantly higher than 80%. A lower rate was
2
observed for only one of the resolutions relating to the 2023 performance
yea r, i f abstentions are included in the votes cast. Howeve r, t he Committee
recalled that the standard for counting votes now excluded abstentions.
The Board:
■
was informed of all the Remuneration Committee's work;
■
approved the changes to the Group's compensation policy;
■
was informed by the Committee Chairman of the approach used to identify those employees whose professional activities have a significant
impact on the Company's risk profile and the principles for their compensation as proposed by Executive Management for the 2023 performance
year;
■
heard the Committee Chairman's report on the appropriateness of the compensation of the Group's Head of RISK and Head of Compliance
for the 2022 performance year;
■
approved the principles of the compensation policies for directors and corporate officers submitted for approval to the Shareholders' Annual
General Meeting of 16 May 2023;
■
approved, without the presence of the Chief Executive Officer and the Chief Operating Officers, the compensation policy for directors and
corporate officers for 2023;
■
reviewed and approved, without the presence of the Chief Executive Officer and the Chief Operating Officers, the assessment made by the
Committee of the quantitative and qualitative criteria related to the annual variable compensation of the executive corporate officers for the
performance year 2022;
■
approved the information relating to the total compensation and benefits of any kind awarded in respect of 2022 or paid during the same
year ("Say on pay") to the directors and corporate officers of BNP Paribas (SA) and submitted for the approval of the Shareholders' Annual
General Meeting of 16 May 2023;
■
approved the amendments to the Internal Rules of the Board of directors;
■
approved the individual split of the compensation allocated to the directors for 2023.
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INTERNAL RULES OF THE BOARD OF DIRECTORS
PREAMBLE
The rules concerning:
■ the Board of directors;
■ the members of the Board of directors, including their rights and
obligations;
■ the Board of directors' Committees,
are set by the statutory and regulatory provisions, the Company's Articles
of Association, and these rules (in addition to these Internal Rules of the
Board of directors, there is the Policy on the suitability of Members of
the management body and Key function holders mentioned in 1.3 below).
The Board of directors also takes into account the French market
guidelines concerning Corporate Governance and, in particula r, t he
provisions of the Corporate Governance Code of Listed Companies
published by the French employers' organisations Association française
des entreprises privées (Afep) and the Mouvement des entreprises de
France (MEDEF), hereinafter called the Afep-MEDEF Code, to which
BNP Paribas (the "Company") refers.
The Board of directors is a collegial body that collectively represents all
shareholders and acts in all circumstances in the corporate interests of
the Company.
The Board of directors is assisted by specialised committees:
■ Financial Statements Committee;
■ Internal Control, Risk Management and Compliance Committee;
■ Corporate Governance, Ethics, Nominations and CSR Committee; and
■ Remuneration Committee;
■ as well as by any ad hoc committee.
PART ONE – THE BOARD OF DIRECTORS,
COLLEGIAL BODY
ARTICLE 1. DUTIES OF THE BOARD OF DIRECTORS
The Board of directors discusses any question coming within the scope
of its statutory and regulatory duties and contributes to promoting the
corporate values aimed, in particula r, t o ensuring that the conduct of
BNP Paribas' activities by its employees complies with the highest ethical
requirements in order to protect the reputation of the Bank.
In particular and non-exhaustively, the Board of directors is competent
in the following areas:
1.1. ORIENTATIONS AND STRATEGIC OPERATIONS
The Board of directors:
■ determines BNP Paribas' s business orientations and supervises their
implementation by the Executive Management, taking the social and
environmental challenges of BNP Paribas' activities into consideration;
■ subject to the powers expressly allocated to the shareholders'
meetings and within the limit of the corporate purpose, it handles
any issue concerning the smooth running of the Company and settles
by its decisions any matters concerning it;
■ gives its prior approval with respect to all investment or disinvestment
decisions (other than portfolio transactions) in an amount in
excess of EUR 250 million, and any proposal to acquire or dispose
of shareholdings (other than portfolio transactions) in excess of
that threshold, submitted to it by the Chief Executive Office r. I t is
also regularly informed by the Chief Executive Officer of significant
transactions which fall below this limit;
■ gives its prior approval to any significant strategic operation which
falls outside the approved orientations;
■ promotes long-term value creation by BNP Paribas.
1.2. CODE OF CONDUCT
The Board of directors and the Executive Management have developed
a Code of conduct of BNP Paribas Group which defines the standards of
conduct in line with the values and missions determined by the Bank.
This Code, which shall be integrated by each business line and each
employee, governs the actions of each employee and guides the decisions
at every level of the organisation. For this purpose, the Board ensures the
Executive Management implements this Code in business lines, countries
and regions.
1.3. GOVERNANCE,INTERNAL CONTROL
AND FINANCIAL STATEMENTS
The Board of directors:
■ appoints the Chairman, the Chief Executive Officer and, on the
recommendation of the latte r, t he Chief Operating Officer(s) (COO);
■ sets any limits to the powers of the Chief Executive Officer and of the
Chief Operating Officer(s);
■ examines the system of governance, which includes, in particula r,
a clear organisational structure with well defined, transparent and
consistent sharing of responsibilities, efficient processes to identify,
manage, monitor and report the risks to which the Company is or
might be exposed to; it periodically assesses the efficiency of this
governance system and ensures that corrective measures have been
taken to remedy any failings;
■ determines the orientations and controls their implementation by the
actual managers of the monitoring measures in order to guarantee
an effective and prudent management of the Company, including the
segregation of duties in the organisation of the Company and the
prevention of conflicts of interests;
■ ensures the fulfilment of the obligations which are incumbent on it
concerning internal control, and, in particula r, e xamines, at least twice
a yea r, t he activity and the results of the internal control;
■ approves the Management report and the Corporate governance report
attached to it;
■ carries out the controls and verifications which it deems appropriate;
■ ensures that the Chief Executive Officer and/or Chief Operating
Officer(s) implement a policy of non-discrimination and of diversity
including gender balance in management bodies;
■ ensures the implementation of process for preventing and detecting
corruption and influence-peddling for which it receives all the
information required for that purpose;
■ examines and closes the financial statements and ensures their
sincerity;
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■ reviews, at least once a yea r, t he draft budgets and the drafts of the
various statutory and regulatory reports which the Chief Executive
Officer submits to it;
■ prepares a Suitability policy that defines the assessment of Members
of the management body and of Key function holders (the "Policy on
the suitability of Members of the management body and Key function
holders"); the Board of directors (and its committees) apply this policy
and revise it regularly to account in particular for any regulatory
changes.
1.4. RISK MANAGEMENT
The Board of directors:
■ regularly examines, in connection with the strategy it has defined, the
opportunities and risks, such as financial, legal, operational, social, and
environmental risks, those linked to money laundering and terrorist
financing issues, as well as the measures taken as a result;
■ as such, approves and regularly reviews the strategies and policies
governing the taking, management, monitoring and reduction of the
risks to which the Company is or might be exposed to, including the
risks caused by the economic environment. In particula r, t he Board of
directors approves the global risk limits and puts into place a specific
process organising its information and, as the case may be, the referral
of the matter to it in the event these limits are exceeded.
1.5. COMMUNICATION
The Board of directors:
■ ensures that the financial information disclosed to the shareholders
and the markets is of high quality;
■ controls the process of financial publication and communication,
quality and reliability of the information intended to be published
and communicated by the Company.
1.6. REMUNERATION
The Board of directors:
■ allocates, without prejudice to the powers of the Annual General
Meeting, the directors' attendance fees;
■ adopts and regularly reviews the general principles of the remuneration
policy of the Group which relates, in particula r, t o the categories of staff
including the risk takers, staff engaged in control functions and any
employee who, given his overall income, is in the same remuneration
bracket as those whose professional activities have an impact on the
risk profile of the Group;
■ decides, without prejudice to the powers of the Annual General
Meeting, the remuneration of the managers who are corporate officers
(dirigeants mandataires sociaux), in particular their fixed and variable
remuneration as well as any other means of remuneration or benefit
in kind.
Executive corporate officers are not present during the discussions of the
Board of directors and the Remuneration Committee regarding their own
compensation, nor do they participate in the vote.
1.7. RESOLUTION
The Board of directors settles the preventive recovery plan of the
institution, as well as the items necessary to establish the resolution
plan communicated to the competent regulatory authorities.
1.8. RELATIONS WITH CONTROL FUNCTIONS
The heads of the control functions (RISK, Compliance, General Inspection
and LEGAL) are interviewed once a year on the organisation, methods and
procedures used and on the work programme of these functions within
the Group by the Internal Control, Risk Management and Compliance
Committee (CCIRC), without the presence of Executive Management.
In addition, the heads of control functions regularly present a summary of
their activities to the Internal Control, Risk Management and Compliance
Committee.
Without reporting to the executive officers, the heads of the control
functions have direct access to the Board of directors - o r, w here
applicable, its committees.
The Board of directors gives its prior approval to:
■ the appointment of the Head of General Inspection;
■ the dismissal of the heads of RISK, Compliance and General Inspection.
The heads of the control functions are subject to the same rules of ethics,
confidentiality and professional conduct as the directors.
ARTICLE 2. FUNCTIONING OF THE BOARD
OF DIRECTORS
2.1. ORGANISATION OF THE MEETINGS
The Board of directors meets at least four times a year and as often as
circumstances or BNP Paribas' interest requires this.
Notices of meetings may be communicated by the Secretary of the Board.
The Secretary of the Board prepares all of the documents necessary to
the Board meetings and arranges to place all of the documentation at
the disposal of the directors and other participants in the meetings.
An attendance register is kept, which is signed by the directors taking
part in the meeting. It mentions the names of the directors considered
as present.
The Board of directors' decisions are recorded in minutes by the Secretary
of the Board which are entered into a special registe r, i n accordance with
the laws in force. The Secretary of the Board of directors is authorised
to issue and certify copies or excerpts of the Board minutes. Each set of
Board minutes must be approved at a subsequent Board meeting.
The decisions of the Board of directors are carried out either by the
Chief Executive Office r, o r a Chief Operating Office r, o r by any special
representative appointed by the Board of directors.
2.2. MEANS OF PARTICIPATION
Directors taking part in the meeting by videoconference or
telecommunication means enabling their identification, guaranteeing
their effective participation, transmitting at least the voices of the
participants, and meeting, through their technical features, the needs
of confidentiality, of continuous and simultaneous retransmission, with
the exception of Board meetings closing out the financial statements
and the annual report, shall be deemed to be present for the purpose of
calculating both the quorum and the majority. The minutes state, as the
case may be, the occurrence of any technical incidents if they disturbed
the conduct of the meeting.
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PART TWO – THE MEMBERS
OF THE BOARD OF DIRECTORS
ARTICLE 3. COMPOSITION, INFORMATION
AND SKILLS
3.1. CHAIRMAN OF THE BOARD OF DIRECTORS
3.1.1. Relations with the Company's other bodies
and with parties outside the Company
In relations with the Company's other bodies and with parties outside the
Company, the Chairman of the Board of directors alone has the power
to act on behalf of the Board of directors and to express himself in its
name, except in exceptional circumstances, and except where specific
assignments or duties are entrusted by the Board of directors to another
directo r.
The Chairman makes sure that he maintains a close and trusting
relationship with Executive Management. He provides him with his
assistance and his advice while respecting his executive responsibilities.
He organises his activities so as to ensure his availability and put his
experience at the Company's service. He contributes to promoting the
values and image of the Company, both within the Group and externally.
Coordinating closely with Executive Management, he can represent
the Group in its high level relationships, and particularly with major
clients, public authorities and the institutions on national, European and
international levels.
He ensures that the quality of relations with shareholders is maintained,
in close coordination with the work of Executive Management in this area.
He reports on this mission to the Board.
He ensures that principles of Corporate governance are defined and
implemented.
The Chairman is the custodian of the proper functioning of the Board of
directors of BNP Paribas. As such:
■ with the support of the Corporate Governance, Ethics, Nominations
and CSR Committee, with the approval of the Board of directors and
of the Annual General Shareholders' Meeting, where appropriate, he
endeavours to build an efficient and balanced Board, and to manage
replacement and succession plan processes related to the Board of
directors and nominations on which it will have to opine;
■ he can attend all committee meetings and can add any subject to the
agenda of the latter which he considers to be relevant;
■ he ensures that the directors have the documentation and information
necessary to carry out their duties in a timely manner and in a clear
and appropriate form.
3.1.2. Organisation of the work of the Board of directors
The Chairman organises and manages the work of the Board of directors
in order to allow it to carry out all of its duties. He sets the timetable and
agenda of Board meetings and convenes them.
He ensures that the work of the Board of directors is well organised, in
a manner conducive to constructive discussion and decision-making. He
directs the work of the Board of directors and coordinates its work with
that of the specialised committees.
He sees to it that the Board of directors devotes an appropriate amount
of time to issues relating to the future of the Company and particularly
its strategy.
The Chairman is kept regularly informed by the Chief Executive Officer and
other members of the Executive Management of significant events and
situations relating to the business of the Group, particularly those relating
to: deployment of strategy, organisation, investment or disinvestment
projects, financial transactions, risks, financial statements.
The Chief Executive Officer provides the Chairman with all information
required under French law regarding the internal control report.
He may ask the Chief Executive Officer or any manage r, a nd in particula r,
the heads of the control functions, for any information likely to assist the
Board and its committees in the carrying out of their duties.
He may hear the Statutory Auditors in order to prepare the work of the
Board of directors and of the financial statements' Committee.
3.2. DIRECTORS
They undertake to act in the corporate interest of BNP Paribas and
to comply with all of the provisions of these Internal Rules that are
applicable to them, and more specifically the procedures of the Board
of directors.
3.3. OTHER PARTICIPANTS
3.3.1. Non-voting directors (censeurs)
The non-voting directors attend the meetings of the Board and of the
specialised committees in an advisory capacity.
3.3.2. Statutory Auditors
The Statutory Auditors attend the meetings of the Board and of the
specialised committees which examine or close the annual or interim
financial statements and may attend the meetings of the Board and of
the specialised committees when the Chairman of the Board considers
it necessary.
3.3.3. Persons invited
The Board can decide to invite one or several persons to attend the
meetings.
3.3.4. Representative of the Central Works Committee
The representative of the Central Works Committee attends the meetings
of the Board in an advisory capacity.
3.3.5. Secretary of the Board
The Secretary of the Board is appointed by the Board and attends the
meetings of the latte r.
3.4. ACCESS TO INFORMATION
3.4.1. Information and documentation
For the purpose of efficiently participating in the Board of directors'
meetings and making enlightened decisions, each director may ask that
the Chairman or the Chief Executive Officer communicates to him or her
all documents and information necessary to perform his or her duties, if
these documents are useful for making decisions and are related to the
Board of directors' powers.
Requests are sent to the Secretary of the Board of directors who informs
the Chairman thereof.
When the Secretary of the Board of directors considers this preferable,
for reasons of convenience or confidentiality, the documents thus placed
at the disposal of the directors as well as of any person attending the
meetings of the Board are consulted through the Secretary of the Board
or through the competent employee of the Group.
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3.4.2. Systems
The placing at disposal of the directors or of any person attending the
Board meetings of all of the documentation with a view to meetings of the
Board, may be done by any means, including dematerialised. In this case,
all the measures of protection considered necessary are taken to protect
the confidentiality, the integrity and the availability of the information
and each member of the Board or any person who has received the
documentation is responsible not only for the systems and media thus
placed at disposal but also for their access.
3.5. TRAINING, INDIVIDUAL AND COLLECTIVE SKILLS
The directors of BNP Paribas possess, both individually and collectively,
the expertise, experience, skills, understanding and personal qualities
necessary, notably in terms of professionalism and integrity, to properly
perform their duties in connection with each of the significant activities
of BNP Paribas and guaranteeing efficient governance and supervision.
The directors shall ensure that their knowledge is kept updated
in compliance with the Policy on the suitability of Members of the
management body and Key function holders.
The directors representing employees and the director representing
employee shareholders are given time dedicated to training determined
by the Board in accordance with the regulations in force. At the end
of the training, the training centre chosen by the Board must issue a
certificate of regular attendance, which the director must remit to the
Secretary of the Board.
ARTICLE 4. OBLIGATIONS
4.1. HOLDING AND KEEPING OF BNP PARIBAS
SHARES
Every director appointed by the General Shareholders' Meeting must
personally hold 1,000 shares. The director must hold all of the shares
within twelve months of appointment. At the expiry of this period, every
director concerned shall make sure to keep the minimum number of
BNP Paribas' shares throughout their term of office.
The directors undertake not to engage in any individual hedging or
insurance strategies to cover their risk on such shares.
This obligation does not concern directors representing employees and
director representing employee shareholders.
4.2. ETHICS– CONFIDENTIALITY
4.2.1. Ethics
4.2.1.1. Availability and regular attendance
The members of the Board of directors shall devote the time and the effort
necessary to carry out their duties and responsibilities, in compliance
with the Policy on the suitability of Members of the management body
and Key function holders.
The directors representing employees and the director representing
employee shareholders are given a preparation time determined by
the Board in accordance with the Guidelines on the assessment of the
suitability of Members of the management body and Key function holders.
4.2.1.2. Independence and loyalty
Every member of the Board of directors shall at all times maintain his or
her independence of mind, in compliance with the Policy on the suitability
of Members of the management body and Key function holders.
He or she shall act with loyalty towards the other directors, shareholders
and BNP Paribas.
He or she shall refuse any benefit or service liable to compromise his
independence.
4.2.1.3. Duty of vigilance
Every member of the Board of directors is bound by a duty of vigilance
with respect to the keeping, use and, as the case may be, the return of
the systems, documents and information placed at disposal.
4.2.2. Confidentiality
Any director and any person participating in the work of the Board is
bound by an obligation of absolute confidentiality about the content of
the discussions and decisions of the Board and of its committees as well
as the information and documents which are presented therein or which
are provided to them, in any form whatsoeve r.
Except as provided by law, he or she is prohibited from communicating
to any person outside of the Board of directors any information that has
not been made public by BNP Paribas.
4.3. ETHICAL CONDUCT – LIMITATION ON
DIRECTORSHIPS – CONFLICTS OF INTERESTS –
PERSONAL DECLARATIONS
4.3.1. Ethical conduct
If directors have any questions related to ethical conduct, they may
consult the head of the Group Compliance Function.
The legislation relating to insider trading applies particularly to directors
both in a personal capacity and when carrying out their duties within
companies that hold shares in BNP Paribas. They are required, in
particula r, t o respect the legal requirements governing the definition,
communication and exploitation of inside information, the principal
provisions of which are communicated to them when they take
directorship.
Directors can only deal in securities of BNP Paribas on a personal
basis during the period of six weeks beginning on the day after the
publication of the quarterly and annual financial statements, or after
the publication of a press release on the Company's operations, unless
they are in possession during that period of information that puts them
in the position of an insider with respect to stock exchange regulations.
Directors shall refrain from any transactions that could be considered as
speculative, and in particular from leveraged purchases or short sales,
or short-term trading.
The director as well as persons with close connections with him are
under the obligation to declare to the French Financial Markets Authority
(Autorité des marchés financiers – AMF), which ensures the publication
thereof, and to BNP Paribas, the transactions that they execute in
BNP Paribas shares and the financial instruments related thereto.
4.3.2. Limitation on directorships
The director complies with the statutory and regulatory provisions which
are applicable to him or he r, o r which are applicable to BNP Paribas,
concerning limitations on directorships, as well as the Policy on the
suitability of Members of the management body and Key function holders.
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4.3.3. Conflicts of interests
The director complies with the applicable statutory and regulatory
provisions regarding conflicts of interests – in particular the so-called
"related-party agreements" (conventions réglementées) regime as well
as with the Policy on the suitability of Members of the management body
and Key function holders.
Whatever the circumstances, in the event of breach of the obligations
with respect to conflict of interests by a directo r, t he Chairman of the
Board of directors shall take all the statutory measures necessary in
order to remedy it. He can, furthermore, keep the relevant regulators
informed of such acts.
4.3.4. Personal declarations
The director undertakes to inform the Secretary of the Board as soon
as possible of any change in his or her personal situation (change of
address, appointment, directorships, duties carried out, or criminal, civil,
or administrative convictions, etc.).
In particula r, a nd in compliance with the Policy on the suitability of
Members of the management body and Key function holders, the director
shall inform, as soon as possible, the Chairman of the Board of directors of
any criminal or civil conviction, management prohibition, administrative
or disciplinary sanction, or measure of exclusion from a professional
organisation, as well as any proceedings liable to entail such sanctions
against him or he r, a ny dismissal for professional misconduct, or any
dismissal from a directorship of which he or she may be the subject.
Similarly, the director informs the Chairman of the Board of directors of
any criminal or civil order entered against it, administrative or disciplinary
sanction or measure of exclusion from a professional organisation, as well
as of any Court-ordered reorganisation or liquidation measure of which
a company of which he is the manage r, s hareholder or partner is the
subject or would be liable to be the subject.
ARTICLE 5. REMUNERATION OF DIRECTORS
AND NON-VOTING DIRECTORS
(CENSEURS)
The overall amount of remuneration given to the directors is determined
by the General Shareholders' Meeting.
The individual amount of remuneration given to directors is determined
by the Board of directors pursuant to a proposal by the remuneration
Committee. It comprises a predominant variable portion based on
actual participation in meetings, regardless of the means. Directors
residing abroad receive an increased amount, except where they may
participate in meetings of the Board of directors by videoconference or
telecommunications means.
Actual participation in the committees entitles committee members to
an additional remuneration, the amount of which may differ depending
on the committees. Committee members receive this additional
remuneration for their participation in each different Committee. The
Chairmen of Committees also receive an additional remuneration.
The remuneration of the non-voting directors is determined by the Board
of directors pursuant to a proposal of the Remuneration Committee.
PART THREE – THE BOARD OF DIRECTORS'
SPECIALISED COMMITTEES
To facilitate the performance of their duties by BNP Paribas' directors,
specialised committees are created within the Board of directors.
ARTICLE 6. COMMON PROVISIONS
6.1. COMPOSITION AND SKILLS
They consist of members of the Board of directors who do not carry
out management duties within the Company. They include the required
number of members who meet the criteria required to qualify as
independent, as recommended by the Afep-MEDEF Code. The members
of the committees have the knowledge and skills suited to carry out of
the missions of the committees in which they participate.
The Remuneration Committee includes at least one director representing
the employees.
Their remits do not reduce or limit the powers of the Board of directors.
The Chairman of the Board of directors sees to it that the numbe r,
missions, composition, and functioning of the committees are adapted
at all times to the statutory and regulatory provisions, to the Board of
directors' needs and to the best Corporate governance practices.
By decision of the Board, the Internal Control, Risk Management and
Compliance Committee (CCIRC), the Remuneration Committee (RemCo),
and the Corporate Governance, Ethics, Nominations and CSR Committee
(CGEN) may, in accordance with the provisions of Article L.511-91 of the
French Monetary and Financial Code (Code monétaire et financier) ensure
their missions for the companies of the Group under the supervision of
the regulator on a consolidated or sub-consolidated basis.
6.2. MEETINGS
The committees shall meet as often as necessary.
6.3. MEANS PLACED AT THE DISPOSAL
OF THE COMMITTEES
They may call upon outside experts when needed.
The Chairman of a Committee may ask to hear any officer within the
Group, regarding issues falling within this Committee's jurisdiction, as
defined in the present Internal Rules.
The Secretary of the Board prepares all of the documents necessary to
the meetings of the specialised committees and organises the placing of
the documentation at the disposal of the directors and other participants
in the meetings.
This documentation can be placed at disposal by any means, including
dematerialised. In this case, all the measures of protection considered
necessary are taken for the purposes of protecting the confidentiality,
integrity and the availability of the information and each member of the
specialised Committee concerned or any person who has received the
documentation is responsible not only for the systems and media and
their provision but also for their access.
6.4. OPINIONS AND MINUTES
They express opinions intended for the Board of directors. The Chairmen
of committees, or in case of their impediment another member of the
same committee, present a verbal summary of their work at the next
Board of directors' meeting.
Written reports of committees' meetings are prepared by the Secretary
of the Board and communicated, after approval at a subsequent meeting,
to the directors who so request.
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ARTICLE 7. THE FINANCIAL STATEMENTS
COMMITTEE
7.1. MISSIONS
In accordance with the provisions of the French Commercial Code,
the Committee ensures the monitoring of the issues concerning the
preparation and verification of the accounting and financial information.
7.1.1. Monitoring of the process of preparation
of the financial information
The Committee is tasked with analysing the quarterly, half-yearly and
annual financial statements issued by the Company in connection with
the closing of financial statements and obtaining further explanations
of certain items prior to presentation of the financial statements to the
Board of directors.
The Committee shall examine all matters relating to these accounts
and financial statements: the choices of accounting principles and
policies, provisions, analytical results, prudential standards, profitability
indicators, and all other accounting matters that raise methodological
issues or are liable to give rise to potential risks.
It makes, as the case may be, recommendations, in order to ensure
integrity of the elaboration process of the financial information.
7.1.2. Monitoring of the efficiency of the internal
control systems and of risk management
concerning accounting and financial matters
The Committee shall analyse, at least twice a yea r, t he summary of
the operations and the results of the internal accounting and financial
control, as well as those originate from controls on the elaboration
process and the processing of accounting, financial and extra-financial
information, based on the information communicated to it by the
Executive Management. It shall be briefed of incidents revealed by the
accounting and financial internal control, reported on the basis of the
thresholds and criteria defined by the Board of directors and shall report
on its findings to the Board of directors.
It is informed by the Chairman of the Board of directors of any possible
failure to implement corrective measures decided within the framework
of the accounting and financial internal control system that has been
brought to his direct knowledge by the head of periodic control and
reports on its findings to the Board of directors.
7.1.3. Monitoring of the statutory auditing of the annual
financial statements and of the consolidated
financial statements by the Statutory Auditors as
well as of the independence of the Statutory Auditors
The Committee shall steer the procedure for selection of the Statutory
Auditors, express an opinion on the amount of fees charged for conducting
the legal auditing engagements and report to the Board of directors on
the outcome of this selection process.
It shall review the Statutory Auditors' audit plan, together with their
recommendations and their monitoring.
It shall be notified on a yearly basis of the amount and breakdown of
the fees paid by the BNP Paribas Group to the Statutory Auditors and
the networks to which they belong, calculated using a model approved
by the Committee. It shall ensure that the amount or the portion of the
audit firms or the networks' revenues that BNP Paribas represents is not
likely to compromise the Statutory Auditors' independence.
Its prior approval shall be required for any engagement entailing total
fees of over EUR 1 million (before tax). The Committee shall approve,
a posteriori, all other engagements, based on submissions from
the Finance Department. The Committee shall validate the Finance
Department's fast-track approval and control procedure for all "non-
audit" engagements entailing fees of over EUR 50,000. The Committee
shall receive, on a yearly basis from the Finance Department, a report
on all "non-audit" engagements carried out by the networks to which
the Group's Statutory Auditors belong.
It receives from the Statutory Auditors a written report on their main
observations concerning the weaknesses of internal control and reviews
it, as well as most significant recommendations issued in the framework of
their mission and reviews it. It takes notes of the most significant statements
and recommendations issued by the internal audit in the framework of their
missions regarding accounting and financial information.
Each Statutory Auditor shall report on a yearly basis to the Committee on
its internal control system for guaranteeing its independence, and shall
provide a written statement of its independence in auditing the Group.
The Committee accounts for the statements and conclusions of the Haut
Conseil des Commissaires aux comptes (H3C) resulting from the controls
provided by the H3C in the professional activity of Statutory Auditors.
At least twice a yea r, t he Committee shall devote part of a meeting to a
discussion with the team of Statutory Auditors, without any member of
the company's Executive Management being present.
The Committee meets in the presence of the team of Statutory Auditors,
to review quarterly, half-yearly and annual financial statements.
Howeve r, t he Statutory Auditors shall not attend all or part of Committee
meetings dealing with their fees or their re-appointment.
The Statutory Auditors shall not attend all or part of Committee meetings
dealing with specific issues that concern a member of their staff.
Except in the event of exceptional circumstances, the files containing
the quarterly, half-yearly and annual results and financial statements
shall be sent to Committee members at least three days prior to the
Committee meetings.
Where questions of interpretation of accounting principles arise in
connection with quarterly, half-yearly and annual results, and involve
choices with a significant impact, the Statutory Auditors and FINANCE
shall submit, on a quarterly basis, a memorandum to the Committee
analysing the nature and significance of the issues at play, presenting
the pros and cons of the various possible solutions and explaining the
rationale for the choices ultimately made.
They present, at least twice a yea r, a n ote on the works on certification of
the financial statements. Based on it, the Committee reports to the Board
on the results of this mission and on the way this mission has contributed
to the integrity of the financial information and on his own role in it.
7.2. CHAIRMAN'S REPORT
The Committee shall review that part of the draft of the Chairman's report
on internal control procedures relating to the preparation and processing
of accounting and financial information.
7.3. HEARINGS
With regard to all issues falling within its jurisdiction, the Committee may,
at its initiative, hear the heads of finances and accounting of the Group,
as well as the head of Asset/liability management.
The Committee may ask to hear the head of Finances Group with regard
to any issue within its jurisdiction, for which he may be held liable, or
the Company's management may be held liable, or that could call into
question the quality of accounting and financial information disclosed
by the Company.
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ARTICLE 8. THE INTERNAL CONTROL, RISK
MANAGEMENT AND COMPLIANCE
COMMITTEE
8.1. MISSIONS
8.1.1. Missions concerning the global risk strategy
The Committee advises the Board of directors on the adequacy of the
global strategy of the Company and the overall current and future risk
2
appetite. It assists the Board of directors when the latter verifies the
implementation of this strategy by the actual managers and by the Head
of risk management.
For this purpose, the Committee examines the key orientations of the
Group's risk policy, including social and environmental orientations, based
on measurements of the risk and profitability of the operations reported
to it, in accordance with the regulations in force, as well as any specific
issues related to these matters and methods.
In the event that a global risk limit is exceeded, a procedure to refer the
matter to the Board of directors is provided for: the Executive Management
informs the Chairman of the Committee, who can decide to convene the
Committee or to request the convening of the Board of directors.
8.1.2. Missions concerning the examination
of the prices of the products and services
proposed to customers
In the framework of its mission and according to the terms it shall define,
the Committee examines whether the prices of the products and services
proposed to customers are compatible with the risk strategy. Where prices
do not properly reflect the risks, it presents to the Board of directors an
action plan to remedy this.
8.1.3. Missions concerning remuneration
Without prejudice to the missions of the Remuneration Committee, the
Internal Control, Risk Management and Compliance Committee examines
whether the incentives provided for by the policy and the remuneration
practices of the Company are compatible with its situation with respect to
the risks to which it is exposed, its capital, its liquidity and the probability
and the spreading over time of the expected profits.
To carry out this mission, the Chairperson of the Committee or his/her
representative shall attend the Remuneration Committee's meeting and
presents to it the position upheld.
8.1.4. Missions concerning internal control
and compliance
The Committee ensures compliance with its obligations relating to internal
control, including compliance with banking and financial regulations on
internal control; it also examines any issue relating to the compliance
policy relating, in particula r, t o reputational risk or professional ethics.
The Committee analyses the risk measurement and monitoring report.
Twice a year it examines the internal control operations and findings
(excluding accounting and financial internal control, which is the
responsibility of the Financial Statements Committee) based on the
information provided to it by Executive Management and the reports
presented to it by the heads of permanent control, compliance and
periodic controls. It reviews the Company's exchanges of correspondence
with the Secretariat General of the Prudential Control and Resolution
Authority (Autorité de contrôle prudentiel et de résolution – ACPR).
The Committee is briefed on incidents revealed by internal control that
are reported on the basis of the thresholds and criteria defined by the
Board of directors and reports on its findings to the Board of directors.
It analyses the status of recommendations made by the General
Inspection unit that were not implemented. It is informed by the Chairman
of the Board of directors of any possible failure to implement corrective
measures decided within the framework of the internal control, of which
it would have been informed directly by the head of periodic control and
reports on its findings to the Board of directors.
The General Inspection charter is presented to the Committee.
8.2. ACCESS TO THE INFORMATION
The Committee has all the information about the situation of the Company
with respect to risks. It may, if this is necessary, use the services of the
Head of risk management or of outside experts.
8.3. JOINT MEETINGS OF THE FINANCIAL
STATEMENTS COMMITTEE AND THE
INTERNAL CONTROL, RISK MANAGEMENT
AND COMPLIANCE COMMITTEE
The Financial Statements Committee and the Internal Control, Risk
Management and Compliance Committee shall meet at the request of
the Chairman of the Internal Control, Risk Management and Compliance
Committee, or at the request of the Chairman of the Financial Statements
Committee or at the request of the Chairman of the Board of directors.
In that context, the members of these committees:
■ shall be briefed of the mission plan of the General Inspection and of
the audit plan of the Statutory Auditors and shall prepare the work of
the Board of directors in assessing the risk policies and management
systems;
■ deal with common subjects concerning the risks and financial
impacts policy (including provisioning). They carry out, in particula r,
a systematic review of the risks that can in the future have a significant
impact on the financial statements.
This meeting shall be chaired by the Chairman of the Financial
Statements Committee.
ARTICLE 9. THE CORPORATE GOVERNANCE, ETHICS,
NOMINATIONS AND CSR COMMITTEE
9.1. MISSIONS CONCERNING CORPORATE
GOVERNANCE
The Committee is tasked with monitoring Corporate governance issues.
Its role is to help the Board of directors to adapt Corporate governance
practices within BNP Paribas and to assess its functioning.
It ensures the follows up on a regular basis of the evolution in the governance
disciplines at the global, European and national levels. At least once a yea r,
it presents a summary thereon to the Board of directors. It selects measures
that are suitable for the Group and which are likely to bring its procedures,
organisation and conduct in line with best practice in this area.
It examines the draft report on Corporate governance and all other
documents required by applicable laws and regulations.
The Committee is in charge of the follow up of questions related to
the social and environmental responsibility ("CSR"). For this purpose,
it handles more specifically the Group's contribution to sustainable
economic development, in particular by an ethical financing of the
economy, by promoting the development and the commitment of the
employees, by the protection of the environment and the fight against
climate change, as well as the positive impact of the Group in the society.
9.2. CODE OF CONDUCT
The Committee carries out regular monitoring of the update of
BNP Paribas Group's Code of conduct.
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9.3. MISSIONS CONCERNING THE IDENTIFICATION
O F, S ELECTION O F, A ND SUCCESSION PLAN
FOR DIRECTORS, COMMITTEE MEMBERS,
AND NON-VOTING DIRECTORS (CENSEURS)
For the identification of, selection of, and succession plan for the directors,
the Committee applies the principles and procedure described in the
Policy on the suitability of Members of the management body and
Key function holders. The Committee regularly reviews this policy and
proposes any amendments it deems advisable to the Board of directors.
The Committee sets an objective to achieve with respect to gender
balance on the Board of directors. It draws up a policy aimed at achieving
this objective. This objective and this policy, once set, are approved by
the Board of directors.
As the case may be, the Committee proposes to the Board of directors
the appointment of the non-voting directors.
9.4. MISSIONS CONCERNING THE ASSESSMENT
OF THE BOARD OF DIRECTORS
The Committee assesses periodically, and at least once a yea r, t he balance
and diversity of the Board in compliance with the Policy on the suitability
of Members of the management body and Key function holders.
Furthermore, an assessment of the Board of directors is made by a firm
of external expert advisors every three years.
9.5. MISSIONS CONCERNING THE SELECTION O F,
APPOINTMENT O F, A ND SUCCESSION PLAN
FOR THE CHAIRMAN, MEMBERS OF EXECUTIVE
MANAGEMEN T, A ND KEY FUNCTION HOLDERS
The Committee periodically examines the Policy on the suitability of
Members of the management body and Key function holders regarding
the selection of, appointment of, and succession plan for the executive
officers, the Chief Operating Officer(s), the Chairman, and the Key function
holders as defined in this Policy, and makes recommendations in the
matte r.
The Committee contributes to the selection and appointment of, as well
as the establishment of succession plans fo r, t he Chairman and members
of the Executive Management, pursuant to the Policy on the suitability of
Members of the management body and Key function holders.
With regard to the key function holders, it ensures that the Policy on the
suitability of Members of the Management body and Key function holders
is applied by Executive Management.
9.6. MISSIONS CONCERNING THE ASSESSMENT
OF THE CHAIRMAN, CHIEF EXECUTIVE OFFICER,
AND CHIEF OPERATING OFFICER(S)
The Committee assesses the action of the Chairman.
It makes an assessment of the performance of the Chief Executive Officer
and of the Chief Operating Officer(s) in the light of the strategic directions
of the business established by the Board of directors and taking into
consideration their capacities for anticipation, decision, organisation and
exemplarity.
9.7. MISSIONS CONCERNING THE INDEPENDENCE
OF THE DIRECTORS
The Committee is tasked with assessing the independence of the
directors, within the meaning of the Afep-MEDEF Code, and reporting its
findings to the Board of directors.
9.8. MISSIONS CONCERNING THE GENERAL BALANCE
OF THE BOARD OF DIRECTORS
The Committee ensures that the Board of directors is not dominated by
one person o r, a s mall group of persons in a manner that is detrimental to
the interests of the Company. For this purpose, it applies the Policy on the
suitability of Members of the management body and Key function holders.
ARTICLE 10. THE REMUNERATION COMMITTEE
The Committee prepares the decisions that the Board of directors
approves concerning remuneration, in particular that which has an effect
on risk and the management of risks.
The Committee makes an annual examination:
■ of the principles of the remuneration policy of the Company;
■ of the remuneration, allowances and benefits of any kind granted to
the directors and corporate officers of the Company;
■ of the remuneration policies of the categories of staff, including the
executive managers, risk takers, and staff engaged in control functions
and any employee, who given his overall income, is in the same
remuneration bracket as those whose professional activities have a
material impact on the risk profile of the Company or of the Group.
The Committee directly controls the compensation of the Head of the RISK
Function, the Head of Compliance and the Head of General Inspection,
with regard to their independence and the rules laid down by the Code
of conduct.
Within the framework of the missions described above, the Committee
prepares the work of the Board of directors on the principles of the
remuneration policies, in particular concerning Group staff whose
professional activities have a material impact on the Group's risk profile,
in accordance with the regulations in force.
It is tasked with studying all issues related to the personal status of
the directors and corporate officers, and in particular the remuneration,
the amount of retirement benefits and the allotment of subscription or
purchase options to the Company's shares, as well as the provisions
governing the departure of the members of the Company's management
or representational bodies.
It examines the conditions, the amount and the distribution of the
subscription or purchase stock option plans. Similarly, it examines the
conditions for the allotment of free shares.
With the Chairman, it is also within its remit to assist the Chief Executive
Officer with any matter relating to the remuneration of senior executives
that the latter might submit to it.
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GUIDELINES ON THE ASSESSMENT OF THE SUITABILITY OF MEMBERS
OF THE MANAGEMENT BODY AND KEY FUNCTION HOLDERS
CORPORATE GOVERNANCE AND INTERNAL CONTROL
I.
BACKGROUND AND DEFINITIONS
a.
Background
The purpose of the Policy on the suitability of Members of the management
body and Key function holders is, while complying with the legal and
regulatory provisions applicable to the Company, to specify and detail
the procedures for implementing the provisions of the Internal Rules and
of the regulations applicable to BNP Paribas in the French Monetary and
Financial Code (hereinafter "CoMoFi"), the European Banking Authority
("EBA") Guidelines on the assessment of the suitability of members of
the management body and key function holders (the "Fit and Proper
Guidelines") for which the revision published on 2 July 2021, and on
Internal governance, from the comply or explain process (defined below).
Pursuant to these provisions, these guidelines cover the following topics:
I.
Identification of, selection of, and succession plan for Members of
the management body and Key function holders:
a. Identification of, selection of, and succession plan for directors,
b. Identification of, selection of, and succession plan for the Chief
Executive Officer and Chief Operating Officer(s),
c. Identification of, selection of, and succession plan for Key function
holders;
II. Independence of mind and management of conflicts of interest of
the Members of the management body:
a. General principles,
b. Cases of conflicts of interests,
c. Management of conflicts of interests;
III. Compliance with the rules on limitation of directorships and on
availability of the Members of the management body:
a. Compliance with rules when appointing a Member of the
management body,
b. Compliance with rules while holding directorship as a Member
of the management body;
I V. Good repute, honesty, and integrity of the Members of the
management body;
V. Diversity of the Members of the management body and collective
competence of the Board of directors;
VI. Induction and training of the Members of the management body.
These guidelines are approved by the Board of directors. Updates shall
also be submitted for approval to the Board of directors.
b.
Definitions
Members of the management body means the directors, the Chief
Executive Office r, a nd the Chief Operating Officer(s).
Key function holders means, for the purposes of the Fit and Proper
Guidelines, the Chief Financial Office r, t he Head of Compliance, the Head
of RISK and the Head of the General Inspection, the Head of LEGAL, the
Head of Human Resources, and the individuals to whom the Company has
decided to confer the title of Deputy Chief Operating Officers.
Fit and Proper means the assessment conducted by BNP Paribas on the
collective suitability of the Board and of the relevant individuals with
regard to the following criteria:
■ knowledge, skills and experience;
■ good repute, honesty, and integrity;
■ independence of mind;
■ compliance with the rules on limitation of directorships and on
availability.
Comply or explain process means the procedure in the Single Supervisory
Mechanism by virtue of which the European Central Bank ("ECB") and
the competent national authorities announce their intention to comply,
fully, partially, or not at all, with the guidelines issued by that authority.
Company means BNP Paribas.
CGEN means the Corporate Governance, Ethics, Nominations and CSR
Committee of BNP Paribas.
SCA means the Secretariat of the Board of directors of BNP Paribas.
II.
IDENTIFICATION O F, S ELECTION O F, A ND
SUCCESSION PLAN FOR MEMBERS OF THE
MANAGEMENT BODY AND KEY FUNCTION HOLDERS
a.
Identification of, selection of, and succession
plan for directors
The CGEN is tasked with the identification of the persons that are likely to
be appointed as directors, regardless of their role on the Board of directors,
to establish and to maintain at all times a list of these persons, which
will be periodically monitored by the CGEN, without precisely determining
the circumstances requiring their nomination to the Board of directors.
Identification by the CGEN of the persons likely
to be appointed as directors
The CGEN shall identify and recommend to the Board of directors
candidates suitable for the non-executive directorship of directo r,
with a view to proposing their candidacy to the General Meeting. In
the determination of the potential candidates, the CGEN assesses the
balance of skills, experience, diversity, as well as the integrity and the
capacity of understanding the stakes and the risks, both personal and
collective, of the members of the Board. It ensures, furthermore, that
the candidates are able to act objectively, critically and independently,
notably with respect to other directorships they hold, that they have
the courage necessary to express their thoughts and their judgements,
sufficient availability to have a strong commitment in their duties and
the objectivity indispensable for their directorship and, lastly, the desire
to protect the interests of the Company and ensure its proper running.
The CGEN specifies the missions and the necessary qualifications for the
duties to be carried out within the Board of directors and calculates the
time to be devoted to such duties.
For the purposes of identifying the candidate, the CGEN,
■ on the one hand, mandates, if it wishes so, one or several specialised
agencies in the research for independent directors with the meaning of
the provisions provided in Afep-MEDEF Code; this or these specialised
agencies are selected further to a tender organised in coordination with
the SCA;
■ on the other hand gathers inputs on this from other Board members.
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Upon receipt of a proposal, the CGEN conducts a careful examination
of the provisions of these guidelines as well as on the following criteria
based on both personal and collective skills:
■ knowledge and skill in requested areas, based on experience and
the ability to understand the issues and risks of key activities for the
Bank, including social and environmental issues as well as money
laundering and terrorism financing related risks, enabling directors
to make informed and effective decisions;
■ courage, in particular to express opinions and make judgments,
enabling directors to remain objective and independent;
■ availability, i.e. sufficient time for the director to dedicate to his or
her directorship and related training, and the assiduity, which allow
the necessary hindsight and promote the director's commitment and
sense of responsibility regarding the exercise of their directorship;
■ loyalty, which fosters the director's commitment to the Company and
to their duties within the Board, which collectively represents the
shareholders;
■ director's proper understanding of the Company's culture and ethics;
■ good repute and propriety: a person should not be considered of good
repute and meeting the propriety criterion if his or her personal or
business conduct gives rise to any material doubt about his or her
ability to ensure his or her directorship as independent directo r,
and if, more specifically, he or she is personally involved in a money
laundering or terrorism financing operation or attempt.
The CGEN ensures the regular updating of the list of persons that are
likely to be selected, and, once a yea r, r eports to the Board the work
performed in order to identify the persons that are likely to be appointed
directors so that the Board can deliberate on it.
As appropriate, the CGEN shall identify those individuals likely to be
selected for the non-executive directorship of Chairman in consideration
of the criteria set out above.
Selection by the Board of directors of the persons likely
to become members of the Board
When the Board has to decide the appointment of a new membe r, t he
CGEN decides upon the submission of the candidacy to the Board in orde r,
if the Board decides so, to propose such candidacy to the General Meeting.
First, it shall communicate to the Chairman of the Board the name of
the person who is likely to be appointed setting out the reasons for its
proposal. The Chairman of the Board of directors contacts the relevant
person and, in the case of an agreement with this person, asked the
SCA to review the situation of the person in accordance with the above
provisions. The Chairman of the CGEN and the Chairman of the Board
met potential candidates.
A candidate for the non-executive directorship of Chairman of the Board
of directors is submitted to the Chairman of CGEN so that this latter may
contact the relevant candidate.
If the review and interview regarding the duties of both director and
Chairman of the Board of directors are deemed to be satisfactory, the
CGEN can then propose to the Board of directors to adopt the proposal
for the submission of the candidacy.
The SCA can ask the candidates for any document required for its
review, which it will retain pursuant to legal and regulatory provisions
on personal data.
For specialised committees, the CGEN makes recommendations to the
Board of directors on the appointment of the members in cooperation
with the Chairman of the relevant Committee, and of the Chairmen of
the Committees when they are to be renewed.
Succession plan for directors and review of the composition
of the Board
The CGEN is responsible for examining the provisions allowing for the
succession of the directors as well as, where applicable, the Chairman.
Once a yea r, t he SCA, under the responsibility of the CGEN, reviews the
composition of the Board of directors in accordance with the provisions
relating to the identification of persons likely to become members of
the Board of directors. The CGEN presents to the Board of directors the
outcome of such review, which is subject to Board's deliberation.
Moreove r, t he CGEN carried out an annual assessment of the potential
successor(s) for the Chairman of the Board of directors liable to be
proposed to the Board of directors in the event of temporary or permanent
incapacity or death of the position holde r. T he Chairman of the Board of
directors has obtained the consent of the potential successor(s). This
assessment gives rise to the preparation of a list of names that is kept
by the SCA.
b.
Identification of, selection of, and succession plan
for the Chief Executive Officer and Chief Operating
Officer(s)
The Board of directors appoints the Chief Executive Officer and, on the
recommendation of the latte r, t he Chief Operating Officer(s), and sets
any limits to their powers.
For this purpose, acting jointly with the Chairman, the CGEN puts forward
recommendations for the selection of the Chief Executive Officer for
consideration by the Board, and, acting on recommendation of the Chief
Executive Office r, i t puts forward recommendations for the selection of the
Chief Operating Officer(s). The CGEN ensures, at the time of identifying
and putting forward recommendations for the Chief Operating Officer
position(s), upon proposal from the Chief Executive Officer and where
applicable with the support of the Company's Human Resources, that
there is a gender balance and guarantees the presence of at least one
woman and one man until the end of the selection process.
To identify the candidate, the CGEN conducts a careful examination of
his or her candidacy in consideration of the provisions of this policy as
well as the following criteria:
■ knowledge and skill in requested areas, based on experience and
ability to understand the issues and risks of key activities for the Bank,
including social and environmental issues as well as money laundering
and terrorism financing related risks, enabling them to make informed
and effective decisions;
■ courage, in particular to express opinions and make judgements,
enabling directors to remain objective and independent;
■ availability, i.e. the sufficient time which the Chief Executive Officer
and Chief Operating Officer(s) must dedicate to their duties and to
the relevant training;
■ loyalty, which fosters the commitment of the Chief Executive Officer
and the Chief Operating Officer(s) to the Company and its shareholders;
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■ good repute and propriety: a person shall not be considered of good
repute or meeting the propriety criterion if his or her personal or
business conduct gives rise to any material doubt about his or her
suitability as Chief Executive Officer or Chief Operating Office r, a s the
case may be, and if, more specifically, he or she is personally involved
in a money laundering or terrorism financing operation or attempt.
The SCA can ask the candidate or the Company, as the case may be, for
any document required for its review, which it shall retain pursuant to
the legal and regulatory provisions on personal data.
It is also responsible for examining the provisions allowing the succession
of the Chief Executive Officer and Chief Operating Officer(s).
Moreove r, t he CGEN carried out an annual assessment of the potential
successor(s) for the Chief Executive Officer liable to be proposed to the
Board of directors in the event of temporary or permanent incapacity
or death of the position holde r. T he Chairman of the Board of directors
has obtained the consent of the potential successor(s). This assessment
gives rise to the preparation of a list of names that is kept by the SCA.
c.
Identification and appointment of the Key
function holders
The CGEN ensures that in the identification and appointment of the
Key function holders by Executive Management, with the support of the
Company's Human Resources, as the case may be, the following are
considered:
■ skills, qualification, and experience;
■ and good repute, honesty, and integrity, taking particular care to ensure
that the concerned person is not personally involved in a money
laundering or terrorism financing operation or attempt.
III. INDEPENDENCE OF MIND AND MANAGEMENT
OF CONFLICTS OF INTEREST OF THE MEMBERS
OF THE MANAGEMENT BODY
In consideration of the so-called "related-party agreements" regime
in articles L.225-38 et seq. of the French Commercial Code, provisions
regarding independence of mind and conflicts of interest set out in
section 9 of the Fit and Proper Guidelines and Principle 3 of the Guidelines
on Corporate governance principles for banks, published in July 2015 by
the Basel Committee on Banking Supervision, and with the objective to
embrace the best practices observed in the governance area, the aim
of this section is to (i) recall the general principles applied to ensure
the independence of mind of every Member of the management body,
(ii) define the situations of conflicts of interest to which directors may
face in light of the various activities that the Group conducts and which
could be in competition with the interests of the concerned directo r, s hall
it be directly or indirectly, and (iii) provide details, in case such conflict
of interest occurs, concerning the necessary measures to be adopted in
order to take the situation into account and handle it in an appropriate
manne r.
a.
General principles
Every Member of the management body shall at all times maintain
his or her independence of mind, analysis, assessment, decision, and
action so as to be able to issue opinions and make decisions in an
informed, judicious and objective manne r. For this purpose, the Member
of the management body shall respect both the legal and regulatory
provisions applicable to conflicts of interest – specifically the so-called
"related-party" agreements – and the provisions below on the measures
to be adopted in recognising conflicts of interest and managing them
appropriately.
More specifically, the Members of the management body shall refuse
any benefit or service liable to compromise their independence, and
undertake to avoid any conflict of interest (as described below).
Each member of the Board of directors shall freely express his or her
positions, possibly minority positions, about the subjects discussed in the
meetings of the Board or specialised committee.
It is recalled that any conflict of interest may question the fact that a
director qualifies as an independent director according to the provisions
of the Afep-MEDEF Code.
b.
Cases of conflicts of interests
Besides the so-called "conventions réglementées" regime provided for
by articles L.225-38 and et seq. of the French Commercial Code, the
following situations may give rise to conflicts of interest:
a) each agreement entered into directly, or through an intermediary
person(1), between a company that BNP Paribas controls within the
meaning of article L.233-16 of the French Commercial Code and one
of the Members of the Company's management body;
b) each agreement to which one of the Members of the Company's
management body is indirectly interested, meaning that without
being directly party to the said agreement entered into by one of
the companies controlled by the Company within the meaning of
article L.233-16 of the French Commercial Code, the Member of the
management body benefits in a way or another from the agreement;
c) each agreement entered into between one of the companies
controlled by the Company, within the meaning of article L.233-16
of the French Commercial Code, and a company owned by a Member
of the Company's management body or of which such director is
also an owne r, g eneral partne r, m anage r, d irecto r, M ember of
the Supervisory Board o r, g enerally, in a senior manager of this
company;
d) each situation where a member of the management body is or
might be, in relation with the exercise of his or her non-executive
directorship, the recipient of inside information (i) concerning a
company in which he or she is an executive director within the
meaning of c) or in which he or she exercises a function or holds
interests whateve r, o r (ii) concerning the Company or one of the
companies under its control within the meaning of article L.233-16
of the French Commercial Code which may be interests concerning
the activity of a company in which he or she is an executive director
within the meaning of c) or in which he or she exercises a function
or holds interests whatever they may be;
(1) The interposition of an intermediary corresponds to a situation in which the Member of the management body is the ultimate real beneficiary of the agreement between one of
the companies that BNP Paribas controls and the co-contracting party of that controlled company.
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e) each situation where the Member of the management body could
take part in a Board meeting which would be of interest to any
person with whom he or she has family or professional links, or
close relations;
f) the undertaking of a new directorship whether in a listed or unlisted
entity, French or foreign, not belonging to a group of which he or
she is a manage r, o r any participation in the specialised Committee
of a corporate body or any other new directorship(1);
g) each currently valid commitment made under directorship
previously held in France or abroad (e.g. a non-competition clause);
h) more generally, each situation that may constitute a conflict of
interest between the Member of the management body and
the Company or one of its subsidiaries within the meaning of
article L.233-16 of the French Commercial Code.
c.
Management of conflicts of interests
The assessment of current agreements is subject to a separate procedure
by the Board of directors entitled "Implementation procedure for conflicts
of interest in relation to loans and other transactions granted to the
members of the management body and their related parties".
Situations covered by the "related-party agreements"
regime
The Members of the management body acknowledge having read and
understood the related-party agreement regime and the obligations
resulting from such regime.
Other situations
If one of the situations described in a) through e) or g) or h) above should
occu r, t he Member of the management body shall immediately inform the
Chairman of the Board of directors, who shall in turn inform the CGEN
so that the latte r, b ased on the analysis of the presented situation, may
give an opinion which may consist of one or more measures described in
the following paragraph. This opinion is then submitted to the Board of
directors and, if followed by the said Board, is notified by the Chairman of
the Board, to the concerned directo r. T he decision of the Board of directors
will be included in the minutes of the meeting.
More specifically, if one of the situations described in a) through e) or g)
or h) above should occur during a Board of directors meeting or one of
its Committees, and without prejudice to the application of the preceding
paragraph, the Board of directors or the Committee, as the case may be,
shall immediately determine the measures to be taken, which may take
different forms including the fact the concerned director or Committee
would not participate to the debate or the votes, would not receive
the information on the issue that gives or may give rise to a conflict of
interest, or even would have to leave the meeting of the Board or the
Committee during the discussion of the concerned issue. The minutes of
the Board or the Committee includes the measures adopted.
If the situation covered in f) above should occu r, h e or she shall inform the
Chairman of the Board of directors of his or her intention to accept (i) a
new directorship, whether in a listed or unlisted, French or foreign entity
that does not belong to a group of which he or she is an executive directo r,
or (ii) each participation in the specialised committees of a corporate
body, or (iii) any other new directorship, such that the Board of directors,
on the recommendation of the CGEN, may decide on the compatibility of
such an appointment with the non-executive directorship of a Member
of the management body in the Company. If necessary, the provisions
on limitation of directorships and on the availability of Members of the
management body set forth below shall be applied mutatis mutandis.
In any case, if the Board considers that the relevant Member of the
management body is no longer able to perform his or her duties therein
because of a conflict of interest, he or she shall resign.
More generally, in the event of a breach of obligations with respect to
conflicts of interest by a Member of the management body, the Chairman
of the Board of directors shall take all legal measures required to remedy
it. He or she may, furthermore, keep the relevant regulators informed
of such acts.
IV. COMPLIANCE WITH RULES ON LIMITATION
OF DIRECTORSHIPS AND ON AVAILABILITY
OF THE MEMBERS OF THE MANAGEMENT BODY
The Member of the management body complies with legal and regulatory
provisions, specifically those set out in articles L.511-52 and R.511-17
of the CoMoFi (the "CoMoFi Provisions") and in the Fit and Proper
Guidelines, which are applicable to him or her or applicable to the
Company in matters of limitation of directorships and of availability as
well as those in the Afep-MEDEF Corporate Governance Code.
a.
Compliance with rules when appointing
a Member of the management body
Once a candidate is chosen by the CGEN and prior to submitting it to the
Board of directors, the SCA, under the responsibility of the Chairman of
the Board of directors:
a) contacts the candidate in order to request the list of directorships
as well as any other functions he or she may hold, and how much
time is spent on them each year;
b) ensures that the candidate is in compliance with the Provisions of
the CoMoFi regarding the number of directorships;
c) ensures that the candidate has the time required for the duties and
training he or she would perform for the directorship in question;
d) and checks that these directorships and other functions are
suitable with the position of a Member of the management body,
in accordance with the above provisions on independence of mind
and management of conflicts of interest.
The candidate shall certify that the list of directorships and functions
is complete and provide on request of the SCA any document (company
bylaws, extracts from trade registers or equivalent, certificate, statement,
etc.), that the SCA deems useful to have.
The SCA then analyses the directorships declared by the candidate so as
to ensure that the Provisions of the CoMoFi are complied with. It records
the written documents on which the analysis and the conclusions were
based, in accordance with personal data laws and regulations. As part
of this review, the SCA may proceed to the researches he deems useful.
At the outcome of the SCA's review,
a) either the candidate is in compliance with the Provisions of the
CoMoFi and has the time required to serve as a director: the SCA
shall report to the Chairman of the Board of directors, who shall
inform the Chairman of the CGEN. The CGEN shall then propose
the candidate to the Board of directors which shall take a decision
on his or her appointment or co-option, as the case may be; or
(1) This includes those of a political nature.
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b) the candidate is not in compliance with the Provisions of the CoMoFi
or does not have the time required to serve as a director: the SCA
shall inform the Chairman of the Board, who shall in turn notify
the Chairman of the CGEN, so that the measures for remedying this
situation can be reviewed with the candidate. If the candidate is
willing to make the necessary arrangements prior to his nomination
or his or her co-option, the SCA states this in minutes which will
then be submitted to the Board of directors which will decide on
the nomination or co-option, as the case may be.
If the candidate is not willing or cannot implement the necessary steps,
the SCA establishes minutes to the attention of the CGEN, which acts the
end of the selection process.
b.
Compliance with rules while holding directorship
as a Member of the management body
At all times, the Members of the management body shall comply with
the rules on limitation of directorships and dedicate the time and effort
required to carrying out their duties and responsibilities. They accept
the discipline involved in working together in the respect of each other's
opinions and they exercise their sense of responsibilities towards
shareholders and the other stakeholders of the Group.
In addition, directors shall actively and regularly participate in meetings
of the Board of directors and of the committees, and shall attend the
Annual General Shareholders' Meeting. Furthermore, the directors
representing employees and the directors representing employee
shareholders, are given preparation time determined by the Board, in
accordance with the laws in force.
To this end, every Member of the management body shall inform the
Chairman of the Board of directors of his or her intention to accept (i) a
new directorship, whether in a listed or unlisted, French or foreign entity,
not belonging to a group of which he or she is an executive office r, o r
(ii) any participation in the specialised committees of a corporate body,
or (iii) any new directorship, in France or abroad, such that the Board of
directors, on the recommendation of the Corporate Governance, Ethics,
Nominations and CSR Committee may decide on the compatibility of such
an appointment with the non-executive directorship in the Company.
In this case, the SCA shall follow the analysis and verification procedure
for the appointment of a Member of the management body.
At the end of the analysis referred to above, one of two situations may arise:
a) either the Member of the management body accepting this new
directorship complies with the Provisions of the CoMoFi, in which case
the SCA informs the Chairman of the Board of directors, who in turn
informs the CGEN. The CGEN then ensures that this new directorship
complies specifically with the conflicts of interest rules on set out above;
b) or the Member of the management body, by accepting this new
directorship, is no longer in compliance with the Provisions of the
CoMoFi, in which case the SCA shall inform the Chairman of the
Board of directors, who shall report it to the Chairman of the CGEN,
so that the measures for complying with the CoMoFi Provisions can
be reviewed with the Member of the management body.
Whatever the case, if he or she no longer has the time to perform his or
her duties, the SCA shall inform the Chairman of the Board of directors,
who shall report it to the Chairman of the CGEN so that the measures
for remedying the situation can be reviewed with the Member of the
management body.
If the Member of the management body is willing to maintain his or
her directorship in the Company, he or she shall either not accept the
proposed directorship, or resign from a directorship he or she already
holds. The SCA shall include this in minutes that shall then be submitted
to the Board of directors.
If the Member of the management body decides to accept this new
directorship without resigning from any directorship he or she already
holds, the Member of the management body shall tender his or her
letter of resignation as Member of the management body. The SCA shall
mention this in a report to be addressed to the CGEN which acts this
resignation, with the effective date to be decided on by the Board of
directors. Any Member of the management body who considers him- or
herself unable to continue on the Board of directors, or on the Committees
of which he or she is a member shall resign.
At least once a yea r, t he SCA asks the Members of the management body
to update the form known as the "EBA Form", under which are listed all
the directorships held by each Member of the management body, and to
which is appended their availability table.
This update shall enable the SCA to ensure that all Members of the
management body are in compliance with the Provisions of the CoMoFi
and available on an ongoing basis.
V.
GOOD REPUTE, HONEST Y, A ND INTEGRITY
OF THE MEMBERS OF THE MANAGEMENT BODY
At all times, the Members of the management body shall meet the
requirements of good repute and show honesty and integrity.
Candidates and Members of the management body undertake to
immediately notify the Chairman of the Board of directors and the SCA of:
a) any conviction (including on appeal, in criminal, civil, or
administrative proceedings);
b) any disciplinary measure;
c) any prior refusal of validation by competent banking or financial
authorities in France or abroad;
d) any refusal, withdrawal, revocation, or prohibition on management
of any registration, authorisation, membership, or licence to conduct
a business or profession;
e) any sanction by public authorities or professional organisations, or
investigations or enforcement proceedings ongoing in France or abroad;
f) any dismissal for professional misconduct or any dismissal from a
directorship he or she may be the subject;
g) any situation mentioned in a) through f) above concerning a company
of which he or she is an executive office r, s hareholde r, o r partne r.
The SCA shall retain the written evidence and documents on which the
analysis and the conclusions of the CGEN were based, in accordance
with personal data laws and regulations. As part of this review, and at
the request of the Chairman of the Board of directors, o r, a s applicable,
the Chairman of the CGEN, the SCA may carry out any searches it deems
useful, including questioning the relevant person.
If the Chairman of the Board of directors, o r, a s applicable, the Chairman
of the CGEN, is notified of the occurrence of one of the aforementioned
cases, he or she shall inform the CGEN so that this latte r, b ased on the
analysis of the reported situation, can issue an opinion as to the good
repute of the Member of the management body and decide whether to
ask him or her to resign. This opinion is then submitted to the Board of
directors and if followed by the said Board, is notified by the Chairman of
the Board to the director concerned. The decision of the Board of directors
will be included in the minutes of the meeting.
In addition, every Member of the management board undertakes to act
with loyalty and integrity toward the Members of the management board,
the shareholders, and the Company alike. Failing this, the Chairman of
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the Board of directors, o r, a s applicable, the Chairman of the CGEN, may
refer the matter to the CGEN so that the latter can issue an opinion as
to the loyalty and integrity of the Member of the management body and
may decide to ask him or her to resign.
VI. DIVERSITY OF THE MEMBERS OF THE
MANAGEMENT BODY AND COLLECTIVE
COMPETENCE OF THE BOARD OF DIRECTORS
The CGEN shall set the objectives to achieve with respect to gender
balance on the Board of directors, age diversity, professional qualifications
and experience, and nationality among the Members of the management
body, so as to ensure that at all times they have the skills necessary to
understand the risks, including money laundering and terrorism financing
risks, and issues, including social and environmental issues, and potential
developments in the Company.
For this purpose, the CGEN periodically assesses and at least once a yea r,
the structure, the size, the composition and the effectiveness of the Board
of directors with respect to the missions with which it is entrusted, and
makes any useful recommendations to the Board.
VII. INDUCTION AND TRAINING OF THE MEMBERS
OF THE MANAGEMENT BODY
The Members of the Company's management body shall possess,
both individually and collectively, the expertise, experience, skills,
understanding, and personal qualities necessary, specifically in terms
of professionalism and integrity, to properly perform their duties in
connection with each of the significant activities of the Company,
guaranteeing effective governance and supervision.
The Members of the management body shall maintain their knowledge in
the following fields: finance and banking, risk management (in particular
environmental, social, money laundering and terrorism financing related
risks), regulations applicable to the Company, and, more broadly, any field
related to the development and strategy of the Company.
The Company shall dedicate the human and financial resources required
for the training of the Members of the management body. With this aim,
annual training courses are administered by the managers of the topics
presented, and strategy seminars are held.
In addition to the training courses mentioned above, any director may
request additional training. For this purpose, he or she shall initiate
a dialogue with the Chairman and the SCA, who shall determine the
arrangements for the requested training.
The directors representing employees and the directors representing
employee shareholders are given time dedicated to training determined
by the Board, in accordance with the laws in force. At the end of the
training, the training centre chosen by the Board must issue a certificate
of regular attendance, which the director representing employees and the
director representing employee shareholders must give to the Secretary
of the Board.
The Board of directors shall ensure that new directors meet with the
Key function holders.
DESCRIPTION OF THE IMPLEMENTATION PROCEDURE FOR CONFLICTS
OF INTEREST IN RELATION TO LOANS AND OTHER TRANSACTIONS GRANTED
TO THE MEMBERS OF THE MANAGEMENT BODY AND THEIR RELATED PARTIES
Pursuant to article L. 22-10-12 of the French Commercial Code, the Board
of directors has implemented a procedure in order to regularly ensure
that the transactions entered into in the ordinary course of business
and on arms' length basis (so-called "free" agreements) meet these
conditions, to strengthen the process for identifying and monitoring
conflicts of interest and to implement a process dedicated to review
loans granted by the Bank to Members of the management body and
related natural and legal persons.
Pursuant to the provisions of article 72 of the Belgian law on the status
and supervision of credit institutions, this procedure was extended by
the Board of directors in June 2022 to transactions concluded between
BNP Paribas Fortis and the directors, the Chief Executive Officer and the
Chief Operating Officers of BNP Paribas.
This procedure covers agreements concluded between BNP Paribas and
the directors, the Chairman, the Chief Executive Officer and the Chief
Operating Officers of BNP Paribas or natural persons closely associated
with them, their holding companies and legal entities in which they have
an interest (directorship or equity holding).
There are two parts to the procedure for so-called "free" agreements:
■ Agreements between BNP Paribas and the natural persons or holding
companies mentioned above:
Each yea r, t he Bank reviews the list of agreements entered into
between BNP Paribas and the natural persons or asset holding
companies mentioned above. The Compliance Function ensures that
these agreements do cover current operations and are concluded
under normal conditions and prepares a report that it sends to the
Secretary of the Board of directors.
■ Agreements between BNP Paribas and legal entities (other than asset
management companies) mentioned above:
This procedure is based on existing policies (such as the Code of
conduct or the "Customer Interests Protection Policy") and also
provides:
■
the declaration by the directors and corporate officers of the legal
entities with which they are associated,
■
the verification by the Bank of any business relationships between
each of these legal entities,
■
in-depth monitoring of agreements identified using a risk-based
approach.
A report is prepared for each of these elements and submitted every year
to the CGEN which informs the Board of directors.
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2.1.3 COMPENSATION AND BENEFITS AWARDED TO THE GROUP'S DIRECTORS
AND CORPORATE OFFICERS
The provisions of the French Commercial Code provide for ex ante approval
each year by the Ordinary Annual General Meeting of the compensation
policy for directors and corporate officers. The compensation policy for
directors and corporate officers of BNP Paribas is presented below on
pages 79 to 85.
The compensation of these same directors and corporate officers is also
subject to the ex post vote of the Ordinary Annual General Meeting on
the information on compensation referred to in article L.22-10-9 I of the
French Commercial Code (this information is set out below on pages 86
et seq.). When the Annual General Meeting does not approve these items,
the Board of directors submits an amended compensation policy, taking
into account the shareholders' vote, for the approval of the next Annual
General Meeting. The payment of directors' compensation for the current
year is suspended until the amended compensation policy is approved.
When the payment is reinstated, payments are backdated to the last
Annual General Meeting.
Lastly, the compensation of each corporate officer is subject to a second
ex post vote on the total compensation and benefits in kind paid during
the previous year or awarded in respect of the same year (the information
relating to this compensation is outlined in tables 1a and b, 2a and b,
3a and b and 4a and b on pages 87 et seq.). The variable components of
compensation awarded to the corporate officers in respect of the previous
year can only be paid after they have been approved by the Annual
General Meeting on the basis of this second vote.
COMPENSATION POLICY FOR DIRECTORS
AND CORPORATE OFFICERS SUBMITTED
FOR SHAREHOLDERS' EX ANTE
APPRO V A L, IN ACCORDANCE WITH
ARTICLE L.22-10-8 OF THE FRENCH
COMMERCIAL CODE, AT THE ANNUAL
GENERAL MEETING OF 14 M A Y 2024
In this report, the Board of directors provides details of the fixed and
variable components of total compensation and benefits in kind,
attributable to the directors, the Chairman of the Board of directors, the
Chief Executive Officer and the Chief Operating Officers for their three-
year corporate offices within BNP Paribas (SA), over a three-year period.
The elements of the compensation policy presented below are the subject
of resolutions submitted for the approval of the Shareholders' Annual
General Meeting voting under the quorum and majority conditions
required for Ordinary General Meetings. If the Annual General Meeting
does not approve these resolutions, the previous compensation policy,
already approved by the Annual General Meeting of 16 May 2023, will
continue to apply. In this case, the Board of directors will submit for the
approval of the next Annual General Meeting a draft resolution outlining
an amended compensation policy, indicating how the shareholders' vote
was taken into account and, where appropriate, the opinions stated during
the Annual General Meeting.
The compensation policy for directors and corporate officers complies
with applicable legislation and regulations, the Afep-MEDEF Code and the
BNP Paribas Code of conduct. The policy as detailed below (in particular
the performance criteria):
(i) is aligned with the Company's corporate interest and contributes
to the Company's commercial strategy and sustainability;
(ii) takes into consideration the compensation and employment
conditions of employees within the Company; and
(iii) is gender-neutral.
Without prejudice to the powers of the Annual General Meeting in
this respect, the determination of the compensation of directors and
corporate officers is the responsibility of the Board of directors and
is based on proposals from the Remuneration Committee, which
drafts the decisions which the Board of directors approves regarding
compensation. In particula r, t he Remuneration Committee annually
reviews the remuneration, compensation and benefits in kind awarded to
the Company's directors and corporate officers. This committee is made
up of three independent members who have experience of compensation
systems and market practices in this area and includes a director elected
by employees.
Measures aimed at avoiding and managing conflicts of interest are
established in the Internal Rules of the Board of directors, by the Policy
on the suitability of Members of the management body and Key function
holders, as well as by the Implementation procedure for conflicts of
interest in relation to loans and other transactions granted to the
Members of the management body and their related parties. Executive
corporate officers do not take part in deliberations or voting on their
own compensation.
The compensation of corporate officers takes into account, in its
principles, the following objectives:
■ alignment with the Bank's corporate interest and with that of its
shareholders:
■
consistency with a medium to long-term outlook, especially in terms
of the growth of the Bank's value, good risk management and the
relative performance of its share,
■
integration of extra-financial assessment criteria,
■
taking into account CSR aspects to determine the compensation
(partly aligned with the CSR objectives considered for certain
employees), and in particular criteria related to the Group's climate
objectives,
■
guaranteeing sufficient variability in the amounts allocated to reflect
changes in the Bank's results without weighing too heavily on fixed
expenses;
■ the transparency of compensation:
■
all components (fixed, annual variable, conditional long-term
incentive plan) are included in the overall assessment of
compensation,
■
balance between the components of compensation, which must
contribute to the general interest of the Bank and reflect best
market practices and legal and regulatory constraints,
■
the rules must be stable, strict and intelligible;
■ compensation that is sufficiently attractive to facilitate the selection of
profiles that are particularly competent in the Group's business areas.
CORPORATE GOVERNANCE AND INTERNAL CONTROL
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I.
Directors' compensation
The compensation policy for directors is gender-neutral.
In accordance with the law, the global amount of directors' compensation
is set by the Shareholders' Annual General Meeting.
The individual amount of directors' compensation is determined by the
Board of directors pursuant to a proposal of the Remuneration Committee.
It consists of a fixed portion and a portion based on actual participation
in meetings, regardless of the means. Directors residing abroad receive
an increased amount, except where they may participate in meetings of
the Board of directors by videoconference or telecommunications means.
Additional compensation is paid for actual participation in one of the four
Specialised Committees. This is increased for directors participating in
the CCIRC in view of the specific investment required by this committee.
At the end of the yea r, t he Remuneration Committee examines the
allocation of directors' compensation and the amount paid to each of
them in respect of the year on the basis of an audit of each director's
actual presence at Board and Committee meetings. Where applicable,
the remainder of the global amount fixed by the Annual General Meeting
is allocated in proportion to the amount paid to each directo r. I n the
event of an additional extraordinary meeting of the Board or Committees,
the amount of the compensation due to each director is adjusted, in
proportion to the amounts paid to each directo r.
The Board of directors then approves the individual distribution of
the directors' compensation for the year before its actual payment to
the directors (subject to the provisions of article L.22-10-34 I of the
French Commercial Code which provides that the payment of directors'
compensation for the current year is suspended in the event of a negative
vote by the shareholders on the components of compensation paid during
or awarded in respect of the past year to corporate officers).
II.
Compensation of the Chairman of the Board
of directors
The annual fixed compensation of the Chairman, Mr Jean Lemierre,
amounts to EUR 950,000 gross.
The Chairman does not receive annual variable compensation or
conditional long-term incentive plans. The absence of variable
compensation reflects the independence of the Chairman with respect
to the Executive Management.
Should a new Chairman be appointed, on the proposal of the Remuneration
Committee and under this compensation policy, the Board of directors
will set the amount of his/her fixed compensation in line with the new
Chairman's profile and experience.
III. Compensation of executive corporate officers
Compensation for executive corporate officers includes:
■ a fixed component;
■ an annual variable component;
■ a conditional long-term incentive plan (long-term incentive plan or
LTIP).
The levels of these different components are determined using established
market benchmarks.
Compensation takes into account the cap on total variable compensation
in relation to fixed compensation (including awards under long-term
incentive plans) in accordance with article L.511-78 of the French
Monetary and Financial Code, applicable specifically to credit institutions.
In accordance with paragraph 2 of said article, the Shareholders' Annual
General Meeting of BNP Paribas of 18 May 2021 decided that this cap
would be set at twice the amount of the fixed compensation for a duration
of three years; this decision will once again be submitted for approval to
the Shareholders' Annual General Meeting of 14 May 2024.
For the purposes of calculating the aforementioned ratio, a discount
rate may in addition be applied to no more than 25% of the total
variable compensation inasmuch as the payment is made in the form of
instruments after a deferred period of at least five years, in accordance
with article L.511-79 of the French Monetary and Financial Code.
1.
Fixed compensation
The annual fixed compensation of the Chief Executive Office r, M r Jean-
Laurent Bonnafé, amounts to EUR 1,843,000 gross.
The last increase in the fixed annual compensation of the Chief Executive
Office r, e ffective from 1 January 2022, was decided by the Board of
directors and approved by Annual General Meeting of 17 May 2022. The
Board of directors had noted the Bank's very good performance since the
Chief Executive Officer was appointed.
As part of the annual review of compensation, the Board reviewed the
compensation of the Chief Executive Officers of ten comparable European
banks. The compensation of the Chief Executive Officer of BNP Paribas
remains significantly lower than the median of the situations observed.
At 31 December 2023, the fixed annual compensation of the Chief
Operating Officers amounted to EUR 1,500,000 gross for the Chief
Operating Officer in charge of the CIB scope, Mr Yann Gérardin, and
EUR 900,000 gross for the Chief Operating Officer in charge of the CPBS
scope, Mr Thierry Laborde. These fixed annual compensations have
remained unchanged since their determination in May 2021 when
Mr Yann Gérardin and Mr Thierry Laborde were appointed.
Subject to approval by the Annual General Meeting of 14 May 2024,
the Board of directors proposes a revaluation of 20% of the fixed annual
compensation of the Chief Operating Officers, effective from 1 January
2024, taking into account the following items:
■ the significant growth in the Bank's results and the consolidation of
its European leadership;
■ the growth in revenues of the CIB and CPBS divisions since 2020, +20%
and +11% respectively (excluding the activity related to Bank of the
West sold on 1 February 2023) and the confirmation of the BNP Paribas
Group's leadership positions in these strategic activities;
■ the increase in the average fixed compensation of BNP Paribas SA
employees in France between 2020 and 2023 (+11% based on the
data presented in the social reports for 2020 to 2022 and taking into
account individual and collective salary increases for 2023).
The Board of directors also reviewed the compensation of holders
of comparable positions on the basis of a study carried out by the
independent firm WTW. This study is based on a panel of nine comparable
European banks (Barclays, BBVA, Crédit Agricole, Deutsche Bank,
HSBC, Santande r, S ociété Générale, UBS and Unicredit) among which
BNP Paribas ranks in terms of revenues at year-end 2022, in first position
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for the CIB division and in third position for the CPBS division. The total
compensation awarded to the Group's Chief Operating Officers for 2022
is in sixth position out of ten, around 30% lower than the median.
Following this 20% revaluation effective on 1 January 2024, the annual
fixed compensation of the Chief Operating Officer in charge of the CIB
scope, Mr Yann Gérardin, amounts to EUR 1,800,000 gross and that of the
Chief Operating Officer in charge of the CPBS scope, Mr Thierry Laborde,
to EUR 1,080,000 gross.
After revaluation, the total compensation of the Chief Operating Officers
remains below the median of the situations recorded for the panel of
holders of comparable functions of the nine comparable European banks.
Should a new Chief Executive Officer or a new Chief Operating Officer
be appointed, the Board of directors will, on the proposal of the
Remuneration Committee and under this compensation policy, set
his/her fixed compensation in line with his/her profile and experience.
The components of annual variable compensation or of the conditional
long-term incentive plan will be set in accordance with the principles
set out in this compensation policy.
2.
Annual variable compensation
The variable component is intended to reflect the effective contribution
of executive corporate officers to the success of BNP Paribas in respect
of their functions as executive managers of an International Financial
Services Group.
General principles
The variable compensation of executive corporate officers is determined
based on a target compensation equal to 100% of their annual fixed
compensation for the Chief Executive Officer and the Chief Operating
Officers.
The variable compensation varies in accordance with criteria
representative of the Group's results, CSR-linked criteria and a qualitative
assessment by the Board of directors.
In addition, the payment of the annual variable compensation includes
a deferred period, "malus" and "claw-back" arrangements, as well as
a cancellation clause in the event of a bank resolution measure, in
accordance with same terms and conditions as those described below
for the LTIP (see 3 below).
Criteria linked to the Group's financial performance
Criteria linked to the Group's financial performance account for 75% of
the target variable compensation and enable the corresponding portion
of the annual variable compensation to be calculated in proportion to the
evolution of financial indicators. There are two Group-based quantitative
criteria for the Chief Executive Officer and four for the Chief Operating
Officers, half of which are Group-based and the other half based on their
respective areas of responsibility.
If objectives based on quantitative criteria are exceeded (or not achieved),
the fraction of the target compensation in question evolves proportionally
within the limits of the cap mentioned below.
■ For the Chief Executive Office r, t he quantitative criteria apply to the
Group's overall performance based on the following equally weighted
criteria:
■
evolution of net earnings per share for the year compared to the
previous year (37.5% of the target variable compensation);
■
percentage of achievement of the Group's budgeted gross operating
income (37.5% of the target variable compensation).
■ For the Chief Operating Officers, half of the quantitative criteria are
based on the Group's overall performance and half on the performance
of their respective scopes of responsibility based on the following
equally weighted criteria:
■
evolution of net earnings per share for the year compared to the
previous year (18.75% of the target variable compensation);
■
percentage of achievement of the Group's budgeted gross operating
income (18.75% of the target variable compensation);
■
evolution of pre-tax net income for the year compared to the
previous year for their respective areas of responsibility (18.75% of
the target variable compensation);
■
percentage of achievement of the budgeted gross operating income
of their respective areas of responsibility (18.75% of the target
variable compensation).
Criteria linked to the Group's CSR performance
A portion of 15% of the target variable compensation is linked to the
Group's CSR performance.
The allocation of this portion of the annual variable compensation is
based on multi-criteria measurement resulting from a holistic approach
of actions undertaken by the BNP Paribas Group with respect to social,
societal, and environmental issues.
With this in mind, this compensation structure includes three weighted
criteria, each at 5%:
(i) the Board of directors' assessment of the year's highlights, primarily
with regard to climatic and social challenges;
(ii) the publications of extra-financial rating agencies measuring the
quality of the BNP Paribas' CSR positioning relative to its peers;
(iii) an alignment with the CSR objectives included in the loyalty
plans granted to the Group's key employees. These objectives are
based on the Group's four CSR pillars in terms of economic, social,
civic and environmental responsibility and include, in particula r,
quantified climate objectives as part of the support for the Group's
clients towards a low-carbon economy and the reduction of the
BNP Paribas Group's environmental footprint.
For several years, the BNP Paribas Group has made the variable
compensation of executive corporate officers conditional on the
achievement of criteria in line with the Group's climate objectives in
accordance with the principle of the Afep-MEDEF Code, which came into
force in December 2022.
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75%
15%
Group ꢀnancial
Group CSR
performance
performance
(i) By the Board
Positioning of BNP Paribas in the
ꢀrst quartile of the Banking sector
in the extra-ꢀnancial performance
rankings of FTSE, S&P Global CSA
and Moody's ESG Solutions
Annual measurement by the Board of
directors of achievements and key
developments around a line of action
focused on climate and social
challenges
Achievement of the CSR objectives
set in the loyalty plan awarded to
the Group's key employees which
was paid during the year
(ii) By the Market
5%
5%
5%
(iii) Alignment with key
employees of the Group
10%
Qualitative criteria
Holistic assessment of CSR policy
Qualitative criteria
The portion of the variable compensation linked to the Board of directors'
qualitative assessment is 10% of the target variable compensation.
The Board of directors considers it essential to carry out this qualitative
assessment, particularly given its enhanced responsibilities in terms of
supervision and control in line with the French Monetary and Financial
Code. In addition to the Bank's strategy, which it must approve considering
social and environmental issues, the Board of directors must also assess
the performance of executive corporate officers based on their capacities
for anticipation, decision-making, leadership and exemplary behaviour
as part of the 2025 strategic plan.
This assessment will be made in light of the economic situation and with
regard to the Group's operational and integrated model.
➤
SUMMARY OF THE CRITERIA USED TO DETERMINE THE ANNUAL VARIABLE COMPENSATION APPLICABLE
TO THE CHIEF EXECUTIVE OFFICER AND THE CHIEF OPERATING OFFICERS
Criteria
% of target annual variable
compensation
Officers Type
Chief Executive
Officer
Chief Operating
Criteria linked to the Group's
financial performance
37.50%
18.75% Evolution of net earnings per share for the year compared to the
previous year
37.50%
18.75% Achievement of budgeted Group gross operating income
N/A.
18.75% Evolution of pre-tax net income of the area of responsibility
for the year compared to the previous year
N/A.
18.75% Achievement of budgeted gross operating income of the area
of responsibility
Criteria linked to the Group's
CSR performance
15.00%
15.00% Multicriteria assessment of the actions taken by BNP Paribas Group
with respect to social, societal and environmental issues
Qualitative criteria
10.00%
10.00% Assessment with regard to implementation of the Bank's strategic
guidelines, particularly the human, organisational and technical
dimensions of the Growth, Technology & Sustainability 2025 plan,
and taking into account the general context of the year under
consideration
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Ceiling
The Board of directors ensures the consistency of the annual variable
compensation with evolution of the Group's results and the area of
responsibility of each of the Chief Operating Officers.
In any case:
■ each of the criteria related to the Group's financial performance (two
in the case of the Chief Executive Officer and four in the case of the
Chief Operating Officers) is capped at 130% of its target weight and
cannot therefore result in an annual variable compensation exceeding
respectively 48.75% of the target variable compensation for the Chief
Executive Officer and 24.375% for the Chief Operating Officers;
■ the criteria related to the Group's CSR performance, as well as the
qualitative criteria, are capped at 100% of their target weight and
cannot therefore result in an annual variable compensation greater
than, respectively, 15% and 10% of the target variable compensation;
■ the amount of the annual variable compensation awarded to each
executive corporate officer is capped at 120% of their target variable
compensation.
Terms and conditions of payment
The payment terms for variable compensation of BNP Paribas Group's
executive corporate officers, in accordance with the provisions of
the French Monetary and Financial Code and the European Banking
Authority's Guidelines on compensation policy, are:
■ 60% of annual variable compensation is deferred over five years, at
the rate of one-fifth per year;
■ regarding the non-deferred portion of the variable compensation:
■
half will be paid in cash in May of the year of the award, subject to
the approval of the Shareholders' Annual General Meeting under the
terms provided for by article L.22-10-34 II of the French Commercial
Code, and
■
half will be paid in cash indexed to BNP Paribas share performance,
at the end of a one-year holding period starting on the award date
(award date is the date of the Board of directors' decision), i.e.
in practice, in March of the year following the year in which the
compensation is awarded;
■ the deferred portion of the variable compensation will be paid annually
in fifths over five years, the first payment being paid only at the end
of a deferred period of one year from the award date of the variable
compensation. Each instalment will be paid:
■
half in cash in March every yea r, a nd
■
half in cash indexed to BNP Paribas share performance, in March of
the following yea r, a t the end of a one-year holding period,
■
provided that the Group's pre-tax ROE for the year preceding the
payment is greater than 5%.
3.
Conditional Long-T e rm Incentive Plan
over five years (L T IP)
In 2011, to align the interests of executive corporate officers with the
medium to long-term performance of the BNP Paribas Group without
compromising risk management, the Board of directors introduced a
conditional long-term incentive plan (LTIP) over five years.
The LTI P, w hich amounts to the target annual variable compensation
awarded in respect of the previous yea r, i s split into two equal parts: one
recognising the increase in the intrinsic value of the BNP Paribas share,
and the othe r, i ts potential outperformance relative to peers.
First half of the awarded amount: intrinsic share
performance
The first half of the awarded amount depends on the evolution of the
share price(1) given that no payment will be made for this first half of the
awarded amount if the BNP Paribas share price does not increase by at
least 5% from the date of the award by the Board of directors to the end
of a five-year period from the award date.
(1) The initial and final amounts used to measure the performance of the share price over the five-year period are as follows:
• the initial value is the average of the opening price of the BNP Paribas share for the rolling twelve-month period preceding the award date;
• the final value is the average of the opening price of the BNP Paribas share in the rolling twelve-month period preceding the payment date.
If the share price increases by at least 5% during this period, a factor is applied to the initial amount, resulting in the amount being increased or reduced,
in line with the table below:
Evolution of the BNP Paribas share price over five years
Factor applied to the first half of the award
Strictly under 5%
0 (no payment)
Equal to or higher than 5% and under 10%
40%
Equal to or higher than 10% and under 20%
80%
Equal to or higher than 20% and under 33%
120%
Equal to or higher than 33% and under 50%
130%
Equal to or higher than 50% and under 75%
150%
Equal or higher than 75%
175%
Thus, the first half of the awarded amount will only be paid in full at the end of the five-year period if the share price increases by more than 20%
during this five-year period. The factor applied to the first half of the award will, in any event, always be less than or equal to the evolution of the share
price and cannot, under any circumstances, exceed 175% of the awarded amount, assuming that the share price has increased by more than 75% at
the end of the five-year period.
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Second half of the awarded amount: outperformance
of the BNP Paribas share relative to peers
Fulfilment of this condition is assessed by measuring the performance of
the BNP Paribas share price relative to the "EURO STOXX Banks" index
of main Eurozone banks.
It only takes into account the outperformance of the BNP Paribas share
price relative to the average index measured over the twelve months
prior to the award date, compared with the average for this same index
for a period of twelve months prior to payment. The second half of the
target amount under the LTIP will only be paid in full if the BNP Paribas
share price outperforms the index by at least 10%.
Relative performance of the BNP Paribas share in relation
to the performance of the EURO STOXX Banks index
Factor applied to the second half of the award
Lower or equal to 0 point
0%
0 to 5 points inclusive
50%
5 to 10 points inclusive
80%
Greater than 10 points
100%
The amount determined by applying each of the conditions over the plan's
five-year period is the compensation paid under the LTI P.
Ceiling
According to the provisions of article L.511-78 of the French Monetary
and Financial Code relating to the cap on the variable component as
a percentage of the fixed component, total variable compensation
awarded, including amounts awarded under the LTI P, m ay not be more
than twice the fixed compensation, in accordance with the decision of
the Shareholders' Annual General Meeting of 18 May 2021; this decision
will once again be submitted for approval to the Shareholders' Annual
General Meeting of 14 May 2024. To calculate the ratio, a discount rate
may in addition be applied to no more than 25% of the total variable
compensation in as much as the payment is made in the form of
instruments after a deferred period of at least five years.
Payment of LTIP
Based on the evolution of the BNP Paribas share price, the first half of the
amount paid under the LTIP may not, under any circumstances, exceed
175% of the initial awarded amount. Payment of the second half of the
award may not, under any circumstances, exceed the initial awarded
amount.
Thus, under no circumstances can payments under the LTIP exceed
137.5% of their award value.
Continued presence requirement
LTIP rules require continued presence throughout the entire duration of
the plan. Departure from the Group would result in the LTIP not being
paid. Nonetheless, in the event of retirement or death after the end
of the first year of the plan, payments would be made provided that
performance conditions are met and subject to assessment by the Board
of directors.
Malus and Claw-back clauses
The LTIP provides for "malus" clauses and "claw-back" arrangements.
Thus, in the event that the beneficiary should behave in a way or be guilty
of acts that do not comply with BNP Paribas' expectations, as defined in
particular in terms of:
(i) compliance with the Code of conduct, internal rules, regulations;
and
(ii) risk assessment and management,
the Board of directors may decide not only not to proceed with the
payment of the planned amount, whether or not the beneficiary is
present, but also to request the return of all or part of the sums already
paid under previous plans over a period of five years.
Moreove r, t his rule provides that in the event of the implementation of a
bank resolution measure under the French Monetary and Financial Code,
the LTIP rights shall be definitively cancelled.
The Board of directors reserves the right to reduce awards under the LTI P,
in particular in the event of non-compliance with the above-mentioned
ceiling.
IV. Extraordinary compensation
No extraordinary compensation may be paid to the directors, the
Chairman of the Board of directors, the Chief Executive Officer or the
Chief Operating Officers.
V.
Benefits in kind
The Chairman of the Board of directors, the Chief Executive Officer and
the Chief Operating Officers may have a company ca r.
VI. Stock option or share purchase subscription plans
Directors and corporate officers do not benefit from any stock option or
share purchase subscription plans.
VII. Performance shares
Directors and corporate officers do not receive any performance or free
shares.
VIII. Post-employment benefits
1.
Payments or benefits due or likely to become
due upon termination or change in functions
Directors and corporate officers do not receive any contractual
compensation for termination of their term of directorship.
2.
Retirement benefits
Directors and corporate officers, with the exception of the Chief Operating
Officers, do not receive post-employment benefits when they leave the
Company or when they retire.
The Chief Operating Officers are entitled to the standard retirement
benefits awarded to all BNP Paribas (SA) employees pursuant to their
initial employment contract.
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3.
Supplementary pension plans
The corporate officers benefit solely from the supplementary defined-
contribution pension plan set up for all BNP Paribas (SA) employees, in
accordance with article 83 of the French General T a x Code.
4.
Protection insurance
The Chairman of the Board of directors, the Chief Executive Officer and the
Chief Operating Officers are entitled to the same flexible welfare benefits
(death and disability insurance, as well as the common healthcare benefit
scheme) as all BNP Paribas (SA) employees.
They also benefit from the Garantie Vie Professionnelle Accidents
system (death and disability insurance), which covers all employees of
BNP Paribas (SA).
The Chief Executive Officer and the Chief Operating Officers are also
entitled to the supplementary plan set up for members of the Group
Executive Committee, which pays out additional capital of EUR 1.10 million
in the event of death or total and permanent disability. The employer
contribution under this scheme is recognised as a benefit in kind.
5.
Non-compete agreement
Please note that the Chief Executive Officer signed a non-compete
agreement with BNP Paribas (SA) on 25 February 2016. This agreement
was approved by the Annual General Meeting of 26 May 2016 pursuant
to the provisions of article L.225-38 of the French Commercial Code.
Under this agreement, if he ceases to hold any role or position in
BNP Paribas, Mr Jean-Laurent Bonnafé undertakes, for a period of
twelve months, not to take any role whatsoeve r, e ither directly or
indirectly, for a credit institution, investment or insurance firm whose
securities are traded on a regulated market in France or abroad, as well
as in France for a credit institution, investment or insurance firm whose
securities are not traded on a regulated market. Decisions to apply the
agreement will be taken in due time with sincerity and loyalty.
Under this agreement, the Chief Executive Officer will receive a payment
equal to 1.2 times the total of his fixed and variable compensation
2
(excluding LTIP) received during the year prior to his departure. One-
twelfth of the indemnity would be paid each month.
In accordance with the Afep-MEDEF Code and article R.22-10-14 of the
French Commercial Code which stipulate that the payment of a non-
compete indemnity must be excluded if the person concerned claimed
his pension rights or has exceeded the age of 65 and in line with the
stipulations of said non-compete agreement, the Board of directors and
the Chief Executive Officer have confirmed that they comply with this
provision.
IX. Loans,advances and guarantees granted
to the Group's directors and corporate officers
BNP Paribas directors and corporate officers and their spouse and
dependent children may be granted loans.
These loans, representing normal transactions, are granted on an arm's
length basis, in accordance with the Implementation procedure for
conflicts of interest in relation to loans and other transactions granted
to the Members of the management body and their related parties.
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COMPONENTS OF COMPENSATION PAID IN 2023 OR ALLOCATED IN RESPECT
OF THE SAME YEAR SUBMITTED TO THE EX POST VOTE OF SHAREHOLDERS
DURING THE ANNUAL GENERAL MEETING OF 14 M A Y 2 024 IN ACCORDANCE
WITH ARTICLE L.22-10-34 OF THE FRENCH COMMERCIAL CODE
The total compensation of directors and corporate officers, as described below, is in line with the compensation policy adopted at the Annual General
Meeting of 16 May 2023.
➤
DIRECTORS' COMPENSATION (amounts in euros)
Directors
Amounts paid in 2022
in respect of the year
(as a reminder)
Amounts paid in 2023
in respect of the year
ASCHENBROICH Jacques
100,901
135,521
BONNAFÉ Jean-Laurent
63,220
64,758
BRISAC Juliette
88,341
90,490
DE CHALENDAR Pierre André
111,996
122,655
COHEN Monique
158,993
159,966
DE PLOEY Wouter(1)
42,803
N/A
EPAILLARD Hugues(2)
112,206
121,368
GIBSON-BRANDON Rajna(3)
90,748
57,707
GUILLOU Marion
104,042
106,573
LEMIERRE Jean
63,220
64,758
LOGGHE Lieve(4)
54,330
97,245
NOYER Christian
110,322
117,080
SCHWARZER Daniela
97,761
121,798
TILMANT Michel
116,078
116,866
VERRIER Sandrine(2)
88,341
87,274
WICKER-MIURIN Fields(5)
136,698
75,941
TOTAL
1,540,000
1,540,000
(1) Director until 17 May 2022.
(2) Amount paid to the corresponding trade union organisation.
(3) Director until 10 September 2023.
(4) Director from 17 May 2022.
(5) Director until 16 May 2023.
For information, the rules for allocating directors' compensation are as follows:
Fixed portion(1)
Scheduled meeting
Portion based on actual participation
Extraordinary meeting
Directors resident in France
EUR 23,000
EUR 3,300/meeting
EUR 4,400/meeting
Directors resident outside of France
EUR 23,000
EUR 4,500/meeting(2)
EUR 4,600/meeting(3)
Chairman of a specialised committee (excluding CCIRC)
EUR 6,000/meeting
EUR 6,000/meeting
Member of a specialised committee (excluding CCIRC)
EUR 3,000/meeting
EUR 3,000/meeting
Chairman of CCIRC
EUR 6,200/meeting
EUR 6,200/meeting
Member of the CCIRC (excluding joint session)
EUR 3,200/meeting
EUR 3,200/meeting
(1) The fixed portion is calculated prorata temporis of the term of directorship during the year in question.
(2) Or EUR 3,300 per meeting if participation is via videoconference or telecommunication means.
(3) Or EUR 4,400 per meeting if participation is via videoconference or telecommunication means.
Directors elected by the employees and the director representing the employee shareholders receive compensation under their employment contract.
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At 31 December 2023, the composition of the Board of directors complies
with the obligation for gender parity provided by article L225-18-1 of the
French Commercial Code.
Directors' compensation is also gender-neutral. It consists of a fixed
portion and a portion based on actual participation in meetings on the
basis of the allocation rules presented above.
Compensation and benefits of the corporate officers
➤
TABLE NO. 1: COMPONENTS OF COMPENSATION PAID DURING 2023 OR AWARDED IN RESPECT OF THE SAME YEAR
TO MR JEAN LEMIERRE, CHAIRMAN OF THE BOARD OF DIRECTORS, SUBMITTED TO THE VOTE OF THE SHAREHOLDERS
(amounts in euros)
➤ a. Components of compensation awarded in respect of 2023 to Mr Jean LEMIERRE, Chairman of the Board of directors
Amounts Comments
Fixed compensation
950,000 The compensation paid to Mr Jean LEMIERRE is determined following the guidelines
(paid) proposed by the Remuneration Committee and approved by the Board of directors.
This fixed compensation has not changed since December 2014.
Annual variable compensation
None Mr Jean LEMIERRE is not entitled to annual variable compensation. The absence of
variable compensation reflects the independence of the Chairman with respect to
the Executive Management.
Conditional long-term incentive plan
None Mr Jean LEMIERRE does not benefit from a conditional long-term incentive plan. The
absence of variable compensation reflects the independence of the Chairman with
respect to the Executive Management.
Compensation linked to the term
of directorship
64,758 Mr Jean LEMIERRE does not receive any compensation in respect of directorships that
(paid) he holds in the Group's companies other than BNP Paribas (SA).
Extraordinary compensation
None
Stock options awarded during the period
None
Performance shares awarded during the year
None
Benefits in kind
5,023 Mr Jean LEMIERRE has a company ca r.
TOTAL
1,019,781
➤ b. Components of compensation paid to Mr Jean LEMIERRE, Chairman of the Board of directors during 2023
in respect of previous years (having been subject to a shareholders' vote at the time of their award)
Submission date to the AGM
and resolution number
Amounts paid in 2023
None
➤ c. Commitments of any kind corresponding to compensation components, indemnities or benefits in kind due or likely to be due
as a result of the assumption, termination or change in functions or after performing these to the benefit of Mr Jean LEMIERRE,
Chairman of the Board of directors
Amounts Comments
Sign-on bonuses and severance payments
None Mr Jean LEMIERRE receives no sign-on bonus or severance payment.
Supplementary defined-benefit pension
plan
None Mr Jean LEMIERRE does not benefit from any supplementary defined-benefit pension
plan.
Supplementary defined-contribution pension
plan
1,892 Mr Jean LEMIERRE benefits from the defined-contribution plan (article 83 of the
French General T a x Code) set up for all BNP Paribas (SA) employees. The amount
of contributions paid by the Company under the plan for Mr Jean LEMIERRE in 2023
was EUR 1,892.
Welfare benefit and healthcare plans
4,115 Mr Jean LEMIERRE benefits from the disability, invalidity and death, and healthcare
insurance plans offered to employees of BNP Paribas (SA). He also benefits from
the Garantie Vie Professionnelle Accidents system (death and disability insurance)
covering all employees of BNP Paribas (SA). The amount of the contributions paid by
the Company in this respect for Mr Jean LEMIERRE in 2023 was EUR 4,115.
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TABLE NO. 2: COMPONENTS OF COMPENSATION PAID DURING 2023 OR AWARDED IN RESPECT OF THE
SAME YEAR TO MR JEAN-LAURENT BONNAFÉ, CHIEF EXECUTIVE OFFICER, SUBMITTED TO THE VOTE
OF THE SHAREHOLDERS (amounts in euros)
➤ a. Components of compensation awarded in respect of 2023 to Mr Jean-Laurent BONNAFÉ, Chief Executive Officer
Amounts Comments
Fixed compensation
1,843,000 The compensation paid to Mr Jean-Laurent BONNAFÉ is determined following the guidelines proposed
(paid) by the Remuneration Committee and approved by the Board of directors. The last increase in
the fixed compensation of Mr Jean-Laurent BONNAFÉ, bringing it to EUR 1,843,000, dates from 7
February 2022 with effect from 1 January 2022. The Board of directors had noted the Bank's very
good performance since the appointment of the Chief Executive Office r.
Annual variable compensation(1)
1,877,648 The variable compensation of Mr Jean-Laurent BONNAFÉ evolves depending on criteria
representative of Group results and his managerial performance. It is expressed as a percentage
of a target variable compensation corresponding to 100% of fixed compensation for the yea r.
The quantitative criteria depend on indicators linked to the Group's overall performance; they
are as follows:
■ evolution of net earnings per share for the year compared to the previous year (37.5% of the
target variable compensation);
■ percentage of achievement of the Group's budgeted gross operating income (37.5% of the target
variable compensation).
CSR criteria also condition 15% of the target variable compensation. They correspond to the
multi-criteria assessment of the actions taken by the Group with respect to social, societal and
environmental issues.
The qualitative criteria represents 10% of the target variable compensation.
After taking into account quantitative, CSR and qualitative criteria, the Board of directors set the
annual variable compensation of Mr Jean-Laurent BONNAFÉ for 2023 at EUR 1,877,648, i.e. 101.88%
of the target annual variable compensation:
■ half of the non-deferred portion of the variable compensation will be paid in May 2024, and
half in March 2025, indexed to the performance of the BNP Paribas share;
■ the deferred portion of the variable compensation will be paid in fifths as of 2025. Each payment
will be made half in March every yea r, a nd half in March of the following yea r, i ndexed to the
performance of the BNP Paribas share. The last payment in respect of 2023 will therefore be
made in March 2030;
■ the annual payment of the deferred variable compensation is subject to the condition that the
ROE before tax of the Group for the year preceding the payment is greater than 5%.
The ratio between the annual fixed compensation and variable compensation, as required under
the French Commercial Code, is 101.88%.
Conditional long-term incentive
plan (fully deferred for a period
of five years)
610,217 The fair value of the LTIP awarded to Mr Jean-Laurent BONNAFÉ on 31 January 2024 with respect
to 2023 amounts to EUR 610,217.
The term of the LTIP is five years. The two conditions of the LTI P, o ne recognising an increase in the
intrinsic value of the BNP Paribas share and the other recognising its potential outperformance
relative to its peers, are assigned equal weighting in order to measure their effects separately.
Payments under the LTIP may not exceed 137.5% of their award value.
Compensation linked to the
term of directorship
64,758 Mr Jean-Laurent BONNAFÉ receives compensation for his term of his directorship at BNP Paribas
(SA).
Extraordinary compensation
None
Stock options awarded during
the period
None
Performance shares awarded
during the year
None
Benefits in kind
6,267 Mr Jean-Laurent BONNAFÉ has a company ca r. T his amount also includes the employer contribution
of EUR 1,360 paid by BNP Paribas (SA) for 2023 under the Executive Committee professional life
insurance policy, offering an additional EUR 1.10 million in the event of death or total permanent
disability.
TOTAL
4,401,890
(1) Payment subject to the approval of the Annual General Meeting of 14 May 2024 pursuant to article L.22-10-34 II of the French Commercial Code.
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➤ b. Components of compensation paid to Mr Jean-Laurent BONNAFÉ, Chief Executive Officer, during 2023 in respect of previous
years (having been subject to the shareholders' vote at the time of their award)
In euros
Submission date to the AGM
and resolution number
Amounts paid in 2023
Annual variable remuneration
1,775,057
Including partial payment of the annual variable compensation in respect of 2022
16 May 2023
15th resolution
386,293
2
Including partial payment of the annual variable compensation in respect of 2021
17 May 2022
15th resolution
461,683
Including partial payment of the annual variable compensation in respect of 2020
18 May 2021
15th resolution
198,511
Including partial payment of the annual variable compensation in respect of 2019
19 May 2020
16th resolution
223,218
Including partial payment of the annual variable compensation in respect of 2018
23 May 2019
14th resolution
214,434
Including partial payment of the annual variable compensation in respect of 2017
24 May 2018
15th resolution
185,320
Including partial payment of the annual variable compensation in respect of 2016
23 May 2017
14th resolution
105,598
Conditional long-term incentive plan
24 May 2018
15th resolution
781,000
➤ c. Commitments of any kind corresponding to compensation components, indemnities or benefits in kind due or likely to be due
as a result of the assumption, termination or change in functions or after performing these to the benefit of Mr Jean-Laurent
BONNAFÉ, Chief Executive Officer
Amounts Comments
Sign-on bonuses and
severance payments
None Mr Jean-Laurent BONNAFÉ receives no sign-on bonus or severance payment.
Non-compete indemnity
None Under the non-compete clause signed on 25 February 2016, and subject to the conditions detailed
below, Mr Jean-Laurent BONNAFÉ would receive compensation equal to 1.2 times the sum of his fixed
and variable compensation (excluding conditional long-term incentive plan) received during the year
prior to his departure. One-twelfth of the indemnity would be paid each month.
Under this agreement, if he ceases to hold any role or position in BNP Paribas, Mr Jean-Laurent
BONNAFÉ undertakes, for a period of twelve months, not to take any role whatsoeve r, e ither directly
or indirectly, for a credit institution, investment or insurance firm whose securities are traded on
a regulated market in France or abroad, as well as in France for a credit institution, investment or
insurance firm whose securities are not traded on a regulated market. Decisions to apply the agreement
will be taken in due time with sincerity and loyalty.
In accordance with the Afep-MEDEF Code and article R.22-10-14 III of the French Commercial Code,
which stipulate that the payment of a non-compete payment must be excluded if the person concerned
claimed his pension rights or has exceeded the age of 65 and in line with the stipulations of said
non-compete agreement, the Board of directors and the Chief Executive Officer have confirmed that
they comply with this provision.
Supplementary defined-benefit
pension plan
None Mr Jean-Laurent BONNAFÉ does not benefit from any supplementary defined-benefit pension plan.
Supplementary defined-
contribution pension plan
1,892 Mr Jean-Laurent BONNAFÉ benefits from the defined-contribution plan (article 83 of the French
General T a x Code) set up for all BNP Paribas (SA) employees. The amount of contributions paid
by the Company in this respect for Mr Jean-Laurent BONNAFÉ was, in 2023, EUR 1,892.
Welfare benefit and
healthcare plans
4,115 Mr Jean-Laurent BONNAFÉ benefits from the disability, invalidity and death and healthcare insurance
plans offered to employees of BNP Paribas (SA). He also benefits from the Garantie Vie Professionnelle
Accidents system (death and disability insurance) covering all employees of BNP Paribas (SA). The
amount of contributions paid by the Company in this respect for Mr Jean-Laurent BONNAFÉ was,
in 2023, EUR 4,115.
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TABLE NO. 3: COMPONENTS OF COMPENSATION PAID DURING 2023 OR AWARDED IN RESPECT OF THE SAME YEAR
TO MR YANN GÉRARDIN, CHIEF OPERATING OFFICER, SUBMITTED TO THE VOTE OF THE SHAREHOLDERS (amounts in euros)
➤ a. Components of the compensation awarded in respect of 2023 to Mr Yann GÉRARDIN, Chief Operating Officer
Amounts Comments
Fixed compensation
1,500,000 The compensation paid to Mr Yann GÉRARDIN is determined following the guidelines proposed
(paid) by the Remuneration Committee and approved by the Board of directors.
Annual variable compensation(1)
1,529,100 The variable compensation of Mr Yann GÉRARDIN evolves depending on criteria representative
of the Group's results as well as the results of the CIB division and his managerial performance.
It is expressed as a percentage of a target variable compensation corresponding to 100% of fixed
compensation for the yea r.
The quantitative criteria depend on the following performance indicators:
■ evolution of net earnings per share for the year compared to the previous year (18.75% of the
target variable compensation);
■ percentage of achievement of the Group's budgeted gross operating income (18.75% of the
target variable compensation);
■ evolution of net income before tax for the CIB scope for the year compared to the previous year
(18.75% of the target variable compensation);
■ percentage of achievement of the CIB scope's gross operating income budget (18.75% of the
target variable compensation).
CSR criteria also condition 15% of the target variable compensation. They correspond to the
multi-criteria assessment of the actions taken by the Group with respect to social, societal and
environmental issues.
The qualitative criteria represents 10% of the target variable compensation.
After taking into account quantitative, CSR and qualitative criteria, the Board of directors set the
annual variable compensation of Mr Yann GÉRARDIN for 2023 at EUR 1,529,100, i.e. 101.94% of
the target annual variable compensation:
■ half of the non-deferred portion of the variable compensation will be paid in May 2024, and
half in March 2025, indexed to the performance of the BNP Paribas share;
■ the deferred portion of the variable compensation will be paid in fifths as of 2025. Each payment
will be made half in March every yea r, a nd half in March of the following yea r, i ndexed to the
performance of the BNP Paribas share. The last payment in respect of 2023 will therefore be
made in March 2030;
■ the annual payment of the deferred variable compensation is subject to the condition that the
ROE before tax of the Group for the year preceding the payment is greater than 5%.
The ratio between the annual fixed compensation and variable compensation, as required under
the French Commercial Code, is 101.94%.
Conditional long-term incentive
plan (fully deferred for a period
of five years)
496,650 The fair value of the LTIP awarded to Mr Yann GÉRARDIN on 31 January 2024 with respect to 2023
amounts to EUR 496,650.
The term of the LTIP is five years. The two conditions of the LTI P, o ne recognising an increase in the
intrinsic value of the BNP Paribas share and the other recognising its potential outperformance relative
to its peers, are assigned equal weighting in order to measure their effects separately.
Payments under the LTIP may not exceed 137.5% of their award value.
Compensation linked to the
term of directorship
None Mr Yann GÉRARDIN does not hold a directorship in Group companies.
Extraordinary compensation
None
Stock options awarded during
the period
None
Performance shares awarded
during the year
None
Benefits in kind
1,360 This amount corresponds to the annual employer contribution paid by BNP Paribas (SA) for
2023 under the Executive Committee professional life insurance policy, offering an additional
EUR 1.10 million in the event of death or total permanent disability.
TOTAL
3,527,110
(1) Payment subject to the approval of the Annual General Meeting of 14 May 2024 pursuant to article L.22-10-34 II of the French Commercial Code.
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➤ b. Components of compensation paid to Mr Yann GÉRARDIN, Chief Operating Officer, during 2023 in respect of previous years
(having been subject to the shareholders' vote at the time of their award)
In euros
Submission date to the AGM
and resolution number
Amounts paid in 2023
Annual variable remuneration
601,354
Including partial payment of the annual variable compensation in respect of 2022
16 May 2023
2
16th resolution
320,400
Including partial payment of the annual variable compensation in respect of 2021
17 May 2022
17th resolution
280,954
Conditional long-term incentive plan
None
None
➤ c. Commitments of any kind corresponding to compensation components, indemnities or benefits due or likely to be due in
respect of the assumption, termination or change of functions or after performing these to the benefit of Mr Yann GÉRARDIN,
Chief Operating Officer
Amounts Comments
Sign-on bonuses and
severance payments
None Mr Yann GÉRARDIN receives no sign-on bonus or severance payment.
Supplementary defined-benefit
pension plan
None Mr Yann GÉRARDIN does not benefit from any supplementary defined-benefit pension plan.
Supplementary defined-
contribution pension plan
1,892 Mr Yann GÉRARDIN benefits from the defined-contribution plan (article 83 of the French General
T a x Code) set up for all employees of BNP Paribas (SA). In 2023, the amount of contributions paid
by the Company in this respect for Mr Yann GÉRARDIN was EUR 1,892.
Welfare benefit and
healthcare plans
4,115 Mr Yann GÉRARDIN benefits from the disability, invalidity and death and healthcare insurance
offered to employees of BNP Paribas (SA). He also benefits from the Garantie Vie Professionnelle
Accidents system (death and disability insurance) covering all employees of BNP Paribas (SA). In
2023, the amount of contributions paid by the Company in this respect for Mr Yann GÉRARDIN
was EUR 4,115.
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➤
TABLE NO. 4: COMPONENTS OF COMPENSATION PAID DURING 2023 OR AWARDED IN RESPECT OF
THE SAME YEAR TO MR THIERRY LABORDE, CHIEF OPERATING OFFICER, SUBMITTED TO THE VOTE
OF THE SHAREHOLDERS (amounts in euros)
➤ a. Components of the compensation awarded in respect of 2023 to Mr. Thierry LABORDE, Chief Operating Officer
Amounts Comments
Fixed compensation due
900,000 The compensation paid to Mr Thierry LABORDE is determined following the guidelines proposed
(paid) by the Remuneration Committee and approved by the Board of directors.
Annual variable compensation(1)
902,520 The variable compensation of Mr Thierry LABORDE evolves depending on criteria representative
of the Group's results as well as the results of the CPBS division and his managerial performance.
It is expressed as a percentage of a target variable compensation corresponding to 100% of fixed
compensation for the yea r.
The quantitative criteria depend on the following performance indicators:
■ evolution of net earnings per share for the year compared to the previous year (18.75% of the
target variable compensation);
■ percentage of achievement of the Group's budgeted gross operating income (18.75% of the
target variable compensation);
■ evolution of net income before tax of the CPBS scope for the year compared to the previous
year (18.75% of the target variable compensation);
■ percentage of achievement of the CPBS scope's gross operating income budget (18.75% of the
target variable compensation).
CSR criteria also condition 15% of the target variable compensation. They correspond to the
multi-criteria assessment of the actions taken by the Group with respect to social, societal and
environmental issues.
The qualitative criteria represents 10% of the target variable compensation.
After taking into account quantitative, CSR and qualitative criteria, the Board of directors set the
annual variable compensation of Mr Thierry LABORDE for 2023 at EUR 902,520, i.e. 100.28% of
the target annual variable compensation;
■ half of the non-deferred portion of the variable compensation will be paid in May 2024, and
half in March 2025, indexed to the performance of the BNP Paribas share;
■ the deferred portion of the variable compensation will be paid in fifths as of 2025. Each payment
will be made half in March every yea r, a nd half in March of the following yea r, i ndexed to the
performance of the BNP Paribas share. The last payment in respect of 2023 will therefore be
made in March 2030;
■ the annual payment of the deferred variable compensation is subject to the condition that the
ROE before tax of the Group for the year preceding the payment is greater than 5%.
The ratio between the annual fixed compensation and variable compensation, as required under
the French Commercial Code, is 100.28%.
Conditional long-term incentive
plan (fully deferred for a period
of five years)
297,990 The fair value of the LTIP awarded to Mr Thierry LABORDE on 31 January 2024 with respect to
2023 amounts to EUR 297,990.
The term of the LTIP is five years. The two conditions of the LTI P, o ne recognising an increase in the
intrinsic value of the BNP Paribas share and the other recognising its potential outperformance relative
to its peers, are assigned equal weighting in order to measure their effects separately.
Payments under the LTIP may not exceed 137.5% of their award value.
Compensation linked to
the term of directorship
None Mr Thierry LABORDE does not receive any compensation for the directorships he holds in the
Group's companies.
Extraordinary compensation
None
Stock options awarded
during the period
None
Performance shares awarded
during the year
None
Benefits in kind
6,708 Mr Thierry LABORDE has a company ca r. T his amount also includes the employer contribution
of EUR 1,360 paid by BNP Paribas (SA) for 2023 under the Executive Committee professional life
insurance policy, offering an additional EUR 1.10 million in the event of death or total permanent
disability.
TOTAL
2,107,218
(1) Payment subject to the approval of the Annual General Meeting of 14 May 2024 pursuant to article L.22-10-34 II of the French Commercial Code.
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➤ b. Components of the compensation paid to Mr Thierry LABORDE, Chief Operating Officer, during 2023 in respect
of previous years (having been subject to a shareholder vote at the time of their award)
In euros
Submission date to the AGM
and resolution number
Amounts paid in 2023
Annual variable remuneration
357,137
Including partial payment of the annual variable compensation in respect of 2022
16 May 2023
2
17th resolution
194,616
Including partial payment of the annual variable compensation in respect of 2021
17 May 2022
18th resolution
162,521
Conditional long-term incentive plan
None
None
➤ c. Commitments of any kind corresponding to compensation components, indemnities or benefits due or likely to be due
in respect of the assumption, termination or change of functions or after performing these to the benefit of Mr Thierry LABORDE,
Chief Operating Officer
Amounts Comments
Sign-on bonuses and
severance payments
None Mr Thierry LABORDE does not receive any sign-on bonus or severance payment.
Supplementary defined-benefit
pension plan
None Mr Thierry LABORDE does not benefit from any supplementary defined-benefit pension plan.
Supplementary defined-
contribution pension plan
1,892 Mr Thierry LABORDE benefits from the defined-contribution plan (article 83 of the French General
T a x Code) set up for all employees of BNP Paribas (SA). In 2023, the amount of contributions paid
by the Company in this respect for Mr Thierry LABORDE was EUR 1,892.
Welfare benefit and
healthcare plans
4,115 Mr Thierry LABORDE benefits from the disability, invalidity and death and healthcare insurance
plans offered to BNP Paribas (SA) employees. He also benefits from the Garantie Vie Professionnelle
Accidents system (death and disability insurance) covering all employees of BNP Paribas (SA). In
2023, the amount of contributions paid by the Company in this respect for Mr Thierry LABORDE
was EUR 4,115.
Details relating to the annual variable compensation
of executive corporate officers
Assessment of the achievement of the targets set for 2023
At its meeting of 31 January 2024, the Board of directors assessed the
achievement of the objectives set in accordance with the compensation
policy.
Group performance criteria
Concerning the criterion linked to the evolution of net earnings per share
for the year compared to the previous yea r, i ts measurement for the Chief
Executive Officer Mr Jean-Laurent Bonnafé as a percentage of the target
variable compensation, amounts to 41.25% for 2023 (20.63% for the Chief
Operating Officers, Mr Yann Gérardin and Mr Thierry Laborde).
Concerning the criterion related to the achievement of the Group's
gross operating income budget, its measurement for the Chief Executive
Officer Mr Jean-Laurent Bonnafé as a percentage of the target variable
compensation, amounts to 35.63% for 2023 (17.81% for the Chief
Operating Officers, Mr Yann Gérardin and Mr Thierry Laborde).
In addition, for the Chief Operating Officers, Mr Yann Gérardin and
Mr Thierry Laborde:
■ concerning the criterion related to the evolution of net income before
tax for the year compared to the previous yea r, r elating to the scope
under their responsibility, its measurement, as a percentage of the
target variable compensation, is 19.95% for the CIB scope and 18.26%
for the CPBS scope;
■ concerning the criterion related to the achievement of the gross
operating income budget for the scope under their responsibility, its
measurement, as a percentage of the target variable compensation, is
18.55% for the CIB scope and 18.58% for the CPBS scope.
2022
2023(1)
Variation
Application to 37.5% of
target annual variable
compensation
Chief Executive Officer – Mr Jean-Laurent BONNAFÉ
Net earnings per share
7.80
8.58
10.00%
41.25%
Gross Operating Income
2023 Budget(2):
EUR 15,704 million
Achieved:
EUR 14,918 million
-5.00%
35.63%
(1) The indicators used to calculate the annual financial performance of the Chief Executive Officer and Chief Operating Officers are based on the 2023
accounting results.
(2) These data are calculated using the average exchange rate for 2023.
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2022
2023(3)
Application to 18.75%
of the target annual
Variation variable compensation
Chief Operating Officers – Mr Yann GÉRARDIN and Mr Thierry LABORDE
Group
Net earnings per share
7.80
8.58
10.00%
20.63%
Gross Operating Income
2023 Budget(1):
EUR 15,704 million
Achieved:
EUR 14,918 million
-5.00%
17.81%
Scope of responsibility – CIB
Net income before tax
EUR 5,398 million
EUR 5,744 million
6.42%
19.95%
Gross Operating Income
2023 Budget(1):
EUR 5,747 million
Achieved:
EUR 5,686 million
-1.05%
18.55%
Scope of responsibility – CPBS
Net income before tax
EUR 7,285 million (2)
EUR 7,095 million
-2.61%
18.26%
Gross Operating Income
2023 Budget(1):
EUR 10,284 million
Achieved:
EUR 10,191 million
-0.90%
18.58%
(1) These data are calculated using the average exchange rate for 2023.
(2) In order to be comparable with the results for 2023, the results for 2022 have been recomposed to take into account, in particula r, t he IFRS 5 impact. This
recomposition was presented to the market in May 2023.
(3) The indicators used to calculate the annual financial performance of the Chief Executive Officer and Chief Operating Officers are based on the 2023 accounting
results.
Criteria linked to the Group's CSR performance
The Board of directors reviewed the achievement of the multi-criteria
measurement with regard to the three criteria linked to the Group's CSR
performance provided for in the compensation policy, each of which has
a 5% weighting.
(i) Board's assessment of the CSR policy
With regard to the qualitative assessment, the Board of directors
considered that this criteria has been met given the significant
achievements in 2023 regarding environmental and social issues.
BNP Paribas has an ambitious policy of engagement in society on these
issues, notably with a clear energy transition strategy and initiatives
in favour of ethical responsibility. In 2023, the Bank accelerated its
commitments to sustainable finance, which is one of the pillars of its
2025 strategic plan (Growth, Technology & Sustainability).
On the economic pillar:
■ alignment of the loan portfolio with the Net Zero emissions objective
in 2050 with the publication of the first Climate report with targets
(i) by the end of 2025 for the electricity production, oil and gas and
automotive sectors, and (ii) by the end of 2030 for the steel, aluminium
and cement sectors;
■ strengthening of the oil and gas policy to take into account the Group's
new commitments, such as (i) achieving the target of 80% low-carbon
in BNP Paribas' financing of energy production by 2028, (ii) achieving
the target of 90% low-carbon in BNP Paribas' financing of energy
production by 2030, (iii) the exclusion of all financing dedicated to the
development of new oil and gas capacities and (iv) the 80% reduction
of all upstream oil financing and the 30% reduction in financing for
gas exploration-production by 2030;
■ BNP Paribas' shift towards a majority of low-carbon energies was
characterised in 2023 by a 13% increase in its low-carbon financing,
representing EUR 32 billion at the end of September 2023 or 65%
of financing related to energy production. At the same time, the
Group reduced its fossil fuel financing by 27%, which at the end of
September 2023 represented EUR 17.3 billion, i.e. 35% of financing
related to energy production;
■ number one world ranking in terms of sustainable bonds and ESG loans
in 2023 according to Dealogic with USD 62.5 billion and 5th in terms
of Sustainability-Linked Loans with USD 16.2 billion (1st European);
■ prize for the best bank in the world in terms of sustainable finance in
2023 by Euromoney for the 3rd consecutive year;
■ EUR 254 billion in assets under management of articles 8 and 9 funds
within the meaning of SFDR(1) in BNP Paribas Asset Management's
open-ended funds distributed in Europe;
■ deployment of the ESG Assessment, a tool for assessing the
environmental, social and governance (ESG) risk profile of the Group's
corporate clients, which was almost completed at the end of 2023
for the Group's large corporate clients and extended to various client
segments.
On the social pillar:
■ protection of Group employees by providing assistance wherever they
may need it (Türkiye, Morocco, Ukraine, Middle East) and by deploying
the We Care program worldwide to promote the Bank's offer in terms
of prevention, health and well-being at work;
■ achievement of the Group's ambitious target in terms of gender
representation with 37.1% of women in Senior Management Positions
(SMP) by the end of 2023 (40% by 2025);
(1) "Sustainable Finance Disclosure Regulation": European regulation on the disclosure of sustainability information in the financial services secto r, w hich entered into force in
March 2021, which imposes transparency obligations on sustainable investment funds:
• "article 8" funds: products that promote environmental or social characteristics;
• "article 9" funds: products with a sustainable investment objective.
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■ broad promotion of BNP Paribas' inclusion policy during Inclusion
Days, to raise employee awareness of equal opportunities, prejudice,
disability and financial inclusion. A large majority of employees
surveyed actively support BNP Paribas' initiatives in terms of diversity
and inclusion (according to the Conduct & Inclusion survey conducted
in 2023, which notably revealed that 87% of employees say they can
be themselves at their workplace);
■ recognition of the Group in 2023 as Top Employer Europe for the
2
10th consecutive year;
■ success of the Sustainability Academy with more than 86,000 unique
employees trained at least once on sustainable finance topics in 2023
(for 1.7 hours of training and 4.3 modules per person on average).
On the civic pillar:
■ continued development of the Nickel offer (accounts and payment
cards from twelve years old, without conditions) contributing to better
financial inclusion: nearly 3.7 million accounts at the end of 2023 with
a presence in France, Spain, Belgium, Portugal, and in Germany since
the summer of 2023;
■ continued development of Impact Contracts as a structurer and
investor with nine new projects for a total amount of EUR 28 million,
including the one operated by Andes, which aims to combat food waste
and food insecurity on a large scale;
■ sixteen new investments with a social and/or environmental impact
in 2023 for a total of nearly EUR 56 million, including Ecov, a shared
mobility operator in areas where the public transport offering is
reduced or absent;
■ development of the first ISLF (Inclusive & Sustainability-Linked
Financing), which aim to support inclusion players, through
reduced-rate financing and dedicated technical assistance if social,
environmental and fair transition objectives are achieved, with the
first three signed with Adie in France, PerMicro in Italy, and Banco
da Familia in Brazil;
■ exceptional donations of over EUR 35 million from, among other
actions, the sale of fine furniture (EUR 500,000), an exceptional TEB
budget for disaster victims in Türkiye (over EUR 12 million) and
EUR 20 million from the solidarity tranche (ESG component) linked
to the buyback of shares in favour of over 90 structures promoting
environmental knowledge and combating extreme poverty.
On the environmental pillar:
■ number one world ranking for green bonds with USD 25.6 billion in
2023 according to Dealogic;
■ numerous low-carbon transactions with the LCTG (Low-Carbon
Transition Group), including:
■
major role in the loan of more than EUR 4 billion for the Baltic Power
project, enabling the construction of the first offshore wind farm in
Polish waters, which will provide renewable energy to more than
1.5 million households from 2026,
■
financing of more than EUR 800 million for AESC (Automotive Energy
Supply Corporation), a Japanese world leader in battery design and
production, for a gigafactory planned for construction in Douai in
France;
■ acquisition by BNP Paribas Asset Management of a majority interest in
International Woodland Company (IWC), based in Denmark, specialised
in investment and advisory services dedicated to sustainable forestry,
agriculture and natural ecosystems, as well as carbon credits and
conservation projects;
■ launch of a multi-year partnership with the Naturalis Biodiversity
Center to protect and restore biodiversity, by supporting 150
biodiversity scientists, with the objectives of education, data or
financial innovation.
(ii) Market assessment of the CSR policy
Regarding the criterion related to the Group's CSR positioning compared
to its peers in the extra-financial performance rankings of FTSE, S&P
Global Corporate Sustainability Assessment and Moody's ESG Solutions,
BNP Paribas is effectively in the 1st quartile of the Banks sector of the
three aforementioned agencies.
(iii) Assessment of the CSR policy by alignment with the
Group's key employees
Regarding the criterion of alignment with the Group's key employees, the
three-year CSR target measure set in the loyalty plan awarded to the
Group's key employees are also met.
Consequently, the multi-criteria measure, as a percentage of the target
variable compensation, amounts to 15% for 2023 for the Chief Executive
Officer and the Chief Operating Officers.
CSR – Assessment of the CSR policy
(i) By the Board
(ii) By the market
(iii) Alignment with
key employees
Multi-criteria
measurement
Weighting
5.00%
5.00%
5.00%
Measurement
5.00%
5.00%
5.00%
15.00%
Qualitative criteria
The Board of directors assessed the qualitative portion of the annual
variable compensation in terms of the application of the criteria provided
for in the compensation policy.
For 2023, the Board of directors took into main consideration and deemed
satisfied by Mr Jean-Laurent Bonnafé the following:
■ increase of 2023 net income attributable to the shareholders compared
to 2022; the Group generated a positive jaws effect and continued its
growth in a long-term approach by managing its risks in a prudent
manner;
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■ his decisive role in the Bank's management with the continued
implementation of the GTS 2025 Plan and in particular in strengthening
the Group's operational resilience;
■ his decisive action in the sale of Bank of the West to BMO Financial
Group, generating a net capital gain of EUR 2.9 billion partly
redeployed to the Group's organic growth and targeted investments
and acquisitions;
■ his continued involvement in the definition and implementation of
the Group's CSR strategy in order to contribute to a carbon neutral
economy in 2050, in particular through new commitments made in
2023: reduction of financing dedicated to the (i) oil and gas sectors
with, in particula r, t he end of new production capacities financing and
the (ii) steel, cement and aluminium sectors;
■ his role in increasing the number of women in governing bodies as
well as his involvement in all the pillars of the Group's diversity and
inclusion policy.
For Mr Yann Gérardin, as Chief Operating Officer in charge of the
Corporate and Institutional Banking (CIB) division and in line with the
assessments proposed for Mr Jean-Laurent Bonnafé:
■ CIB division's results in 2023 in line with budget after an exceptional
year in 2022, with good risk management, reflecting BNP Paribas'
continued improvement in the rankings of investment banks in Europe
thanks to market share gains;
■ his contribution to the implementation of the BNP Paribas integrated
model through the acceleration of joint initiatives with each of the
CPBS and IPS divisions, in particular as part of the Payments & Flows
and Savings transversal initiatives;
■ his commitment to continuing to make CIB a leader in CSR, and which
is reflected by the Bank's position as the world No. 1 in sustainable
financing in the EMEA region as well as by the award obtained as the
best bank at the global level for sustainable financing (Euromoney)
in 2023;
■ his involvement in the integration of Exane's activities with the
successful merger of Exane SA into BNP Paribas SA, enabling CIB to
offer a more comprehensive range of products and services in the
equity and equity derivatives segment;
■ his involvement in strengthening controls and operational resilience
and in the continued adoption of the Code of conduct in market
activities.
For Mr Thierry Laborde, as Chief Operating Officer in charge of the
Commercial, Personal Banking & Services division (CPBS) and in line
with the assessments proposed for Mr Jean-Laurent Bonnafé:
■ positive value creation, by controlling the effects of changes in interest
rates resulting, in particula r, f rom monetary policy;
■ his involvement in the adaptation of the business model, particularly
with regard to consumer finance and Retail Banking;
■ his role in the deployment by CPBS of the GTS 2025 Plan, with significant
progress in customer satisfaction, the continued digitalisation of the
customer journey, as well as in supporting business lines and territories
requiring transformation plans and/or restructuring;
■ his role as sponsor in the Mobility and Payments & Flows transversal
initiatives, which achieved new commercial successes in 2023, with
the conclusion of new partnerships and with the acceleration of
BNP Paribas' presence in the digital business lines (in particular the
continued deployment of Nickel in Europe and the increase in the
number of active Floa partners);
■ his decisive contribution to strategic projects, in particular the
European Payments Initiative (EPI), which made concrete progress
in 2023;
■ his commitment to continue integrating the CSR dimension into CPBS's
business lines.
Summary
After taking into account all the criteria used to set annual variable
compensation, and the evolution of the Group's operating results, the
Board of directors, on the proposal of the Remuneration Committee, set
the variable compensation awarded in respect of 2023 at:
■ EUR 1,877,648 for Mr Jean-Laurent Bonnafé (representing 101.88% of
his target annual variable compensation);
■ EUR 1,529,100 for Mr Yann Gérardin (representing 101.94% of his
target annual variable compensation);
■ EUR 902,520 for Mr Thierry Laborde (representing 100.28% of his
target annual variable compensation).
The result in respect of each criterion is set out in the following table:
Quantitative criteria
CSR
performance Qualitative
criteria
Annual
variable
with
criteria to 2023 compensation
Reminder of
respect target variable
EPS(2)
GOI(3)
NIBT(4) GOI(5)
Group
Group Business Business
Jean-Laurent BONNAFÉ
Weighting(1) 37.50%
37.50%
15.00%
10.00%
Measurement(1) 41.25%
35.63%
15.00%
10.00%
1,877,648
1,843,000
Yann GÉRARDIN
Weighting(1) 18.75%
18.75%
18.75%
18.75%
15.00%
10.00%
Measurement(1) 20.63%
17.81%
19.95%
18.55%
15.00%
10.00%
1,529,100
1,500,000
Thierry LABORDE
Weighting(1) 18.75%
18.75%
18.75%
18.75%
15.00%
10.00%
Measurement(1) 20.63%
17.81%
18.26%
18.58%
15.00%
10.00%
902,520
900,000
(1) As a percentage of target annual variable compensation.
(2) Evolution of net earnings per share (EPS) for the year compared to the previous yea r.
(3) Percentage of achievement of budgeted gross operating income (GOI) for the Group.
(4) Evolution of net income before tax (NIBT) for the year compared to the previous yea r. Yann Gérardin: CIB scope/Thierry Laborde: CPBS scope.
(5) Percentage of achievement of budgeted gross operating income (GOI). Yann Gérardin: CIB scope/Thierry Laborde: CPBS scope.
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Terms and conditions of payment
a) The payment terms for variable compensation of BNP Paribas Group
executive corporate officers in respect of 2023, in accordance with
the provisions of the French Monetary and Financial Code and the
EBA's 2 July 2021 Guidelines on compensation policy are:
■
60% of annual variable compensation is deferred over five years, at
the rate of one-fifth per year;
■
half of the non-deferred portion of the variable compensation is paid
in May 2024, subject to the approval of the Shareholders' Annual
General Meeting under the terms provided for by article L.22-
10-34 II of the French Commercial Code; and half in March 2025,
indexed to the performance of the BNP Paribas share since the
award;
■
the deferred portion of the variable compensation will be paid
annually in fifths starting in 2025. Each payment will be made
half in March every yea r, a nd half in March of the following yea r,
indexed to the performance of the BNP Paribas share since the
award. The last payment in respect of 2023 will therefore be made
in March 2030.
b) In addition, the annual payment of the deferred variable
compensation is subject to the condition that the ROE before tax of
the Group for the year preceding the payment is greater than 5%.
The Board of directors noted that this performance condition was met
in 2023; accordingly, deferred compensation payable in 2024 in respect
of previous plans will be paid.
Details relating to the conditional long-term incentive
2
plan over five years (L T IP)
LTIP amounts awarded in 2024
In accordance with the compensation policy and on the proposal of the
Remuneration Committee, the Board of directors set the LTIP amounts
awarded in 2024.
The amount awarded under the LTIP is equal to the target annual variable
compensation for 2023.
LTIP awarded on 31 January 2024 (in euros)
Awarded amount(1)
Fair value of the
awarded amount(2)
Jean-Laurent BONNAFÉ
1,843,000
610,217
Yann GÉRARDIN
1,500,000
496,650
Thierry LABORDE
900,000
297,990
(1) See explanations above.
(2) Fair value of the awarded amount in accordance with IFRS. The calculation is carried out by an independent expert.
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➤
STRUCTURE OF THE PAYMENT OF THE COMPENSATION OF CORPORATE OFFICERS IN RESPECT OF 2023 AFTER
TAKING INTO ACCOUNT THE EBA GUIDELINES
May 2024(3)
March 2025
March 2025(2)
March 2026
March 2027
March 2027
March 2028
March 2026
February
1/10
March 2028
1/10
1/10
1/2
1/2
March 2029
1/10
March 2029
1/10
March 2030
1/10
1/10
1/10
1/10
1/2
1/2
February
2
2029
Cash
Cash indexed
to the BNP Paribas
share price
Cash indexed on the
performance of the BNP
Paribas share compared
to the performance of the
EURO STOXX Banks index
Conditional long-term
2029
incentive
plan (LTIP)(1)
Fixed compensation
2023
Non-deferred
portion
(40%)
Amounts paid subject to condition that the consolidated pre-tax
ROE for the year preceding the payment is greater than 5%
Amounts subject to clawback
(1) The L T IP is a long-term compensation plan, payment will be made at the end of the ꢀve-year period.
(2) Payment at the end of a one-year holding period starting on the date of the annual variable compensation award.
(3) Awarded in March 2024 and payment deferred until May 2024 subject to the approval of the Shareholders' Annual General
Meeting under the terms pursuant to article L.22-10-34 II of the French Commercial Code.
Deferred
portion
1/10
(60%)
Relative proportion of fixed and variable compensation
of executive corporate officers
The cap on total variable compensation provided for by article L.511-78
of the French Monetary and Financial Code was not exceeded. Pursuant
to article L.511-79 of the French Monetary and Financial Code, a
discount rate may in addition be applied to no more than 25% of total
variable compensation inasmuch as the payment is made in the form of
instruments after a deferred period of at least five years.
After applying the discount rate to the variable compensation amounts
awarded in the form of instruments deferred for five years (discount
rate of 42.24% in accordance with European Banking Authority
guidelines on the application of the notional discount rate for variable
compensation, published on 27 March 2014), the ratio between total
variable compensation and fixed compensation is 1.73 for the Chief
Executive Officer Mr Jean-Laurent Bonnafé, 1.73 and 1.71 respectively
for Messrs Yann Gérardin and Thierry Laborde as Chief Operating Officers
for 2023.
Use of "malus" and "claw-back" clauses
The Board of directors has not been called upon to apply the "malus"
and "claw-back" clauses, provided for in the compensation policy defined
above.
Compensation paid or awarded by a company included
in the consolidation scope
No compensation has been paid or awarded to directors and corporate
officers by a company included in the scope of consolidation of
BNP Paribas within the meaning of article L.233-16 of the French
Commercial Code.
Compensation multiples and evolutions
In accordance with the provisions of article L.22-10-9 of the French
Commercial Code and the Afep guidelines on compensation multiples
updated in February 2021, the level of compensation of the Chairman of
the Board of directors, the Chief Executive Officer and the Chief Operating
Officers, with respect to the average compensation and the median
compensation based on full-time equivalent employees of BNP Paribas
(SA), as well as evolutions of this compensation, these ratios and the
Company's performance criteria, are shown below.
This information is provided over a five-year period.
The employees considered are those of BNP Paribas (SA) in France
and its branches, continuously present over the yea r. C ompensation
due or awarded to employees includes fixed compensation, variable
compensation, commercial bonuses, loyalty plans, profit-sharing and
incentive bonuses, as well as benefits in kind.
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The compensation due or awarded to corporate officers includes fixed
compensation, variable compensation, fair value of the long-term
incentive plan, directors' compensation, as well as benefits in kind,
information already presented in chapter 2 of this document for 2022
and 2023.
All this compensation, due or awarded, is presented on a gross basis,
excluding employer contributions.
The table below shows the compensation multiples and their evolutions
for each corporate office r.
Year
2019
2020
2021
2022(1)
2023(2)
Performance of the Company
Net pre-tax income (in millions of euros)
11,394
9,822
13,637
13,214
11,725
Evolution between N/N-1
12%
-14%
39%
6%
-11%
Operating income (in millions of euros)
10,057
8,364
12,199
12,564
11,236
Evolution between N/N-1
10%
-17%
46%
13%
-11%
Net earnings per share (in euros)
6.21
5.31
7.26
7.80
8.58
Evolution between N/N-1
8%
-14%
37%
7%
10%
Compensation of employees (in thousands of euros)
Average compensation
86
88
93
96
99
Evolution between N/N-1
5%
2%
6%
3%
2%
Median compensation
56
57
59
62
66
Evolution between N/N-1
3%
2%
4%
5%
5%
Chairman of the Board of directors
Compensation of the Chairman of the Board of directors
(in thousands of euros)
1,014
1,013
1,020
1,018
1,020
Evolution between N/N-1
0%
0%
1%
0%
0%
Average compensation of employees ratio
12
12
11
11
10
Evolution between N/N-1
-5%
-2%
-5%
-3%
-2%
Median compensation of employees ratio
18
18
17
16
16
Evolution between N/N-1
-3%
-2%
-3%
-5%
-5%
Chief Executive Officer
Compensation of the Chief Executive Officer (in thousands of euros)
3,858
3,756
4,110
4,604
4,402
Evolution between N/N-1
14%
-3%
9%
12%
-4%
Average compensation of employees ratio
45
43
44
48
45
Evolution between N/N-1
9%
-5%
3%
8%
-7%
Median compensation of employees ratio
69
66
69
74
67
Evolution between N/N-1
11%
-5%
6%
7%
-9%
Yann Gérardin, Chief Operating Officer(3)
Compensation of the Chief Operating Officer
(in thousands of euros)
3,924
3,722
3,527
Evolution between N/N-1
-5%
-5%
Average compensation of employees ratio
42
39
36
Evolution between N/N-1
-8%
-7%
Median compensation of employees ratio
66
60
54
Evolution between N/N-1
-10%
-10%
Thierry Laborde, Chief Operating Officer(3)
Compensation of the Chief Operating Officer
(in thousands of euros)
2,323
2,251
2,107
Evolution between N/N-1
-3%
-6%
Average compensation of employees ratio
25
23
21
Evolution between N/N-1
-6%
-9%
Median compensation of employees ratio
39
36
32
Evolution between N/N-1
-8%
-11%
(1) In order to be comparable with the results for 2023, the results for 2022 have been recomposed to take into account the enforcement of IFRS 5 and IFRS
17 accounting standards.
(2)
2023 results are on an accounting basis.
(3) The terms of offices of Messrs Yann Gérardin and Thierry Laborde as Chief Operating Officers began on 18 May 2021. Their compensation for 2021 has
been annualised for comparability purposes.
Application of the provisions of the second paragraph of article L.225-45 of the French Commercial Code
The provisions of the second paragraph of article L.225-45 of the French Commercial Code do not need to be applied in 2023.
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OTHER INFORMATION ON THE COMPENSATION OF CORPORATE OFFICERS PAID OR AWARDED
IN RESPECT OF 2023, NOT SUBMITTED TO THE SHAREHOLDERS' VOTE
The components below, relating to the compensation of corporate officers, reiterate some information already presented in this chapte r.
➤
TOTAL COMPENSATION AWARDED IN RESPECT OF 2023 AND COMPARISON WITH 2022
(in euros)
2022
Jean-Laurent BONNAFÉ
Yann GÉRARDIN
Thierry LABORDE
2023
2022
2023
2022
2023
Fixed compensation amount
1,843,000
1,843,000
1,500,000
1,500,000
900,000
900,000
Annual variable compensation awarded
1,931,464
1,877,648
1,602,000
1,529,100
973,080
902,520
Sub-total
3,774,464
3,720,648
3,102,000
3,029,100
1,873,080
1,802,520
LTIP amount (fair value)(1)
759,685
610,217
618,300
496,650
370,980
297,990
TOTAL
4,534,149
4,330,865
3,720,300
3,525,750
2,244,060
2,100,510
(1) This is an estimated value at the award date. The final amount will be known at the date of payment.
Share ownership
The Board of directors has decided that the minimum number of shares
that Messrs Jean Lemierre, Jean-Laurent Bonnafé, Yann Gérardin and
Thierry Laborde shall be required to hold for the duration of their terms
of office shall be 10,000, 80,000, 30,000 and 20,000 shares respectively.
The four interested parties have complied with this obligation, through
the direct ownership of shares or units in the Company Savings Plan fully
invested in BNP Paribas shares.
Quantitative information on the compensation
of corporate officers
The table after shows the gross compensation awarded in respect of the
yea r, i ncluding compensation linked to a term of directorship and benefits
in kind, for each corporate office r.
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SUMMARY TABLE OF THE COMPENSATION AWARDED TO EACH CORPORATE OFFICER
(in euros)
2022
2023
Awarded amounts
Awarded amounts
Jean LEMIERRE
Chairman of the
Board of directors
Annual variable compensation
Fixed compensation
950,000
950,000
None
None
Conditional long-term incentive plan
None
None
Value of stock options awarded during the year
None
None
Value of performance shares awarded during the year
None
None
Sub-total
950,000
950,000
Extraordinary compensation
None
None
Compensation linked to the term of directorship
63,220
64,758
Benefits in kind(1)
5,128
5,023
TOTAL
1,018,348
1,019,781
Jean-Laurent BONNAFÉ
Chief Executive Officer
Fixed compensation
1,843,000
1,843,000
Annual variable compensation
1,931,464
1,877,648
Conditional long-term incentive plan(2)
759,685
610,217
Value of stock options awarded during the year
None
None
Value of performance shares awarded during the year
None
None
Sub-total
4,534,149
4,330,865
Extraordinary compensation
None
None
Compensation linked to the term of directorship
63,220
64,758
Benefits in kind(1)
6,446
6,267
TOTAL
4,603,815
4,401,890
Yann GÉRARDIN
Chief Operating Officer
Fixed compensation
1,500,000
1,500,000
Annual variable compensation
1,602,000
1,529,100
Conditional long-term incentive plan(2)
618,300
496,650
Value of stock options awarded during the year
None
None
Value of performance shares awarded during the year
None
None
Sub-total
3,720,300
3,525,750
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind(1)
1,433
1,360
TOTAL
3,721,733
3,527,110
Thierry LABORDE
Chief Operating Officer
Fixed compensation
900,000
900,000
Annual variable compensation
973,080
902,520
Conditional long-term incentive plan(2)
370,980
297,990
Value of stock options awarded during the year
None
None
Value of performance shares awarded during the year
None
None
Sub-total
2,244,060
2,100,510
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind(1)
6,781
6,708
TOTAL
2,250,841
2,107,218
(1) The Chairman of the Board of directors, the Chief Executive Officer and the Chief Operating Officers, if applicable, have a company ca r. T he Chief Executive
Officer and Chief Operating Officers benefit from the Executive Committee professional life insurance, for which the Company's contribution is recognised
as a benefit in kind.
(2) Value of amount awarded subject to performance conditions.
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The tables below show the gross compensation paid in 2023, including compensation linked to directorships and benefits in kind, for each corporate office r.
➤
SUMMARY TABLE OF COMPENSATION PAID AS CORPORATE OFFICER
In euros
2022
2023
Paid amounts
Paid amounts
Jean LEMIERRE
Chairman of the
Board of directors
Annual variable compensation
Fixed compensation
950,000
950,000
None
None
Conditional long-term incentive plan
None
None
Extraordinary compensation
None
None
Compensation linked to the term of directorship
63,220
64,758
Benefits in kind(1)
5,128
5,023
TOTAL
1,018,348
1,019,781
Jean-Laurent BONNAFÉ
Chief Executive Officer
Fixed compensation
1,843,000
1,843,000
Annual variable compensation
1,689,625
1,775,057
of which annual variable compensation in respect of 2022
None
386,293
of which annual variable compensation in respect of 2021
359,354
461,683
of which annual variable compensation in respect of 2020
476,315
198,511
of which annual variable compensation in respect of 2019
230,692
223,218
of which annual variable compensation in respect of 2018
221,890
214,434
of which annual variable compensation in respect of 2017
190,676
185,320
of which annual variable compensation in respect of 2016
210,698
105,598
Conditional long-term incentive plan
1,405,800(2)
781,000(2)
Extraordinary compensation
None
None
Compensation linked to the term of directorship
63,220
64,758
Benefits in kind(1)
6,446
6,267
TOTAL
5,008,091
4,470,082
Yann GÉRARDIN
Chief Operating Officer
Fixed compensation
1,500,000
1,500,000
Annual variable compensation
218,667
601,354
of which annual variable compensation in respect of 2022
None
320,400
of which annual variable compensation in respect of 2021
218,667
280,954
of which annual variable compensation in respect of 2020
None
None
of which annual variable compensation in respect of 2019
None
None
of which annual variable compensation in respect of 2018
None
None
of which annual variable compensation in respect of 2017
None
None
of which annual variable compensation in respect of 2016
None
None
Conditional long-term incentive plan
None
None
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind(1)
1,433
1,360
TOTAL
1,720,100
2,102,714
(1) See footnote on the following page.
(2) See footnote on the following page.
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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
In euros
2022
2023
Paid amounts
Paid amounts
Thierry LABORDE
Chief Operating Officer
Fixed compensation
900,000
900,000
Annual variable compensation
126,493
357,137
of which annual variable compensation in respect of 2022
None
194,616
of which annual variable compensation in respect of 2021
126,493
162,521
of which annual variable compensation in respect of 2020
None
None
of which annual variable compensation in respect of 2019
None
None
of which annual variable compensation in respect of 2018
None
None
of which annual variable compensation in respect of 2017
None
None
of which annual variable compensation in respect of 2016
None
None
Conditional long-term incentive plan
None
None
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind(1)
6,781
6,708
TOTAL
1,033,274
1,263,845
The average tax and social contribution rate on this compensation is 34% in 2023 (unchanged compared to 2022).
(1) The Chairman of the Board of directors, the Chief Executive Officer and the Chief Operating Officers, if applicable, have a company ca r. T he Chief Executive
Officer and Chief Operating Officers benefit from the Executive Committee professional life insurance, for which the Company's contribution is recognised
as a benefit in kind.
(2) The application of the performance conditions attached to the L T IP awarded in 2018 led to a payment in 2023 corresponding to 50% of the amount
awarded to Mr Bonnafé. As a reminde r, t he application of the performance conditions attached to the L T IP awarded in 2017 led to a payment in 2022
corresponding to 90% of the amount awarded to Mr Bonnafé.
➤
SUMMARY TABLE OF COMPENSATION PAID DURING THEIR TERMS OF OFFICE, IN RESPECT OF THEIR PREVIOUS
ACTIVITIES AS EMPLOYEES OF THE GROUP
In euros
2022
2023
Paid amounts
Paid amounts
Yann GÉRARDIN
Fixed compensation
Chief Operating Officer
None
None
Annual variable compensation(1)
1,632,762
1,208,802
of which annual variable compensation in respect of 2021
367,912
103,350
of which annual variable compensation in respect of 2020
215,404
242,426
of which annual variable compensation in respect of 2019
207,559
234,332
of which annual variable compensation in respect of 2018
276,858
314,114
of which annual variable compensation in respect of 2017
283,453
314,580
of which annual variable compensation in respect of 2016
281,576
None
Long-term compensation
281,050
319,200
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind
None
None
TOTAL
1,913,812
1,528,002
(1) See footnote on the following page.
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2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
Report on Corporate governance
In euros
2022
2023
Paid amounts
Paid amounts
Thierry LABORDE
Fixed compensation
Chief Operating Officer
None
None
Annual variable compensation(1)
321,774
212,074
of which annual variable compensation in respect of 2021
149,707
35,751
2
of which annual variable compensation in respect of 2020
55,138
62,052
of which annual variable compensation in respect of 2019
41,369
46,704
of which annual variable compensation in respect of 2018
38,986
44,233
of which annual variable compensation in respect of 2017
20,808
23,334
of which annual variable compensation in respect of 2016
15,766
None
Long-term compensation
393,470
446,880
Extraordinary compensation
None
None
Compensation linked to the term of directorship
None
None
Benefits in kind
None
None
TOTAL
715,244
658,954
(1) The amounts shown here correspond to the deferred variable compensation awarded in respect of the previous salaried activities of the corporate officers,
prior to their term of office.
The average tax and social contribution rate on this compensation is 34% in 2023 (unchanged compared to 2022).
➤
STOCK SUBSCRIPTION OR PURCHASE OPTIONS
AWARDED DURING THE YEAR TO EACH CORPORATE
OFFICER BY THE ISSUER AND BY ANY GROUP
COMPANY
No stock subscription or purchase options were awarded during the year
to the corporate officers by the Company or by any other Group company.
➤
STOCK SUBSCRIPTION OR PURCHASE OPTIONS
EXERCISED DURING THE YEAR BY EACH
CORPORATE OFFICER
No stock subscription or purchase options were exercised during the year
by the corporate officers.
➤
PERFORMANCE SHARES AWARDED DURING
THE YEAR TO EACH CORPORATE OFFICER BY THE
ISSUER AND BY ANY GROUP COMPANY
No performance share was awarded during the year to corporate officers
by the Company or any company in the Group.
➤
PERFORMANCE SHARES THAT BECAME AVAILABLE
DURING THE YEAR FOR EACH CORPORATE OFFICER
No performance share became available during the year for the corporate
officers.
➤
HISTORY OF STOCK SUBSCRIPTION
OR PURCHASE OPTIONS
None.
➤
HISTORY OF PERFORMANCE SHARE AWARDS
None.
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Report on Corporate governance
➤
VALUATION(1) OF THE CONDITIONAL LONG-T ERM INCENTIVE PLAN AT THE AWARD DATE AND AT 31 DECEMBER 2023
Award date
of the plan
05/02/2019
04/02/2020
04/02/2021
07/02/2022
06/02/2023 31/01/2024
Maturity date
of the plan
05/02/2024
04/02/2025
04/02/2026
07/02/2027
06/02/2028
Valuation(1)
At award
date
At
31/12/2023
At award
date
At
31/12/2023
At award
date
At
31/12/2023
At award
date
At
31/12/2023
At award
date
At
31/12/2023
2
At award
date
Jean LEMIERRE
-
-
-
-
-
-
-
-
-
-
-
Jean-Laurent
BONNAFÉ
282,644
1,388,987
617,927
1,378,497
649,636
1,136,901
680,720
544,383
759,685
761,500
610,217
Yann
GÉRARDIN
-
-
-
-
-
-
404,169
323,221
618,300
619,778
496,650
Thierry
LABORDE
-
-
-
-
-
-
242,502
193,933
370,980
371,867
297,990
TOTAL
282,644
1,388,987
617,927
1,378,497
649,636
1,136,901
1,327,391
1,061,536
1,748,965
1,753,145
1,404,857
(1) Valuation according to the method adopted for the consolidated financial statements.
➤
ASSUMPTIONS USED TO VALUE THE CONDITIONAL LONG-T ERM INCENTIVE PLAN IN ACCORDANCE WITH THE METHOD
ADOPTED FOR THE CONSOLIDATED FINANCIAL STATEMENTS
Valuation at award date
Award date of the plan
06/02/2023
31/01/2024
Opening price of BNP Paribas share
EUR 61.08
EUR 62.45
Opening level of the EURO STOXX Banks index
111.40
121.66
Zero-coupon rate
Euribor
Euribor
Volatility of the BNP Paribas share
25.57%
23.42%
Volatility of the EURO STOXX Banks index
24.59%
21.66%
Correlation between the BNP Paribas share and the EURO STOXX Banks index
93.59%
93.00%
Financial model used
Monte-Carlo
Monte-Carlo
Fair value of the plan at award date(1)
41.22%
33.11%
(1) As a percentage of the awarded amount.
Initial value of
the share at
award date
Fair value at
award date(2)
Valuation at
closing date
31/12/2022
Valuation at
closing date
31/12/2023
Closing price of BNP Paribas share
EUR 53.25
EUR 62.59
Closing level of the EURO STOXX Banks index
95.86
118.38
Zero-coupon rate
Euribor
Euribor
Volatility of the BNP Paribas share
27.59%
23.77%
Volatility of the EURO STOXX Banks index
26.26%
22.32%
Correlation between the BNP Paribas share and the EURO STOXX
Banks index
93.08%
93.31%
Financial model used
Monte-Carlo
Monte-Carlo
Fair value of the plan awarded on 5 February 2019
EUR 53.08(1)
18.10%
54.86%
88.92%
Fair value of the plan awarded on 4 February 2020
EUR 45.27(1)
39.56%
62.89%
88.25%
Fair value of the plan awarded on 4 February 2021
EUR 36.83(1)
41.59%
60.08%
72.78%
Fair value of the plan awarded on 7 February 2022
EUR 55.13(1)
43.58%
30.24%
34.85%
Fair value of the plan awarded on 6 February 2023
EUR 50.98(1)
41.22%
41.32%
(1) The initial value is the average of the opening price of the BNP Paribas share for the rolling twelve-month period preceding the award date.
(2) As a percentage of the awarded amount.
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Report on Corporate governance
➤
DETAILED CONTRACTUAL SITUATION OF THE GROUP'S CORPORATE OFFICERS
2
Corporate officers in 2023
Employment contract
Supplementary
pension plan
Payments or benefits
due or likely to
become due upon
termination or
change in functions
Non-compete
indemnity
Yes
No
Yes
No
Yes
No
Yes
No
Jean LEMIERRE
Chairman of the Board of directors
(1)
✓
✓
(2)
✓
✓
Jean-Laurent BONNAFÉ
Chief Executive Officer
✓
✓
(3)
✓
(2)
✓
(4)
Yann GÉRARDIN
Chief Operating Officer
✓
✓
✓
(5)
✓
(2)
Thierry LABORDE
Chief Operating Officer
(5)
✓
✓
(2)
✓
✓
(1) Waiver of employment contract with effect from 1 December 2014 in accordance with Afep-MEDEF Code.
(2) Messrs Jean Lemierre, Jean-Laurent Bonnafé, Yann Gérardin and Thierry Laborde benefit exclusively from the pension plan set up for all BNP Paribas (SA)
employees (article 83 of the French General T a x Code).
(3) Waiver of employment contract with effect from 1 July 2012.
(4) See section regarding the Non-compete agreement.
(5) Employment contract suspended.
SUMMARY OF TRANSACTIONS REPORTED ON BNP PARIBAS STOCK
The following table lists the transactions indicated in article L.621-18-2 of the French Monetary and Financial Code on the Company's securities,
covered by articles 223-22 A to 223-26 of the General regulation of the AM F, c arried out in 2023 by the directors and corporate officers and which must
be disclosed pursuant to the AMF regulations.
First name and surname
Quality
Transactions
carried out
Type of financial
instrument Nature of the transaction
Number of
transactions
Amount of
transactions
(in euros)
Jean-Laurent BONNAFÉ
Chief Executive Officer
On a personal basis
BNP Paribas shares
Purchase
1
115,058
Jean-Laurent BONNAFÉ
Chief Executive Officer
On a personal basis
BNP Paribas shares
Reinvestment of dividend
1
249,462
Yann GÉRARDIN
Chief Operating Officer
On a personal basis
BNP Paribas shares
Purchase
1
117,081
Thierry LABORDE
Chief Operating Officer
On a personal basis
BNP Paribas shares
Purchase
2
10,210
Jean LEMIERRE
Chairman
On a personal basis
BNP Paribas shares
Purchase
1
5,769
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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Report on Corporate governance
2.1.4 OTHER INFORMATION
1. INFORMATION ON STOCK SUBSCRIPTION OR PURCHASE OPTIONS
AND ON PERFORMANCE SHARES
The Company did not grant any instruments to employees who are not directors or corporate officers in 2022.
No instruments were transferred or exercised in 2022 for the benefit of employees who are not directors or corporate officers.
2. LOANS,AD V A NCES AND GUARANTEES GRANTED TO THE GROUP'S
DIRECTORS AND CORPORATE OFFICERS
As at 31 December 2023, the total outstanding loans granted directly or indirectly to directors and corporate officers amounted to EUR 5,770,986
(EUR 5,179,096 as at 31 December 2022). This represents the total amount of loans granted to BNP Paribas' directors and corporate officers, their
spouse and dependent children. These loans representing normal transactions were carried out at arm's length, in accordance with the Implementation
procedure for conflicts of interest in relation to loans and other transactions granted to the Members of the management body and their related parties.
3. TABLE OF DELEGATIONS
Resolutions adopted at Shareholders' Annual General Meetings valid for 2023
The following delegations to increase or reduce the share capital have been granted to the Board of directors under resolutions approved by Shareholders'
General Meetings and were valid during 2023:
Resolutions adopted at Shareholders' General Meetings
Use of authorisation
in 2023
Shareholders'
Combined General
Meeting of
17 May 2022
(5th resolution)
Authorisation given to the Board of directors to set up a share buyback programme by
the Company up to a maximum of 10% of the shares comprising the share capital.
Said acquisitions of shares, at a price not exceeding EUR 88 per share (previously
EUR 73), would be intended to fulfil several objectives:
■ cancelling shares in accordance with conditions set by the Shareholders' Combined
General Meeting of 17 May 2022 (28th resolution);
■ fulfilling obligations arising from the issue of securities giving access to capital, stock
option programmes, the award of free shares, the award or assignment of shares to
employees in connection with the employee profit-sharing scheme or company savings
plans, and all forms of share grants to employees and/or directors and corporate
officers of BNP Paribas and the companies controlled exclusively by BNP Paribas
as defined in article L.233-16 of the French Commercial Code;
■ holding and subsequently remitting them in exchange or payment for external growth
transactions, mergers, spin-offs or asset contributions;
■ under a market-making agreement in accordance with Decision No. 2021 of 22 June 2021
of the French Financial Markets Authority (Autorité des Marchés Financiers – AMF);
■ carrying out investment services for which BNP Paribas is authorised or to hedge
them.
This authorisation was granted for a period of 18 months and replaces that granted
by the 5th resolution of the Shareholders' Combined General Meeting of 18 May 2021.
As part of the share
buyback programme
authorised by the Board
of directors on 6 February
2023, 15,607,680 shares
were repurchased from
3 April 2023 to the date
of the Shareholders'
Combined General
Meeting of 16 May
2023, by virtue of this
delegation, representing
1.26% of the share capital
Shareholders'
Combined General
Meeting of
17 May 2022
(21st resolution)
Capital increase, with preferential subscription rights maintained, through the issue of
ordinary shares and securities (valeurs mobilières) giving access immediately or in the
future to shares to be issued.
The nominal amount of capital increases that may be carried out, immediately
and/or in the future, by virtue of this delegation, may not exceed EUR 985 million
(i.e. 492,500,000 shares).
This authorisation was granted for a period of 26 months and replaces that granted by
the 19th resolution of the Shareholders' Combined General Meeting of 19 May 2020.
This resolution was not
used during the period
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Report on Corporate governance
Resolutions adopted at Shareholders' General Meetings
Use of authorisation
in 2023
Shareholders'
Combined General
Meeting of
17 May 2022
2
(22nd resolution)
Capital increase, without preferential subscription rights, by issue of ordinary shares and
securities (valeurs mobilières) giving access immediately or in the future to shares to be
issued.
The nominal amount of capital increases that may be carried out, immediately
and/or in the future, by virtue of this authorisation, may not exceed EUR 240 million
(i.e. 120 million shares).
This authorisation was granted for a period of 26 months and replaces that granted by
the 20th resolution of the Shareholders' Combined General Meeting of 19 May 2020.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
17 May 2022
(23rd resolution)
Capital increase, with cancellation of preferential subscription rights, through the issue
of ordinary shares and securities (valeurs mobilières) giving access, immediately or in
the future, to shares to be issued intended to remunerate contributions of securities up to
a limit of 10% of the share capital.
The nominal amount of capital increases that may be carried out in one or more times by
virtue of this authorisation, may not exceed 10% of the share capital of BNP Paribas as at
the date of the decision of the Board of directors.
This delegation was given for a period of 26 months and replaces that granted by the
21st resolution of the Shareholders' Combined General Meeting of 19 May 2020.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
17 May 2022
(24th resolution)
Overall limit on authorisations to issue shares with cancellation or without preferential
subscription rights for existing shareholders.
The maximum nominal amount of capital increases with cancellation or without
preferential subscription rights for existing shareholders carried out immediately
and/or in the future may not exceed EUR 240 million as part of authorisations by virtue
of the 22nd and 23rd resolutions of the Shareholders' Combined General Meeting of 17
May 2022.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
17 May 2022
(25th resolution)
Capital increase by capitalising reserves, retained earnings, additional paid-in capital
or contribution premium.
Authorisation was given to increase the share capital up to a maximum amount of
EUR 985 million in one or more times, by capitalising all or part of the reserves,
profits or additional paid-in capital, merger or contribution premiums, successively
or simultaneously, through the issuance and award of free shares, through an increase
in the par value of existing shares, or through a combination of these two methods.
This authorisation was granted for a period of 26 months and replaces that granted
by the 23rd resolution of the Shareholders' Combined General Meeting of 19 May 2020.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
17 May 2022
(26th resolution)
Overall limit on authorisations to issue shares with, with cancellation or
without preferential subscription rights for existing shareholders
The maximum nominal amount of capital increases with, with cancellation
or without preferential subscription rights for existing shareholders carried
out immediately and/or in the future may not exceed EUR 985 million as part of
authorisations by virtue of the 21st to 23rd resolutions of the Shareholders' Combined
General Meeting of 17 May 2022.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
17 May 2022
(27th resolution)
Authorisation granted to the Board of directors to carry out transactions reserved
for members of the BNP Paribas Group Company Savings Plan, with cancellation
of preferential subscription rights, which may take the form of capital increases
and/or disposals of reserved titles.
Authorisation was given to increase the share capital within the limit of a maximum
nominal amount of EUR 46 million in one or more times by issuing ordinary shares (with
cancellation of preferential subscription rights for existing shareholders), reserved for
members of the BNP Paribas Group's Company Savings Plan, or by selling of shares.
This authorisation was granted for a period of 26 months and replaces that granted by
the 25th resolution of the Shareholders' Combined General Meeting of 19 May 2020.
This resolution was not
used during the period
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Report on Corporate governance
Resolutions adopted at Shareholders' General Meetings
Use of authorisation
in 2023
Shareholders'
Combined General
Meeting of
17 May 2022
2
(28th resolution)
Authorisation granted to the Board of directors to reduce the share capital
by cancelling shares.
Authorisation is given to cancel, in one or more times, through reduction of the share
capital, all or some of the shares that BNP Paribas holds and that it could hold, up
to a maximum of 10% of the total number of shares constituting the share capital
existing as at the date of the transaction, for a period of 24 months.
Delegation of all powers to carry out this reduction in share capital, and allocate
the difference between the purchase price of the cancelled shares and their nominal
value to share premium and retained earnings, including the legal reserve up to 10%
of the share capital cancelled.
This authorisation was granted for a period of 18 months and replaces that granted by
the 20th resolution of the Shareholders' Combined General Meeting of 18 May 2021.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
16 May 2023
(5th resolution)
Authorisation given to the Board of directors to set up a share buyback programme by
the Company up to a maximum of 10% of the shares comprising the share capital.
Said acquisitions of shares, at a price not exceeding EUR 89 per share (previously
EUR 88), would be intended to fulfil several objectives:
■ cancelling shares in accordance with conditions set by the Shareholders' Combined
General Meeting of 16 May 2023 (21st resolution);
■ fulfilling obligations arising from the issue of securities giving access to capital, stock
option programmes, the award of free shares, the award or assignment of shares to
employees in connection with the employee profit-sharing scheme or company savings
plans, and all forms of share grants to employees and/or directors and corporate
officers of BNP Paribas and the companies controlled exclusively by BNP Paribas
as defined in article L.233-16 of the French Commercial Code;
■ holding and subsequently remitting them in exchange or payment for external growth
transactions, mergers, spin-offs or asset contributions;
■ under a market-making agreement in accordance with Decision No. 2021-01
of 22 June 2021 of the French Financial Markets Authority (Autorité des Marchés
Financiers – AMF);
■ carrying out investment services for which BNP Paribas is authorised or to hedge them.
This authorisation was granted for a period of 18 months and replaces that granted by
the 5th resolution of the Shareholders' Combined General Meeting of 17 May 2022.
As part of the share
buyback programme
authorised by the Board
of directors on 6 February
2023, 71,246,557 shares
were repurchased from
the date of the Combined
General Meeting of 16
May 2023 to 8 November
2023 by virtue of this
delegation, representing
5.77% of the share capital
Shareholders'
Combined General
Meeting of
16 May 2023
(19th resolution)
In the context of an offer referred to in article L.411-2 1° of the French Monetary
and Financial Code, authorisation granted to the Board of directors to increase the
share capital with cancellation of preferential subscription rights, through the issue of
super-subordinated convertible contingent bonds that would be converted into ordinary
shares of BNP Paribas to be issued, up to a limit of 10% of the share capital, only in the
event that the Common Equity Tier One ratio ("CET1") becomes equal to or falls below
a threshold of 5.125%.
The Board of directors is authorised to increase the share capital in one or more times,
with cancellation of preferential subscription rights, by offering securities to a restricted
circle of investors and/or qualified investors, as part of issues of super-subordinated
bonds convertible into ordinary shares of BNP Paribas in the event that the Group's
Common Equity Tier One (CET 1) ratio becomes equal to or falls below the threshold
of 5.125% or any other threshold allowing classification as additional Tier 1 capital
instruments (the "AT1 Bonds"). These AT1 Bonds will be denominated in USD, it being
recalled that the ordinary shares are denominated in euros.
The maximum nominal amount of capital increases that may be carried out, in one or
more times, by virtue of this delegation, is set at EUR 240 million, and may not exceed
10% of the share capital of BNP Paribas per year as at the date of the issue decision.
This delegation was granted for a period of 14 months.
Pursuant to the
authorisation to the
Board of directors of 16
May 2023, issue on 7
August 2023 of AT1 Bonds
(super-subordinated
convertible contingent
bonds) for a nominal
amount of USD 1.5 billion,
which may give rise in
the event of conversion
to a capital increase
equal to a maximum of
EUR 66,529,200, subject
to any adjustments
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Resolutions adopted at Shareholders' General Meetings
Use of authorisation
in 2023
Shareholders'
Combined General
Meeting of
16 May 2023
2
(20th resolution)
Authorisation granted to the Board of directors to carry out transactions reserved
for members of the BNP Paribas Group Company Savings Plan, with cancellation of
preferential subscription rights, which may take the form of capital increases and/or
disposals of reserved titles.
Authorisation is given to increase, in one or more times, the share capital by a maximum
nominal amount of EUR 46 million, through the issue of ordinary shares or securities
(valeurs mobilières) governed by article L.228-92 paragraph 1 of the French Commercial
Code giving access to the share capital of BNP Paribas reserved for members of the
BNP Paribas Group Company Savings Plan or by disposal of shares.
This authorisation was granted for a period of 26 months and replaces that granted by the
27th resolution of the Shareholders' Combined General Meeting of 17 May 2022.
This resolution was not
used during the period
Shareholders'
Combined General
Meeting of
16 May 2023
(21st resolution)
Authorisation granted to the Board of directors to reduce the share capital by cancelling
shares.
Authorisation is given to cancel, in one or more times, through reduction of the share
capital, all or some of the shares that BNP Paribas holds and that it could hold, up to a
maximum of 10% of the total number of shares constituting the share capital existing as
at the date of the transaction, for a period of 24 months.
Delegation of all powers to carry out this reduction in share capital, and allocate the
difference between the purchase price of the cancelled shares and their nominal value to
share premium and retained earnings, including the legal reserve up to 10% of the share
capital cancelled.
This authorisation was granted for a period of 18 months and replaces that granted by the
28th resolution of the Shareholders' Combined General Meeting of 17 May 2022.
Cancellation of
86,854,237 shares with
a par value of EUR 2
from 27 September 2023
to 17 November 2023
representing 7.04% of the
share capital
4. ITEMS LIKE L Y T O HAVE AN IMPACT IN THE EVENT OF A PUBLIC TENDER OR EXCHANGE
OFFER (ARTICLE L.22-10-11 OF THE FRENCH COMMERCIAL CODE)
Among the items referred to in article L.22-10-11 of the French Commercial Code, there is no item likely to have an impact in the event of a public
tender or exchange offe r.
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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
The Executive Committee
2.2 Statutory Auditors' report
The comments required by article L.22-10-71 of the French Commercial Code are covered in the Statutory Auditor's report on the parent company
financial statements (chapter 6.6).
2.3 The Executive Committee
At 31 December 2023, the BNP Paribas Executive Committee had the following members:
■ Jean-Laurent Bonnafé, Director and Chief Executive Officer;
■ Yann Gérardin, Chief Operating Officer in charge of the Corporate & Institutional Banking division;
■ Thierry Laborde, Chief Operating Officer in charge of the Commercial, Personal Banking & Services division;
■ Laurent David, Deputy Chief Operating Officer;
■ Renaud Dumora, Deputy Chief Operating Officer in charge of the Investment & Protection Services division;
■ Marguerite Bérard, Head of Commercial & Personal Banking in France;
■ Charlotte Dennery, Director and Chief Executive Officer of BNP Paribas Personal Finance;
■ Elena Goitini, Chief Executive Officer of BNL;
■ Michael Anseeuw, Director and Chief Executive Officer and Chairman of the Executive Board of BNP Paribas Fortis;
■ Yannick Jung, Head of Corporate & Institutional Banking Global Banking;
■ Pauline Leclerc-Glorieux, Chief Executive Officer of BNP Paribas Cardif;
■ Olivier Osty, Head of Corporate & Institutional Banking Global Markets;
■ Bernard Gavgani, Chief Information Officer;
■ Stéphanie Maarek, Head of Compliance;
■ Lars Machenil, Chief Financial Officer;
■ Sofia Merlo, Head of Human Resources;
■ Frank Roncey, Chief Risk Officer;
■ Antoine Sire, Head of Company Engagement.
The BNP Paribas Executive Committee has had a permanent Secretariat since November 2007.
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Internal control
2.4 Internal control
The following information relating to internal control was submitted
to the Group's Executive Management. The Chief Executive Office r, a s
executive directo r, i s responsible for the organisation and procedures of
internal control and for all information required by French law regarding
the internal control report. This document is based on the information
provided by the Compliance, RISK, Finance & Strategy, LEGAL and General
Inspection Functions. It has been approved by the Board of directors.
BNP PARIBAS' INTERNAL CONTROL
STANDARDS
The principles and procedures for the internal control of banking activities
in France and abroad are at the heart of banking and financial regulations
and are subject to numerous legislative and regulatory provisions.
The main text applicable to BNP Paribas is the Ministerial Order of
3 November 2014. This text sets out the conditions for the implementation
and monitoring of internal control in credit institutions and investment
firms, in compliance with the European Directive CRD 4. In particula r, i t
specifies the principles relating to internal transaction control systems
and procedures, organisation of accounting and information processing,
risk and result measurement systems, risk monitoring and control
systems, and the information and documentation system for internal
control. Article 258 of this Order provides for the drafting for the Board
of directors of an annual regulatory report on the conditions under which
internal control is implemented.
This Order requires BNP Paribas to have an internal control system
(hereinafter Internal control) comprising specific departments and
persons responsible for permanent control (including the Compliance
and RISK Functions) and periodic control. This system must also take
into account, as appropriate, the General regulation of the AM F, t he
regulations applicable to foreign branches and subsidiaries and to
specialised activities such as portfolio management and insurance,
and the recommendations of leading international bodies dealing with
issues related to the prudential regulation of international banks, first
and foremost the Basel Committee, the Financial Stability Board, the
European Authorities, the European Securities and Markets Authority, the
European Central Bank and the French Autorité de contrôle prudentiel
et de résolution.
DEFINITION, OBJECTIVES AND
STANDARDS OF INTERNAL CONTROL
The BNP Paribas Group's Executive Management has implemented an
internal control system whose main purpose is to ensure overall control
of the risks and to provide reasonable assurance that the Company's
objectives in this respect are achieved.
The BNP Paribas Internal Control Charter specifies the framework of this
system and constitutes BNP Paribas' basic internal control framework.
Widely distributed within the Group and accessible to all its employees,
this charter firstly recalls the objectives of internal control, which aims
to ensure:
■ a sound and prudent risk management approach, aligned with
BNP Paribas' values and Code of conduct in conjunction with the
policies outlined in its corporate social responsibility framework;
■ operational security of BNP Paribas' internal operations;
■ the relevance and reliability of accounting and financial information;
■ compliance with laws, regulations and internal policies.
Its implementation requires, in particula r, t hat a high-level culture of risk
and ethics be promoted to all employees and in BNP Paribas' relations
with third parties, clients, intermediaries or suppliers as well as its
shareholders.
The charter then sets out the rules governing the organisation
responsibility and scope of operations of the various internal control
entities and establishes the principle according to which the control
functions (Compliance, LEGAL, RISK and General Inspection in particular)
execute these controls independently.
SCOPE OF INTERNAL CONTROL
The BNP Paribas Group's internal control is overarching:
■ it covers all types of risks to which the Group may be exposed (credit
and counterparty risk, market risk, liquidity risk, interest rate risk in the
banking book, underwriting risk with respect to insurance, operational
risk, risk of non-compliance, equity risk, etc.);
■ it is applied at the Group level and at the level of directly or indirectly
controlled entities, irrespective of their line of business and irrespective
of whether they are consolidated entities or otherwise. For other
entities (in particula r, l egal entities subject to significant influence),
the Group's representatives on the corporate bodies of these entities
are strongly encouraged to promote the same standards of internal
control;
■ it also covers the use of outsourced services, in accordance with
principles defined by regulation.
FUNDAMENTAL PRINCIPLES
OF INTERNAL CONTROL
BNP Paribas' internal control system is based on its values and the Code
of conduct as well as the following additional principles of action:
■ clearly identified responsibilities: internal control is the responsibility
of every employee, irrespective of their seniority or responsibilities.
The exercise of a managerial function carries the additional
responsibility of ensuring the proper implementation of the internal
control system within the scope subject to regulation. As such, the
necessary responsibilities and delegations must be clearly identified
and communicated to all stakeholders;
■ a structured risk identification, assessment and management system
(involving, among others, a decision-making system, delegation,
organisational principles, controls, reporting and alert mechanism, etc.);
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Internal control
■ independent control and oversight of risks: the Heads of the operational
activities have the ultimate responsibility for those risks created by
their activities and as such, the foremost responsibility of implementing
and operating a system that identifies, assesses and manages risk. The
internal control system provides for mandatory intervention, and as
early as possible, of functions exercising independent control under
a second level of control. This intervention takes the following forms:
■
defining the overall normative framework for risk identification,
assessment and management,
■
defining cases where a prior second review by a function exercising a
second-level control shared with the operational entity is necessary
for decision-making,
■
independent controls, called second-level controls, carried out
by said function on the system implemented by the Heads of the
operational activities and on their operations (result of the risk
identification and assessment process, relevance and compliance
of the risk control systems and in particula r, c ompliance with the
limits set);
■ separation of duties: this is a key element of the risk control system. It
consists of assigning certain operational tasks that contribute to the
performance of a single process to stakeholders at various hierarchical
levels or to separate these tasks by other means, in particular by
electronic means. Thus, for example, tasks related to transaction
initiation, confirmation, accounting, settlement and accounts
reconciliation must be performed by different parties;
■ proportionality of risks: the internal control system must be
implemented under an approach and with an intensity that is
proportionate to the risks involved. This proportionality is determined
based on one or more criteria:
■
risk intensity as identified in the context of assessment programmes
("Risk ID", RCSA, etc.),
■
amount of allocated capital and/or ratios in terms of solvency and
liquidity,
■
criticality of activities with regard to systemic issues,
■
regulatory conditions governing the exercise of business activities,
size of business activities carried out,
■
customer type and distribution channels,
■
complexity of the products designed or marketed and/or services
provided,
■
complexity of the processes carried out and/or the level of use of
outsourcing with internal/external entities of the Group,
■
sensitivity of the environment where the activities are located,
■
legal form and/or presence of minority shareholders;
■ appropriate governance: the internal control system is subject to
governance involving the different stakeholders and covering the
various aspects of internal control, both organisational and monitoring
and oversight; the Internal Control Committees are a key instrument in
this system. The framework is part of the decision-making processes
managed through a system of delegations in the management
reporting lines. They may involve the input of a third party belonging to
another reporting line, whenever the systems defined by the operating
entities and/or the functions exercising a second-level control so
provide. The escalation process allows for disagreements between
the operating entities and functions exercising second-level control,
especially those related to decision-making, to be escalated to the
higher hierarchical and possibly functional levels, to which the two
parties report, and ultimately, if these disputes cannot be resolved in
this way, to arbitration conducted by the Group's Executive Officers.
This process is implemented in accordance with the powers conferred
to the Group Risk Office r, w ho may exercise his right of veto under the
conditions set out in the RISK Function Charter;
■ a requirement for formalisation and traceability: Internal Control
relies on the instructions of the Executive Officers, written policies
and procedures and audit trails. As such, the controls, their results,
their implementation and the feedback from the entities to the higher
levels of the Group's governance are documented and traceable;
■ a duty of transparency: all Group employees, irrespective of their
position, have a duty to communicate, in a transparent manne r, t hat is,
spontaneously and promptly, to a higher level within the organisation
to which they belong:
■
any information required for a proper analysis of the situation of
the entity in which the employee operates, and which may impact
the risks or the reputation of the entity or the Group,
■
any question that the employee could not resolve independently in
the exercise of his or her duties,
■
any anomaly of which the employee becomes aware.
In addition, he or she has a whistleblowing right, as provided for in
the Group's Code of conduct, allowing them to make a report within
a framework placed under the responsibility of the Compliance
Function, providing a guarantee of confidentiality and enhanced
protection against the risk of retaliation;
■ Human Resources management taking into account internal control
objectives: the internal control objectives to be considered in employee
career management and remuneration (including: as part of the
employee evaluation process, training, recruitment for key positions,
and in determining remuneration);
■ continuous adaptation of the system in response to changes: the
internal control system must be actively managed by its various
stakeholders. This adjustment in response to changes of any kind
that the Group must face must be done according to a periodic cycle
defined in advance but also continuously as soon as events so justify.
Compliance with these principles is verified on a regular basis, in
particular through assignments carried out by the periodic control teams
(General Inspection).
ORGANISATION OF INTERNAL CONTROL
BNP Paribas Group's internal control system is organised around three
lines of defence, under the responsibility of the Executive Officers and
under the oversight of the Board of directors.
Permanent control is the ongoing implementation of the risk management
system and is provided by the first two lines of defence. Periodic control,
provided by the third line of defence, has an audit and assessment
function that is performed according to its own audit cycle.
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Internal control
The functions exercising the second and the third lines of defence are so-called functions exercising independent control. They report directly to the
Executive Officers and with respect to Compliance, LEGAL, RISK and General Inspection, they report on the performance of their duties to the Board of
directors.
Key players in Internal Control
Three lines of defence
L1Cs
L2Cs
L3Cs
Permanent
control
Periodic control
Board of
Ofꢀcers
Directors
(*) 2nd level non-integrated function
(**) 2nd level integrated functions
Executive
Direct hierarchical reporting
The Compliance, LEGAL,
RISK and General Inspection
functions report on the
performance of their duties
to the Board of Directors
G
Operating
entities
Level 1 controls
(L1Cs)
Level 2 controls
(L2Cs)
Level 3 controls
(L3Cs)
General Inspection
KEY PL A Y ERS IN INTERNAL CONTROL
■ Operating entities are the first line of defence: operating entities are
primarily responsible for managing their risks and are the front-line
in permanent control. They act within the framework defined by the
Group's Executive Officers and reviewed by its Board of directors,
transcribed in the form of policies and procedures and to the extent
necessary, tailored by the corporate bodies of the Group's entities.
■ The risk control system operated by the first line of defence forms what
is called the first-level control system. It is implemented by employees
and/or their reporting line and/or control teams that do not operate
the processes under their control.
The operating entities cover:
■
all operating divisions and business lines, whether these are profit
centres or their support functions;
■
all cross-divisional functions, including the control functions for the
processes that they operate directly and not under the responsibility
of the second line of defence;
■
all the Territories, attached to an operating division.
■ The functions exercising second-level control (second line of defence):
■
the functions exercising second-level control are responsible, under
the delegation given by the Executive Officers, for the organisation
and functioning of the risk control system and its compliance
with laws and regulations on a range of areas (subjects and/or
processes), as defined in their Responsibility Charter;
■
as such, in their field of expertise and, where appropriate, after
having consulted the operating entities, they define the general
normative framework in which they manage the risk for which
they are responsible, the terms of their intervention (thresholds,
delegations, escalation, etc.), implement this system in the
relevant areas and for which they are responsible, for first-level
and second-level permanent control. They challenge and provide
an independent view of risk identification and assessment vis-à-vis
operating entities. They also contribute to spreading a culture of
risk and ethics within the Group;
■
the Heads of these functions provide the Executive Officers and
Board of directors with a reasoned opinion on the level of risk
control, current or potential, in particular regarding the "Risk
Appetite Statement" as defined and propose any actions for
improvement that they deem necessary;
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Internal control
■
the Head of a function performing a second-level control performs
this mission by relying on teams that can be placed, either:
■
under its direct or indirect hierarchical responsibility, where the
function is then called integrated. It thus has full authority over
its budget and the management of its Human Resources, or
■
under its direct or indirect functional responsibility (so-called
non-integrated function) subject to joint decision-making with
the reporting line manager for Human Resources and budget.
The three integrated functions exercising second-level control are:
■
RISK, in charge of organising and overseeing the overall system for
controlling those risks to which the BNP Paribas Group is exposed,
particularly credit risk and counterparty risk, market risk, funding
and liquidity risk, interest rate and exchange rate risk in the Banking
book, insurance risk, operational risk, and environmental and social
risk factors that affect the above risk categories;
■
Compliance, responsible for organising and overseeing the non-
compliance risk control system. As such, it contributes to the
permanent control of compliance with laws and regulations,
professional and ethical standards and the guidelines of the Board
of directors and the instructions of the Executive Management;
■
LEGAL, responsible for organising and overseeing the legal risk
control system, exercises its responsibility to prevent and manage
legal risks through its advisory and control roles. It exercises this
control by (i) issuing legal opinions for the purpose of avoiding or
mitigating the effects of a major legal risk, (ii) first- and second-
level control exerted on the legal processes and (iii) the definition
of a Group-level control plan for the business lines and functions
to cover certain risks that may affect the processes under their
responsibility. The missions entrusted to this function are performed
independently of the business activities and support functions. The
function is integrated hierarchically under the sole authority of its
Department head, the Group General Counsel, who reports to the
Chief Executive Office r.
The Heads of these functions may be heard by the Board or any of
its specialised committees, directly, possibly without the presence of
Executive Officers, or at their request.
Finance & Strategy is a non-integrated function that exercises a second-
level control. The Standards & Controls Department, within it, is
responsible for defining and implementing the risk management system
related to accounting and financial information.
RISK, Compliance and Finance & Strategy share responsibility for the
second line of defence in terms of tax risk with the support of the T a x
function, which acts as an expert on tax-related issues.
The appointment of the Heads of the Compliance, Finance & Strategy
and RISK Functions falls within the framework defined by the European
Banking Authority.
Permanent control can be outlined as follows:
G
Operating
entities
Operating entities
Control Functions
Level 1 controls
(L1Cs)
L1Cs
L2Cs
Level 2 controls
(L2Cs)
Permanent Control
- Responsible for controlling
their risks
- Deploy and perform the
controls within their respective
scopes
- Perform the level 2 controls :
independent review of the
robustness and effectiveness
of the control system
■ General Inspection (third line of defence): the General Inspection is
responsible for periodic control, performs the internal audit function
and contributes to the protection of the Group by independently acting
as its third line of defence on all Group entities and in all areas. It
includes:
■
centrally-based inspectors who carry out their duties throughout
the Group,
■
auditors distributed in the geographical or business line platforms
(called "hubs").
The General Inspecto r, r esponsible for periodic controls, reports to the
Chief Executive Office r.
■ Executive Officers: the Chief Executive Officer and the Chief Operating
Officers ensure the effective management of the Company for
regulatory and legal purposes. In practice, the Executive Officers make
key decisions through specialised committees that allow them to rely
on experts with a deep understanding of the issues to be addressed.
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Executive Officers are responsible for the internal control system as
a whole. As such and notwithstanding the powers of the Board of
directors, the Executive Officers:
■
decide on the key policies and procedures serving as the basis for
this system;
■
directly oversee the functions exercising independent control
and provide them with the means to allow them to fulfil their
responsibilities effectively;
■
define the Group's risk-taking policies, validate the most important
decisions in this area and, if necessary, make the final decisions in
the context of the escalation process. This process is implemented
in accordance with the powers conferred to the Group Risk Office r,
who may exercise his or her right of veto under the conditions set
out in the RISK Function Charter;
■
periodically evaluate and monitor the effectiveness of the internal
control policies, systems and procedures and implement the
appropriate measures to remedy any deficiencies;
■
receive the main reports on internal control within the Group;
■
report to the Board of directors or its relevant committees on the
operation of this system.
■ Pursuant to the Decree of 3 November 2014 on the internal control of
companies in the banking, payment services and investment services
sector subject to the control of the ACPR, BNP Paribas must appoint
an executive director responsible for overseeing the consistency
and effectiveness of the BNP Paribas Group's internal control. At
31 December 2023, the Chief Executive Officer is the Executive Officer
responsible for overseeing the consistency and effectiveness of
BNP Paribas Group's internal control.
■ The Board of directors: the Board of directors exercises directly or
through specialised committees (Financial Statements Committee,
Internal Control, Risk Management and Compliance [CCIRC] Committee,
Governance, Ethics, Nominations and CSR Committee, etc.) key
responsibilities in terms of internal control. Among others, the Board
of directors:
■
determines, on the proposal of the Executive Officers, the strategy
and guidelines of the internal control activity and ensures their
implementation;
■
reviews the internal control activity and results at least once per
year;
■
regularly reviews, assesses and verifies the effectiveness of
the governance system, including in particular clearly defined
responsibilities, and internal control, which notably includes risk
reporting procedures, and takes appropriate measures to remedy
any failings uncovered;
■
validates the Risk Appetite Statement, approves and periodically
reviews the strategies and policies for taking up, managing,
monitoring and controlling risks and approves their overall limits.
The organisation of the Board of directors and its specialised committees
is defined through its Internal Rules. The Heads of General Inspection and
the integrated functions exercising second-level control have the right
to be heard, possibly without the presence of Executive Officers, by the
Board of directors or one of its specialised committees.
Finally, among the specialised committees, the Internal Control, Risk
Management and Compliance Committee (CCIRC) is essential in the
Group's internal control system. Indeed, it assumes the following
responsibilities:
■ analyses reports on internal control and on risk measurement and
monitoring, reports on the activities of the General Inspection, and
significant correspondence with the main regulators;
■ examines the strategic directions of the risk policy;
■ reports to the Board of directors.
COORDINATION OF INTERNAL CONTROL
At the consolidated level, the Group Supervisory & Control Committee –
GSCC coordinates internal control, and is responsible, in particula r, f or
ensuring consistency and coordination in the internal control system.
Chaired by the Chief Executive Office r, i t brings together the Chief
Operating Officers, the Deputy Chief Operating Officers and the Heads
of control functions.
In those entities and territories that are significant for the Group, their
Executive Officers are responsible for arranging this coordination,
generally within the framework of the Internal Control Committees.
PROCEDURES
The procedures are one of the key elements of the permanent control
system alongside the identification and assessment of risks, controls,
reporting and monitoring of the control system.
Written guidelines are distributed throughout the Group and provide the
organisation and procedures to be applied as well as the controls to be
performed. These procedures constitute the basic framework for internal
control. The RISK Function regularly monitors procedure guidelines. The
Group's cross-functional procedures framework is regularly updated with
contributions from all divisions and functions. Regarding the control
framework, investigations into the status of the system are included in
the report on permanent control.
Among the Group's cross-functional procedures, applicable in all entities,
risk control is critically important in, for example:
■ the procedures that govern the process for approving exceptional
transactions, new products and new business activities;
■ the procedure for approving credit and market transactions;
■ the procedures for compliance with embargoes, anti-money laundering
and the financing of terrorism and anti-corruption.
The processes from these procedural frameworks rely primarily on
committees (Exceptional Transactions Committees, New Business
Activities and Products Committees, Credit Committees, etc.) mainly
covering both operational and related functions such as IT and Operations,
as well as the control functions (RISK, Compliance, Finance & Strategy
and LEGAL Functions), which take a "second-look" on transactions.
In the event of a dispute, they are submitted to a higher level of the
organisation. At the highest level of the Group, there are committees
(Credit, Market Risk, Risk Policy Committees, etc.) chaired by members
of Executive Management.
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COMPLIANCE
Organisation and change to the function
Compliance is a globally integrated function: all compliance managers
in the operating divisions, business lines, regions, territories and their
teams report to it hierarchically, which guarantees their independence. Its
organisation brings together proximity teams aligned with the structure
2
of the Group's operating divisions, business lines and entities, as well as
central areas of expertise.
Compliance contributes to the three components of the Group's GTS
2025 strategic plan:
■ growth: by participating in projects for new products, new channels and
external growth as part of the business lines' development strategy;
■ technology: by continuing the automation of processes and the
deployment of standard IT tools;
■ sustainability: by anticipating emerging risks and regulatory changes,
and by supporting the Group's ESG commitments.
The Compliance workforce stood at 3,610 full-time equivalents (FTE) at
the end of December 2023.
Compliance activity in 2023
Financial security
2023 was marked by an exacerbated geopolitical context and the prospect
of significant regulatory changes at the European level.
The Group's remediation plan for international financial sanctions is now
complete and has been submitted to the authorities in France and the
United States.
The highly complex sanction measures against Russia continue to
mobilise the Compliance teams and have led to the adaptation of tools
and operational processes to effectively manage the new regulations.
The system is being adapted to better capture the risk of circumvention
of these sanctions.
In general, the system for combating money laundering and the financing
of terrorism, compliance with international sanctions and the freezing of
assets is subject to continuous improvement of its standards and IT tools.
In 2023, this improvement focused, in particula r, o n the strengthening
of steering
for risk management purposes and the search for greater
operational efficiency through the implementation of homogeneous
indicators and dashboards in the Group.
Lastly, in terms of regulations, the Group took part in the consultations
organised as part of the development of the new European framework for
combating money laundering and the financing of terrorism.
The fight against corruption
As part of a continuous improvement approach, the system for preventing
and detecting corruption and influence peddling is being strengthened in
its various components with regard to risk assessment.
The due diligence measues on customers, intermediaries and suppliers
knowledge have been complemented in order to improve the assessment
of the risk of corruption. Procurement procedures have been revised. The
automation of the detection of negative information on third parties is
being implemented.
Professional ethics
The system for overseeing employees' personal transactions, private
mandates and gifts & invitations has been strengthened with the update
of the procedural body, the deployment of the dedicated IT tool allowing
homogeneous risk management throughout the Group, as well as the
publication of guidelines governing the management of breaches.
The whistleblowing system is now extended to external players and
the protection of whistleblowers has been strengthened. In addition,
employees responsible for processing alerts receive specific training.
Finally, a comprehensive report on alerts is presented each year to
Executive Management and the Board of directors.
Market integrity
The regulatory system has been updated: the procedures as well as the
control plan applicable by the first line of defence have been updated.
In collaboration with the Professional Ethics and Protecting Clients'
Interests Departments, the Group's conflict of interest policy was updated
and the management system strengthened.
The integration of Exane's activities into the Group's overall monitoring
system (in particula r, d etection and treatment of conflicts of interest and
market abuse) was completed in November 2023.
The communication channels used by the market activities were subject
to an exhaustive review to ensure the compliance of the registration and
information retention processes.
Lastly, the algorithmic trading activities conducted within the various
business lines and entities were subject to an in-depth review to ensure
their compliance with the Group's control system.
Regulation of banking activities
The BNP Paribas Group is subject to the French Banking Separation and
Regulation Act, as well as to the Volcker rule. The associated compliance
system has been updated and adapted to the specificities and operational
constraints of each activity and each legal entity, in compliance with legal
and regulatory provisions.
The Group's swap activities, mainly under the responsibility of CIB, subject
to CFTC (Commodity Futures Trading Commission) and SEC (Securities
and Exchange Commission) regulations, have been the subject of several
initiatives to strengthen their compliance framework.
Tax regulations applicable to customers
The BNP Paribas Group is subject to a set of tax regulations with
extraterritorial scope: FATCA (Foreign Account T a x Compliance Act), QI
regime (Qualified Intermediary) regulating the withholding of income
from US securities; AEOI (automatic exchange of tax information within
the OECD); DAC6 directive (declaration of tax schemes considered to be
aggressive in the European Union).
The compliance systems relating to these regulations have been in place
since their entry into force, including procedures, an employee training
programme and adapted control plans.
In 2023, the local tax regulations applicable to customers were
harmonised by Compliance, RISK and Finance & Strategy, which share
the responsibility for the second line of defence in terms of tax risk with
the support of the T a x function, acting as an expert in tax-related matters.
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Conduct
In addition to its role as second line of defence in terms of risks relating
to the rules of conduct that it shares with RISK and LEGAL, Compliance
ensures the coordination, steering and information of management on
transverse initiatives aimed at strengthening the Group's Conduct system
composed of the following pillars:
■ customer's interest;
■ financial security;
■ market integrity;
■ conflicts of interests;
■ professional ethics;
■ respect for colleagues;
■ protection of the Group;
■ commitment to society;
■ the fight against corruption and influence peddling.
This responsibility is now carried out within Compliance by a new domain
of expertise, Supervisory & Conduct.
In 2023, the Group focused on strengthening the monitoring framework
for Conduct, particularly within its market activities, in terms of risk
assessment, procedures, controls and indicators. Specific governance
has been put in place for these activities.
In addition, a series of indicators is regularly reported to the Board of
directors. They relate to the use of the whistleblowing system, alerts
relating to respect for people, the monitoring of mandatory training and
customer complaints related to the topics of Conduct.
A recent survey of the Group's employees confirmed their high level of
adherence to the values and behaviours defined in the Code of conduct,
as well as a good knowledge of the channels used to raise alerts. These
good overall results are the subject of a detailed analysis at the level of
each entity in order to identify any additional actions.
ESG practice
In order to integrate environmental, societal and governance stakes into
the risk management ensured by Compliance, an ESG practice team was
created to bring expertise to the various domains of the Function and
to establish collaboration with RISK, LEGAL, Company Engagement and
the business lines.
The compliance system has been adapted, in particular in terms of
protecting clients' interests with the issuance of instructions – for
example to prevent the risk of greenwashing – and in terms of knowledge
of third parties – in particular to integrate the identification of ESG risk
factors when entering into relations.
Finally, a training programme for Compliance employees was designed
within the Sustainability Academy, in liaison with Human Resources.
Risk management system
In 2023, actions relating to the risk management system focused on:
■ the improvement of Risk and Control Self Assessment thanks to a
more detailed taxonomy;
■ the standardisation of the second-level control process carried out by
Compliance on the first line of defence;
■ increased use of the standard Group operational risk management
tools.
Training
Mandatory training programmes, adjusted in their content, continued
with high completion rates.
All new employees, when they join the Group, are systematically
registered for training on the Code of conduct (Conduct Journey) and
financial security (know your custome r, fi ght against money laundering,
financing of terrorism and corruption, international sanctions and
embargoes).
All Group employees are assigned a training course on all the topics of
the Code of conduct. In its third edition, the Conduct Journey was enriched
with information on whistleblowing channels and with a new module on
diversity, equity and inclusion.
In addition, employees particularly exposed to certain risks receive
complementary training on:
■ financial security – advanced course;
■ the fight against corruption – advanced course;
■ the MIFID II regulation;
■ the fight against market abuse and banking laws with extraterritorial
scope;
■ AEOI and FATCA tax regulations.
For all these campaigns completed during the yea r, t he completion rates
are between 96% and 99%.
Industrialisation of Compliance
The COO Technology and Operational Performance Department
continuously carries out actions to improve the effectiveness of
Compliance tools and operational processes. Thus:
■ close collaboration with the Group IT has made it possible to automate
the search for adverse information on customers and suppliers, and to
implement a new tool for managing risks related to professional ethics;
■ innovative projects are carried out with the RISK Function to design
solutions integrating artificial intelligence, process robotization and
advanced information analysis technologies.
LEGAL
Organisation and change to the function
LEGAL is an independent and integrated function comprising all the
Group's legal teams. All LEGAL employees report directly or indirectly
to the Group General Counsel, in order to enable the legal experts to
carry out their duties under conditions that guarantee their freedom of
judgement and action.
At all levels of the Group, the LEGAL organisation enables adequate
coverage of legal risks, including:
■ dedicated legal teams that cover the business lines, regions and
territories, based on the Group's organisation;
■ platforms, created in 2020 and numbering nine at the end of 2023,
which are dedicated internal legal teams that deliver legal services
in all business activity sectors, entities and geographies concerned,
within the framework of their exclusive main domain of expertise;
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■ the Group Dispute Resolution (GDR), a global and hierarchically
integrated team which ensures appropriate management of the
Group's major litigations and investigations as well as legal issues
related to financial security (such as embargoes and anti-money
laundering);
■ the LEGAL Practice Competition Law specialising in competition law,
which joined forces with Compliance in 2022 to strengthen the Group's
compliance system in this area;
■ finally, two central departments provide support services to the
organisation of LEGAL.
LEGAL activity in 2023
Throughout the yea r, L EGAL continued to strengthen the legal risk
management system.
As part of its legal advisory activity, LEGAL has contributed to the analysis
of emerging risks on themes such as corporate social responsibility
(CSR), blockchain, crypto-assets, cybersecurity, artificial intelligence,
outsourcing, etc.
In terms of legal risk prevention, training and awareness-raising actions
have been undertaken at all levels of the organisation up to its executive
managers.
To meet the technological challenges of the Group's GTS strategic plan, a
Digital Learning Centre (DLC2) programme has been designed offering a
continuous training course on digital topics for LEGAL employees as well
as round tables by associating business lines and functions.
In the area of sustainable development, one of the three pillars of the
GTS plan, LEGAL has actively contributed to raising the awareness of the
management teams of the divisions, business lines and functions on the
legal challenges
in terms of sustainable finance and ESG. In addition,
within the Regulatory, platform, a Sustainable Finance practice has been
structured and a training course dedicated to LEGAL employees has been
built with Human Resources – the LEGAL Sustainability Academy, in line
with the Group's.
Lastly, LEGAL continued to implement the legal risk management system:
■ updating the Risk and Control Self-Assessment – RCSA for the entire
function;
■ performing second-level controls on legal processes;
■ overseeing operational risk incidents involving legal risk; and
■ contributing to the deployment of the library of controls relating
to legal risks by continuing to provide educational support for the
business lines and functions.
RISK AND PERMANENT CONTROL
Operational risk management
The operational risk management model for the RISK Function is based on
both decentralised teams within the businesses, under the responsibility
of the Risk directors of these businesses, close to the processes,
operational staff and systems, and on a central structure (RISK ORM) with
a steering and coordination role and providing local teams with support
on subjects requiring specific expertise (for example: cybersecurity,
anti-fraud or managing risks related to products and services supplied
by third parties).
All of the components of the procedural system for operational risk have
been significantly overhauled since 2018:
■ Risk and Control Self-Assessment (RCSA);
■ controls;
■ collection of historical incidents;
■ analysis and quantification of operational risk scenarios ("potential
incidents");
■ action plans;
■ outsourcing risk management.
Work on the taxonomy of risks as well as the mapping of processes and
organisational structures has also been completed to further standardise
guidelines supporting the assessment and management of operational
risk.
In addition to these methodological changes, a new integrated
operational risk management tool (360 Risk Op), composed of various
interconnected modules, was rolled out in the fourth quarter of 2019.
After the launch of the module dedicated to the collection of Historical
Incidents in 2019, those relating to RSCAs, Potential Incidents and the
collection of outsourcing arrangements in 2020, the one dedicated to
Action Plans has been available since April 2021. The control modules
have been gradually developed and deployed since the summer of 2021
and implemented in 2023.
Management of risks related to Information
and Communication Technologies
The ongoing implementation of the Group's digitisation initiatives aimed
at creating streamlined channels for its customers and partners as well
as new ways of collaboration for its staff, introduces new technologies
and risks, and reinforces the need to continue to monitor the Group's
technological risk profile and ensure the effectiveness of controls.
In 2023, the RISK teams continued to improve the risk management
framework related to information and communication technologies (ICT)
through the following actions:
■ the performance of penetration tests (Red Team) on several entities in
order to assess their capabilities of detecting cybersecurity incidents,
and reinforcing protection measures where necessary;
■ better integration of ICT risk elements into the entire reference
framework;
■ participation in major Group programmes in order to provide an
independent analysis of the risks and action plans identified on topics
such as fraud, cyber risk management or the deployment of the cloud;
■ the implementation of Group-level governance and a procedural
framework for operational resilience;
■ monitoring cybersecurity threats, notably in the context of the conflict
in Ukraine.
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Management of risks related to personal data
protection
In 2023, BNP Paribas continued to integrate personal data protection into
the existing RISK management and governance practices. A robust control
system makes it possible to respond to requests from the authorities,
to correct vulnerabilities as a priority and to demonstrate the Group's
responsibility in this area.
■ In accordance with the Group's new confidentiality policy, the
normative framework has been revised and is being implemented
in all entities.
■ The general risk taxonomy has been revised to include personal data
protection and a Generic Control Library was designed.
■ An independent testing plan was implemented by the second line of
defence in the majority of entities.
■ Improving the system and tools for detecting and managing personal
data incidents makes it possible to react more effectively and
strengthen their prevention.
■ Contracts with third parties as well as cross-border data transfers
are subject to continuous review, facilitated by automation measures.
■ The Privacy Risk Assessment process has been improved and
automated.
■ A mandatory training programme has been rolled out.
■ The global system has been automated, enabling the production of risk
indicators, thus contributing to a better maturity of entities operating
outside the scope of the European regulation.
All of these actions strengthen the consistency of the system, reduce risks
and vulnerabilities, and improve visibility and control.
Changes to the RISK Function
RISK continues to roll out its RISK2025 transformation plan, the aim of
which, in line with the Group's GTS Strategic Plan, is to optimise the
effectiveness and efficiency of the function through the development of
enhanced capabilities to manage risks, optimise the function's operating
model and ensure the attraction, retention and development of talent.
In this context, a certain number of initiatives were continued and new
ones launched, structured transverse programmes covering the main
types of risks. They make it possible to simplify, automate and pool certain
internal processes and contribute to the end-to-end review of customer
processes, while ensuring that the control system is at the highest level.
They are based on reinforcing new technologies (for example in the
context of lending processes and the detection and monitoring of risks),
on consolidating internal skills (for example through the increased
use of key profiles related to new modelling methods or through the
internalisation of external assistance positions), or the strengthening of
its pooled operational platforms in Portugal, India, Spain and Canada.
Environmental, social and governance (ESG) risk
management
As part of the Group's "Sustainable Finance" governance, a multi-year
programme was launched to strengthen the integration of ESG risk
factors into the Group's risk management system. These risk factors likely
to affect so-called traditional risk categories (such as credit, market or
operational risks) are thus better identified, assessed and analysed, and
therefore better integrated into the Group's risk management.
In particula r, a h omogeneous approach to assess the ESG profile of large
corporate clients is being rolled out, making it possible to:
■ identify potential adverse impacts that could result in credit,
investment, and reputational risks on the environment and society; and
■ support dialogue with corporate clients and accompany their transition
to a more sustainable business model.
As a second line of defence for environmental risks, the RISK Function has
continued to integrate this analysis approach into the credit processes,
in collaboration with the operating entities. This work will continue in
2024 with the adaptation of this approach to other customer segments
such as midcap companies or financial institutions.
Additional information on climate change risk management can be found
in Commitment 3 described in chapter 7 of the Universal registration
document.
PERIODIC CONTROL
In 2023, the General Inspection adjusted its framework following the
disposals of Bank of the West, BICI Senegal and BICI Côte d'Ivoire. Thus,
the initial audit plan of 916 missions was resized accordingly to 835
missions. A total of 798 missions were finally completed in 2023, i.e. 96%
of the target for the year; 92% of them were scheduled in the original
audit plan.
At the end of 2021, the European Central Bank initiated an audit on the
General Inspection. The report was issued in 2023, highlighting positive
points but also expressing recommendations. These are currently being
closed in accordance with the agreed schedules.
At the end of 2021, the General Inspection had laid the foundations of
a new modernisation plan with the creation of the Transformation &
Digital Intelligence team. After a first year of framing and structuring
the IG+ programme in 2022, 2023 saw the implementation of
profound transformations impacting the daily life of the function and
all of its employees around the world. This plan is structured around
seven projects, the first two of which are the pillars that support the
whole. Simplification and cross-functionality are the key words of this
transformation.
Four projects are focused on processes and tools:
■ as provided for in the project plan, in the spring of 2023, the General
Inspection Department implemented an end-to-end audit tool with the
highest standards in the profession, enabling a profound improvement
in operational efficiency. This tool, deployed in all audit teams around
the world, has made it possible to switch the conduct of all assurance
missions into a new ergonomic, collaborative environment, allowing
cross-functionalities at the level of the entire function, and also
interfaces and feed of information from the other control functions;
■ the continued strengthening of data analytics capabilities was backed
by a complete overhaul of the underlying tools and technologies and
the standardisation of data exchange protocols within BNP Paribas
in compliance with the highest standards, systematic use of these
techniques in the missions and a continuous acculturation and training
effort aimed at the entire General Inspection population;
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■ the revision of mission conduct methodologies, systematically
integrates the audit guides to improve efficiency and consistency
between similar missions, thanks to the new tool;
■ the overhaul of Risk Assessment mechanisms promotes better
integration of the results of the works of the first and second lines
of defence (e.g. RCSA data – Risk and Control Self Assessment), and
implements new data analysis techniques to improve access and the
industrial use of the business line data necessary for risk assessment
(for example, the analysis of the Group's Corporates activities).
Three projects are focused on people:
■ an overhaul of the Employer Value Proposition (EVP) for inspectors/
auditors;
■ a review of working methods to continue to improve cross-functionality
and everything that contributes to it;
■ a change management project to support employees in these
transformations.
Supported by its transformation, General Inspection continued to develop
the methods of collaboration created during the pandemic – between the
central General Inspection teams and those of the audit hubs present in
the countries; with other control functions; between auditors and auditees
– allowing work in remote mode and also a better coordination of teams.
Among the virtuous consequences of this transformation, the General
Inspection has considerably improved its carbon footprint by significantly
reducing international travel.
In 2023, the General Inspection Department repeated its annual risk
assessment exercise. All of the approximately 3,000 Audit Units (AUs)
were reviewed and a document describing the broad outline of the AU
and detailing the assessment of its inherent risk and the quality of the
controls carried out therein was produced for each. The changes in scope
adjustments offset each other overall:
■ disposals of entities and therefore removal of the AUs that represented
them; and
■ conversely: creation of new entities, division of AUs in the Group's
offshoring platforms to take into account the increase in these teams
and the diversification of the services they provide to the Group.
Overall, the residual risk profile for 2023, which results from the
combination of the two factors: inherent risk and quality of controls,
is slightly improved compared to that of 2022. The General Inspection
noted a certain stability of the inherent pro forma risk and the continued
improvement of the quality of controls to a very good level.
In terms of the audit plan, 2023 is the start of a new cycle (2023-2027).
The General Inspection department always endeavours to cover the entire
auditable scope at the right frequency. The audit frequency applicable to
each AU depends on the residual risk score. The frequency is shorter when
the measured residual risk is high. If the AU has a specific regulatory audit
cycle, the applicable cycle is the shorter one between the regulatory cycle
and the cycle resulting from the Risk Assessment. All the AUs were placed
in order of priority by combining these different elements. The duration
of the audit cycle cannot exceed five years in any case.
Thanks to the capabilities offered by the new General Inspection tool,
the audit plan promotes transverse missions in which the employees of
the hubs and the central General Inspection audit similar AUs spread
around the world, at the same time and using the same tool. In addition
to an obvious gain in efficiency, these missions are of increased interest
to auditees and auditors.
The policy of very high investment in training continued:
■ in particular around the pillars of the General Inspection's
transformation: new tool, new audit methods, actions taken in terms
of data analysis;
■ also in the various audit areas: in particular to enable new employees
to acquire the required skills base; such that all employees of the
Function follow regulatory training with a high level of expertise;
or by offering technical training related to auditors' profiles and
specialisations;
■ the training framework is organised between face-to-face, distance
learning and e-learning, to provide for digital and classroom-based
at the same time;
■ the headcount of the General Inspection department was down at the
end of 2023 compared to the end of 2022. This trend is due to a scope
effect related to disposals. It masks targeted increases, for example:
audit of offshore platforms, audit of Conduct. The General Inspection
is continuing a permanent recruitment effort in a context of a war
for talent, which has made Human Resources challenges its priority,
notably reflected in the revision of its EV P.
INTERNAL CONTROL EMPLOYEES
The various internal control functions are based on the following headcount (in FTE = Full-T ime Equivalents, calculated at the end of the period):
2018
2019
2020
2021(1)
2022(2)
2023(3)
Variation
2023/2022
Compliance
4,183
4,219
4,105
3,770
3,791
3,610
-4.8%
LEGAL
1,846
1,810
1,779
1,736
1,703
1,651
-3.1%
RISK
5,520
5,462
5,191
5,029
4,885
4,754
-2.7%
Periodic control
1,394
1,446
1,381
1,355
1,342
1,278
-4.8%
TOTAL
12,943
12,937
12,456
11,890
11,721
11,293
-3.7%
(1) In 2021, the reduction in the headcount of the Compliance and RISK Functions is mainly due to the transfer of control teams to the first line of defence (business lines).
(2) In 2022, the headcount reductions result from the continuation of this transfer for the RISK Function, and a change in the scope of consolidation for all
functions (deconsolidation of Ukrsibbank in Ukraine). On a like-for-like basis, the headcount increased by 2.7% for Compliance and remained virtually
stable for the other functions.
(3) In 2023, the headcount reductions result from a change in the scope of consolidation for all functions (mainly the disposals of Bank of the West in the
United States, BICI Senegal and BICI Côte d'Ivoire). On a like-for-like basis, the total headcount for the control functions remained stable.
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INTERNAL CONTROL PROCEDURES RELATING TO THE PREPARATION
AND PROCESSING OF FINANCIAL INFORMATION
ROLES AND RESPONSIBILITIES
FOR PREPARING AND PROCESSING
ACCOUNTING AND FINANCIAL
INFORMATION
Under the authority of the Chief Executive Office r, t he Finance & Strategy
Function is notably responsible for preparing and processing financial
information. It also performs an independent control mission which
aims at ensuring control of the risk related to accounting and financial
information. The specific missions assigned by the Group to the Finance
& Strategy Function are defined by a charte r. T hese consist of:
■ preparing the financial information and guaranteeing the consistency
and fairness of the financial and prudential information published, in
compliance with the regulatory framework and standards;
■ providing Executive Management with support for the Group's
economic management at each level of its organisation;
■ managing the Group's tax risk, representing the Group in tax matters
and helping to preserve its reputation;
■ defining accounting policies, management standards and prudential
standards for the Group and overseeing their operational
implementation;
■ defining, deploying and supervising the permanent control system
concerning financial information for the entire Group;
■ assisting Executive Management in defining the Group's strategy,
ensuring the benchmarking of the Group's performance and initiating
and examining mergers and acquisitions ("M&A");
■ managing the Group's equity and conducting the analysis and
financial structuring of the Group's external and internal acquisition,
partnership and disposal projects;
■ ensuring the Group's financial communication and monitoring of the
BNP Paribas share price, shareholders and market reactions;
■ managing relations with market authorities and investors and
organising Annual General Meetings;
■ anticipating regulatory and prudential changes, and developing and
communicating the Group's positions on these issues;
■ coordinating the Group's banking supervision, in particular the
relationship with the ECB;
■ meeting the economic research needs of all of the Group's customers,
business lines and functions;
■ defining and managing the organisation of the Finance & Strategy
Function and monitoring its resources and costs;
■ managing the implementation of the target operational system,
contributing to the definition of the functional architecture and the
design of the Finance systems and deploying them.
All these missions require those involved to be fully competent in their
particular areas, to understand and check the information they produce
and to comply with the required standards and time limits. Particular
attention is paid to compliance, quality and integrity of the information
used and data protection. All those involved in the function have a duty to
alert Executive Management. The missions of the function are carried out
in conjunction with the RISK and ALM Treasury Functions for regulatory
requirements, with the Project Management team for Finance & Strategy
and RISK, housed within Group I T, w ith regard to user processes and the
changes to the information system. In practice, the responsibility of the
Finance & Strategy Function is carried out as follows:
■ the financial data produced is the responsibility of the Finance
Department of each entity, whether produced at its own level or
by shared regional platforms; when they contribute to the Group's
consolidated results, they are sent to the divisions/business lines for
approval;
■ the production of forecast financial data is carried out by the divisions/
business lines, ensuring their consistency with the actual data
produced by the entities or regional platforms;
■ centrally, the Finance & Strategy Function prepares the reporting
instructions distributed to all divisions/business lines and consolidated
entities in order to ensure that the data is homogeneous and complies
with the Group's rules. It gathers all the accounting and management
information produced by the entities and approved by the divisions/
business lines and assembles and consolidates these data for use by
Executive Management or for communication to third parties.
PRODUCTION OF ACCOUNTING
AND FINANCIAL DATA
Standards framework
The local financial statements for each entity are prepared following the
accounting standards prevailing in the country where the entity carries on
business, while the Group consolidated financial statements are prepared
under IFRS (International Financial Reporting Standards) as adopted by
the European Union.
Within Finance & Strategy (Group), the "Standards & Controls – Group
Financial Policies" (GFP) department defines the IFRS-based accounting
principles to be applied to the Group as a whole. It monitors regulatory
changes to IFRS and French standards and interprets them as necessary by
issuing new principles. A manual of the Group's IFRS accounting principles
is available for the divisions/business lines and entities on the internal
network communication tools ("intranet") of BNP Paribas. It is regularly
updated to reflect regulatory changes. At the request of GFP or those
responsible for reporting, certain interpretations and major elements of
doctrine are submitted to a specialised committee ("A ccounting Policy
Committee") for approval or arbitration. This committee reviews and
approves the changes to be made to the accounting principles manual.
In addition, the "Group Financial Policies" department reviews the specific
accounting studies carried out by the divisions or entities as part of the
preparation of the financial statements and during the approval process
of new products or new activities, when these are complex or require the
exercise of judgement. In some cases, it is also responsible for carrying
out these analyses.
Finally, this department is also responsible for maintaining the
management standards manual, incorporating the needs identified by
the performance management teams. These principles and standards
can also be accessed using internal network tools (intranet).
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The solvency framework is the joint responsibility of the RISK and
Finance & Strategy Functions. The Finance & Strategy Function is notably
responsible for the normative elements relating to the prudential scope,
regulatory capital, and the calculation of leverage and GSIB ratios. The
other aspects relating to risk measurement are the responsibility of
the RISK Function. A joint "Solvency Policies Committee", co-chaired by
the two functions, performs the same role as the "A ccounting Policy
Committee" in terms of prudential standards.
The regulatory liquidity framework is the responsibility of ALM Treasury
(with the contribution of the Finance & Strategy and RISK Functions).
Data processing system
The data processing system is organised around two channels, the first
structured according to entities, and the second according to business
lines:
■ "Measure, Control and Explain (MCE)" is the Finance channel dedicated
to the preparation of financial data. Organised around shared and
multi-business regional platforms, it combines expertise and
industrialisation for all financial reporting flows (financial statements,
regulatory, management, solvency, liquidity, taxes), at Group or local
level;
■ "Monitor and Foster Performance (MFP)" is the Finance channel which
has an analysis and advisory role in terms of strategic management
of the businesses, based on the financial data provided by the MCE
channel. It is also responsible for preparing forecast financial reports
(estimate, budget, three-year plan, financial information in stressed
scenarios) by interacting closely with the Business heads. This is why
this channel is structured according to the Division, Business Line,
Function.
PERMANENT CONTROL OF ACCOUNTING
AND FINANCIAL INFORMATION
Internal control within the Finance
& Strategy Function
To allow centralised monitoring of the risk related to accounting and
financial information, the "Group Financial Controls" team within Finance
& Strategy (Group) carries out the following main missions:
■ defining the Group's policy as regards the accounting internal
control system. This system requires accounting entities to follow
rules in organising their accounting internal control environments
and to implement key controls ensuring that the information in their
consolidation packages is reliable. The Group has issued internal
accounting control guidelines for use by the consolidated entities
and a standard accounting control plan listing the major mandatory
controls aiming at covering the accounting risk;
■ ensuring that the internal control environment for accounting and
financial information functions properly within the Group, in particular
via the procedure for internal certification of accounts described
below; reporting quarterly to Executive Management and the Board
of directors' Financial Statements Committee on the quality of the
Group's financial statements;
■ together with the RISK Function, overseeing the proper functioning
of the system for collecting and processing consolidated credit risk
reporting, including by means of quality indicators;
■ ensuring the proper functioning of the data collection and processing
system for the preparation of liquidity reports, in particular by means
of a specific certification system and quality indicators;
■ ensuring the implementation by the entities of the Statutory Auditors'
recommendations, the recommendations of the General Inspection
relating to the Finance process and the ECB's recommendations
allocated to Finance & Strategy with the support of the divisions/
business lines. This monitoring is facilitated by use of a dedicated
tool that enables each entity to monitor the recommendations made
to it and to regularly report on the progress made on the various
action plans. Centralised monitoring of these recommendations
enables Finance to identify improvements to the accounting internal
control system made within the consolidated entities, identify any
cross-functional problems and, if necessary, revise the Group-level
procedures and instructions.
These missions are relayed within the Finance Departments of the
divisions-business lines by central, independent second-level control
teams who carry out close supervision of the entities and develop, if
necessary, accounting control procedures adapted to the specificities of
their scope, in line with Group-level procedures.
Lastly, within the entities/businesses' Finance Departments, the Group's
accounting internal control principles have led to dedicated and
independent second-level accounting control teams or representatives,
depending on the size of the entities, being set up. As such, the Group's
established approach, in which the reporting production tasks are
consolidated on regional platforms (improving the harmonisation of the
first-line reporting and control processes and increasing their efficiency
for the scope of the entities concerned), also ensures that the second-
level accounting control teams are the appropriate size and have the
necessary expertise. The main missions of these local teams are as
follows:
■ implementing second-level accounting controls on all entities falling
within their scope and covering in particular the controls carried out
by the entities' Finance Functions (including the first-level controls
carried out on the processes operated by the Back Offices). These
procedures are based, in particula r, o n standardised accounting control
plans and accounting control tools that allow control responsibilities
to be allocated to the various contributors to flows. Several control
tools support first- and second-line defence controls, for example,
identifying, for each account, the department responsible for its
justification and control, reconciling the balances recorded in the
accounting system with the balances appearing in the Operations
systems of each activity and identifying, justifying and monitoring the
clearance of outstanding items in the flow accounts;
■ implementing control and coordinating (directly when this task is
not performed by first-line controls) the "elementary certification"
process (described below) requiring an entity's different departments
to report to the Finance & Strategy Function on the controls that they
have carried out;
■ ensuring that the accounting internal control system enables the
entity's Finance Department to have sufficient oversight of the process
of preparation of account summaries, and in particular over all the
elements necessary for the Group's certification process (described
below). To assist in achieving this objective, the tasks involved in
accounts closure are formally defined. The use of tools to map the
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processes and associated risks and to document the checks as well as
the coordination with other control channels contributes to improving
the quality.
Internal Certification Process
At Group level
Finance & Strategy (Group) uses FACT (Finance Accounting Control Tool)
for the internal certification of the quarterly data produced by each entity
for the consolidation package and for the consolidation process for which
the "Financial & Regulatory Reporting" Department within Finance &
Strategy (Group) is responsible.
The Chief Financial Officer of each entity concerned certifies to Finance
& Strategy (Group) that:
■ the transmitted data have been prepared in accordance with the
Group's norms and standards;
■ the accounting internal control system guarantees its quality and
reliability.
The main certificate completed by fully consolidated entities reproduces
the results of all of the major controls defined in the Group's accounting
control plan, and leads to the determination of a rating for each entity.
Entities consolidated by the equity method complete an appropriate
certificate. Finally, non-consolidated entities are certified annually
through a simplified procedure.
This internal certification process forms part of the Group's monitoring
system for Internal control and enables the Finance & Strategy (Group)
Function, which has the overall responsibility for the preparation and
quality of the Group's consolidated financial statements, to be informed
of any problems in the financial statements and to monitor the entities'
implementation of appropriate corrective measures. A report on this
process is presented to Executive Management and to the Financial
Statements Committee of the Board of directors at the close of the Group's
quarterly consolidated accounts.
This certification system is also in place for the information included
in regulatory reporting on credit risk and the capital adequacy ratio.
Those contributing to the reports attest that they have complied with
the standards and procedures and that the data used is of appropriate
quality. They further describe the results of the controls carried out at
the various stages of producing the reports.
On the same principles, a certification system is in place for the
reporting of liquidity-related data. The various contributors report on the
compliance of the data transmitted with the standards, and the results
of key controls performed to ensure the quality of reporting.
At entity level
In order to ensure the oversight of all the process of preparation of
accounting information at the level of each entity's Finance Department,
the permanent control procedures of Finance & Strategy (Group),
developed by Group Financial Controls require the implementation of
first-level procedures relating to accounting data or controls when the
process of preparing the accounting information is operated or controlled
in a decentralised way. In this context, an "elementary certification" (or
"sub-certification") procedure can be deployed.
This is a process by which the providers of the information used to
prepare accounting and financial data (e.g. Middle Office, Back Office,
Human Resources, Risk, Suppliers' Accounts, etc.) formally certify that the
fundamental controls intended to ensure the reliability of the accounting
and financial data under their responsibility function properly. The
elementary certificates are sent to the local Finance Department first
level of control, which analyses them in combination with the accounting
controls that it exercises directly, prepares a summary report intended
to be used to prepare the main certificate, and liaises with the various
players in order to monitor points requiring attention.
The FACT application also makes it possible to automate this sub-
certification process by providing entities with a dedicated environment
in which they can directly manage the processes set up at their level.
Valuation control of financial instruments
measured at fair value
Assets and derivatives measured at fair value
through profit or loss in the trading portfolio
The trading portfolio mainly focuses on the market activities of Global
Markets and a few othe r, l ess significant scopes. Finance & Strategy
(Group) has defined a specific system for the main scope. This is based
on the principle that Finance & Strategy, responsible for the preparation
and quality of the Group's accounting and management information,
delegates the production and control of the market or model value of
financial instruments to the various players of the chain, thus constituting
a single and integrated valuation channel for financial instruments. The
processes covered include in particular:
■ verifying the appropriateness of the valuation system as part of the
approval process for new transactions or activities;
■ verifying the proper recording of transactions in the systems and
ensuring it is appropriate with the valuation methodologies;
■ verifying the development and approval mechanism independent of
the valuation methods;
■ determining the market parameters and the procedure for an
independent verification of these parameters;
■ determining valuation adjustments for market, liquidity and
counterparty risks;
■ determining and reviewing the rules for making parameters observable;
■ classifying instruments within the fair value hierarchy, determining day
one profit adjustments, estimating the sensitivity of level 3 valuations
to valuation assumptions.
Through appropriate processes and tools, the channel's objectives are to
ensure both the correctness and the reliability of the process for valuing
financial instruments, and the quality and comprehensiveness of the
control system. It can thus provide the appropriate data to the various
decision-making bodies, data that also informs the operational processes
for compiling the accounting and management results, and ensures the
transparency of appendices dedicated to fair value.
Control of the valuation channel, which involves all participants, is
supervised by the Finance & Strategy Function within the framework of
a specific charter and a dedicated governance. This control system is
based on a set of organisational principles defined in the Group's Internal
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CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
2
Internal control
Control Charter for each organisational level, i.e. Group, CIB and the main
entities that account for market transactions.
To ensure its proper functioning, the Finance & Strategy Function relies on
dedicated teams ("Standards & Controls – Valuation Risk and Governance,
S&C – VRG"), which oversee the entire system. The Finance Function
decides on the information that must be reported by the various players:
this comprises both quantitative and qualitative data indicating trends
in different businesses as well as the results and quality of upstream
controls carried out.
Several committees that meet on a quarterly or monthly basis are set
up to bring all the players together to review and examine, for each
process and Business line, the methods used and/or the results of the
controls conducted. These committees' operating methods are governed
by procedures approved by the Finance & Strategy Function, ensuring that
Finance & Strategy takes part in the main choices and arbitrations. Lastly,
the S&C – VRG reports at each accounting quarter-end to the Product
Financial Control Committee (PFC), chaired by the Group Deputy Chief
Financial Office r, o n its work, and informs the committee of the points
of arbitration or attention concerning the effectiveness of the controls
and the degree of reliability of the valuation and results determination
process. This quarterly committee brings together the business lines,
Finance & Strategy (Group) and the divisions concerned, ALMT and the
RISK Function. Intermediary PFC committees complete this system and
aim at defining project priorities, monitoring their implementation and
thoroughly examining certain technical elements.
Instruments measured at fair value through profit
or loss or through equity outside the trading portfolio
Fixed income securities, derivatives and debt measured
at fair value through profit or loss or through equity
Most of the instruments relating to this scope are covered by the system
in place for the trading portfolio, thanks to an adapted extension of the
governance as well as the pooling of systems, processes and valuation
methodologies. The main business line concerned is ALM Treasury, which
is represented on the aforementioned PFC committee.
Equity securities measured at fair value through profit
or loss or through equity
Since 2020, Group Financial Policies has developed a specific valuation
standard, and the valuation governance system has been standardised
to ensure homogeneous coverage of this portfolio and an appropriate
distribution of responsibilities and decision-making chains.
Other items measured at fair value
Control systems, meeting the requirements of the Group's accounting
control plan, exist at the level of the entities or at the level of the
divisions-business lines to ensure the necessary level of control on loans
that do not meet IFRS 9 SPPI(1) criteria.
Development of the system
The Finance & Strategy Function's general
permanent control framework
The permanent control system related to the risk on accounting and
financial information is continuously being adapted. In 2021, the
Finance & Strategy Function reviewed its permanent control system
and the articulation between its two lines of defence as well as with the
functions exercising second line of defence missions. This framework has
also introduced a strong governance of the system articulated through
committees called "FORCC(2)" through which all the permanent control
processes of the Finance operating business units are reviewed. The
comprehensive deployment of this system was completed in 2022. The
procedures described above, as well as the change in the tools are part
of an evolving framework that aims at guaranteeing an adequate level of
control throughout the Group, and a better harmonisation of the control
of accounting and financial information. Thus, the implementation within
the channel of a standardised tool for formalising and monitoring controls
(Beacon) is continuing in order to cover all entities and central teams on
the various financial control plans (accounting, strategic management,
solvency and liquidity). Lastly, the inherent risk assessment methodology
was clarified this yea r. T he entities measure a level of risk dynamically in
anticipation of closing, based on the major events of the quarte r, i dentified
locally or by the Group, and the analysis of risk indicators adapted to each
generic control point concerned. It thus makes it possible to prioritise
risks in advance and to guide the intensity of the control activities of the
second line of defence finance teams locally.
Moreove r, t he quality of the accounting certification process is
regularly reviewed with the divisions/business lines, for instance with
the preparation of quantitative indicators for some controls, targeted
cross-functional reviews of a major control and ad hoc reviews with
the divisions/business lines on specific points for improvement in
various scopes. These reviews are supplemented by presentations to
the various committees in the Finance & Strategy channel and training
sessions. Group procedures clarifying some major controls, and detailed
instructions aiming at ensuring consistent responses and adequately-
documented processes are also distributed. These Group procedures and
instructions are extended where necessary at division/business line level
to cover issues specific to them.
Similarly, the certification system of the data contributing to the
calculation of the capital solvency ratio is subject to adjustment in order
to take into account developments in the processes and the organisation,
and to capitalise on indicators and controls in place in the various sectors
in connection with the improvement programme on the reporting and
the quality of the data.
In addition, for liquidity reporting, changes in processes and tools are
carried out regularly in order to adapt to the new regulatory reporting
demands, and specific actions are taken with the various contributors in
order to enhance the quality and controls for the channel.
(1) SPPI (Solely Payment of Principal and Interest): The SPPI criterion is a criterion required in addition to the management model in order to determine the classification of financial
instruments excluding trading activities on the balance sheet. It is linked to the contractual characteristics of the instruments. The tests must be carried out on all assets whose
management model is "HTC" ("Held T o Collect", collect contractual cash flows and keep the asset until maturity) or "HTCS" ("Held T o Collect and Sell", collect contractual flows
and sell the asset) in order to determine the accounting category: amortised cost, fair value through equity or fair value through profit or loss.
(2) FORCC: Financial and Operational Risk Control Committee.
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2
CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Internal control
Data control system
As in previous years, the Group continued to adapt its system in 2023
to continue to improve the quality and integrity of the data required
to produce the reports covering the different types of risks to which
BNP Paribas is exposed (risk related to the accounting and financial
information, credit, market/counterparty, liquidity and operational risks),
and to improve the consistency of related reporting at all levels of the
organisation during normal periods as well as during stress or crisis
periods.
This continuous adaptation of the system is part of the regulatory
framework of the principles set by the Basel Committee for the
aggregation of risk data and their reporting ("Principles for effective
risk data aggregation and risk reporting – Basel Committee on Banking
Supervision – Standard 239") and aims at ensuring the Group's
compliance with these principles.
Significant orientations taken in previous years were maintained in 2023
as part of the data strategy ("Data Towards 2025") in line with the Group's
2025 ambitions, in particular in the following areas:
■ the implementation of the Group's Data Management strategy, including
the Data Management by Design approach, the data compilation model
around the Group Data Management tool, "WeData", monitoring and
quality control (strengthening of local Business line indicators and
their consolidated vision, organisation of the extension of the scope
of critical data for implementation from 2023/2025), the organisation
of the processes supporting these activities (inclusion of the Single
Channel organisational model), the use of adapted technologies and
a strengthened data culture within the Group with active management
of the Data community (organisation of different Data events during
the year);
■ the coordination of Data governance with, in particula r, t he holding
of the Group Data Board (biannual), a Shared Data Council for the
data of the Group's standards and quality assessment committees
and monitoring of remediation actions of the Group, Business
lines or functions and entities ("Quality Assessment & Remediation
Committees – QARC") generally quarterly. Also in 2023 the update of
the Group "Roles & Responsibilities related to Data Quality, Integrity
and Protection" procedure;
■ consideration of the Data strategy as part of the Group's IT strategy,
notably by integrating the principles of Data Management by Design
and the IT contribution to the data compilation model (including
the development of dictionaries of application data), and with the
permanent presence of the Group CIO on the Group Data Board, the
individual assignment of Data responsibilities within the Group IT
Function and the participation in the main Data projects.
PERIODIC CONTROL
General Inspection has a dedicated Finance channel (called the "Finance
Domain") with a team of specialist inspectors in accounting and financial
auditing, thus reflecting the General Inspection's strategy of having a
robust auditing capability, as regards both the technical complexity of its
work and its scope of coverage of accounting and financial risk.
Its action plan is based on an annual risk assessment exercise, the
practical details of which have been established by General Inspection
based on the risk evaluation chart defined by the RISK Function.
The core aims of this team are as follows:
■ establishing a hub of accounting and financial expertise in order
to reinforce the capability of General Inspection when carrying out
inspections in these areas;
■ disseminating accounting and financial internal audit best practices
and standardising the quality of related audit work within the Group;
■ identifying and inspecting areas of accounting and financial risk at
Group level.
RELATIONS WITH THE STATUTORY AUDITORS
Each yea r, a s part of their statutory assignment, the Statutory Auditors
issue a report in which they give their opinion concerning the consistency
and fairness of the consolidated financial statements of the BNP
Paribas Group as well as the annual financial statements of the Group's
companies. The Statutory Auditors also carry out limited reviews on the
closing of the half-yearly accounts, and specific tasks in relation to the
quarterly accounts.
Thus, as part of their statutory mission:
■ they examine any significant changes in accounting standards
and present their opinions to the Financial Statements Committee
concerning the accounting choices with a material impact;
■ they present their conclusions to the Finance & Strategy Functions
in the entities/business lines/divisions and at a Group level, and
in particular any observations and recommendations to improve
certain aspects of the internal control system that contribute to the
preparation of the accounting and financial information that they
reviewed during their audit.
FINANCIAL COMMUNICATION (PRESS
RELEASES, SPECIAL PRESENTATIONS, ETC.)
Financial communications for publication are written by the "Investor
Relations and Financial Information" Department within Finance &
Strategy (Group). It is directed at retail and institutional shareholders,
financial analysts and rating agencies, and presents the Group's different
activities, explains its results and describes its development strategy,
while maintaining the financial information homogeneous with that used
at an internal level.
The team, which reports to Executive Management and the Chief Financial
Office r, p roposes and defines the format in which financial information
is published by the BNP Paribas Group. It works with the divisions and
functions to prepare the presentation of financial results, strategic
projects and specific topics. It distributes them to the financial community.
The Statutory Auditors are associated with the validation and review
phase of communications relating to the closing of quarterly, half-yearly
or annual financial statements, before their presentation to the Financial
Statements Committee and to the Board of directors, who approve them.
3
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127
2023 REVIEW OF OPERATIONS
3.1
BNP Paribas consolidated results
128
Solid results
128
3.2
Results by division/business line
131
Corporate and Institutional Banking (CIB)
131
Commercial, Personal Banking & Services (CPBS)
133
Investment & Protection Services (IPS)
141
Corporate centre
143
3.3
Balance sheet
145
Assets
145
Liabilities
146
Minority interests
148
Shareholders' equity
148
Financing and guarantee commitments
148
3.4
Profit and loss account
149
Revenues from continuing activities
149
Operating expenses, depreciation and amortisation
151
Gross operating income from continuing activities
151
Cost of risk and other net losses for risk on financial instruments
151
Operating income from continuing activities
152
Net income attributable to equity holders
152
Minority interests
153
3.5
Recent events
153
Products and services
153
Acquisitions and partnerships
153
3.6
Outlook
154
2024 Trend
154
Information on trends
157
3.7
Financial structure
157
3.8
Alternative Performance Measures (APM) – Article 223-1 of the AMF's
General regulation
158
Methodology – Comparative analysis at constant scope and exchange rates
160
Reminder
160
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3
2023 REVIEW OF OPERATIONS
3
BNP Paribas consolidated results
3.1 BNP Paribas consolidated results
As a reminde r, t he financial information and data at 31 December 2022
have been restated in line with the consolidated financial statements to
take into account (i) the application of IFRS 5 relating to groups of assets
and liabilities held for sale, following the sale of Bank of the West on
1 February 2023; (ii) the application of IFRS 17 (Insurance Contracts) and
the application of IFRS 9 for insurance entities, effective 1 January 2023;
(iii) the application of IAS 29 (Financial Reporting in Hyperinflationary
Economies) to Türkiye, effective 1 January 2022; and (iv) the internal
transfers of activities and results at Global Markets and Commercial &
Personal Banking in Belgium.
The section includes references to 2023 distributable income. The
distributable income is the basis for the calculation of the distribution in
2023 and reflects the intrinsic performance of the Group after the impact
of the sale of Bank of the West, after the contribution to the constitution
of the Single Resolution Fund (SRF) and excluding extraordinary items.
In millions of euros
2023 distributable
2023
Variation
2022
2023 /2022
Revenues
45,874
46,927
45,430
+1.0%
Operating Expenses and Dep.
(30,956)
(29,580)
(29,864)
+3.7%
Gross Operating Income
14,918
17,347
15,566
-4.2%
Cost of Risk
(2,907)
(2,907)
(3,003)
-3.2%
Other net losses for risk on financial instruments
(775)
0
0
n.s.
Operating Income
11,236
14,440
12,564
-10.6%
Share of Earnings of Equity-Method Entities
593
593
655
-9.5%
Other Non-Operating Items
(104)
(104)
(4)
n.s.
Pre-T a x Income
11,725
14,929
13,214
-11.3%
Corporate Income T a x
(3,266)
(3,266)
(3,653)
-10.6%
Net Income Attributable to Minority Interests
(431)
(431)
(400)
+7.8%
Net Income from discontinued activities
2,947
0
687
n.s.
Net Income Attributable to Equity Holders
10,975
11,232
9,848
+11.4%
Cost/Income
67.5%
63.0%
65.7%
+1.8 pt
SOLID RESU L T S
BNP Paribas' diversified and integrated model and its capacity to
accompany clients and the economy in a comprehensive way by
mobilising its teams, its resources, and its capabilities, continued to drive
growth in activity and results in 2023.
The Group's performance, as reflected in distributable Net Income(1),
is solid and in line with the 2023 objective. Distributable Net Income(1)
amounted to EUR 11,232 million in 2023, up sharply by 10.2% compared to
the 2022 reported result(2). Distributable Net Income reflects BNP Paribas'
intrinsic performance post impact of the sale of Bank of the West and post
contribution to the ramp-up of the Single Resolution Fund and enabled
the absorption of the very significant negative impact of extraordinary
items in 2023 recognised in Corporate Centre.
On this basis(1), revenue growth was strong (+3.3%), and operating
expenses decreased by 1.0%. The Group achieved a positive jaws
effect(3). Thanks to its long-term approach and prudent and proactive risk
management, cost of risk is at a low level (32 basis points of outstanding
customer loans)(4), driven by a structural improvement in the risk profile
over the past 10 years.
(1) Result serving as a basis for calculating the distribution in 2023.
(2) Reported on 7 February 2023, i.e. EUR 10,196 million.
(3) +1.0 point on distributable basis and excluding exceptional operating expenses and taxes subject to IFRIC 21.
(4) Note:cost of risk does not include "Other net losses for risk on financial instruments" i.e. charges related to risk of invalidation or non-enforceability of financial instruments granted
(extraordinary provisions on mortgage loans in Poland, provisions for litigation related to Personal Finance, and provisions for risk on receivables in 2023 recognised in Corporate
Centre (EUR 775 million in 2023)).
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2023 REVIEW OF OPERATIONS
BNP Paribas consolidated results
The financial structure is solid, and the trajectory of the common equity
Tier 1 ratio is on track to meeting the 12% objective post implementation
of the new CRR 3 regulation. Lastly, the redeployment of capital is well
underway and disciplined in its approach and sustains the acceleration
in growth.
For the whole of 2023, revenues came to EUR 45,874 million
(EUR 45,430 million in 2022). They reflected the extraordinary negative
impact of -EUR 938 million due to changes in TLTRO terms and conditions
decided by the European Central Bank in the fourth quarter 2022 and
the exceptional impact of -EUR 125 million from provisions for litigation
booked in the second quarter 2023, both recognised in Corporate Centre.
Revenues adjusted to derive distributable Net Income rose by 3.3%
to EUR 46,927 million. They excluded the extraordinary negative
3
impact and an additional adjustment of EUR 115 million for a total of
EUR 1,053 million.
In the operating divisions, revenues increased by 1.8% (+2.5% at constant
scope and exchange rates). They rose by 0.6% at Corporate & Institutional
Banking (CIB) (+2.0% at constant scope and exchange rates), driven by
the steep rise in Global Banking revenues (+14.5% at constant scope and
exchange rates) and the increase at Securities Services (+5.6% at constant
scope and exchange rates). Global Markets revenues decreased by 6.5%
at constant scope and exchange rates, as activity was more normalised.
Revenues at Commercial, Personal Banking & Services (CPBS)(1) rose
by 4.3% (+4.7% at constant scope and exchange rates). Revenues at
Commercial & Personal Banking (+4.6%) were up strongly with the
increase in net interest revenues. Revenues at Specialised Businesses
rose by 3.8%, driven by the strong increase at Arval & Leasing Solutions
(+12.5%) and at New Digital Businesses & Personal Investors (+19.0%). The
context was less favourable for Personal Finance (-3.1% at constant scope
and exchange rates). At Investment & Protection Services (IPS) revenues
decreased by 3.8% (-3.6% at constant scope and exchange rates), due to
the very negative impacts of the current downturn on Real Estate and of a
base effect at Principal Investments. Excluding the contribution from Real
Estate and Principal Investments, IPS revenues were up by 3.7%, driven by
sustained growth at Wealth Management (+6.0%) and Insurance (+3.6%).
The Group's operating expenses came to EUR 30,956 million
(EUR 29,864 million in 2022). In 2023, they reflected the exceptional
impact of restructuring and adaptation costs (EUR 182 million) and IT
reinforcement costs (EUR 395 million) for a total of EUR 576 million
(EUR 490 million in 2022). In 2023, they also reflected the extraordinary
impact of overall adaptation costs related in particular to Personal Finance
(EUR 276 million). For 2023, the Group's operating expenses were also
affected by taxes subject to IFRIC 21, which came to EUR 1,896 million
(EUR 1,874 million in 2022), including the contribution to the Single
Resolution Fund in the amount of EUR 1,002 million (EUR 1,256 million
in 2022) and the impact of UK bank levies (EUR 226 million), considered
as an extraordinary item. These exceptional and extraordinary items are
recognised in Corporate Centre.
At EUR 29,580 million,operating expenses adjusted to derive
distributable Net Income decreased by 1.0%. They reflected the impact
of the anticipation of the end of the ramp-up of the Single Resolution
Fund (including the impact of the UK bank levies) in the amount of
-EUR 1,028 million and an additional adjustment of -EUR 72 million
and excluded the extraordinary impact of overall adaptation costs
related in particular to Personal Finance (EUR 276 million), for a total of
EUR 1,376 million. On this basis, the Group achieved a positive jaws effect.
In the operating divisions, operating expenses were up by 2.3% (+3.1%
at constant scope and exchange rates). CIB's operating expenses rose by
1.2% (+2.9% at constant scope and exchange rates). The jaws effect was
positive at Global Banking and Securities Services. Operating expenses
at CPBS(1) were up by 3.5% (+3.8% at constant scope and exchange rates),
and its jaws effect was positive (+0.8 point(1)). Operating expenses(1) rose
by 2.5% at Commercial & Personal Banking and by 5.8% at Specialised
Businesses. IPS's operating expenses increased by 0.4% (+0.6% at constant
scope and exchange rates), and its jaws effect was positive (+2.1 points)
excluding the contributions from Real Estate and Principal Investments.
The Group's gross operating income thus amounted to EUR 14,918 million
(EUR 15,566 million in 2022).
The Group's gross operating income adjusted to derive distributable Net
Income came to EUR 17,347 million, an 11.4% increase.
At EUR 2,907 million(2) (EUR 3,003 million in 2022), the Group's cost of
risk came to a low level of 32 basis points of outstanding customer loans.
It reflected EUR 517 million in releases of provisions on performing loans
in 2023 and a provision on non-performing loans of EUR 1,833 million
excluding cost of risk at Personal Finance.
Other net losses for risk on financial instruments are charges related
to the risk of invalidation or non-enforceability of financial instruments
granted. They came to EUR 775 million and are recognised in Corporate
Centre. For 2023, they reflected the extraordinary impact of provisions
on mortgage loans in Poland (EUR 450 million), provisions for litigation
related to Personal Finance (EUR 221 million) and provisions for risk on
receivables (EUR 104 million). These other net losses for risk on financial
instruments are considered extraordinary items in 2023 recognised in
Corporate Centre and are excluded in order to derive the distributable
Net Income.
The Group's operating income came to EUR 11,236 million. In 2022, it
amounted to EUR 12,564 million.
The Group's operating income adjusted to derive distributable Net Income
amounted to EUR 14,440 million, up by 14.9%.
The Group's non-operating items amounted to EUR 489 million
(EUR 651 million in 2022). For 2023, they reflected the exceptional
impact of -EUR 87 million from the sale of an Insurance business and
a capital gain of +EUR 91 million on a divestment. In 2022, they had
reflected the positive impact of negative goodwill related to bpost
bank (+EUR 244 million), and a capital gain (+EUR 204 million), offset
by the impairment of Ukrsibbank shares and the negative impact
from the reclassification to profit and loss of exchange differences
(-EUR 433 million).
(1) Including 100% of Private Banking (excluding PEL/CEL effects in France).
(2) Note: cost of risk does not include other net losses for risk on financial instruments.
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2023 REVIEW OF OPERATIONS
BNP Paribas consolidated results
The Group's pre-tax income came to EUR 11,725 million
(EUR 13,214 million in 2022).
The average corporate tax rate stood at 29.3% (29.7% in 2022). The
Group is also a substantial taxpayer with a total taxes and levies of
EUR 6.8 billion paid in 2023.
The Group closed the sale of Bank of the West on 1 February 2023.
The conditions of this transaction announced on 20 December 2021 fall
within the scope of application of IFRS 5 relating to groups of assets and
liabilities held for sale. In accordance with IFRS 5, the result of activities
held for sale came to EUR 2,947 million in 2023, reflecting the capital
gain on the sale of Bank of the West, treated as an extraordinary item.
This result had come to EUR 687 million in 2022.
3
Net Income, Group share thus amounted to EUR 10,975 million in 2023.
In 2022, it had come to EUR 9,848 million in 2022.
As announced in February 2023, Net Income, Group share for 2023 has
been adjusted to calculate distributable Net Income, Group share. It
reflects the Group's intrinsic performance following the sale of Bank
of the West and following the end of the contribution to the ramp-up
of the Single Resolution Fund and enabled the absorption from 2023 of
the negative impact of extraordinary items. Distributable Net Income
came to EUR 11,232 million in 2023, up by 10.2% (EUR 1,036 million)
compared to the Net Income, Group share reported in February 2023
(EUR 10,196 million), in line with the 2023 objective. Distributable
Net Income for the first nine months of 2023 has been restated (see
31 January 2024 announcement) to reflect these impacts on an annual
basis. After restatements, it came to EUR 9,225 million (EUR 8,810 million
prior to these restatements).
Return on non-revaluated tangible equity stood at 10.71% (10.98% on
the basis of the distributable Net Income). This reflects the BNP Paribas
Group's solid performances, which are due to the strength of its diversified
and integrated model.
As of 31 December 2023, the common equity Tier 1 ratio stood at
13.2%(1). The liquidity coverage ratio (at end of period) came to 148%
as of 31 December 2023. The Group's immediately available liquidity
reserve amounted to EUR 474 billion, or more than one year of room
to manoeuvre in terms of wholesale funding. The leverage ratio(2) stood
at 4.6%.
T a ngible net book value(3) per share amounted to EUR 87.60, a 10.4%
increase since 31 December 2022, illustrating constant value creation
across economic cycles.
(1) CRD 5; including IFRS 9 transitional arrangements.
(2) Calculated in accordance with Regulation (EU) No. 2019/876.
(3) Revaluated.
Capital allocation
Revenue from the capital allocated to each division is included in
the division's profit and loss account. The capital allocated to each
division corresponds to the amount required to comply with CRR 2/
CRD 5 regulation, also known as Basel 3, and is based on 11% of
risk-weighted assets.
Risk-weighted assets are calculated as the sum of:
■
the risk-weighted assets for credit and counterparty risk,
calculated using the standard approach or the Internal Ratings
Based Approach (IRBA) depending on the particular entity or
business activity;
■
the regulatory capital requirement for market risks, for adjustment
of credit valuation and for operational risk, multiplied by 12.5.
Moreove r, e lements that are deducted from Tier 1 capital are
allocated to each division. Last, the capital allocated to the
insurance business is based on the minimum solvency capital
requirement as defined by Solvency II.
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
3.2 Results by division/business line
CORPORATE AND INSTITUTIONAL BANKING (CIB)
In millions of euros
2023
2022
2023/2022
Revenues
16,509
16,404
+0.6%
Operating Expenses and Dep.
(10,823)
(10,691)
+1.2%
Gross Operating Income
5,686
5,712
-0.5%
Cost of Risk
63
(325)
n.s.
Operating Income
5,749
5,387
+6.7%
Share of Earnings of Equity-Method Entities
13
20
-35.1%
Other Non-Operating Items
(18)
(10)
+77.0%
Pre-T a x Income
5,744
5,398
+6.4%
Cost/Income
65.6%
65.2%
+0.4 pt
Allocated Equity (€bn, year to date)
29.1
29.9
-2.9%
GLOBAL BANKING
In millions of euros
2023
2022
2023/2022
Revenues
5,822
5,181
+12.4%
Operating Expenses and Dep.
(2,918)
(2,841)
+2.7%
Gross Operating Income
2,904
2,340
+24.1%
Cost of Risk
74
(336)
n.s.
Operating Income
2,978
2,004
+48.6%
Share of Earnings of Equity-Method Entities
5
4
+29.7%
Other Non-Operating Items
0
0
-25.7%
Pre-T a x Income
2,984
2,009
+48.5%
Cost/Income
50.1%
54.8%
-4.7 pt
Allocated Equity (€bn, year to date)
16.2
16.5
-2.1%
2023 Universal registration document and annual financial report - BNP PARIBAS
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
GLOBAL MARKETS
In millions of euros
2023
2022
2023/2022
Revenues
7,996
8,636
-7.4%
Incl. FICC
5,138
5,789
-11.2%
Incl. Equity & Prime Services
2,858
2,848
+0.3%
Operating Expenses and Dep.
(5,798)
(5,781)
+0.3%
Gross Operating Income
2,198
2,855
-23.0%
Cost of Risk
(13)
11
n.s.
Operating Income
2,185
2,866
-23.8%
Share of Earnings of Equity-Method Entities
4
14
-69.0%
Other Non-Operating Items
4
(10)
n.s.
Pre-T a x Income
2,193
2,870
-23.6%
Cost/Income
72.5%
66.9%
+5.6 pt
Allocated Equity (€bn, year to date)
11.7
12.0
-2.6%
SECURITIES SERVICES
In millions of euros
2023
2022
2023/2022
Revenues
2,691
2,586
+4.1%
Operating Expenses and Dep.
(2,107)
(2,069)
+1.8%
Gross Operating Income
585
517
+13.1%
Cost of Risk
1
0
n.s.
Operating Income
586
517
+13.4%
Share of Earnings of Equity-Method Entities
4
2
+49.2%
Other Non-Operating Items
(22)
0
n.s.
Pre-T a x Income
567
519
+9.2%
Cost/Income
78.3%
80.0%
-1.7 pt
Allocated Equity (€bn, year to date)
1.2
1.4
-16.4%
For the whole of 2023, CIB was the leading Europe-based CIB in EMEA,
with increased market shares(1) on the back of a diversified model
supported by three powerful franchises at the service of clients. CIB has
increased its global market share(2) by 10 basis points since 31 December
2022.
The financing business lines achieved a very good level of client activity,
in particular in the Americas and EMEA. Activity was sustained on the
equity markets, in particular in equity derivatives and prime brokerage,
and demand was up sharply on the credit markets. On the rates,
foreign exchange and commodities markets, the environment was more
normalised. Securities Services continued its strong business drive, and
average assets rose with the year end market rebound.
CIB revenues, at EUR 16,509 million, increased by 0.6% (+2.0%(3)), driven
by the very strong rise at Global Banking (+14.5%(3)), the increase at
Securities Services (+5.6%(3)) and good resiliency at Global Markets
(-6.5%(3)).
Global Banking revenues, at EUR 5,822 million, rose very sharply by
12.4% (+14.5% at constant scope and exchange rates) and were up in all
three regions(3), thanks in particular to strong growth in the Americas and
EMEA. Activity was up very sharply in Transaction Banking, particularly in
EMEA (+56.4%(3)), with a very sharp increase in revenues on the Capital
Markets platform, particularly in the Americas and EMEA. Advisory
progressed(3) in a market that was down sharply.
(1) Source:Coalition Greenwich 3Q23 YTD Competitor Analytics. Ranking based on Coalition Greenwich Index banks and on BNP Paribas' product scope; EMEA: Europe, Middle East, Africa.
(2) Source: reported BNP Paribas' revenues; Coalition Greenwich Competitor Analytics based on BNP Paribas' product scope. Market share calculated as the ratio of BNP Paribas'
reported revenues to industry revenues.
(3) At constant scope and exchange rates.
2023 Universal registration document and annual financial report - BNP PARIBAS
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
At EUR 7,996 million, Global Markets revenues decreased by 7.4% (-6.5%
at constant scope and exchange rates). At EUR 5,138 million, FICC(1)
revenues were down by 11.2%(2). The performance was very good in credit
activities but was offset by more normalised activity in EMEA in rates and
foreign exchange and, even more, in commodities compared to a high
base in 2022. At EUR 2,858 million, Equity & Prime Services revenues
were up by 0.3%(2), a strong performance supported by activity in equity
derivatives and prime brokerage.
At EUR 2,691 million, Securities Services revenues were up by 4.1%
(+5.6% at constant scope and exchange rates), driven by the favourable
impact of the interest-rate environment and the effect of the increase
in average assets. Transaction volumes decreased because of more
moderate volatility.
CIB operating expenses, at EUR 10,823 million, were up by 1.2% (+2.9%
at constant scope and exchange rates). The jaws effect was very positive
at Global Banking and positive at Securities Services.
CIB gross operating income thus decreased by 0.5% (+0.4% at constant
scope and exchange rates), to EUR 5,686 million.
CIB released EUR 63 million in cost of risk. Global Banking released
EUR 74 million and cost of risk came to -4 basis points of outstanding
customer loans. This included releases of provisions on performing loans
(stages 1 and 2). Cost of risk on non-performing loans (stage 3) was low.
CIB thus achieved pre-tax income of EUR 5,744 million, up strongly by
6.4% (+7.1% at constant scope and exchange rates).
(1) Fixed Income, Currency, and Commodities.
(2) Reminder: restatement reported on 11 December 2023.
(3) Excluding Italy.
COMMERCIAL, PERSONAL BANKING & SERVICES (CPBS)
In millions of euros
2023
2022
2023/2022
Commercial, Personal Banking & Services - excluding PEL/CEL effects
Revenues
26,627
25,524
+4.3%
Operating Expenses and Dep.
(16,437)
(15,876)
+3.5%
Gross Operating Income
10,191
9,648
+5.6%
Cost of Risk
(2,923)
(2,491)
+17.3%
Other net losses for risk on financial instruments
-
-
-
Operating Income
7,267
7,156
+1.5%
Share of Earnings of Equity-Method Entities
337
433
-22.2%
Other Non-Operating Items
(181)
(23)
n.s.
Pre-T a x Income
7,423
7,567
-1.9%
Income Attributable to Wealth and Asset Management
(328)
(282)
+16.4%
Pre-T a x Income of Commercial, Personal Banking & Services
7,095
7,285
-2.6%
Cost/Income
61.7%
62.2%
-0.5 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking in France, Belgium, Italy,
Luxembourg, Poland, Türkiye and Germany)
43.2
41.7
+3.5%
For the whole of 2023, on the strength of its diversification and strong
positions in the Corporate and Private Banking client segments in Europe
and in Specialised Businesses, CPBS activity was up, despite the impact
of the repositioning of Personal Finance and of the decisions by European
public authorities late in the year (in particular in connection with
mandatory reserves or the Belgian government bond issue).
Loan outstandings increased by 2.9% compared to 2022. They were up
slightly at Commercial & Personal Banking in the Eurozone (+0.8%) and up
sharply in Specialised Businesses (+11.3%). Deposits were down by 1.6%
compared to 2022 but stable in the fourth quarter 2023 compared to the
third quarter 2023 at Commercial & Personal Banking in the Eurozone,
excluding the impact of the Belgian government bonds. Private Banking
achieved good net asset inflows of EUR 12.5 billion in 2023 (or 5.0% of
assets under management at the start of the year). Hello bank! continued
to acquire customers, with 463,000 new customers in 2023 (+35.7%
compared to 31 December 2022)(3) and the pace of account openings at
Nickel was high (+22.8% compared to 31 December 2022).
2023 Universal registration document and annual financial report - BNP PARIBAS
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
Revenues(1), at EUR 26,627 million, increased by 4.3%, driven by revenue
growth at Commercial & Personal Banking (+4.6%) with an increase in net
interest revenues (+8.0%) and growth at Specialised Businesses (+3.8%;
+13.8% excluding Personal Finance).
Operating expenses(1) increased by 3.5%, to EUR 16,437 million. The jaws
effect was positive (+0.8 point), driven by Commercial & Personal Banking
(+2.1 points) and Arval & Leasing Solutions (+4.9 points).
Gross operating income(1) thus amounted to EUR 10,191 million and
increased by 5.6%.
Cost of risk(1) stood at EUR 2,923 million (EUR 2,491 million in 2022).
In 2022, it had registered a release of provision in connection with a
change in method to align with European standards (EUR 163 million at
Commercial Banking in France)(2).
The other net losses for risk on financial instruments were null overall
in 2023.
As a result, after allocating one third of Private Banking's Net Income
to Wealth Management (IPS division), CPBS achieved pre-tax income(3)
of EUR 7,095 million, a 2.6% decrease, in connection mainly with the
hyperinflationary situation in Türkiye(4) (-EUR 250 million compared to
2022).
(1) Including 100% of Private Banking (excluding PEL/CEL effects in France).
(2) Note: cost of risk does not include "Other net losses for risk on financial instruments".
(3) Including 2/3 of Private Banking (excluding PEL/CEL effects in France).
(4) Effects of application of IAS 29 and reflecting the efficiency of hedging (with CPI linkers) in T ü rkiye.
(5) Including 100% of Private Banking (excluding PEL/CEL effects).
(6) Including 2/3 of Private Banking (excluding PEL/CEL effects).
COMMERCIAL & PERSONAL BANKING IN FRANCE (CPBF)
For the whole of 2023, loan outstandings increased (+1.2% compared to
2022) across all customer segments, and adjustments in margins continued.
Deposits were down by 2.7% compared to 2022 but did stabilise gradually
(-0.6% between 30 September 2023 and 31 December 2023), with an
increase in deposits from corporate clients late in the year (+1.9% between
end-September and end-December 2023). Off-balance sheet savings
increased by 5.9% compared to 31 December 2022, and net asset inflows
in life insurance were high (+EUR 1.6 billion in 2023, +8.5% compared to
2022). Private Banking achieved good net asset inflows of EUR 4.6 billion.
Revenues(5) amounted to EUR 6,593 million, down by 0.6%. Net interest
revenues decreased by 0.7% (+2.2% excluding the impact of inflation
hedges). Fees were quasi-stable (-0.5% compared to 2022), supported by
a good performance in cash management and fees on payment means.
Operating expenses(5) at EUR 4,749 million, were up by 1.1%.
Gross operating income(5) amounted to EUR 1,844 million, down by 4.8%.
Cost of risk(5) came to EUR 485 million (EUR 237 million in 2022), or 21
basis points of outstanding customer loans. In 2022, it benefited from the
release of a provision due to a change in method in order to align with
European standards (-EUR 163 million).
As a result, after allocating one third of Private Banking's Net Income to
Wealth Management (IPS division), CPBF achieved pre-tax income(6) of
EUR 1,193 million, a 23.9% decrease.
In millions of euros
2023
2022
2023/2022
Commercial and Personal Banking in France - excluding PEL/CEL effects
Revenues
6,593
6,634
-0.6%
Incl. net interest revenue
3,498
3,522
-0.7%
Incl. fees
3,095
3,112
-0.5%
Operating Expenses and Dep.
(4,749)
(4,698)
+1.1%
Gross Operating Income
1,844
1,936
-4.8%
Cost of Risk
(485)
(237)
n.s.
Operating Income
1,358
1,699
-20.0%
Share of Earnings of Equity-Method Entities
0
1
n.s.
Other Non-Operating Items
0
25
-100.0%
Pre-T a x Income
1,358
1,725
-21.3%
Income Attributable to Wealth and Asset Management
(165)
(158)
+4.5%
Pre-T a x Income of CPBF
1,193
1,567
-23.9%
Cost/Income
72.0%
70.8%
+1.2 pts
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
11.5
11.3
+ 2.0%
2023 Universal registration document and annual financial report - BNP PARIBAS
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
In millions of euros
2023
2022
2023/2022
Revenues
2,727
2,634
+3.5%
Incl. net interest revenue
1,619
1,519
+6.6%
Incl. fees
1,108
1,115
-0.6%
Operating Expenses and Dep.
(1,804)
(1,735)
+4.0%
Gross Operating Income
923
899
+2.7%
Cost of Risk
(410)
(465)
-11.9%
Operating Income
513
433
+18.4%
Share of Earnings of Equity-Method Entities
0
0
n.s.
Other Non-Operating Items
(3)
2
n.s.
Pre-T a x Income
509
436
+16.9%
Income Attributable to Wealth and Asset Management
(22)
(26)
-15.2%
Pre-T a x Income of BNL bc
488
410
+18.8%
Cost/Income
66.2%
65.9%
+0.3 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
5.7
6.0
-3.9%
Including 100% of Private Banking in Italy for the Revenues to Pre-tax income line items.
For the whole of 2023, loan outstandings were down by 4.4% compared to
2022 and by 3.0% on the scope excluding non-performing loans. Loans to
individuals held up well and corporate loan outstandings decreased. The
management of margins at production was disciplined in a competitive
environment. Deposits expanded by 0.3% compared to 2022, with good
resilience (+3.7% compared to the third quarter 2023) and a steady
improvement in margins, in particular late in the yea r. O ff-balance sheet
savings decreased by 7.7% compared to 31 December 2022. Net asset
inflows into Private Banking were very good (EUR 2.8 billion).
Revenues(1) increased by 3.5% to EUR 2,727 million. Net interest
revenues(1) rose by 6.6%, with an acceleration in the fourth quarter
2023, driven by the margin on deposits, partially offset by the effect of
lower volumes and the increase in loan financing costs. Fees decreased
(-0.6%), thanks to good resilience in banking fees despite the decrease
in financial fees.
At EUR 1,804 million, operating expenses(1) were up by 4.0%, due mainly
to the impact of inflation.
Gross operating income(1) increased by 2.7%, to EUR 923 million.
At EUR 410 million, cost of risk(1) improved by EUR 55 million with the
steady improvement in the risk profile. It came to 53 basis points of
outstanding customer loans.
As a result, after allocating one third of Private Banking's Net Income to
Wealth Management (IPS division), BNL bc achieved pre-tax income(2)
of EUR 488 million, up very sharply by 18.8%.
(1) Including 100% of Private Banking..
(2) Including 2/3 of Private Banking.
BNL BANCA COMMERCIALE (BNL BC)
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3
2023 REVIEW OF OPERATIONS
3
Results by division/business line
COMMERCIAL & PERSONAL BANKING IN BELGIUM (CPBB)
In millions of euros
2023
2022
2023/2022
Revenues
3,990
3,764
+6.0%
Incl. net interest revenue
2,867
2,618
+9.5%
Incl. fees
1,123
1,146
-2.0%
Operating Expenses and Dep.
(2,739)
(2,615)
+4.7%
Gross Operating Income
1,251
1,149
+8.9%
Cost of Risk
(86)
(36)
n.s.
Operating Income
1,165
1,113
+4.6%
Share of Earnings of Equity-Method Entities
1
0
n.s.
Other Non-Operating Items
9
10
-7.2%
Pre-T a x Income
1,175
1,123
+4.6%
Income Attributable to Wealth and Asset Management
(84)
(74)
+13.6%
Pre-T a x Income of CPBB
1,091
1,049
+4.0%
Cost/Income
68.6%
69.5%
-0.9 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
6.1
6.1
-0.7%
Including 100% of Private Banking in Belgium for the Revenues to Pre-tax income line items.
For the whole of 2023, loan outstandings increased by 3.2% compared to
2022, driven by rises across all customer segments. Deposits decreased
by 2.0% compared to 2022 (-0.5% excluding the impact of the issue of
Belgian government bonds maturing in September 2024(1)). Off-balance
sheet savings increased by 4.1% compared to 31 December 2022, driven
by mutual funds. At EUR 2.0 billion, net asset inflows into Private Banking
were good.
Revenues(2) rose sharply by 6.0% to EUR 3,990 million. Net interest
revenues(2) were up very sharply by 9.5%, supported by margins that
held up well on deposits and despite the increase in refinancing costs and
the negative impact of the Belgium government bond issue in the fourth
quarter 2023. Fees(2) decreased by 2.0%, due to the decrease in banking
fees, partially offset by the increase in financial fees.
At EUR 2,739 million, operating expenses(2) were up by 4.7%. The jaws
effect was positive (+1.3 points), thanks to contained operating expenses,
which partially offset the impact of inflation.
Gross operating income(2) rose sharply by 8.9%, to EUR 1,251 million.
At EUR 86 million (EUR 36 million in 2022), cost of risk(2) remained low
at 6 basis points of outstanding customer loans.
As a result, after allocating one third of Private Banking's Net Income to
Wealth Management (IPS division), CPBB achieved pre-tax income(3) of
EUR 1,091 million, up sharply by 4.0%.
(1) Impact of -EUR 6.9bn on end-of-period deposit volumes offset by increased volumes on securities accounts (+EUR 5.1bn at end of period) included in off-balance sheet client assets
but not included in off-balance sheet savings.
(2) Including 100% of Private Banking.
(3) Including 2/3 of Private Banking.
2023 Universal registration document and annual financial report - BNP PARIBAS
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2023 REVIEW OF OPERATIONS
3
Results by division/business line
COMMERCIAL & PERSONAL BANKING IN LUXEMBOURG (CPBL)
In millions of euros
2023
2022
2023/2022
Revenues
592
475
+24.7%
Incl. net interest revenue
497
377
+31.6%
Incl. fees
96
97
-1.7%
Operating Expenses and Dep.
(302)
(275)
+9.8%
Gross Operating Income
290
200
+45.3%
Cost of Risk
(8)
19
n.s.
Operating Income
283
219
+29.1%
Share of Earnings of Equity-Method Entities
0
0
n.s.
Other Non-Operating Items
5
3
+71.4%
Pre-T a x Income
288
222
+29.8%
Income Attributable to Wealth and Asset Management
(7)
(6)
+12.5%
Pre-T a x Income of CPBL
281
216
+30.3%
Cost/Income
51.0%
57.9%
-6.9 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
0.8
0.8
-0.6%
Including 100% of Private Banking in Luxembourg for the Revenues to Pre-tax income line items.
For the whole of 2023, loan outstandings increased by 1.3% and were up
across all customer segments. Deposits decreased by 4.2%.
Revenues(1) rose very sharply by 24.7% to EUR 592 million. Net interest
revenues(1) were up very sharply by 31.6%, thanks to margins on deposits
that held up well, particularly in corporate clients, and the increase in
loan outstandings. Fees(1) were down by 1.7% compared to a high 2022
base.
At EUR 302 million, operating expenses(1) increased by 9.8%. The jaws
effect was very positive (+14.9 points).
Gross operating income(1) rose very sharply by 45.3% to EUR 290 million.
At EUR 8 million, cost of risk(1) was very low.
As a result, after allocating one third of Private Banking's Net Income to
Wealth Management (IPS division), CPBL thus achieved pre-tax income(2)
of EUR 281 million, up very sharply by 30.3%.
(1) Including 100% of Private Banking.
(2) Including 2/3 of Private Banking.
2023 Universal registration document and annual financial report - BNP PARIBAS
138
3
2023 REVIEW OF OPERATIONS
Results by division/business line
EUROPE-MEDITERRANEAN
In millions of euros
2023
2022
2023/2022
Revenues
2,687
2,346
+14.5%
Incl. net interest revenue
2,241
1,895
+18.3%
Incl. fees
446
451
-1.2%
Operating Expenses and Dep.
(1,666)
(1,658)
+0.5%
Gross Operating Income
1,021
688
+48.4%
Cost of Risk
(44)
(153)
-70.9%
Other net losses for risk on financial instruments
0
0
n.s.
3
Operating Income
977
535
+82.5%
Share of Earnings of Equity-Method Entities
283
376
-24.7%
Other Non-Operating Items
(183)
(87)
n.s.
Pre-T a x Income
1,077
824
+30.8%
Income Attributable to Wealth and Asset Management
(47)
(16)
n.s.
Pre-T a x Income of Europe-Mediterranean
1,030
808
+27.6%
Cost/Income
62.0%
70.7%
-8.7 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
5.3
5.5
-2.8%
Including 100% of Private Banking in Poland and in T ü rkiye for the Revenues to Pre-tax income line items.
For the whole of 2023, loan outstandings were up by 2.2%(1) compared to
2022. T a rgeted origination was prudent in Türkiye and Poland, particularly
with individual customers. Deposits increased by 8.1%(1) compared to
2022, with an increase in all countries.
Revenues(2), at EUR 2,687 million, were up very sharply by 19.4%(3), due
in particular to the good increase in net interest revenues in Poland.
Operating expenses(2), at EUR 1,666 million, were up by 5.6%(3), due to
high inflation.
Gross operating income(2), at EUR 1,021 million, rose very sharply by
51.9%(3).
Cost of risk(2) came to EUR 44 million (EUR 153 million in 2022), or 13
basis points of outstanding customer loans(4). The other net losses for
risk on financial instruments are null overall in 2023.
The hyperinflationary situation in Türkiye(5) led to a decrease in "other
non-operating items" of EUR 212 million compared to 2022.
As a result, after allocating one third of Private Banking's Net Income
to Wealth Management (IPS division), Europe-Mediterranean achieved
pre-tax income(6) of EUR 1,030 million, up very sharply by 23.2%(3).
(1) At constant scope and exchange rates.
(2) Including 100% of Private Banking.
(3) At constant scope and exchange rates, excluding T ü rkiye at historical exchange rates in accordance with IAS 29.
(4) The extraordinary provision on mortgage loans in Poland is booked in Corporate Centre under "Other net losses for risk on financial instruments" (EUR 450 million) and therefore
has no impact on cost of risk at Europe-Mediterranean.
(5) Effects of application of IAS 29 and reflecting the efficiency of hedging (with CPI linkers ) in T ü rkiye.
(6) Including 2/3 of Private Banking.
2023 Universal registration document and annual financial report - BNP PARIBAS
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3
2023 REVIEW OF OPERATIONS
3
Results by division/business line
SPECIALISED BUSINESSES – PERSONAL FINANCE
In millions of euros
2023
2022
2023/2022
Revenues
5,163
5,387
-4.2%
Operating Expenses and Dep.
(2,998)
(2,922)
+2.6%
Gross Operating Income
2,164
2,465
-12.2%
Cost of Risk
(1,600)
(1,373)
+16.5%
Operating Income
565
1,092
-48.3%
Share of Earnings of Equity-Method Entities
61
57
+7.1%
Other Non-Operating Items
4
(29)
n.s.
Pre-T a x Income
630
1,121
-43.8%
Cost/Income
58.1%
54.2%
+3.9 pt
Allocated Equity (€bn, year to date)
9.2
8.1
+12.7%
For the whole of 2023, Personal Finance continued its transformation. The
geographical refocusing of its business activities and the reorganisation
of its operating model are going smoothly. Seven entities, in particular
in Central Europe, were divested or put into run-off. The effects of the
new auto loan partnerships continued and contributed to the expansion
in volumes and to the structural improvement in the risk profile. Loan
outstandings were up by 10.1% compared to 2022, driven in particular
by robust growth in mobility. There was greater selectivity in loan
origination. Production margins continued to improve despite increased
pressure.
Revenues, at EUR 5,163 million, decreased by 4.2% (-3.1% at constant
scope and exchange rates), due to pressure on margins and higher
financing costs and despite increased volumes.
Operating expenses, at 2,998 million, rose by 2.6%, in connection with
targeted development projects.
Gross operating income decreased by 12.2% to EUR 2,164 million.
Cost of risk came to EUR 1,600 million (EUR 1,373 million in 2022), or
155 basis points of outstanding customer loans. Cost of risk remains low
despite the impact of the current downturn, on the back of the structural
improvement in the risk profile.
Pre-tax income at Personal Finance thus amounted to EUR 630 million,
down by 43.8%, due to the decrease in gross operating income and the
impact of the current downturn on the cost of risk.
SPECIALISED BUSINESSES – AR V A L & LEASING SOLUTIONS
In millions of euros
2023
2022
2023/2022
Revenues
3,869
3,438
+12.5%
Operating Expenses and Dep.
(1,501)
(1,395)
+7.6%
Gross Operating Income
2,368
2,043
+15.9%
Cost of Risk
(167)
(146)
+14.2%
Operating Income
2,201
1,897
+16.0%
Share of Earnings of Equity-Method Entities
0
8
n.s.
Other Non-Operating Items
(14)
52
n.s.
Pre-T a x Income
2,188
1,957
+11.8%
Cost/Income
38.8%
40.6%
-1.8 pt
Allocated Equity (€bn, year to date)
3.8
3.5
+10.0%
For the whole of 2023, with 1.7 million financed vehicles(1), Arval's
financed fleet expanded robustly (+6.9% compared to 2022). The volume
effect was favourable on vehicle sales on the back of shorter delivery
times (342,000 vehicles sold in 2023, compared to a low base in 2022).
At EUR 23.5 billion, outstandings at Leasing Solutions increased by 4.4%
compared to 2022. Business drive was good, with production volumes
up by 4.3% compared to 2022.
(1) Fleet at end of period.
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Results by division/business line
Revenues, at EUR 3,869 million, rose sharply by 12.5%, driven by the steep
increase in Arval revenues (+16.8% compared to 2022), supported by
increases in outstandings and in the number of vehicles sold, despite the
gradual normalisation, but at a high level, of used car prices. Revenues
at Leasing Solutions rose with the increase in outstandings.
Operating expenses, at EUR 1,501 million, rose by 7.6%. The jaws effect
was positive (+4.9 pts).
Pre-tax income at Arval and Leasing Solutions was up sharply by 11.8%
to EUR 2,188 million.
SPECIALISED BUSINESSES – NEW DIGITAL BUSINESSES (NICKEL, FLOA, L Y F)
AND PERSONAL INVESTORS
In millions of euros
2023
2022
2023/2022
Revenues
1,007
846
+19.0%
Operating Expenses and Dep.
(677)
(578)
+17.1%
Gross Operating Income
330
268
+23.0%
Cost of Risk
(123)
(100)
+23.5%
Operating Income
206
168
+22.7%
Share of Earnings of Equity-Method Entities
(9)
(10)
-10.8%
Other Non-Operating Items
0
1
-56.8%
Pre-T a x Income
198
159
+24.4%
Income Attributable to Wealth and Asset Management
(3)
(2)
+57.8%
Pre-T a x Income of New Digital Businesses & Personal Investors
195
157
+23.9%
Cost/Income
67.3%
68.3%
-1.0 pt
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
0.8
0.5
+54.1%
Including 100% of Private Banking in Germany for the Revenues to Pre-tax income line items.
For the whole of 2023, Nickel maintained a steady increase in account
openings (more than 63,000 per month(1)). The number of Floa's active
partnerships rose very quickly (2.8-fold since 1 January 2023). Personal
Investors achieved a 12.4% increase in assets under management
compared to 31 December 2022, driven by the very high level of customer
acquisitions (about 230,000 in 2023).
Revenues(2), at EUR 1,007 million, rose very sharply by 19.0%, driven by
the increase at New Digital Businesses with the development of activity
and the strong increase in Personal Investors revenues, driven by the
interest-rate environment.
Operating expenses(2), at EUR 677 million, increased by 17.1%. The jaws
effect was positive.
Gross operating income(2) rose very sharply by 23.0%, to EUR 330 million.
Cost of risk(2) came to EUR 123 million (EUR 100 million in 2022).
Pre-tax income(3) at New Digital Businesses and Personal Investors
after allocating one third of results of Private Banking in Germany
to Wealth Management (IPS division), rose very sharply by 23.9%, to
EUR 195 million.
(1) On average in the fourth quarter 2023 in all countries.
(2) Including 100% of Private Banking in Germany.
(3) Including 2/3 of Private Banking in Germany.
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Results by division/business line
INVESTMENT & PROTECTION SERVICES (IPS)
In millions of euros
2023
2022
2023/2022
Revenues
5,590
5,813
-3.8%
Operating Expenses and Dep.
(3,566)
(3,552)
+0.4%
Gross Operating Income
2,024
2,261
-10.5%
Cost of Risk
(13)
5
n.s.
Operating Income
2,011
2,265
-11.2%
Share of Earnings of Equity-Method Entities
224
178
+25.7%
Other Non-Operating Items
(76)
88
n.s.
Pre-T a x Income
2,159
2,532
-14.7%
Cost/Income
63.8%
61.1%
+2.7 pt
Allocated Equity (€bn, year to date)
10.3
10.0
+3.8%
For the whole of 2023, IPS, a player of reference in protection, savings,
and responsible investment, continued to deploy its plan and to pursue
its strategic initiatives. Insurance results improved, driven by Protection
and an increased contribution from partnerships. Wealth Management
achieved strong growth in revenues and good net asset inflows
(+EUR 17.1 billion in 2023(1)) in all geographies. Asset Management(2)
performed well, with net asset inflows of +EUR 13.4 billion in 2023.
Results at Real Estate and Principal Investments were strongly affected by
a high base effect and a market at Real Estate that slowed considerably.
Revenues decreased by 3.8% but increased by 3.7% without the
contribution from Real Estate and Principal Investments. They were
driven by growth at Wealth Management (+6.0%), Insurance (+3.6%)
and Asset Management(2) (+1.7%, excluding a negative non-recurring
base effect).
At EUR 3,566 million, operating expenses rose by 0.4% (+1.7% excluding
the contribution of Real Estate and Principal Investments).
The jaws effect was positive (+2.1 points) excluding the current downturn
impact at Real Estate and Principal Investments.
Gross operating income came to EUR 2,024 million, down by 10.5%.
At EUR 2,159 million, IPS's pre-tax income was down by 14.7% (+1.8%
excluding the contribution of Real Estate and Principal Investments).
(1) Excluding the impact of the sale of a portfolio in Spain.
(2) Excluding Real Estate and Principal Investments.
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Results by division/business line
INSURANCE AND WEA L T H MANAGEMENT
➤
INSURANCE
In millions of euros
2023
2022
2023/2022
Revenues
2,090
2,016
+3.6%
Operating Expenses and Dep.
(808)
(794)
+1.8%
Gross Operating Income
1,281
1,222
+4.8%
Cost of Risk
0
0
n.s.
Operating Income
1,281
1,222
+4.8%
Share of Earnings of Equity-Method Entities
193
104
+84.4%
3
Other Non-Operating Items
(80)
13
n.s.
Pre-T a x Income
1,394
1,340
+4.1%
Cost/Income
38.7%
39.4%
-0.7 pt
Allocated Equity (€bn, year to date)
7.0
7.1
-1.4%
➤
WEALTH MANAGEMENT
In millions of euros
2023
2022
2023/2022
Revenues
3,500
3,797
-7.8%
Operating Expenses and Dep.
(2,757)
(2,758)
-0.1%
Gross Operating Income
743
1,038
-28.5%
Cost of Risk
(13)
5
n.s.
Operating Income
730
1,043
-30.0%
Share of Earnings of Equity-Method Entities
31
74
-57.4%
Other Non-Operating Items
4
75
-95.2%
Pre-T a x Income
765
1,192
-35.8%
Cost/Income
78.8%
72.7%
+6.1 pt
Allocated Equity (€bn, year to date)
3.4
2.9
+16.3%
Inflows and assets under management
As of 31 December 2023, assets under management(1) came to
EUR 1,236 billion.They reflected a market performance effect
of +EUR 54.4 billion and the effect of strong net asset inflows of
+EUR 23.8 billion, partially offset by the unfavourable forex impact of
-EUR 9.8 billion. Net asset inflows were good and driven mainly by asset
inflows into money-market funds at Asset Management and good inflows
at Wealth Management. Assets under management(1) were up by 5.5%
compared to 31 December 2022.
As of 31 December 2023, assets under management(1) broke down into
EUR 566 billion at Asset Management and Real Estate, EUR 415 billion
at Wealth Management, and EUR 255 billion at Insurance.
Insurance
For the whole of 2023, savings activity achieved gross asset inflows of
EUR 22.9 billion, driven by strong business drive in France, with net asset
inflows sustained by inflows into unit-linked policies. Protection activity
continued to rise in Latin America and France, in particular in affinity
insurance, property & casualty insurance, and individual protection.
Revenues rose by 3.6%, to EUR 2,090 million, driven mainly by the good
performance at Protection and the increase in the technical result.
Operating expenses, at EUR 808 million, were up by 1.8%.
At EUR 1,394 million, pre-tax income at Insurance was up by 4.1%,
including strong contributions from associates in all regions. In the fourth
quarter 2023, it reflected the negative exceptional impact of the sale of
a business in Argentina.
(1) Including distributed assets.
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2023 REVIEW OF OPERATIONS
Results by division/business line
Wealth & Asset Management
For the whole of 2023, activity improved at Private Wealth Management
with good net asset inflows (EUR 17.1 billion(1) in 2023), in particular in
Commercial & Personal Banking and with large clients. Revenues were
up very sharply sustained by the interest-rate environment.
Asset Management(2) achieved sustained asset inflows, driven by inflows
into money-market funds despite net outflows from medium- and long-
term funds. Revenues rose with the effect of inflows and marketing drive.
Real Estate decreased sharply on a market that slowed considerably,
and the performance of Principal Investments compares with a high
2022 base.
Revenues, at EUR 3,500 million, decreased by 7.8% but increased by +3.8%
3
excluding the contribution from Real Estate and Principal Investments.
They were driven by higher revenues at Wealth Management (+6.0%) and
Asset Management(2) (+1.7% excluding a negative third quarter 2022 base
effect), offset by the decrease at Real Estate and Principal Investments.
Operating expenses were down by 0.1% (+1.6% excluding the contribution
from Real Estate and Principal Investments), at EUR 2,757 million. The
jaws effect was positive (+2.2 points) excluding the impact of the current
downturn at Real Estate and Principal Investments.
Pre-tax income at Wealth & Asset Management thus amounted to
EUR 765 million, down by 35.8%. This compares with a high base in 2022,
which had reflected the impact of capital gains on divestment due to a
sale at Wealth Management and the creation of a joint venture at Asset
Management.
(1) Excluding the impact of the sale of a portfolio in Spain.
(2) Excluding Real Estate and Principal Investments.
CORPORATE CENTRE
In millions of euros
2023
2022
2023/2022
Revenues
(2,141)
(1,718)
+24.6%
Incl. Restatement of the volatility (Insurance business)
(40)
(384)
-89.6%
Incl. Restatement of attributable costs (Internal Distributors)
(1,041)
(1,056)
-1.4%
Operating Expenses and Dep.
(509)
(107)
n.s.
Incl. Restructuring, IT Reinforcement and Adaptation Costs
(852)
(490)
+73.8%
Incl. Restatement of attributable costs (Internal Distributors)
1,041
1,056
-1.4%
Gross Operating Income
(2,650)
(1,824)
+45.3%
Cost of Risk
(37)
(185)
-80.1%
Other net losses for risk on financial instruments
(775)
0
n.s.
Operating Income
(3,462)
(2,010)
+72.3%
Share of Earnings of Equity-Method Entities
19
23
-18.7%
Other Non-Operating Items
171
(59)
n.s.
Pre-T a x Income
(3,272)
(2,046)
+60.0%
Allocated Equity (€bn, year to date)
4.5
3.7
+23.1%
IFRS 17 "Insurance contracts" has replaced IFRS 4 "Insurance contracts"
since 1 January 2023. IFRS 17 entered into force together with the
implementation of IFRS 9 for insurance activities.
The main effects are as follows:
■ Operating expenses deemed "attributable to insurance activities"
are recognised in deduction of revenues and no longer booked in
operating expenses. These accounting entries apply only to Insurance
and to Group entities (other than in the Insurance business line) that
distribute insurance contracts (i.e. internal distributors) and have no
impact on gross operating income. The impact of these entries for
internal distributors is presented in Corporate Centre, in order not to
impede the readability of their financial performance.
■ The impact of the volatility generated by the fair value accounting of
certain assets through profit and loss (IFRS 9) is presented in Corporate
Centre and therefore has no impact on Insurance revenues.
As of 1 January 2023, Corporate Centre thus includes restatements, which
will be reported separately each quarter to improve readability.
For the whole of 2023, revenues on restatements related to insurance
activities in Corporate Centre amounted to -EUR 1,081 million
(-EUR 1,440 million in 2022). This included -EUR 1,041 million from
the impact of restating "attributable" operating expenses of internal
distributors (-EUR 1,056 million in 2022) and -EUR 40 million from the
impact of volatility at Insurance generated by the fair value accounting
of assets through profit and loss (IFRS 9) (-EUR 384 million in 2022).
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2023 REVIEW OF OPERATIONS
Results by division/business line
Operating expenses from restatements related to insurance activities in
Corporate Centre amounted to -EUR 1,041 million (-EUR 1,056 million
pour 2022).
Corporate Centre's pre-tax income from restatements related to
insurance activities thus amounted to -EUR 40 million (-EUR 384 million
in 2022).
For the whole of 2023, the extraordinary items are recognised in Corporate
Centre. Corporate Centre's revenues excluding restatements related to
insurance activities came to -EUR 1,060 million (-EUR 278 million in
2022), -EUR 122 million excluding the impact of extraordinary items.
They indeed reflected the extraordinary impact of the adjustment of
hedges, due to changes in TLTRO terms and conditions decided by the
3
European Central Bank in the fourth quarter 2022 (-EUR 938 million) and
the exceptional impact of provisions for litigation (-EUR 125 million). They
also reflected a negative impact of EUR 55 million from the revaluation of
proprietary credit risk included in derivatives (DVA) (+EUR 185 million in
2022 offset by the impact of a negative non-recurring item).
Corporate Centre's operating expenses excluding restatements related
to insurance activities stood at EUR 1,551 million (EUR 1,163 million in
2022), EUR 1,049 million excluding the impact of extraordinary items.
They reflected the extraordinary impact of overall adaptation costs
related in particular to Personal Finance (EUR 276 million) and the impact
of the bank levy in Great Britain (EUR 226 million), and the exceptional
impact of restructuring costs and adaptation costs in the amount of
EUR 182 million (EUR 189 million in 2022) and IT reinforcement costs
of EUR 395 million (EUR 302 million in 2022).
Corporate Centre's cost of risk excluding restatements related to
insurance activities(1) came to EUR 37 million (EUR 185 million in 2022).
Other net losses for risk on financial instruments, i.e. charges related
to the risk of invalidation or non-enforceability of financial instruments
granted came to EUR 775 million and are considered as extraordinary
items. In 2023, they reflected the extraordinary impact of provisions
on mortgage loans in Poland (EUR 450 million), provisions for litigation
related to Personal Finance (EUR 221 million), and provisions for risk on
receivables (EUR 104 million).
Other non-operating items of Corporate Centre excluding restatements
related to insurance activities amounted to EUR 190 million
(-EUR 36 million in 2022). They reflected the positive impact of
capital gains on sales in the second quarter 2023. In 2022, they had
reflected the negative impact of the impairment of Ukrsibbank shares
and the reclassification to profit and loss of exchange differences(2)
(-EUR 433 million), partially offset by the positive effects of negative
goodwill at bpost bank (+EUR 244 million) and a capital gain on the sale
of a stake (+EUR 204 million).
Pre-tax income of Corporate Centre excluding restatements related
to insurance activities thus amounted to -EUR 3,233 million
(-EUR 1,662 million in 2022), -EUR 1,017 million excluding the impact
of extraordinary items.
(1) Note: cost of risk does not include the other net losses for risk on financial instruments.
(2) Previously recorded in consolidated equity.
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3
Balance sheet
3.3 Balance sheet
ASSETS
OVERVIEW
Since 1 January 2023, BNP Paribas Group's insurance entities have
applied IFRS 17 "Insurance Contracts" and IFRS 9 "Financial Instruments".
The effects of this change on the balance sheet at 31 December 2022 are
presented in chapter 4 note 2 IFRS 17 and IFRS 9 first time application
impacts.
At 31 December 2023, the total consolidated balance sheet of the
BNP Paribas Group amounted to EUR 2,591.5 billion, down by -3% from
31 December 2022 (EUR 2,663.7 billion restated according to IFRS 17
and 9). The Group's main assets include cash and balances at central
banks, financial instruments at fair value through profit or loss, loans and
advances to customers, debt securities at amortised cost, investments
and other assets related to insurance activities and accrued income
and other assets, which, togethe r, a ccounted for 94% of total assets at
31 December 2023 (91% at 31 December 2022). The -3% decrease in
assets is mainly due to the evolution of:
■ financial instruments at fair value through profit or loss which increased
by +7% (+EUR 45.8 billion, or EUR 730.9 billion at 31 December 2023);
■ financial instruments at fair value through equity which increased by
+38% (+EUR 14.5 billion, or EUR 52.5 billion at 31 December 2023);
■ investments and other assets related to insurance activities
which increased by +5% (+EUR 11.6 billion, or EUR 257.1 billion at
31 December 2023);
■ loans and advances to credit institutions which decreased by -25%
(-EUR 8.3 billion, or EUR 24.3 billion at 31 December 2023);
■ accrued income and other assets which decreased by -18%
(-EUR 37.8 billion, or EUR 170.8 billion at 31 December 2023);
■ assets held for sales which decreased by -EUR 86.8 billion following
the sale of the retail and commercial banking activities in the United
States operated by the BancWest cash-generating unit.
CASH AND BALANCES AT CENTRAL BANKS
Cash and central banks accounted for EUR 288.3 billion
at
31 December 2023, decreased by -9.5% from 31 December 2022
(EUR 318.6 billion).
FINANCIAL INSTRUMENTS AT FAIR VALUE
THROUGH PROFIT OR LOSS
Financial assets recognised at market or model value through profit or
loss are composed of trading portfolios, financial derivatives and certain
assets not held for trading purposes, whose characteristics do not permit
recognition at amortised cost or at fair value through equity. Financial
assets in the trading portfolio include securities, loans and repurchase
agreements.
These assets are measured at market or model value at each balance
sheet date.
Total financial instruments at market value by profit and loss increased
by +7% (+EUR 45.8 billion) compared with 31 December 2022.
This increase is mainly due to the +27.4% increase in securities
(+EUR 45.6 billion to EUR 211.6 billion at 31 December 2023), and by the
+18.9% increase in loans and repurchase agreements (+EUR 36.1 billion
to EUR 227.2 billion at 31 December 2023), partially offset by the
-10.9% decrease in derivative financial instruments (-EUR 35.9 billion
to EUR 292.1 billion at 31 December 2023).
LOANS AND AD V A NCES TO CREDIT
INSTITUTIONS
Loans and advances to credit institutions (net of impairment) amounted
to EUR 24.3 billion at 31 December 2023, a decrease of -EUR 8.3 billion
compared with 31 December 2022, and are split between on demand
accounts, loans to credit institutions and repurchase agreements.
Repurchase agreements were down by -17% for a total of EUR 4.9 billion
at 31 December 2023, compared with EUR 5.9 billion at 31 December
2022. Loans to credit institutions decreased by -22% to EUR 12.3 billion at
31 December 2023, compared with EUR 15.8 billion at 31 December 2022.
Impairment provisions were stable at EUR 99 million at 31 December 2023.
LOANS AND AD V A NCES TO CUSTOMERS
Loans and advances to customers are divided into ordinary accounts,
loans to customers, reverse repurchase agreements and finance leases.
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2023 REVIEW OF OPERATIONS
3
Balance sheet
Loans and advances to customers (net of impairment) amounted to
EUR 859.2 billion at 31 December 2023, compared with EUR 857 billion
at 31 December 2022, increasing by +0.3%. This is due to the increase in
financial leases which amounted to EUR 47.7 billion at 31 December 2023,
increasing by +14.9% compared with 31 December 2022 and an increase
in on demand accounts which amounted to 44 billion at 31 December
2023, increasing by +9.6% compared with 2022 offset, by the decrease
in loans to customers (-1%, or EUR 767 billion at 31 December 2023,
compared with EUR 774.6 billion at 31 December 2022). Impairment
provisions were down to EUR 17.5 billion at 31 December 2023, compared
with EUR 18.3 billion at 31 December 2022.
DEBT SECURITIES AT AMORTISED
COST OR AT MARKET OR MODEL V A LUE
THROUGH EQUITY
Debt securities that are not held for trading purposes and which meet
the cash flow criterion established by IFRS 9 are recognised:
■ at amortised cost if managed to collect cash flows by collecting
contractual payments over the life of the instrument; or
■ at fair value through equity if held in a business model whose objective
is achieved through both the collection of contractual cash flows and
the sale of financial assets.
Debt securities at amortised cost
Debt securities at amortised cost are measured using the effective interest
rate method. They totalled EUR 121.2 billion at 31 December 2023 (net
of impairment), compared with EUR 114 billion at 31 December 2022,
thus increasing by +6.3%.
Debt securities at fair value through equity
These assets are measured at market or model value through equity at
each balance sheet date. They increased by EUR 14.4 billion between
31 December 2022 and 31 December 2023, amounting to EUR 50.3 billion.
Debt securities at fair value through equity posted an unrealised loss of
-EUR 585 million at 31 December 2023, compared with -EUR 866 million
at 31 December 2022, an increase of +EUR 281 billion.
INVESTMENTS AND OTHER ASSETS
RELATED TO INSURANCE ACTIVITIES
Financial investments and other assets related to insurance activities
mainly include financial instruments corresponding to investments of
liabilities relating to insurance contracts and in particular unit-linked
contracts, derivative instruments subscribed, investment properties,
equity-method investments and assets related to insurance activities.
Investments and other assets related to insurance activities amounted
to EUR 257.1 billion at 31 December 2023, an increase of +4.7%
compared with 31 December 2022. This variation is mainly due to an
increase of +8.9% in financial assets at fair value through profit or loss
(EUR 156.8 billion at 31 December 2023, compared with EUR 144 billion
at 31 December 2022), and to a decrease of 15.1% in investment properties
(EUR 7.5 billion at 31 December 2023, compared with EUR 8.8 billion at
31 December 2022).
Financial assets at fair value through equity have an unrealised loss of
-EUR 5.1 billion at 31 December 2023, compared with -EUR 10.3 billion
at 31 December 2022, an increase of +EUR 5.2 billion.
ACCRUED INCOME AND OTHER ASSETS
Accrued income and other assets are divided between guarantee deposits
and bank guarantees paid, collection accounts, accrued income and
prepaid expenses, other debtors and miscellaneous assets.
Accrued income and other assets amounted to EUR 170.8 billion at
31 December 2023, compared with EUR 208.5 billion at 31 December
2022, down -18.1%. This decrease is in particular related to guarantee
deposits and bank guarantees paid, down by -EUR 36.9 billion (-23.6%).
LIABILITIES
OVERVIEW
The Group's liabilities (excluding equity) amounted to EUR 2,462.6 billion
at 31 December 2023, down by -3% from 31 December 2022
(EUR 2,537.7 billion restated according to IFRS 17 and 9). The Group's
main liabilities consist of financial instruments at fair value through
profit or loss, deposits from customers and from credit institutions, debt
securities, accrued expenses and other liabilities, and technical reserves
and other insurance liabilities, which, togethe r, a ccounted for 97% of the
Group's total liabilities (excluding equity) at 31 December 2023 (94% at
31 December 2022). The -3% decrease in liabilities is mainly due to the
evolution of:
■ financial instruments at fair value through profit or loss which increased
by +6% (+EUR 42.2 billion, or EUR 741.2 billion at 31 December 2023);
■ deposits from credit institutions which decreased by -24%
(-EUR 29.5 billion, or EUR 95.2 billion at 31 December 2023);
■ deposits from customers which decreased by -2% (-EUR 19.5 billion,
or EUR 988.5 billion at 31 December 2023);
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2023 REVIEW OF OPERATIONS
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Balance sheet
■ accrued expenses and other liabilities which decreased by -22%
(-EUR 41.3 billion, or EUR 143.7 billion at 31 December 2023);
■ liabilities associated with assets held for sale which decreased
by -EUR 77 billion following the sale of the retail and commercial
banking activities in the United States operated by the BancWest cash-
generating unit.
FINANCIAL INSTRUMENTS AT FAIR OR
MODEL V A LUE THROUGH PROFIT OR LOSS
The trading portfolio consists mainly of sales of borrowed securities,
repurchase agreements and financial derivatives. Financial liabilities
designated as at fair or model value through profit or loss are mainly
composed of issues originated and structured on behalf of clients, where
the risk exposure is managed in combination with the hedging strategy.
These types of issues contain significant embedded derivatives, whose
changes in value are offset by changes in value of the hedging instruments.
Total financial instruments at fair or model value through profit or loss
increased by +6.0% (+EUR 42.2 billion) compared with 31 December
2022, related mainly to the +16.9% increase in repurchase agreement
operations (+EUR 39.5 billion to EUR 273.6 billion at 31 December 2023)
and the +5.8% increase in securities (+EUR 5.8 billion to EUR 104.9 billion
in 31 December 2023), partially offset by the -7.1% decrease in financial
derivatives (-EUR 21.2 billion to EUR 278.9 billion at 31 December 2023).
DEPOSITS FROM CREDIT INSTITUTIONS
Amounts due to credit institutions consist primarily of interbank
borrowings, demand deposits and repurchase agreements. Amounts
due to credit institutions decreased by -23.7% or -EUR 29.5 billion to
EUR 95.2 billion at 31 December 2023. This decrease mainly results
from the -47.4% decrease in interbank borrowings EUR 54.8 billion at
31 December 2023 compared with EUR 104.1 billion at 31 December
2022.
DEPOSITS FROM CUSTOMERS
Deposits from customers consist primarily of on-demand deposits, term
accounts, savings accounts and repurchase agreements. Deposits from
customers amounted to -EUR 988.5 billion, down by -EUR 19.5 billion
from 31 December 2022. This is due to the -8.5% decrease in on-demand
deposits (a decrease of -EUR 50.1 billion, to EUR 542.1 billion as at
31 December 2023) and to the increase of +15.5% in term accounts and
short-term notes (an increase of +EUR 39.3 billion, to EUR 292.5 billion
as at 31 December 2023).
DEBT SECURITIES
This category includes negotiable certificates of deposit and bond issues
but does not include debt securities classified as financial liabilities at fair
or model value through profit or loss (see note 5.h to the consolidated
financial statements). Debt securities rose from EUR 155.4 billion at
31 December 2022 to EUR 191.5 billion at 31 December 2023.
ACCRUED EXPENSE AND OTHER
LIABILITIES
Accrued expense and other liabilities consist of guarantee deposits
received, collection accounts, accrued expense and deferred income,
lease liabilities, as well as other creditors and miscellaneous liabilities.
Accrued expense and other liabilities amounted to EUR 143.7 billion at
31 December 2023, compared with EUR 185 billion at 31 December 2022,
a decrease of -22.3%. This decrease is mainly due to guarantee deposits
received, down by -EUR 36.4 billion (-29.4%).
LIABILITIES RELATED TO INSURANCE
CONTRACTS
Liabilities related to insurance contracts increased by +3.9% compared
with 31 December 2022 and amounted to EUR 218 billion at
31 December 2023 (EUR 209.8 billion at 31 December 2022), mainly due
to the increase in the valuation of underlining assets related to insurance
contracts not measured under the Premium Allocation approach.
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Balance sheet
MINORITY INTERESTS
Minority interests amounted to EUR 5.1 billion at 31 December 2023, compared with EUR 4.8 billion at 31 December 2022.
SHAREHOLDERS' EQUITY
Shareholders' equity(before dividend payout) amounted to
EUR 123.7 billion at 31 December 2023, compared with EUR 121.2 billion
3
at 31 December 2022 (restated in accordance with IFRS 17 and 9).
This EUR 2.5 billion increase is mainly attributable to the profit of the
period which amounted to EUR 11.0 billion, to share buybacks for
–EUR 5.0 billion, to the distribution of dividends on 2022 profit for
–EUR 4.7 billion and to undated super subordinated notes' issuances
for EUR 1.7 billion.
FINANCING AND GUARANTEE COMMITMENTS
FINANCING COMMITMENTS
Financing commitments given mainly consist mostly of documentary
credit, other credit confirmations and other commitments. They
decreased by -EUR 17.5 billion compared with 31 December 2022, to
EUR 369.5 billion at 31 December 2023.
Financing commitments given to customers decreased by -4.4% to
EUR 365.8 billion at 31 December 2022 and those given to credit
institutions decreased by -EUR 0.6 billion to EUR 3.7 billion at
31 December 2023.
Financing commitments received consist mainly of financing commitments
received from credit institutions in the context of refinancing from
central banks. Financing commitments received increased by +5.8%, to
EUR 72.8 billion at 31 December 2023, compared with EUR 68.8 billion
at 31 December 2022.
GUARANTEE COMMITMENTS
Guarantee commitments given rose by +6.5% to EUR 190.3 billion at
31 December 2023 (compared with EUR 178.8 billion at 31 December
2022); this increase comes from the guarantee commitments given
to credit institutions (an increase of +4.6% to EUR 63.1 billion at
31 December 2023), and the increase of guarantee commitments to
customers by +7.4% to EUR 127.2 billion at 31 December 2023 (compared
with EUR 118.4 billion at 31 December 2022).
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Profit and loss account
3.4 Profit and loss account
REVENUES FROM CONTINUING ACTIVITIES
In millions of euros
Year to
31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Change
(2023/2022)
Net interest income
19,058
20,933
-9.0%
3
Net commission income
9,821
10,165
-3.4%
Net gain on financial instruments at fair value through profit or loss
10,346
9,352
+10.6%
Net gain on financial instruments at fair value through equity
28
138
-79.7%
Net gain on derecognised financial assets at amortised cost
66
(41)
ns
Net income from insurance activities
2,320
1,901
+22.0%
Net income from other activities
4,235
2,982
+42.0%
REVENUES FROM CONTINUING ACTIVITIES
45,874
45,430
+1.0%
OVERVIEW
The increase of +EUR 444 million in the Group's revenues between
2022 and 2023 was mainly due to the increase of +EUR 1 billion in net
gain on financial instruments at fair value through profit or loss and
+EUR 1.3 billion in net income from other activities partially offset by
the decrease of -EUR 1.9 billion in net interest margin.
NET INTEREST INCOME
This line item includes net interest income and expense related to
customer transactions, interbank transactions, debt instruments issued
by the Group, cash flow hedge instruments, derivatives used for interest-
rate portfolio hedge, debt securities at amortised cost or at fair value
through equity, and non-trading instruments at fair value through profit
or loss.
More specifically, the "Net interest income" line item includes:
■ net interest income from loans and advances, including interest,
transaction costs, fees and commissions included in the initial value
of the loan. These items are calculated using the effective interest
method, and recognised in the profit and loss account over the life
of the loan;
■ net interest income from debt securities held by the Group, which
are measured at amortised cost or at fair value through equity (for
the interest calculated using the effective interest method), and from
non-trading debt securities at fair value through profit or loss (for the
contractual accrued interest);
■ net interest income from cash flow hedges, which are used in
particular to hedge the interest rate risk on variable-rate assets and
liabilities. Changes in the fair value of cash flow hedges are recorded
in equity. The amounts recorded in equity over the life of the hedge
are transferred to "Net interest income" as and when the cash flows
from the hedged item are recognised as profit or loss in the income
statement.
Interest income and expense on fair value hedge derivatives are included
with the interest generated by the hedged item. Similarly, interest
income and expense arising from derivatives used for economic hedge
of transactions designated as at fair value through profit or loss are
allocated to the same line items as the interest income and expense
relating to the underlying transactions.
The main factors affecting the level of net interest income are the relative
volumes of interest-earning assets and interest-bearing liabilities and the
spread between lending and funding rates. Net interest income is also
affected by the impact of hedging transactions, and, to a lesser extent,
exchange rate fluctuations.
Volumes of interest-earning assets and interest-bearing liabilities can be
affected by various factors, in addition to general market conditions and
growth in the Group's lending activities (either organically or through
acquisitions). One such factor is the Group's business mix, such as the
relative proportion of capital allocated to interest-generating as opposed
to fee-generating businesses.
The other principal factor affecting net interest income is the spread
between lending and funding rates, which itself is influenced by several
factors. These include central bank funding rates (which affect both
the yield on interest-earning assets and the rates paid on sources of
funding, although not always in a linear and simultaneous manner),
the proportion of funding sources represented by non-interest bearing
customer deposits, government decisions to raise or lower interest
rates on regulated savings accounts, the competitive environment, the
relative weight of the Group's various interest-bearing products, which
have different margins as a result of different competitive environments,
and the Bank's hedging strategy and accounting treatment of hedging
transactions.
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2023 REVIEW OF OPERATIONS
3
Profit and loss account
Net Interest income decreased by 9% to EUR 19,058 million for the year
ended 31 December 2023. This variation is attributable to the combination
of the decrease in net income on interest rate portfolio hedge instruments
(-EUR 1,940 million in 2023, compared with -EUR 500 million in 2022),
the decrease in net income from financial instruments at amortised
cost (EUR 18,269 million in 2023, compared with EUR 19,390 million in
2022), the decrease in net income from non-trading instruments at fair
value through profit or loss (-EUR 1,211 million in 2023, compared with
-EUR 220 million in 2022), and the increase on financial instruments
designated as at fair value through equity (EUR 1,856 million in 2023,
compared with EUR 738 million in 2022).
NET COMMISSION INCOME
Net commission income includes commissions on customer transactions,
securities and derivatives transactions, financing and guarantee
commitments, and asset management and other services. Net
commission income decreased by -3.4%, from EUR 10,165 million in 2022
to EUR 9,821 million in 2023.
Insurance activity fees are included in "Net income from insurance
activities".
NET GAIN ON FINANCIAL INSTRUMENTS
AT FAIR OR MODEL VALUE THROUGH
PROFIT OR LOSS
This line item includes all profit and loss items relating to financial
instruments managed in the trading book, to financial instruments
designated as at fair value through profit or loss by the Group under
the fair value option and to non-trading debt securities that do not
meet the criteria required to be recognised at amortised cost or at fair
value through equity (other than interest income and expense on the
last two categories, which are recognised under "Net interest income"
as presented above). It also includes gains and losses on non-trading
equity instruments that the Group did not choose to measure at fair value
through equity. This includes both capital gains and losses on the sale
and the marking to fair value of these instruments, along with dividends
from equity securities.
This line item also includes gains and losses due to the ineffectiveness of
fair value hedges, cash flow hedges, and net foreign investment hedges.
The gains and losses resulting from cash flows and the remeasurement
of financial instruments, either cash or derivatives, must be appreciated
as a whole in order to give a fair representation of the profit or loss
resulting from trading activities.
Net gains on financial instruments as at fair or model value through
profit or loss increased by +11% from EUR 9,352 million in 2022 to
EUR 10,346 million in 2023.
The income from items designated as at fair value through profit or
loss are partly offset by changes in value of the derivative instruments
hedging these assets.
NET GAIN ON FINANCIAL INSTRUMENTS
AT FAIR VALUE THROUGH EQUITY
Net gains on financial instruments at fair value through equity correspond
to gains and losses realised on debt securities recognised at fair value
through equity and to dividends from equity securities that the Group
chose to recognise at fair value through equity.
Changes in fair value of these assets are initially recognised under
"Changes in assets and liabilities recognised directly in equity". Upon
sale of these assets, realised gains or losses are recognised in the profit
or loss account under "Net gains on financial instruments at fair value
through equity" for debt securities, or transferred to retained earnings
for equity securities.
Net gains on financial instruments at fair value through equity amounted
to EUR 28 million in 2023 and EUR 138 million in 2022.
NET INCOME FROM INSURANCE ACTIVITIES
Net income from insurance activities includes insurance service result
and financial result. Insurance service result includes revenue from
services relating to a group of insurance contracts compensated by
related insurance service expenses. Financial result includes investment
return compensated by related net finance income or expenses from
insurance contracts.
Net income from insurance activities increased by EUR 419 million
compared with 2022 and amounted to EUR 2,320 million in 2023.
NET INCOME FROM OTHER ACTIVITIES
This item includes, among other things, net income from investment
property, assets held under operating lease and property development
activities. Net income from other activities increased by 41.9%, from
EUR 2,982 million in 2022 to EUR 4,235 million in 2023. This change is
mainly due to a EUR 915 million increase in Net income from assets held
under operating leases.
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Profit and loss account
OPERATING EXPENSES, DEPRECIATION AND AMORTISATION
In millions of euros
Year to
31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Change
(2023/2022)
Operating expenses
(28,713)
(27,560)
+4.2%
Depreciation, amortisation and impairment of property, plant and equipment
and intangible assets
(2,243)
(2,304)
-2.6%
TOTAL OPERATING EXPENSES, DEPRECIATION, AND AMORTISATION
(30,956)
(29,864)
+3.7%
Operating expenses, depreciation and amortisation increased by +3.7%, from -EUR 29,864 million in 2022 to -EUR 30,956 million in 2023.
3
GROSS OPERATING INCOME FROM CONTINUING ACTIVITIES
The Group's gross operating income dropped by -4.2% to EUR 14,918 million for the year ended 31 December 2023 (compared with EUR 15,566 million
for the year ended 31 December 2022), mainly due to the increase in operating expenses (+3.7%).
COST OF RISK AND OTHER NET LOSSES FOR RISK ON FINANCIAL INSTRUMENTS
In millions of euros
Year to
31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Change
(2023/2022)
Net allowances to impairment
(2,596)
(2,440)
+6.4%
Recoveries on loans and receivables previously written off
250
343
-27.1%
Losses on irrecoverable loans
(561)
(717)
-21.8%
Act on assistance to borrowers in Poland
(189)
ns
TOTAL COST OF RISK FOR THE PERIOD
(2,907)
(3,003)
-3.2%
OTHER NET LOSSES FOR RISK ON FINANCIAL INSTRUMENTS
(775)
-
NS
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2023 REVIEW OF OPERATIONS
Profit and loss account
COST OF RISK
This line item represents the net amount of impairment losses recognised
for credit risks inherent in the Group's intermediation activities, as well as
any impairment loss relating to counterparty risks on over-the-counter
derivative instruments.
The Group's cost of risk amounted to EUR 2,907 million in 2023, a
decrease of -3.2% compared with 2022.
The decrease in cost of risk in 2023 is mainly due to the decrease of
EUR 1,087 million in cost of risk related to assets and commitments
classified in stage 1 and 2 offset by an increase of +EUR 991 million in
cost of risk related to impaired assets and commitments (stage 3).
3
As at 31 December 2023, the total amount of doubtful loans, securities
and commitments, net of collateral, amounted to EUR 19.2 billion
(compared with EUR 19.3 billion as at 31 December 2022), and the
related impairment amounted to EUR 13.8 billion, compared with
EUR 14 billion as at 31 December 2022. The coverage ratio was at 72%
at 31 December 2023, compared with 73% at 31 December 2022.
More detailed information on the cost of risk per business line is available
in chapter 4, note 4 Segment Information, paragraph Income by business
segment.
OTHER NET LOSSES FOR RISK ON
FINANCIAL INSTRUMENTS
The corresponding expected and realised cash flow losses are now
presented in "Other net losses for risk on financial instruments".
In 2023, the expense thus recognised mainly related to mortgage loans in
Poland amounting to EUR 450 million (compared with EUR 157 million at
31 December 2022, presented as "Revenues") and foreign currency loans
issued by BNP Paribas Personal Finance amounting to EUR 221 million
(compared with EUR 130 million at 31 December 2022, presented as
"Revenues").
OPERATING INCOME FROM CONTINUING ACTIVITIES
In total, operating income decreased by -10.6%, from EUR 12,563 million in 2022 to EUR 11,236 million for the year ended 31 December 2023. This
change mainly resulted from the increase in operating expenses (+3.7%) and in other net losses for risk on financial instruments.
NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS
In millions of euros
Year to
31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 et 9
Change
(2023/2022)
OPERATING INCOME FROM CONTINUING ACTIVITIES
11,236
12,563
-10.6%
Share of earnings of equity-method entities
593
655
-9.5%
Net gain on non-current assets
(104)
(253)
-58.9%
Goodwill
249
ns
Corporate income tax
(3,266)
(3,653)
-10.6%
Net income from discontinued activities
2,947
687
x4,3
Net income attributable to minority interests
(431)
(400)
+7.8%
NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS
10,975
9,848
+11.4%
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3
Recent events
SHARE OF EARNINGS OF EQUIT Y-METHOD
ENTITIES
The share of earnings of equity-method entities decreased from
EUR 655 million in 2022 to EUR 593 million in 2023.
NET GAIN ON NON-CURRENT ASSETS
This item includes net realised gains or losses on sales of tangible and
intangible assets used in operations and on sales of investments in
consolidated undertakings.
Net gains on fixed assets increased by +EUR 149 million (-EUR 104 million
in 2023 compared with -EUR 253 million in 2022). In 2023, this item
includes the impact of the hyperinflationary situation in Türkiye according
to IAS 29 for -EUR 272 million, the loss of control of UkrSibbank in
Ukraine for EUR 433 million, and the disposal of Axepta SpA in Italy for
+EUR 204 million in 2022.
CHANGE IN V A LUE OF GOODWILL
No change in the value of goodwill was recognised in 2023, compared
with EUR 249 million in 2022 (of which EUR 245 million in badwill on
the takeover of control of bpost bank).
INCOME TAX EXPENSE
The Group recorded an income tax expense of -EUR 3,266 million in 2023,
a decrease compared with the income tax expense of -EUR 3,653 million
recorded in 2022.
NET INCOME FROM DISCONTINUED
ACTIVITIES
The net income from discontinued activities amounted to EUR 2,947 million
in 2023 (related to the net capital gain on the disposal of the retail
and commercial banking activities in the United States operated by the
BancWest cash-generating unit compared with EUR 687 million in 2022.
MINORITY INTERESTS
The share of earnings attributable to minority interests in consolidated companies increased by +EUR 31 million (EUR 431 million in 2023 compared
with EUR 400 million in 2022).
3.5 Recent events
PRODUCTS AND SERVICES
BNP Paribas regularly introduces new products and services for its customers. More information is available on the Group's websites, including in the
press releases at group.bnpparibas and invest.bnpparibas.
ACQUISITIONS AND PARTNERSHIPS
Since 1 February 2024, date of publication of the 2023 annual results, no significant events have occured that should be mentioned in this section.
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2023 REVIEW OF OPERATIONS
Outlook
2024 TREND
On the strength of its diversified model, BNP Paribas should continue to
grow faster than its underlying economy and to gain market share, thus
offsetting a deterioration in the economic environment that is now more
marked than in the economic baseline scenario. Nonetheless, various
decisions by public authorities (ECB mandatory reserves, Belgian bank
3
levy and Belgian government bonds) marked 2023.
T a ken togethe r, t hey have the effect of bringing the projected 2025 ROTE
into the range of 11.5% to 12%. Especially affected by the current cycle,
Personal Finance and Real Estate initiated robust adaptation plans in
2023 and should return to their nominal profitability as early as 2026.
On the strength of its long-term strategy and the return to normal at
Personal Finance and Real Estate, BNP Paribas is confident in its capacity
to deliver 12% ROTE as early as 2026.
In order to present a consistent reference with the presentation of the
financial statements and results for the year 2024, and in particular to
take into account the end of the constitution of the Single Resolution
Fund from 1 January 2024, a restatement(1) of the quarterly series for
2023 was published on 29 February 2024. The restatement leads, in
particula r, t o retaining an amount of EUR 200 million corresponding to the
assumption of a similar contribution to local bank taxes in the divisions
and business lines, and to reallocating to "Corporate Centre" an amount
of approximately EUR 800 million in contribution to the SRF which is not
intended to continue from 2024. This restatement has no impact on the
Group's results for 2023 and is not included in section 3.2. Results by
division/business line in this document.
(1) Restatement – 2023 quarterly series in the 2024 format (invest.bnpparibas).
THE MEDIUM-T ERM STRATEGY IS REAFFIRMED TO ADDRESS THE CHALLENGES OF THE BANKING SECTOR
3.6 Outlook
2022-2025 STRATEGIC PLAN
Growth, Technology & Sustainability 2025
As a reminde r, t he BNP Paribas Group presented its Growth, Technology
& Sustainability 2025 plan on 8 February 2022.
During the presentation of its 2023 annual results, BNP Paribas reiterated
its vision of the challenges faced by the banking sector and its long term
strategy, in addition to its GTS 2025 strategic plan.
BNP Paribas relies on leading platforms, notably in Europe: in flow
businesses (cash management, trade finance and factoring); in capital
market businesses; in specialised businesses, for instance in full-service
leasing with Arval, or in sustainable investment management. These
fully integrated platforms provide the ability to serve clients in a
comprehensive and unique way in Europe and internationally and
hence to develop strong client franchises, in particular in the corporate,
institutional, Private Banking and affluent segments.
This global and complete approach, thus enables the building of strong
relationships with clients, accompanying their development throughout
economic cycles, creating multiple and diversified growth opportunities.
It ensures the development of volumes and market share and growth
at marginal cost.
This distinctive model translates in an organisation based on three solid
pillars, fully integrated focussing on the needs of clients and partners:
Corporate & Institutional Banking (CIB); Commercial & Personal Banking
Gain market shares
at marginal cost
Optimise the cost
of capital constraint
Adapt
to economic cycles
Support
the energy transition
Invest in people
and in technology
Prioritise the
best-positioned clients
Scale up industrial
platforms
Expand cross-selling
Provide the right service
to the right client with the
right level of proꢀtability
Target growth drivers
Expand fee-income
businesses
Invest in Beyond Banking
activities
Strengthen
Originate-to-Distribute
capabilities
Optimise portfolios
on an ongoing basis
Maintain balance
in capital allocation
Perpetuate our prudent
and proactive risk culture
Divest non-core
businesses
Adapt to clients' needs
with dedicated products
Deploy structures
in each business line
Invest in training
on an ongoing basis
Stick to our culture
of engagement
Reinforce employee
commitment
Attract and retain talents
Invest in technology
and security
Anticipate AI-driven
disruptions
1
2
3
4
5
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2023 REVIEW OF OPERATIONS
3
Outlook
and Services (CPBS), which encompasses all the Group's Commercial
and Personal Banking(1) as well as Specialised Businesses(2) such as
BNP Paribas Personal Finance or Arval; and Investment & Protection
Services (IPS), which brings together Wealth and Asset Management
businesses(3) and Insurance.
Leveraging on the strengths of its platforms and favourably positioned
client franchises with the full benefit of its integrated operating model,
the Group is ideally placed to deliver profitable growth, while making
technology and industrialisation a hallmark of its development, scaling
up sustainable finance and social and environmental responsibility as
well as developing its employees' potential and engagement.
Accordingly, and building on the strength of its model, the Group shall
maintain disciplined organic growth while gaining market share at
marginal cost, thus generating new growth opportunities and substantial
economies of scale.
The plan takes into account the achievement of the ramp-up of the Single
Resolution Fund in 2023. It nonetheless includes an assumption of a
stabilisation of similar contributions to local levies at EUR 200 million
annually from 2024.
In particula r, o n 1 February 2024, the Group reaffirmed its objective of
generating a positive jaws effect each year and 2 points higher on average(4),
as well as its cumulative recurring cost savings targets of EUR 2.3 billion
by 2025 (EUR 1.1 billion already achieved at the end of 2023).
Technology and industrialisation at the heart
of our model
The Group has implemented a transformation plan in all its businesses,
aiming to establish a new customer and employee experience, to
accelerate digitalisation, and to improve operational efficiency. The
successful 2017-2020 plan resulted in a decrease of the cost-income ratio
by more than 2 points between 2017 and 2021 and recurring cost savings
of almost EUR 3.1 billion (vs. an initial objective of EUR 2.7 billion).
Industrialisation of processes combined with strong digitalisation of
customer interactions, (digital interactions tripled at Domestic Markets
between 2017 and 2021), a gradual deployment of smart sourcing with
now more than 18,000 employees in shared service centres, an intense
use of artificial intelligence, with more than half of use cases dedicated
to operating efficiency in 2021, have been key levers contributing
structurally to the Group's operational efficiency and enhancing customer
and employee experience.
Technology and industrialisation continue to serve as the foundation
of the Group's model, increasing its operational efficiency, enhancing
customer efficiency and ability to better serve clients and partners.
Six levers will contribute to delivering positive jaws effects throughout the
period of the plan. These are: intensive use of artificial intelligence, data
and robotics; a strong deployment of a secured use of cloud technologies;
a broad APIsation of the IT system; the use of smart sourcing and the
rollout of pooled service centres; an amplification of the "make/buy/share"
strategy; and an accelerated convergence of European technological
platforms.
These initiatives, implemented by all divisions, will sustain an
improvement in the cost/income ratio of all divisions. They will also
sustain the creation of enough manoeuvring room to self-fund the
transformation of activities and investments tied to business lines.
Scaling up sustainable finance and social
and environmental responsibility
The Group is guided by three major strategic paths in accelerating its
commitments to sustainable finance and social and environmental
responsibility, along with the five priority areas aligned with the customer
objectives and the United Nations' Sustainable Development Goals –
savings, investments and sustainable financing; transition towards
carbon neutrality; circular economy; natural capital & biodiversity; and
combatting exclusion.
It has undertaken an alignment of portfolios to achieve carbon-neutrality
objectives while laying out a CO2 emissions reduction trajectory
corresponding to financing of the sectors with the highest levels of
emissions and aligning business lines with shared objectives taking into
account client transitions.
The integrated model and all businesses are fully mobilised and
committed to supporting clients in the transition towards a sustainable
and low-carbon economy through, in particula r, t he Low-Carbon
Transition Group, an organisation of 200 professionals dedicated to
support clients in accelerating their transition.
Lastly, the Group strengthens its processes and steering tools to support
evolving needs and standards, and will strengthen its governance.
As a reminde r, t he Group aims to mobilise EUR 350 billion by 2025 through
loans and bond issues covering environmental and social topics(6), as well
as to reach EUR 300 billion in sustainable and responsible investments
by 2025(5).
(1) Commercial& Personal Banking in France, Commercial & Personal Banking in Belgium, BNL banca commerciale, Commercial & Personal Banking in Luxembourg, Europe-Mediterranean
and BancWest.
(2) Arval & Leasing Solutions, BNP Paribas Personal Finance, New Digital Businesses (including Nickel and Floa) and Personal Investors.
(3) Wealth Management, Asset Management, Real Estate and Principal Investments.
(4) 2022-2025 CAGR of revenues less 2022-2025 CAGR of the Group's operating expenses excluding Bank of the West.
(5) Corporate, institutional and individual loans tied to environmental and social issues and annual sustainable bonds issuances.
(6) BNP Paribas Asset Management open-ended funds distributed in Europe and classified Article 8 or 9 by SFDR.
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Outlook
BNP Paribas stood out in 2023 with a strong acceleration in financing
low-carbon energy production(1) and in exiting the financing of fossil fuel
production(2). Its stock of low-carbon energy production credit exposure
now accounts for 65%(3) of its total stock of energy production loans.
The 80% target initially set for 2030 has been moved forward to 2028,
with a goal of 90% by 2030. As of the end of 2023, the ratio of financing
flows granted by BNP Paribas to oil and gas extraction and production
companies compared to financing flows to renewable energy projects
was 1 to 11.
Development strategies individualised by division
On the back of performing and nimble bank and services, trusted
companions, "for & beyond Banking", Commercial, Personal Banking and
Services (CPBS) further improves the recommendation from customers
and employees, simplifies and broadens its offering of products and
services through an industrialised and resilient operating model
combined with client relationships supported by a new balance between
human and digital.
CPBS strengthens its leadership in Europe in corporate and Private
Banking and accelerates the profitable growth of its Specialised
Businesses at marginal cost. As Retail Banking activities are still facing
headwinds, the division undertakes a strategic repositioning through
more intense segmentation and changes in operating models.
On 1 February 2024, CPBS adjusted its average annual revenue growth
target to 4.5% per annum for the period from 2021 to 2025(3) to take
into account the impact of the authorities' decisions (non remuneration
of reserve requirements, Belgian State bonds) and the repositioning of
Personal Finance.
Investment & Protection Services (IPS) aims to become a reference
European player in protection, savings and sustainable investments by
strengthening its offering of products and services and its distribution
network and by consolidating its leadership in social and environmental
responsibility with the full backing of businesses that are digital, efficient
and tech-savvy.
IPS relies on three strategic pillars to foster growth, fortifies its positions
and captures new growth opportunities: the acceleration of development
of financial savings, the roll-out of a transversal franchise in private
assets, and the strengthening of its leadership in sustainable financing.
It builds up on four key levers making the most of the integrated model,
moving to the next level on digitalisation, data and artificial intelligence,
deploying new ways of working while optimising the operating model.
On 1 February 2024, IPS adjusted its objectives to reflect the impact of
the environment, particularly on the Real Estate business and IFRS 17
and IFRS 9. It is aiming for an average annual revenue growth target of
around 6.5% over the period from 2023 to 2025.
With the ambition of being the Europe-based partner of corporate and
institutional clients on the long term, Corporate & Institutional Banking
(CIB) pursues a strategy that is more relevant than eve r, w ith the goal
of becoming the first Europe-based CIB among global players. As of end
2023, CIB became the 1st European CIB in EMEA(4) with increased market
share(5). CIB builds on the strength of BNP Paribas' integrated model,
technological platforms and sustainability leadership strengthening its
capacity to connect the needs of corporate and institutional clients, while
continuing to win market share in a consolidating secto r.
CIB continues to build on its core assets, supporting clients in their
transition towards a sustainable and low-carbon economy and moving
technological platforms to the next level to serve clients. It pursues and
deepens on key structural levers with the full backing of the integrated
model and enhances its operating model and efficiency. Lastly, CIB steps
up with key transforming initiatives in particular the development of a
solid equity franchise and the acceleration of interregional dynamics.
CIB unlocks the full potential of its distinctive, sustainable and integrated
model, with above-market growth in its revenues.
On 1 February 2024, CIB revised upwards its objectives for all of its
business lines, confirming the success of its long-term strategy and is
targeting average annual growth in its revenues of more than 6% over
the period from 2021 to 2025.
Event subsequent to the Board of directors'
meeting of 31 January 2024
The Group confirms that the Board of directors will propose to the
Shareholders' Annual General Meeting on 14 May 2024 the distribution
of a dividend of EUR 4.60 in cash, equivalent to a 50% pay-out ratio of
2023 distributable income. This distribution will be raised to 60% of 2023
distributable income with the launch of the EUR 1.055 billion buyback
programme(4) on 4 March 2024 following the authorisation from the ECB.
On 13 March 2024, the Group confirmed the growth trajectory in
Net Income, Group Share, with a 2024 Net Income higher than 2023
Distributable Net Income. With a pay-out ratio of 60%(6), this should allow
the Group to return a total of about 20 billion euros(7) to its shareholders
in 2024, 2025 and 2026. The capital gradually redeployed since 2022,
following the sale of Bank of the West, is expected to generate a return
on invested capital of more than 16% in 2025. The Group also announced
recurring operating efficiency measures of about EUR 400 million bringing
the target of the 2022-2025 plan to 2.7 billion euros.
(1) Renewable energies, biofuels, nuclea r.
(2) Refining, oil & gas exploration and production, coal. Source: internal management figures.
(3) Including 100% of private banks excluding the contribution of Bank of the West.
(4) Europe, Middle-East, Africa.
(5) Source: Greenwich Coalition 3Q23 YTD Competitor Analytics. Ranking based on the banks of the Greenwich Coalition index and on the structure of BNP Paribas products. EMEA:
Europe, Middle East, Africa.
(6) Applied to distributable Net Income after taking into account the remuneration of Undated super subordinated notes ("TSSDI").
(7) Subject to the approval of the General Meeting and to ECB authorization (for the share buyback program), cumulated amount with respect to financial years 2023, 2024 and 2025.
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Financial structure
INFORMATION ON TRENDS
Information on trends (Macroeconomic conditions and Legislation and regulations applicable to financial institutions) are described in the section on
Principal and Emerging Risks for the year in the Risks and Capital Adequacy chapte r.
3.7 Financial structure
The Groupe has a solid financial structure.
The common equity Tier 1 ratio stood at 13.2%(1) as of 31 December 2023,
down by 20 basis points compared to 30 September 2023, due mainly to:
■ the placing of fourth quarter 2023 results into reserves after taking a
60% payout ratio into account, net of growth in risk-weighted assets
(0 bp); and
■ the effect of the adjustments related to the distributable Net Income
(-20 bps).
Other impacts on the ratio were limited overall.
The common equity Tier 1 ratio was up by 90 basis points compared to
31 December 2022, due mainly to:
■ the closing of the Bank of the West sale on 1 February 2023 net of the
share buyback programme and the redeployment of capital (+100 bps);
■ the effect of the adjustments related to the distributable Net Income
(-30 bps);
■ the placing of 2023 results into reserves after taking a 60% payout
ratio into account, net of growth in risk-weighted assets and their
optimisation (+30 bps);
■ the impact of the application of IFRS 17, on the updating of models
and regulations in 1Q23 (-10 bps).
Other impacts on the ratio were limited overall.
The leverage ratio(2) stood at 4.6% as of 31 December 2023.
The Liquidity Coverage Ratio(3) (end of period) stood at the high level of
148% as of 31 December 2023.
The immediately available liquidity reserve(4) amounted to EUR 474 billion
as of 31 December 2023, equivalent to more than one year of room to
manoeuvre compared to market resources.
(1) CRD 5, including IFRS 9 transitional arrangements.
(2) Calculated in accordance with Regulation (UE) No. 2019/876.
(3) Calculated in accordance with Regulation (CRR) 575/2013 article 451a.
(4) Liquid market assets or eligible assets in central banks (counterbalancing capacity), taking into account prudential standards, notably US standards, minus intra-day payment
system needs.
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
3.8 Alternative Performance Measures (APM) –
Article 223-1 of the AMF's General regulation
Alternative Performance
Measures
Definition
Reason for use
Insurance P&L aggregates
(Revenues, Operating
expenses, Gross operating
income, Operating
income, Pre-tax income)
Insurance P&L aggregates (Revenues, Gross operating income,
Operating income, Pre-tax income) excluding the volatility generated
by the fair value accounting of certain assets through profit and loss
(IFRS 9) transferred to Corporate Centre; Gains or losses realised in
the event of divestments, as well as potential long-term depreciations
are included in the Insurance income profit and loss account.
A reconciliation with Group P&L aggregates is provided in the tables
"Quarterly Series".
Presentation of the Insurance result reflecting
operational and intrinsic performance (technical
and financial)
Corporate Centre P&L
aggregates
P&L aggregates of "Corporate Centre, including restatement of the
volatility (IFRS 9) and attributable costs (internal distributors)
related to Insurance activities", following the application from
1 January 2023 of IFRS 17 "insurance contracts" in conjunction with
the application of IFRS 9 for insurance activities, including:
■ Restatement in Corporate Centre revenues of the volatility to the
financial result generated by the IFRS 9 fair value recognition of
certain Insurance assets;
■ Operating expenses deemed "attributable to insurance activities", net
of internal margin, are recognised in deduction from revenues and no
longer booked as operating expenses. These accounting entries relate
exclusively to the Insurance business and Group entities (excluding
the Insurance business) that distribute insurance contracts (known as
internal distributors) and have no effect on gross operating income.
The impact of entries related to internal distribution contracts is
borne by the "Corporate Centre".
A reconciliation with Group P&L aggregates is provided in the tables
"Quarterly Series"
Transfer to Corporate Centre of the impact of
operating expenses "attributable to insurance
activities" on internal distribution contracts
in order not to impede the readability of the
financial performance of the various business
lines.
Operating division
profit and loss account
aggregates (revenues,
net interest revenue,
operating expenses,
gross operating income,
operating income, pre-tax
income)
Sum of CPBS' profit and loss account aggregates (with Commercial &
Personal Banking' profit and loss account aggregates, including 2/3
of Private Banking in France, Italy, Belgium, Luxembourg, Germany,
Poland and in Türkiye), IPS and CIB.
BNP Paribas Group profit and loss account aggregates = operating
division profit and loss account aggregates + Corporate Centre profit
and loss account aggregates.
Reconciliation with Group profit and loss account aggregates is
provided in the tables "Results by Core Business".
Net interest revenue mentioned in Commercial & Personal Banking
includes the net interest margin (as defined in note 3.a of the financial
statements), as well as, to a lesser extent, other revenues (as defined
in notes 3.c, 3.d and 3.e of the financial statements), excluding fees
(note 3.b of the financial statements). P&L aggregates of Commercial
& Personal Banking or Specialised Businesses distributing insurance
contracts exclude the impact of the application of IFRS 17 on the
accounting presentation of operating expenses deemed "attributable to
insurance activities" in deduction of revenues and no longer operating
expenses, with the impact carried by Corporate Centre.
Representative measure of the BNP Paribas
Group's operating performance
Profit and loss account
aggregates of Commercial
& Personal Banking
activity with 100% of
Private Banking
Profit and loss account aggregate of a Commercial & Personal
Banking activity including the whole profit and loss account of
Private Banking
Reconciliation with Group profit and loss account aggregates is
provided in the tables "Quarterly series".
Representative measure of the performance of
Commercial & Personal Banking activity including
the total performance of Private Banking (before
sharing the profit & loss account with the Wealth
Management business, Private Banking being
under a joint responsibility of Commercial &
Personal Banking (2/3) and Wealth Management
business (1/3))
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
Alternative Performance
Measures
Definition
Reason for use
Profit and loss account
aggregates, excluding
PEL/CEL effects (revenues,
gross operating income,
operating income, pre-tax
income)
Profit and loss account aggregates, excluding PEL/CEL effects.
Reconciliation with Group profit and loss account aggregates is
provided in the "Quarterly series" tables.
Representative measure of the aggregates of the
period excluding changes in the provision that
accounts for the risk generated by PEL and CEL
accounts during their lifetime
Cost/income ratio
Cost to income ratio
Measure of operational efficiency in the banking
sector
Cost of risk/Customer
loans at the beginning
of the period (in basis
points)
Cost of risk (in €m) divided by customer loans at the beginning of
the period
Cost of risk does not include "Other net losses for risk on financial
instruments"
Measure of the risk level by business in
percentage of the volume of outstanding loans
Evolution of operating
expenses excluding
IFRIC 21
Change in operating expenses excluding taxes and contributions
subject to IFRIC 21.
Representative measure of the change in
operating expenses' excluding the taxes and
contributions subject to IFRIC 21 booked almost
entirely in the 1st half of the yea r, g iven in order to
avoid any confusion compared to other quarters
Return on Equity (ROE)
Details of the ROE calculation are disclosed in the Appendix "Return
on Equity and Permanent Shareholders' Equity" of the results'
presentation
Measure of the BNP Paribas Group's return on
equity
Return on T a ngible Equity
(ROTE)
Details of the ROTE calculation are disclosed in the Appendix "Return
on Equity and Permanent Shareholders' Equity" of the results'
presentation
Measure of the BNP Paribas Group's return on
tangible equity
Distributable Net Income
P&L aggregates up to the net income adjusted in accordance with
the announcements made in February 2023 to reflect the Group's
intrinsic performance in 2023, pivotal yea r, a fter the sale of Bank of
the West on 1 february 2023 but also as the last expected year of
the ramp-up of the Single Resolution Fund, marked by extraordinary
items.
Adjustments are detailed in the 2023 results' presentation:
■ include the effect of the anticipation of the end of the ramp-up of
the Single Resolution Fund in 2023;
■ exclude the net income of entities intended to be sold (application
of IFRS 5) (notably the capital gain on the sale of Bank of the
West) and additional items related to the sale of Bank of the West;
■ exclude extraordinary items such as the extraordinary negative
impact of the hedging adjustment related to changes in the
TLTRO terms decided by the ECB in the fourth quarter 2022 and
extraordinary provisions for litigation.
The distributable net income is used to calculate the ordinary
distribution in 2023 as well as to monitor the Group's performance
in 2023
Measure of BNP Paribas Group's net income
reflecting the Group's intrinsic performance in
2023, pivotal yea r, p ost-impact of the sale of
Bank of the West and the last expected year of
the contribution to the ramp-up of the Single
Resolution Fund, marked by extraordinary
items
Net income Group share
excluding exceptional items
Net income attributable to equity holders excluding exceptional items
Details of exceptional items are disclosed in the slide "Main
Exceptional Items" of the results' presentation
Measure of BNP Paribas Group's net income
excluding non-recurring items of a significant
amount or items that do not reflect the
underlying operating performance, notably
restructuring, adaptation, IT reinforcement and
transformation costs.
Doubtful loans' coverage
ratio
Relationship between stage 3 provisions and impaired outstandings
(stage 3), balance sheet and off-balance sheet, netted for collateral
received, for customers and credit institutions, including liabilities
at amortised cost and debt securities at fair value through equity
(excluding insurance business)
Measure of provisioning for doubtful loans
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
METHODOLOGY – COMPARATIVE ANA L Y SIS AT CONSTANT SCOPE
AND EXCHANGE RATES
The method used to determine the effect of changes in scope of
consolidation depends on the type of transaction (acquisition, sale, etc.).
The underlying purpose of the calculation is to facilitate period-on-period
comparisons.
In case of acquired or created entity, the results of the new entity are
eliminated from the constant scope results of current-year periods
corresponding to the periods when the entity was not owned in the
prior-yea r.
In case of divested entities, the entity's results are excluded symmetrically
for the prior year for quarters when the entity was not owned.
In case of change of consolidation method, the policy is to use the lowest
consolidation percentage over the two years (current and prior) for
results of quarters adjusted on a like-for-like basis.
Comparative analysis at constant exchange rates are prepared by
restating results for the prior-year quarter (reference quarter) at the
current quarter exchange rate (analysed quarter). All of these calculations
are performed by reference to the entity's reporting currency.
REMINDER
Net banking income (NBI): throughout the document, the terms "Net
Banking Income" and "Revenues" are used interchangeably.
Operating expenses: sum of salary and employee benefit expenses, other
operating expenses and depreciation, amortisation and impairment of
property, plant and equipment. Throughout the whole document, the
terms operating expenses or costs can be used indifferently.
The sum of the values indicated in the tables and analyses may differ
slightly from the reported total due to rounding.
Operating divisions: they consist of 3 divisions:
■ Corporate and Institutional Banking (CIB) including: Global Banking,
Global Markets, and Securities Services;
■ Commercial, Personal Banking & Services (CPBS) including:
■
Commercial & Personal Banking in France, Belgium, Italy,
Luxembourg, and Europe-Mediterranean,
■
Specialised Businesses, with Arval & Leasing Solutions; BNP Paribas
Personal Finance; New Digital Businesses (including Nickel, Lyf, etc.)
& Personal Investors;
■ Investment & Protection Services (IPS) including: Insurance, Wealth
and Asset Management, which includes Wealth Management, Asset
Management, Real Estate and Principal Investments.
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
➤
RECONCILIATION OF PROFIT & LOSS WITH THE ALTERNATIVE PERFORMANCE MEASURES
➤ 2023 – Results by Core Business
In millions of euros
Commercial,
Personal Banking
& Services (2/3 of
Private Banking)
Investment
& Protection
Services
CIB
Operating Corporate
divisions
Centre
Group
Revenues
25,917
5,590
16,509
48,015
(2,141)
45,874
% Change 2022
+4.0%
-3.8%
+0.6%
+1.8%
+24.6%
+1.0%
Operating Expenses and Dep.
(16,059)
(3,566)
(10,823)
(30,447)
(509)
(30,956)
% Change 2022
+3.5%
+0.4%
+1.2%
+2.3%
n.s.
+3.7%
Gross Operating Income
9,858
2,024
5,686
17,568
(2,650)
14,918
% Change 2022
+4.7%
-10.5%
-0.5%
+1.0%
+45.3%
-4.2%
Cost of Risk incl. Other net losses
(2,920)
for risk on financial instruments
(13)
63
(2,870)
(812)
(3,682)
% Change 2022
+16.9%
n.s.
n.s.
+1.9%
n.s.
+22.6%
Operating Income
6,938
2,011
5,749
14,698
(3,462)
11,236
% Change 2022
+0.3%
-11.2%
+6.7%
+0.9%
+72.3%
-10.6%
Share of Earnings of
Equity-Method Entities
337
224
13
574
19
593
Other Non-Operating Items
-181
-76
-18
-275
171
-104
Pre-T a x Income
7,094
2,159
5,744
14,997
(3,272)
11,725
% Change 2022
-3.2%
-14.7%
+6.4%
-1.7%
+60.0%
-11.3%
Corporate Income T a x
(3,266)
Net Income Attributable
to Minority Interests
(431)
Net Income from discontinued
activities
2,947
Net Income Attributable
to Equity Holders
10,975
➤ Reconciliation with profit and loss account aggregates of Commercial & Personal Banking activity,
excluding PEL/CEL effect and with 100% of Private Banking
In millions of euros
2023
2022
Commercial, Personal Banking & Services (including 100% of Private Banking in France, Belgium,
Italy, Luxembourg, Poland, Türkiye and Germany)(1)
Revenues
26,627
25,524
Operating Expenses and Dep.
(16,437)
(15,876)
Gross Operating Income
10,191
9,648
Cost of Risk incl. Other net losses for risk on financial instruments
(2,923)
(2,491)
Operating Income
7,267
7,156
Share of Earnings of Equity-Method Entities
337
433
Other Non-Operating Items
(181)
(23)
Pre-T a x Income
7,423
7,567
Income Attributable to Wealth and Asset Management
(328)
(282)
Pre-T a x Income of Commercial, Personal Banking & Services
7,095
7,285
Cost/Income
61.7%
62.2
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
43.2
41.7
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
In millions of euros
2023
2022
Commercial, Personal Banking & Services (including 2/3 of Private Banking in France, Belgium, Italy,
Luxembourg, Poland, Türkiye and Germany)
Revenues
25,918
24,885
Operating Expenses and Dep.
(16,059)
(15,514)
Gross Operating Income
9,860
9,372
Cost of Risk incl. Other net losses for risk on financial instruments
(2,920)
(2,497)
Operating Income
6,939
6,875
Share of Earnings of Equity-Method Entities
337
433
Other Non-Operating Items
(181)
(23)
Pre-T a x Income
7,095
7,285
Cost/Income
62.0%
62.3%
Allocated Equity (€bn, year to date)
43.2
41.7
In millions of euros
2023
2022
Commercial & Personal Banking in France (including 100% of Private Banking)(1)
Revenues
6,591
6,680
Incl. net interest revenue
3,496
3,568
Incl. fees
3,095
3,112
Operating Expenses and Dep.
(4,749)
(4,698)
Gross Operating Income
1,842
1,982
Cost of Risk
(485)
(237)
Operating Income
1,357
1,745
Share of Earnings of Equity-Method Entities
0
1
Other Non-Operating Items
0
25
Pre-T a x Income
1,357
1,771
Income Attributable to Wealth and Asset Management
(165)
(158)
Pre-T a x Income of CPBF
1,192
1,613
Cost/Income
72.1%
70.3%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
11.5
11.3
In millions of euros
2023
2022
Commercial & Personal Banking in France (including 100% of Private Banking)(1)
Revenues
6,593
6,634
Incl. net interest revenue
3,498
3,522
Incl. fees
3,095
3,112
Operating Expenses and Dep.
(4,749)
(4,698)
Gross Operating Income
1,844
1,936
Cost of Risk
(485)
(237)
Operating Income
1,358
1,699
Share of Earnings of Equity-Method Entities
0
1
Other Non-Operating Items
0
25
Pre-T a x Income
1,358
1,725
Income Attributable to Wealth and Asset Management
(165)
(158)
Pre-T a x Income of CPBF
1,193
1,567
Cost/Income
72.0%
70.8%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
11.5
11.3
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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Reminder on PEL/CEL provision: this provision, accounted in the revenues of CPB in France, takes into account the risk generated by Plans Épargne
Logement (PEL) and Comptes Épargne Logement (CEL) during their whole lifetime.
In millions of euros
2023
2022
PEL/CEL effects 100% of Private Banking in France
(1)
46
In millions of euros
2023
2022
Commercial & Personal Banking in France (including 2/3 of Private Banking)
Revenues
6,253
6,315
Operating Expenses and Dep.
(4,576)
(4,530)
Gross Operating Income
1,677
1,786
Cost of Risk
(484)
(245)
Operating Income
1,193
1,541
Non-Operating Items
0
26
Pre-T a x Income
1,193
1,567
Cost/Income
73.2%
71.7
Allocated Equity (€bn, year to date)
11.5
11.3
In millions of euros
2023
2022
BNL bc (including 100% of Private Banking)(1)
Revenues
2,727
2,634
Incl. net interest revenue
1,619
1,519
Incl. fees
1,108
1,115
Operating Expenses and Dep.
(1,804)
(1,735)
Gross Operating Income
923
899
Cost of Risk
(410)
(465)
Operating Income
513
433
Share of Earnings of Equity-Method Entities
0
0
Other Non-Operating Items
(3)
2
Pre-T a x Income
509
436
Income Attributable to Wealth and Asset Management
(22)
(26)
Pre-T a x Income of BNL bc
488
410
Cost/Income
66.2%
65.9%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
5.7
6.0
In millions of euros
2023
2022
BNL bc (including 2/3 of Private Banking)
Revenues
2,646
2,548
Operating Expenses and Dep.
(1,745)
(1,676)
Gross Operating Income
901
872
Cost of Risk
(410)
(464)
Operating Income
491
408
Share of Earnings of Equity-Method Entities
0
0
Other Non-Operating Items
(3)
2
Pre-T a x Income
488
410
Cost/Income
65.9%
65.8%
Allocated Equity (€bn, year to date)
5.7
6.0
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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In millions of euros
2023
2022
Commercial & Personal Banking in Belgium (including 100% of Private Banking)(1)
Revenues
3,990
3,764
Incl. net interest revenue
2,867
2,618
Incl. fees
1,123
1,146
Operating Expenses and Dep.
(2,739)
(2,615)
Gross Operating Income
1,251
1,149
Cost of Risk
(86)
(36)
Operating Income
1,165
1,113
Share of Earnings of Equity-Method Entities
1
0
Other Non-Operating Items
9
10
Pre-T a x Income
1,175
1,123
Income Attributable to Wealth and Asset Management
(84)
(74)
Pre-T a x Income of CPBB
1,091
1,049
Cost/Income
68.6%
69.5%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
6.1
6.1
In millions of euros
2023
2022
Commercial & Personal Banking in Belgium (including 2/3 of Private Banking)
Revenues
3,784
3,577
Operating Expenses and Dep.
(2,618)
(2,502)
Gross Operating Income
1,165
1,075
Cost of Risk
(84)
(36)
Operating Income
1,081
1,039
Share of Earnings of Equity-Method Entities
1
0
Other Non-Operating Items
9
10
Pre-T a x Income
1,091
1,049
Cost/Income
69.2%
69.9%
Allocated Equity (€bn, year to date)
6.1
6.1
In millions of euros
2023
2022
Commercial & Personal Banking in Luxembourg (including 100% of Private Banking)(1)
Revenues
592
475
Incl. net interest revenue
497
377
Incl. fees
96
97
Operating Expenses and Dep.
(302)
(275)
Gross Operating Income
290
200
Cost of Risk
(8)
19
Operating Income
283
219
Share of Earnings of Equity-Method Entities
0
0
Other Non-Operating Items
5
3
Pre-T a x Income
288
222
Income Attributable to Wealth and Asset Management
(7)
(6)
Pre-T a x Income of CPBL
281
216
Cost/Income
51.0%
57.9%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
0.8
0.8
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
In millions of euros
2023
2022
Commercial & Personal Banking in Luxembourg (including 2/3 of Private Banking)
Revenues
577
461
Operating Expenses and Dep.
(294)
(268)
Gross Operating Income
283
193
Cost of Risk
(8)
19
Operating Income
275
213
Share of Earnings of Equity-Method Entities
0
0
Other Non-Operating Items
5
3
Pre-T a x Income
281
216
Cost/Income
50.9%
58.1%
Allocated Equity (€bn, year to date)
0.8
0.8
In millions of euros
2023
2022
Europe-Mediterranean (including 100% of Private Banking)(1)
Revenues
2,687
2,346
Incl. net interest revenue
2,241
1,895
Incl. fees
446
451
Operating Expenses and Dep.
(1,666)
(1,658)
Gross Operating Income
1,021
688
Cost of Risk incl. Other net losses for risk on financial instruments
(44)
(153)
Operating Income
977
535
Share of Earnings of Equity-Method Entities
283
376
Other Non-Operating Items
(183)
(87)
Pre-T a x Income
1,077
824
Income Attributable to Wealth and Asset Management
(47)
(16)
Pre-T a x Income of Commercial & Personal Banking in the rest of the world-EM
1,030
808
Cost/Income
62.0%
70.7%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
5.3
5.5
In millions of euros
2023
2022
Europe-Mediterranean (including 2/3 of Private Banking)
Revenues
2,631
2,321
Operating Expenses and Dep.
(1,657)
(1,650)
Gross Operating Income
974
671
Cost of Risk incl. Other net losses for risk on financial instruments
(44)
(152)
Operating Income
930
519
Share of Earnings of Equity-Method Entities
283
376
Other Non-Operating Items
(183)
(87)
Pre-T a x Income
1,030
808
Cost/Income
63.0%
71.1%
Allocated Equity (€bn, year to date)
5.3
5.5
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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In millions of euros
2023
2022
New Digital Businesses & Personal Investors (including 100% of Private Banking)(1)
Revenues
1,007
846
Operating Expenses and Dep.
(677)
(578)
Gross Operating Income
330
268
Cost of Risk
(123)
(100)
Operating Income
206
168
Share of Earnings of Equity-Method Entities
(9)
(10)
Other Non-Operating Items
0
1
Pre-T a x Income
198
159
Income Attributable to Wealth and Asset Management
(3)
(2)
Pre-T a x Income of New Digital Businesses & Personal Investors
195
157
Cost/Income
67.3%
68.3%
Allocated Equity (€bn, year to date; including 2/3 of Private Banking)
0.8
0.5
In millions of euros
2023
2022
New Digital Businesses and Personal Investors (including 2/3 of Private Banking)
Revenues
995
837
Operating Expenses and Dep.
(669)
(571)
Gross Operating Income
326
266
Cost of Risk
(123)
(100)
Operating Income
203
166
Share of Earnings of Equity-Method Entities
(9)
(10)
Other Non-Operating Items
0
1
Pre-T a x Income
195
157
Cost/Income
67.2%
68.2%
Allocated Equity (€bn, year to date)
0.8
0.5
(1) Including 100% of Private Banking for the Revenues to Pre-tax income items.
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
➤ Reconciliation with the aggregate cost of risk on outstanding (cost of risk/customer loans at the beginning of the period,
in annualised bps)
2023
2022
Commercial, Personal Banking & Services(1)
Loan outstandings as of the beg. of the quarter (€bn)
630.5
610.9
Cost of risk (€m)
2,923
2,491
Cost of risk (in annualised bp)
46
41
Commercial & Personal Banking in the Eurozone(1)
Loan outstandings as of the beg. of the quarter (€bn)
464.2
452.2
Cost of risk (€m)
989
719
Cost of risk (in annualised bp)
21
16
CPBF(1)
Loan outstandings as of the beg. of the quarter (€bn)
230.8
223.5
Cost of risk (€m)
485
237
Cost of risk (in annualised bp)
21
11
BNL bc(1)
Loan outstandings as of the beg. of the quarter (€bn)
77.1
80.3
Cost of risk (€m)
410
465
Cost of risk (in annualised bp)
53
58
CPBB(1)
Loan outstandings as of the beg. of the quarter (€bn)
143.0
135.4
Cost of risk (€m)
86
36
Cost of risk (in annualised bp)
6
3
(1) With Private Banking at 100%.
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2023
2022
Commercial & Personal Banking outside the Eurozone(1)
Loan outstandings as of the beg. of the quarter (€bn)
35.5
37.2
Cost of risk (€m)
44
153
Cost of risk (in annualised bp)
13
41
Europe-Mediterranean(1)
Loan outstandings as of the beg. of the quarter (€bn)
35.5
37.2
Cost of risk (€m)
44
153
Cost of risk (in annualised bp)
13
41
Personal Finance
Loan outstandings as of the beg. of the quarter (€bn)
103.5
96.0
Cost of risk (€m)
1,600
1,373
Cost of risk (in annualised bp)
155
143
CIB - Global Banking
Loan outstandings as of the beg. of the quarter (€bn)
175.2
175.0
Cost of risk (€m)
(74)
336
Cost of risk (in annualised bp)
(4)
19
Group(2)
Loan outstandings as of the beg. of the quarter (€bn)
898.4
894.4
Cost of risk (€m)
2,907
3,003
Cost of risk (in annualised bp)
32
34
(1) With Private Banking at 100% and excluding "Other net losses for risk on financial instruments".
(2) Including cost of risk of market activities, Investment and Protection Services and Corporate Centre and excluding "Other net losses for risk on financial
instruments" i.e. Charges related to risk of invalidation or non-enforceability of financial instruments granted (extraordinary provisions on mortgage loans
in Poland and provisions for litigation related to Personal Finance and provisions on a risk on receivables in 2023 (EUR 50 million in 1Q23, EUR 80 million
in 2Q23 booked in Europe-Mediterranean, release of provisions of EUR 130 million in 4Q23 booked in Europe-Mediterranean and EUR 775 million booked
in "Corporate Centre" in 4Q23).
NET EARNINGS PER SHARE(1)
In millions
31 December 2023
31/12/2022(3)
Net Income attributable to equity holders(2)
11,232
10,196
Remuneration net of tax of Undated super subordinated notes
(677)
(452)
Exchange rate effect on reimbursed Undated super subordinated notes
0
(123)
Net Income attributable to equity holders(2), after remuneration and exchange rate effect
on Undated super subordinated notes
10,555
9,621
Average number of Shares outstanding excluding Treasury Shares
1,200
1,233
Net Earnings per Share (EPS) (in euros)
8.79
7.80
Number of Shares excluding Treasury Shares (end of period)
1,147
1,233
NET EARNINGS PER SHARE END OF PERIOD (EPS END OF PERIOD) (in euros)
9.21
7.80
(1) Calculated on the basis of distributable Net Income in 2023.
(2) Distributable Net Income in 2023.
(3) As reported at 31 December 2022.
2023
Other net losses for risk on financial instruments
775
CHF impacts
450
o/w EM
-130
o/w Corporate Centre
450
Impacts of provisions for litigation related to Personal Finance
221
Impacts of provisions on a risk on receivables
104
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Alternative Performance Measures (APM) – Article 223-1 of the AMF's General regulation
RETURN ON EQUITY
In millions of euros
2023(3)
31 December
31 December
2023(4)
31 December
2022(4)
Net income Group share
11,232
10,975
10,196
Remuneration net of tax of Undated super subordinated notes and exchange effect
(677)
(677)
(575)
Net income Group share used for the calculation of ROE/ROTE
10,555
10,298
9,621
Average permanent shareholders' equity, not revaluated, used
for the ROE calculation(1)
106,938
106,938
105,707
Return on Equity (ROE)
9.9%
9.6%
9.1%
Average tangible permanent shareholders' equity, not revaluated,
used for the ROTE calculation(2)
96,115
96,115
93,937
3
RETURN ON TANGIBLE EQUITY (ROTE)
11.0%
10.7%
10.2%
(1) Average permanent shareholders' equity: average of beginning of the year and end of the period (permanent shareholders' equity = shareholders' equity
attributable to shareholders - changes in assets and liabilities recognised directly in equity - Undated super subordinated notes - remuneration net of tax
payable to holders of Undated super subordinated notes - dividend distribution assumption).
(2) Average tangible permanent shareholders' equity: average of beginning of the year and end of the period (tangible permanent shareholders' equity
= permanent shareholders' equity - intangible assets - goodwill).
(3) Calculated on the basis of distributable Net Income in 2023.
(4) Calculated on the basis of reported results.
MAIN EXCEPTIONAL ITEMS
Exceptional items (excluding extraordinary items) (in millions of euros)
2023
2022
Revenues
Provision for litigation (Corporate Centre)
(125)
Total exceptional revenues
(125)
Operating expenses
Restructuring costs and adaptation costs (Corporate Centre)
(182)
(189)
IT reinforcement costs (Corporate Centre)
(395)
(302)
Total exceptional operating expenses
(576)
(490)
Cost of risk
Impact of the "A ct on Assistance to Borrowers" in Poland (Corporate Centre)
(204)
Total exceptional cost of risk
(204)
Other non-operating items
Impact of a sale (Insurance)
(87)
Capital gain on a sale (Corporate Centre)
91
204
Negative goodwill (bpost bank) (Corporate Centre)
244
Impairment and reclassification to profit and loss of exchange differences (Ukrsibbank)
(Corporate Centre)
(433)
Total exceptional other non-operating items
4
15
TOTAL EXCEPTIONAL ITEMS (PRE-TAX)
(697)
(680)
TOTAL EXCEPTIONAL ITEMS (AFTER-TAX)(1)
(543)
(513)
Note: Some exceptional items reported in 1Q23 and 2Q23 have been reclassified as extraordinary items (see press release as at 31/01/2024).
(1) Group share.
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EXTRAORDINARY ITEMS ARE EXCLUDED FROM 2023 DISTRIBUTABLE INCOME
2023 extraordinary items (excluded from distributable Net Income and recognised in the Corporate Centre)(1)
and anticipation of the end of the ramp-up of the SRF
(in millions of euros)
2023
Revenues
Adjustment of hedges related to changes in the TLTRO terms and conditions decided by the ECB in 4Q22 (Corporate Centre)
(938)
Operating expenses
Impact of the end of the ramp-up of the SRF (including -€201m related to the impact of the bank levy in Great Britain
in 4Q23 (-€226m overall in 2023)) (Corporate Centre)
(1,028)
Overall adaptation costs related in particular to Personal Finance (Corporate Centre)
(276)
Other net losses for risk on financial instruments
Provision on mortgage loans in Poland (Corporate Centre)
(450)
Provisions for risk on receivables (Corporate Centre)
(104)
Provisions for litigation related to Personal Finance (Corporate Centre)
(221)
Income from discontinued activities
Capital gain on the sale of Bank of the West effective 01/02/2023
2,947
TOTAL EXTRAORDINARY ITEMS
(70)
Note: Some exceptional items reported in 9M23 are now considered to be extraordinary items (see press release as at 31/01/2024).
(1) Group share.
Extraordinary adjustments to reported Net Income, Group Share to determine distributable Net Income
(in millions of euros)
2023
Adjustments related to extraordinary items
70
Additional adjustments(1)
187
TOTAL EXTRAORDINARY ADJUSTMENTS
257
(1) Related mainly to the sale of Bank of the West.
4
CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2023
4.1
Profit and loss account for the year ended 31 December 2023
174
4.2
Statement of net income and changes in assets and liabilities
recognised directly in equity
175
4.3
Balance sheet at 31 December 2023
176
4.4
Cash flow statement for the year ended 31 December 2023
177
4.5
Statement of changes in shareholders' equity between 1 January 2022
and 31 December 2023
178
4.6
Notes to the financial statements prepared in accordance with IFRS
as adopted by the European Union
180
Note 1
Summary of significant accounting policies applied by the Group
180
1.a Applicable accounting standards
180
1.b Consolidation
182
1.b.1 Scope of consolidation
182
1.b.2 Consolidation methods
183
1.b.3 Consolidation rules
184
1.b.4 Business combinations and measurement of goodwill
184
1.c Translation of foreign currency transactions
185
1.d Financial information in hyperinflationary economies
185
1.e Net interest income, commissions and income from other activities
186
1.e.1 Net interest income
186
1.e.2 Commissions and income from other activities
186
1.f Financial assets and liabilities
186
1.f.1
Financial assets at amortised cost
187
1.f.2
Financial assets at fair value through shareholders' equity
188
1.f.3
Financing and guarantee commitments
188
1.f.4
Regulated savings and loan contracts
188
1.f.5
Impairment of financial assets measured at amortised cost and
debt instruments measured at fair value through shareholders' equity 189
1.f.6
Cost of risk
191
1.f.7
Financial instruments at fair value through profit or loss
191
1.f.8
Financial liabilities and equity instruments
192
1.f.9
Hedge accounting
192
1.f.10 Determination of fair value
193
1.f.11 Derecognition of financial assets and financial liabilities
194
1.f.12 Offsetting financial assets and financial liabilities
194
1.g Insurance activities
195
1.g.1 Investments related to insurance activities
195
1.g.2 Insurance contracts
195
1.h Property,plant, equipment and intangible assets
198
1.i Leases
199
1.i.1
Group company as lessor
199
1.i.2
Group company as lessee
199
1.j Assets held for sale and discontinued operations
199
1.k Employee benefits
200
1.l Share-based payments
200
1.m Provisions recorded under liabilities
201
1.n Current and deferred tax
201
1.o Cash flow statement
201
1.p Use of estimates in the preparation of the financial statements
202
Note 2
IFRS 17 and IFRS 9 first time application impacts
203
Note 3
Notes to the profit and loss account for the year ended 31 December 2023
206
3.a Net interest income
206
3.b Commission income and expense
207
3.c Net gain on financial instruments at fair value through profit or loss
207
3.d Net gain on financial instruments at fair value through equity
208
3.e Net income from other activities
208
3.f Operating expenses
208
3.g Cost of risk
209
3.h Other net losses for risk on financial instruments
218
3.i Net gain on non-current assets
218
3.j Corporate income tax
218
Note 4
Segment information
219
Note 5
Notes to the balance sheet at 31 December 2023
223
5.a Financial instruments at fair value through profit or loss
223
5.b Derivatives used for hedging purposes
224
5.c Financial assets at fair value through equity
227
5.d Measurement of the fair value of financial instruments
228
5.e Financial assets at amortised cost
237
5.f Impaired financial assets (stage 3)
238
5.g Financial liabilities at amortised cost due to credit institutions and customers
239
5.h Debt securities and subordinated debt
240
5.i Current and deferred taxes
242
5.j Accrued income/expense and other assets/liabilities
243
5.k Equity-method investments
243
5.l Property,plant, equipment and intangible assets used in operations, investment property
244
5.m Goodwill
245
5.n Provisions for contingencies and charges
248
5.o Offsetting of financial assets and liabilities
249
5.p Transfers of financial assets
252
Note 6
Notes related to insurance activities
253
6.a Net income from insurance activities
253
6.b Reconciliation of expenses by type and by function
255
6.c Investments,other assets and financial liabilities related to insurance activities
255
6.d Assets and liabilities related to insurance contracts
258
6.e Risk sensitivity
262
Note 7
Financing and guarantee commitments
264
7.a Financing commitments given or received
264
7.b Guarantee commitments given by signature
264
7.c Securities commitments
265
7.d Other guarantee commitments
265
Note 8
Salaries and employee benefits
266
8.a Salary and employee benefit expense
266
8.b Post-employment benefits
266
8.c Other long-term benefits
272
8.d Termination benefits
273
8.e Share-based payments
273
Note 9
Additional information
274
9.a Changes in share capital and earnings per share
274
9.b Minority interests
277
9.c Legal proceedings and arbitration
279
9.d Business combinations and loss of control or significant influence
280
9.e Discontinued activities
280
9.f Significant restrictions in subsidiaries, joint ventures and associates
281
9.g Structured entities
281
9.h Compensation and benefits awarded to the group's corporate officers
283
9.i Other related parties
284
9.j Fair value of financial instruments carried at amortised cost
286
9.k Scope of consolidation
287
9.l Fees paid to the Statutory Auditors
296
4.7
Statutory Auditors' report on the consolidated financial statements
297
The Board of directors of BNP Paribas approved the Group consolidated financial statements on 31 January 2024.
The consolidated financial statements of the BNP Paribas Group are presented for the years ended 31 December 2023 and 31 December 2022. In
accordance with Annex I of European Delegated Regulation (EU) 2019/980, the consolidated financial statements for the year ended 31 December
2021 are provided in the Universal registration document filed with the Autorité des Marchés Financiers on 24 March 2023 under number D.23-0143.
On 18 December 2021, the Group concluded an agreement with BMO Financial Group for the sale of 100% of its retail and commercial banking activities in the
United States operated by the BancWest cash-generating unit. The terms of this transaction fall within the scope of application of IFRS 5 relating to groups
of assets and liabilities held for sale (see note 9.e Discontinued activities) leading to isolate the "Net income from discontinued activities" on a separate line.
A s imilar reclassification is made in the statement of net income and changes in assets and liabilities recognised directly in equity and in the cash flow statement.
Following the receipt of regulatory approvals, the transaction was finalised on 1 February 2023.
4.1 Profit and loss account for the year ended
31 December 2023
In millions of euros
Notes
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Interest income
3.a
79,542
41,082
Interest expense
3.a
(60,484)
(20,149)
Commission income
3.b
15,011
14,622
Commission expense
3.b
(5,190)
(4,457)
Net gain on financial instruments at fair value through profit or loss
3.c
10,346
9,352
Net gain on financial instruments at fair value through equity
3.d
28
138
Net gain on derecognised financial assets at amortised cost
66
(41)
Net income from insurance activities
6.a
2,320
1,901
of which Insurance revenue
8,945
8,759
Insurance service expenses
(6,786)
(6,619)
Investment return
10,254
(12,077)
Net finance income or expenses from insurance contracts
(10,093)
11,838
Income from other activities
3.e
18,560
15,734
Expense on other activities
3.e
(14,325)
(12,752)
REVENUES FROM CONTINUING ACTIVITIES
45,874
45,430
Operating expenses
3.f
(28,713)
(27,560)
Depreciation, amortisation and impairment of property, plant and equipment
and intangible assets
5.l
(2,243)
(2,304)
GROSS OPERATING INCOME FROM CONTINUING ACTIVITIES
14,918
15,566
Cost of risk
3.g
(2,907)
(3,003)
Other net losses for risk on financial instruments
3.h
(775)
-
OPERATING INCOME FROM CONTINUING ACTIVITIES
11,236
12,563
Share of earnings of equity-method entities
5.k
593
655
Net gain on non-current assets
3.i
(104)
(253)
Goodwill
5.m
-
249
PRE-TAX INCOME FROM CONTINUING ACTIVITIES
11,725
13,214
Corporate income tax from continuing activities
3.j
(3,266)
(3,653)
NET INCOME FROM CONTINUING ACTIVITIES
8,459
9,561
Net income from discontinued activities
9.e
2,947
687
NET INCOME
11,406
10,248
Net income attributable to minority interests
431
400
NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS
10,975
9,848
Basic earnings per share
9.a
8.58
7.52
Diluted earnings per share
9.a
8.58
7.52
4.2 Statement of net income and changes
in assets and liabilities recognised directly
in equity
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Net income for the period
11,406
10,248
Changes in assets and liabilities recognised directly in equity
596
(2,183)
Items that are or may be reclassified to profit or loss
367
(2,381)
Changes in exchange differences
(109)
1,041
Changes in fair value of financial assets at fair value through equity
Changes in fair value recognised in equity
244
(754)
Changes in fair value reported in net income
27
(120)
Changes in fair value of investments of insurance activities
Changes in fair value recognised in equity
4,665
(19,962)
Changes in fair value reported in net income
558
(1)
Changes in fair value of contracts of insurance activities
(4,573)
18,102
Changes in fair value of hedging instruments
Changes in fair value recognised in equity
146
(1,459)
Changes in fair value reported in net income
22
14
Income tax
(283)
1,062
Changes in equity-method investments, after tax
(162)
136
Changes in discontinued activities, after tax
(168)
(440)
Items that will not be reclassified to profit or loss
229
198
Changes in fair value of equity instruments designated as at fair value through equity
232
(57)
Debt remeasurement effect arising from BNP Paribas Group issuer risk
45
515
Remeasurement gains (losses) related to post-employment benefit plans
(173)
(102)
Income tax
11
(81)
Changes in equity-method investments, after tax
114
(83)
Changes in discontinued activities, after tax
-
6
TOTAL
12,002
8,065
Attributable to equity shareholders
11,479
7,572
Attributable to minority interests
523
493
4.3 Balance sheet at 31 December 2023
In millions of euros, at
Notes 31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
1 January 2022
IAS 29, IFRS 17 and 9
ASSETS
Cash and balances at central banks
288,259
318,560
347,883
Financial instruments at fair value through profit or loss
Securities
5.a
211,634
166,077
191,507
Loans and repurchase agreements
5.a
227,175
191,125
249,808
Derivative financial instruments
5.a
292,079
327,932
240,423
Derivatives used for hedging purposes
5.b
21,692
25,401
8,680
Financial assets at fair value through equity
Debt securities
5.c
50,274
35,878
38,915
Equity securities
5.c
2,275
2,188
2,558
Financial assets at amortised cost
Loans and advances to credit institutions
5.e
24,335
32,616
21,751
Loans and advances to customers
5.e
859,200
857,020
814,000
Debt securities
5.e
121,161
114,014
108,612
Remeasurement adjustment on interest-rate risk hedged portfolios
(2,661)
(7,477)
3,005
Investments and other assets related to insurance activities
6.c
257,098
245,475
282,288
Current and deferred tax assets
5.i
6,556
5,932
5,954
Accrued income and other assets
5.j
170,758
208,543
177,176
Equity-method investments
5.k
6,751
6,073
5,468
Property, plant and equipment and investment property
5.l
45,222
38,468
35,191
Intangible assets
5.l
4,142
3,790
3,659
Goodwill
5.m
5,549
5,294
5,121
Assets held for sale
9.e
-
86,839
91,267
TOTAL ASSETS
2,591,499
2,663,748
2,633,266
LIABILITIES
Deposits from central banks
3,374
3,054
1,244
Financial instruments at fair value through profit or loss
Securities
5.a
104,910
99,155
112,338
Deposits and repurchase agreements
5.a
273,614
234,076
292,160
Issued debt securities
5.a
83,763
65,578
64,197
Derivative financial instruments
5.a
278,892
300,121
237,635
Derivatives used for hedging purposes
5.b
38,011
40,001
10,076
Financial liabilities at amortised cost
Deposits from credit institutions
5.g
95,175
124,718
165,698
Deposits from customers
5.g
988,549
1,008,056
957,684
Debt securities
5.h
191,482
155,359
150,822
Subordinated debt
5.h
24,743
24,160
24,720
Remeasurement adjustment on interest-rate risk hedged portfolios
(14,175)
(20,201)
1,367
Current and deferred tax liabilities
5.i
3,821
2,979
3,016
Accrued expenses and other liabilities
5.j
143,673
185,010
146,520
Liabilities related to insurance contracts
6.d
218,043
209,772
240,118
Financial liabilities related to insurance activities
6.c
18,239
18,858
20,041
Provisions for contingencies and charges
5.n
10,518
10,040
10,187
Liabilities associated with assets held for sale
9.e
-
77,002
74,366
TOTAL LIABILITIES
2,462,632
2,537,738
2,512,189
EQUITY
Share capital, additional paid-in capital and retained earnings
115,809
115,008
107,938
Net income for the period attributable to shareholders
10,975
9,848
9,488
Total capital, retained earnings and net income for the period attributable
to shareholders
126,784
124,856
117,426
Changes in assets and liabilities recognised directly in equity
(3,042)
(3,619)
(1,021)
Shareholders' equity
123,742
121,237
116,405
Minority interests
9.b
5,125
4,773
4,672
TOTAL EQUITY
128,867
126,010
121,077
TOTAL LIABILITIES AND EQUITY
2,591,499
2,663,748
2,633,266
4.4 Cash flow statement for the year ended
31 December 2023
In millions of euros
Notes Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Pre-tax income from continuing activities
11,725
13,214
Pre-tax income from discontinued activities
3,658
823
Non-monetary items included in pre-tax net income and other adjustments
8,495
21,838
Net depreciation/amortisation expense on property, plant and equipment and intangible assets
6,245
6,465
Impairment of goodwill and other non-current assets
(32)
91
Net addition to provisions
3,646
3,193
Variation of assets/liabilities related to insurance contracts
(6,240)
(837)
Share of earnings of equity-method entities
(593)
(655)
Net income (expense) from investing activities
(3,600)
265
Net expense (income) from financing activities
506
(1,192)
Other movements
8,563
14,508
Net decrease related to assets and liabilities generated by operating activities
(58,119)
(88,712)
Net decrease related to transactions with customers and credit institutions
(7,751)
(46,438)
Net decrease related to transactions involving other financial assets and liabilities
(32,712)
(30,212)
Net decrease related to transactions involving non-financial assets and liabilities
(14,297)
(10,063)
T a xes paid
(3,359)
(1,999)
NET DECREASE IN CASH AND CASH EQUIVALENTS GENERATED BY OPERATING ACTIVITIES
(34,241)
(52,837)
Net increase related to acquisitions and disposals of consolidated entities
9,520
366
Net decrease related to property, plant and equipment and intangible assets
(2,216)
(2,529)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS RELATED TO INVESTING
ACTIVITIES
7,304
(2,163)
Decrease in cash and cash equivalents related to transactions with shareholders
(8,698)
(2,578)
Increase in cash and cash equivalents generated by other financing activities
4,022
11,828
NET DECREASE (INCREASE) IN CASH AND CASH EQUIVALENTS RELATED TO FINANCING
ACTIVITIES
(4,676)
9,250
EFFECT OF MOVEMENT IN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
(3,506)
1,030
NET DECREASE IN CASH AND CASH EQUIVALENTS
(35,119)
(44,720)
of which net increase (decrease) in cash and cash equivalents from discontinued
activities
9,909
(11,935)
Balance of cash and cash equivalent accounts at the start of the period
317,698
362,418
Cash and amounts due from central banks
318,581
347,901
Due to central banks
(3,054)
(1,244)
On demand deposits with credit institutions
11,927
10,156
On demand loans from credit institutions
5.g
(12,538)
(9,105)
Deduction of receivables and accrued interest on cash and cash equivalents
163
156
Cash and cash equivalent accounts classified as "A ssets held for sale"
2,619
14,554
Balance of cash and cash equivalent accounts at the end of the period
282,579
317,698
Cash and amounts due from central banks
288,279
318,581
Due to central banks
(3,374)
(3,054)
On demand deposits with credit institutions
8,352
11,927
On demand loans from credit institutions
5.g
(10,770)
(12,538)
Deduction of receivables and accrued interest on cash and cash equivalents
92
163
Cash and cash equivalent accounts classified as "A ssets held for sale"
-
2,619
NET DECREASE IN CASH AND CASH EQUIVALENTS
(35,119)
(44,720)
In millions of euros
Capital and retained earnings
Changes in assets and
liabilities recognised directly
in equity that will not be
reclassified to profit or loss
Share
capital and
additional
paid-in- subordinated
capital
Undated
super
notes
reserves
Non-
distributed
Total
as at fair
value through
equity
Own-credit
valuation
Financial adjustment of
assets debt securities Remeasurement
designated designated as gains(losses)
at fair value
through profit
or loss
related to post-
employment
benefit plans
Balance at 31 December 2021
26,347
9,207
82,110
117,664
840
(267)
549
Impacts of IAS 29 1st application in Türkiye
(39)
(39)
Impacts of the transition to IFRS 17
(2,619)
(2,619)
Impacts of the transition to IFRS 9
2,420
2,420
258
Balance at 1 January 2022
26,347
9,207
81,872
117,426
1,098
(267)
549
Appropriation of net income for 2021
(4,527)
(4,527)
Increases in capital and issues
5,024
(4)
5,020
Reduction or redemption of capital
(2,430)
(123)
(2,553)
Movements in own equity instruments
(157)
(1)
(151)
(309)
Remuneration on undated super subordinated notes
(374)
(374)
Impact of internal transactions on minority
shareholders (note 9.b)
1
1
Movements in consolidation scope impacting
minority shareholders (note 9.b)
-
Acquisitions of additional interests or partial sales
of interests (note 9.b)
-
Change in commitments to repurchase minority
shareholders' interests
(2)
(2)
Other movements
4
4
Realised gains or losses reclassified to retained earnings
322
322
(326)
3
1
Changes in assets and liabilities recognised directly
in equity
-
(187)
383
(10)
Net income for 2022
9,848
9,848
Balance at 31 December 2022
26,190
11,800
86,866
124,856
585
119
540
Appropriation of net income for 2022
(4,744)
(4,744)
Increases in capital and issues
1,670
(2)
1,668
Reduction or redemption of capital
(4,983)
(17)
(5,000)
Movements in own equity instruments
(5)
2
(218)
(221)
Share-based payment plans
(8)
(8)
Remuneration on undated super subordinated notes
(654)
(654)
Impact of internal transactions on minority
shareholders (note 9.b)
(21)
(21)
Movements in consolidation scope impacting
minority shareholders (note 9.b)
-
Acquisitions of additional interests or partial sales
of interests (note 9.b)
1
1
Change in commitments to repurchase minority
shareholders' interests
9
9
Other movements
(4)
(4)
Realised gains or losses reclassified to retained earnings
(73)
(73)
(34)
(8)
(4)
Changes in assets and liabilities recognised directly
in equity
-
304
35
(105)
Net income for 2023
10,975
10,975
Balance at 31 December 2023
21,202
13,472
92,110
126,784
855
146
431
4.5 Statement of changes in shareholders' equity
Changes in assets and
liabilities recognised directly
in equity that will not be
reclassified to profit or loss
Changes in assets and liabilities recognised directly
in equity that may be reclassified to profit or loss
Total
shareholders'
equity
Minority
interests
(note 9.b) Total equity
Exchange value through of insurance
Discontinued
activities
Total
differences
Financial investments
assets at fair
equity
Financial
and contracts
activities
Derivatives
used for
hedging Discontinued
purposes
activities
Total
(125)
997
(4,335)
122
1,811
1,019
608
(775)
117,886
4,621
122,507
-
165
165
126
48
174
-
533
533
(2,086)
12
(2,074)
258
(2,199)
(2,199)
479
(9)
470
(125)
1,255
(4,170)
122
145
1,019
608
(2,276)
116,405
4,672
121,077
-
-
(4,527)
(133)
(4,660)
-
-
5,020
34
5,054
-
-
(2,553)
(2,553)
-
-
(309)
(309)
-
-
(374)
(374)
-
-
1
2
3
-
-
-
(136)
(136)
-
-
-
-
-
-
(2)
(157)
(159)
-
-
4
(2)
2
(322)
-
-
-
6
192
980
(633)
(1,607)
(768)
(440)
(2,468)
(2,276)
93
(2,183)
-
-
9,848
400
10,248
(119)
1,125
(3,190)
(511)
(1,462)
251
168
(4,744)
121,237
4,773
126,010
-
-
(4,744)
(179)
(4,923)
-
-
1,668
316
1,984
-
-
(5,000)
(5,000)
-
-
(221)
(221)
-
-
(8)
1
(7)
-
-
(654)
(3)
(657)
-
-
(21)
21
-
-
-
-
(90)
(90)
-
-
1
(12)
(11)
-
-
9
(225)
(216)
-
-
(4)
(4)
119
73
-
-
-
234
(239)
153
490
34
(168)
270
504
92
596
-
-
10,975
431
11,406
-
1,432
(3,429)
(358)
(972)
285
-
(4,474)
123,742
5,125
128,867
between 1 January 2022 and 31 December 2023
4.6 Notes to the financial statements prepared
in accordance with IFRS as adopted
by the European Union
Note 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES APPLIED
BY THE GROUP
1.a APPLICABLE ACCOUNTING STANDARDS
The consolidated financial statements of the BNP Paribas Group have
been prepared in accordance with international accounting standards
(International Financial Reporting Standards – IFRS), as adopted for use in
the European Union(1). Accordingly, certain provisions of IAS 39 on hedge
accounting have been excluded.
Information on the nature and extent of risks relating to financial
instruments as required by IFRS 7 "Financial Instruments: Disclosures"
and to insurance contracts as required by IFRS 17 "Insurance
Contracts", along with information on regulatory capital required by
IAS 1 "Presentation of financial statements" are presented in chapter 5
of the Universal registration document. This information, which is an
integral part of the notes to the consolidated financial statements of
the BNP Paribas Group at 31 December 2023, is covered by the opinion
of the Statutory Auditors on the financial statements, and is identified in
the management report by the word "A udited". Section 4 of chapter 5,
paragraph Exposures, provisions and cost of risk provides, in particula r,
IFRS 7 information on credit risk exposures and related impairment
broken down according to whether the underlying loans are performing
or non-performing, by geographic area and by industry.
■ Since 1 January 2023, BNP Paribas Group's insurance entities have
applied IFRS 17 "Insurance Contracts" published in May 2017,
amended in June 2020 and adopted by the European Union in
November 2021, including the exemption provided for in article 2 of
regulation 2021/2036 regarding annual cohorts. The transition date
for IFRS 17 is 1 January 2022 for the purposes of the opening balance
sheet of the comparative period required by the standard.
As the Group deferred the application of IFRS 9 "Financial Instruments"
for its insurance entities until the entry into force of IFRS 17, they
therefore apply this standard from 1 January 2023.
In addition, the entry into force of IFRS 17 brings into effect various
amendments to other standards, including IAS 1 for presentation,
IAS 16 and IAS 40 for the valuation and presentation of real estate
assets, IAS 28 for exemptions from the equity method and IAS 32 and
IFRS 9 for own equity instruments and other securities issued by the
Group.
Finally, the amendment to IFRS 17 "Initial application of IFRS 17
and IFRS 9 – Comparative information" published by the IASB in
December 2021 and adopted by the European Union on 9 September
2022 allows insurance companies applying IFRS 9 and IFRS 17 for
the first time simultaneously to present 2022 comparative data as if
IFRS 9 was already applied, using an "overlay" approach. The Group
applied this optional approach for all financial instruments, including
those derecognised in 2022, for both classification and measurement
purposes.
Transition from IFRS 4 to IFRS 17
IFRS 17 applies retroactively to all contracts outstanding at the
transition date, i.e. 1 January 2022 due to the mandatory comparative
period. Three transition methods may be used: a full retrospective
approach and, if this cannot be implemented, a modified retrospective
approach or an approach based on the fair value of the contracts at
the transition date.
The majority of entities controlled by the Group have applied the
modified retrospective approach and, to a lesser extent, for some
portfolios, an approach based on the fair value of contracts at the
transition date.
As a matter of fact, not all the necessary information was available or
was not sufficiently granula r, i n particular due to systems migration
and data retention requirements, to apply a full retrospective
approach. Moreove r, t he full retrospective approach would have
required reconstituting management's assumptions and intentions
in previous periods.
The objective of the modified retrospective approach is to achieve a
result that is as close as possible to the result that would have been
obtained through the retrospective application of the standard, based
on reasonable and supportable information available without undue
costs or effort.
Thus, the entities concerned applied the modified retrospective
approach to most portfolios of existing contracts, whether in Protection
or Life/Savings, according to the principles below.
For Protection contracts valued according to the general model,
the principle of the modified retrospective approach consists in
reconstituting liabilities at the initial recognition date based on
their valuation at the transition date, by retroactively reconstituting
movements between the two dates with simplifications:
■
cash flows at inception are estimated by adding the actual cash
flows recorded between the two dates, to the amount at the
transition date;
■
the original discount rate can be determined with interest rate
curves simulating those at the date of first recognition;
(1) The full set of standards adopted for use in the European Union can be found on the website of the European Commission at:
https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/company-reporting_en
■
the changes in the adjustment for non-financial risk between the
inception date and the transition date can be estimated based on
release patterns observed on similar contracts.
For liabilities for remaining coverage that are reconstituted in this way
at the inception date, the contractual service margin at inception (if
any), less any acquisition costs paid in the interim period, is amortised
based on the services provided in the period prior to the transition, in
order to determine the amount of the remaining contractual service
margin at that date, less any remaining acquisition costs.
When contracts are grouped into a single group on the transition date,
the discount rate on that date or an average rate can be used.
The effect of the change in the discount rate on liabilities is recognised
in the profit and loss account, unless the option to split financial
changes between profit and loss and shareholders' equity is retained.
Choosing this option requires the amount carried in shareholders'
equity at the transition date to be recalculated from the inception
rate for the liability for remaining coverage and from the rate at the
date of claims occurrence for the liability for incurred claims. Where
such reconstitution is not possible, the amount shown in equity is zero.
For the purposes of this reconstitution, the simplifications mainly
covered the following:
reconstitution of the annual cohorts or consolidation into a single
■
group of contracts at the transition date according to available data;
the reconstitution of fulfilment cash flows and unamortised
■
acquisition costs;
■
the release of the risk adjustment between the date of issuance of
the contracts and the transition date;
■
discount rates (the rate at inception in the case of a reconstitution
by annual cohorts or an average rate in the case of a consolidation
into a single group of contracts at the transition date);
the amount transferred to changes in equity that may be reclassified
■
to profit or loss at the transition date in respect of changes in the
discount rate, that was reconstituted based on historical rates or
reset to zero if such a reconstitution is not achievable.
For Protection contracts valued according to the simplified method,
the reserves for remaining coverage were generally determined at
transition from the previous reserves for unearned premiums, net
of acquisition costs. The incurred claims reserves arising from these
contracts consist of expected cash flows and risk adjustments for
non-financial risks at the transition date. When cash flows were
discounted and for portfolios for which the disaggregation option of
financial changes between profit and loss account and shareholders'
equity was chosen, the amount carried in changes in equity that may
be reclassified to profit or loss at the transition date in relation to
changes in the discount rate was reconstituted based on the historical
rates or set to zero if such a reconstitution was not achievable.
For Life/Savings contracts valued under the variable fee approach,
the modified retrospective approach also consists in reconstituting the
liability at the inception date, starting from the liability at the transition
date. Howeve r, f or these contracts, the standard provides that the
contractual services margin at the transition date is determined using
the following approach:
■
the realisable value of the underlying assets at the transition date
is first diminished by the fulfilment cash flows (discounted cash
flows and risk adjustment) at that date;
■
to this amount are added the income received from the policyholders
and changes in the risk adjustment, less the acquisition cashflows
paid during the interim period;
■
the contractual service margin net of the acquisition costs initially
reconstituted is then amortised until the transition date to reflect
the services provided to that date, as well as the remaining
acquisition costs.
The main simplifications in implementing this approach were as
follows:
■
existing contracts were grouped according to the planned post-
transition segmentation, without a breakdown in annual cohorts, in
line with the election of the exemption provided for by the European
regulation;
■
for general funds common to participating and non-participating
contracts and to equity, the underlying assets were defined on the
basis of the breakdown used to calculate policyholders' participation;
■
the contractual services margin at the transition date was
reconstituted:
■
based on the fair value of the underlying assets less fulfilment
cash flows at the transition date;
■
by adding the historical margins which were rolled over up to
the transition date, using the same approach as that to be used
after the transition, taking into account the "over-performance"
on assets; and
■
deducting any remaining acquisition costs;
■
the amount recorded in changes in equity that may be reclassified to
profit or loss at the transition date as an adjustment for accounting
mismatches was determined using the fair value of the underlying
assets recognised in equity at the transition date.
Finally, under the fair value method, the contractual service margin at
the transition date was determined as the difference at the transition
date between the realisable value determined without taking into
account the amount payable on demand and the fulfilment cash flows.
This approach was used on some non-material portfolios when the
modified retrospective approach could not be implemented. For these
portfolios, the fair value was estimated based on a Solvency 2 valuation
and, in the particular case of a recent business combination dating
from 2018, based on the amount allocated to the contracts during the
acquisition price allocation process.
Transition from IAS 39 to IFRS 9
Financial assets and liabilities of insurance entities are managed by
portfolios corresponding either to the insurance liabilities they back up
or to the own funds. The business models were therefore determined
according to these portfolios at the transition date to IFRS 9 (see
note 2 IFRS 17 and IFRS 9 First time application impacts).
Amendments to other standards related
to IFRS 17
The Group also applied the changes in IAS 40 and IAS 16 resulting from
IFRS 17, leading to the measurement of property held as underlying
assets of direct participating contracts at fair value through profit or
loss. It also applied the amendments to IAS 32 and IFRS 9, making it
possible to maintain on the balance sheet financial assets issued by the
Group that are held as assets underlying direct participating contracts
and are measured at fair value through profit or loss.
Business combinations (including goodwill) prior to the transition date
were not modified except for the cancellation of specific intangible
assets under IFRS 4.
■ In relation to the IBOR and Eonia rates reform, at the end of 2018 the
Group launched a global transition programme, involving all business
lines and functions. The aim of the programme was to manage and
implement the transition from the old benchmark interest rates
to the new ones in major jurisdictions and currencies (euro, pound
sterling, US dolla r, S wiss franc and Japanese yen), while reducing the
risks associated with this transition and meeting the deadlines set
by the competent authorities. The Group contributed to market-wide
workshops with central banks and financial regulators.
In Europe, the Eonia-€STR transition, which was purely technical given
the fixed link between these two indices, was finalised at the end of
December 2021 while the maintenance of Euribor on a sine die basis
was confirmed.
Publication of JPY synthetic Libor was discontinued at the end of 2022.
Regarding synthetic GBP Libo r, t he publication of the 1-month and
6-month settings ceased in March 2023, thereby only leaving the
3-month setting, which will subsist until March 2024.
In the United States, the decision was taken to continue publishing
the USD Libor until mid-2023, and a legislative solution was passed at
the federal level in the first quarter of 2022 to address legacy US-law
governed contracts. In early April 2023, the FCA (Financial Conduct
Authority) announced its decision to compel ICE BA (as benchmark
administrator) to continue publication of 1-month, 3-month and
6-month USD Libor after 30 June 2023 and until 30 September 2024,
using a synthetic methodology.
Through the implementation and execution of a detailed transition
plan, the Group finalised its migration to the new reference rates.
In September 2019, the IASB published "Phase 1" amendments to
IAS 39 and IFRS 7, amending the hedge accounting requirements so
that hedges affected by the benchmark interest rate reform could
continue despite the uncertainty during the transition of the hedged
items or hedging instruments to the reformed benchmark rates. These
amendments, endorsed by the European Commission on 15 January
2020, have been applied by the Group since 31 December 2019.
In August 2020, the IASB published "Phase 2" amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16 introducing several changes
applicable during the effective transition to the new benchmark interest
rates. These amendments allow for changes in the contractual cash
flows of financial instruments resulting from the IBOR rates reform to
be treated as a simple reset of their variable interest rate, provided,
howeve r, t hat such changes are made on an economically equivalent
basis. They also allow the continuation of hedging relationships,
subject to amendments to their documentation to reflect changes
in hedged instruments, hedging instruments, hedged risk, and/or the
method for measuring effectiveness during the transition to the new
benchmark rates.
These amendments, adopted by the European Commission in
December 2020, have been applied by the Group since 31 December
2020 to maintain its existing hedging relationships which have been
modified as a result of the transition to the new RFRs.
■ Further to the Pillar II recommendations of the Organisation for
Economic Cooperation and Development (OECD) in relation to the
international tax reform, the European Union adopted on 14 December
2022 the 2022/2523 directive instituting a minimum corporate income
tax for international groups, effective 1 January 2024.
To clarify the directive's potential impacts, the IASB issued on 23 May
2023 a series of amendments to IAS 12 "Income T a xes", which were
adopted by the European Union on 8 November 2023. In accordance
with the provisions of these amendments, the Group applies the
mandatory and temporary exception not to recognise deferred taxes
associated with this additional taxation.
Based on the available information, the impact of the Pillar II reform
are expected to be non-material for the Group once adopted. Income
before tax and corporate income tax by country are presented in
chapter 8 of the Universal registration document (part 8.6, section II.
Profit and Loss account items and headcount by country).
■ In France, changes resulting from the pension reform enacted on
14 April 2023 constitute a change in post-employment benefits, based
on IAS 19 § 104. The non-material impact of this change was recorded
in the profit and loss account for the period.
The introduction of other standards, amendments and interpretations that
are mandatory as from 1 January 2023, in particular the amendments to
IAS 1 "Presentation of financial statements", IAS 8 "Changes in accounting
estimates and errors" and "IAS 12 Income T a x", had no effect on the
Group's financial statements at 31 December 2023.
The Group did not early adopt any of the new standards, amendments,
and interpretations adopted by the European Union, when the application
in 2023 was optional.
1.b CONSOLIDATION
1.b.1 Scope of consolidation
The consolidated financial statements of BNP Paribas include entities
that are controlled by the Group, jointly controlled, and under significant
influence, with the exception of those entities whose consolidation is
regarded as immaterial to the Group. Companies that hold shares in
consolidated companies are also consolidated.
Subsidiaries are consolidated from the date on which the Group obtains
effective control. Entities under temporary control are included in the
consolidated financial statements until the date of disposal.
1.b.2 Consolidation methods
Exclusive control
Controlled enterprises are fully consolidated. The Group controls a
subsidiary when it is exposed, or has rights, to variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity.
For entities governed by voting rights, the Group generally controls the
entity if it holds, directly or indirectly, the majority of the voting rights
(and if there are no contractual provisions that alter the power of these
voting rights) or if the power to direct the relevant activities of the entity
is conferred on it by contractual agreements.
Structured entities are entities established so that they are not
governed by voting rights, for instance when those voting rights relate
to administrative tasks only, whereas the relevant activities are directed
by means of contractual arrangements. They often have the following
features or attributes: restricted activities, a narrow and well-defined
objective and insufficient equity to permit them to finance their activities
without subordinated financial support.
For these entities, the analysis of control shall consider the purpose
and design of the entity, the risks to which the entity is designed to be
exposed and to what extent the Group absorbs the related variability. The
assessment of control shall consider all facts and circumstances able
to determine the Group's practical ability to make decisions that could
significantly affect its returns, even if such decisions are contingent on
uncertain future events or circumstances.
In assessing whether it has powe r, t he Group considers only substantive
rights which it holds or which are held by third parties. For a right to be
substantive, the holder must have the practical ability to exercise that
right when decisions about the relevant activities of the entity need to
be made.
Control is reassessed if facts and circumstances indicate that there are
changes to one or more of the elements of control.
Where the Group contractually holds the decision-making powe r, f or
instance where the Group acts as fund manage r, i t shall determine
whether it is acting as agent or principal. Indeed, when associated with
a certain level of exposure to the variability of returns, this decision-
making power may indicate that the Group is acting on its own account
and that it thus has control over those entities.
Minority interests are presented separately in the consolidated profit
and loss account and balance sheet within consolidated equity. The
calculation of minority interests takes into account the outstanding
cumulative preferred shares classified as equity instruments issued by
subsidiaries, when such shares are held outside the Group.
As regards fully consolidated funds, units held by third-party investors
are recognised as debts at fair value through profit or loss, inasmuch as
they are redeemable at fair value at the subscriber's initiative.
For transactions resulting in a loss of control, any equity interest retained
by the Group is remeasured at its fair value through profit or loss.
Joint control
Where the Group carries out an activity with one or more partners,
sharing control by virtue of a contractual agreement which requires
unanimous consent on relevant activities (those that significantly affect
the entity's returns), the Group exercises joint control over the activity.
Where the jointly controlled activity is structured through a separate
vehicle in which the partners have rights to the net assets, this joint
venture is accounted for using the equity method. Where the jointly
controlled activity is not structured through a separate vehicle or where
the partners have rights to the assets and obligations for the liabilities
of the jointly controlled activity, the Group accounts for its share of
the assets, liabilities, revenues and expenses in accordance with the
applicable IFRS.
Significant influence
Companies over which the Group exercises significant influence or
associates are accounted for by the equity method. Significant influence
is the power to participate in the financial and operating policy decisions
of a company without exercising control. Significant influence is presumed
to exist when the Group holds, directly or indirectly, 20% or more of the
voting rights of a company. Interests of less than 20% can be included
in the consolidation scope if the Group effectively exercises significant
influence. This is the case for example for entities developed in partnership
with other associates, where the BNP Paribas Group participates in
strategic decisions of the enterprise through representation on the Board
of directors or equivalent governing body, or exercises influence over
the enterprise's operational management by supplying management
systems or senior managers, or provides technical assistance to support
the enterprise's development.
Changes in the net assets of associates (companies accounted for under
the equity method) are recognised on the assets side of the balance
sheet under "Investments in equity-method entities" and in the relevant
component of shareholders' equity. Goodwill recorded on associates is
also included under "Equity-method investments".
Whenever there is an indication of impairment, the carrying amount
of the investment consolidated under the equity method (including
goodwill) is subjected to an impairment test, by comparing its recoverable
value (the higher of value-in-use and market value less costs to sell) to
its carrying amount. Where appropriate, impairment is recognised under
"Share of earnings of equity-method entities" in the consolidated income
statement and can be reversed at a later date.
If the Group's share of losses of an equity-method entity equals or
exceeds the carrying amount of its investment in this entity, the Group
discontinues including its share of further losses. The investment is
reported at nil value. Additional losses of the equity-method entity are
provided for only to the extent that the Group has contracted a legal or
constructive obligation or has made payments on behalf of this entity.
Where the Group holds an interest in an associate, directly or indirectly
through an entity that is a venture capital organisation, a mutual fund, an
open-ended investment company or similar entity such as an investment-
related insurance fund, it may elect to measure that interest at fair value
through profit or loss.
Realised gains and losses on investments in consolidated undertakings
are recognised in the profit and loss account under "Net gain on non-
current assets".
The consolidated financial statements are prepared using uniform
accounting policies for similar transactions and other events occurring
in similar circumstances.
1.b.3 Consolidation rules
Elimination of intragroup balances
and transactions
Intragroup balances arising from transactions between consolidated
enterprises, and the transactions themselves (including income, expenses
and dividends), are eliminated. Profits and losses arising from intragroup
sales of assets are eliminated, except where there is an indication that
the asset sold is impaired. Unrealised gains and losses included in the
value of financial instruments at fair value through equity are maintained
in the consolidated financial statements.
By way of exception, amendments to IAS 32 and IFRS 9 allow intra-group
assets to be retained in the balance sheet if they are held as underlying
components of direct participating contracts. These assets are measured
at fair value through profit or loss. These are:
■ own shares by amendment to IAS 32;
■ financial liabilities issued by the entity in amendment to IFRS 9.
These provisions are applied by the Group's insurance entities that issue
direct participating contracts, the underlying elements of which include
securities issued by the Group either directly or through consolidated
investment entities.
Translation of accounts expressed in foreign
currencies
The consolidated financial statements of BNP Paribas are prepared in
euros.
The financial statements of enterprises whose functional currency is
not the euro are translated using the closing rate method. Under this
method, all assets and liabilities, both monetary and non-monetary, are
translated using the spot exchange rate at the balance sheet date. Income
and expense items are translated at the average rate for the period.
Financial statements of the Group's subsidiaries located in hyperinflationary
economies, previously adjusted for inflation by applying a general price
index, are translated using the closing rate. This rate applies to the
translation of assets and liabilities as well as income and expenses.
Differences arising from the translation of balance sheet items and profit
and loss items are recorded in shareholders' equity under "Exchange
differences", and in "Minority interests" for the portion attributable to
outside investors. Under the optional treatment permitted by IFRS 1,
the Group has reset to zero all translation differences, by booking all
cumulative translation differences attributable to shareholders and to
minority interests in the opening balance sheet at 1 January 2004 to
retained earnings.
On liquidation or disposal of some or all of an interest held in a foreign
enterprise located outside the Eurozone, leading to a change in the nature
of the investment (loss of control, loss of significant influence or loss
of joint control without keeping a significant influence), the cumulative
exchange difference at the date of liquidation or sale is recognised in the
profit and loss account.
Should the percentage of interest change without leading to a modification
in the nature of the investment, the exchange difference is reallocated
between the portion attributable to shareholders and that attributable
to minority interests if the entity is fully consolidated; if the entity is
consolidated under the equity method, it is recorded in profit or loss for
the portion related to the interest sold.
1.b.4 Business combinations and
measurement of goodwill
Business combinations
Business combinations are accounted for using the purchase method.
Under this method, the acquiree's identifiable assets and liabilities
assumed are measured at fair value at the acquisition date except for
non-current assets classified as assets held for sale which are accounted
for at fair value less costs to sell.
The acquiree's contingent liabilities are not recognised in the consolidated
balance sheet unless they represent a present obligation on the
acquisition date and their fair value can be measured reliably.
The cost of a business combination is the fair value, at the date of
exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued to obtain control of the acquiree. Costs directly
attributable to the business combination are treated as a separate
transaction and recognised through profit or loss.
Any contingent consideration is included in the cost, as soon as control is
obtained, at fair value on the date when control was acquired. Subsequent
changes in the value of any contingent consideration recognised as a
financial liability are recognised through profit or loss.
The Group may recognise any adjustments to the provisional accounting
within 12 months of the acquisition date.
Goodwill represents the difference between the cost of the combination
and the acquirer's interest in the net fair value of the identifiable assets
and liabilities of the acquiree at the acquisition date. Positive goodwill
is recognised in the acquirer's balance sheet, while negative goodwill is
recognised immediately in profit or loss, on the acquisition date. Minority
interests are measured at their share of the fair value of the acquiree's
identifiable assets and liabilities. Howeve r, f or each business combination,
the Group can elect to measure minority interests at fair value, in which
case a proportion of goodwill is allocated to them. To date, the Group
has never used this latter option.
Goodwill is recognised in the functional currency of the acquiree and
translated at the closing exchange rate.
On the acquisition date, any previously held equity interest in the acquiree
is remeasured at its fair value through profit or loss. In the case of a step
acquisition, the goodwill is therefore determined by reference to the
acquisition-date fair value.
Since the revised IFRS 3 has been applied prospectively, business
combinations completed prior to 1 January 2010 were not restated for
the effects of changes to IFRS 3.
As permitted under IFRS 1, business combinations that took place before
1 January 2004 and were recorded in accordance with the previously
applicable accounting standards (French GAAP), had not been restated
in accordance with the principles of IFRS 3.
Specificities relating to insurance contracts acquired through business
combinations are set out in note 1.g.2 in the paragraph Recognition and
derecognition.
Measurement of goodwill
The BNP Paribas Group tests goodwill for impairment on a regular basis.
Cash-generating units
The BNP Paribas Group has split all its activities into cash-generating
units(1) representing major business lines. This split is consistent with the
Group's organisational structure and management methods, and reflects
the independence of each unit in terms of results and management
approach. It is reviewed on a regular basis in order to take account of
events likely to affect the composition of cash-generating units, such as
acquisitions, disposals and major reorganisations.
Testing cash-generating units for impairment
Goodwill allocated to cash-generating units is tested for impairment
annually and whenever there is an indication that a unit may be
impaired, by comparing the carrying amount of the unit with its
recoverable amount. If the recoverable amount is less than the carrying
amount, an irreversible impairment loss is recognised, and the goodwill
is written down by the excess of the carrying amount of the unit over
its recoverable amount.
Recoverable amount of a cash-generating unit
The recoverable amount of a cash-generating unit is the higher of the
fair value of the unit less costs to sell, and its value in use.
Fair value is the price that would be obtained from selling the unit at the
market conditions prevailing at the date of measurement, as determined
mainly by reference to actual prices of recent transactions involving
similar entities or on the basis of stock market multiples for comparable
companies.
hyperinflation.
Value in use is based on an estimate of the future cash flows to be
generated by the cash-generating unit, derived from the annual forecasts
prepared by the unit's management and approved by Group Executive
Management, and from analyses of changes in the relative positioning
of the unit's activities on their market. These cash flows are discounted
at a rate that reflects the return that investors would require from an
investment in the business sector and region involved.
1.c TRANSLATION OF FOREIGN CURRENCY
TRANSACTIONS
The methods used to account for assets and liabilities relating to foreign
currency transactions entered into by the Group, and to measure the
foreign exchange risk arising on such transactions, depend on whether
the asset or liability in question is classified as a monetary or a non-
monetary item.
Monetary assets and liabilities(2) expressed
in foreign currencies
Monetary assets and liabilities expressed in foreign currencies are
translated into the functional currency of the relevant Group entity at
the closing rate. Foreign exchange differences are recognised in the profit
and loss account, except for those arising from financial instruments
designated as a cash flow hedge or a net foreign investment hedge, which
are recognised in shareholders' equity.
Non-monetary assets and liabilities expressed
in foreign currencies
Non-monetary assets may be measured either at historical cost or at
fair value. Non-monetary assets expressed in foreign currencies are
translated using the exchange rate at the date of the transaction (i.e. date
of initial recognition of the non-monetary asset) if they are measured at
historical cost, and at the closing rate if they are measured at fair value.
Foreign exchange differences relating to non-monetary assets
denominated in foreign currencies and recognised at fair value (equity
instruments) are recognised in profit or loss when the asset is classified
in "Financial assets at fair value through profit or loss" and in equity
when the asset is classified under "Financial assets at fair value through
equity".
1.d FINANCIAL INFORMATION IN
HYPERINFLATIONARY ECONOMIES
The Group applies IAS 29 to the presentation of the accounts of its
consolidated subsidiaries located in countries whose economies are in
IAS 29 presents a number of quantitative and qualitative criteria to assess
whether an economy is hyperinflationary, including a cumulative, three-
year inflation rate approaching or exceeding 100%.
All non-monetary assets and liabilities of subsidiaries in hyperinflationary
countries, including equity and each line of the income statement has
been restated on the basis of changes in the Consumer Price Index (CPI).
This restatement between 1 January and the closing date resulted in the
recognition of a gain or loss in its net monetary situation, recognised
under "Net gain on non-current assets". Financial statements of these
subsidiaries are translated into euros at the closing rate.
In accordance with the provisions of the IFRIC's decision of March 2020
on classifying the effects of indexation and translation of accounts of
subsidiaries in hyperinflationary economies, the Group has opted to
(1) As defined by IAS 36.
(2) Monetary assets and liabilities are assets and liabilities to be received or paid in fixed or determinable amounts of cash.
present these effects (including the net book value effect at the date of
the initial application of IAS 29) within changes in assets and liabilities
recognised directly through equity related to exchange differences.
Since 1 January 2022, the Group has applied IAS 29 to the presentation of
the accounts of its consolidated subsidiaries located in Türkiye.
1.e NET INTEREST INCOME, COMMISSIONS
AND INCOME FROM OTHER ACTIVITIES
1.e.1 Net interest income
Income and expenses relating to debt instruments measured at amortised
cost and at fair value through shareholders' equity are recognised in the
income statement using the effective interest rate method.
The effective interest rate is the rate that ensures the discounted value
of estimated future cash flows through the expected life of the financial
instrument o r, w hen appropriate, a shorter period, is equal to the carrying
amount of the asset or liability in the balance sheet. The effective interest
rate measurement takes into account all fees received or paid that are
an integral part of the effective interest rate of the contract, transaction
costs, and premiums and discounts.
Commissions considered as an additional component of interest are
included in the effective interest rate and are recognised in the profit
and loss account in "Net interest income". This category includes notably
commissions on financing commitments when it is considered that the
setting up of a loan is more likely than unlikely. Commissions received in
respect of financing commitments are deferred until they are drawn and
then included in the effective interest rate calculation and amortised over
the life of the loan. Syndication commissions are also included in this
category for the portion of the commission equivalent to the remuneration
of other syndication participants.
1.e.2 Commissions and income from other
activities
Commissions received with regards to banking and similar services
provided (except for those that are integral part of the effective interest
rate), revenues from property development and revenues from services
provided in connection with lease contracts fall within the scope of
IFRS 15 "Revenue from Contracts with Customers".
This standard defines a single model for recognising revenue based
on principles set out in five steps. These five steps enable to identify
the distinct performance obligations included in the contracts and
allocate the transaction price among them. The income related to those
performance obligations is recognised as revenue when the latter are
satisfied, namely when the control of the promised goods or services
has been transferred.
The price of a service may contain a variable component. Variable
amounts may be recognised in the income statement only if it is highly
probable that the amounts recorded will not result in a significant
downward adjustment.
Commission
The Group records commission income and expense in profit or loss
either:
■ over time as the service is rendered when the client receives
continuous service. These include, for example, certain commissions
on transactions with customers when services are rendered on a
continuous basis, commissions on financing commitments that are
not included in the interest margin, because the probability that
they give rise to the drawing up of a loan is low, commissions on
financial collateral, clearing commissions on financial instruments,
commissions related to trust and similar activities, securities custody
fees, etc.
Commissions received under financial guarantee commitments are
deemed to represent the initial fair value of the commitment. The
resulting liability is subsequently amortised over the term of the
commitment, in commission income; or
■ at a point in time when the service is rendered, in other cases. These
include, for example, distribution fees received, loan syndication fees
remunerating the arrangement service, advisory fees, etc.
Income from other activities
Income from property development as well as income from services
provided in connection with lease contracts is recorded under "Income
from other activities" in the income statement.
As regards property development income, the Group records it in profit
or loss:
■ over time, when the performance obligation creates or enhances an
asset over which the customer obtains control as it is created or
enhanced (e.g. work in progress controlled by the client on the land
on which the asset is located, etc.), or where the service performed
does not create an asset that the entity could otherwise use and gives
it an enforceable right to payment for performance completed to date.
This is the case for contracts such as VEFA (sale in the future state of
completion) in France;
■ at completion in other cases.
Regarding income from services provided in connection with lease
contracts, the Group records them in profit or loss as the service is
rendered, i.e. in proportion to the costs incurred for maintenance
contracts.
1.f FINANCIAL ASSETS AND LIABILITIES
Financial assets are classified at amortised cost, at fair value through
shareholders' equity or at fair value through profit or loss depending on
the business model and the contractual features of the instruments at
initial recognition.
Financial liabilities are classified at amortised cost or at fair value through
profit or loss at initial recognition.
Financial assets and liabilities are recognised in the balance sheet
when the Group becomes a party to the contractual provisions of the
instrument. Purchases and sales of financial assets made within a
period established by the regulations or by a convention in the relevant
marketplace are recognised in the balance sheet at the settlement date.
1.f.1 Financial assets at amortised cost
Financial assets are classified at amortised cost if the following two
criteria are met: the business model objective is to hold the instrument
in order to collect the contractual cash flows and the cash flows consist
solely of payments relating to principal and interest on the principal.
Business model criterion
Financial assets are managed within a business model whose objective
is to hold financial assets in order to collect cash flows through the
collection of contractual payments over the life of the instrument.
The realisation of disposals close to the maturity of the instrument
and for an amount close to the remaining contractual cash flows, or
due to an increase in the counterparty's credit risk is consistent with a
business model whose objective is to collect the contractual cash flows
("collect"). Sales imposed by regulatory requirements or to manage the
concentration of credit risk (without an increase in the asset's credit risk)
are also consistent with this business model when they are infrequent
or insignificant in value.
Cash flow criterion
The cash flow criterion is satisfied if the contractual terms of the debt
instrument give rise, on specified dates, to cash flows that are solely
repayments of principal and interest on the principal amount outstanding.
The criterion is not met in the event of a contractual characteristic that
exposes the holder to risks or to the volatility of contractual cash flows
that are inconsistent with those of a non-structured or "basic lending"
arrangement. It is also not satisfied in the event of leverage that increases
the variability of the contractual cash flows.
Interest consists of consideration for the time value of money, for the
credit risk, and for the remuneration of other risks (e.g. liquidity risk),
costs (e.g. administration fees), and a profit margin consistent with that
of a basic lending arrangement. The existence of negative interest does
not call into question the cash flow criterion.
The time value of money is the component of interest - usually referred
to as the "rate" component - which provides consideration for only the
passage of time. The relationship between the interest rate and the
passage of time must not be modified by specific characteristics that
could call into question the respect of the cash flow criterion.
Thus, when the variable interest rate of the financial asset is periodically
reset at a frequency that does not match the duration for which the
interest rate is established, the time value of money may be considered
as modified and, depending on the significance of that modification, the
cash flow criterion may not be met. Some financial assets held by the
Group present a mismatch between the interest rate reset frequency
and the maturity of the index, or interest rates indexed to an average of
benchmark rate. The Group has developed a consistent methodology for
analysing this alteration of the time value of money.
Regulated rates meet the cash flow criterion when they provide
consideration that is broadly consistent with the passage of time and do
not expose to risks or volatility in the contractual cash flows that would
be inconsistent with those of a basic lending arrangement (example:
loans granted in the context of Livret A savings accounts).
Some contractual clauses may change the timing or the amount of cash
flows. Early redemption options do not call into question the cash flow
criterion if the prepayment amount substantially represents the principal
amount outstanding and the interest thereon, which may include
reasonable compensation for the early termination of the contract. For
example, as regards loans to retail customers, the compensation limited
to 6 months of interest or 3% of the capital outstanding is considered
reasonable. Actuarial penalties, corresponding to the discounted value
of the difference between the residual contractual cash flows of the
loan, and their reinvestment in a loan to a similar counterparty or in
the interbank market for a similar residual maturity are also considered
as reasonable, even when the compensation can be positive or negative
(i.e. "symmetric" compensation). An option that permits the issuer or
the holder of a financial instrument to change the interest rate from
floating to fixed rate does not breach the cash flow criterion if the fixed
rate is determined at origination, or if it represents the time value of
money for the residual maturity of the instrument at the date of exercise
of the option. Clauses included in financing granted to encourage the
sustainable development of companies which adjust the interest margin
depending on the achievement of environmental, social or governance
(ESG) objectives and disclosed in chapter 7 of the Universal registration
document, do not call into question the cash flow criterion when such an
adjustment is considered to be minimal. Structured instruments indexed
to ESG market indices do not meet the cash flow criterion.
In the particular case of financial assets contractually linked to payments
received on a portfolio of underlying assets and which include a priority
order for payment of cash flows between investors ("tranches"), thereby
creating concentrations of credit risk, a specific analysis is carried out.
The contractual characteristics of the tranche and those of the underlying
financial instrument portfolios must meet the cash flow criterion and the
credit risk exposure of the tranche must be equal to or lower than the
exposure to credit risk of the underlying pool of financial instruments.
Certain loans may be "non-recourse", either contractually, or in substance
when they are granted to a special purpose entity. That is in particular
the case of numerous project financing or asset financing loans. The
cash flow criterion is met as long as these loans do not represent a
direct exposure on the assets acting as collateral. In practice, the sole
fact that the financial asset explicitly gives rise to cash flows that are
consistent with payments of principal and interest is not sufficient to
conclude that the instrument meets the cash flow criterion. In that case,
the particular underlying assets to which there is limited recourse shall
be analysed using the "look-through" approach. If those assets do not
themselves meet the cash flow criterion, the existing credit enhancement
is assessed. The following aspects are considered: structuring and sizing
of the transaction, own funds level of the structure, expected source
of repayment, price volatility of the underlying assets. This analysis is
applied to "non-recourse" loans granted by the Group.
The "financial assets at amortised cost" category includes, in particula r,
loans granted by the Group, as well as reverse repurchase agreements
and securities held by the Group ALM Treasury in order to collect
contractual flows and meeting the cash flow criterion.
Recognition
On initial recognition, financial assets are recognised at fair value,
including transaction costs directly attributable to the transaction as
well as commissions related to the origination of the loans.
They are subsequently measured at amortised cost, including accrued
interest and net of repayments of principal and interest during the
past period. These financial assets are also subject from their initial
recognition, to the measurement of a loss allowance for expected credit
losses (note 1.f.5).
Interest is calculated using the effective interest method determined at
inception of the contract.
1.f.2 Financial assets at fair value through
shareholders' equity
Debt instruments
Debt instruments are classified at fair value through shareholders' equity
if the following two criteria are met:
■ business model criterion: financial assets are held in a business model
whose objective is achieved by both holding the financial assets in
order to collect contractual cash flows and selling the financial assets
("collect and sale"). The latter is not incidental but is an integral part
of the business model;
■ cash flow criterion: the principles are identical to those applicable to
financial assets at amortised cost.
The securities held by the Group ALM Treasury in order to collect
contractual flows or to be sold and meeting the cash flow criterion are
in particular classified in this category.
On initial recognition, financial assets are recognised at their fair value,
including transaction costs directly attributable to the transaction.
They are subsequently measured at fair value and changes in fair value
are recognised, under a specific line of shareholders' equity entitled
"Changes in assets and liabilities recognised directly in equity that may be
reclassified to profit or loss". These financial assets are also subject to the
measurement of a loss allowance for expected credit losses on the same
approach as for debt instruments at amortised cost. The counterparty
of the related impact in cost of risk is recognised in the same specific
line of shareholders' equity. On disposal, changes in fair value previously
recognised in shareholders' equity are reclassified to profit or loss.
In addition, interest is recognised in the income statement using the
effective interest method determined at the inception of the contract.
Equity instruments
Investments in equity instruments such as shares are classified on option,
and on a case-by-case basis, at fair value through shareholders' equity
(under a specific line). On disposal of the shares, changes in fair value
previously recognised in equity are not recognised in profit or loss. Only
dividends, if they represent remuneration for the investment and not
repayment of capital, are recognised in profit or loss. These instruments
are not subject to impairment.
Investments in mutual funds puttable to the issuer do not meet the
definition of equity instruments. They do not meet the cash flow criterion
eithe r, a nd thus are recognised at fair value through profit or loss.
1.f.3 Financing and guarantee commitments
Financing and financial guarantee commitments that are not recognised
at fair value through profit or loss are presented in the note relating
to financing and guarantee commitments. They are subject to the
measurement of a loss allowance for expected credit losses. These
loss allowances are presented under "Provisions for contingencies and
charges".
1.f.4 Regulated savings and loan contracts
Home savings accounts (Comptes Épargne-Logement – "CEL") and home
savings plans (Plans d'Épargne Logement – "PEL") are government-
regulated retail products sold in France. They combine a savings phase
and a loan phase which are inseparable, with the loan phase contingent
upon the savings phase.
These products contain two types of obligations for BNP Paribas: an
obligation to pay interest on the savings for an indefinite period, at a
rate set by the government at the inception of the contract (in the case
of PEL products) or at a rate reset every six months using an indexation
formula set by law (in the case of CEL products); and an obligation to lend
to the customer (at the customer's option) an amount contingent upon
the rights acquired during the savings phase, at a rate set at the inception
of the contract (in the case of PEL products) or at a rate contingent upon
the savings phase (in the case of CEL products).
The Group's future obligations with respect to each generation (in the
case of PEL products, a generation comprises all products with the same
interest rate at inception; in the case of CEL products, all such products
constitute a single generation) are measured by discounting potential
future earnings from at-risk outstandings for that generation.
At-risk outstandings are estimated on the basis of a historical analysis
of customer behaviou r, a nd are equivalent to:
■ for the loan phase: statistically probable loans outstanding and actual
loans outstanding;
■ for the savings phase: the difference between statistically probable
outstandings and minimum expected outstandings, with minimum
expected outstandings being deemed equivalent to unconditional term
deposits.
Earnings for future periods from the savings phase are estimated as the
difference between the reinvestment rate and the fixed savings interest
rate on at-risk savings outstanding for the period in question. Earnings
for future periods from the loan phase are estimated as the difference
between the refinancing rate and the fixed loan interest rate on at-risk
loans outstanding for the period in question.
The reinvestment rate for savings and the refinancing rate for loans
are derived from the swap yield curve and from the spreads expected
on financial instruments of similar type and maturity. Spreads are
determined on the basis of actual spreads on fixed-rate home loans in
the case of the loan phase and products offered to individual clients in
the case of the savings phase. In order to reflect the uncertainty of future
interest rate trends, and the impact of such trends on customer behaviour
models and on at-risk outstandings, the obligations are estimated using
the Monte-Carlo method.
Where the sum of the Group's estimated future obligations with respect
to the savings and loan phases of any generation of contracts indicates a
potentially unfavourable situation for the Group, a provision is recognised
(with no offset between generations) in the balance sheet in "Provisions
for contingencies and charges". Movements in this provision are
recognised as interest income in the profit and loss account.
1.f.5 Impairment of financial assets
measured at amortised cost and debt
instruments measured at fair value
through shareholders' equity
The impairment model for credit risk is based on expected losses.
This model applies to loans and debt instruments measured at amortised
cost or at fair value through equity, to loan commitments and financial
guarantee contracts that are not recognised at fair value, as well as to
lease receivables, trade receivables and contract assets.
General model
The Group identifies three "stages" that each correspond to a specific
status with regards to the evolution of counterparty credit risk since the
initial recognition of the asset.
■ 12-month expected credit losses ("stage 1"): if at the reporting
date, the credit risk of the financial instrument has not increased
significantly since its initial recognition, this instrument is impaired at
an amount equal to 12-month expected credit losses (resulting from
the risk of default within the next 12 months);
■ lifetime expected credit losses for non-impaired assets ("stage 2"):
the loss allowance is measured at an amount equal to the lifetime
expected credit losses if the credit risk of the financial instrument has
increased significantly since initial recognition but the financial asset
is not considered credit-impaired or doubtful;
■ lifetime expected credit losses for credit-impaired or doubtful financial
assets ("stage 3"): the loss allowance is also measured for an amount
equal to the lifetime expected credit losses.
This general model is applied to all instruments within the scope of IFRS 9
impairment, except for purchased or originated credit-impaired financial
assets and instruments for which a simplified model is used (see below).
The IFRS 9 expected credit loss approach is symmetrical, i.e. if lifetime
expected credit losses have been recognised in a previous reporting
period, and if it is assessed in the current reporting period that there is
no longer any significant increase in credit risk since initial recognition,
the loss allowance reverts to a 12-months expected credit loss.
As regards interest income, under "stages" 1 and 2, it is calculated on
the gross carrying amount. Under "stage 3", interest income is calculated
on the amortised cost (i.e. the gross carrying amount adjusted for the
loss allowance).
Definition of default
The definition of default is aligned with the Basel regulatory default
definition, with a rebuttable presumption that the default occurs no
later than 90 days past due. This definition takes into account the EBA
guidelines of 28 September 2016, notably those regarding the thresholds
applicable for the counting of past-due and probation periods.
The definition of default is used consistently for assessing the increase
in credit risk and measuring expected credit losses.
Credit-impaired or doubtful financial assets
Definition
A financial asset is considered credit-impaired or doubtful and classified
in "stage 3" when one or more events that have a detrimental impact
on the estimated future cash flows of that financial asset have occurred.
At an individual level, objective evidence that a financial asset is credit-
impaired includes observable data regarding the following events: the
existence of accounts that are more than 90 days past due; knowledge
or indications that the borrower is experiencing significant financial
difficulties, such that a risk can be considered to have arisen regardless
of whether the borrower has missed any payments; concessions with
respect to the credit terms granted to the borrower that the lender would
not have considered had the borrower not been in financial difficulty
(see section Restructuring of financial assets for financial difficulties).
Specific cases of purchased or originated credit-impaired
assets
In some cases, financial assets are credit-impaired at initial recognition.
For these assets, no loss allowance is recorded on initial recognition.
The effective interest rate is calculated taking into account the lifetime
expected credit losses in the initial estimated cash flows. Any change
in lifetime expected credit losses since initial recognition, positive or
negative, is recognised as a loss allowance adjustment in profit or loss.
Simplified model
The simplified approach consists in accounting for a loss allowance
corresponding to lifetime expected credit losses since initial recognition,
and at each reporting date.
The Group applies this model to trade receivables with a maturity shorter
than 12 months.
Significant increase in credit risk
A significant increase in credit risk may be assessed on an individual basis
or on a collective basis (by grouping financial instruments according to
common credit risk characteristics), taking into account all reasonable
and supportable information and comparing the risk of default of the
financial instrument at the reporting date with the risk of default of the
financial instrument at the date of initial recognition.
Assessment of deterioration is based on the comparison of the
probabilities of default derived from the ratings on the date of initial
recognition with those existing at the reporting date.
There is also, according to the standard, a rebuttable presumption that
the credit risk of an instrument has significantly increased since initial
recognition when the contractual payments are more than 30 days past
due.
In the consumer credit specialist business, a significant increase in credit
risk is also considered when a past due event has occurred within the
last 12 months, even if it has since been regularised.
The principles applied to assess the significant increase in credit risk are
detailed in note 3.g Cost of risk.
Measurement of expected credit losses
Expected credit losses are defined as an estimate of credit losses (i.e.
the present value of all cash shortfalls) weighted by the probability
of occurrence of these losses over the expected life of the financial
instruments. They are measured on an individual basis, for all exposures.
In practice, for exposures classified in stage 1 and stage 2, expected credit
losses are measured as the product of the probability of default ("PD"),
Loss Given Default ("LGD") and exposure at default ("EAD"), discounted at
the effective interest rate of the exposure (EIR). They result from the risk
of default within the next 12 months (stage 1), or from the risk of default
over the maturity of the facility (stage 2). In the consumer credit specialist
business, because of the specificity of credit exposures, the methodology
used is based on the probability of transition to term forfeiture, and
on discounted loss rates after term forfeiture. These parameters are
measured on a statistical basis for homogeneous populations.
For exposures classified in stage 3, expected credit losses are measured
as the value, discounted at the effective interest rate, of all cash shortfalls
over the life of the financial instrument. Cash shortfalls represent the
difference between the cash flows that are due in accordance with the
contract, and the cash flows that are expected to be received. Where
appropriate, the estimate of expected cash flows takes into account a
cash flow scenario arising from the sale of the defaulted loans or groups
of loans. Proceeds from the sale are recorded net of costs to sell.
The methodology developed is based on existing concepts and
methods (in particular the Basel framework) on exposures for which
capital requirement for credit risk is measured according to the IRBA
methodology. This method is also applied to portfolios for which capital
requirement for credit risk is measured according to the standardised
approach. Besides, the Basel framework has been adjusted in order to
be compliant with IFRS 9 requirements, in particular the use of forward-
looking information.
Maturity
All contractual terms of the financial instrument are taken into account,
including prepayment, extension and similar options. In the rare cases
where the expected life of the financial instrument cannot be estimated
reliably, the residual contractual term is used. The standard specifies
that the maximum period to consider when measuring expected credit
losses is the maximum contractual period. Howeve r, f or revolving credit
cards and overdrafts, in accordance with the exception provided by IFRS 9
for these products, the maturity considered for measuring expected
credit losses is the period over which the entity is exposed to credit
risk, which may extend beyond the contractual maturity (notice period).
For revolving credits and overdrafts to non-retail counterparties, the
contractual maturity can be used, for example if the next review date is
the contractual maturity as they are individually managed.
Probabilities of Default (PD)
Probability of Default is an estimate of the likelihood of default over a
given time horizon.
The determination of the PD is based on the Group's internal rating
system, which is described in chapter 5 of the Universal registration
document (section 5.4 Credit risk – Credit risk management policy). This
section describes how environmental, social and governance (ESG) risks
are taken into account in credit and rating policies, notably with the
introduction of a new tool: the ESG Assessment.
The measurement of expected credit losses requires the estimation of
both 1-year probabilities of default and lifetime probabilities of default.
1-year PDs are derived from long term average regulatory "through the
cycle" PDs to reflect the current situation ("Point in Time" or "PIT").
Lifetime PDs are determined based on the rating migration matrices
reflecting the expected changes in the rating of the exposure until
maturity, and the associated probabilities of default.
Loss Given Default (LGD)
Loss Given Default is the difference between contractual cash flows
and expected cash flows, discounted using the effective interest rate
(or an approximation thereof) at the default date. LGD is expressed as a
percentage of the Exposure At Default (EAD).
The estimate of expected cash flows takes into account cash flows
resulting from the sale of collateral held or other credit enhancements
if they are part of the contractual terms and are not accounted for
separately by the entity (for example, a mortgage associated with a
residential loan), net of the costs of obtaining and selling the collateral.
For guaranteed loans, the guarantee is considered as integral to the
loan agreement if it is embedded in the contractual clauses of the
loan, or if it was granted concomitantly to the loan, and if the expected
reimbursement amount can be attached to a loan in particular (i.e.
absence of pooling effect by means of a tranching mechanism, or
the existence of a global cap for a whole portfolio). In such case, the
guarantee is taken into account when measuring the expected credit
losses. Otherwise, it is accounted for as a separate reimbursement asset.
The LGD used for IFRS 9 purposes is derived from the Basel LGD
parameters. It is adjusted for downturn and conservatism margins (in
particular regulatory margins), except for margins for model uncertainties.
Exposure At Default (EAD)
Exposure At Default (EAD) of an instrument is the anticipated outstanding
amount owed by the obligor at the time of default. It is determined by the
expected payment profile taking into account, depending on the product
type: the contractual repayment schedule, expected early repayments
and expected future drawings for revolving facilities.
Forward-looking information
The amount of expected credit losses is measured on the basis of
probability-weighted scenarios, in view of past events, current conditions
and reasonable and supportable economic forecasts.
The principles applied to take into account forward-looking information
when measuring expected credit losses are detailed in note 3.g Cost of
risk.
Write-offs
A write-off consists in reducing the gross carrying amount of a financial
asset when there are no longer reasonable expectations of recovering
that financial asset in its entirety or a portion thereof, or when it has
been fully or partially forgiven. The write-off is recorded when all other
means available to the Bank for recovering the receivables or guarantees
have failed, and also generally depends on the context specific to each
jurisdiction.
If the amount of loss on write-off is greater than the accumulated loss
allowance, the difference is recognised as an additional impairment loss
in "Cost of risk". For any recovery once the financial asset (or part thereof)
is no longer recognised on the balance sheet, the amount received is
recorded as a gain in "Cost of risk".
Recoveries through the repossession
of the collateral
When a loan is secured by a financial or a non-financial asset serving as
a guarantee and the counterparty is in default, the Group may decide to
exercise the guarantee and, depending on the jurisdiction, it may then
become owner of the asset. In such a situation, the loan is written-off
against the asset received as collateral.
Once ownership of the asset is effective, it is recognised at fair value and
classified according to the intent of use.
Restructuring of financial assets for financial
difficulties
A restructuring due to the borrower's financial difficulties is defined as
a change in the terms and conditions of the initial transaction that the
Group is considering only for economic or legal reasons related to the
borrower's financial difficulties.
For restructurings not resulting in derecognition of the financial asset, the
restructured asset's gross carrying amount is reduced to the discounted
amount, using the original effective interest rate of the asset, of the new
expected future flows. The change in the gross carrying amount of the
asset is recorded in the income statement in "Cost of risk".
The existence of a significant increase in credit risk for the financial
instrument is then assessed by comparing the risk of default after the
restructuring (under the revised contractual terms) and the risk of default
at the initial recognition date (under the original contractual terms). In
order to demonstrate that the criteria for recognising lifetime expected
credit losses are no longer met, good payment behaviour will have to be
observed over a certain period of time.
When the restructuring consists of a partial or total exchange against
other substantially different assets (for example, the exchange of a debt
instrument against an equity instrument), it results in the extinction of
the original asset and the recognition of the assets remitted in exchange,
measured at their fair value at the date of exchange. The difference in
value is recorded in the income statement in "Cost of risk".
Modifications to financial assets that are not due to a borrower's financial
difficulties, or granted in the context of a moratorium (i.e. commercial
renegotiations) are generally analysed as the early repayment of the
former loan, which is then derecognised, followed by the set-up of a new
loan at market conditions. If there is no significant repayment penalty,
they consist in resetting the interest rate of the loan at market conditions,
with the client being in a position to change lender and not encountering
any financial difficulties.
Probation periods
The Group applies observation periods to assess the possible return to
a better stage. Accordingly, a 3-month probation period is observed for
the transition from stage 3 to stage 2 which is extended to 12 months
in the event of restructuring due to financial difficulties.
For the transition from stage 2 to stage 1, a probation period of two
years is observed for loans that have been restructured due to financial
difficulties.
1.f.6 Cost of risk
Cost of risk includes the following items of profit or loss:
■ impairment gains and losses resulting from the accounting of loss
allowances for 12-month expected credit losses and lifetime expected
credit losses ("stage 1" and "stage 2") relating to debt instruments
measured at amortised cost or at fair value through shareholders'
equity, loan commitments and financial guarantee contracts that are
not recognised at fair value as well as lease receivables, contract
assets and trade receivables;
■ impairment gains and losses resulting from the accounting of loss
allowances relating to financial assets (including those at fair
value through profit or loss) for which there is objective evidence of
impairment ("stage 3"), write-offs on irrecoverable loans and amounts
recovered on loans written-off.
It also includes expenses relating to fraud and to disputes inherent to
the financing activity.
1.f.7 Financial instruments at fair value
through profit or loss
Trading portfolio and other financial assets
measured at fair value through profit or loss
The trading portfolio includes instruments held for trading (trading
transactions), including derivatives.
Other financial assets measured at fair value through profit or loss
include debt instruments that do not meet the "collect" or "collect
and sale" business model criterion or that do not meet the cash flow
criterion, as well as equity instruments for which the fair value through
shareholders' equity option has not been retained. Finally financial assets
may be designated as at fair value through profit or loss if this enables the
entity to eliminate or significantly reduce a mismatch in the measurement
and accounting treatment of assets and liabilities that would otherwise
arise if they were to be classified in separate categories.
All those financial instruments are measured at fair value at initial
recognition, with transaction costs directly posted in profit or loss. At the
reporting date, they are measured at fair value, with changes presented
in "Net gain/loss on financial instruments at fair value through profit
or loss". Income, dividends, and realised gains and losses on disposal
related to held-for-trading transactions are accounted for in the same
profit or loss account.
Financial liabilities designated as at fair value
through profit or loss
Financial liabilities are recognised under option in this category in the
two following situations:
■ for hybrid financial instruments containing one or more embedded
derivatives which otherwise would have been separated and accounted
for separately. An embedded derivative is such that its economic
characteristics and risks are not closely related to those of the host
contract;
■ when using the option enables the entity to eliminate or significantly
reduce a mismatch in the measurement and accounting treatment
of assets and liabilities that would otherwise arise if they were to be
classified in separate categories.
Changes in fair value due to the own credit risk are recognised under a
specific heading of shareholders' equity.
1.f.8 Financial liabilities and equity
instruments
A financial instrument issued or its various components are classified as
a financial liability or equity instrument, in accordance with the economic
substance of the legal contract.
Financial instruments issued by the Group are qualified as debt
instruments if the entity in the Group issuing the instruments has a
contractual obligation to deliver cash or another financial asset to the
holder of the instrument. The same applies if the Group is required to
exchange financial assets or financial liabilities with another entity under
conditions that are potentially unfavourable to the Group, or to deliver a
variable number of the Group's own equity instruments.
Equity instruments result from contracts evidencing a residual interest
in an entity's assets after deducting all of its liabilities.
Debt securities and subordinated debt
Debt securities and subordinated debt are measured at amortised cost
unless they are recognised at fair value through profit or loss.
Debt securities are initially recognised at the issue value including
transaction costs and are subsequently measured at amortised cost
using the effective interest method.
Issued bonds redeemable or convertible into own equity may contain
a debt component and an equity component, determined upon initial
recognition of the transaction. In this case, they will be qualified as
compound financial instruments.
In this respect, the Group has elected to record contingent convertible
bonds issued, without maturity, when convertible into a variable number
of own shares on the occurrence of a predetermined trigger event (e.g.
a decrease in the solvency ratio below a threshold), as compound
instruments, to the extent that the coupons on these bonds are paid
discretionarily.
Equity instruments
The term "own equity instruments" refers to shares issued by the parent
company (BNP Paribas SA) and by its fully consolidated subsidiaries.
External costs that are directly attributable to an issue of new shares
are deducted from equity net of all related taxes.
Own equity instruments held by the Group, also known as treasury
shares, are deducted from consolidated shareholders' equity irrespective
of the purpose for which they are held. Gains and losses arising on such
instruments are eliminated from the consolidated profit and loss account.
When the Group acquires equity instruments issued by subsidiaries
under the exclusive control of BNP Paribas, the difference between the
acquisition price and the share of net assets acquired is recorded in
retained earnings attributable to BNP Paribas shareholders. Similarly, the
liability corresponding to put options granted to minority shareholders
in such subsidiaries, and changes in the value of that liability, are offset
against minority interests, with any surplus offset against retained
earnings attributable to BNP Paribas shareholders. Until these options
have been exercised, the portion of net income attributable to minority
interests is allocated to minority interests in the profit and loss account.
A decrease in the Group's interest in a fully consolidated subsidiary is
recognised in the Group's accounts as a change in shareholders' equity.
Financial instruments issued by the Group and classified as equity
instruments (e.g. undated super subordinated notes) are presented in
the balance sheet in "Capital and retained earnings".
Distributions from a financial instrument classified as an equity
instrument are recognised directly as a deduction from equity. Similarly,
the transaction costs of an instrument classified as equity are recognised
as a deduction from shareholders' equity.
Own equity instrument derivatives are treated as follows, depending on
the method of settlement:
■ as equity instruments if they are settled by physical delivery of a fixed
number of own equity instruments for a fixed amount of cash or other
financial asset. Such instruments are not revalued;
■ as derivatives if they are settled in cash or by choice by physical
delivery of the shares or in cash. Changes in value of such instruments
are taken to the profit and loss account.
If the contract includes an obligation, whether contingent or not, for the
bank to repurchase its own shares, the bank recognises the debt at its
present value with an offsetting entry in shareholders' equity.
1.f.9 Hedge accounting
The Group retained the option provided by the standard to maintain
the hedge accounting requirements of IAS 39 until the future standard
on macro-hedging is entered into force. Furthermore, IFRS 9 does not
explicitly address the fair value hedge of the interest rate risk on a
portfolio of financial assets or liabilities. The provisions in IAS 39 for these
portfolio hedges, as adopted by the European Union, continue to apply.
Derivatives contracted as part of a hedging relationship are designated
according to the purpose of the hedge.
Fair value hedges are particularly used to hedge interest rate risk on
fixed-rate assets and liabilities, both for identified financial instruments
(securities, debt issues, loans, borrowings) and for portfolios of financial
instruments (in particula r, d emand deposits and fixed-rate loans).
Cash flow hedges are particularly used to hedge interest rate risk on
floating-rate assets and liabilities, including rollovers, and foreign
exchange risks on highly probable forecast foreign currency revenues.
At the inception of the hedge, the Group prepares formal documentation
which details the hedging relationship, identifying the instrument, or
portion of the instrument, or portion of risk that is being hedged, the
hedging strategy and the type of risk hedged, the hedging instrument, and
the methods used to assess the effectiveness of the hedging relationship.
On inception and at least quarterly, the Group assesses, in consistency
with the original documentation, the actual (retrospective) and expected
(prospective) effectiveness of the hedging relationship. Retrospective
effectiveness tests are designed to assess whether the ratio of actual
changes in the fair value or cash flows of the hedging instrument to
those in the hedged item is within a range of 80% to 125%. Prospective
effectiveness tests are designed to ensure that expected changes in the
fair value or cash flows of the derivative over the residual life of the hedge
adequately offset those of the hedged item. For highly probable forecast
transactions, effectiveness is assessed largely on the basis of historical
data for similar transactions.
Under IAS 39 as adopted by the European Union, which excludes certain
provisions on portfolio hedging, interest rate risk hedging relationships
based on portfolios of assets or liabilities qualify for fair value hedge
accounting as follows:
■ the risk designated as being hedged is the interest rate risk associated
with the interbank rate component of interest rates on commercial
banking transactions (loans to customers, savings accounts and
demand deposits);
■ the instruments designated as being hedged correspond, for each
maturity band, to a portion of the interest rate gap associated with
the hedged underlying;
■ the hedging instruments used consist exclusively of "plain vanilla"
swaps;
■ prospective hedge effectiveness is established by the fact that all
derivatives must, on inception, have the effect of reducing interest
rate risk in the portfolio of hedged underlying. Retrospectively, a hedge
will be disqualified from hedge accounting once a shortfall arises in the
underlying specifically associated with that hedge for each maturity
band (due to prepayment of loans or withdrawals of deposits).
The accounting treatment of derivatives and hedged items depends on
the hedging strategy.
In a fair value hedging relationship, the derivative instrument is
remeasured at fair value in the balance sheet, with changes in fair value
recognised in profit or loss in "Net gain/loss on financial instruments at
fair value through profit or loss", symmetrically with the remeasurement
of the hedged item to reflect the hedged risk. In the balance sheet, the
fair value remeasurement of the hedged component is recognised in
accordance with the classification of the hedged item in the case of
a hedge of identified assets and liabilities, or under "Remeasurement
adjustment on interest rate risk hedged portfolios" in the case of a
portfolio hedging relationship.
If a hedging relationship ceases or no longer fulfils the effectiveness
criteria, the hedging instrument is transferred to the trading book and
accounted for using the treatment applied to this category. In the case
of identified fixed-income instruments, the remeasurement adjustment
recognised in the balance sheet is amortised at the effective interest
rate over the remaining life of the instrument. In the case of interest
rate risk hedged fixed-income portfolios, the adjustment is amortised
on a straight-line basis over the remainder of the original term of the
hedge. If the hedged item no longer appears in the balance sheet, in
particular due to prepayments, the adjustment is taken to the profit and
loss account immediately.
In a cash flow hedging relationship, the derivative is measured at
fair value in the balance sheet, with changes in fair value taken to
shareholders' equity on a separate line, "Changes in fair value recognised
directly in equity". The amounts taken to shareholders' equity over the
life of the hedge are transferred to the profit and loss account under
"Net interest income" as and when the cash flows from the hedged item
impact profit or loss. The hedged items continue to be accounted for using
the treatment specific to the category to which they belong.
If the hedging relationship ceases or no longer fulfils the effectiveness
criteria, the cumulative amounts recognised in shareholders' equity as
a result of the remeasurement of the hedging instrument remain in
equity until the hedged transaction itself impacts profit or loss, or until
it becomes clear that the transaction will not occu r, a t which point they
are transferred to the profit and loss account.
If the hedged item ceases to exist, the cumulative amounts recognised in
shareholders' equity are immediately taken to the profit and loss account.
Whatever the hedging strategy used, any ineffective portion of the hedge
is recognised in the profit and loss account under "Net gain/loss on
financial instruments at fair value through profit or loss".
Hedges of net foreign currency investments in subsidiaries and branches
are accounted for in the same way as cash flow hedges. Hedging
instruments may be foreign exchange derivatives or any other non-
derivative financial instrument.
1.f.10 Determination of fair value
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants in the principal market or most advantageous market, at
the measurement date.
The Group determines the fair value of financial instruments either by
using prices obtained directly from external data or by using valuation
techniques. These valuation techniques are primarily market and income
approaches encompassing generally accepted models (e.g. discounted
cash flows, Black-Scholes model, and interpolation techniques).
They maximise the use of observable inputs and minimise the use of
unobservable inputs. They are calibrated to reflect current market
conditions and valuation adjustments are applied as appropriate, when
some factors such as model, liquidity and credit risks are not captured
by the models or their underlying inputs but are nevertheless considered
by market participants when setting the exit price.
The unit of measurement is the individual financial asset or financial
liability but a portfolio-based measurement can be elected, subject to
certain conditions. Accordingly, the Group retains this portfolio-based
measurement exception to determine the fair value when some group
of financial assets and financial liabilities and other contracts within the
scope of the standard relating to financial instruments with substantially
similar and offsetting market risks or credit risks is managed on the basis
of a net exposure, in accordance with the documented risk management
strategy.
Assets and liabilities measured or disclosed at fair value are categorised
into the three following levels of the fair value hierarchy:
■ Level 1: fair values are determined using directly quoted prices in
active markets for identical assets and liabilities. Characteristics of
an active market include the existence of a sufficient frequency and
volume of activity and of readily available prices;
■ Level 2: fair values are determined based on valuation techniques for
which significant inputs are observable market data, either directly
or indirectly. These techniques are regularly calibrated and the inputs
are corroborated with information from active markets;
■ Level 3: fair values are determined using valuation techniques for
which significant inputs are unobservable or cannot be corroborated
by market-based observations, due for instance to illiquidity of the
instrument and significant model risk. An unobservable input is a
parameter for which there are no market data available and that
is therefore derived from proprietary assumptions about what other
market participants would consider when assessing fair value. The
assessment of whether a product is illiquid or subject to significant
model risks is a matter of judgment.
The level in the fair value hierarchy within which the asset or liability
is categorised in its entirety is based upon the lowest level input that is
significant to the entire fair value.
For financial instruments disclosed in Level 3 of the fair value hierarchy,
and marginally some instruments disclosed in Level 2, a difference
between the transaction price and the fair value may arise at initial
recognition. This "Day One Profit" is deferred and released to the profit
and loss account over the period during which the valuation parameters
are expected to remain non-observable. When parameters that were
originally non-observable become observable, or when the valuation can
be substantiated in comparison with recent similar transactions in an
active market, the unrecognised portion of the day one profit is released
to the profit and loss account.
1.f.11 Derecognition of financial assets
and financial liabilities
Derecognition of financial assets
The Group derecognises all or part of a financial asset when the
contractual rights to the cash flows of the asset expire, or when the Group
transfers the asset – either on the basis of a transfer of the contractual
rights to its cash flows, or by retaining the contractual rights to receive
the cash flows of the asset while assuming an obligation to pay the cash
flows of the asset under an eligible pass-through arrangement – as well
as substantially all the risks and rewards of the asset.
Where the Group has transferred the cash flows of a financial asset
but has neither transferred nor retained substantially all the risks and
rewards of ownership of the financial asset and has not in practice
retained control of the financial asset, the Group derecognises the
financial asset and then records separately, if necessary, an asset or
liability representing the rights and obligations created or held as part of
the transfer of the asset. If the Group has retained control of the financial
asset, it maintains it on its balance sheet to the extent of its continuing
involvement in that asset.
Upon the derecognition of a financial asset in its entirety, a gain or loss
on disposal is recognised in the profit and loss account for an amount
equal to the difference between the carrying amount of the asset and the
value of the consideration received, adjusted where appropriate for any
unrealised gain or loss previously recognised directly in equity.
If all these conditions are not met, the Group retains the asset in its
balance sheet and recognises a liability for the obligations arising on
the transfer of the asset.
Derecognition of financial liabilities
The Group derecognises all or part of a financial liability when the
liability is extinguished, i.e. when the obligation specified in the contract
is extinguished, cancelled or expired. A financial liability may also be
derecognised in the event of a substantial change in its contractual terms
or if exchanged with the lender for an instrument with substantially
different contractual terms.
Repurchase agreements and securities lending/
borrowing
Securities temporarily sold under repurchase agreements continue to
be recognised in the Group's balance sheet in the category of securities
to which they belong. The corresponding liability is recognised at
amortised cost under the appropriate "Financial liabilities at amortised
cost" category on the balance sheet, except in the case of repurchase
agreements contracted for trading purposes, for which the corresponding
liability is recognised in "Financial liabilities at fair value through profit
or loss".
Securities temporarily acquired under reverse repurchase agreements are
not recognised in the Group's balance sheet. The corresponding receivable
is recognised at amortised cost under the appropriate "Financial assets
at amortised cost" category in the balance sheet, except in the case
of reverse repurchase agreements contracted for trading purposes, for
which the corresponding receivable is recognised in "Financial assets at
fair value through profit or loss".
Securities lending transactions do not result in derecognition of the
lent securities, and securities borrowing transactions do not result in
recognition of the borrowed securities on the balance sheet. In cases
where the borrowed securities are subsequently sold by the Group, the
obligation to deliver the borrowed securities on maturity is recognised
on the balance sheet under "Financial liabilities at fair value through
profit or loss".
1.f.12 Offsetting financial assets and financial
liabilities
A financial asset and a financial liability are offset and the net amount
presented in the balance sheet if, and only if, the Group has a legally
enforceable right to set off the recognised amounts, and intends either
to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Repurchase agreements and derivatives that meet the two criteria set out
in the accounting standard are offset in the balance sheet.
1.g INSURANCE ACTIVITIES
1.g.1 Investments related to insurance
activities
IFRS 9 is applied in the same way as other Group entities (see note 1.f).
Investments of insurance activities include investment property which
are measured at fair value as underlying assets of direct participating
contracts.
1.g.2 Insurance contracts
The Group applies IFRS 17 to insurance contracts issued, reinsurance
contracts issued and held, and discretionary investment contracts issued
(if the entity also issues insurance contracts).
The main IFRS 17 contracts issued by the Group correspond to:
■ contracts covering risks related to persons or property; and
■ life or savings contracts.
These contracts are described in note 6.d Assets and liabilities related
to insurance contracts.
Prior separation of components covered by other standards
and not closely related
When insurance or investment contracts with discretionary participation
include components, which would fall within the scope of another
standard if they were separate contracts, an analysis must be carried
out to determine whether these components should be accounted for
separately. Thus:
■ an embedded derivative is separated from the host insurance contract
and accounted for under IFRS 9 when its economic characteristics and
risks are not closely related to those of the host contract;
■ an investment component corresponds to the amount that the
insurer is required to repay to the insured in all cases whether the
insured event occurs or not. It is separated from the host insurance
contract and accounted for under IFRS 9 when it is distinct from the
host insurance contract and when equivalent contracts could be sold
separately in the same market or legal area. It is not separated if
it is closely linked to the host contract. Changes in a non-distinct
investment component (and in particular related payments) are not
recognised in the profit and loss account;
■ a promise to transfer to the policyholder distinct goods or services
other than the services of the insurance contract is separated from the
host insurance contract and accounted for under IFRS 15.
Insurance contracts
An insurance contract is a contract under which a party, the issue r,
assumes a significant insurance risk for another party, the policyholde r,
by agreeing to indemnify the policyholder if a specified uncertain future
event, the insured event, is detrimental to the policyholde r.
An insurance risk is significant if, and only if, an insured event can
cause the insurer to pay significant additional amounts in any scenario,
excluding scenarios that are devoid of commercial substance. A contract
transfers a significant insurance risk only if there is a scenario with a
commercial substance in which there is a possibility that the issuer will
incur a loss based on the present value.
Investment contracts with discretionary participating features
Investment contracts do not expose the insurer to significant insurance
risk. They are within the scope of IFRS 17 if they are issued by entities
that also issue insurance contracts.
Discretionary participation is defined as the contractual right to receive,
in addition to an amount that is not at the issuer's discretion, additional
amounts that are likely to represent a significant portion of the total
benefits provided under the contract, the timing or amount of which is
contractually left to the issuer's discretion and that are contractually
based on the returns arising from a defined set of contracts or type of
contract or on the realised and/or unrealised investment returns from
a defined set of assets held by the issue r, o r the result of the entity or
fund issuing the contract.
Accounting and measurement
Aggregation of contracts
Insurance contracts are accounted and measured by groups of contracts
within portfolios of contracts covering similar risks and managed
togethe r. G roups of contracts are determined according to their expected
profitability at inception: onerous contracts, profitable contracts with
a low risk of becoming onerous, and others. A group of contracts may
contain only contracts issued no more than one year apart (corresponding
to an annual "cohort"), except where the optional exemption provided for
in the European regulation applies (for life-savings contracts).
For creditor protection insurance (CPI), personal protection insurance and
other non-life risks, the Group uses the following discriminatory criteria
when constructing portfolios of homogeneous contracts: legal entity,
nature of the risks and partne r, d istributo r. T he reinsurance contracts
accepted shall follow the same principles.
For life and savings contracts, the Group uses the following criteria for
insurance portfolios: legal entity, product and underlying assets. Savings
and retirement contracts are classified in separate portfolios (including
in the period prior to the transition) due to the existence of a risk of
longevity in retirement contracts.
For reinsurance contracts held, the Group uses the following criteria: legal
entity, underlying item and partne r. A p ortfolio can sometimes correspond
to a single reinsurance treaty.
Recognition and derecognition
A group of insurance contracts (or reinsurance contracts held) is
recognised from the earliest of the following dates: the beginning of the
period of coverage of the group of contracts, the date on which the first
payment of a policyholder in the group becomes due (o r, i n the absence
of such a date, when the first payment is received) and, in the case of
a group of onerous contracts, the date on which the group becomes
onerous.
A group of reinsurance contracts held is recognised from the beginning
of the period of coverage of the group of reinsurance contracts held o r,
if the reinsurance was contracted in anticipation of the coverage of an
underlying group of onerous insurance contracts, on the first recognition
of that onerous group.
On initial recognition of portfolios of insurance contracts acquired as part
of a business combination or a separate transfe r, g roups of contracts
acquired are treated as if the contracts had been issued at the date
of the transaction. The consideration received or paid in exchange for
the contracts is treated as an approximation of the premiums received
for the purpose of calculating the contractual service margin at initial
recognition from this amount. In the case of a business combination
within the scope of IFRS 3, the consideration received or paid is the fair
value of the contracts at that date. For onerous contracts, the excess
of the fulfilment cash flows over the consideration paid or received is
recognised in the goodwill (or the profit resulting from an acquisition on
advantageous terms) if it is a business combination and in a separate
transfe r, i n the profit and loss account. For profitable contracts, the
difference is recorded as a contractual service margin. In addition, an
asset for cash flows related to acquisition costs must be recognised, for
its fair value, for the acquisition costs related to the renewal of existing
insurance contracts or for the acquisition costs already paid by the
acquired company for future contracts.
An insurance contract shall be derecognised when the obligation it covers
is extinguished, by payment or maturity, or if the terms of the contract
are amended in such a way that the accounting treatment of the contract
would have been substantially different if those amendments had
originally existed. The derecognition of a contract entails the adjustment
of the fulfilment cash flows, the contractual services margin and the
coverage units of the group in which it was included.
General measurement model (Building Block Approach – BBA)
The general model for the measurement of insurance contracts is the best
estimate of the future cash flows to be paid or received necessary to meet
contractual obligations. This estimate should reflect the different possible
scenarios and the effect of the options and guarantees included in the
contracts within the limit or "contract boundary". The determination of
this contract boundary requires an analysis of the rights and obligations
arising from the contract and, in particula r, o f the insurer's ability to
change its price to reflect the risks. This leads, for example, to the
exclusion of tacit renewals if the tariff can be amended or to the inclusion
of such renewals if not.
Cash flows are discounted to reflect the time value of money. They
correspond only to cash flows attributable to insurance contracts either
directly or through allocation methods: premiums, acquisition and
contract management costs, claims and benefits, indirect costs, taxes
and depreciation of tangible and intangible assets.
The cash flows estimate is supplemented by an explicit risk adjustment
to cover the uncertainty for non-financial risk. These two elements
constitute the fulfilment cash flows of the contracts. A contractual service
margin is added representing the expected gain or loss on future services
related to a group of contracts.
If the contractual service margin is positive, it is shown on the balance
sheet within the insurance contract's measurement and amortised as
the services are rendered; if negative, it is recognised immediately in the
income statement. The original loss (or "loss component") is monitored
extra-accounting to allow for the subsequent recognition of the insurance
service revenue.
Acquisition costs are deducted from the contractual service margin of
the group of contracts to which they relate.
At each reporting date, the carrying amount of a group of insurance
contracts is the sum of the liabilities for the remaining coverage which
include the fulfilment cash flows related to future services (best estimate
and risk adjustment) and the contractual service margin remaining at
that date, and of the liabilities for incurred claims which include the
best estimate of the cash flows and the risk adjustment, without any
contractual service margin. The assumptions used to estimate future cash
flows and the non-financial risks adjustment are updated, as well as the
discount rate, to reflect the situation at the reporting date.
The contractual service margin is adjusted for changes in the estimates
of non-financial assumptions related to future services, capitalised at
inception rate, and then amortised in the income statement for services
rendered over the period in the insurance service revenue. In the case of
contracts which become onerous, after consumption of the contractual
service margin, the loss is recognised in the reporting period. In the
case of onerous contracts that become profitable again as a result of
favourable changes in assumptions, the contractual service margin is
only reconstitued after offsetting the loss component
The release of expected fulfillment flows (cash flow estimates and risk
adjustments) for the period, except for the amount allocated to the
loss component, is recorded in insurance service revenue. The change
in estimates related to past service is recognised in insurance service
expenses.
The Group includes the change in the adjustment for non-financial risk
in its entirety in the insurance service result.
The Group records in equity the effect of the change in the discount rate.
The expense of unwinding the discount is recorded in "insurance financial
income or expenses" based on the initial rate (the inception rate for
the liability for remaining coverage, and the rate at claims occurrence
date for the liability for incurred claims). The difference between the
value of liabilities discounted at the rate fixed at initial date and the
value of those same liabilities estimated using current discount rate
is recognised in equity. The effect on liabilities of changes in financial
variables, in particular the indexation of benefits under the contract, is
also recognised in equity.
Creditor protection insurance (CPI), personal protection insurance and
other non-life risks are measured either according to the general model
o r, i f the conditions are met, using the simplified approach. The same
treatment applies to reinsurance contracts assumed or held.
The discount rate is based on the risk-free rate adjusted for the illiquidity
of the liabilities.
The risk adjustment is determined using the quantile method.
The coverage unit used to amortise the contractual service margin is
derived from the risk premium earned during the period.
Measurement model for contracts with direct participation
features (Variable Fee Approach – VFA)
Direct participating contracts are insurance or investment contracts for
which:
■ the contractual terms specify that the policyholder is entitled to a
share of a clearly defined portfolio of underlying assets;
■ the insurer expects to pay the policyholder a sum corresponding to
a substantial portion of the return on the fair value of the underlying
assets;
■ the insurer expects that any change in the amounts to be paid to the
policyholder is, in a substantial proportion, attributable to the change
in the fair value of the underlying assets.
Compliance with these conditions is monitored on the underwriting date
and is not reviewed late r.
For these contracts, for which the insurer has to pay the policyholder an
amount corresponding to the fair value of clearly identified underlying
assets, less a variable compensation, a specific model (called the
"Variable Fee Approach") has been developed by adapting the general
model.
At each reporting date, liabilities related to these contracts are adjusted
for the return earned and changes in the fair value of the underlying
assets: the policyholders' share is recorded in the contract fulfilment cash
flows against insurance financial income or expense and the insurer's
share corresponding to the variable fee is included in the contractual
service margin.
The contractual service margin is also adjusted for the effect of changes
in cash flows that do not vary according to the returns on the underlying
assets and that relate to future services: estimation of cash flows, risk
adjustment, changes in the time value effect of money and changes in the
financial risks that do not result from the underlying assets (for example,
the effect of financial guarantees).
Changes in the fulfillment cash flows that do not change in connection
with the yields of underlying assets and that relate to past service events
are recognised in the profit and loss account.
Due to the mechanism for allocating the change in the value of the
underlying assets between the policyholders and the insure r, t he result
of these contracts is in principle mainly represented by the release
of the fulfilment cash flows and the amortisation of the contractual
service margin. When the underlying assets fully support the liabilities
and are measured at fair value through profit or loss, the financial result
under these contracts should be nil. The Group has chosen the option of
reclassifying in shareholders' equity the change in the liabilities related
to the underlying assets that are not measured at fair value through
profit or loss.
Life and savings contracts meeting the above definition of direct
participating contracts are valued using the variable fee approach. When
these contracts include a surrender value, it meets the definition of a
non-distinct investment component and changes in that investment
component (including related payments) are therefore not recognised
in the income statement.
The Group has chosen to apply the option introduced by the European
regulation not to divide the portfolios of participating contracts based
on intergenerational mutualisation by annual cohort. This option
is applied to insurance contracts and investment contracts with
discretionary participation that are eligible to the variable fee approach,
euro mono-supports or multi-supports including a euro fund, for which
the policyholders' profit-sharing is mutualised between the different
generations of policyholders in France, Italy and Luxembourg. As a result
of this choice, the assessment of the onerousness is made on the basis
of the portfolio and not on the basis of the annual cohorts.
The contract boundary includes future payments as long as the applicable
pricing is not modifiable (e.g. acquisition or management loadings),
as well as the annuity phase in service when contracts provide for a
mandatory annuity.
The discount rate is based on the risk-free rate, extrapolated over the
duration exceeding the period for which observable data are available
and adjusted by a liquidity premium on the basis of the underlying assets
to reflect the illiquidity of the liabilities.
The risk adjustment is determined using the cost of capital method
including future payments without considering the risk of mass lapses.
The coverage unit used to amortise the contractual service margin is the
change in savings due to policyholders (determined at present value),
adjusted to take into account the impact of the real return on financial
or property assets compared to the actuarial neutral risk projection.
Simplified measurement model
(Premium Allocation Approach – PAA)
Short-term contracts (less than one year) may be measured using a
simplified approach known as the premium allocation approach, also
applicable to longer-term contracts if it leads to results similar to those
of the general model in terms of liability for the remaining coverage. For
profitable contracts, the liability for the remaining coverage is measured
based on the deferral of premiums collected according to a logic similar
to that used under IFRS 4. Onerous contracts and liabilities for incurred
claims are valued according to the general model. Liabilities for incurred
claims are discounted if the expected settlement of claims takes place
one year after the date of occurrence. In this case, the option of classifying
the effect of changes in the discount rate in equity is also applicable.
The Group has chosen the option of deferring acquisition costs over the
coverage duration and therefore presenting them as a deduction of the
deferred premiums.
Liabilities for incurred claims are discounted if the expected settlement
of claims takes place after one year from the date of occurrence. The
discount expense is recognised in insurance financial income or expenses
as in the general model. In this case, the option to classify the effect of
changes in the discount rate into equity is also applicable. The Group has
retained this option for the liabilities for incurred claims.
At each reporting date, the adjustment of liabilities for remaining coverage
and for incurred claims is recognised in profit or loss.
Creditor insurance (ADE), personal protection insurance and other non-
life insurance contracts, and reinsurance contracts assumed or held,
are measured using the simplified approach if the conditions are met.
Treatment of the reinsurance
The reinsurance ceded is also treated according to the general or
simplified model, but the equivalent of the contractual service margin
represents the expected gain or loss on the reinsurance and may be
positive or negative. If a reinsurance contract immediately offsets the
losses of an underlying group of onerous contracts, the reinsurance gain is
recognised immediately in profit or loss. This "loss recovery component"
is used to record amounts that are subsequently presented in net income.
In addition, contract execution flows include the reinsurer's risk of non-
performance.
Reinsurance contracts held are measured by the Group using the
simplified approach or the general model.
Presentation in the balance sheet and in the
profit and loss
The Group has chosen to present the investments of insurance activities
and their results separately from the financial assets and liabilities of
banking activities.
Financial income or expenses from issued insurance contracts
are presented separately between the profit and loss account and
shareholders' equity for portfolios for which this breakdown has been
deemed relevant, as allowed by the standard. For the Protection
contracts liabilities measured under the general model and for the
liabilities for incurred claims arising from contracts measured under
the simplified model, this choice for portfolio classification was made by
taking into account both the effects in the profit and loss account of the
undiscounting of the liabilities and the accounting treatment of the assets
backing them. For contracts measured using the variable fee approach,
this choice was made to offset any accounting mismatch that may exist
in the profit and loss account between the effect of changes in fair value
from insurance or investment liabilities and that from the underlying
assets when these are not recognised at fair value through profit or loss.
Insurance contracts may be distributed and managed by non-insurance
entities of the Group that are remunerated as such by commissions
paid by insurance entities. The measurement model for insurance
contracts requires projecting in the contract fulfilment cash flows the
acquisition and management costs that will be paid in the future and
presenting in the profit and loss account, the release of the estimated
costs for the period on the one hand, and on the othe r, t he actual costs.
For commissions between consolidated companies in the Group, the
Group restates the internal margin on the balance sheet and in the
profit and loss account (in the breakdown of insurance liabilities and
the related results between cash flows and contractual service margin)
by presenting as insurance service expenses the portion of the general
expenses (excluding internal margins) of the banking entities that can
be attributed to the insurance activity. The internal distributors' margins
are determined based on standardised management data for each of the
related networks.
Effect of accounting estimates in interim
financial statements
The Group has elected under IFRS 17 to record in its annual financial
statements the effects of changes in accounting estimates relating to
insurance contracts issued or held, without taking into account estimates
previously made in its interim financial statements.
1.h PROPERT Y, P LAN T, E QUIPMENT
AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets shown in the
consolidated balance sheet are composed of assets used in operations
and investment property. Rights-of-use related to leased assets (see
note 1.i.2) are presented by the lessee within fixed assets in the same
category as similar assets held.
Assets used in operations are those used in the provision of services or
for administrative purposes, and include non-property assets leased by
the Group as lessor under operating leases.
Investment property comprises property assets held to generate rental
income and capital gains.
Investment property is recognised at cost, except for those held as
underlying assets under participating direct contracts (as amended by
IAS 40), which are measured at fair value through profit or loss and
presented in the balance sheet under "Investments related to insurance
activities" (see note 1.g.1).
Property, plant and equipment and intangible assets are initially
recognised at purchase price plus directly attributable costs, together
with borrowing costs where a long period of construction or adaptation is
required before the asset can be brought into service. By way of exception,
property occupied by the holder entity that is an underlying component
of direct participating contracts is measured at fair value (by amendment
to IAS 16).
Software developed internally by the BNP Paribas Group that fulfils
the criteria for capitalisation is capitalised at direct development cost,
which includes external costs and the labour costs of employees directly
attributable to the project.
Subsequent to initial recognition, property, plant and equipment and
intangible assets are measured at cost less accumulated depreciation
or amortisation and any impairment losses.
The depreciable amount of property, plant and equipment and intangible
assets is calculated after deducting the residual value of the asset. Only
assets leased by the Group as the lessor under operating leases are
presumed to have a residual value, as the useful life of property, plant
and equipment and intangible assets used in operations is generally the
same as their economic life.
Property, plant and equipment and intangible assets are depreciated
or amortised using the straight-line method over the useful life of the
asset. Depreciation and amortisation expense is recognised in the profit
and loss account under "Depreciation, amortisation and impairment of
property, plant and equipment and intangible assets".
Where an asset consists of a number of components which may require
replacement at regular intervals, or which have different uses or generate
economic benefits at different rates, each component is recognised
separately and depreciated using a method appropriate to that
component. The BNP Paribas Group has adopted the component-based
approach for property used in operations and for investment property.
The depreciation periods used for office property are as follows: 80 years
or 60 years for the shell (for prime and other property respectively);
30 years for facades; 20 years for general and technical installations;
and 10 years for fixtures and fittings.
Software is amortised, depending on its type, over periods of no more
than 8 years in the case of infrastructure developments and 3 years or
5 years in the case of software developed primarily for the purpose of
providing services to customers.
Software maintenance costs are expensed as incurred. Howeve r,
expenditure that is regarded as upgrading the software or extending its
useful life is included in the initial acquisition or production cost.
Depreciable property, plant and equipment and intangible assets are
tested for impairment if there is an indication of potential impairment at
the balance sheet date. Non-depreciable assets are tested for impairment
at least annually, using the same method as for goodwill allocated to
cash-generating units.
If there is an indication of impairment, the new recoverable amount
of the asset is compared with the carrying amount. If the asset is
found to be impaired, an impairment loss is recognised in the profit
and loss account. This loss is reversed in the event of a change in the
estimated recoverable amount or if there is no longer an indication of
impairment. Impairment losses are taken to the profit and loss account
in "Depreciation, amortisation and impairment of property, plant and
equipment and intangible assets".
Gains and losses on disposals of property, plant and equipment and
intangible assets used in operations are recognised in the profit and loss
account in "Net gain on non-current assets".
Gains and losses on disposals of investment property are recognised in
the profit and loss account in "Income from other activities" or "Expense
on other activities".
1.i LEASES
Group companies may either be the lessee or the lessor in a lease
agreement.
1.i.1 Group company as lessor
Leases contracted by the Group as lessor are categorised as either finance
leases or operating leases.
Finance leases
In a finance lease, the lessor transfers substantially all the risks and
rewards of ownership of an asset to the lessee. It is treated as a loan
made to the lessee to finance the purchase of the asset.
The present value of the lease payments, plus any residual value, is
recognised as a receivable. The net income earned from the lease by the
lessor is equal to the amount of interest on the loan and is taken to the
profit and loss account under "Interest income". The lease payments are
spread over the lease term and are allocated to reduction of the principal
and to interest such that the net income reflects a constant rate of return
on the net investment outstanding in the lease. The rate of interest used
is the rate implicit in the lease.
Impairments of lease receivables are determined using the same
principles as applied to financial assets measured at amortised cost.
Operating leases
An operating lease is a lease under which substantially all the risks
and rewards of ownership of an asset are not transferred to the lessee.
The asset is recognised under property, plant and equipment in the
lessor's balance sheet and depreciated on a straight-line basis over its
useful life. The depreciable amount excludes the residual value of the
asset. The lease payments are taken to the profit and loss account in
full on a straight-line basis over the lease term. Lease payments and
depreciation expenses are taken to the profit and loss account under
"Income from other activities" and "Expense on other activities".
1.i.2 Group company as lessee
Lease contracts concluded by the Group, with the exception of contracts
whose term is shorter than or equal to 12 months and low-value
contracts, are recognised in the balance sheet in the form of a right-
of-use on the leased asset presented under fixed assets, along with the
recognition of a financial liability for the rent and other payments to
be made over the leasing period. The righ t-of-use assets is amortised
on a straight-line basis and the financial liabilities are amortised on an
actuarial basis over the lease period. Dismantling costs corresponding
to specific and significant fittings and fixtures are included in the initial
right-of-use estimation, in counterparty of a provision liability.
The key hypotheses used by the Group for the measurement of rights of
use and lease liabilities are the following:
■ the lease term corresponds to the non-cancellable period of the
contract, together with periods covered by an extension option if
the Group is reasonably certain to exercise this option. In France,
the standard commercial lease contract is the so-called "three, six,
nine" contract for which the maximum period of use is nine years,
with a first non-cancellable period of three years followed by two
optional extension periods of three years each; hence, depending on
the assessment, the lease term can be of three, six or nine years.
When investments like fittings or fixtures are performed under the
contract, the lease term is aligned with their useful lives. For tacitly
renewable contracts, with or without an enforceable period, related
right of use and lease liabilities are recognised based on an estimate
of the reasonably foreseeable economic life of the contracts, minimal
occupation period included;
■ the discount rate used to measure the right of use and the lease
liability is assessed for each contract as the interest rate implicit in
the lease, if that rate can be readily determined, or more generally
based on the incremental borrowing rate of the lessee at the date of
signature. The incremental borrowing rate is determined considering
the average term (duration) of the contract;
■ when the contract is modified, a new assessment of the lease liability
is made taking into account the new residual term of the contract,
and therefore a new assessment of the right of use and the lease
liability is established.
1.j ASSETS HELD FOR SALE AND
DISCONTINUED OPERATIONS
Where the Group decides to sell assets or a group of assets and liabilities
and it is highly probable that the sale will occur within 12 months, these
assets are shown separately in the balance sheet, on the line "A ssets
held for sale". Any liabilities associated with these assets are also shown
separately in the balance sheet, on the line "Liabilities associated with
assets held for sale". When the Group is committed to a sale plan
involving loss of control of a subsidiary and the sale is highly probable
within 12 months, all the assets and liabilities of that subsidiary are
classified as held for sale.
Once classified in this category, assets and the group of assets and
liabilities are measured at the lower of carrying amount or fair value
less costs to sell.
Such assets are no longer depreciated. If an asset or group of assets and
liabilities becomes impaired, an impairment loss is recognised in the
profit and loss account. Impairment losses may be reversed.
Where a group of assets and liabilities held for sale represents a
cash-generating unit, it is categorised as a "discontinued operation".
Discontinued operations include operations that are held for sale,
operations that have been shut down, and subsidiaries acquired
exclusively with a view to resell.
In this case, gains and losses related to discontinued operations are
shown separately in the profit and loss account, on the line "Net income
from discontinued activities". This line includes after tax profits or
losses of discontinued operations, after tax gain or loss arising from
remeasurement at fair value less costs to sell, and after tax gain or loss
on disposal of the operation.
1.k EMPLOYEE BENEFITS
Employee benefits are classified into four categories:
■ short-term benefits, such as salary, annual leave, incentive plans,
profit-sharing and additional payments;
■ long-term benefits, including compensated absences, long-service
awards, and other types of cash-based deferred compensation;
■ termination benefits;
■ post-employment benefits, including top-up banking industry pensions
and retirement bonuses in France and pension plans in other countries,
some of which are operated through pension funds.
Short-term benefits
The Group recognises an expense when it has used services rendered by
employees in exchange for employee benefits.
Long-term benefits
These are benefits, other than short-term benefits, post-employment
benefits and termination benefits. This relates, in particula r, t o
compensation deferred for more than 12 months and not linked to the
BNP Paribas share price, which is accrued in the financial statements
for the period in which it is earned.
The actuarial techniques used are similar to those used for defined-
benefit post-employment benefits, except that the revaluation items are
recognised in the profit and loss account and not in equity.
Termination benefits
Termination benefits are employee benefits payable in exchange for the
termination of an employee's contract as a result of either a decision
by the Group to terminate a contract of employment before the legal
retirement age, or a decision by an employee to accept voluntary
redundancy in exchange for these benefits. Termination benefits due
more than 12 months after the balance sheet date are discounted.
Post-employment benefits
In accordance with IFRS, the BNP Paribas Group draws a distinction
between defined-contribution plans and defined-benefit plans.
Defined-contribution plans do not give rise to an obligation for the
Group and do not require a provision. The amount of the employer's
contributions payable during the period is recognised as an expense.
Only defined-benefit schemes give rise to an obligation for the Group.
This obligation must be measured and recognised as a liability by means
of a provision.
The classification of plans into these two categories is based on the
economic substance of the plan, which is reviewed to determine whether
the Group has a legal or constructive obligation to pay the agreed benefits
to employees.
Post-employment benefit obligations under defined-benefit plans are
measured using actuarial techniques that take demographic and financial
assumptions into account.
The net liability recognised with respect to post-employment benefit
plans is the difference between the present value of the defined-benefit
obligation and the fair value of any plan assets.
The present value of the defined-benefit obligation is measured on
the basis of the actuarial assumptions applied by the Group, using the
projected unit credit method. This method takes into account various
parameters, specific to each country or Group entity, such as demographic
assumptions, the probability that employees will leave before retirement
age, salary inflation, a discount rate, and the general inflation rate.
When the value of the plan assets exceeds the amount of the obligation,
an asset is recognised if it represents a future economic benefit for the
Group in the form of a reduction in future contributions or a future partial
refund of amounts paid into the plan.
The annual expense recognised in the profit and loss account under
"Salaries and employee benefits", with respect to defined-benefit plans
includes the current service cost (the rights vested by each employee
during the period in return for service rendered), the net interests linked
to the effect of discounting the net defined-benefit liability (asset), the
past service cost arising from plan amendments or curtailments, and the
effect of any plan settlements.
Remeasurements of the net defined-benefit liability (asset) are recognised
in shareholders' equity and are never reclassified to profit or loss. They
include actuarial gains and losses, the return on plan assets and any
change in the effect of the asset ceiling (excluding amounts included in
net interest on the defined-benefit liability or asset).
1.l SHARE-BASED PAYMENTS
Share-based payment transactions are payments based on shares issued
by the Group, whether the transaction is settled in the form of equity or
cash of which the amount is based on trends in the value of BNP Paribas
shares.
Stock option and share award plans
The expense related to stock option and share award plans is recognised
over the vesting period, if the benefit is conditional upon the grantee's
continued employment.
Stock options and share award expenses are recorded under salary
and employee benefits expenses, with a corresponding adjustment to
shareholders' equity. They are calculated on the basis of the overall plan
value, determined at the date of grant by the Board of directors.
In the absence of any market for these instruments, financial valuation
models are used that take into account any performance conditions
related to the BNP Paribas share price. The total expense of a plan is
determined by multiplying the unit value per option or share awarded
by the estimated number of options or shares awarded vested at the end
of the vesting period, taking into account the conditions regarding the
grantee's continued employment.
The only assumptions revised during the vesting period, and hence
resulting in a remeasurement of the expense, are those relating to
the probability that employees will leave the Group and those relating
to performance conditions that are not linked to the price value of
BNP Paribas shares.
Share price-linked cash-settled deferred
compensation plans
The expense related to these plans is recognised in the year during which
the employee rendered the corresponding services.
If the payment of share-based variable compensation is explicitly subject
to the employee's continued presence at the vesting date, the services
are presumed to have been rendered during the vesting period and the
corresponding compensation expense is recognised on a pro rata basis
over that period. The expense is recognised under salary and employee
benefits expenses with a corresponding liability in the balance sheet. It is
revised to take into account any non-fulfilment of the continued presence
or performance conditions and the change in BNP Paribas share price.
If there is no continued presence condition, the expense is not deferred,
but recognised immediately with a corresponding liability in the balance
sheet. This is then revised on each reporting date until settlement to
take into account any performance conditions and the change in the
BNP Paribas share price.
1.m PROVISIONS RECORDED UNDER
LIABILITIES
Provisions recorded under liabilities (other than those relating to financial
instruments, employee benefits and insurance contracts) mainly relate
to restructuring, claims and litigation, fines and penalties.
A provision is recognised when it is probable that an outflow of resources
embodying economic benefits will be required to settle an obligation
arising from a past event, and a reliable estimate can be made of the
amount of the obligation. The amount of such obligations is discounted,
where the impact of discounting is material, in order to determine the
amount of the provision.
1.n CURRENT AND DEFERRED TAX
The current income tax charge is determined on the basis of the tax laws
and tax rates in force in each country in which the Group operates during
the period in which the income is generated.
Deferred taxes are recognised when temporary differences arise between
the carrying amount of an asset or liability in the balance sheet and its
tax base.
Deferred tax liabilities are recognised for all taxable temporary differences
other than:
■ taxable temporary differences on initial recognition of goodwill;
■ taxable temporary differences on investments in enterprises under
the exclusive or joint control of the Group, where the Group is able
to control the timing of the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary
differences and unused carryforwards of tax losses only to the extent
that it is probable that the entity in question will generate future taxable
profits against which these temporary differences and tax losses can
be offset.
Deferred tax assets and liabilities are measured using the liability method,
using the tax rate which is expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates and tax laws that
have been or will have been enacted by the balance sheet date of that
period. They are not discounted.
Deferred tax assets and liabilities are offset when they arise within the
same tax group, they fall under the jurisdiction of a single tax authority,
and there is a legal right to offset.
As regards the assessment of uncertainty over income tax treatments,
the Group adopts the following approach:
■ the Group assesses whether it is probable that a taxation authority
will accept an uncertain tax treatment;
■ any uncertainty shall be reflected when determining the taxable
profit (loss) by considering either the most likely amount (having the
higher probability of occurrence), or the expected value (sum of the
probability-weighted amounts).
Current and deferred taxes are recognised as tax income or expenses
in the profit and loss account, except for those relating to a transaction
or an event directly recognised in shareholders' equity, which are also
recognised in shareholders' equity. This concerns in particular the tax
effect of coupons paid on financial instruments issued by the Group and
qualified as equity instruments, such as undated super subordinated
notes.
When tax credits on revenues from receivables and securities are used
to settle corporate income tax payable for the period, the tax credits are
recognised on the same line as the income to which they relate. The
corresponding tax expense continues to be carried in the profit and loss
account under "Corporate income tax".
1.o CASH FLOW STATEMENT
The cash and cash equivalents balance is composed of the net balance
of cash accounts and accounts with central banks, and the net balance
of interbank demand loans and deposits.
Changes in cash and cash equivalents related to operating activities
reflect cash flows generated by the Group's operations, including those
relating to financial investments of insurance activities and negotiable
certificates of deposit.
Changes in cash and cash equivalents related to investing activities reflect
cash flows resulting from acquisitions and disposals of subsidiaries,
associates or joint ventures included in the consolidated Group, as well
as acquisitions and disposals of property, plant and equipment excluding
investment property and property held under operating leases.
Changes in cash and cash equivalents related to financing activities
reflect the cash inflows and outflows resulting from transactions with
shareholders, cash flows related to bonds and subordinated debt, and
debt securities (excluding negotiable certificates of deposit).
1.p USE OF ESTIMATES IN THE
PREPARATION OF THE FINANCIAL
STATEMENTS
Preparation of the financial statements requires managers of core
businesses and corporate functions to make assumptions and estimates
that are reflected in the measurement of income and expense in the profit
and loss account and of assets and liabilities in the balance sheet, and
in the disclosure of information in the notes to the financial statements.
This requires the managers in question to exercise their judgement and
to make use of information available at the date of the preparation of
the financial statements when making their estimates. The actual future
results from operations where managers have made use of estimates
may in reality differ significantly from those estimates, mainly according
to market conditions. This may have a material effect on the financial
statements.
This applies in particular to:
■ the analysis of the cash flow criterion for specific financial assets;
■ the measurement of expected credit losses. This applies in particular
to the assessment of significant increase in credit risk, the models and
assumptions used to measure expected credit losses, the determination
of the different economic scenarios and their weighting;
■ the analysis of renegotiated loans, in order to assess whether they
should be maintained on the balance sheet or derecognised;
■ the assessment of an active market, and the use of internally
developed models for the measurement of the fair value of financial
instruments not quoted in an active market classified in "Financial
assets at fair value through equity", or in "Financial instruments at
fair value through profit or loss", whether as assets or liabilities, and
more generally calculations of the fair value of financial instruments
subject to a fair value disclosure requirement;
■ the assumptions applied to assess the sensitivity to each type of market
risk of the market value of financial instruments and the sensitivity of
these valuations to the main unobservable inputs as disclosed in the
notes to the financial statements;
■ the appropriateness of the designation of certain derivative instruments
such as cash flow hedges, and the measurement of hedge effectiveness;
■ impairment tests performed on intangible assets;
■ the estimation of residual assets values under simple lease
agreements. These values are used as a basis for the determination
of depreciation as well as any impairment, notably in relation to the
effect of environmental considerations on the evaluation of future
prices of second-hand vehicles;
■ the deferred tax assets;
■ the measurement of insurance liabilities and assets, and investment
contracts with discretionary participation, by groups of contracts, on
the basis of discounted and probability weighted future fulfilment
cash flows, based on assumptions that can be derived from market or
entity-specific data, and the recognition of the results of such contracts
on the basis of the services rendered over the coverage period;
■ the measurement of uncertainty over income tax treatments and
other provisions for contingencies and charges. In particula r, w hile
investigations and litigations are ongoing, it is difficult to foresee their
outcome and potential impact. Provision estimation is established
by taking into account all available information at the date of the
preparation of the financial statements, in particular the nature of
the dispute, the underlying facts, the ongoing legal proceedings and
court decisions, including those related to similar cases. The Group
may also use the opinion of experts and independent legal advisers
to exercise its judgement.
Note 2
IFRS 17 AND IFRS 9 FIRST TIME APPLICATION IMPACTS
➤
IFRS 17 AND IFRS 9 FIRST TIME APPLICATION IMPACTS ON THE BALANCE SHEET AT 31 DECEMBER 2022
In millions of euros, at
31 December 2022
IFRS 17 and 9
1st time application restated according
impacts
31 December 2022
to IFRS 17 and 9
ASSETS
Cash and balances at central banks
318,560
318,560
Financial instruments at fair value through profit or loss
Securities
166,077
166,077
Loans and repurchase agreements
191,125
191,125
Derivative financial instruments
327,932
327,932
Derivatives used for hedging purposes
25,401
25,401
Financial assets at fair value through equity
Debt securities
35,878
35,878
Equity securities
2,188
2,188
Financial assets at amortised cost
Loans and advances to credit institutions
32,616
32,616
Loans and advances to customers
857,020
857,020
Debt securities
114,014
114,014
Remeasurement adjustment on interest-rate risk hedged portfolios
(7,477)
(7,477)
Investments and other assets related to insurance activities
247,403
(1,928)(a)(c)(d)
245,475
Current and deferred tax assets
5,893
39
5,932
Accrued income and other assets
209,092
(549)
208,543
Equity-method investments
6,263
(190)
6,073
Property, plant and equipment and investment property
38,468
38,468
Intangible assets
3,790
3,790
Goodwill
5,294
5,294
Assets held for sale
86,839
86,839
TOTAL ASSETS
2,666,376
(2,628)
2,663,748
LIABILITIES
Deposits from central banks
3,054
3,054
Financial instruments at fair value through profit or loss
Securities
99,155
99,155
Deposits and repurchase agreements
234,076
234,076
Issued debt securities
70,460
(4,882)(e)(c)
65,578
Derivative financial instruments
300,121
300,121
Derivatives used for hedging purposes
40,001
40,001
Financial liabilities at amortised cost
Deposits from credit institutions
124,718
124,718
Deposits from customers
1,008,054
2
1,008,056
Debt securities
154,143
1,216(c)
155,359
Subordinated debt
24,156
4
24,160
Remeasurement adjustment on interest-rate risk hedged portfolios
(20,201)
(20,201)
Current and deferred tax liabilities
3,054
(75)
2,979
Accrued expenses and other liabilities
185,456
(446)
185,010
Technical reserves and other insurance liabilities
226,532
(226,532)(a)(e)
Liabilities related to insurance contracts
209,772 (b)
209,772
Financial liabilities related to insurance activities
18,858 (e)
18,858
Provisions for contingencies and charges
10,040
10,040
Liabilities associated with assets held for sale
77,002
77,002
TOTAL LIABILITIES
2,539,821
(2,083)
2,537,738
EQUITY
Share capital, additional paid-in capital and retained earnings
115,149
(141)
115,008
Net income for the period attributable to shareholders
10,196
(348)
9,848
Total capital, retained earnings and net income for the period attributable to
shareholders
125,345
(489)
124,856
Changes in assets and liabilities recognised directly in equity
(3,553)
(66)
(3,619)
Shareholders' equity
121,792
(555)(f)
121,237
Minority interests
4,763
10
4,773
TOTAL EQUITY
126,555
(545)
126,010
TOTAL LIABILITIES AND EQUITY
2,666,376
(2,629)
2,663,748
The transition from IFRS 4 to IFRS 17 leads to the removal through equity
of assets and liabilities of insurance contracts recognised in accordance
with the previous standard net of deferred tax effects: insurance liabilities,
reinsurance assets held, and deferred policyholders' participation arising
from "shadow accounting". Receivables and payables related to insurance
or reinsurance contracts were not cancelled but are included in the new
measurement of insurance liabilities and assets.
The main impacts linked to the first time application of IFRS 4 and IFRS 17
at 31 December 2022 are:
(a) the removal of insurance assets and liabilities recognised under
IFRS 4:
■
on the assets side, -EUR 5.2 billion within "Investments and other
assets related to insurance activities": -EUR 2.3 billion linked to
reinsurance assets held, mainly mathematical reserves, and
-EUR 2.9 billion in respect of deferred profit-sharing arising from
shadow accounting,
■
on the liabilities side, -EUR 221.6 billion of insurance contract
liabilities previously recorded as "Technical reserves and other
insurance liabilities";
(b)the recognition of "Liabilities related to insurance contracts" for
+EUR 209.8 billion, including:
■
the best estimate of future fulfilment cash flows together with the
risk adjustment and the contractual service margin measured in
accordance to IFRS 17;
■
other assets and liabilities linked to insurance contracts (mainly
policyholders' receivables and payables).
The methods used at transition date for the measurement of the
insurance contracts are described in note 1.a Applicable accounting
standards – T r ansition from IFRS 4 to IFRS 17.
(c) The application of the amendment to IFRS 9 enabling the recognition
in the balance sheet of financial assets issued by the Group that
are held as underlying items of direct participating contracts and
are measured at fair value through profit or loss. Consequently,
"Investments and other assets related to insurance activities"
increased by +EUR 2 billion, against, on the liabilities side, an increase
of +EUR 0.8 billion in "Issued debt securities at fair value through
profit or loss" and +EUR 1.2 billion in "Debt securities at amortised
cost";
(d) The Group also applies the amendments to IAS 40 and IAS 16 resulting
from IFRS 17, leading to measure at fair value through profit or loss of
the buildings held as underlying items of direct participating contracts
and recognise +EUR 1.6 billion within "Investments and other assets
related to insurance activities";
(e) "Financial liabilities related to insurance activities" previously
recorded as "Issued debt securities" for +EUR 5.7 billion or as "Other
insurance liabilities" have been combined under the same line;
(f) The application of IFRS 17 and IFRS 9 results in a -EUR 0.6 billion
impact to equity attributable to shareholders, net of tax effect at
31 December 2022.
At 1 January 2022, this impact was -EUR 1.6 billion of which
+EUR 0.5 billion related to the transition from IAS 39 to IFRS 9 and
-EUR 2.1 billion related to the transition from IFRS 4 to IFRS 17.
➤
IFRS 9 AND IFRS 17 FIRST TIME APPLICATION IMPACTS ON "INVESTMENTS AND OTHER ASSETS RELATED
TO INSURANCE ACTIVITIES"
In millions of euros, at
31 December
2022
(IAS 39/
IFRS 4)
Reclassifications
Total
to IFRS 9
IFRS 9 impacts
(insurance entities)
IFRS 17, IAS 16
and IAS 40
31 December
2022
restated
according to
impacts IFRS 17 and 9
Available-for-sale
financial assets at fair
Held-to-maturity
financial assets at
amortised cost
Other reclassifications
Remea- Impairment
surement adjustments
categories (phase 1)
(phase 2)
Debt
securities securities securities receivables fications
Equity
Debt Loans and reclassi-
Financial instruments at
fair value through profit
or loss
125,640
7,694
9,497
101
165
325
17,782
276
2,015
145,713
Financial assets at fair
value through equity
104,961
(7,694)
(9,497)
967
255
(15,969)
93
(60)
89,025
Financial assets at
amortised cost
4,044
(1,068)
(165)
(29)
(1,262)
(1,629)
1,153
Equity-method
investments
342
(228)
(228)
114
Investment property
7,257
1,562
8,819
Reinsurer's share of
technical reserves
2,277
(2,277)
Policyholders' surplus
reserve - assets
2,882
(2,882)
Assets related to
insurance activities
651
651
INVESTMENTS AND
OTHER ASSETS RELATED
TO INSURANCE
ACTIVITIES
247,403
-
-
-
-
323
323
369
(60)
(2,560)
245,475
Financial assets and liabilities of insurance entities are managed by
portfolios corresponding to the insurance liabilities they back up or to
the own funds. The business models were therefore determined according
to these portfolios at the transition date to IFRS 9.
Under the business model and cash flow criteria, debt instruments
are largely classified according to the "collect and sell" model, except
for those representing unit-linked contracts, debt instruments held by
consolidated UCITS and managed at disposal value, which are measured
at fair value through profit or loss. Certain specific assets are designated
as at fair value through profit or loss. Most equity instruments are
measured at fair value through profit or loss, except for certain assets
backing own-funds and non-participating contracts portfolios, which are
measured at fair value through equity. Non-consolidated funds classified
as available-for-sale financial assets under IAS 39 have been reclassified
at fair value through profit or loss. The treatment of derivatives remains
unchanged, including for hedge accounting, for which the principles of
IAS 39 continue to be applied by the Group (see note 1.f.9).
Note 3
NOTES TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED
31 DECEMBER 2023
3.a NET INTEREST INCOME
The BNP Paribas Group includes in "Interest income" and "Interest
expense" all income and expense calculated using the effective interest
method (interest, fees and transaction costs) from financial instruments
measured at amortised cost and financial instruments measured at fair
value through equity.
These items also include the interest income and expense of non-trading
financial instruments the characteristics of which do not allow for
recognition at amortised cost or at fair value through equity, as well as
of financial instruments that the Group has designated as at fair value
through profit or loss. The change in fair value on financial instruments at
fair value through profit or loss (excluding accrued interest) is recognised
under "Net gain on financial instruments at fair value through profit or
loss".
Interest income and expense on derivatives accounted for as fair value
hedges are included with the revenues generated by the hedged item.
Similarly, interest income and expense arising from derivatives used to
hedge transactions designated as at fair value through profit or loss
is allocated to the same accounts as the interest income and expense
relating to the underlying transactions.
In the case of a negative interest rates related to loans and receivables
or deposits from customers and credit institutions, they are accounted
for in interest expense or interest income respectively.
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Income
Expense
Net
Income
Expense
Net
Financial instruments at amortised cost
66,886
(48,617)
18,269
34,795
(15,405)
19,390
Deposits, loans and borrowings
59,019
(36,827)
22,192
30,749
(11,652)
19,097
Repurchase agreements
681
(1,295)
(614)
274
(83)
191
Finance leases
2,480
(109)
2,371
1,763
(102)
1,661
Debt securities
4,706
4,706
2,009
2,009
Issued debt securities and subordinated debt
(10,386)
(10,386)
(3,568)
(3,568)
Financial instruments at fair value through equity
1,856
-
1,856
738
-
738
Financial instruments at fair value through profit
or loss (Trading securities excluded)
243
(1,454)
(1,211)
59
(279)
(220)
Cash flow hedge instruments
3,897
(1,741)
2,156
3,025
(1,450)
1,575
Interest rate portfolio hedge instruments
6,660
(8,600)
(1,940)
2,465
(2,965)
(500)
Lease liabilities
-
(72)
(72)
(50)
(50)
TOTAL INTEREST INCOME/(EXPENSE)
79,542
(60,484)
19,058
41,082
(20,149)
20,933
Net interest income notably includes an expense of EUR 938 million due
to the adjustment of economic hedges consecutive to the changes in the
TLTRO terms and conditions mentioned below.
Net interest income includes funding costs related to Global Markets,
whose revenues are mainly accounted for in "Net gain on financial
instruments at fair value through profit or loss" (see note 3.c), as well
as to Arval, whose income from operating leases is presented in note 3.e.
The evolution of the net interest income is therefore to be analysed in
conjunction with those observed for these lines.
Interest income on individually impaired loans amounted to
EUR 342 million for the year ended 2023, compared to EUR 287 million
for the year ended 2022.
The Group subscribed to the TLTRO III (T a rgeted Longer-T e rm Refinancing
Operations) programme, as modified by the Governing Council of the
European Central Bank in March 2020, in December 2020 and in
October 2022 (see note 5.g). The Group achieved the lending performance
thresholds that enabled it to benefit from favourable interest rate
conditions applicable for each of the reference period, namely:
■ over the two special interest periods (i.e. from June 2020 to June 2022):
the average deposit facility rate ("DFR") -50 basis points, or -1%;
■ over the next period (i.e. from June 2022 to November 2022): the
average of the DFR between the TLTRO III initial date of subscription
and 22 November 2022, i.e. for the main draws, -0.36% for the
June 2020 tranche and -0.29% for the March 2021 tranche;
■ over the last period (since 23 November 2022): the average of the DFR
between 23 November 2022 and the redemption date. The average
effective interest rate for the latter period was 3.15% (1.64% until
31 December 2022 and 3.31% for the year 2023).
This floating interest rate is considered as a market rate since it is
applicable to all financial institutions meeting the lending criteria
defined by the European Central Bank. The effective interest rate of
these financial liabilities is determined for each reference period, its two
components (reference rate and margin) being adjustable; it corresponds
to the nominal interest rate. The addition of the last interest period in
October 2022 is part of the European Central Bank's monetary policy and
is therefore not considered a contractual amendment according to IFRS 9
but a revision of the market rate.
3.b COMMISSION INCOME AND EXPENSE
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
according to IFRS 17 and 9
Income
Expense
Net
Income
Expense
Net
Customer transactions
4,997
(1,250)
3,747
4,772
(1,172)
3,600
Securities and derivatives transactions
2,483
(1,965)
518
2,051
(1,561)
490
Financing and guarantee commitments
1,155
(189)
966
1,181
(100)
1,081
Asset management and other services
5,176
(367)
4,809
5,425
(385)
5,040
Others
1,200
(1,419)
(219)
1,193
(1,239)
(46)
COMMISSION INCOME AND EXPENSE
15,011
(5,190)
9,821
14,622
(4,457)
10,165
of which net commission income related to trust
and similar activities through which the Group
holds or invests assets on behalf of clients,
trusts, pension and personal risk funds or other
institutions
3,133
(360)
2,773
3,248
(376)
2,872
of which commission income and expense on
financial instruments not measured at fair value
through profit or loss
3,133
(453)
2,680
3,048
(370)
2,678
3.c NET GAIN ON FINANCIAL INSTRUMENTS
AT FAIR VALUE THROUGH PROFIT
OR LOSS
Net gain on financial instruments measured at fair value through profit
or loss includes all profit and loss items relating to financial instruments
held for trading, financial instruments that the Group has designated as
at fair value through profit or loss, non-trading equity instruments that
the Group did not choose to measure at fair value through equity, as
well as debt instruments whose cash flows are not solely repayments
of principal and interest on the principal or whose business model is
not to collect cash flows nor to collect cash flows and sell the assets.
These income items include dividends on these instruments and exclude
interest income and expense from financial instruments designated as
at fair value through profit or loss and instruments whose cash flows
are not only repayments of principal and interest on the principal or
whose business model is not to collect cash flows nor to collect cash
flows and sell the assets, which are presented in "Net interest income"
(see note 3.a).
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Financial instruments held for trading
13,801
(2,023)
Interest rate and credit instruments
8,948
(6,014)
Equity financial instruments
3,184
(3,268)
Foreign exchange financial instruments
5,452
5,898
Loans and repurchase agreements
(4,515)
(1,326)
Other financial instruments
732
2,687
Financial instruments designated as at fair value through profit or loss
(3,985)
11,328
Other financial instruments at fair value through profit or loss
565
143
Impact of hedge accounting
(35)
(96)
Fair value hedging derivatives
(1,247)
(9,123)
Hedged items in fair value hedge
1,212
9,027
NET GAIN ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
10,346
9,352
Gains and losses on financial instruments designated as at fair value
through profit or loss are mainly related to instruments for which
changes in value may be compensated by changes in the value of
economic hedging derivative financial instruments held for trading.
Net gain on financial instruments held for trading in 2023 and 2022
includes a non-material amount related to the ineffective portion of cash
flow hedges.
Potential sources of ineffectiveness can be the differences between
hedging instruments and hedged items, notably generated by mismatches
in the terms of hedged and hedging instruments, such as the frequency
and timing of interest rate
resetting, the frequency of payments and
the discounting factors, or when hedging derivatives have a non-zero
fair value at the inception date of the hedging relationship. Credit
valuation adjustments applied to hedging derivatives are also sources
of ineffectiveness.
Cumulated changes in fair value related to discontinued cash flow hedge
relationships, previously recognised in equity and included in 2023 in
profit and loss accounts are not material, whether the hedged item
ceased to exist or not.
3.d NET GAIN ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH EQUITY
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Net gain on debt instruments
(56)
9
Dividend income on equity instruments
84
129
NET GAIN ON FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH EQUITY
28
138
Interest income from debt instruments is included in note 3.a Net interest income, and impairment losses related to potential issuer default are included
in note 3.g Cost of risk.
3.e NET INCOME FROM OTHER ACTIVITIES
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Income
Expense
Net
Income
Expense
Net
Net income from investment property
54
(28)
26
58
(30)
28
Net income from assets held under operating leases
15,787
(12,103)
3,684
13,134
(10,365)
2,769
Net income from property development activities
488
(416)
72
773
(653)
120
Other net income
2,231
(1,778)
453
1,769
(1,704)
65
TOTAL NET INCOME FROM OTHER ACTIVITIES
18,560
(14,325)
4,235
15,734
(12,752)
2,982
3.f OPERATING EXPENSES
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Salary and employee benefit expense for banking activities
(17,775)
(16,877)
Other operating expenses for banking activities
(11,221)
(11,026)
of which external services and other operating expenses
(8,865)
(8,611)
of which taxes and contributions(1)
(2,356)
(2,415)
Insurance activities non-attributable costs (note 6.b)
(758)
(713)
Reclassification of expenses incurred by internal distributors attributable to insurance contracts
1,041
1,056
OPERATING EXPENSES
(28,713)
(27,560)
(1) Contributions to the Single Resolution Fund, including exceptional contributions, amounted to EUR 1,002 million for year ended 2023 compared with
EUR 1,256 million for the year ended 2022.
T a xes and contributions, including those related to insurance activities,
amounted to EUR 2,442 million for the year ended 2023 (compared to
EUR 2,510 million for the year ended 2022).
Expenses directly attributable to insurance contracts are presented in
"Net income from insurance activities". These costs consist mainly of
distribution commissions paid for the acquisition of the contracts and
other costs necessary for handling the contracts. They are included in the
fulfilment expenses within the "Insurance service result" (see note 6.a).
Expenses attributable to insurance contracts include the operating
expenses incurred by the Group banking networks to distribute insurance
contracts. Related costs are assessed on the basis of the commissions paid
by the insurance entities to the internal distributors less their margin.
These costs are excluded from "Operating expenses" to be included in the
contracts fulfilment cash flows through the "Reclassification of expenses
incurred by internal distributors attributable to insurance contracts".
Operating costs not directly attributable to insurance contracts are
included in "Operating expenses".
Reconciliation by type and by function of insurance activities operating
expenses is presented in note 6.b.
3.g COST OF RISK
The general model for impairment described in note 1.f.5 used by the
Group relies on the following two steps:
■ assessing whether there has been a significant increase in credit risk
since initial recognition; and
■ measuring impairment allowance as either 12-month expected credit
losses or lifetime expected credit loss (i.e. loss expected at maturity).
Both steps rely on forward-looking information.
Significant increase in credit risk
At 31 December 2022, BNP Paribas revised its criteria for assessing the
significant increase in credit risk in line with the recommendations issued
by the European Banking Authority and the European Central Bank.
Previously, except for the consumer credit specialist business, the credit
risk deterioration was mainly evaluated based on changes in the internal
credit rating, an indicator of the average 1-year probability of default
through the cycle. In order to fully consider forward-looking information,
the new criteria use the probability of default to maturity, which is derived
from the internal rating, incorporating the expected consequences of
changes in macroeconomic scenarios, as the main indicato r.
Under these new criteria, credit risk is assumed to have significantly
increased, and the asset is classified in stage 2, if the probability of
default to maturity of the instrument has increased at least threefold
since its origination. This relative variation criterion is supplemented
by an absolute variation criterion of the default probability of 400 basis
points.
Furthermore, for all portfolios (except for the consumer credit specialist
business):
■ the facility is assumed to be in stage 1 when its 1-year "Point in Time"
probability of default (PiT PD) is below 0.3% at the reporting date, since
changes in probability of default due to credit downgrades in this zone
are not material, and therefore not considered "significant";
■ when the 1-year PiT PD is greater than 20% at the reporting date, given
the Group's credit issuance practices, the deterioration is considered
significant, and the facility is classified in stage 2 (as long as the facility
is not credit-impaired).
In the consumer credit specialist business, the existence of a payment
incident during the last 12 months, potentially regularised, is considered
to be an indication of significant increase in credit risk and the facility is
therefore classified in stage 2.
The table below shows a comparison between the previous and the new criteria for assessing the significant increase in credit risk:
Previous
criteria
Retail
One year probability of default* < 0.25%
Small and
Medium
Entreprises
Large
Corporates
* Probability of default through the cycle.
** "Point in Time" (PiT) probability of default including forward-looking.
Stage 1 presumption
Rating ≤ 4-
One year PiT probability of defaul t** < 0.3%
Deterioration from origination leading
to transfer to stage 2
Rating downgrade ≥ 6 notches
Rating downgrade ≥ 3 notches
One year probability of default > 10%
Stage 2 presumption
Rating ≥ 9+
One year PiT probability of defaul t> 20%
One year probability of default
One year probability of default at origination
Rating downgrade ≥ 6 notches
> 4
or
Lifetime PiT probability of default
> 3
Lifetime PiT probability of default at origination
Variation of lifetime PiT probability of default
since origination > 400 bps
or
New criteria
Credit risk is assumed to have increased significantly since initial
recognition and the asset is classified in stage 2 in the event of late
payment of more than 30 days or restructuring due to financial difficulties
(as long as the facility is not credit-impaired). Since 31 December 2023,
performing corporate clients placed under credit watch are systematically
downgraded to stage 2.
In the first half of 2022, the internal ratings of the Russian counterparties
(including the sovereign rating) were systematically downgraded to
take into account recent events, thus leading to the transfer of their
outstandings to stage 2. Howeve r, g iven the Group's limited level of
exposure to this country, this deterioration had no significant effect on
the cost of risk.
Forward-Looking Information
The Group considers forward-looking information both when assessing
significant increase in credit risk and when measuring Expected Credit
Losses (ECL).
Regarding the measurement of expected credit losses, the Group has
chosen to use 4 macroeconomic scenarios by geographic area covering
a wide range of potential future economic conditions:
■ a baseline scenario, consistent with the scenario used for budgeting;
■ a favourable scenario, capturing situations where the economy
performs better than anticipated;
■ an adverse scenario, corresponding to the scenario used for the
Group's quarterly stress tests;
■ a severe scenario corresponding to a shock of magnitude greater than
that of the adverse scenario.
The link between the macroeconomic scenarios and the ECL measurement
is mainly achieved through a modelling of the probabilities of default
and deformation of migration matrices based on internal rating (or risk
parameter). The probabilities of default determined according to these
scenarios are used to measure expected credit losses in each of these
scenarios.
The Group's setup is broken down by sector to take into account the
heterogeneity of sectoral dynamics when assessing the probability of
default for corporates.
Forward-looking information is also considered when determining the
significant deterioration in credit risk. As a matter of fact, the probabilities
of default used as the basis for this assessment include forward-looking
multi-scenario information in the same way as for the calculation of the
expected losses.
The weight to be attributed to the expected credit losses calculated in
each of the scenarios is defined as 50% for the baseline scenario, and:
■ the weight of the three alternative scenarios is defined according to
the position in the credit cycle. In this approach, the adverse scenario
carries more weight in situations at the upper end of the cycle than
those at the lower end of the cycle, in anticipation of a potential
downturn in the economy;
■ the weight of the favourable scenario is at least 10% and at most 40%;
■ the total weight of adverse scenarios fluctuates symmetrically with the
favourable also within a range of 10% to 40%; with a severe component
representing 20% of this weight with a minimum weight of 5%.
When appropriate, the ECL measurement can take into account asset
sale scenarios.
Macroeconomic scenarios
The four macroeconomic scenarios are defined over a three-year
projection horizon. They correspond to:
■ a baseline scenario, which describes the most likely path of the
economy over the projection horizon. This scenario is updated on
a quarterly basis and is prepared by the Group Economic Research
Department in collaboration with various experts within the Group.
Projections are designed for each key market of the Group (France,
Italy, Belgium, the United States, and the Eurozone) using key
macroeconomic variables (Gross Domestic Product - GDP - and its
components, unemployment rate, consumer prices, interest rates,
foreign exchange rates, oil prices, real estate prices, etc.) which are key
drivers for modeling risk parameters used in the stress test process;
■ an adverse scenario, which describes the impact of the materialisation
of some of the risks weighing on the baseline scenario, resulting in a
much less favourable economic path than in the baseline scenario.
The GDP shock is applied with varying magnitudes, but simultaneously,
to the economies under consideration. Generally, these assumptions
are broadly consistent with those proposed by the regulators. The
calibration of shocks on other variables (e.g. unemployment, consumer
prices, interest rates, etc.) is based on models and expert judgment;
■ a severely adverse scenario, which is an aggravated version of the
adverse scenario;
■ a favourable scenario, which reflects the impact of the materialisation
of some of the upside risks for the economy, resulting in a more
favourable economic path. The favourable shock on GDP is deducted
from the structural adverse shock on GDP in such a way that the
probabilities of the two shocks are equal on average over the cycle.
Other variables (e.g. unemployment, inflation, interest rates, etc.) are
defined in the same way as in the adverse scenario.
The link between the macroeconomic scenarios and the measurement of
the ECL is complemented by an approach allowing to take into account
anticipation aspects not captured by the models in the generic approach.
This is particularly the case when unprecedented events in the historical
chronicle taken into account to build the models occur or are anticipated,
or when the nature or amplitude of change in macroeconomic parameter
calls into question past correlations. Thus, the situation of high inflation
and the current and projected level of interest rates correspond to aspects
not observed in the reference history. In this context, the Group has
developed an approach to take into account the future economic outlook
when assessing the financial strength of counterparties. This approach
involves projecting the impact of higher interest rates on customers'
financial ratios, notably considering their level of indebtedness. Credit
ratings and associated probabilities of default are revalued based on
these simulated financial ratios. This approach is also used to anticipate
the effect of lower prices of commercial properties.
Baseline scenario
Global activity decelerated in 2023, in a context of tight financial
conditions and still high inflation. Global GDP is expected to grow
by 2.8% on annual average (compared with 3.3% in 2022), mainly
reflecting weaker developments among European economies. In the
Eurozone, activity growth is expected to have decelerated to 0.5% in
2023 (while, at 30 June 2023, it was expected to reach 0.7%), reflecting
much less dynamic domestic demand (both in terms of consumption and
investment). The US economy has proved more resilient than initially
anticipated and is assumed to grow by 2.3% in 2023 (while, at 30 June
2023, it was expected to grow by only 0.9%). In 2024, economic conditions
are expected to be sluggish among advanced economies, with growth
rates slightly below 1% in both the Eurozone and the US.
While inflation has receded at a quite rapid pace in the course of 2023, it
has remained significantly above central bank targets in many countries.
This high inflation environment has pushed central banks to implement
the most pronounced monetary tightening in recent decades.
The main central banks (European Central Bank, US Federal Reserve) may
have completed their monetary policy tightening cycle by the end of 2023.
They are expected to keep their monetary stance broadly unchanged for a
few months. Both short-term and long-term interest rates have reached
levels not seen since the years 2000 and are expected to remain relatively
high for some time. Tight financial conditions should thus continue to
weigh on activity in 2024.
The graph below presents a comparison of Eurozone GDP projections used in the baseline scenario for the calculation of ECLs on 31 December 2023
and 31 December 2022.
➤
EUROZONE GDP: INDEX BASE 100 AT THE FOURTH QUARTER OF 2019
85
90
95
100
105
110
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Dec-23
Dec-24
Dec-25
Dec-26
Baseline scenario at 31 December 2023
Baseline scenario at 31 December 2022
➤
MACROECONOMIC VARIABLES, BASELINE SCENARIO AT 31 DECEMBER 2023
(annual averages)
2023
2024
2025
2026
GDP growth rate
Eurozone
0.5%
0.8%
1.6%
1.7%
France
0.9%
0.8%
1.5%
1.6%
Italy
0.7%
0.8%
1.2%
1.3%
Belgium
1.1%
0.9%
1.5%
1.6%
United States
2.3%
0.7%
2.0%
2.1%
Unemployment rate
Eurozone
6.6%
6.8%
6.6%
6.2%
France
7.3%
7.6%
7.3%
6.7%
Italy
7.6%
7.7%
7.6%
7.4%
Belgium
5.6%
5.9%
5.8%
5.5%
United States
3.7%
4.4%
4.2%
3.6%
Inflation rate
Eurozone
5.6%
2.8%
2.1%
2.2%
France
5.8%
2.6%
2.2%
2.2%
Italy
6.2%
2.9%
2.3%
2.3%
Belgium
2.4%
3.2%
1.6%
2.1%
United States
4.2%
2.6%
2.1%
2.1%
10-year sovereign bond yields
Germany
2.51%
2.58%
2.50%
2.50%
France
3.06%
3.13%
3.05%
3.05%
Italy
4.33%
4.58%
4.50%
4.50%
Belgium
3.15%
3.22%
3.14%
3.14%
United States
4.04%
4.19%
4.00%
4.00%
Adverse and severely adverse scenarios
The adverse and severely adverse scenarios are based on the assumption
that certain downside risks will materialise, resulting in much less
favourable economic paths than in the baseline scenario.
The following main risks are identified:
■ Geopolitical risks and globalisation developments. Geopolitical risks
have increased significantly in recent years, contributing to a fracturing
of the global economy. Geopolitical tensions can weigh on the global
economy through various channels, including shocks on commodity
prices, financial markets, business confidence, supply chains and
trade. Such developments are susceptible to lead simultaneously to
higher inflation developments and weaker activity, complicating the
task of central banks. The growing use of international sanctions also
increases the possible magnitude of consequences of such events;
■ A greater impact of tight monetary conditions. The marked tightening
of monetary policy in response to high inflation over past quarters
has led to much higher short-term and long-term interest rates
than in previous years. This has already weighed on activity, notably
through weaker developments in most interest rate sensitive sectors,
in particular the real estate secto r. T hese negative consequences
could extend further given the usual delays between the increase in
rates and its effect on the economy. In a more unfavourable economic
context, tighter financial conditions, combined with weaker activity
developments could lead to weaker trends (than assumed in the
baseline scenario) regarding credit, investment, residential and
commercial real estate prices, and lead to higher default rates;
■ More fragile public finances. The fact that debt-to-GDP ratios are high
increases risks related to public finances in an environment of high
interest rates and weak growth. These combined developments could
give birth in some countries to market tensions (widening sovereign
bond spreads) and affect activity through several channels (higher
interest rates, reduced government spending, higher taxes).
The adverse and severe scenarios assume the materialisation of these
identified latent risks from the first quarter of 2024.
While downside risks are shared by the adverse and the severely adverse
scenarios, the impacts are assumed to be markedly higher in the severely
adverse scenario, due to both more pronounced direct shocks (e.g. higher
commodity prices) and the development of a negative spiral between key
driving factors (e.g. activity, public debt, bond yields, equity markets).
Among the considered countries, GDP levels in the adverse scenario stand
between 7.8% and 11.1% lower than in the baseline scenario at the end
of the shock period. In particula r, t his deviation reaches 9% on average
in both the Eurozone and the United States.
In the severe scenario, GDP levels stand between 11.6% and 16.2% lower
than in the baseline scenario at the end of the shock period. This deviation
reaches 13.2% in both the Eurozone and the United States.
Scenario weighting and cost of risk sensitivity
At 31 December 2023, the weight of the favourable scenario considered
by the Group was 33%, and 12% for the adverse scenario and 5% for
the severe scenario. At 31 December 2022, the weight of the favourable
scenario was 34% and 16% for the adverse scenario (the severe scenario
was introduced in the first half 2023).
The sensitivity of the amount of expected credit losses for all financial
assets at amortised cost or at fair value through equity and credit
commitments is assessed by comparing the estimated expected credit
losses resulting from the weighting of the above scenarios with that
resulting from each of the two alternative scenarios:
■ an increase in ECL of 23%, or EUR 1,150 million according to the
adverse scenario (22% at 31 December 2022);
■ a decrease in ECL of 12%, or EUR 600 million according to the
favourable scenario (7% at 31 December 2022).
Post-model adjustments
Post-model adjustments are made when system limitations are
identified in a particular context, for instance, in the case of insufficient
statistical data to reflect the specific situation in the models. Post-model
adjustments are also considered to take into account, where applicable,
the consequences of climatic events on expected credit losses.
■ Adaptation of the ECL assessment process to factor in the specific
nature of the health crisis:
Conservative adjustments were taken into account when the models
used were based on indicators that show unusual levels in the context
of the health crisis and the support programmes, such as the increase
in deposits and the decrease in past due events for retail customers
and entrepreneurs.
For the consumer credit specialist business, a conservative adjustment
had been considered in 2020 for loans that benefitted from a
moratorium. In 2021, this adjustment was reversed in connection with
the satisfactory return to payment observed on these loans. Howeve r,
a conservative adjustment was made to compensate for the atypical
level of late payments.
These post-model adjustments were reversed in 2022.
■ Adaptation of the ECL assessment process to factor in the significant
rise in inflation and in interest rates:
Additional adjustments were made in 2022 to take into account the
effects of inflation and interest rate hikes when this effect is not
directly estimated by the models. For example, within the consumer
credit specialist business, adjustments were considered for the
categories of customers most sensitive to the gradual decline in the
level of their net income.
Part of these adjustments were integrated into the models in 2022
and in the first half of 2023, leading to a decrease in the post-model
adjustments.
All of these adjustments represent 4.5% of the total amount of expected
credit losses at 31 December 2023, compared to 6.1% at 31 December 2022.
➤
COST OF CREDIT RISK FOR THE PERIOD
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Net allowances to impairment
(2,596)
(2,440)
Recoveries on loans and receivables previously written off
250
343
Losses on irrecoverable loans
(561)
(717)
Act on assistance to borrowers in Poland
(189)
TOTAL COST OF RISK FOR THE PERIOD
(2,907)
(3,003)
➤
COST OF RISK FOR THE PERIOD BY ACCOUNTING CATEGORY AND ASSET TYPE
In millions of euros
Year to
31 Dec. 2023
Year to
31 Dec. 2022
restated according
to IFRS 17 and 9
Cash and balances at central banks
(5)
(6)
Financial instruments at fair value through profit or loss
(31)
(28)
Financial assets at fair value through equity
3
14
Financial assets at amortised cost
(2,904)
(2,853)
Loans and receivables
(2,912)
(2,845)
Debt securities
8
(8)
Other assets
(2)
(17)
Financing and guarantee commitments and other items
32
(113)
TOTAL COST OF RISK FOR THE PERIOD
(2,907)
(3,003)
Cost of risk on unimpaired assets and commitments
517
(570)
of which stage 1
122
(511)
of which stage 2
395
(59)
Cost of risk on impaired assets and commitments - stage 3
(3,424)
(2,433)
➤
CREDIT RISK IMPAIRMENT
Changes in impairment by accounting category and asset type during the period
In millions of euros, at
31 December 2022
restated according
to IFRS 17 and 9
Net allowance
to impairment
Impairment exchange
provisions
Changes
in scope,
rates and
used other items 31 December 2023
Assets impairment
Amounts due from central banks
21
5
(6)
20
Financial instruments at fair value through profit or loss
108
30
(24)
(6)
108
Financial assets at fair value through equity
130
(3)
(6)
121
Financial assets at amortised cost
18,511
2,620
(3,273)
(143)
17,715
Loans and receivables
18,381
2,627
(3,264)
(133)
17,611
Debt securities
130
(7)
(9)
(10)
104
Other assets
43
(14)
1
30
Total impairment of financial assets
18,813
2,652
(3,311)
(160)
17,994
of which stage 1
2,074
(60)
(2)
(46)
1,966
of which stage 2
2,881
(347)
(41)
(64)
2,429
of which stage 3
13,858
3,059
(3,268)
(50)
13,599
Provisions recognised as liabilities
Provisions for commitments
980
(69)
(1)
(27)
883
Other provisions
450
13
(44)
(32)
387
Total provisions recognised for credit commitments
1,430
(56)
(45)
(59)
1,270
of which stage 1
326
(47)
(10)
269
of which stage 2
338
(25)
(12)
301
of which stage 3
766
16
(45)
(37)
700
TOTAL IMPAIRMENT AND PROVISIONS
20,243
2,596
(3,356)
(219)
19,264
Change in impairment by accounting category and asset type during the previous period
In millions of euros, at
31 December 2021
Net allowance
to impairment
Impairment exchange
provisions
Changes
in scope,
rates and
used other items
31 December 2022
restated according
to IFRS 17 and 9
Assets impairment
Amounts due from central banks
18
5
(2)
21
Financial instruments at fair value through profit or loss
121
15
(28)
108
Financial assets at fair value through equity
140
(14)
4
130
Financial assets at amortised cost
20,196
2,371
(4,187)
131
18,511
Loans and receivables
20,028
2,326
(4,106)
133
18,381
Debt securities
168
45
(81)
(2)
130
Other assets
59
(7)
(3)
(6)
43
Total impairment of financial assets
20,534
2,370
(4,190)
99
18,813
of which stage 1
1,891
223
(4)
(36)
2,074
of which stage 2
2,748
87
(3)
49
2,881
of which stage 3
15,895
2,060
(4,183)
86
13,858
Provisions recognised as liabilities
Provisions for commitments
958
32
(15)
5
980
Other provisions
467
38
(56)
1
450
Total provisions recognised for credit commitments
1,425
70
(71)
6
1,430
of which stage 1
230
94
2
326
of which stage 2
374
(33)
(3)
338
of which stage 3
821
9
(71)
7
766
TOTAL IMPAIRMENT AND PROVISIONS
21,959
2,440
(4,261)
105
20,243
Changes in impairment of financial assets at amortised cost during the period
In millions of euros
Impairment on
assets subject to
12-month Expected
Credit Losses
(Stage 1)
Impairment on
assets subject to
lifetime Expected
Credit Losses
(Stage 2)
(Stage 3)
Impairment on
doubtful assets
Total
At 31 December 2022
restated according to IFRS 17 and 9
2,035
2,860
13,616
18,511
Net allowance to impairment
(63)
(339)
3,022
2,620
Financial assets purchased or originated during the
period
691
294
985
Financial assets derecognised during the period(1)
(405)
(490)
(726)
(1,621)
Transfer to stage 2
(371)
2,121
(199)
1,551
Transfer to stage 3
(74)
(990)
2,258
1,194
Transfer to stage 1
288
(860)
(86)
(658)
Other allowances/reversals without stage transfer(2)
(192)
(414)
1,775
1,169
Impairment provisions used
(2)
(41)
(3,230)
(3,273)
Changes in exchange rates
(16)
(7)
(80)
(103)
Changes in scope of consolidation and other items
(16)
(57)
33
(40)
At 31 December 2023
1,938
2,416
13,361
17,715
(1) Including disposals.
(2) Including amortisation.
In 2023, the volume of financial assets at amortised cost was stable
compared to previous year and amounted to EUR 1,022 billion (see
note 5.e Financial assets at amortised cost) of which EUR 877 billion in
loans and advances to customers.
Loans and advances to customers classified in stage 1 increased by
EUR 15 billion over the yea r, w hile stage 2 outstandings decreased by
EUR 14 billion. This evolution mainly reflects a deterioration in activity
during the first half of 2023 that was less pronounced than in the forecasts
made for the 31 December 2022 closing. This situation is reflected both
in the consequences of the change in the GDP scenarios, and in the
effects of the interest rate increase projections on customers' financial
ratios, thus leading to the return to stage 1 of outstandings previously
transferred to stage 2 and to provision reversals without stage transfe r.
The systematic classification into stage 2, for the corporate category, of
performing clients under credit watch as of 31 December 2023 led to
limited transfers of outstandings from stage 1 to stage 2.
Besides, in relation to the deterioration in activity, transfers to stage 3
for EUR 8.6 billion were higher than in 2022, particularly for corporate
clients (see note 5.f Impaired financial assets).
These combined effects led to a net reversal of impairment on stage 1
and 2 in 2023. The provisioning ratio for loans and advances to customers
classified in stage 2 remained stable at 3.2% at 31 December 2023.
Changes in impairment of financial assets at amortised cost during the previous period
In millions of euros
Impairment on
assets subject to
12-month Expected
Credit Losses
(Stage 1)
Impairment on
assets subject to
lifetime Expected
Credit Losses
(Stage 2)
(Stage 3)
Impairment on
doubtful assets
Total
At 31 December 2021
1,867
2,714
15,615
20,196
Net allowance to impairment
212
102
2,057
2,371
Financial assets purchased or originated during the
period
683
234
917
Financial assets derecognised during the period(1)
(390)
(388)
(822)
(1,600)
Transfer to stage 2
(133)
1,773
(212)
1,428
Transfer to stage 3
(65)
(665)
1,806
1,076
Transfer to stage 1
63
(502)
(36)
(475)
Change in the significant increase in credit risk
assessment criteria
29
(280)
(251)
Other allowances/reversals without stage transfer(2)
25
(70)
1,321
1,276
Impairment provisions used
(3)
(3)
(4,181)
(4,187)
Changes in exchange rates
(6)
(30)
104
68
Changes in scope of consolidation and other items
(35)
77
21
63
At 31 December 2022 restated according to IFRS 17 and 9
2,035
2,860
13,616
18,511
(1) Including disposals.
(2) Including amortisation.
3.h OTHER NET LOSSES FOR RISK ON
FINANCIAL INSTRUMENTS
In 2023, the Group modified its accounting policy relating to the risk of
loss of cash flows on financial instruments granted that are not linked
to the counterparty's default, such as legal risks calling into question the
validity or enforceability of such contracts.
The effect on expected cash flows due to these risks is now considered
as a change in the contract's cash flows, in accordance with IFRS 9
B5.4.6, and is recorded as a decrease in the gross value of the asset.
It was previously recognised separately in accordance with IAS 37 in
"Provisions for risks and charges" (see note 5.n). Expected losses on
derecognised financial instruments, as is the case when loans have been
repaid, continue to be recognised in accordance with IAS 37.
The corresponding expected and realised cash flow losses are now
presented in "Other net losses for risk on financial instruments".
In 2023, the expense thus recognised mainly related to mortgage loans in
Poland amounting to EUR 450 million (compared with EUR 157 million at
31 December 2022, presented as "Revenues") and foreign currency loans
issued by BNP Paribas Personal Finance amounting to EUR 221 million
(compared with EUR 130 million at 31 December 2022, presented as
"Revenues").
3.i NET GAIN ON NON-CURRENT ASSETS
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Gain or loss on investments in consolidated undertakings (note 9.d)
29
(257)
Gain or loss on tangible and intangible assets
139
7
Results from net monetary position
(272)
(3)
Net gain on non-current assets
(104)
(253)
According to IAS 29 in connection with the hyperinflation situation of the economy in Türkiye, the line "Results from net monetary positions" mainly
includes the effect of the evolution of the consumer price index in Türkiye on the valuation of non-monetary assets and liabilities (-EUR 563 million)
and on accrued income from the Turkish government bonds portfolio indexed to inflation and held by Turk Ekonomi Bankasi AS (+EUR 291 million,
reclassified from interest margin) in 2023 (respectively -EUR 434 million and +EUR 431 million in 2022).
3.j CORPORATE INCOME TAX
Reconciliation of the effective tax expense to the theoretical tax
expense at standard tax rate in France
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
in millions
of euros
in millions
tax rate
of euros
tax rate
Corporate income tax expense on pre-tax income at standard tax
rate in France(1)
(2,875)
25.8%
(3,180)
25.8%
Impact of differently taxed foreign profits
(56)
0.5%
(61)
0.5%
Impact of dividends and disposals taxed at reduced rate
131
-1.2%
54
-0.4%
Impact of the non-deductibility of taxes and bank levies(2)
(369)
3.3%
(300)
2.4%
Impact of previously unrecognised deferred taxes
(tax losses and temporary differences)
432
-3.9%
Impact of the hyperinflation in Türkiye
(202)
1.9%
(188)
1.6%
Other items
(327)
2.9%
22
-0.2%
Corporate income tax expense from continuing activities
(3,266)
29.3%
(3,653)
29.7%
Current tax expense for the year to 31 December
(3,063)
(2,844)
Deferred tax expense for the year to 31 December (note 5.i)
(203)
(809)
(1) Restated for the share of profits in equity-method entities and goodwill impairment.
(2) Contribution to the Single Resolution Fund and other non-deductible banking taxes.
Note 4
SEGMENT INFORMATION
The Group is composed of three operating divisions:
■ Corporate & Institutional Banking (CIB) which covers Global Banking,
Global Markets and Securities Services;
■ Commercial, Personal Banking & Services (CPBS) which covers
Commercial & Personal Banking in the Eurozone, with Commercial &
Personal Banking in France (CPBF), Commercial & Personal Banking in
Italy (BNL bc), Commercial & Personal Banking in Belgium (CPBB) and
Commercial & Personal Banking in Luxembourg (CPBL); Commercial
& Personal Banking outside the Eurozone, which is organised around
Europe-Mediterranean, to cover Central and Eastern Europe and
Türkiye. Lastly, it also covers specialised businesses (Arval, BNP Paribas
Leasing Solutions, BNP Paribas Personal Finance, BNP Paribas Personal
Investors and New Digital Businesses like Nickel, Floa, Lyf);
■ Investment & Protection Services (IPS) which covers Insurance
(BNP Paribas Cardif), Wealth and Asset Management (BNP Paribas
Asset Management, BNP Paribas Wealth Management and
BNP Paribas Real Estate), Management of the BNP Paribas Group's
portfolio of unlisted and listed industrial and commercial investments
(BNP Paribas Principal Investments).
Other Activities mainly include 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 significant
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, adaptation and IT reinforcement costs relating to the
Group's savings programmes.
In addition, Other Activities carry the impact, related to the application
of IFRS 17, of the reclassification as a deduction from revenues of the
operating expenses "attributable to insurance contracts" of the Group's
business lines (other than Insurance) that distribute insurance contracts
(i.e. internal distributors), in order not to disrupt the readability of
their financial performance. This is also the case for the impact of the
volatility on the financial result generated by the recognition at fair
value through profit or loss of assets backing insurance entities' equity
or non-participating contracts. In the event of divestment connected to
this portfolio, the realised gains or losses are allocated to the revenues
of the Insurance business line.
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 capital allocation to segments is based
on a minimum of 11% of weighted assets. The breakdown of balance sheet
by core business follows the same rules as the breakdown of the profit
or loss by core business.
In order to be comparable with the presentation format used since
1 January 2023, the year ended 31 December 2022 of this note has
been restated for the following effects as if they had occurred on
1 January 2022.
■ Following the sale of Bank of the West on 1 February 2023, it was
decided to apply IFRS 5 standard relating to groups of assets and
liabilities held for sale to the management income. As a result, the
contribution of Bank of the West in 2022 and the capital gain related
to the sale in 2023 are both presented separately. Accordingly, in the
profit and loss account, profits and losses are reclassified on a separate
line "Net income from discontinued activities".
■ Since 1 January 2023, the Group has applied IFRS 17 "Insurance
contracts", as well as IFRS 9 for its insurance entities (see note 1.a).
The main effects are:
■
operating expenses deemed "attributable to insurance contracts"
are recognised in deduction of revenues and no longer booked
in operating expenses. These accounting entries apply only to
Insurance and to Group entities (other than in the Insurance
business line) that distribute insurance contracts (i.e. internal
distributors) and have no impact on gross operating income;
■
the impact of the volatility on the financial result generated
by the recognition at fair value through profit or loss of assets
backing insurance entities' equity and non-participating contracts
is presented in "Other Activities". Accordingly, "Other Activities"
revenues reflect, for 2022, the impact of volatility relating to the
unfavourable market context;
■
capital gains from the Savings activity are now integrated in the
contractual service margin and are recognised over the entire
duration of insurance contracts. Accordingly, Insurance Revenues
recorded a decrease for 2022 due to the impact of capital gains
which offset the impact of volatility on the 2022 financial result.
■ Internal transfers of activities and results were made, particularly at
Global Markets (following BNP Paribas' acquisition of Exane, which
closed on 13 July 2021) and within Commercial & Personal Banking in
Belgium (e.g. transfer of some individual clients, SMEs in particular to
the corporate segment in relation with the commercial reorganisation).
These changes have no impact on the Group's results as a whole but
only on their analytical breakdown in 2022.
➤
INCOME BY BUSINESS SEGMENT
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Revenues expenses risk(1)
Operating Cost of
Operating operating
income
Non-
items income
Pre-tax
Revenues expenses
Operating Cost of
risk
Operating operating
income
Non-
items income
Pre-tax
Corporate & Institutional
Banking
16,509
(10,823)
63
5,749
(5)
5,744
16,404
(10,691)
(325)
5,387
10
5,398
Global Banking
5,822
(2,918)
74
2,978
6
2,984
5,181
(2,841)
(336)
2,004
4
2,009
Global Markets
7,996
(5,798)
(13)
2,185
8
2,193
8,636
(5,781)
11
2,866
4
2,870
Securities Services
2,691
(2,107)
1
586
(19)
567
2,586
(2,069)
517
2
519
Commercial, Personal
Banking & Services
25,917
(16,059)
(2,920)
6,938
156
7,094
24,931
(15,514)
(2,497)
6,921
410
7,331
Commercial & Personal
Banking in the Eurozone
13,259
(9,233)
(986)
3,039
12
3,051
12,948
(8,976)
(726)
3,246
42
3,288
Commercial & Personal
Banking in France(2)
6,251
(4,576)
(484)
1,192
1,192
6,361
(4,530)
(245)
1,587
26
1,613
BNL banca commerciale(2)
2,646
(1,745)
(410)
491
(3)
488
2,548
(1,676)
(464)
408
3
410
Commercial & Personal
Banking in Belgium(2)
3,784
(2,618)
(84)
1,081
10
1,091
3,577
(2,502)
(36)
1,039
10
1,049
Commercial & Personal
Banking in Luxembourg(2)
577
(294)
(8)
275
5
281
461
(268)
19
213
3
216
Commercial & Personal
Banking in the rest of the
world
2,631
(1,657)
(44)
930
100
1,030
2,321
(1,650)
(152)
519
289
808
Europe-Mediterranean(2)
2,631
(1,657)
(44)
930
100
1,030
2,321
(1,650)
(152)
519
289
808
Specialised businesses
10,027
(5,168)
(1,890)
2,969
44
3,012
9,662
(4,888)
(1,619)
3,155
80
3,235
Personal Finance
5,163
(2,998)
(1,600)
565
65
630
5,387
(2,922)
(1,373)
1,092
28
1,121
Arval & Leasing Solutions
3,869
(1,501)
(167)
2,201
(14)
2,188
3,438
(1,395)
(146)
1,897
60
1,957
New Digital Businesses &
Personal Investors(2)
995
(669)
(123)
203
(8)
195
837
(571)
(100)
166
(9)
157
Investment & Protection
Services
5,590
(3,566)
(13)
2,011
148
2,159
5,813
(3,552)
5
2,265
266
2,532
Insurance
2,090
(808)
1,281
113
1,394
2,016
(794)
1,222
117
1,340
Wealth Management
1,603
(1,196)
(3)
404
4
408
1,512
(1,183)
3
333
39
372
Asset Management(3)
1,897
(1,561)
(10)
326
31
357
2,284
(1,576)
2
710
110
820
Other Activities - excl.
restatement related
to insurance activities
(1,060)
(1,551)
(812)
(3,422)
190
(3,233)
(278)
(1,163)
(185)
(1,626)
(36)
(1,662)
Other Activities -
restatement related
to insurance activities
(1,081)
1,041
(40)
(40)
(1,440)
1,056
(384)
(384)
of which volatility
(40)
(40)
(40)
(384)
(384)
(384)
of which attributable costs
to internal distributors
(1,041)
1,041
(1,056)
1,056
TOTAL CONTINUING
ACTIVITIES
45,874
(30,956)
(3,682)
11,236
489
11,725
45,430
(29,864)
(3,003)
12,564
651
13,214
(1) Including"Other net losses for risk on financial instruments".
(2) Commercial& Personal Banking in France, BNL banca commerciale, Commercial & Personal Banking in Belgium, Commercial & Personal Banking in Luxembourg,
Europe-Mediterranean and Personal Investors after the reallocation within Wealth and Asset Management of one-third of the Wealth Management activities in France, Italy,
Belgium, Luxembourg, Germany, T ü rkiye and Poland.
(3) Including Real Estate and Principal Investments.
➤
NET COMMISSION INCOME BY BUSINESS SEGMENT
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Corporate & Institutional Banking
2,214
2,304
Global Banking
1,784
2,037
Global Markets
(975)
(1,230)
Securities Services
1,405
1,497
Commercial, Personal Banking & Services
6,777
6,792
Commercial & Personal Banking in the Eurozone
5,019
5,059
Commercial & Personal Banking in France(1)
2,875
2,896
BNL banca commerciale(1)
1,043
1,047
Commercial & Personal Banking in Belgium(1)
1,014
1,028
Commercial & Personal Banking in Luxembourg(1)
87
88
Commercial & Personal Banking in the rest of the world
442
448
Europe-Mediterranean(1)
442
448
Specialised businesses
1,316
1,285
Personal Finance
776
743
Arval & Leasing Solutions
54
41
New Digital Businesses & Personal Investors(1)
486
502
Investment & Protection Services
1,850
1,987
Insurance
(368)
(388)
Wealth Management
749
768
Asset Management(2)
1,469
1,607
Other activities - excl. restatement related to insurance activities
21
139
Other activities - restatement related to insurance activities
(1,041)
(1,056)
TOTAL GROUP
9,821
10,165
(1) Commercial& Personal Banking in France, BNL banca commerciale, Commercial & Personal Banking in Belgium, Commercial & Personal Banking in
Luxembourg, Europe-Mediterranean and Personal Investors after the reallocation within Wealth and Asset Management of one-third of the Wealth
Management activities in France, Italy, Belgium, Luxembourg, Germany, T ü rkiye and Poland.
(2) Including Real Estate and Principal Investments.
➤
ASSETS AND LIABILITIES BY BUSINESS SEGMENT
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Asset
Liability
Asset
Liability
Corporate & Institutional Banking
1,136,691
1,309,407
1,136,501
1,302,279
Global Banking
176,822
241,346
183,096
239,352
Global Markets
921,650
917,780
913,848
908,354
Securities Services
38,219
150,281
39,557
154,573
Commercial, Personal Banking & Services
790,648
703,270
843,217
798,966
Commercial & Personal Banking in the Eurozone
552,876
559,503
546,268
584,747
Commercial & Personal Banking in France
236,866
244,563
235,614
255,334
BNL banca commerciale
94,164
81,275
94,230
93,880
Commercial & Personal Banking in Belgium
192,423
202,447
189,119
204,538
Commercial & Personal Banking in Luxembourg
29,423
31,218
27,305
30,995
Commercial & Personal Banking in the rest of the world
59,282
55,409
141,356
138,231
Europe-Mediterranean
59,282
55,409
59,132
55,360
BancWest
82,224
82,871
Specialised businesses
178,490
88,358
155,593
75,988
Personal Finance
108,791
29,003
94,906
24,412
Arval & Leasing Solutions
65,086
22,245
56,668
17,789
New Digital Businesses & Personal Investors
4,613
37,110
4,019
33,787
Investment & Protection Services
289,711
317,405
280,400
309,513
Insurance
257,133
243,510
244,774
231,500
Wealth Management
25,495
68,984
28,242
74,563
Asset Management
7,083
4,911
7,384
3,450
Other activities
374,449
261,417
403,630
252,990
TOTAL GROUP
2,591,499
2,591,499
2,663,748
2,663,748
Information by business segment relating to goodwill is presented in note 5.m Goodwill.
Information by geographic area
The geographic split of segment results, assets and liabilities is based on the region in which they are recognised for accounting purposes, adjusted as
per the managerial origin of the business activity. It does not necessarily reflect the counterparty's nationality or the location of operational businesses.
➤
REVENUES FROM CONTINUING ACTIVITIES BY GEOGRAPHIC AREA
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
EMEA
37,822
37,675
Americas (North and South)
4,286
3,818
APAC
3,766
3,937
TOTAL GROUP
45,874
45,430
➤
ASSETS AND LIABILITIES, IN CONTRIBUTION TO THE CONSOLIDATED ACCOUNTS, BY GEOGRAPHIC AREA
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
EMEA
2,148,461
2,188,593
Americas (North and South)
255,099
304,829
APAC
187,939
170,326
TOTAL GROUP
2,591,499
2,663,748
Note 5
NOTES TO THE BALANCE SHEET AT 31 DECEMBER 2023
5.a FINANCIAL INSTRUMENTS AT FAIR
VALUE THROUGH PROFIT OR LOSS
Financial assets and liabilities at fair value
through profit or loss
Financial assets and financial liabilities at fair value through profit or
loss consist of held-for-trading transactions - including derivatives, of
certain liabilities designated by the Group as at fair value through profit
or loss at the time of issuance and of non-trading instruments whose
characteristics prevent their accounting at amortised cost or at fair value
through equity.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
held for trading
Financial
instruments
designated as
Financial at fair value
instruments through profit value through
or loss
Other
financial
assets at fair
profit or loss
Total held for trading
Financial
instruments
designated as
Financial at fair value
instruments through profit value through
or loss
profit or loss
Other
financial
assets at fair
Total
Securities
202,225
549
8,860
211,634
157,138
1,273
7,666
166,077
Loans and repurchase agreements
224,700
2,475
227,175
186,968
4,157
191,125
FINANCIAL ASSETS AT FAIR VALUE
THROUGH PROFIT OR LOSS
426,925
549
11,335
438,809
344,106
1,273
11,823
357,202
Securities
104,910
104,910
99,155
99,155
Deposits and repurchase agreements
271,486
2,128
273,614
232,351
1,725
234,076
Issued debt securities (note 5.h)
83,763
83,763
65,578
65,578
of which subordinated debt
735
735
675
675
of which non subordinated debt
83,028
83,028
64,903
64,903
FINANCIAL LIABILITIES AT FAIR VALUE
THROUGH PROFIT OR LOSS
376,396
85,891
462,287
331,506
67,303
398,809
Detail of these assets and liabilities is provided in note 5.d.
Financial liabilities designated as at fair value
through profit or loss
Financial liabilities at fair value through profit or loss mainly consist of
issued debt securities, originated and structured on behalf of customers,
where the risk exposure is managed in combination with the hedging
strategy. These types of issued debt securities contain significant
embedded derivatives, which changes in value may be compensated by
changes in the value of economic hedging derivatives.
The redemption value of debt issued and designated as at fair value
through profit or loss at 31 December 2023 was EUR 89,910 million (EUR
71,721 million at 31 December 2022).
Other financial assets measured at fair value
through profit or loss
Other financial assets at fair value through profit or loss are financial
assets not held for trading:
■ debt instruments that do not meet the criteria defined by IFRS 9 to
be classified as financial instruments at "fair value through equity"
or at "amortised cost":
■
their business model is not to "collect contractual cash flows" nor
"collect contractual cash flows and sell the instruments", and/or
■
their cash flows are not solely repayments of principal and interest
on the principal amount outstanding;
■ equity instruments that the Group did not choose to classify as at "fair
value through equity".
Derivative financial instruments
The majority of derivative financial instruments held for trading are
related to transactions initiated for trading purposes. They may result
from market-making or arbitrage activities. BNP Paribas actively trades
in derivatives. Transactions include trades in "ordinary" instruments such
as credit default swaps, and structured transactions with complex risk
profiles tailored to meet the needs of its customers. The net position is
in all cases subject to limits.
Some derivative instruments are also contracted to hedge financial assets
or financial liabilities for which the Group has not documented a hedging
relationship, or which do not qualify for hedge accounting under IFRS.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Positive market
value
Negative market
value
Positive market
value
Negative market
value
Interest rate derivatives
133,500
105,976
150,122
125,215
Foreign exchange derivatives
119,094
118,126
134,382
129,274
Credit derivatives
8,427
10,320
7,294
7,731
Equity derivatives
24,067
38,027
22,602
27,291
Other derivatives
6,991
6,443
13,532
10,610
DERIVATIVE FINANCIAL INSTRUMENTS
292,079
278,892
327,932
300,121
The table below shows the total notional amount of trading derivatives. The notional amounts of derivative instruments are merely an indication of the
volume of the Group's activities in financial instruments markets, and do not reflect the market risks associated with such instruments.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Exchange-
traded
Over-the-
counter,
cleared
through
central
clearing Over-the-
houses counter
Total
Exchange-
traded
Over-the-
counter,
cleared
through
central
clearing
houses
counter
Over-the-
Total
Interest rate derivatives
1,327,902
14,448,396
6,811,394
22,587,692
1,442,663
12,349,668
5,254,166
19,046,497
Foreign exchange derivatives
57,625
173,339
8,980,659
9,211,623
40,292
130,148
7,610,392
7,780,832
Credit derivatives
357,964
465,403
823,367
464,228
518,926
983,154
Equity derivatives
1,130,554
638,904
1,769,458
1,177,728
535,465
1,713,193
Other derivatives
119,024
84,251
203,275
133,820
95,722
229,542
DERIVATIVE FINANCIAL INSTRUMENTS
2,635,105
14,979,699
16,980,611
34,595,415
2,794,503
12,944,044
14,014,671
29,753,218
As part of its Client Clearing activity, the Group guarantees the risk of default of its clients to central counterparties. The corresponding notional amount
is EUR 1,197 billion at 31 December 2023 (EUR 1,187 billion at 31 December 2022).
5.b DERIVATIVES USED FOR HEDGING PURPOSES
The table below shows the notional amounts and the fair value of derivatives used for hedging purposes.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Notional
amounts
Positive
fair value
Negative
fair value
Notional
amounts
Positive
fair value
Negative
fair value
Fair value hedges
1,148,308
19,409
33,808
1,103,455
24,213
36,872
Interest rate derivatives
1,139,647
18,516
32,617
1,094,689
23,955
36,525
Foreign exchange derivatives
8,661
893
1,191
8,766
258
347
Cash flow hedges
241,125
2,233
4,138
213,866
1,126
3,070
Interest rate derivatives
66,134
896
1,760
59,641
429
1,602
Foreign exchange derivatives
174,426
1,270
2,312
153,811
664
1,416
Other derivatives
565
67
66
414
33
52
Net foreign investment hedges
2,648
50
65
1,719
62
59
Foreign exchange derivatives
2,648
50
65
1,719
62
59
DERIVATIVES USED FOR HEDGING
PURPOSES
1,392,081
21,692
38,011
1,319,040
25,401
40,001
Interest rate risk and foreign exchange risk management strategies are described in chapter 5 – Pillar 3 of the Universal registration document
(section 5.7 – Market risk – Market risk related to banking activities). Quantitative information related to foreign currency borrowings used for net
investment hedges is also mentioned in this chapte r.
The table below presents the detail of fair value hedge relationships for identified financial instruments and portfolios of financial instruments that
are continuing at 31 December 2023:
In millions of euros,
at 31 December 2023
Hedging instruments
Hedged instruments
Notional Positive
amounts fair value fair value
Negative ineffective-
Cumulated
changes in fair
value used as
the basis for
recognising
ness
Carrying changes in
amount -
asset
Cumulated
fair value -
asset
Carrying changes in
amount -
liability
Cumulated
fair value -
liability
Fair value hedges of identified
instruments
405,307
9,539
13,084
(582)
133,418
(6,571)
154,708
(7,030)
Interest rate derivatives hedging
the interest rate risk related to
398,328
8,653
11,932
(491)
129,967
(6,575)
151,227
(6,948)
Loans and receivables
20,674
487
449
88
20,886
(82)
Securities
162,254
7,826
2,383
6,369
109,081
(6,493)
Deposits
24,158
123
222
(203)
20,487
(201)
Debt securities
191,242
217
8,878
(6,745)
130,740
(6,747)
Foreign exchange derivatives
hedging the interest rate and
foreign exchange risks related to
6,979
886
1,152
(91)
3,451
4
3,481
(82)
Loans and receivables
2,069
687
737
(11)
2,055
10
Securities
1,405
184
193
8
1,396
(6)
Deposits
833
6
21
4
846
3
Debt securities
2,672
9
201
(92)
2,635
(85)
Interest rate risk hedged
portfolios
743,001
9,870
20,724
(10,261)
233,224
(3,803)
228,527
(14,009)
Interest rate derivatives hedging
the interest rate risk related to(1)
741,319
9,862
20,685
(10,263)
231,609
(3,801)
228,527
(14,009)
Loans and receivables
339,035
6,302
1,938
3,780
231,609
(3,801)
Deposits
402,284
3,560
18,747
(14,043)
228,527
(14,009)
Foreign exchange derivatives
hedging the interest rate and
foreign exchange risks related to
1,682
8
39
2
1,615
(2)
Loans and receivables
1,682
8
39
2
1,615
(2)
TOTAL FAIR VALUE HEDGE
1,148,308
19,409
33,808
(10,843)
366,642
(10,374)
383,235
(21,039)
(1) Are included in this section the notional amounts of hedging derivatives and of swaps that reverse the interest rate positions, thus reducing the hedge
relationship, when the hedged item still exists, for respectively EUR 93,839 million for derivatives hedging loans and receivables and EUR 177,833 million
for derivatives hedging deposits.
The table below presents the detail of fair value hedge relationships for identified financial instruments and portfolios of financial instruments that
are continuing at 31 December 2022:
In millions of euros,
at 31 December 2022
restated according to IFRS 17 and 9
Hedging instruments
Hedged instruments
Notional Positive
amounts fair value fair value
Negative ineffective-
Cumulated
changes in fair
value used as
the basis for
recognising
ness
Carrying changes in
amount -
asset
Cumulated
fair value -
asset
Carrying changes in
amount -
liability
Cumulated
fair value -
liability
Fair value hedges of identified
instruments
332,749
11,155
12,711
1,500
114,741
(12,204)
122,280
(10,588)
Interest rate derivatives hedging
the interest rate risk related to
325,470
10,992
12,376
1,487
110,376
(12,128)
119,694
(10,540)
Loans and receivables
19,827
613
171
527
18,394
(541)
Securities
131,460
10,297
1,258
11,521
91,982
(11,587)
Deposits
8,081
31
291
(375)
7,878
(388)
Debt securities
166,102
51
10,656
(10,186)
111,816
(10,152)
Foreign exchange derivatives
hedging the interest rate and
foreign exchange risks related to
7,279
163
335
13
4,365
(76)
2,586
(48)
Loans and receivables
2,619
95
64
35
2,410
(42)
Securities
1,957
55
12
34
1,955
(34)
Deposits
64
-
30
2
76
2
Debt securities
2,639
13
229
(58)
2,510
(50)
Interest rate risk hedged
portfolios
770,706
13,058
24,161
(11,240)
204,827
(8,877)
310,192
(20,063)
Interest rate derivatives hedging
the interest rate risk related to(1)
769,218
12,963
24,149
(11,292)
203,490
(8,830)
310,192
(20,063)
Loans and receivables
346,924
9,243
162
9,680
203,490
(8,830)
Deposits
422,294
3,720
23,987
(20,972)
310,192
(20,063)
Foreign exchange derivatives
hedging the interest rate and
foreign exchange risks related to
1,488
95
12
52
1,337
(47)
Loans and receivables
1,488
95
12
52
1,337
(47)
TOTAL FAIR VALUE HEDGE
1,103,455
24,213
36,872
(9,740)
319,568
(21,081)
432,472
(30,651)
(1) Are included in this section the notional amounts of hedging derivatives and of swaps that reverse the interest rate positions, thus reducing the hedge
relationship, when the hedged item still exists, for respectively EUR 121,183 million for derivatives hedging loans and receivables and EUR 103,261 million
for derivatives hedging deposits.
An asset or a liability or set of assets and liabilities, can be hedged over
several periods of time with different derivative financial instruments.
Besides, some hedges are achieved by the combination of two derivative
instruments. In this case, the notional amounts add up and their total
amount is higher than the hedged amount. The first situation is observed
more particularly for interest rate risk hedged portfolios and the second
for hedges of issued debt securities.
As regards discontinued fair value hedge relationships where the
derivative contract was terminated, the cumulated amount of
revaluation remaining to be amortised over the residual life of the hedged
instruments amounts to EUR 1,143 million in assets at 31 December
2023, and to -EUR 166 million in liabilities, for hedges of portfolios
of financial instruments. At 31 December 2022, these amounts were
EUR 1,399 million in assets and -EUR 138 million in liabilities.
Regarding hedges of identified instruments, the cumulated amount of
revaluation remaining to be amortised over the residual life of the hedged
instruments amounts to EUR 105 million in assets at 31 December 2023.
At 31 December 2022, this amount was EUR 111 million in assets.
The notional amount of cash flow hedge derivatives is EUR 241,125 million
at 31 December 2023. Changes in assets and liabilities recognised directly
in equity amount to EUR 189 million. At 31 December 2022, the notional
amount of cash flow hedge derivatives was EUR 213,866 million and
changes in assets and liabilities recognised directly in equity amounted
to -EUR 245 million.
The tables below present the notional amounts of hedging derivatives by maturity at 31 December 2023 and at 31 December 2022:
In millions of euros,
at 31 December 2023
Maturity date
Less than 1 year
Between 1 and
5 years
Over 5 years
Total
Fair value hedges
328,104
487,495
332,709
1,148,308
Interest rate derivatives
323,853
483,325
332,469
1,139,647
Foreign exchange derivatives
4,251
4,170
240
8,661
Cash flow hedges
176,330
52,161
12,634
241,125
Interest rate derivatives
30,565
28,999
6,570
66,134
Foreign exchange derivatives
145,532
22,832
6,062
174,426
Other derivatives
233
330
2
565
Net foreign investment hedges
2,648
-
-
2,648
Foreign exchange derivatives
2,648
2,648
In millions of euros,
at 31 December 2022
restated according to IFRS 17 and 9
Maturity date
Less than 1 year
Between 1 and
5 years
Over 5 years
Total
Fair value hedges
382,063
430,968
290,424
1,103,455
Interest rate derivatives
378,055
426,364
290,270
1,094,689
Foreign exchange derivatives
4,008
4,604
154
8,766
Cash flow hedges
142,568
51,041
20,257
213,866
Interest rate derivatives
18,178
30,041
11,422
59,641
Foreign exchange derivatives
124,223
20,753
8,835
153,811
Other derivatives
167
247
414
Net foreign investment hedges
1,719
-
-
1,719
Foreign exchange derivatives
1,719
1,719
5.c FINANCIAL ASSETS AT FAIR VALUE THROUGH EQUITY
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Fair value
directly to equity
of which
changes in value
recognised
Fair value
of which
changes in value
recognised
directly to equity
Debt securities
50,274
(585)
35,878
(866)
Governments
23,334
(207)
18,682
(350)
Other public administrations
16,188
(117)
9,921
(197)
Credit institutions
7,388
(248)
3,816
(302)
Others
3,364
(13)
3,459
(17)
Equity securities
2,275
767
2,188
623
TOTAL FINANCIAL ASSETS AT FAIR VALUE
THROUGH EQUITY
52,549
182
38,066
(243)
Debt securities at fair value through equity include EUR 109 million
classified as stage 3 at 31 December 2023 (EUR 108 million at
31 December 2022). For these securities, the credit impairment recognised
in the profit and loss account has been charged to the negative changes
in value recognised in equity for EUR 102 million at 31 December 2023
(EUR 100 million at 31 December 2022).
The option to recognise certain equity instruments at fair value through
equity was retained in particular for shares held through strategic
partnerships and shares that the Group is required to hold in order to
carry out certain activities.
During the year ended 31 December 2023, the Group sold several of these
investments and a net gain of EUR 9 million was transferred to "retained
earnings" (EUR 267 million for the year ended 31 December 2022).
5.d MEASUREMENT OF THE FAIR VALUE
OF FINANCIAL INSTRUMENTS
Valuation process
BNP Paribas has retained the fundamental principle that it should have
a unique and integrated processing chain for producing and controlling
the valuations of financial instruments that are used for the purpose of
daily risk management and financial reporting. All these processes are
based on a common economic valuation which is a core component of
business decisions and risk management strategies.
Economic value is composed of mid-market value, to which valuation
adjustments are made.
Mid-market value is derived from external data or valuation techniques
that maximise the use of observable and market-based data. Mid-market
value is a theoretical additive value which does not take account of i)
the direction of the transaction or its impact on the existing risks in the
portfolio, ii) the nature of the counterparties, and iii) the aversion of a
market participant to particular risks inherent in the instrument, the
market in which it is traded, or the risk management strategy.
Valuation adjustments take into account valuation uncertainty and
include market and credit risk premiums to reflect costs that could be
incurred in case of an exit transaction in the principal market.
Fair value generally equals the economic value, subject to limited
adjustments, such as own credit adjustments, which are specifically
required by IFRS standards.
The main valuation adjustments are presented in the section below.
Valuation adjustments
Valuation adjustments retained by BNP Paribas for determining fair
values are as follows:
Bid/offer adjustments: the bid/offer range reflects the additional exit cost
for a price taker and symmetrically the compensation sought by dealers
to bear the risk of holding the position or closing it out by accepting
another dealer's price.
BNP Paribas assumes that the best estimate of an exit price is the bid
or offer price, unless there is evidence that another point in the bid/offer
range would provide a more representative exit price.
Input uncertainty adjustments: when the observation of prices or
data inputs required by valuation techniques is difficult or irregula r, a n
uncertainty exists on the exit price. There are several ways to gauge the
degree of uncertainty on the exit price such as measuring the dispersion
of the available price indications or estimating the possible ranges of the
inputs to a valuation technique.
Model uncertainty adjustments: these relate to situations where
valuation uncertainty is due to the valuation technique used, even
though observable inputs might be available. This situation arises when
the risks inherent in the instruments are different from those available
in the observable data, and therefore the valuation technique involves
assumptions that cannot be easily corroborated.
Future Hedging Costs adjustments (FHC): this adjustment applies to
positions that require dynamic hedging throughout their lifetime leading
to additional bid/offer costs. Calculation methods capture these expected
costs in particular based on the optimal hedging frequency.
Credit valuation adjustment (CVA): the CVA adjustment applies to
valuations and market quotations whereby the credit worthiness of the
counterparty is not reflected. It aims to account for the possibility that
the counterparty may default and that BNP Paribas may not receive the
full fair value of the transactions.
In determining the cost of exiting or transferring counterparty risk
exposures, the relevant market is deemed to be an inter-dealer market.
Howeve r, t he determination of CVA remains judgemental due to i) the
possible absence or lack of price discovery in the inter-dealer market, ii)
the influence of the regulatory landscape relating to counterparty risk
on the market participants' pricing behaviour and iii) the absence of a
dominant business model for managing counterparty risk.
The CVA model is grounded on the same exposures as those used for
regulatory purposes. The model attempts to estimate the cost of an
optimal risk management strategy based on i) implicit incentives and
constraints inherent in the regulations in force and their evolutions, ii)
market perception of the probability of default, and iii) default parameters
used for regulatory purposes.
Funding valuation adjustment (FVA): when valuation techniques are used
for the purpose of deriving fair value, funding assumptions related to
the future expected cash flows are an integral part of the mid-market
valuation, notably through the use of appropriate discount rates. These
assumptions reflect what the Bank anticipates as being the effective
funding conditions of the instrument that a market participant would
conside r. T his notably takes into account the existence and terms of any
collateral agreement. In particula r, f or non- or imperfectly collateralised
derivative instruments, they include an explicit adjustment to the
interbank interest rate.
Own-credit valuation adjustment for debts (OCA) and for derivatives
(debit valuation adjustment - DVA): OCA and DVA are adjustments
reflecting the effect of credit worthiness of BNP Paribas, on respectively
the value of debt securities designated as at fair value through profit
or loss and derivatives. Both adjustments are based on the expected
future liability profiles of such instruments. The own credit worthiness is
inferred from the market-based observation of the relevant bond issuance
levels. The DVA adjustment is determined after taking into account the
Funding Valuation Adjustment (FVA).
Thus, the carrying value of debt securities designated as at fair value
though profit or loss is decreased by EUR 198 million at 31 December
2023, compared with a decrease in value of EUR 160 million at
31 December 2022, i.e. a +EUR 38 million variation recognised directly
in equity that will not be reclassified to profit or loss.
Instrument classes and classification within the fair value hierarchy for assets and liabilities
measured at fair value
As explained in the summary of significant accounting policies (note 1.f.10), financial instruments measured at fair value are categorised into a fair
value hierarchy consisting of three levels.
In millions of euros, at
31 December 2023
Financial instruments held for trading
Instruments at fair value through profit
or loss not held for trading
Financial assets at fair value
through equity
Level 1
Level 2
Level 3
Total Level 1 Level 2 Level 3
Total Level 1 Level 2 Level 3
Total
Securities
171,172
30,482
571
202,225
1,205
1,079
7,125
9,409
44,707
7,095
747
52,549
Governments
80,933
14,291
10
95,234
225
225
19,919
3,367
48
23,334
Other debt securities
19,776
15,747
439
35,962
327
363
380
1,070
23,218
3,515
207
26,940
Equities and other equity
securities
70,463
444
122
71,029
653
716
6,745
8,114
1,570
213
492
2,275
Loans and repurchase
agreements
-
224,512
188
224,700
-
913
1,562
2,475
-
-
-
-
Loans
8,441
8,441
913
1,562
2,475
Repurchase agreements
216,071
188
216,259
-
FINANCIAL ASSETS
AT FAIR VALUE
171,172
254,994
759
426,925
1,205
1,992
8,687
11,884
44,707
7,095
747
52,549
Securities
102,913
1,955
42
104,910
-
-
-
-
Governments
69,811
398
70,209
-
Other debt securities
9,670
1,544
41
11,255
-
Equities and other equity
securities
23,432
13
1
23,446
-
Borrowings and repurchase
agreements
-
270,854
632
271,486
-
1,973
155
2,128
Borrowings
4,846
4,846
1,973
155
2,128
Repurchase agreements
266,008
632
266,640
-
Issued debt securities (note 5.h)
-
-
-
-
14
60,132
23,617
83,763
Subordinated debt (note 5.h)
-
735
735
Non-subordinated debt
(note 5.h)
-
14
59,397
23,617
83,028
FINANCIAL LIABILITIES
AT FAIR VALUE
102,913
272,809
674
376,396
14
62,105
23,772
85,891
In millions of euros, at
31 December 2022
restated according to IFRS 17 and 9
Financial instruments held for trading
Instruments at fair value through profit or
loss not held for trading
Financial assets at fair
value through equity
Level 1
Level 2
Level 3
Total Level 1 Level 2 Level 3
Total Level 1 Level 2 Level 3
Total
Securities
130,589
25,744
805
157,138
1,643
1,495
5,801
8,939
32,727
4,395
944
38,066
Governments
59,860
10,136
28
70,024
-
16,785
1,770
127
18,682
Other debt securities
16,454
14,695
630
31,779
1,152
500
333
1,985
14,496
2,412
288
17,196
Equities and other equity
securities
54,275
913
147
55,335
491
995
5,468
6,954
1,446
213
529
2,188
Loans and repurchase
agreements
-
186,170
798
186,968
-
1,274
2,883
4,157
-
-
-
-
Loans
6,428
5
6,433
1,274
2,883
4,157
Repurchase agreements
179,742
793
180,535
-
FINANCIAL ASSETS
AT FAIR VALUE
130,589
211,914
1,603
344,106
1,643
2,769
8,684
13,096
32,727
4,395
944
38,066
Securities
97,367
1,716
72
99,155
-
-
-
-
Governments
57,949
92
16
58,057
Other debt securities
13,183
1,581
47
14,811
Equities and other equity
securities
26,235
43
9
26,287
Borrowings and repurchase
agreements
-
230,303
2,048
232,351
-
1,472
253
1,725
Borrowings
6,952
6,952
1,472
253
1,725
Repurchase agreements
223,351
2,048
225,399
Issued debt securities (note 5.h)
-
-
-
-
4
46,628
18,946
65,578
Subordinated debt (note 5.h)
675
675
Non-subordinated debt
(note 5.h)
4
45,953
18,946
64,903
FINANCIAL LIABILITIES
AT FAIR VALUE
97,367
232,019
2,120
331,506
4
48,100
19,199
67,303
Fair values of derivatives are broken down by dominant risk facto r, n amely interest rate, foreign exchange, credit and equity. Derivatives used for hedging
purposes are mainly interest rate derivatives.
In millions of euros, at
31 December 2023
Positive market value
Negative market value
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Interest rate derivatives
734
131,382
1,384
133,500
714
103,334
1,928
105,976
Foreign exchange derivatives
18
118,300
776
119,094
16
118,065
45
118,126
Credit derivatives
7,663
764
8,427
8,697
1,623
10,320
Equity derivatives
15
21,177
2,875
24,067
659
31,222
6,146
38,027
Other derivatives
586
6,365
40
6,991
607
5,769
67
6,443
DERIVATIVE FINANCIAL INSTRUMENTS
NOT USED FOR HEDGING PURPOSES
1,353
284,887
5,839
292,079
1,996
267,087
9,809
278,892
DERIVATIVE FINANCIAL INSTRUMENTS
USED FOR HEDGING PURPOSES
-
21,692
-
21,692
-
38,011
-
38,011
In millions of euros, at
31 December 2022
restated according to IFRS 17 and 9
Positive market value
Negative market value
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Interest rate derivatives
873
147,853
1,396
150,122
503
122,659
2,053
125,215
Foreign exchange derivatives
33
133,628
721
134,382
35
129,204
35
129,274
Credit derivatives
6,382
912
7,294
6,822
909
7,731
Equity derivatives
6,760
13,512
2,330
22,602
9,177
13,290
4,824
27,291
Other derivatives
1,295
12,158
79
13,532
843
9,629
138
10,610
DERIVATIVE FINANCIAL INSTRUMENTS
NOT USED FOR HEDGING PURPOSES
8,961
313,533
5,438
327,932
10,558
281,604
7,959
300,121
DERIVATIVE FINANCIAL INSTRUMENTS
USED FOR HEDGING PURPOSES
-
25,401
-
25,401
-
40,001
-
40,001
Transfers between levels may occur when an instrument fulfils the
criteria defined, which are generally market and product dependent.
The main factors influencing transfers are changes in the observation
capabilities, passage of time, and events during the transaction lifetime.
The timing of recognising transfers is determined at the beginning of
the reporting period.
During the year 2023, the main transfers between Level 1 and Level 2 are
related to the reclassification of equity derivatives from Level 1 to Level 2
due to the reassessment of the observable nature of the associated
valuation parameters.
Description of main instruments in each level
The following section provides a description of the instruments in each
level in the hierarchy. It describes notably instruments classified in
Level 3 and the associated valuation methodologies.
For main trading book instruments and derivatives classified in Level 3,
further quantitative information is provided about the inputs used to
derive fair value.
Level 1
This level encompasses all derivatives and securities that are quoted
continuously in active markets.
Level 1 includes notably equity securities and liquid bonds, shortselling
of these instruments, derivative instruments traded on organised
markets (futures, options, etc.). It includes shares of funds and UCITS,
for which the net asset value is calculated on a daily basis, as well as
debt representative of shares of consolidated funds held by third parties.
Level 2
The Level 2 stock of securities is composed of securities which are
less liquid than the Level 1 bonds. They are predominantly corporate
debt securities, government bonds, mortgage-backed securities, fund
shares and short-term securities such as certificates of deposit. They
are classified in Level 2 notably when external prices for the same
security can be regularly observed from a reasonable number of market
makers that are active in this security, but these prices do not represent
directly tradable prices. This comprises amongst othe r, c onsensus pricing
services with a reasonable number of contributors that are active market
makers as well as indicative runs from active brokers and/or dealers.
Other sources, such as primary issuance market, may also be used where
relevant.
Repurchase agreements are classified predominantly in Level 2. The
classification is primarily based on the observability and liquidity of the
repo market, depending on the underlying collateral and the maturity
of the repo transaction.
Debts issued designated as at fair value through profit or loss, are
classified in the same level as the one that would apply to the embedded
derivative taken individually. The issuance spread is considered
observable.
Derivatives classified in Level 2 comprise mainly the following
instruments:
■ vanilla instruments such as interest rate swaps, caps, floors and
swaptions, credit default swaps, equity/foreign exchange (FX)/
commodities forwards and options;
■ structured derivatives for which model uncertainty is not significant
such as exotic FX options, mono- and multi-underlying equity/funds
derivatives, single curve exotic interest rate derivatives and derivatives
based on structured rates.
The above derivatives are classified in Level 2 when there is a documented
stream of evidence supporting one of the following:
■ fair value is predominantly derived from prices or quotations of
other Level 1 and Level 2 instruments, through standard market
interpolation or stripping techniques whose results are regularly
corroborated by real transactions;
■ fair value is derived from other standard techniques such as replication
or discounted cash flows that are calibrated to observable prices, that
bear limited model risk and enable an effective offset of the risks of the
instrument through trading Level 1 or Level 2 instruments;
■ fair value is derived from more sophisticated or proprietary valuation
techniques but is directly evidenced through regular back-testing using
external market-based data.
Determining whether an over-the-counter (OTC) derivative is eligible
for Level 2 classification involves judgement. Consideration is given to
the origin, transparency and reliability of external data used, and the
amount of uncertainty associated with the use of models. It follows that
the Level 2 classification criteria involve multiple analysis axis within an
"observability zone" whose limits are determined by i) a predetermined
list of product categories and ii) the underlying and maturity bands.
These criteria are regularly reviewed and updated, together with the
applicable valuation adjustments, so that the classification by level
remains consistent with the valuation adjustment policy.
Level 3
Level 3 securities of the trading book mainly comprise units of funds
and unlisted equity shares measured at fair value through profit or loss
or through equity.
Unlisted private equities are systematically classified as Level 3, with
the exception of UCITS with a daily net asset value, which are classified
in Level 1 of the fair value hierarchy.
Shares and other unlisted variable income securities in Level 3 are valued
using one of the following methods: a share of revalued net book value,
multiples of comparable companies, future cash flow method, multi-
criteria approach.
Repurchase agreements, mainly long-term or structured repurchase
agreements on corporate bonds and ABSs: the valuation of these
transactions requires proprietary methodologies given the bespoke nature
of the transactions and the lack of activity and price discovery in the
long-term repo market. The curves used in the valuation are corroborated
using available data such as recent long-term repo trade data and price
enquiry data. Valuation adjustments applicable to these exposures are
commensurate with the degree of uncertainty inherent in the modelling
choices and amount of data available.
Debts issued designated as at fair value through profit or loss, are
classified in the same level as the one that would apply to the embedded
derivative taken individually. The issuance spread is considered
observable.
Derivatives
Vanilla derivatives are classified in Level 3 when the exposure is beyond
the observation zone for rate curves or volatility surfaces, or relates
to less liquid markets such as tranches on old credit index series or
emerging markets interest rates markets. The main instruments are:
■ Interest rate derivatives: exposures mainly comprise swap products
in less liquid currencies. Classification is driven by the lower liquidity
of some maturities, while observation capabilities through consensus
may be available. The valuation technique is standard, and uses
external market information and extrapolation techniques;
■ Credit derivatives (CDS): exposures mainly comprise CDSs beyond the
maximum observable maturity and, to a much lesser extent, CDSs on
illiquid or distressed names and CDSs on loan indices. Classification
is driven by the lack of liquidity while observation capabilities may
be available notably through consensus. Level 3 exposures also
comprise CDS and Total Return Swaps (TRS) positions on securitised
assets. These are priced along the same modelling techniques as the
underlying bonds, taking into consideration the funding basis and
specific risk premium;
■ Equity derivatives: exposures essentially comprise long dated
forward or volatility products or exposures where there is a limited
market for optional products. The marking of the forward curves and
volatility surfaces beyond the maximum observable maturity relies
on extrapolation techniques. Howeve r, w hen there is no market for
model input, volatility or forward is generally determined on the basis
of proxy or historical analysis.
Similarly, long-term transactions on equity baskets are also classified
in Level 3, based on the absence of equity correlation observability on
long maturities.
These vanilla derivatives are subject to valuation adjustments linked to
uncertainty on liquidity, specialised by nature of underlying and liquidity
bands.
Structured derivatives classified in Level 3 predominantly comprise
hybrid products (FX/Interest Rates hybrids, Equity hybrids), credit
correlation products, prepayment-sensitive products, some stock basket
optional products and some interest rate optional instruments. The main
exposures are described below, with insight into the related valuation
techniques and on the source of uncertainty:
■ Structured interest rate options are classified in Level 3 when they
involve currencies where there is not sufficient observation or when
they include a quanto feature where the pay-off is measured with a
forex forward fixed rate (except for the main currencies). Long term
structured derivatives are also classified in Level 3;
■ Hybrid FX/Interest rate products essentially comprise a specific
product family known as Power Reverse Dual Currency (PRDC) when
there is material valuation uncertainty. When valuation of PRDCs
requires sophisticated modelling of joint behaviour of FX and interest
rate, and is notably sensitive to the unobservable FX/interest rate
correlations, such products are classified as Level 3. PRDCs valuations
are corroborated with recent trade data and consensus data;
■ Securitisation swaps mainly comprise fixed-rate swaps, cross-
currency or basis swaps whose notional is indexed to the prepayment
behaviour of some underlying portfolio. The estimation of the maturity
profile of securitisation swaps is corroborated by statistical estimates
using external historical data;
■ Forward volatility options are generally products whose pay-off
is indexed to the future variability of a rate index such as volatility
swaps. These products involve material model risk as it is difficult to
infer forward volatility information from market-traded instruments.
The valuation adjustment framework is calibrated to the uncertainty
inherent in the product, and to the range of uncertainty from the
existing external consensus data;
■ Inflation derivatives classified in Level 3 mainly comprise swap
products on inflation indices that are not associated with a liquid
indexed bond market, optional products on inflation indices (such
as caps and floors) and other forms of inflation indices involving
optionality on the inflation indices or on the inflation annual rate.
Valuation techniques used for inflation derivatives are predominantly
standard market models. Proxy techniques are used for a few limited
exposures. Although the valuations are corroborated through monthly
consensus data, these products are classified as Level 3 due to their
lack of liquidity and some uncertainties inherent in the calibration;
■ the valuation of bespoke CDOs requires correlation of default events
when there is material valuation uncertainty. This information is
inferred from the active index tranche market through a proprietary
projection technique and involves proprietary extrapolation and
interpolation techniques. Multi-geography CDOs further require an
additional correlation assumption. Finally, the bespoke CDO model
also involves proprietary assumptions and parameters related to the
dynamic of the recovery facto r. C DO modelling is calibrated on the
observable index tranche markets, and is regularly back-tested against
consensus data on standardised pools. The uncertainty arises from
the model risk associated with the projection and geography mixing
technique, and the uncertainty of associated parameters, together
with the recovery modelling;
■ N to Default baskets are other forms of credit correlation products,
modelled through standard copula techniques. The main inputs
required are the pair-wise correlations between the basket components
which can be observed in the consensus and the transactions. Linear
baskets are considered observable;
■ Equity and equity-hybrid correlation products are instruments whose
pay-off is dependent on the joint behaviour of a basket of equities/
indices leading to a sensitivity of the fair value measurement to the
correlation amongst the basket components. Hybrid versions of these
instruments involve baskets that mix equity and non-equity underlyings
such as commodity indices, or foreign exchange rates. Only a subset
of the Equity/index correlation matrix is regularly observable and
traded, while most cross-asset correlations are not active. Therefore,
classification in Level 3 depends on the composition of the basket, the
maturity, and the hybrid nature of the product. The correlation input
is derived from a proprietary model combining historical estimators,
and other adjustment factors, that are corroborated by reference to
recent trades or external data. The correlation matrix is essentially
available from consensus services, and when a correlation between
two underlying instruments is not available, it might be obtained from
extrapolation or proxy techniques.
These structured derivatives are subject to specific valuation adjustments
to cover uncertainties linked to liquidity, parameters and model risk.
Valuation adjustments (CVA, DVA and FVA)
The valuation adjustment for counterparty credit risk (CVA), own-credit
risk for derivatives (DVA) and the explicit funding valuation adjustment
(FVA) are deemed to be unobservable components of the valuation
framework and therefore classified in Level 3. This does not impact,
in general cases, the classification of individual transactions into the
fair value hierarchy. Howeve r, a s pecific process allows to identify
individual deals for which the marginal contribution of these adjustments
and related uncertainty is significant and justifies classifying these
transactions in Level 3.
The table below provides the range of values of main unobservable inputs
for the valuation of Level 3 financial instruments. The ranges displayed
correspond to a variety of different underlying instruments and are
meaningful only in the context of the valuation technique implemented
by BNP Paribas. The weighted averages, where relevant and available,
are based on fair values, nominal amounts or sensitivities.
The main unobservable parameters used for the valuation of debt issued
in Level 3 are equivalent to those of their economic hedge derivative.
Information on those derivatives, displayed in the following table, is also
applicable to these debts.
Risk classes
Balance sheet
valuation
(in millions of euros)
Main product types composing the
Level 3 stock within the risk class
Valuation technique used for the product
types considered
Main unobservable inputs for
the product types considered
Range of
unobservable
input across
Level 3 population
considered
Weighted
Asset Liability
average
Repurchase
agreements
188
632
Long-term repo and reverse-
repo agreements
Proxy techniques, based
amongst other on the funding
basis of a benchmark bond
pool that is actively traded
and representative of the repo
underlying
Long-term repo spread on
High Grade) and on ABSs
private bonds (High Yield,0 bp to 152 bp 30 bp(a)
Interest rate
derivatives
Hybrid Forex/Interest rate
derivatives
Hybrid Forex interest rate option
pricing model
Correlation between FX
rate and interest rates.
Main currency pairs are
EUR/JP Y, U SD/JP Y, A UD/
JPY
-16% to 52%
8%(a)
Hybrid inflation rates/Interest
rate derivatives
Hybrid inflation interest rate
option pricing model
Correlation between
interest rates and
inflation rates mainly in
Europe.
10% to 32%
29%
Floors and caps on inflation
1,384 1,928 rate or on the cumulative
inflation (such as redemption
floors), predominantly on
European and French inflation
Inflation pricing model
Volatility of cumulative
inflation
1.3% to 11.7%
(b)
Volatility of the year-on-
year inflation rate
0.5% to 2.8%
Forward Volatility products
such as volatility swaps,
mainly in euros
Interest rate option pricing
model
Forward volatility of
interest rates
0.5% to 1.0%
(b)
Balance-guaranteed fixed rate,
basis or cross currency swaps,
predominantly indexed on
European collateral pools
Prepayment modelling
Discounted cash flows
Constant prepayment
rates
0% to 18%
2%(a)
Credit
N-to-default baskets
Credit default model
derivatives
764
1,623
Collateralised Debt Obligations
and index tranches for inactive
index series
Base correlation projection
technique and recovery
modelling
Base correlation curve for
bespoke portfolios
29% to 99%
(b)
Recovery rate variance for
single name underlyings
0% to 25%
(b)
Default correlation
48% to 84%
49%(a)
Single name Credit Default
Swaps (other than CDS on
ABSs and loans indices)
Stripping, extrapolation and
interpolation
Credit default spreads
beyond observation limit
(10 years)
N.A.
99 bp
Illiquid credit default
spread curves
(across main tenors)
3 bp to
2,824 bp(1)
76 bp(c)
Equity
derivatives
Simple and complex
2,875 6,146 derivatives on multi-
underlying baskets on stocks
50%(c)
Various volatility option models
Unobservable equity
volatility
0% to 122%(2)
30%(d)
Unobservable equity
correlation
15% to 98%
(1) The upper bound of the range relates to building, retail and services sector issuers that represent an insignificant portion of the balance sheet (CDSs with illiquid
underlying instruments).
(2) The upper part of the range relates to 7 equities representing a non-material portion of the balance sheet on options with equity underlying instruments.
Including these inputs, the upper bound of the range would be around 196%.
(a) Weights based on relevant risk axis at portfolio level.
(b) No weighting, since no explicit sensitivity is attributed to these inputs.
(c) Weighting is not based on risks, but on an alternative methodology in relation with the Level 3 instruments (present value or notional).
(d) Simple averaging.
Table of movements in level 3 financial instruments
For Level 3 financial instruments, the following movements occurred during the year ended 2023:
In millions of euros
Financial assets
Financial liabilities
at fair value
through profit
for trading
at fair value
through profit
or loss not held
for trading
Financial
assets at
fair value
equity
Financial
instruments
at fair value
through designated
profit or
or loss held
loss held for
Financial
Financial
Financial
instruments instruments
instruments
as at fair
through
value through
TOTAL
trading profit or loss
TOTAL
AT 31 DECEMBER 2022
restated according to IFRS 17 and 9
7,041
8,684
944
16,669
(10,079)
(19,199)
(29,278)
Purchases
812
1,442
154
2,408
-
Issues
-
(5,229)
(5,229)
Sales
(903)
(1,791)
(162)
(2,856)
39
39
Settlements(1)
(3,019)
(98)
(66)
(3,183)
(3,416)
1,355
(2,061)
Transfers to Level 3
2,797
36
2,833
(1,799)
(359)
(2,158)
Transfers from Level 3
(3,347)
(90)
(3,437)
2,527
429
2,956
Gains (or losses) recognised in profit or
loss with respect to transactions expired
or terminated during the period
981
486
(1)
1,466
(3,421)
(757)
(4,178)
Gains (or losses) recognised in profit
or loss with respect to unexpired
instruments at the end of the period
2,233
(5)
2,228
5,669
(12)
5,657
Items related to exchange rate
movements
3
(67)
(18)
(82)
(3)
(3)
Changes in fair value of assets and
liabilities recognised in equity
(14)
(14)
-
AT 31 DECEMBER 2023
6,598
8,687
747
16,032
(10,483)
(23,772)
(34,255)
(1) For the assets, includes redemptions of principal, interest payments as well as cash inflows and outflows relating to derivatives. For the liabilities,
includes principal redemptions, interest payments as well as cash inflows and outflows relating to derivatives the fair value of which is negative.
Transfers out of Level 3 of derivatives include mainly the update of the
observability tenor of certain yield curves, and of market parameters
related to repurchase agreements and credit transactions but also the
effect of derivatives becoming only or mainly sensitive to observable
inputs due to the shortening of their lifetime.
Transfers into Level 3 of instruments at fair value reflect the effect of the
regular update of the observability zones.
Transfers have been reflected as if they had taken place at the beginning
of the reporting period.
The Level 3 financial instruments may be hedged by other Level 1 and
Level 2 instruments, the gains and losses of which are not shown in this
table. Consequently, the gains and losses shown in this table are not
representative of the gains and losses arising from management of the
net risk on all these instruments.
Sensitivity of fair value to reasonably possible
changes in level 3 assumptions
The following table summarises those financial assets and financial
liabilities classified as Level 3 for which alternative assumptions in one
or more of the unobservable inputs would change fair value significantly.
The amounts disclosed are intended to illustrate the range of possible
uncertainty inherent to the judgement applied when estimating Level 3
parameters, or when selecting valuation techniques. These amounts
reflect valuation uncertainties that prevail at the measurement date,
and even though such uncertainties predominantly derive from the
portfolio sensitivities that prevailed at that measurement date, they are
not predictive or indicative of future movements in fair value, nor do they
represent the effect of market stress on the portfolio value.
In estimating sensitivities, BNP Paribas either remeasured the financial
instruments using reasonably possible inputs, or applied assumptions
based on the valuation adjustment policy.
For the sake of simplicity, the sensitivity on cash instruments that are
not relating to securitised instruments was based on a uniform 1% shift
in the price. More specific shifts were however calibrated for each class
of the Level 3 securitised exposures, based on the possible ranges of the
unobservable inputs.
For derivative exposures, the sensitivity measurement is based on
the credit valuation adjustment (CVA), the explicit funding valuation
adjustment (FVA) and the parameter and model uncertainty adjustments
related to Level 3.
Regarding the credit valuation adjustment (CVA) and the explicit funding
valuation adjustment (FVA), the uncertainty was calibrated based on
prudent valuation adjustments described in the technical standard
"Prudent Valuation" published by the European Banking Authority.
For other valuation adjustments, two scenarios were considered: a
favourable scenario where all or a portion of the valuation adjustment
is not considered by market participants, and an unfavourable scenario
where market participants would require twice the amount of valuation
adjustments considered by BNP Paribas for entering into a transaction.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Potential impact on
income
Potential impact on
equity
Potential impact on
income
Potential impact on
equity
Debt securities
+/-6
+/-2
+/-8
+/-3
Equities and other equity securities
+/-68
+/-5
+/-56
+/-5
Loans and repurchase agreements
+/-20
+/-42
Derivative financial instruments
+/-586
+/-576
Interest rate and foreign exchange derivatives
+/-218
+/-227
Credit derivatives
+/-94
+/-98
Equity derivatives
+/-271
+/-245
Other derivatives
+/-3
+/-6
SENSITIVITY OF LEVEL 3 FINANCIAL
INSTRUMENTS
+/-680
+/-7
+/-682
+/-8
Deferred margin on financial instruments
measured using techniques developed
internally and based on inputs partly
unobservable in active markets
Deferred margin on financial instruments ("Day One Profit") primarily
concerns the scope of financial instruments eligible for Level 3 and to
a lesser extent some financial instruments eligible for Level 2 where
valuation adjustments for uncertainties regarding parameters or models
are not negligible compared to the initial margin.
The Day One Profit is calculated after setting aside valuation adjustments
for uncertainties as described previously and released to profit or loss
over the expected period for which the inputs will be unobservable. The
unamortised amount is included under "Financial instruments at fair
value through profit or loss" as a reduction in the fair value of the relevant
transactions.
In millions of euros
Deferred margin at
31 December 2022
restated according to
IFRS 17 and 9
Deferred margin on
transactions during
the period
Margin taken to
the profit and loss
account during the
period
Deferred margin at
31 December 2023
Interest rate and foreign exchange derivatives
194
113
(140)
167
Credit derivatives
174
175
(124)
225
Equity derivatives
426
166
(211)
381
Other instruments
10
140
(139)
11
Financial instruments
804
594
(614)
784
5.e FINANCIAL ASSETS AT AMORTISED COST
➤
DETAIL OF LOANS AND ADVANCES BY NATURE
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Gross value
Impairment
(note 3.g)
Carrying
amount
Gross value
Impairment
(note 3.g)
Carrying
amount
Loans and advances to credit institutions
24,434
(99)
24,335
32,716
(100)
32,616
On demand accounts
7,252
(6)
7,246
11,000
(8)
10,992
Loans(1)
12,267
(93)
12,174
15,767
(92)
15,675
Repurchase agreements
4,915
4,915
5,949
5,949
Loans and advances to customers
876,712
(17,512)
859,200
875,301
(18,281)
857,020
On demand accounts
46,733
(2,752)
43,981
42,963
(2,844)
40,119
Loans to customers
780,638
(13,593)
767,045
788,971
(14,354)
774,617
Finance leases
48,842
(1,167)
47,675
42,574
(1,083)
41,491
Repurchase agreements
499
499
793
793
TOTAL LOANS AND ADVANCES
AT AMORTISED COST
901,146
(17,611)
883,535
908,017
(18,381)
889,636
(1) Loans and advances to credit institutions include term deposits made with central banks.
➤
CONTRACTUAL MATURITIES OF FINANCE LEASES
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Gross investment
53,562
45,602
Receivable within 1 year
15,771
13,278
Receivable after 1 year but within 5 years
32,539
28,068
Receivable beyond 5 years
5,252
4,256
Unearned interest income
(4,720)
(3,028)
Net investment before impairment
48,842
42,574
Receivable within 1 year
14,057
12,176
Receivable after 1 year but within 5 years
29,999
26,396
Receivable beyond 5 years
4,786
4,002
Impairment provisions
(1,167)
(1,083)
Net investment after impairment
47,675
41,491
➤
DETAIL OF DEBT SECURITIES BY TYPE OF ISSUER
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Gross value
Impairment
(note 3.g)
Carrying
amount
Gross value
Impairment
(note 3.g)
Carrying
amount
Governments
62,659
(11)
62,648
59,961
(23)
59,938
Other public administration
16,288
(2)
16,286
15,686
(2)
15,684
Credit institutions
10,318
(2)
10,316
9,062
(2)
9,060
Others
32,000
(89)
31,911
29,435
(103)
29,332
TOTAL DEBT SECURITIES
AT AMORTISED COST
121,265
(104)
121,161
114,144
(130)
114,014
➤
DETAIL OF FINANCIAL ASSETS AT AMORTISED COST BY STAGE
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Gross Value
Impairment
(note 3.g)
Carrying
amount
Gross Value
Impairment
(note 3.g)
Carrying
amount
Loans and advances to credit institutions
24,434
(99)
24,335
32,716
(100)
32,616
Stage 1
23,673
(19)
23,654
32,439
(11)
32,428
Stage 2
679
(13)
666
191
(10)
181
Stage 3
82
(67)
15
86
(79)
7
Loans and advances to customers
876,712
(17,512)
859,200
875,301
(18,281)
857,020
Stage 1
777,190
(1,906)
775,284
761,930
(1,998)
759,932
Stage 2
74,214
(2,399)
71,815
88,095
(2,839)
85,256
Stage 3
25,308
(13,207)
12,101
25,276
(13,444)
11,832
Debt securities
121,265
(104)
121,161
114,144
(130)
114,014
Stage 1
120,991
(12)
120,979
113,602
(27)
113,575
Stage 2
94
(5)
89
387
(10)
377
Stage 3
180
(87)
93
155
(93)
62
TOTAL FINANCIAL ASSETS
AT AMORTISED COST
1,022,411
(17,715)
1,004,696
1,022,161
(18,511)
1,003,650
5.f IMPAIRED FINANCIAL ASSETS (STAGE 3)
The following tables present the carrying amounts of impaired financial assets carried at amortised cost and of impaired financing and guarantee
commitments, as well as related collateral and other guarantees.
The amounts shown for collateral and other guarantees correspond to the lower of the value of the collateral or other guarantee and the value of the
secured assets.
In millions of euros, at
31 December 2023
Impaired financial assets (Stage 3)
Collateral
Gross value
Impairment
Net
received
Loans and advances to credit institutions (note 5.e)
82
(67)
15
Loans and advances to customers (note 5.e)
25,308
(13,207)
12,101
7,720
Debt securities at amortised cost (note 5.e)
180
(87)
93
TOTAL AMORTISED-COST IMPAIRED ASSETS (STAGE 3)
25,570
(13,361)
12,209
7,720
Financing commitments given
889
(96)
793
263
Guarantee commitments given
769
(218)
551
135
TOTAL OFF-BALANCE SHEET IMPAIRED COMMITMENTS (STAGE 3)
1,658
(314)
1,344
398
In millions of euros, at
31 December 2022
restated according to IFRS 17 and 9
Impaired financial assets (Stage 3)
Collateral
Gross value
Impairment
Net
received
Loans and advances to credit institutions (note 5.e)
86
(79)
7
1
Loans and advances to customers (note 5.e)
25,276
(13,444)
11,832
7,651
Debt securities at amortised cost (note 5.e)
155
(93)
62
14
TOTAL AMORTISED-COST IMPAIRED ASSETS (STAGE 3)
25,517
(13,616)
11,901
7,666
Financing commitments given
898
(73)
825
198
Guarantee commitments given
820
(243)
577
135
TOTAL OFF-BALANCE SHEET IMPAIRED COMMITMENTS
(STAGE 3)
1,718
(316)
1,402
333
The following table presents the changes in gross exposures of stage 3 assets (EU CR2):
Gross value
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
IMPAIRED EXPOSURES (STAGE 3) AT OPENING BALANCE
25,517
28,165
Transfer to stage 3
8,632
6,125
Transfer to stage 1 or stage 2
(2,166)
(1,672)
Assets written off
(3,769)
(4,827)
Other changes
(2,644)
(2,274)
IMPAIRED EXPOSURES (STAGE 3) AT CLOSING BALANCE
25,570
25,517
5.g FINANCIAL LIABILITIES AT AMORTISED COST DUE TO CREDIT INSTITUTIONS
AND CUSTOMERS
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Deposits from credit institutions
95,175
124,718
On demand accounts
10,770
12,538
Interbank borrowings(1)
54,825
104,135
Repurchase agreements
29,580
8,045
Deposits from customers
988,549
1,008,056
On demand deposits
542,133
592,269
Savings accounts
152,636
162,354
Term accounts and short-term notes
292,491
253,210
Repurchase agreements
1,289
223
(1) Interbank borrowings from credit institutions include term borrowings from central banks, of which EUR 18 billion of T L T RO III at 31 December 2023
compared to EUR 67 billion at 31 December 2022 (see note 3.a Net Interest Income).
5.h DEBT SECURITIES AND SUBORDINATED DEBT
This note covers all issued debt securities and subordinated debt measured at amortised cost and designated as at fair value through profit or loss.
➤
DEBT SECURITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS (NOTE 5.A)
Issuer/Issue date
In millions of euros, at
Currency
Original
amount
in foreign
currency
Date of call or
(millions) interest step-up
Interest
rate
Interest rate
reset
Conditions
precedent
for coupon
payment(1) 31 December 2023
31 December 2022
restated according
IFRS 17 and 9
Debt securities
83,028
64,902
Subordinated debt
735
676
Redeemable subordinated debt
(2)
18
16
Perpetual subordinated debt
717
660
BNP Paribas Fortis Dec. 2007(3)
EUR
3,000
Dec.-14 +200 bp
3-month
Euribor
A
717
660
(1) Conditions precedent for coupon payment:
A Coupon payments are halted should the issuer have insufficient capital or the underwriters become insolvent or when the dividend declared for
Ageas shares falls below a certain threshold.
(2) After agreement from the banking supervisory authority and at the issuer's initiative, redeemable subordinated debt issues may contain a call
provision authorising the Group to redeem the securities prior to maturity by repurchasing them in the stock market, via public tender offers, or in the
case of private placements over the counte r. D ebt issued by BNP Paribas SA or foreign subsidiaries of the Group via placements in the international
markets may be subject to early redemption of the capital and early payment of interest due at maturity at the issuer's discretion on or after a
date stipulated in the issue particulars (call option), or in the event that changes in the applicable tax rules oblige the BNP Paribas Group issuer to
compensate debt-holders for the consequences of such changes. Redemption may be subject to a notice period of between 15 and 60 days, and is in all
cases subject to approval by the banking supervisory authorities.
(3) Convertible And Subordinated Hybrid Equity-linked Securities (CASHES) issued by BNP Paribas Fortis (previously Fortis Banque) in December 2007.
The CASHES are perpetual securities but may be exchanged for Ageas (previously Fortis SA/NV) shares at the holder's sole discretion at a price of
EUR 239.40. Howeve r, a s of 19 December 2014, the CASHES will be automatically exchanged into Ageas shares if their price is equal to or higher than
EUR 359.10 for twenty consecutive trading days. The principal amount will never be redeemed in cash. The rights of the CASHES holders are limited to
the Ageas shares held by BNP Paribas Fortis and pledged to them.
Ageas and BNP Paribas Fortis have entered into a Relative Performance Note (RPN) contract, the value of which varies contractually so as to offset the
impact on BNP Paribas Fortis of the relative difference between changes in the value of the CASHES and changes in the value of the Ageas shares.
Since 1 January 2022, the liability is no longer eligible to prudential own funds.
➤
DEBT SECURITIES MEASURED AT AMORTISED COST
Issuer/Issue date
In millions of euros, at
Original
amount
in foreign
currency
Date of call or
Currency (millions) interest step-up
Interest
rate
Interest
rate reset
Conditions
precedent
for coupon
payment(1) 31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Debt securities
191,482
155,359
Debt securities in issue with an initial maturity of less than one year
75,743
58,342
Negotiable debt securities
75,743
58,342
Debt securities in issue with an initial maturity of more than one year
115,739
97,017
Negotiable debt securities
30,592
18,503
Bonds
85,147
78,514
Subordinated debt
24,743
24,160
Redeemable subordinated debt
(2)
21,662
22,419
Undated subordinated notes
2,852
1,509
BNP Paribas SA Oct. 85(5)
EUR
305
TMO
-
-0.25%
-
B
254
254
BNP Paribas SA Sept. 86(5)
USD
500
6 month-
Libor
-
+0.075%
-
C
248
255
BNP Paribas Cardif Nov. 14
EUR
Nov. 25
4.032%
+393 bp
3 month-
Euribor
1,000
D
998
1,000
BNP Paribas SA Aug. 23(6)
USD
1,500
Aug. 28
8.500%
+4.354%
CMT
E
1,352
-
Participating notes
225
225
BNP Paribas SA July 84(3) (5)
EUR
337
(4)
-
-
219
219
Others
6
6
Expenses and commission, related debt
4
7
(1) Conditions precedent for coupon payment:
B Payment of the interest is mandatory, unless the Board of directors decides to postpone these payments after the shareholders' General Meeting
has officially noted that there is no income available for distribution, where this occurs within the 12-month period preceding the due date for
payment of the interest. Interest payments are cumulative and are payable in full once dividend payments resume;
C Payment of the interest is mandatory, unless the Board of directors decides to postpone these payments after the shareholders' General Meeting
has validated the decision not to pay out a dividend, where this occurs within the 12-month period preceding the due date for payment of the
interest. Interest payments are cumulative and are payable in full once dividend payments resume. The bank has the option of resuming payment
of interest arrears, even where no dividend is paid out;
D Payment of the interest is mandatory, except for cases of regulatory deficiency, in agreement with the regulato r, o r of suspension of payments.
Interest payments are cumulative and are payable in full, once coupon payments resume, o r, i f these events occur before, when the issuance is
redeemed or when the issuer is liquidated;
E Payment of the interest is at full discretion and could be cancelled in whole or in part if the relevant regulator notifies based on its assessment of
the financial and solvency situation of the issue r. I nterest Amounts on the notes will be non-cumulative, once coupon payments resume.
(2) See reference relating to "Debt securities at fair value through profit or loss".
(3) The participating notes issued by BNP Paribas SA may be repurchased as provided for in the law of 3 January 1983. The number of notes in the market
is 1,434,092.
(4) Depending on net income subject to a minimum of 85% of the TMO rate and a maximum of 130% of the TMO rate.
(5) As from 31 December 2023, these securities are no longer eligible to prudential own funds.
(6) The instruments issued by BNP Paribas SA in August 2023 are contingent convertible securities classified as financial liabilities in accounting and
eligible to Additionnal Tier 1 capital (see note 1.f.8).
5.i CURRENT AND DEFERRED TAXES
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Current taxes
2,942
1,685
Deferred taxes
3,614
4,247
Current and deferred tax assets
6,556
5,932
Current taxes
2,725
2,042
Deferred taxes
1,096
937
Current and deferred tax liabilities
3,821
2,979
Change in deferred tax by nature over the period:
In millions of euros, at
31 December
2022
restated
according to
IFRS 17 and 9
recognised in
profit or loss
Changes
recognised in
Changes equity that may
be reclassified
to profit or loss
Changes
recognised
in equity that
will not be
reclassified to
profit or loss
Effects of
exchange
rates,
consolidation
scope
and other
movements
31 December
2023
Financial instruments
(1,559)
(49)
(476)
(46)
63
(2,067)
Provisions for employee benefit
obligations
754
136
-
53
(46)
897
Unrealised finance lease reserve
(577)
(24)
-
-
2
(599)
Credit risk impairment
2,632
(285)
-
-
5
2,352
T a x loss carryforwards
564
184
-
-
(16)
732
Other items
1,496
(280)
(15)
5
(3)
1,203
NET DEFERRED TAXES
3,310
(318)
(491)
12
5
2,518
Deferred tax assets
4,247
3,614
Deferred tax liabilities
(937)
(1,096)
In order to determine the amount of the tax loss carryforwards recognised
as assets, the Group conducts every year a specific review for each
relevant entity based on the applicable tax regime, notably incorporating
any time limit rules, and a realistic projection of their future revenue and
charges in line with their business plan.
Deferred tax assets recognised on tax loss carryforwards are mainly
related to BNP Paribas Fortis for EUR 132 million at 31 December 2023,
with a 2-year expected recovery period (unlimited carryforward period).
Unrecognised deferred tax assets totalled EUR 541 million at
31 December 2023 (of which EUR 491 million of tax loss carryforwards)
compared with EUR 1,585 million at 31 December 2022 (of which EUR
1,331 million of tax loss carryforwards), amount restated according to
IFRS 17 and 9.
5.j ACCRUED INCOME/EXPENSE AND OTHER ASSETS/LIABILITIES
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Guarantee deposits and bank guarantees paid
119,187
156,077
Collection accounts
773
282
Accrued income and prepaid expenses
5,400
6,839
Other debtors and miscellaneous assets
45,398
45,345
TOTAL ACCRUED INCOME AND OTHER ASSETS
170,758
208,543
Guarantee deposits received
87,612
124,055
Collection accounts
3,124
2,907
Accrued expense and deferred income
8,265
10,849
Lease liabilities
3,058
3,075
Other creditors and miscellaneous liabilities
41,614
44,124
TOTAL ACCRUED EXPENSE AND OTHER LIABILITIES
143,673
185,010
5.k EQUITY-METHOD INVESTMENTS
Cumulated financial information of associates and joint ventures is presented in the following table:
In millions of euros
Year to 31 Dec. 2023
31 December
2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
31 December
2022
restated
according to
IFRS 17 and 9
Share of net
Share of changes
in assets and changes in assets
recognised recognised
income directly in equity
Share of net
income and
liabilities and liabilities
directly in equity
investments income
Equity-method Share of net
Share of changes
in assets and changes in assets
recognised recognised
directly in equity
Share of net
income and
liabilities and liabilities
directly in equity
Equity-method
investments
Joint ventures
(49)
(64)
(113)
1,784
19
19
1,445
Associates(1)
642
16
658
4,967
636
53
689
4,628
TOTAL EQUITY-
METHOD ENTITIES
593
(48)
545
6,751
655
53
708
6,073
(1) Including controlled but non-material entities consolidated under the equity method.
Financing and guarantee commitments given by the Group to joint ventures are listed in note 9.i Other related parties.
The carrying amount of the Group's investment in the main joint ventures and associates is presented in the following table:
In millions of euros, at
Country of registration
Activity Interest (%)
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Joint ventures
Union de Creditos Inmobiliarios
Spain
Retail mortgage
50%
256
327
BoB Cardif Life Insurance
China
Life Insurance
50%
240
232
Genius Auto Finance Co Ltd
China
Specialised loans
25%
290
195
Pinnacle Pet Holding Ltd
United Kingdom
Insurance
25%
393
181
Associates
AG Insurance
Belgium
Insurance
25%
462
416
Bank of Nanjing
China
Retail Banking
14%
2,813
2,757
Allfunds Group Plc
United Kingdom
Financial Services
12%
312
318
5.l PROPERT Y, P LAN T, E QUIPMENT AND INTANGIBLE ASSETS USED IN OPERATIONS,
INVESTMENT PROPERTY
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Gross value
Accumulated
depreciation,
amortisation and
impairment
Carrying
amount
Gross value
Accumulated
depreciation,
amortisation and
impairment
Carrying
amount
INVESTMENT PROPERTY
785
(299)
486
827
(298)
529
Land and buildings
11,317
(4,633)
6,684
11,507
(4,704)
6,803
Equipment, furniture and fixtures
7,007
(5,321)
1,686
7,177
(5,400)
1,777
Plant and equipment leased as
lessor under operating leases
45,720
(10,567)
35,153
38,817
(10,658)
28,159
Other property, plant and equipment
2,338
(1,125)
1,213
2,318
(1,118)
1,200
PROPERT Y, P LANT AND EQUIPMENT
66,382
(21,646)
44,736
59,819
(21,880)
37,939
Of which right of use
5,978
(3,322)
2,656
6,000
(3,294)
2,706
PROPERT Y, P LANT AND EQUIPMENT
AND INVESTMENT PROPERTY
67,167
(21,945)
45,222
60,646
(22,178)
38,468
Purchased software
3,853
(3,145)
708
3,690
(3,035)
655
Internally developed software
6,908
(5,398)
1,510
6,345
(5,000)
1,345
Other intangible assets
2,547
(623)
1,924
2,367
(577)
1,790
INTANGIBLE ASSETS
13,308
(9,166)
4,142
12,402
(8,612)
3,790
Investment property
Land and buildings leased by the Group as lessor under operating leases are recorded in "Investment property".
The estimated fair value of investment property accounted for at amortised cost at 31 December 2023 is EUR 702 million, compared with EUR 736 million
at 31 December 2022.
Operating leases
Operating leases and investment property transactions are in certain cases subject to agreements providing for the following minimum future payments:
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Future minimum lease payments receivable under non-cancellable leases
10,718
8,221
Payments receivable within 1 year
4,570
3,613
Payments receivable after 1 year but within 5 years
6,105
4,582
Payments receivable beyond 5 years
43
26
Future minimum lease payments receivable under non-cancellable leases are payments that the lessee is required to make during the lease term.
Intangible assets
Other intangible assets include leasehold rights, goodwill and trademarks acquired by the Group.
Amortisation and provision
Net depreciation and amortisation expense for the year ended 31 December 2023 was EUR 2,224 million, compared with EUR 2,284 million for the year
ended 31 December 2022.
The net increase in impairment on property, plant, equipment and intangible assets taken to the profit and loss account for the year ended 31 December
2023 amounted to EUR 19 million, compared with EUR 20 million for the year ended 31 December 2022.
5.m GOODWILL
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
CARRYING AMOUNT AT START OF PERIOD
5,294
5,121
Acquisitions
260
215
Divestments
(7)
(15)
Impairment recognised during the period
(28)
Exchange rate adjustments
2
1
CARRYING AMOUNT AT END OF PERIOD
5,549
5,294
Gross value
8,639
8,413
Accumulated impairment recognised at the end of period
(3,090)
(3,119)
Goodwill by cash-generating unit is as follows:
In millions of euros
Carrying amount
Recognised impairment
Acquisitions
31 December
2023
31 December
2022
2022
restated
according to
IFRS 17 and 9
Year to 31 Dec.
2023
Year to 31 Dec.
restated
according to
IFRS 17 and 9
31 December
2023
31 December
2022
restated
according to
IFRS 17 and 9
Corporate & Institutional
Banking
1,275
1,215
-
-
67
-
Global Banking
277
279
Global Markets
549
490
67
Securities Services
449
446
Commercial, Personal Banking
& Services
3,058
2,894
-
(19)
166
215
Arval
633
608
23
96
Leasing Solutions
147
148
Personal Finance
1,432
1,291
(19)
143
61
Personal Investors
562
564
New Digital Businesses
220
220
61
Other
64
63
(3)
Investment & Protection
Services
1,213
1,182
-
(9)
27
-
Asset Management
197
190
9
Insurance
299
281
18
Real Estate
404
402
Wealth Management
313
309
(9)
Other Activities
3
3
-
-
-
-
TOTAL GOODWILL
5,549
5,294
-
(28)
260
215
Negative goodwill
-
277
CHANGE IN VALUE OF
GOODWILL RECOGNISED
IN THE PROFIT AND LOSS
ACCOUNT
-
249
The Group carried out a detailed analysis of goodwill to identify whether
impairments were necessary in connection with the health crisis.
This analysis is based in particular on the assumptions of economic
scenarios (see note 3.g).
The cash-generating units (CGU) to which goodwill is allocated are:
Global Banking: Global Banking combines financing solutions to
corporates, all transaction banking products, corporate finance advisory
services in mergers and acquisitions and primary equity activities.
Global Markets: Global Markets provides investment, hedging, financing
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 Pacific
and the Americas, with innovative solutions and digital platforms. Global
Markets includes activities of Global Macro (Foreign Exchange, Global
Rates, Local Markets, Commodity Derivatives), Global Credit (DCM Bonds,
Credit, Securitisation) and Global Equities (Equities, Cash Equities and
Prime Services).
Securities Services: Securities Services provides integrated solutions for
all actors involved in the investment cycle, sell side, buy side and issuers.
BNP Paribas is one of the major global players in securities services.
Arval: Specialist in vehicle long-term leasing and mobility, Arval offers
corporates (from multinational companies to small and medium
companies), employees and individuals tailored solutions that optimise
their mobility.
Leasing Solutions: BNP Paribas Leasing Solutions uses a multi-channel
partnership approach (sales via referrals, partnerships, direct sales and
banking networks) to offer corporate and small business clients an array
of leasing and rental solutions, ranging from equipment financing to
fleet outsourcing.
Personal Finance: BNP Paribas Personal Finance is the Group's consumer
credit specialist. Through its brands and partnerships such as Cetelem,
Cofinoga, Findomestic, AlphaCredit or Stellantis Financial Services,
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 websites and mobile applications. The business line, in
some countries outside the Domestic Markets, is integrated into the
BNP Paribas Group's retail banking.
Personal Investors: BNP Paribas Personal Investors is a digital specialist
of banking and investment services. Based in Germany and India, it
provides a wide range of banking, savings and long and short-term
investment services to individual clients via the internet, and 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 financial consultants, asset managers and FinTechs.
New Digital Businesses: they include the account management service
"Nickel" and Floa since January 2022. Nickel is open to all, without any
conditions regarding income, deposits or personal wealth, and without
any overdraft or credit facility. This service, which operates in real time
using the latest technology, is available through over 10,000 points of sale
in France, Spain, Belgium, Portugal and Germany. Floa offers consumers
split payments, mini-loans and bank cards. The Company is a partner of
major e-retailers, key players in travel and FinTechs, for which it develops
tailor-made services. Already leader in France in payment facilities, Floa
is present in Spain, Belgium, Italy and Portugal.
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, official
institutions). 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, private asset and real asset 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 also offers products in damage insurance, 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.
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).
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 financial needs.
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 flows (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 flows) based on medium-term
business plans over a period of five years. Cash flow 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 reflect the
normal conditions of the economic cycle.
The key parameters which are sensitive to the assumptions made are
the cost of capital, the cost/income ratio, the cost of risk and the growth
rate to perpetuity.
Cost of capital is determined on the basis of a risk-free rate, an observed
market risk premium weighted by a risk factor based on comparables
specific to each cash-generating unit. The values of these parameters
are obtained from external information sources.
Allocated capital is determined for each cash-generating unit based on
the "Common Equity Tier One" regulatory requirements for the legal
entity to which the cash-generating unit belongs, with a minimum of 7%.
The growth rate to perpetuity used is 2% for mature economies in Europe.
For CGUs implemented in countries with high levels of inflation, a specific
add-on is taken into account (calculated according to inflation rates
disclosed by external sources).
The following table shows the sensitivity of the valuation of the Personal
Finance cash-generating unit to changes in the value of parameters
used in the DCF calculation: the cost of capital, the cost/income ratio
in terminal value, the cost of risk in terminal value and the growth rate
to perpetuity.
➤
SENSITIVITY OF THE MAIN GOODWILL VALUATIONS TO A 10-BASIS POINT CHANGE IN THE COST OF CAPITAL,
A 1% CHANGE IN THE COST/INCOME RATIO IN TERMINAL VALUE, A 5% CHANGE OF THE COST OF RISK IN TERMINAL
VALUE AND A 50-BASIS POINT CHANGE IN THE GROWTH RATE TO PERPETUITY
In millions of euros
Personal Finance
Cost of capital
10.3%
Adverse change (+10 basis points)
(150)
Positive change (-10 basis points)
154
Cost/income ratio
46.4%
Adverse change (+1%)
(372)
Positive change (-1%)
372
Cost of risk
(1,719)
Adverse change (+5%)
(504)
Positive change (-5%)
504
Growth rate to perpetuity
2.0%
Adverse change (-50 basis points)
(218)
Positive change (+50 basis points)
246
Concerning the cash-generating unit Personal Finance, there would be no need to depreciate even by using, for the impairment test, the four most
unfavourable variations in the table.
5.n PROVISIONS FOR CONTINGENCIES AND CHARGES
➤
PROVISIONS FOR CONTINGENCIES AND CHARGES BY TYPE
In millions of euros, at
31 December
2022
restated
to IFRS 17 and 9
according Net additions
to provisions
Provisions used
Changes in value
directly in equity
Effect of
movements
in exchange
recognised rates and other
movements
31 December
2023
Provisions for employee benefits
6,117
1,473
(1,243)
246
(84)
6,509
of which post-employment benefits
(note 8.b)
3,160
174
(296)
253
(93)
3,198
of which post-employment
healthcare benefits (note 8.b)
83
5
(2)
(7)
(1)
78
of which provision for other long-
term benefits (note 8.c)
1,546
391
(367)
1
1,571
of which provision for voluntary
departure, early retirement plans, and
headcount adaptation plan (note 8.d)
270
314
(105)
3
482
of which provision for share-based
payments (note 8.e)
1,059
589
(473)
5
1,180
Provisions for home savings accounts
and plans
47
1
-
-
48
Provisions for credit commitments
(note 3.g)
1,430
(56)
(45)
(59)
1,270
Provisions for litigations
1,172
411
(337)
(241)
1,005
Other provisions for contingencies
and charges
1,274
104
(174)
482
1,686
TOTAL PROVISIONS FOR
CONTINGENCIES AND CHARGES
10,040
1,933
(1,799)
246
98
10,518
In 2023, the Group modified its accounting policy relating to the risk of
loss of cash flows on financial instruments granted that are not linked
to the counterparty's default, such as legal risks calling into question the
validity or enforceability of such contracts (see note 3.h).
The effect on expected cash flows due to these risks is now considered
as a change in the contract's cash flows, in accordance with IFRS 9
B5.4.6, and is recorded as a decrease in the gross value of the asset.
It was previously recognised separately in accordance with IAS 37 in
"Provisions for risks and charges" (see note 5.n). Expected losses on
derecognised financial instruments, as is the case when loans have been
repaid, continue to be recognised in accordance with IAS 37.
As a result, EUR 313 million previously presented in "Provisions for
litigations" were deducted from "Financial assets at amortised cost".
As of 31 December 2023, reserves related to the uncertainty on the
residual value of Arval's vehicles previously recognised as a decrease in
assets were included in "Other provisions for contingencies and charges".
➤
PROVISIONS AND DISCOUNT FOR HOME SAVINGS ACCOUNTS AND PLANS
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Deposits collected under home savings accounts and plans
14,606
16,547
of which deposits collected under home savings plans
12,426
14,409
Aged more than 10 years
6,695
6,332
Aged between 4 and 10 years
4,926
7,227
Aged less than 4 years
805
850
Outstanding loans granted under home savings accounts and plans
9
10
of which loans granted under home savings plans
4
2
Provisions and discount recognised for home savings accounts and plans
48
47
provisions recognised for home savings plans
33
42
provisions recognised for home savings accounts
15
5
discount recognised for home savings accounts and plans
-
-
5.o OFFSETTING OF FINANCIAL ASSETS
AND LIABILITIES
The following tables present the amounts of financial assets and
liabilities before and after offsetting. This information, required by
IFRS 7, aims to enable the comparability with the accounting treatment
applicable in accordance with generally accepted accounting principles
in the United States (US GAAP), which are less restrictive than IAS 32
as regards offsetting.
"A mounts set off on the balance sheet" have been determined according
to IAS 32. Thus, a financial asset and a financial liability are offset and
the net amount presented on the balance sheet when, and only when, the
Group has a legally enforceable right to set off the recognised amounts
and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously. Amounts set off derive mainly from
repurchase agreements and derivative instruments traded with clearing
houses.
The "impacts of master netting agreements and similar agreements" are
relative to outstanding amounts of transactions within an enforceable
agreement, which do not meet the offsetting criteria defined by IAS 32.
This is the case of transactions for which offsetting can only be performed
in case of default, insolvency or bankruptcy of one of the contracting
parties.
"Financial instruments given or received as collateral" include
guarantee deposits and securities collateral recognised at fair value.
These guarantees can only be exercised in case of default, insolvency or
bankruptcy of one of the contracting parties.
Regarding master netting agreements, the guarantee deposits received or
given in compensation for the positive or negative fair values of financial
instruments are recognised in the balance sheet in accrued income or
expenses and other assets or liabilities.
In millions of euros,
at 31 December 2023
Gross Gross
amounts of
amounts set
financial off on the
assets balance sheet
Net amounts
presented on
the balance
sheet
Impact of
Master
Netting
Agreements
(MNA) and
similar
agreements
Financial
instruments
received as
collateral Net amounts
Assets
Financial instruments at fair value
through profit or loss
Securities
211,634
211,634
211,634
Loans and repurchase agreements
462,109
(234,934)
227,175
(28,383)
(181,529)
17,263
Derivative financial instruments
(including derivatives used for
hedging purposes)
890,604
(576,833)
313,771
(213,517)
(51,325)
48,929
Financial assets at amortised cost
1,005,096
(400)
1,004,696
(676)
(4,325)
999,695
of which repurchase agreements
5,813
(400)
5,413
(676)
(4,325)
412
Accrued income and other assets
170,758
170,758
(40,664)
130,094
of which guarantee deposits paid
119,187
119,187
(40,664)
78,523
Other assets not subject to offsetting
663,465
663,465
663,465
TOTAL ASSETS
3,403,666
(812,167)
2,591,499
(242,576)
(277,843)
2,071,080
In millions of euros,
at 31 December 2023
Gross
amounts of
Gross
amounts set
financial off on the
liabilities balance sheet
Net amounts
presented on
the balance
sheet
Impact of
Master
Netting
Agreements
(MNA) and
similar
agreements
Financial
instruments
given as
collateral Net amounts
Liabilities
Financial instruments at fair value
through profit or loss
Securities
104,910
104,910
104,910
Deposits and repurchase agreements
508,548
(234,934)
273,614
(26,113)
(231,737)
15,764
Issued debt securities
83,763
83,763
83,763
Derivative financial instruments
(including derivatives used for
hedging purposes)
893,736
(576,833)
316,903
(213,517)
(41,756)
61,630
Financial liabilities at amortised cost
1,084,124
(400)
1,083,724
(2,946)
(26,145)
1,054,633
of which repurchase agreements
31,269
(400)
30,869
(2,946)
(26,145)
1,778
Accrued expense and other liabilities
143,673
143,673
(46,631)
97,042
of which guarantee deposits received
87,612
87,612
(46,631)
40,981
Other liabilities not subject to offsetting
456,045
456,045
456,045
TOTAL LIABILITIES
3,274,799
(812,167)
2,462,632
(242,576)
(346,269)
1,873,787
In millions of euros,
at 31 December 2022
restated according to IFRS 17 and 9
Gross Gross
amounts of
amounts set
financial off on the
assets balance sheet
Net amounts
presented on
the balance
sheet
Impact of
Master
Netting
Agreements
(MNA) and
similar
agreements
Financial
instruments
received as
collateral Net amounts
Assets
Financial instruments at fair value
through profit or loss
Securities
166,077
166,077
166,077
Loans and repurchase agreements
334,401
(143,276)
191,125
(27,377)
(147,368)
16,380
Derivative financial instruments
(including derivatives used for
hedging purposes)
980,162
(626,829)
353,333
(228,379)
(64,980)
59,974
Financial assets at amortised cost
1,003,650
1,003,650
(966)
(5,198)
997,486
of which repurchase agreements
6,742
6,742
(966)
(5,198)
578
Accrued income and other assets
208,543
208,543
(44,982)
163,561
of which guarantee deposits paid
156,077
156,077
(44,982)
111,095
Other assets not subject to offsetting
741,020
741,020
741,020
TOTAL ASSETS
3,433,853
(770,105)
2,663,748
(256,722)
(262,528)
2,144,498
In millions of euros,
at 31 December 2022
restated according to IFRS 17 and 9
Gross Gross
amounts of
amounts set
financial off on the
liabilities balance sheet
Net amounts
presented on
the balance
sheet
Impact of
Master
Netting
Agreements
(MNA) and
similar
agreements
Financial
instruments
given as
collateral Net amounts
Liabilities
Financial instruments at fair value
through profit or loss
Securities
99,155
99,155
99,155
Deposits and repurchase agreements
377,352
(143,276)
234,076
(27,376)
(184,013)
22,687
Issued debt securities
65,578
65,578
65,578
Derivative financial instruments
(including derivatives used for
hedging purposes)
966,951
(626,829)
340,122
(228,379)
(44,335)
67,408
Financial liabilities at amortised cost
1,132,774
1,132,774
(967)
(6,500)
1,125,307
of which repurchase agreements
8,268
8,268
(967)
(6,500)
801
Accrued expense and other liabilities
185,010
185,010
(57,443)
127,567
of which guarantee deposits received
124,055
124,055
(57,443)
66,612
Other liabilities not subject to offsetting
481,023
481,023
481,023
TOTAL LIABILITIES
3,307,843
(770,105)
2,537,738
(256,722)
(292,291)
1,988,725
5.p TRANSFERS OF FINANCIAL ASSETS
Financial assets that have been transferred but not derecognised by the Group are mainly composed of securities sold temporarily under repurchase
agreements or securities lending transactions, as well as securitised assets. The liabilities associated to securities temporarily sold under repurchase
agreements consist of debts recognised under the "repurchase agreements" heading. The liabilities associated to securitised assets consist of the
securitisation notes purchased by third parties.
➤
SECURITIES LENDING, REPURCHASE AGREEMENTS AND OTHER TRANSACTIONS:
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Carrying amount of
transferred assets
Carrying amount
of associated
Carrying amount of
liabilities transferred assets
Carrying amount
of associated
liabilities
Securities lending operations
Financial instruments at fair value through profit or loss
7,565
6,274
Financial assets at amortised cost
474
1,410
Financial assets at fair value through equity
39
75
Repurchase agreements
Financial instruments at fair value through profit or loss
49,747
49,700
33,550
33,547
Financial assets at amortised cost
5,949
5,949
6,311
6,287
Financial assets at fair value through equity
1,936
1,936
459
459
Financial investments of insurance activities
8,995
8,316
6,312
6,895
TOTAL
74,705
65,901
54,391
47,188
➤
SECURITISATION TRANSACTIONS PARTIALLY REFINANCED BY EXTERNAL INVESTORS, WHOSE RECOURSE IS LIMITED
TO THE TRANSFERRED ASSETS:
In millions of euros, at 31 December 2023
Carrying amount of
transferred assets
Carrying amount
of associated
Fair value of
liabilities transferred assets
Fair value of
associated
liabilities
Net position
Securitisation
Financial assets at amortised cost
27,995
26,355
28,032
26,278
1,754
TOTAL
27,995
26,355
28,032
26,278
1,754
In millions of euros, at 31 December 2022
restated according to IFRS 17 and 9
Carrying amount of
transferred assets
Carrying amount
of associated
Fair value of
liabilities transferred assets
Fair value of
associated
liabilities
Net position
Securitisation
Financial assets at amortised cost
24,126
23,326
24,164
22,112
2,052
TOTAL
24,126
23,326
24,164
22,112
2,052
There have been no significant transfers leading to partial or full derecognition of the financial assets in which the Bank has a continuing involvement.
Note 6
NOTES RELATED TO INSURANCE ACTIVITIES
6.a NET INCOME FROM INSURANCE
ACTIVITIES
The various income and expenses of insurance contracts are broken down
in the "Net income from insurance activities" as follows:
■ "Insurance revenue" include revenue from insurance activities related
to groups of insurance contracts issued. Insurance revenue reflects
the provision of services relating to a group of contracts in an amount
corresponding to the consideration to which the insurer expects to be
entitled in exchange for those services;
■ "Insurance service expenses": actual charges attributable to insurance
contracts incurred over the period, changes related to past and current
service, amortisation of acquisition costs, and the loss component for
onerous contracts;
■ "Investment return";
■ "Net finance income or expenses from insurance contracts" include
the change in the carrying amount of insurance contracts resulting
from the undiscounting effect, and the financial risk including changes
in financial assumptions.
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Insurance revenue
8,945
8,759
Insurance service expenses(1)
(6,786)
(6,619)
Investment return
10,254
(12,077)
Net finance income or expenses from insurance contracts
(10,093)
11,838
NET INCOME FROM INSURANCE ACTIVITIES
2,320
1,901
(1) Insurance service expenses include attributable expenses which amounted to -EUR 3,723 million for the year ended 2023, compared to -EUR 3,641 million
for the year ended 2022 (see note 6.b).
Insurance service result
"Insurance service result" includes:
■ "Insurance revenue": for contracts under the variable fee approach
and under the building block approach it represents the release of
fulfilment insurance contracts cash flows over the period (excluding
changes in investment component and the amount allocated to the loss
component), change in the non-financial risk adjustment, amortisation
of the contractual service margin for services provided over the period,
the amount allocated for the amortisation of acquisition cost, and
experience adjustments related to premiums.
For contracts under the variable fee approach, the amortisation of
the margin on contractual services is determined after adjusting the
difference between the real-world expected financial return and the
risk-neutral projection. The main financial assumptions underlying
the calculation of the real-world expected financial return are those
adopted by the Group over the horizon of the strategic plan. Beyond
this horizon, the interest rate and return assumptions used are
determined in line with those underlying the risk-neutral projection.
The recovery of insurance acquisition cash flows corresponds to the
portion of the premiums that relate to recovering these cash flows and
the same amount is recognised as an expense on the line "A mortisation
of insurance acquisition cash flows".
For contracts under the simplified measurement model, revenue
represents expected cash flows over the period;
■ "Insurance service expenses" include incurred and past claims
expenses of the period (excluding repayments of investment
component) and other expenses that have been incurred related
to insurance activities. Other insurance service expenses include
the amortisation of insurance acquisition cash flows; changes that
relate to past services and changes that relate to future services.
This line includes also the operating expenses and depreciation and
amortisation attributable to insurance contracts;
■ "Net expenses from reinsurance contracts held" are service expenses
from reinsurance net of amounts recovered from reinsurers.
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Contracts not measured under the premium allocation approach
5,435
5,489
Changes in the liability for remaining coverage
2,221
2,145
Change in the risk adjustment
122
102
Contractual service margin
1,825
1,828
Recovery of insurance acquisition cash flows
1,267
1,414
Contracts measured under the premium allocation approach
3,510
3,270
Insurance revenue
8,945
8,759
Incurred claims and expenses
(3,928)
(3,591)
Amortisation of insurance acquisition cash flows
(2,612)
(2,678)
Changes that relate to past service
249
151
Loss component recognised in profit or loss
(62)
(75)
Net expenses from reinsurance contracts held
(433)
(426)
Insurance service expenses
(6,786)
(6,619)
INSURANCE SERVICE RESULT
2,159
2,140
Financial result
"Financial Result" includes "Investment return" and "Net finance income
or expenses from insurance contracts."
"Investment return" includes net income from financial instruments and
from investment properties.
"Changes in fair value of underlying items of direct participation
contracts" reflects the changes in value of underlying investments for
the amount which was not recognised directly in equity, and excluding
the portion of these changes adjusting the contract service margin.
"Other insurance financial expenses" measured under the general
model and under the simplified model represent the change in technical
liabilities arising from financial risks (discount rates variations, forex
rates, time value and financial variations expected in the contracts) for
the amount which was not recognised directly in equity.
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Net interest income
2,376
2,698
Net gain on financial instruments at fair value through equity
(432)
(574)
Net gain on debt instruments
(445)
(598)
Dividend income on equity instruments
13
24
Net gain on financial instruments at fair value through profit or loss
9,040
(14,073)
Cost of risk
24
22
Investment property income
(672)
(79)
Share of earnings of equity-method investments
(6)
(3)
Other expenses
(76)
(68)
Investment return
10,254
(12,077)
Changes in fair value of underlying items of direct participation contracts
(9,940)
11,968
Other insurance financial expenses
(153)
(130)
Net finance income or expenses from insurance contracts
(10,093)
11,838
FINANCIAL RESULT
161
(239)
6.b RECONCILIATION OF EXPENSES BY TYPE AND BY FUNCTION
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Commissions and other expenses
(2,494)
(2,217)
Expenses incurred by internal distributors (see note 3.f)
(1,041)
(1,056)
Salary and employee benefit expense
(778)
(728)
T a xes and contributions
(86)
(95)
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets
(32)
(63)
TOTAL EXPENSES BY TYPE
(4,431)
(4,159)
Acquisition cash flows incurred over the period
2,562
2,483
Amortisation of acquisition cash flows
(2,612)
(2,678)
TOTAL EXPENSES BY TYPE ADJUSTED FOR ACQUISITION CASH FLOWS AMORTISATION EFFECT
(4,481)
(4,354)
Insurance contracts attributable expenses (see note 6.a)
(3,723)
(3,641)
Insurance activities non-attributable costs (see note 3.f)
(758)
(713)
Acquisition cash flows over the period are deducted from total expenses and amortised over the coverage period of the contracts.
6.c INVESTMENTS, OTHER ASSETS AND FINANCIAL LIABILITIES RELATED TO INSURANCE
ACTIVITIES
➤
INVESTMENTS AND OTHER ASSETS RELATED TO INSURANCE ACTIVITIES
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Derivative financial instruments
1,658
1,728
Derivatives used for hedging purposes
36
Financial assets at fair value through profit or loss
156,758
143,985
Financial assets at fair value through equity
89,139
89,025
Financial assets at amortised cost
1,267
1,153
Investment properties
7,491
8,819
Equity-method investments
89
114
Assets related to insurance activities (note 6.d)
660
651
INVESTMENTS AND OTHER ASSETS RELATED TO INSURANCE ACTIVITIES
257,098
245,475
➤
FINANCIAL LIABILITIES RELATED TO INSURANCE ACTIVITIES
"Financial liabilities related to insurance activities" comprise unit-linked investment contracts without discretionary participating features. Those
contracts are measured under IFRS 9 at fair value through profit or loss.
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Derivative financial instruments
1,138
1,502
Derivatives used for hedging purposes
152
348
Deposit at fair value through profit or loss
1,063
1,148
Debt representative of shares of consolidated funds held by third parties
5,802
5,675
Investment contracts without discretionary participation feature - Unit-linked contracts
8,427
8,255
Other debts
1,657
1,930
FINANCIAL LIABILITIES RELATED TO INSURANCE ACTIVITIES
18,239
18,858
➤
MEASUREMENT OF THE FAIR VALUE OF FINANCIAL INSTRUMENTS
The criteria for allocating instruments to each level of the fair value hierarchy, the measurement methods, and the principles governing transfers
between levels are those presented in note 5.d for the Group's financial instruments.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets designated as at fair
value through profit or loss
85,585
56,294
14,879
156,758
83,905
46,913
13,167
143,985
Equity instruments
79,269
41,846
14,779
135,894
77,484
34,083
13,127
124,694
Debt securities
6,316
13,740
41
20,097
6,421
12,317
24
18,762
Loans
708
59
767
513
16
529
Financial assets at fair value through
equity
81,018
8,106
15
89,139
80,167
8,663
195
89,025
Equity instruments
646
646
210
210
Debt securities
80,372
8,106
15
88,493
79,957
8,663
195
88,815
Derivative financial instruments
2
1,678
14
1,694
-
1,709
19
1,728
FINANCIAL ASSETS MEASURED
AT FAIR VALUE
166,605
66,078
14,908
247,591
164,072
57,285
13,381
234,738
Financial liabilities designated at fair
value through profit or loss
8,741
5,923
628
15,292
7,205
7,213
660
15,078
Deposit at fair value through profit or loss
1,063
1,063
1,148
1,148
Debt representative of shares of
consolidated funds held by third parties
2,625
3,177
5,802
1,881
3,794
5,675
Investment contracts without
discretionary participation feature - Unit-
linked contracts
6,116
1,683
628
8,427
5,324
2,271
660
8,255
Derivative financial instruments
127
977
186
1,290
-
1,485
365
1,850
FINANCIAL LIABILITIES MEASURED
AT FAIR VALUE
8,868
6,900
814
16,582
7,205
8,698
1,025
16,928
Level 1 includes notably equity securities and liquid bonds, derivative instruments traded on organised markets (futures, options, etc.), shares of funds
and UCITS, for which the net asset value is calculated on a daily basis.
Level 2 includes equity securities, government bonds, corporate debt securities, shares of funds and UCITS, and over-the-counter derivatives.
Level 3 includes units of funds and unlisted equity shares which are mainly company shares and venture capital.
➤
TABLE OF MOVEMENTS IN LEVEL 3 FINANCIAL INSTRUMENTS
For financial instruments in Level 3, the following variations occurred during the period:
In millions of euros
Financial assets
Financial liabilities
Financial
instruments
at fair value
through profit
or loss
Financial
assets at fair
value through
equity
Financial
instruments
at fair value
through profit
Total
or loss
Total
AT 31 DECEMBER 2022
restated according to IFRS 17 and 9
13,186
195
13,381
(1,025)
(1,025)
Purchases
2,179
9
2,188
Sales
(771)
(47)
(818)
Settlements
(194)
(194)
214
214
Transfers to Level 3
1,193
1,193
Transfers from Level 3
(569)
(136)
(705)
Gains recognised in profit or loss
(129)
(129)
Items related to exchange rate movement
(2)
(2)
(3)
(3)
Changes in fair value of assets and liabilities recognised
in equity
(6)
(6)
AT 31 DECEMBER 2023
14,893
15
14,908
(814)
(814)
➤
FINANCIAL ASSETS AT FAIR VALUE THROUGH EQUITY
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Fair value
directly to equity
of which
changes in value
recognised
Fair Value
of which
changes in value
recognised
directly to equity
Debt securities
88,493
(5,154)
88,815
(10,261)
Equity securities
646
70
210
11
TOTAL FINANCIAL ASSETS AT FAIR VALUE THROUGH EQUITY
89,139
(5,084)
89,025
(10,250)
The option to recognise certain equity instruments at fair value through
equity was retained in particular for shares held through strategic
partnerships and shares that the Group is required to hold in order to
carry out certain activities.
During the year ended 31 December 2023, the Group sold several of these
investments and a net gain of EUR 26 million was transferred to "retained
earnings" (EUR 59 million for the year ended at 31 December 2022).
➤
INVESTMENT PROPERTIES FAIR VALUE
The fair value of investment properties amounts to EUR 7.5 billion at
31 December 2023, compared with EUR 8.8 billion at 31 December 2022.
The entire non-listed real estate portfolio is appraised by one or more
independent third parties. Experts have professional rules for carrying
out these assessments.
For buildings that are directly held, experts use three main methods:
■ the method by which similar transactions are compared;
■ the rate of return method (rate applied to a rental basis);
■ the discounted cash flow method.
The final value retained by the expert may be a compromise between
these three methods.
➤
FAIR VALUE OF FINANCIAL INSTRUMENTS CARRIED AT AMORTISED COST
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Estimated fair value
Carrying
value
Level 1
Level 2
Level 3
Estimated fair value
Carrying
Level 1
Level 2
Level 3
Total
Total
value
Loans and
receivables
-
1,242
24
1,266
1,267
-
1,125
27
1,152
1,153
6.d ASSETS AND LIABILITIES RELATED
TO INSURANCE CONTRACTS
The main insurance contracts issued by the Group are:
■ contracts covering risks related to persons or property: creditor
protection insurance (CPI), personal protection insurance and
other non-life risks, and reinsurance contracts accepted from other
insurers for these types of risks. These contracts are measured under
the general model (building block approach - BBA) or the premium
allocation approach (PAA) for contracts with a duration of at most
one year;
■ life or savings contracts: single and multi-support contracts, with or
without insurance risk, including a discretionary participation, and
unit-linked contracts with a minimum coverage in the event of death.
These contracts are measured under the variable fee approach (VFA).
The insurance contracts issued by BNP Paribas Group entities cover risks
of death (guarantees in the event of death), longevity (guarantees in the
event of life, for example life annuities), morbidity (guarantees in the
event of disability), disability, health (medical coverage), unemployment,
civil liability, and property damage.
Life or savings contracts are considered to be insurance contracts if
they include a survival risk (in the case of retirement contracts with a
mandatory annuity) or a death risk (in the case of unit-linked contracts
with a minimum death guarantee and savings contracts with a guarantee
of an additional amount in the case of death).
Savings contracts invested in a euro fund, and multi-support contracts
invested in unit-linked assets and in a euro fund are considered as
investment contracts with discretionary participating features under
the variable fee approach.
Insurance and reinsurance contracts issued and reinsurance contracts
held are presented on the assets or liabilities side of the balance sheet
according to the overall position of the portfolios to which they belong.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Assets
Liabilities or Liabilities
Net (Assets)
Assets
Net (Assets)
Liabilities or Liabilities
Insurance contracts not measured under the
premium allocation approach
22
215,689
215,667
8
207,543
207,535
Insurance contracts measured under the premium
allocation approach
84
2,354
2,270
126
2,142
2,016
Reinsurance contracts held
554
(554)
517
87
(430)
ASSETS AND LIABILITIES RELATED TO INSURANCE
CONTRACTS
660
218,043
217,383
651
209,772
209,121
T a bles below show movements in carrying amounts of insurance contracts and do not include reinsurance contracts held.
➤
MOVEMENTS IN CARRYING AMOUNTS OF INSURANCE CONTRACTS - REMAINING COVERAGE AND INCURRED CLAIMS
Insurance contracts issued, excluding reinsurance
contracts
In millions of euros
Remaining coverage
Incurred
claims
Total
net liabilities
excluding
loss component
loss
component
NET (ASSETS) OR LIABILITIES AT 1 JANUARY 2022
236,471
93
3,354
239,918
Insurance service result: (income) or expenses
(24,419)
60
21,793
(2,566)
of which insurance revenue
(8,759)
(8,759)
of which insurance service expenses
2,381
60
3,752
6,193
of which investment component
(18,041)
18,041
-
Net finance (income) or expenses from insurance
contracts(2)
(29,773)
(172)
(29,945)
Total changes recognised in profit and loss and in equity
(54,192)
60
21,621
(32,511)
Premiums received for insurance contracts issued
25,895
25,895
Insurance acquisition cash flows
(2,186)
(2,186)
Claims and other service expenses paid
(21,997)
(21,997)
Total cash flows
23,709
-
(21,997)
1,712
Other movements
(551)
(1)
984
432
NET (ASSETS) OR LIABILITIES AT 31 DECEMBER 2022(1)
205,437
152
3,962
209,551
Insurance service result: (income) or expenses
(30,502)
23
27,887
(2,592)
of which insurance revenue
(8,945)
(8,945)
of which insurance service expenses
2,335
23
3,995
6,353
of which investment component
(23,892)
23,892
-
Net finance (income) or expenses from insurance
contracts(2)
14,617
2
65
14,684
Total changes recognised in profit and loss and in equity
(15,885)
25
27,952
12,092
Premiums received for insurance contracts issued
26,128
26,128
Insurance acquisition cash flows
(2,285)
(2,285)
Claims and other service expenses paid
(27,454)
(27,454)
Total cash flows
23,843
-
(27,454)
(3,611)
Other movements
(371)
(7)
283
(95)
NET (ASSETS) OR LIABILITIES AT 31 DECEMBER 2023(1)
213,024
170
4,743
217,937
(1) Including receivables and liabilities attributable to insurance contracts for a net asset of EUR 549 million at 31 December 2023, compared to a net asset of
EUR 501 million at 31 December 2022.
(2) Including finance income and expenses recognised directly in equity.
➤
MOVEMENTS IN CARRYING AMOUNTS OF INSURANCE CONTRACTS NOT MEASURED UNDER THE PREMIUM
ALLOCATION APPROACH – ANALYSIS BY MEASUREMENT COMPONENT
Insurance contracts issued not measured under the
premium allocation approach, excluding reinsurance
contracts
In millions of euros
Present value of
future cash flows
Non-financial risk
adjustment
service margin
Contractual
Total
NET (ASSETS) OR LIABILITIES AT 1 JANUARY 2022
217,803
1,260
18,598
237,661
Insurance service result: (income) or expenses
(372)
(172)
(1,493)
(2,037)
of which changes related to future services - new
contracts
(1,587)
99
1,551
63
of which changes related to future services - change
in estimation
1,387
(160)
(1,217)
10
of which changes related to current service(2)
(34)
(77)
(1,827)
(1,938)
of which changes related to past service
(138)
(34)
(172)
Net finance (income) or expenses from insurance
contracts(3)
(29,882)
(39)
36
(29,885)
Total changes recognised in profit and loss and in equity
(30,254)
(211)
(1,457)
(31,922)
Premiums received for insurance contracts issued
22,690
22,690
Insurance acquisition cash flows
(911)
(911)
Claims and other service expenses paid
(20,557)
(20,557)
Total cash flows
1,222
-
-
1,222
Other movements
651
(1)
(76)
574
NET (ASSETS) OR LIABILITIES AT 31 DECEMBER 2022(1)
189,422
1,048
17,065
207,535
Insurance service result: (income) or expenses
(1,674)
550
(839)
(1,963)
of which changes related to future services - new
contracts
(1,164)
90
1,107
33
of which changes related to future services - change
in estimation
(447)
602
(121)
34
of which changes related to current service(2)
32
(103)
(1,825)
(1,896)
of which changes related to past service
(95)
(39)
(134)
Net finance (income) or expenses from insurance
contracts(3)
14,510
8
51
14,569
Total changes recognised in profit and loss and in equity
12,836
558
(788)
12,606
Premiums received for insurance contracts issued
22,621
22,621
Insurance acquisition cash flows
(892)
(892)
Claims and other service expenses paid
(25,994)
(25,994)
Total cash flows
(4,265)
-
-
(4,265)
Other movements
(204)
(3)
(2)
(209)
NET (ASSETS) OR LIABILITIES AT 31 DECEMBER 2023(1)
197,789
1,603
16,275
215,667
(1) Including receivables and liabilities attributable to insurance contracts for a net asset of EUR 501 million at 31 December 2023, compared to a net asset of
EUR 504 million at 31 December 2022.
(2) Including an experience adjustment that amounted to +EUR 38 million for the year ended 2023 and to -EUR 33 million for the year ended 2022.
(3) Including finance income and expenses recognised directly in equity.
➤
EXPECTED AMORTISATION SCHEDULE FOR THE CONTRACTUAL SERVICE MARGIN
The schedule presents the amortisation of the contractual service margin to be recognised over time in profit or loss for protection contracts under the
general model and for saving contracts under the variable fee approach. For the latte r, i t considers the over performance of financial assets compared
to a risk-neutral measurement.
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Less than 5 years
6,734
6,793
5 to 10 years
5,183
4,709
More than 10 years
4,358
5,563
TOTAL
16,275
17,065
➤
DISCOUNT RATES AND ADJUSTMENT FOR NON-FINANCIAL RISK
The table below presents the average discount rates used in the measurement of savings and protection contracts for the main horizons of the euro curve.
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Savings
Protection
Savings
Protection
1 year
4.00%
3.36%
3.64%
2.67%
5 years
2.96%
2.32%
3.60%
2.92%
10 years
3.03%
2.39%
3.56%
3.07%
15 years
3.10%
2.47%
3.50%
3.07%
20 years
3.04%
2.41%
3.29%
2.85%
40 years
3.04%
3.10%
The difference between the Savings and Protection yield curves is equal
to that of their respective illiquidity premium.
■ For savings contracts measured under the variable fee approach,
the discounting rate consists of the risk-free rate, extrapolated over
the duration exceeding the period for which observable data are
available and adjusted for a liquidity premium determined based on
the underlying assets and reflecting the illiquidity of liabilities.
The risk adjustment is determined according to the cost of capital
method, including future payments and excluding massive lapses.
It is measured within a confidence range of 60-70%. This one
corresponds to a level of confidence of 65% at 31 December 2023
(64% at 31 December 2022).
■ For protection contracts measured under the general model and
for liabilities for incurred claims under the simplified approach, the
discounting rate consists of the risk-free rate adjusted to reflect the
illiquidity of liabilities.
The level of confidence used in determining the adjustment for non-
financial risks for the main countries is 70% (based on the quantile
method).
6.e RISK SENSITIVITY
Market risk: rate risk and asset value variation
Sensitivity of the valuation of financial assets and liabilities related to insurance contracts, on the profit or loss and on equity to a variation of +/-50bps
of interest rates and to a variation of +/-10% of the equity market and real estate market.
The table below presents impacts before tax:
In millions of euros, at
31 December 2023
Potential impact on income
Potential impact on equity
related to
investments(1)
related to
insurance
contracts Net impact investments
related to
related to
insurance
contracts Net impact
+50 bps variation of interest rate risk
(225)
206
(19)
(3,662)
3,330
(332)
-50 bps variation of interest rate risk
239
(220)
19
3,662
(3,330)
332
+10% variation of equity market
1,834
(1,760)
74
61
61
-10% variation of equity market
(1,834)
1,760
(74)
(61)
(61)
+10% variation of real estate market
1,062
(1,031)
31
37
37
-10% variation of real estate market
(1,062)
1,031
(31)
(37)
(37)
(1) Except financial assets representing unit-linked contracts.
The sensitivity was measured for most significant countries, i.e. France, Italy and Luxembourg.
For savings contracts measured under the variable fee approach, changes
in the value of underlying financial assets are largely offset by changes in
the value of liabilities, as contractual service margin is positive.
Potential impacts on profit and loss and equity are mainly due to non-
participating contracts and to assets backing insurance entities' equity.
Liquidity risk
The table below presents the schedule of the present value of future
cash flows for all insurance contracts excluding reinsurance.
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
1 year
7,094
5,966
1 to 2 years
6,274
5,358
2 to 3 years
6,179
5,263
3 to 4 years
6,074
5,165
4 to 5 years
5,598
4,756
5 to 10 years
19,511
21,237
More than 10 years
148,819
143,321
TOTAL
199,549
191,066
For participating contracts, amounts payable on demand correspond to surrender values of saving contracts.
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Amount payable
on demand
Carrying amount
Amount payable
on demand
Carrying amount
Participating contracts
197,551
212,297
197,330
203,833
Non-participating contracts
70
5,640
147
5,718
TOTAL
197,621
217,937
197,477
209,551
Underwriting risk by geographic area
The table below presents liabilities related to insurance contracts, excluding reinsurance contracts, by country of issue. They include the present value
of future cash flows, the contractual service margin and the risk adjustment for non-financial risk.
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
France(1)
158,470
148,401
Italy(1)
23,236
25,870
Luxembourg(1)
28,158
27,022
Other Europe(1)
1,492
1,454
Asia(1)
6,055
6,250
Latin America(2)
526
554
TOTAL
217,937
209,551
(1) Savings and protection.
(2) Protection only.
Sensitivity of underwriting risk measurement, on the profit or loss and on equity to a variation of 1% of mortality rate, 5% of lapse rate and 5% of
ultimate loss rate.
Sensitivities to non-financial risks are presented excluding reinsurance contracts and assuming that all other variables remain unchanged.
In millions of euros, at
31 December 2023
Potential impact
on income
Potential impact
on equity
Savings
Mortality rates (1% increase/decrease)
-
-
Lapse rates (5% increase/decrease)
-/+2
-
Protection
Ultimate loss rate (5% increase/decrease)
-/+94
-
Note 7
FINANCING AND GUARANTEE COMMITMENTS
7.a FINANCING COMMITMENTS GIVEN OR RECEIVED
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Financing commitments given
to credit institutions
3,650
4,235
to customers
365,821
382,746
Confirmed financing commitments
328,678
347,650
Other commitments given to customers
37,143
35,096
TOTAL FINANCING COMMITMENTS GIVEN
369,471
386,981
of which stage 1
353,147
343,339
of which stage 2
14,857
18,745
of which stage 3
889
898
of which insurance activities
578
1,477
of which financing commitments given associated with assets held for sale
22,522
Financing commitments received
from credit institutions
69,596
66,554
from customers
3,185
2,221
TOTAL FINANCING COMMITMENTS RECEIVED
72,781
68,775
of which financing commitments received associated with assets held for sale
-
9,272
7.b GUARANTEE COMMITMENTS GIVEN BY SIGNATURE
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Guarantee commitments given
to credit institutions
63,132
60,357
to customers
127,203
118,427
Property guarantees
2,403
2,285
Sureties provided to tax and other authorities, other sureties
66,791
65,294
Other guarantees
58,009
50,848
TOTAL GUARANTEE COMMITMENTS GIVEN
190,335
178,784
of which stage 1
177,315
165,549
of which stage 2
11,701
12,120
of which stage 3
769
820
of which insurance activities
550
295
The Group's annual contribution to the European Union's Single
Resolution Fund may be partly in the form of an irrevocable payment
commitment (IPC) guaranteed by a cash deposit of the same amount.
Where the resolution of an institution involves the fund, the fund may
call all or part of the IPC received.
The irrevocable payment commitment is qualified as contingent liabilities.
A provision is established if the probability of a commitment call by the
fund exceeds 50%. Since this probability is estimated to be below this
threshold, no provision was recognised by the Group at 31 December
2023.
These commitments amounted to EUR 1,261 million at 31 December 2023
(compared with EUR 969 million at 31 December 2022).
Cash provided as collateral is remunerated and recognised as a financial
asset at amortised cost.
7.c SECURITIES COMMITMENTS
In connection with the settlement date accounting for securities, commitments representing securities to be delivered or securities to be received are
the following:
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Securities to be delivered
23,159
17,325
Securities to be received
21,384
17,263
7.d OTHER GUARANTEE COMMITMENTS
➤
FINANCIAL INSTRUMENTS GIVEN AS COLLATERAL
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Financial instruments (negotiable securities and private receivables) lodged with central banks
and eligible for use at any time as collateral for refinancing transactions after haircut
87,881
132,938
Used as collateral with central banks
20,560
67,792
Available for refinancing transactions
67,321
65,146
Securities sold under repurchase agreements
519,731
371,552
Other financial and similar assets pledged as collateral for transactions with credit institutions,
financial customers or subscribers of covered bonds issued by the Group(1)
323,491
239,761
(1) Notably including "Société de Financement de l'Économie Française" and "Caisse de Refinancement de l'Habitat" financing.
The fair value of financial instruments given as collateral or transferred under repurchase agreements by the Group that the beneficiary is authorised
to sell or reuse as collateral amounted to EUR 726,703 million at 31 December 2023 (EUR 523,321 million at 31 December 2022).
➤
FINANCIAL INSTRUMENTS RECEIVED AS COLLATERAL
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Financial instruments received as collateral (excluding repurchase agreements)
350,947
326,198
of which instruments that the Group is authorised to sell and reuse as collateral
187,021
192,274
Securities received under repurchase agreements
467,822
336,799
The fair value of financial instruments received as collateral or under repurchase agreements that the Group effectively sold or reused as collateral
amounted to EUR 377,078 million at 31 December 2023 (compared with EUR 307,886 million at 31 December 2022).
Note 8
SALARIES AND EMPLOYEE BENEFITS
8.a SALARY AND EMPLOYEE BENEFIT EXPENSE
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Fixed and variable remuneration, incentive bonuses and profit-sharing
13,445
12,995
Employee benefit expense
3,856
3,429
Payroll taxes
474
453
TOTAL SALARY AND EMPLOYEE BENEFIT EXPENSE FOR BANKING ACTIVITIES (NOTE 3.f)
17,775
16,877
Salary and employee benefit expense of insurance activities (note 6.b)
778
728
TOTAL SALARY AND EMPLOYEE BENEFIT EXPENSE
18,553
17,605
8.b POST-EMPLOYMENT BENEFITS
IAS 19 distinguishes between two categories of plans, each handled
differently depending on the risk incurred by the entity. When the entity
is only committed to paying a fixed amount, stated as a percentage of the
beneficiary's annual salary, for example, to an external entity handling
payment of the benefits based on the assets available for each plan
membe r, i t is described as a defined-contribution plan. Conversely, when
the entity's obligation is to manage the financial assets funded through
the collection of contributions from employees and to bear the cost of
benefits itself or to guarantee the final amount subject to future events,
it is described as a defined-benefit plan. The same applies if the entity
entrusts management of the collection of premiums and payment of
benefits to a separate entity but retains the risk arising from management
of the assets and/or from future changes in the benefits.
Main Defined-contribution pension plans
for Group entities
The BNP Paribas Group has implemented over the past few years a wide
campaign of converting defined-benefit plans into defined-contribution
plans.
Thus, in France, the BNP Paribas Group pays contributions to mandatory
state and complementary pension schemes. BNP Paribas SA and certain
subsidiaries have set up a complementary defined-contribution pension
plan under a company-wide agreement. Under this plan, employees will
receive an annuity or a lump sum on retirement in addition to the pension
paid by mandatory schemes.
Since defined-benefit plans have been closed to new employees in most
countries outside France, they are offered the benefit of joining defined-
contribution pension plans.
In Italy, the plan introduced by BNL is funded by employer contributions
(4.2% of salaries) and employee contributions (2% of salaries). Employees
can also make additional voluntary contributions.
In the United Kingdom, the employer contributes 12% of salaries for
the majority of employees; employees can make additional voluntary
contributions.
In the US, the bank matches the voluntary contributions made by
employees, within certain limits.
The amount paid into defined-contribution post-employment plans for
the year ended 31 December 2023 was EUR 791 million, compared with
EUR 720 million for the year ended 31 December 2022 (including amount
paid by entities which are insurance companies).
The breakdown by major contributors is determined as follows:
Contribution amount
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
France
386
353
Italy
106
90
UK
62
64
Türkiye
39
26
Hong Kong
29
26
Luxembourg
30
28
USA
27
25
Others
112
108
TOTAL
791
720
Main defined-benefit pension plans for Group
entities and indemnities payable on retirement
Defined-benefit plans
In Belgium, BNP Paribas Fortis funds a defined-benefit plan, based on
final salary and number of years of service, for its management and
employees who joined the bank before its pension plans were harmonised
on 1 January 2002. Actuarial liabilities under this scheme are pre-funded
at 91% at 31 December 2023 (compared with 88% at 31 December 2022)
through insurance companies.
BNP Paribas Fortis senior managers joining before 1 January 2015 are
covered by a top-up pension plan, paying a lump sum based on the
number of years of service and final salary. This plan is pre-funded at
94% at 31 December 2023 (90% at 31 December 2022) through insurance
companies.
In Belgium, employees benefit from a defined-contribution scheme with
a legal obligation for the employer to guarantee a minimum return on
financial assets invested. Thus, a provision was recognised for these
schemes, as this guarantee is not entirely covered by the insurance
company.
In France, BNP Paribas pays a top-up banking industry pension arising
from rights acquired to 31 December 1993 by retired employees and
active employees in service at that date. At 31 December 2023, the
Group's residual obligations for these employees were recognised on
the balance sheet in full.
The defined-benefit plans previously granted to some Group senior
managers have all been closed to new employees and converted into top-
up type schemes. The amounts allocated to residual beneficiaries, subject
to their presence within the Group at retirement, were fixed when these
schemes were closed. At 31 December 2023, these pension plans were
funded at 264% through insurance companies (221% at 31 December
2022).
In the United Kingdom, defined-benefit pension plans (pension funds) still
exist but are closed to new employees. Under these plans, the defined
pension is generally based on final salary and number of years of service.
Pension schemes are managed by independent management bodies
(Trustees). At 31 December 2023, obligations for all UK entities were 118%
covered by financial assets, compared with 125% at 31 December 2022.
In Switzerland, liabilities relate to top-up pension plans based on the
principle of defined-contribution schemes with guaranteed returns,
paying an annuity under pre-defined terms. These schemes are managed
by a foundation. At 31 December 2023, obligations were 111% covered by
financial assets, compared with 121% at 31 December 2022.
In the United States, defined-benefit pension plans are based on annual
vesting rights to a lump sum comprising a pension expressed as a
percentage of annual salary and paying interest at a pre-defined rate.
These plans are closed to new entrants and have offered almost no new
vesting rights. At 31 December 2023, the obligation was 87% covered by
financial assets, (85% at 31 December 2022).
In Germany, liabilities are mainly related to defined-benefit pension
plans, closed to new employees. Under these plans, the defined pension
is generally based on the number of years of service and final salary.
They offer the payment of an annuity under pre-defined terms. At
31 December 2023, the obligation was 66% covered by financial assets,
(70% at 31 December 2022).
In Türkiye, the main pension plan replaces the national pension scheme
and should eventually be transferred to the Turkish State. This plan offers
guarantees exceeding the minimal legal requirements. At the end of
2023, obligations under this plan are fully funded by financial assets held
with an external foundation; these financial assets exceeding the related
obligations, this surplus is not recognised as an asset by the Group.
Other post-employment benefits
Group employees also receive various other contractual post-employment
benefits, such as indemnities payable on retirement, determined
according to minimal legal requirements (Labour Code, collective
agreements) or according to specific company-level agreements.
In France, the obligations for these benefits are funded through a contract
held with a third-party insure r. A t 31 December 2023, this obligation was
127% covered by financial assets, compared with 132% at 31 December
2022.
The law of 14 April 2023 changed the age and quarters criteria required
to settle pension rights. The specificities of this law have been taken into
account for the determination of the present value of the obligation under
IFRS, with a decrease impact of its value of EUR 22 million.
In other countries, the obligations of the Group related to other post-
employment benefits are mainly concentrated in Italy, where vested
rights up to 31 December 2006 were frozen.
Obligations under defined-benefit pension plans and indemnities payable on retirement
➤
ASSETS AND LIABILITIES RECOGNISED ON THE BALANCE SHEET
In millions of euros,
at 31 December 2023
Defined-benefit
obligation
arising from
wholly or
partially funded
Defined-benefit
arising from
plans unfunded plans
obligation Present value of
defined-benefit Fair value of
obligation plan assets ment rights(1)
Fair value of
reimburse-
Effect
of asset
ceiling obligation
Net
of which asset
recognised in
the balance
sheet for
defined-
benefit plans benefit plans
of which net
assets of
defined-
of which
fair value of
reimburse- defined-benefit
ment rights
of which
obligation
recognised in
the balance
sheet for
plans
Belgium
2,830
2,830
(152)
(2,502)
176
(2,502)
(2,502)
2,678
UK
1,158
1,158
(1,365)
(207)
(209)
(209)
2
Switzerland
1,123
1,123
(1,251)
130
2
2
France
856
52
908
(1,134)
(226)
(331)
(331)
105
USA
146
1
147
(127)
20
(4)
(4)
24
Türkiye
235
43
278
(258)
22
42
42
Italy
164
164
164
164
Germany
129
49
178
(118)
60
60
Others
334
47
381
(269)
(1)
1
112
(9)
(8)
(1)
121
TOTAL
6,811
356
7,167
(4,674)
(2,503)
153
143
(3,055)
(552)
(2,503)
3,198
In millions of euros,
at 31 December 2022
restated according
to IFRS 17 and 9
Defined-
benefit
obligation
arising from
wholly or
partially
funded plans
Defined-benefit
arising from
unfunded plans
obligation Present value of
defined-benefit Fair value of
obligation plan assets ment rights(1)
Fair value of
reimburse-
Effect
of asset
ceiling obligation
Net
of which asset
recognised in
the balance
sheet for
defined-
benefit plans benefit plans
of which net
assets of
defined-
of which
fair value of
reimburse- defined-benefit
ment rights
of which
obligation
recognised in
the balance
sheet for
plans
Belgium
2,738
2,738
(124)
(2,395)
219
(2,395)
(2,395)
2,614
UK
1,067
1,067
(1,334)
(267)
(267)
(267)
Switzerland
979
979
(1,185)
208
2
2
France
845
62
907
(1,157)
(250)
(346)
(346)
96
USA
467
64
531
(458)
73
(24)
(24)
97
Türkiye
139
63
202
(295)
157
64
64
Italy
182
182
182
182
Germany
93
45
138
(98)
40
(7)
(7)
47
Others
379
51
430
(313)
(2)
2
117
(13)
(11)
(2)
130
TOTAL
6,707
467
7,174
(4,964)
(2,397)
367
180
(3,052)
(655)
(2,397)
3,232
of which
continuing
activities
6,391
404
6,795
(4,635)
(2,397)
367
130
(3,030)
(633)
(2,397)
3,160
of which
discontinued
activities
316
63
379
(329)
-
-
50
(22)
(22)
-
72
(1) The reimbursement rights are principally found on the balance sheet of the Group's insurance subsidiaries and associated companies - notably AG
Insurance with respect to BNP Paribas Fortis' defined-benefit plan - to hedge their commitments to other Group entities that were transferred to them to
cover the post-employment benefits of certain employee categories.
➤
CHANGE IN THE PRESENT VALUE OF THE DEFINED-BENEFIT OBLIGATION INCLUDING DISCONTINUED ACTIVITIES
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
PRESENT VALUE OF DEFINED-BENEFIT OBLIGATION AT START OF PERIOD
7,174
9,060
Current service cost
181
215
Interest cost
236
100
Past service cost
(25)
(5)
Settlements
(15)
(11)
Actuarial (gains)/losses on change in demographic assumptions
(11)
10
Actuarial (gains)/losses on change in financial assumptions
203
(1,985)
Actuarial (gains)/losses on experience gaps
330
341
Actual employee contributions
24
23
Benefits paid directly by the employer
(87)
(101)
Benefits paid from assets/reimbursement rights
(453)
(489)
Exchange rate (gains)/losses on obligation
(41)
(25)
(Gains)/losses on obligation related to changes in the consolidation scope
(349)
41
PRESENT VALUE OF DEFINED-BENEFIT OBLIGATION AT END OF PERIOD
7,167
7,174
➤
CHANGE IN THE FAIR VALUE OF PLAN ASSETS AND REIMBURSEMENT RIGHTS INCLUDING DISCONTINUED
ACTIVITIES
In millions of euros
Plan assets
Reimbursement rights
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
FAIR VALUE OF ASSETS AT START OF PERIOD
4,964
6,082
2,397
2,932
Expected return on assets
169
99
84
13
Settlements
(14)
(21)
Actuarial gains/(losses) on assets
10
(938)
99
(548)
Actual employee contributions
14
13
10
10
Employer contributions
60
54
131
198
Benefits paid from assets
(234)
(257)
(219)
(232)
Exchange rate gains/(losses) on assets
(36)
(64)
Gains/(losses) on assets related to changes in the
consolidation scope
(259)
(4)
1
24
FAIR VALUE OF ASSETS AT END OF PERIOD
4,674
4,964
2,503
2,397
➤
COMPONENTS OF THE COST OF DEFINED-BENEFIT PLANS
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Service costs
155
220
Current service cost
181
215
Past service cost
(25)
(5)
Settlements
(1)
10
Net financial expense
1
6
Interest cost
236
100
Interest income on plan asset
18
18
Interest income on reimbursement rights
(169)
(99)
Expected return on asset ceiling
(84)
(13)
TOTAL RECOGNISED IN "SALARY AND EMPLOYEE BENEFIT EXPENSE"
156
226
of which continuing activities
156
222
of which discontinued activities
-
4
➤
OTHER ITEMS RECOGNISED DIRECTLY IN EQUITY
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Actuarial (losses)/gains on plan assets or reimbursement rights
109
(1,486)
Actuarial (losses)/gains of demographic assumptions on the present value of obligations
11
(10)
Actuarial (losses)/gains of financial assumptions on the present value of obligations
(203)
1,985
Experience (losses)/gains on obligations
(330)
(341)
Variation of the effect of assets limitation
216
(263)
TOTAL OF OTHER ITEMS RECOGNISED DIRECTLY IN EQUITY
(197)
(115)
of which continuing activities
(197)
(127)
of which discontinued activities
-
12
➤
MAIN ACTUARIAL ASSUMPTIONS USED TO CALCULATE OBLIGATIONS
In the Eurozone, United Kingdom and United States, the Group discounts its obligations using the yields of high quality corporate bonds, with a term
consistent with the duration of the obligations.
The ranges of rates used are as follows:
In %
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Discount rate
Compensation
increase rate(1)
Discount rate
Compensation
increase rate(1)
Belgium
3.00% / 3.60%
3.30% / 4.10%
1.90% / 3.80%
3.30% / 5.00%
UK
4.40% / 5.30%
2.00% / 3.40%
3.50% / 4.90%
2.00% / 3.30%
France
3.00% / 3.60%
2.90% / 3.10%
3.30% / 3.80%
2.10% / 3.65%
Switzerland
1.40% / 1.60%
1.80% / 2.00%
2.00% / 2.15%
1.75% / 2.00%
USA
4.70% / 5.30%
2.50%
4.90% / 5.00%
2.50%
Italy
3.00% / 3.60%
3.00% / 3.10%
1.90% / 3.60%
2.10% / 3.20%
Germany
3.20% / 3.70%
2.00% / 2.90%
2.30% / 3.80%
2.00% / 2.90%
Türkiye
23.10%
18.80%
10.60%
8.50%
(1) Including price increases (inflation)
Average discount rates weighted by obligation amounts are as follows:
■ In the Eurozone: 3.16% at 31 December 2023 (3.54% at 31 December 2022);
■ In the United Kingdom: 4.51% at 31 December 2023 (4.78% at 31 December 2022);
■ In Switzerland: 1.40% at 31 December 2023 (2.15% at 31 December 2022).
The impact of a 100 bps change in discount rates on the present value of post-employment benefit obligations is as follows:
Change in the present value of obligations
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Discount rate
-100bps
Discount rate
+100bps
Discount rate
-100bps
Discount rate
+100bps
Belgium
231
(168)
201
(175)
UK
170
(137)
187
(147)
France
88
(75)
92
(78)
Switzerland
148
(119)
133
(107)
USA
15
(13)
18
(15)
Italy
10
(9)
12
(11)
Germany
27
(21)
26
(20)
Türkiye
11
(9)
13
(10)
Inflation assumptions used for the valuations of the Group obligations are determined locally depending on the monetary area, except for the Eurozone
for which the assumption is determined centrally.
Average discount rates weighted by obligation amounts are as follows:
■ in the Eurozone: 2.27% at 31 December 2023 (2.43% at 31 December 2022);
■ in the United Kingdom: 2.94% at 31 December 2023 (3.03% at 31 December 2022);
■ in Switzerland: 1.25% at 31 December 2023 (1.25% at 31 December 2022).
The impact of a +100 bps increase in inflation rates on the present value of post-employment benefit obligations is as follows:
Change in the present value of obligations
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Inflation rate
+100bps
Inflation rate
+100bps
Belgium
133
148
UK
100
126
France
88
92
Switzerland
8
8
Italy
7
8
Germany
16
14
Türkiye
11
12
Variation effects of discount and inflation rates presented above are not cumulative.
➤
ACTUAL RATE OF RETURN ON PLAN ASSETS AND REIMBURSEMENT RIGHTS OVER THE PERIOD
In %
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Range of value
(reflecting the
existence of several
plans in the same
country)
Weighted average
rates
Range of value
(reflecting the
existence of several
plans in the same
country)
Weighted average
rates
Belgium
-0.20% / 13.20%
6.45%
-18.75% / 6.30%
-12.65%
UK
-10.50% / 5.40%
0.50%
-38.30% / 0%
-34.60%
France
2.60%
2.60%
2.60%
2.60%
Switzerland
1.70% / 2.50%
2.50%
-15.85% / 1%
0.50%
USA
1.65% / 5.45%
5.25%
-29.75% / -16.75%
-28.90%
Germany
-2.85% / 11.50%
9.30%
-26.15% / 1.30%
-11.20%
Türkiye
44.90%
44.90%
40.80%
40.80%
➤
BREAKDOWN OF PLAN ASSETS
In %
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Shares
Govern-
bonds
Non-Go-
mental vernmental
bonds estate
account Others
Real Deposit
Shares
Govern-
mental Non-Govern-
bonds mental bonds estate
Real Deposit
account Others
Belgium
8%
46%
19%
1%
2%
24%
8%
48%
20%
1%
0%
23%
UK
12%
62%
16%
0%
2%
8%
7%
65%
13%
0%
2%
13%
France(1)
8%
59%
18%
13%
2%
0%
8%
60%
18%
13%
1%
0%
Switzerland
29%
0%
26%
25%
4%
16%
32%
0%
23%
21%
3%
20%
USA
17%
24%
45%
0%
13%
1%
19%
18%
58%
0%
1%
4%
Germany
22%
52%
0%
0%
0%
26%
25%
64%
0%
0%
3%
9%
Türkiye
0%
68%
0%
6%
21%
5%
0%
59%
0%
3%
30%
7%
Others
9%
22%
12%
1%
2%
54%
10%
18%
12%
2%
2%
57%
GROUP
12%
43%
19%
7%
3%
16%
12%
44%
18%
6%
2%
18%
(1) In France, the breakdown of plan assets reflects the breakdown of the general fund of the insurance company through which the Group's obligations
are funded.
The Group introduced an asset management governance for assets
backing defined-benefit pension plan commitments, the main objectives
of which are the management and control of the risks in terms of
investment.
It sets out investment principles, in particula r, b y defining an
investment strategy for plan assets, based on financial objectives and
risk management, to specify the way in which plan assets have to be
managed, via financial management servicing contracts.
The investment strategy is based on an assets and liabilities management
analysis that should be realised at least every three years for plans with
assets in excess of EUR 100 million.
Post-employment healthcare benefits
The Group offers some healthcare benefit plans for retired employees,
mainly in Belgium.
The present value of post-employment healthcare benefit obligations
stood at EUR 78 million at 31 December 2023, compared with EUR
83 million at 31 December 2022.
8.c OTHER LONG-T ERM BENEFITS
BNP Paribas offers its employees various long-term benefits, mainly long-
service awards, the ability to save up paid annual leave in time savings
accounts, and certain guarantees protecting them in the event they
become incapacitated. The net provision amounted to EUR 462 million
at 31 December 2023 (EUR 453 million at 31 December 2022).
As part of the Group's variable compensation policy, annual deferred
compensation plans are set up for certain high-performing employees or
pursuant to special regulatory frameworks. Under these plans, payment
is deferred over time and is subject to the performance achieved by the
business lines, divisions and Group.
Since 2013, BNP Paribas has introduced a Group loyalty scheme with
a cash payment, at the end of a three-year to four-year vesting period,
which fluctuates according to the Group's intrinsic performance. The aim
of this loyalty scheme is to make different categories of managerial staff
partners in the Group's development and profitability objectives. These
personnels are representative of the Group's talent and the breadth of its
managerial framework, i.e. senior managers, managers in key positions,
line managers and experts, high-potential managers, high-performing
young executives with good career development prospects and key
contributors to the Group's results.
The amounts allocated under this plan are linked to changes in the
Group's operational performance over the duration of the plan (for 80%)
and to the achievement of the Group's corporate social responsibility
(CSR) targets (for 20%). These ten targets are in line with the four pillars
on which the Group's CSR policy is based. In addition, the final payment
is subject to continuous service within the Group between the grant date
and the payment date, provided that the Group's operating income and
pre-tax income for the year prior to payment are strictly positive. For
employees subject to special regulatory frameworks, this loyalty scheme
is adjusted in accordance with the CRD European Directive.
The net obligation related to deferred compensation plans and loyalty
schemes amounts to EUR 1,033 million at 31 December 2023 (EUR
1,017 million at 31 December 2022).
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Net provisions for other long-term benefits
1,495
1,470
Asset recognised in the balance sheet under the other long-term benefits
(76)
(76)
Obligation recognised in the balance sheet under the other long-term benefits
1,571
1,546
8.d TERMINATION BENEFITS
BNP Paribas has implemented a number of voluntary redundancy
plans and headcount adaptation plans for employees who meet certain
eligibility criteria. The obligations to eligible active employees under such
plans are provided for as soon as a bilateral agreement or a bilateral
agreement proposal for a particular plan is made.
In 2023, BNP Paribas Personal Finance subgroup implemented a
voluntary departure plan in France in respect of which a provision of
EUR 215 million was established.
In millions of euros, at
31 December 2023
31 December 2022
restated according
to IFRS 17 and 9
Provision for voluntary departure, early retirement plans, and headcount adaptation plans
482
270
8.e SHARE-BASED PAYMENTS
As part of the Group's variable remuneration policy, deferred annual
compensation plans offered to certain high-performing employees or set
up pursuant to special regulatory frameworks may entitle beneficiaries
to variable compensation settled in cash but linked to the share price,
payable over several years.
Variable compensation for employees, subject
to special regulatory frameworks
Since the publication of the Decree by the French Ministry of Finance on
13 December 2010, and following the provisions of the European Directive
CRD 4 of 26 July 2013, modified by the CRD 5 Directive of 20 May 2019,
transposed into the French law in the Monetary and Financial Code by the
Ordinance of 20 February 2014, and the Ordinance of 21 December 2020,
as well as the Decrees and Orders of 3 November 2014 and 22 December
2020 and the Delegated European Regulation of 25 March 2021, the
variable compensation plans apply to Group employees performing
activities that may have a material impact on the Group's risk profile.
Under these plans, payment is deferred over time and is contingent on
the performance achieved by the business lines, core businesses and
Group.
Sums will mostly be paid in cash linked to the increase or decrease in
the BNP Paribas share price.
Deferred variable compensation for other
Group employees
Sums due under the annual deferred compensation plans for high-
performing employees are partly paid in cash linked to the increase or
decrease in the BNP Paribas share price.
➤
EXPENSE OF SHARE-BASED PAYMENTS
Expense / (revenue)
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Prior deferred compensation plans
48
(116)
Deferred compensation plans for the year
541
614
TOTAL
589
498
Note 9
ADDITIONAL INFORMATION
9.a CHANGES IN SHARE CAPITAL AND EARNINGS PER SHARE
At 31 December 2023, the share capital of BNP Paribas SA amounted to EUR 2,294,954,818 and was divided into 1,147,447,409 shares. The nominal
value of each share is EUR 2 (compared to 1,234,331,646 at 31 December 2022).
Ordinary shares issued by BNP Paribas and held by the Group
Proprietary transactions
Trading transactions(1)
Total
Number
of shares
Carrying
amount
(in millions of euros)
Number
of shares
Carrying
amount
(in millions of euros)
Number
of shares
Carrying
amount
(in millions of euros)
Shares held at 31 December 2021
721,971
38
-
-
721,971
38
Net movements
159,670
8
159,670
8
Shares held at 31 December 2022
721,971
38
159,670
8
881,641
46
Acquisitions
86,854,237
5,000
86,854,237
5,000
Capital decrease
(86,854,237)
(5,000)
(86,854,237)
(5,000)
Net movements
64,888
5
64,888
5
Shares held at 31 December 2023
721,971
38
224,558
13
946,529
51
(1) T r ansactions realised in the framework of an activity of trading and arbitrage transactions on equity indices.
Throughout the year 2023, BNP Paribas SA bought back on the market
then cancelled 86,854,237 of its own shares in accordance with the
decision made by the Board of directors on 6 February 2023.
At 31 December 2023, the Group holds 946,529 BNP Paribas shares
representing an amount of EUR 51 million, which were deducted from
equity.
Undated super subordinated notes eligible
as Tier 1 regulatory capital
BNP Paribas SA has issued undated super subordinated notes which pay
a fixed, fixed adjustable or floating-rate coupon and are redeemable at
the end of a fixed period and thereafter at each coupon date or every
five years.
On 3 January 2022, BNP Paribas SA redeemed the July 2006 issue, for an
amount of EUR 150 million. These notes paid a 5.45% fixed-rate coupon.
On 12 January 2022, BNP Paribas SA issued undated super subordinated
notes for an amount of USD 1,250 million which pay a 4.625% fixed-rate
coupon. These notes could be redeemed at the end of a period of 5 years.
If the notes are not redeemed in 2027, a US 5-year Constant Maturity
Treasury rate coupon will be paid half-yearly. This issue is eligible to
Additional Tier 1 capital.
On 19 January 2022, BNP Paribas SA redeemed the June 2007 issue, for
an amount of USD 1,100 million. These notes paid a 7.195% fixed-rate
coupon.
On 14 March 2022, BNP Paribas SA redeemed the December 2016 issue,
for an amount of USD 750 million. These notes paid a 6.75% fixed-rate
coupon.
On 17 June 2022, BNP Paribas SA redeemed the June 2015 issue, for an
amount of EUR 750 million, at the first call date. These notes paid a
6.125% fixed-rate coupon.
On 16 August 2022, BNP Paribas SA issued undated super subordinated
notes for an amount of USD 2,000 million which pay a 7.75% fixed-rate
coupon. These notes could be redeemed at the end of a period of 7 years.
If the notes are not redeemed in 2029, a US 5-year Constant Maturity
Treasury rate coupon will be paid half-yearly. This issue is eligible to
Additional Tier 1 capital.
On 6 September 2022, BNP Paribas SA issued undated super subordinated
notes for an amount of EUR 1,000 million which pay a 6.875% fixed-
rate coupon. These notes could be redeemed at the end of a period of
7 years and 3 months. If the notes are not redeemed in 2029, a mid-swap
rate EUR 5-year coupon will be paid half-yearly. This issue is eligible to
Additional Tier 1 capital.
On 17 November 2022, BNP Paribas SA issued undated super subordinated
notes for an amount of USD 1,000 million which pay a 9.25% fixed-rate
coupon. These notes could be redeemed at the end of a period of 5 years.
If the notes are not redeemed in 2027, a US 5-year Constant Maturity
Treasury rate coupon will be paid half-yearly. This issue is eligible to
Additional Tier 1 capital.
On 11 January 2023, BNP Paribas SA issued undated super subordinated
notes for an amount of EUR 1,250 million which pay a 7.375% fixed-
rate coupon. These notes could be redeemed at the end of a period of
7 years. If the notes are not redeemed in 2030, a mid-swap rate EUR
5-year coupon will be paid half-yearly. This issue is eligible to Additional
Tier 1 capital.
On 28 February 2023, BNP Paribas SA issued undated super subordinated
notes for an amount of SGD 600 million which pay a 5.9% fixed-rate
coupon. These notes could be redeemed at the end of a period of 5 years.
If the notes are not redeemed in 2028, a SGD SORA 5-year rate coupon
will be paid half-yearly. This issue is eligible to Additional Tier 1 capital.
The following table summarises the characteristics of these various issues:
Date of issue
Amount
Currency (in millions of currency units)
Coupon
payment date
before 1st call date
Rate and term
Rate after 1st call date
August 2015
USD
1,500
semi-annual
7.375%
10 years
USD 5-year swap +5.150%
November 2017
USD
750
semi-annual
5.125%
10 years
USD 5-year swap +2.838%
August 2018
USD
750
semi-annual
7.000%
10 years
USD 5-year swap +3.980%
March 2019
USD
1,500
semi-annual
6.625%
5 years
USD 5-year swap +4.149%
July 2019
AUD
300
semi-annual
4.500%
5.5 years
AUD 5-year swap +3.372%
February 2020
USD
1,750
semi-annual
4.500%
10 years
US 5-year CMT +2.944%
February 2021
USD
1,250
semi-annual
4.625%
10 years
US 5-year CMT +3.340%
January 2022
USD
1,250
semi-annual
4.625%
5 years
US 5-year CMT +3.196%
August 2022
USD
2,000
semi-annual
7.750%
7 years
US 5-year CMT +4.899%
September 2022
EUR
1,000
semi-annual
6.875%
7.25 years
EUR 5-year Mid-swap +4.645%
November 2022
USD
1,000
semi-annual
9.250%
5 years
US 5-year CMT +4.969%
January 2023
EUR
1,250
semi-annual
7.375%
7 years
EUR 5-year Mid-swap +4.631%
February 2023
SGD
600
semi-annual
5.900%
5 years
SGD SORA 5-year +2.674%
TOTAL EURO-EQUIVALENT
HISTORICAL VALUE AT
31 DECEMBER 2023
13,472(1)
(1) Net of shares held in treasury by Group entities.
BNP Paribas has the option of not paying interest due on these undated
super subordinated notes. Unpaid interest is not carried forward.
For notes issued before 2015, the absence of coupon payment is
conditional on the absence of dividend payment on BNP Paribas SA
ordinary shares or on undated super subordinated note equivalents
during the previous yea r. I nterest due is payable once dividend payment
on BNP Paribas SA ordinary shares resumes.
The contracts relating to these undated super subordinated notes contain
a loss absorption clause. Under the terms of this clause, in the event of
insufficient regulatory capital, the nominal value of the notes may be
reduced in order to serve as a new basis for the calculation of the related
coupons until the capital deficiency is made up and the nominal value of
the notes is increased to its original amount.
The proceeds from these issues are recorded in equity under "Capital
and retained earnings". In accordance with IAS 21, issues denominated
in foreign currencies are recognised at their historical value based on
their translation into euros at the issue date. Interest on the instruments
is treated in the same way as dividends.
At 31 December 2023, the BNP Paribas Group held EUR 12 million
of undated super subordinated notes which were deducted from
shareholders' equity.
Earnings per share
Basic earnings per share are calculated by dividing the net income for the
period attributable to holders of ordinary shares by the weighted average
number of ordinary shares outstanding during the period. The net income
attributable to ordinary shareholders is determined by deducting the net
income attributable to holders of preferred shares.
Diluted earnings per share correspond to the net income for the period
attributable to holders of ordinary shares, divided by the weighted
average number of shares outstanding as adjusted for the maximum
effect of the conversion of dilutive equity instruments into ordinary
shares. In-the-money stock subscription options are taken into account
in the diluted earnings per share calculation, as are performance shares
granted under the Global Share-Based Incentive Plan. Conversion of these
instruments would have no effect on the net income figure used in this
calculation. All stock option and performance share plans are expired.
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according
to IFRS 17 and 9
Net profit used to calculate basic and diluted earnings per ordinary share
(in millions of euros)(1)
10,298
9,273
Weighted average number of ordinary shares outstanding during the year
1,200,367,337
1,232,991,607
Effect of potentially dilutive ordinary shares
-
-
Weighted average number of ordinary shares used to calculate diluted earnings per share
1,200,367,337
1,232,991,607
Basic earnings per share (in euros)
8.58
7.52
of which continuing activities (in euros)
6.12
6.96
of which discontinued activities (in euros)
2.46
0.56
Diluted earnings per share (in euros)
8.58
7.52
of which continuing activities (in euros)
6.12
6.96
of which discontinued activities (in euros)
2.46
0.56
(1) The net profit used to calculate basic and diluted earnings per share is the net profit attributable to equity shareholders, adjusted for the remuneration
on the undated super subordinated notes issued by BNP Paribas SA (treated as preferred share equivalents), which for accounting purposes is handled as
dividends, as well as the related foreign exchange gain or loss impact recognised directly in shareholders' equity in case of repurchase.
The Board of directors will propose to the Annual General Meeting on
14 May 2024, a dividend per share of EUR 4.60 out of the 2023 net income
(against EUR 3.90 out of the 2022 net income).
The proposed distribution amounted to EUR 5,274 million, against
EUR 4,744 million paid in 2023.
This distribution is raised to 60% of the 2023 net income with a share
buyback programme of EUR 1,055 million, initiated on 4 March 2024,
after having received the authorisation from the European Central Bank.
9.b MINORITY INTERESTS
In millions of euros
Capital and
retained
earnings
Changes in assets
and liabilities
recognised recognised
directly in equity
that will not be
reclassified to
profit or loss
Changes in assets
and liabilities
directly in equity
that may be
reclassified to
profit or loss
Minority interests
Balance at 31 December 2021
4,712
15
(106)
4,621
Impacts of IAS 29 1st application in Türkiye
(14)
62
48
Impacts of the transition to IFRS 17
(9)
21
12
Impacts of the transition to IFRS 9
17
(26)
(9)
Balance at 1 January 2022
4,706
15
(49)
4,672
Appropriation of net income for 2021
(133)
(133)
Increases in capital and issues
34
34
Impact of internal transactions on minority shareholders
2
2
Movements in consolidation scope impacting minority
shareholders
(136)
(136)
Change in commitments to repurchase minority
shareholders' interests
(157)
(157)
Other movements
(2)
(2)
Changes in assets and liabilities recognised directly in equity
6
87
93
Net income for 2022
400
400
Balance at 31 December 2022
4,714
21
38
4,773
Appropriation of net income for 2022
(179)
(179)
Increases in capital and issues
316
316
Share-based payment plans
1
1
Remuneration of undated super subordinated notes
(3)
(3)
Impact of internal transactions on minority shareholders
21
21
Movements in consolidation scope impacting minority
shareholders
(90)
(90)
Acquisitions of additional interests or partial sales of interests
(12)
(12)
Change in commitments to repurchase minority
shareholders' interests
(225)
(225)
Other movements
-
Changes in assets and liabilities recognised directly in equity
(5)
97
92
Net income for 2023
431
431
Balance at 31 December 2023
4,974
16
135
5,125
➤
MAIN MINORITY INTERESTS
The assessment of the material nature of minority interests is based on the contribution of the relevant subsidiaries to the Group balance sheet (before
elimination of intra-group balances and transactions) and to the Group profit and loss account.
In millions of euros
31 December
2023
Year to 31 Dec. 2023
Total assets
before
elimination of
intra-group
transactions Revenues
Net
Net income
and changes
in assets and
liabilities
recognised shareholders'
income directly in equity
Minority attributable
interest (%)
Net income
to minority
interests
Net income
and changes
in assets and
liabilities
recognised
directly in equity
- attributable
to minority
interests shareholders
Dividends paid
to minority
Contribution of the entities
belonging to the BGL
BNP Paribas Group
97,504
1,922
674
766
34%
230
260
137
Other minority interests
201
263
45
TOTAL
431
523
182
In millions of euros
31 December
2022
restated
according to
IFRS 17 and 9
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Total assets
before
elimination of
intra-group
transactions Revenues
Net
Net income
and changes
in assets and
liabilities
recognised shareholders'
income directly in equity
Minority attributable
interest (%)
Net income
to minority
interests
Net income
and changes
in assets and
liabilities
recognised
directly in equity
- attributable
to minority
interests shareholders
Dividends paid
to minority
Contribution of the entities
belonging to the BGL
BNP Paribas Group
95,172
1,769
587
340
34%
189
128
81
Other minority interests
211
365
52
TOTAL
400
493
133
There are no particular contractual restrictions on the assets of BGL BNP Paribas related to the presence of the minority shareholde r.
➤
INTERNAL RESTRUCTURING THAT LED TO A CHANGE IN MINORITY SHAREHOLDERS' INTEREST IN THE EQUITY OF
SUBSIDIARIES
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Attributable to
shareholders Minority interests
Attributable to
shareholders Minority interests
TEB Finansman
Internal sale from BNPP Personal Finance to TEB Holding,
raising the Group interest rate to 72.5%.
(22)
22
Others
1
(1)
1
2
TOTAL
(21)
21
1
2
➤
ACQUISITIONS OF ADDITIONAL INTERESTS AND PARTIAL SALES OF INTERESTS LEADING TO CHANGES IN MINORITY
INTERESTS IN THE EQUITY OF SUBSIDIARIES
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Attributable to
shareholders
Minority
interests
Attributable to
shareholders
Minority
interests
Artigiancassa Spa
Additional acquisition of 26.14% of the total share, increasing
the Group's share to 100%
5
(9)
Dynamic Credit Group
Additional acquisition of 25% of the total share, increasing
the Group's share to 73.65%
(3)
(4)
Other
(1)
1
TOTAL
1
(12)
-
-
Commitments to repurchase minority
shareholders' interests
In connection with the acquisition of certain entities, the Group granted
minority shareholders put options on their holdings.
The total value of these commitments, which are recorded as a reduction
in shareholders' equity, amounted to EUR 510 million at 31 December
2023, compared with EUR 361 million at 31 December 2022.
9.c LEGAL PROCEEDINGS AND ARBITRATION
BNP Paribas (the "Bank") is party as a defendant in various claims,
disputes and legal proceedings (including investigations by judicial or
supervisory authorities) in a number of jurisdictions arising in the ordinary
course of its business, including inter alia in connection with its activities
as market counterparty, lende r, e mploye r, i nvestor and taxpaye r.
The related risks have been assessed by the Bank and are subject,
where appropriate, to provisions disclosed in note 5.n Provisions for
contingencies and charge; a provision is recognised when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation arising from a past event and a reliable
estimate can be made of the amount of the obligation.
The main contingent liabilities related to pending legal, governmental,
or arbitral proceedings as of 31 Decembe r, 2 023 are described below.
The Bank currently considers that none of these proceedings is likely to
have a material adverse effect on its financial position or profitability;
howeve r, t he outcome of legal or governmental proceedings is by
definition unpredictable.
The Bank and certain of its subsidiaries are defendants in several actions
pending before the United States Bankruptcy Court for the Southern
District of New York brought by the Trustee appointed for the liquidation
of Bernard L. Madoff Investment Securities LLC ("BLMIS"). These actions,
known generally as "clawback claims", are similar to those brought by the
BLMIS Trustee under the U.S. Bankruptcy Code and New York state law
against numerous institutions, and seek recovery of amounts allegedly
received by BNP Paribas entities from BLMIS or indirectly through BLMIS-
related "feeder funds" in which BNP Paribas entities held interests.
As a result of certain decisions of the Bankruptcy Court and the United
States District Court between 2016 and 2018, the majority of the BLMIS
Trustee's actions were either dismissed or substantially narrowed.
Howeve r, t hose decisions were either reversed or effectively overruled
by subsequent decisions of the United States Court of Appeals for the
Second Circuit issued on 25 February 2019 and 30 August 2021. As a
result, the BLMIS Trustee refiled certain of these actions and, as of
end May 2023, has asserted aggregate claims of approximately USD
1.2 billion. BNP Paribas has substantial and credible defenses to these
actions and is defending against them vigorously.
Litigation was brought in Belgium by minority shareholders of the
previous Fortis Group against the Société fédérale de Participations et
d'Investissement, Ageas and BNP Paribas seeking (amongst other things)
damages from BNP Paribas as restitution for part of the BNP Paribas
Fortis shares that were contributed to BNP Paribas in 2009, on the ground
that the transfer of these shares was null and void. On 29 April 2016,
the Brussels Commercial court decided to stay the proceedings until
the resolution of the pending Fortis criminal proceeding in Belgium. The
criminal proceeding, in which the Public Prosecutor had requested a
dismissal, is definitively closed, as the Council Chamber of the Brussels
Court of first instance issued on 4 September 2020 a ruling (which since
became final) that the charges were time-barred. Certain minority
shareholders are continuing the civil proceedings against BNP Paribas
and the Société fédérale de Participations et d'Investissement before
the Brussels Commercial court; BNP Paribas continues to defend itself
vigorously against the allegations of these shareholders.
On 26 February 2020, the Paris Criminal Court found BNP Paribas Personal
Finance guilty of misleading commercial practice and concealment
of this practice. BNP Paribas Personal Finance was ordered to pay a
fine of EUR 187,500 and damages and legal fees to the civil plaintiffs.
On 28 November 2023, the Court of Appeal of Paris upheld the Paris
Criminal Court's decision relating to misleading commercial practice and
the concealment of those practices. As for the damages owed to the civil
plaintiffs, though the Court of Appeal of Paris adjusted the calculation
methodology, the majority of the damages had already been paid by
provisional enforcement of the Paris Criminal Court's judgment. An
agreement was also entered into with the "Consommation Logement
Cadre de Vie" association to settle the case with customers wishing to
do so.
Like many other financial institutions in the banking, investment,
mutual funds and brokerage sectors, the Bank has received or may
receive requests for information from, or be subject to investigations by
supervisory, governmental or self-regulatory agencies. The Bank responds
to such requests and cooperates with the relevant authorities and
regulators and seeks to address and remedy any issues that may arise.
In 2023, BNP Paribas premises (along with those of other financial
institutions) were searched by the French financial prosecutor's office;
BNP Paribas was informed that the office had opened a preliminary
investigation relating to French securities transactions.
There are no other legal, governmental or arbitral proceedings (including
any such proceedings which are pending or threatened) that could have,
or during the last twelve months have had, significant effects on the
Bank's financial condition or profitability.
9.d BUSINESS COMBINATIONS AND LOSS OF
CONTROL OR SIGNIFICANT INFLUENCE
Operation of 2023
Partnership with Stellantis
On 3 April 2023, BNP Paribas Personal Finance became the exclusive
partner of Stellantis captive company in its financing activities across
three strategic markets: Germany, Austria and the United Kingdom.
This operation involved the purchase of three entities in these three
countries, in conjunction with the sale of activities to various Stellantis
joint ventures in France, Italy and Spain.
This restructuring increased the Group's balance sheet by EUR 8 billion, in
particular in financial assets at amortised cost, and led to the recognition
of a net gain on disposal of EUR 54 million and of a goodwill of EUR
143 million.
Operations of 2022
bpost bank
On 3 January 2022, BNP Paribas Fortis purchased the residual 50% stake
in bpost bank.
The Group BNP Paribas took therefore exclusive control of this entity and
fully consolidated it from the first quarter of 2022.
Consequently, this operation increased the Group's balance sheet by
EUR 12 billion at the acquisition date, in particular EUR 11 billion in
financial assets at amortised cost and led to the recognition of badwill
of EUR 245 million in the profit and loss account.
Axepta SpA
On 4 January 2022, Banca Nazionale del Lavoro sold 80% of its stake of
Wordline Merchant Services Italia (ex-Axepta Spa).
The Group BNP Paribas lost exclusive control of this entity but kept a
significant influence.
The disposal led to the recognition of a result of EUR 204 million on the
line "Net gain on non-current assets".
The residual stake of 20% was consolidated using the equity method for
its remeasured value, including goodwill of EUR 41 million.
Floa
On 31 January 2022, BNP Paribas purchased 100% of Floa.
The Group BNP Paribas took exclusive control of this entity and fully
consolidated it from the first quarter of 2022.
The Group's balance sheet increased by EUR 2 billion at the acquisition
date, in particular in financial assets at amortised cost.
The goodwill related to this operation was EUR 122 million.
UkrSibbank
In the context of the conflict in Ukraine, the Group reassessed the nature
of control over its subsidiary UkrSibbank and concluded to the loss
of exclusive control, and the maintain of a significant influence. This
situation led the Group to consolidate the entity using the equity method
from 1 March 2022.
The loss of exclusive control involved the recognition of a loss on disposal
of -EUR 159 million and the reclassification to the profit and loss account
of cumulated changes in assets and liabilities for exchange differences
of -EUR 274 million, in "Net gain on non-current assets".
The Group's balance sheet decreased by EUR 2 billion at the date of loss
of exclusive control, in particular in financial assets at amortised cost.
Terberg Leasing Group BV
On 30 November 2022, Arval Service Lease purchased 100% of Terberg
Leasing Group BV.
The Group BNP Paribas took exclusive control of these entities and fully
consolidated them from the last quarter of 2022.
The Group's balance sheet increased by EUR 1 billion at the acquisition
date, in particular in tangible assets.
The goodwill related to this operation was EUR 92 million.
9.e DISCONTINUED ACTIVITIES
On 18 December 2021, BNP Paribas concluded an agreement with BMO
Financial Group for the sale of 100% of its retail and commercial banking
activities in the United States, operated by the BancWest cash-generating
unit, for a total consideration of USD 16.3 billion in cash.
The transaction was closed on 1 February 2023 following receipt of all
regulatory approvals by BMO Financial Group.
The group of assets covered by the agreement comprises most of the
entities of the homogeneous BancWest set (see reference D2 in note 9.k
Scope of consolidation).
As required by IFRS 5 related to groups of assets and liabilities held
for sale, the Group's consolidated financial statements are adapted to
present BancWest separately since December 2021:
■ the assets are reclassified on a separate line of the balance sheet
"A ssets held for sale";
■ the liabilities are also reclassified in a separate line "Liabilities
associated with assets held for sale";
■ amounts accounted for in equity for the revaluation of assets and
liabilities are presented separately in the statement of net income
and changes in assets and liabilities recognised directly in equity;
■ revenues and expenses are reclassified in a separate line "Net income
from discontinued activities" in the profit and loss statement. This
income includes revenues and expenses from internal transactions
with BancWest, provided that, following the sale, the Group will no
longer receive these revenues or incur these expenses;
■ the net change in cash and cash equivalents is isolated in the cash
flow statement.
The disposal realised on 1 February 2023 resulted in EUR 87 billion
decrease in "A ssets held for sale".
The net capital gain on the disposal amounted to EUR 2.9 billion.
9.f 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 2023, none of the BNP Paribas Group entities were
subject to significant 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
42 billion at 31 December 2023 (EUR 37 billion at 31 December 2022).
Significant restrictions related to the Group's
ability to use assets pledged as collateral or
under repurchase agreements
The financial instruments pledged by the BNP Paribas Group as collateral
or under repurchase agreements are presented in notes 5.p and 7.d.
Significant restrictions related to liquidity
reserves
Significant restrictions related to liquidity reserves correspond to the
mandatory deposits placed with central banks presented in chapter 5 of
the Universal registration document under Liquidity risk.
Assets representative of unit-linked insurance
contracts
Assets representative of unit-linked insurance contracts designated as
at fair value through profit or loss, which amountes to EUR 95.8 billion
at 31 December 2023 (compared with EUR 88.5 billion at 31 December
2022 restated according to IFRS 17 and 9), are held for the benefit of the
holders of these contracts.
9.g STRUCTURED ENTITIES
The BNP Paribas Group is engaged in transactions with sponsored
structured entities mainly through its activities of securitisation of
financial assets - as either originator or sponso r, f und management and
specialised asset financing.
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 and Matchpoint fund securitisation transactions
managed by the BNP Paribas Group on behalf of its customers. Details
on how these are financed and the Group's risk exposure are presented
in chapter 5 of the Universal registration document under Securitisation
as sponsor on behalf of clients/Short-term refinancing.
Proprietary securitisation: proprietary securitisation positions originated
and held by the BNP Paribas Group are detailed in chapter 5 of the
Universal 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 manage r, i nvesto r, c ustodian
or guaranto r. T hese funds are consolidated when the Group is both the
manager and a significant 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 financing solutions for their assets,
either directly or through consolidated ABCP conduits. Each vehicle
finances 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 financing, which is guaranteed by the asset held by the
structured entity.
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.
The Group's assets and liabilities related to the interests held in sponsored structured entities are as follows:
In millions of euros, at 31 December 2023
Securitisation
Funds
Financing
Asset
Others
Total
INTERESTS ON THE GROUP BALANCE SHEET
ASSETS
Financial instruments at fair value through profit or loss
1
1,374
1
480
1,856
Derivatives used for hedging purposes
7
1,005
9
16
1,037
Financial instruments at fair value through equity
105
105
Financial assets at amortised cost
23,623
262
1,992
37
25,914
Other assets
84
1
85
Financial investments and other assets related to
insurance activities
41,406
41,406
TOTAL ASSETS
23,736
44,131
2,002
534
70,403
LIABILITIES
Financial instruments at fair value through profit or loss
528
41
438
1,007
Derivatives used for hedging purposes
Financial liabilities at amortised cost
116
13,223
242
299
13,880
Other liabilities
2
251
57
310
TOTAL LIABILITIES
118
14,002
340
737
15,197
MAXIMUM EXPOSURE TO LOSS
34,922
44,657
3,097
1,517
84,193
SIZE OF STRUCTURED ENTITIES(1)
199,055
344,598
6,611
4,362
554,626
In millions of euros, at 31 December 2022
restated according to IFRS 17 and 9
Securitisation
Funds
Financing
Asset
Others
Total
INTERESTS ON THE GROUP BALANCE SHEET
ASSETS
Financial instruments at fair value through profit or loss
7
1,468
449
1,924
Derivatives used for hedging purposes
9
1,067
13
19
1,108
Financial instruments at fair value through equity
147
147
Financial assets at amortised cost
21,058
278
2,150
228
23,714
Other assets
2
110
26
138
Financial investments and other assets related to
insurance activities
34,933
34,933
TOTAL ASSETS
21,223
37,856
2,189
696
61,964
LIABILITIES
Financial instruments at fair value through profit or loss
14
597
53
230
894
Derivatives used for hedging purposes
Financial liabilities at amortised cost
553
10,907
181
27
11,668
Other liabilities
4
296
117
417
TOTAL LIABILITIES
571
11,800
351
257
12,979
MAXIMUM EXPOSURE TO LOSS
29,679
38,505
3,527
753
72,464
SIZE OF STRUCTURED ENTITIES(1)
163,455
308,773
5,755
4,365
482,348
(1) The size of sponsored structured entities equals the total assets of the structured entity for securitisation vehicles, the net asset value for funds
(excluding management mandates) and the structured entity's total assets or the amount of the BNP Paribas Group's commitment for asset financing
and other structures.
The BNP Paribas Group's maximum exposure to losses on sponsored
structured entities is the carrying amount of the assets, excluding, for
financial assets at fair value through equity, changes in value taken
directly to equity, as well as the nominal amount of the financing
commitments and guarantee commitments given and the notional
amount of credit default swaps (CDS) sold.
Information relative to interests in non-
sponsored structured entities
The main interests held by the BNP Paribas Group when it acts solely
as an investor in non-sponsored structured entities are detailed below:
■ units in funds that are not managed by the Group, which are held by
the Insurance business line: as part of the asset allocation strategy
corresponding to investments related to the premiums for unit-
linked contracts or for the general fund, the Insurance business line
subscribes to units of structured entities. These short- or medium-term
investments are held for their financial performance and meet the
risk diversification criteria inherent to the business. They amounted
to EUR 26 billion at 31 December 2023 (EUR 27 billion at 31 December
2022). Changes in value and the majority of the risks associated with
these investments are borne by policyholders in the case of assets
representative of unit-linked contracts, and by the insurer in the case
of assets representative of the general fund;
■ other investments in funds not managed by the Group: as part of its
trading business, the BNP Paribas Group invests in structured entities
without any involvement in either managing or structuring these
entities (investments in mutual funds, securities funds or alternative
funds), particularly as economic hedge for structured products sold to
customers. The Group also invests in minority holdings in investment
funds, in support of companies, as part of its venture capital business.
These investments amounted to EUR 12 billion at 31 December 2023
(8 billion at 31 December 2022);
■ investments in securitisation vehicles: the breakdown of the Group's
exposure and the nature of the securities held are presented in
chapter 5 of the Universal registration document in the section
Securitisation as investor.
Besides, in the framework of its asset financing activity, the BNP Paribas
Group provides financing to structured entities that are established by
and for its clients and whose purpose is to acquire assets (aircraft, ships,
etc.) intended for lease to those same clients. These financings amount to
EUR 6 billion at 31 December 2023 (EUR 4 billion at 31 December 2022).
9.h COMPENSATION AND BENEFITS
AWARDED TO THE GROUP'S CORPORATE
OFFICERS
The Group's corporate officers, their spouse and their dependent children
are considered related parties.
The remuneration and benefits policy relating to the Group's corporate
officers, as well as the detailed information on an individual basis, are
presented in chapter 2 Corporate governance of the Universal registration
document.
➤
REMUNERATION AND BENEFITS AWARDED TO THE GROUP'S CORPORATE OFFICERS AND TO DIRECTORS
REPRESENTING THE EMPLOYEES
In euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
Gross remuneration
Gross remuneration paid during the year including benefits in kind
9,319,675
9,220,047
Remuneration linked to the term of directorship (paid to the trade unions)
428,648
415,328
Welfare benefits: premiums paid by BNP Paribas during the year
26,788
26,494
Post-employment benefits
1,141,635
1,123,483
Share-based payments: conditional long-term incentive plan (LTIP) - fair value at grant date(1)
1,404,857
1,748,965
(1) Valuation according to the method described in note 8.e.
At 31 December 2023, no corporate officer is eligible for a contingent
collective defined-benefit top-up pension plan.
Remuneration linked to the term of
directorship paid to members of the Board
of directors
Remuneration linked to the term of directorship paid to all members of
the Board of directors in 2023 amounts to EUR 1,540,000, unchanged
compared to 2022. The amount paid in 2023 to members other than
corporate officers was EUR 1,410,484 compared with EUR 1,413,560 in
2022.
Loans, advances and guarantees granted
to the Group's corporate officers
At 31 December 2023, the total outstanding loans granted directly
or indirectly to the Group's corporate officers and their spouse and
dependent children amounted to EUR 5,770,986 (EUR 5,179,096 at
31 December 2022). These loans representing normal transactions were
carried out on an arm's length basis.
9.i OTHER RELATED PARTIES
Other related parties of the BNP Paribas Group comprise consolidated
companies (including entities consolidated under the equity method)
and entities managing post-employment benefit plans offered to Group
employees (except for multi-employer and multi-industry schemes).
Transactions between the BNP Paribas Group and related parties are
carried out on an arm's length basis.
Relations between consolidated companies
A list of companies consolidated by the BNP Paribas Group is provided in
note 9.k Scope of consolidation. T ransactions and outstanding balances
between fully-consolidated entities are eliminated. The tables below
show transactions with entities accounted for under the equity method.
➤
OUTSTANDING BALANCES OF RELATED-PARTY TRANSACTIONS
In millions of euros, at
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Joint ventures
Associates
Joint ventures
Associates
ASSETS
On demand accounts
5
4
Loans
3,510
88
3,436
91
Securities
356
440
Other assets
1
52
3
72
Financial investments and other assets related to
insurance activities
3
1
TOTAL ASSETS
3,867
148
3,880
167
LIABILITIES
On demand accounts
337
1,118
166
1,243
Other borrowings
46
588
73
826
Other liabilities
4
18
2
30
Liabilities related to insurance contracts
195
1
190
TOTAL LIABILITIES
387
1,919
242
2,289
FINANCING COMMITMENTS AND GUARANTEE COMMITMENTS
Financing commitments given
19
538
24
143
Guarantee commitments given
7
111
65
120
TOTAL FINANCING AND GUARANTEE COMMITMENTS
26
649
89
263
The Group also carries out trading transactions with related parties involving derivatives (swaps, options and forwards, etc.) and financial instruments
purchased or underwritten and issued by them (equities, bonds, etc.).
➤
RELATED-PARTY PROFIT AND LOSS ITEMS
In millions of euros
Year to 31 Dec. 2023
Year to 31 Dec. 2022
restated according to IFRS 17 and 9
Joint ventures
Associates
Joint ventures
Associates
Interest income
155
9
43
9
Interest expense
(13)
(75)
(2)
(15)
Commission income
1
284
1
288
Commission expense
(1)
(78)
(1)
(78)
Services provided
2
29
Services received
Lease income
Net income from insurance activities
8
(2)
(2)
TOTAL
142
150
39
231
Group entities involved in certain
post-employment benefit plans offered
to group employees
In Belgium, BNP Paribas Fortis funds a number of pension schemes
managed by AG Insurance in which the BNP Paribas Group has a 25%
equity interest.
In other countries, post-employment benefit plans are generally managed
by independent fund managers or independent insurance companies,
and occasionally by Group companies, in particular BNP Paribas Asset
Management.
At 31 December 2023, the value of plan assets managed by Group
companies or by companies over which the Group exercises significant
influence was EUR 3,864 million (EUR 3,689 million at 31 December
2022). Amounts received by Group companies in the year to 31 December
2023 totalled EUR 5 million and were mainly composed of management
and custody fees (EUR 5 million at 31 December 2022).
9.j FAIR VALUE OF FINANCIAL INSTRUMENTS
CARRIED AT AMORTISED COST
The information supplied in this note must be used and interpreted with
the greatest caution for the following reasons:
■ these fair values are an estimate of the value of the relevant
instruments at 31 December 2023. They are liable to fluctuate from
day to day as a result of changes in various parameters, such as
interest rates and credit quality of the counterparty. In particula r, t hey
may differ significantly from the amounts actually received or paid
on maturity of the instrument. In most cases, the fair value is not
intended to be realised immediately, and in practice might not be
realised immediately. Consequently, this fair value does not reflect
the actual value of the instrument to BNP Paribas as a going concern;
■ most of these fair values are not meaningful, and hence are not taken
into account in the management of the commercial banking activities
which use these instruments;
■ estimating a fair value for financial instruments carried at historical
cost often requires the use of modelling techniques, hypotheses and
assumptions that may vary from bank to bank. This means that
comparisons between the fair values of financial instruments carried at
historical cost as disclosed by different banks may not be meaningful;
■ the fair values shown below do not include the fair values of finance
lease transactions, non-financial instruments such as property, plant
and equipment, goodwill and other intangible assets such as the value
attributed to demand deposit portfolios or customer relationships.
Consequently, these fair values should not be regarded as the actual
contribution of the instruments concerned to the overall valuation of
the BNP Paribas Group.
In millions of euros,
at 31 December 2023
Estimated fair value
Carrying
Level 1
Level 2
Level 3
Total
value
FINANCIAL ASSETS
Loans and advances to credit institutions and customers(1)
91,565
719,554
811,119
835,860
Debt securities at amortised cost (note 5.e)
88,984
29,720
989
119,693
121,161
FINANCIAL LIABILITIES
Deposits from credit institutions and customers
1,083,782
1,083,782
1,083,724
Debt securities (note 5.h)
77,165
115,102
192,267
191,482
Subordinated debt (note 5.h)
17,128
7,588
24,716
24,743
(1) Finance leases excluded.
In millions of euros,
at 31 December 2022
restated according to IFRS 17 and 9
Estimated fair value
Carrying
Level 1
Level 2
Level 3
Total
value
FINANCIAL ASSETS
Loans and advances to credit institutions and customers(1)
92,635
731,555
824,190
848,145
Debt securities at amortised cost (note 5.e)
85,758
26,235
771
112,764
114,014
Assets held for sale
4,440
9,980
53,325
67,746
72,176
FINANCIAL LIABILITIES
Deposits from credit institutions and customers
1,132,282
1,132,282
1,132,774
Debt securities (note 5.h)
64,889
90,215
155,104
155,359
Subordinated debt (note 5.h)
17,193
6,627
23,820
24,160
Liabilities associated with assets held for sale
74,567
74,567
74,563
(1) Finance leases excluded.
The valuation techniques and assumptions used by BNP Paribas ensure
that the fair value of financial assets and liabilities carried at amortised
cost is measured on a consistent basis throughout the Group. Fair value
is based on prices quoted in an active market when these are available.
In other cases, fair value is determined using valuation techniques such
as discounting of estimated future cash flows for loans, liabilities and
debt securities at amortised cost, or specific valuation models for other
financial instruments as described in note 1, Summary of significant
accounting policies applied by the BNP Paribas Group. The description
of the fair value hierarchy levels is also presented in the accounting
principles (see note 1.f.10). In the case of loans, liabilities and debt
securities at amortised cost that have an initial maturity of less than one
year (including demand deposits) or of most regulated savings products,
fair value equates to carrying amount. These instruments have been
classified in Level 2, except for loans to customers, which are classified
in Level 3.
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
BNP Paribas SA
France
Full (1)
100%
100%
Full (1)
BNPP SA (Argentina branch)
Argentina
Full
100%
100%
Full
100%
100%
BNPP SA (Australia branch)
Australia
Full
100%
100%
Full
100%
100%
BNPP SA (Austria branch)
Austria
Full
100%
100%
Full
100%
100%
BNPP SA (Bahrain branch)
Bahrain
Full
100%
100%
Full
100%
100%
BNPP SA (Belgium branch)
Belgium
Full
100%
100%
Full
100%
100%
BNPP SA (Bulgaria branch)
Bulgaria
Full
100%
100%
Full
100%
100%
BNPP SA (Canada branch)
Canada
Full
100%
100%
Full
100%
100%
BNPP SA (Czech Republic
branch)
Czech Rep.
Full
100%
100%
Full
100%
100%
BNPP SA (Denmark branch)
Denmark
Full
100%
100%
Full
100%
100%
BNPP SA (Finland branch)
Finland
Full
100%
100%
Full
100%
100%
BNPP SA (Germany branch)
Germany
Full
100%
100%
Full
100%
100%
BNPP SA (Greece branch)
Greece
Full
100%
100%
Full
100%
100%
E2
BNPP SA (Guernsey branch)
Guernsey
Full
100%
100%
Full
100%
100%
E2
(Netherlands branch)
Netherlands
BNPP SA (Hong Kong branch)
Hong Kong
Full
100%
100%
Full
100%
100%
BNPP SA (Hungary branch)
Hungary
Full
100%
100%
Full
100%
100%
BNPP SA (India branch)
India
Full
100%
100%
Full
100%
100%
BNPP SA (Ireland branch)
Ireland
Full
100%
100%
Full
100%
100%
BNPP SA (Italy branch)
Italy
Full
100%
100%
Full
100%
100%
BNPP SA (Japan branch)
Japan
Full
100%
100%
Full
100%
100%
BNPP SA (Jersey branch)
Jersey
Full
100%
100%
Full
100%
100%
E2
(Spain branch)
Spain
BNPP SA (Kuwait branch)
Kuwait
Full
100%
100%
Full
100%
100%
BNPP SA (Luxembourg branch)Luxembourg
Full
100%
100%
Full
100%
100%
BNPP SA (Malaysia branch)
Malaysia
Full
100%
100%
Full
100%
100%
BNPP SA (Monaco branch)
Monaco
Full
100%
100%
Full
100%
100%
BNPP SA (Netherlands branch)Netherlands
Full
100%
100%
Full
100%
100%
BNPP SA (Norway branch)
Norway
Full
100%
100%
Full
100%
100%
BNPP SA (Panama branch)
Panama
S1
BNPP SA (Philippines branch)
Philippines
Full
100%
100%
Full
100%
100%
BNPP SA (Poland branch)
Poland
Full
100%
100%
Full
100%
100%
BNPP SA (Portugal branch)
Portugal
Full
100%
100%
Full
100%
100%
BNPP SA (Qatar branch)
Qatar
Full
100%
100%
BNPP SA (Republic of Korea
branch)
Rep. of Korea
Full
100%
100%
Full
100%
100%
100%
100%
BNPP SA (Romania branch)
Romania
Full
100%
100%
BNPP SA (Saudi Arabia branch)Saudi Arabia
Full
100%
100%
BNPP SA (Singapore branch)
Singapore
Full
100%
100%
BNPP SA (South Africa branch)
South Africa
Full
100%
100%
Full
100%
100%
BNPP SA (Spain branch)
Spain
Full
100%
100%
BNPP SA (Sweden branch)
Sweden
Full
100%
100%
Full
100%
100%
BNPP SA (Switzerland branch)
Switzerland
Full
100%
100%
E2
Exane Derivatives
France
BNPP SA (Taiwan branch)
Taiwan
Full
100%
100%
Full
100%
100%
BNPP SA (Thailand branch)
Thailand
Full
100%
100%
Full
100%
100%
BNPP SA (United Arab
Emirates branch)
United Arab
Emirates
BNPP SA (United Kingdom
BNPP SA (United States
branch)
USA
Full
100%
100%
BNPP SA (Viet Nam branch)
Viet Nam
Full
100%
100%
Full
100%
100%
CORPORATE & INSTITUTIONAL BANKING
EMEA (Europe, Middle East, Africa)
France
Atargatis(s)
France
S4
Honoré
Austin Finance(s)
S4 Full
-
-
Financière Paris Haussmann(s)France
BNPP Financial Markets (Ex-
BNPP Arbitrage)
France
Full (1)
100%
100%
Full (1)
100%
100%
BNPP Securities Services
France
BNPP Securities Services
(Australia branch)
Australia
S4
Participations Opéra(s)
France
BNPP Securities Services
(Belgium branch)
Belgium
S4
d'Intégration Boursière
BNPP Securities Services
(Germany branch)
Germany
S4
BNPP Securities Services
(Greece branch)
Greece
S4
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
BNPP Securities Services
(Guernsey branch)
Guernsey
S4
BNPP Securities Services
(Hong Kong branch)
Hong Kong
S4
BNPP Securities Services
(Hungary branch)
Hungary
S4
BNPP Securities Services
(Ireland branch)
Ireland
S4
BNPP Securities Services
(Italy branch)
Italy
S4
BNPP Securities Services
(Jersey branch)
Jersey
S4
BNPP Securities Services
(Luxembourg branch)
Luxembourg
S4
BNPP Securities Services
S4
BNPP Securities Services
(Poland branch)
Poland
S4
BNPP Securities Services
(Portugal branch)
Portugal
S4
BNPP Securities Services
(Singapore branch)
Singapore
S4
BNPP Securities Services
S4
BNPP Securities Services
(Switzerland branch)
Switzerland
S4
BNPP Securities Services
(United Kingdom branch)
UK
S4
Compagnie d'Investissement
Italiens(s)
France
S4
Compagnie d'Investissement
Opéra(s)
France
S4
Ellipsis Asset Management
France
S2
Eurotitrisation
France
Equity
22.0%
22.0%
V4 Equity
21.7%
21.7%
Full
100%
100%
Exane
France
S4 Full
100%
100%
Exane (Germany branch)
Germany
S4 Full
100%
100%
Exane (Italy branch)
Italy
S4 Full
Full
100%
100%
Exane (Spain branch)
Spain
S4 Full
100%
100%
Full
100%
100%
Exane (Sweden branch)
Sweden
S4 Full
100%
100%
Full
100%
100%
Exane (Switzerland branch)
Switzerland
S4 Full
100%
100%
Exane (United Kingdom
Full
100%
100%
branch)
UK
S4 Full
100%
100%
Exane Asset Management
France
Equity
35.0%
35.0%
V2 Equity
51.0% 51.0% V1
Full
100%
100%
S4 Full
100%
100%
Exane Derivatives (Italy
branch)
Italy
S1
Exane Derivatives (Switzerland
Full
100%
100%
Full
100%
100%
branch)
Switzerland
S4 Full
100%
100%
Exane Derivatives (United
branch)
UK
Full
100%
100%
Full
100%
100%
Kingdom branch)
UK
S4 Full
100%
100%
Exane Derivatives Gerance
France
S4 Full
100%
100%
Full
100%
100%
Exane Finance
France
Full
100%
100%
Full
100%
100%
Exane Participations
France
S4
FCT Juice(t)
France
Full
-
-
Full
-
-
Financière des Italiens(s)
France
S4 Full
-
-
Financière du Marché Saint
France
Full
100%
100%
Full
100%
100%
France
S4
Financière Taitbout(s)
France
S4
Mediterranea(s)
France
S4
S4
Optichamps(s)
France
S4 Full
-
-
Parilease
France
Full (1)
100%
100%
Full (1)
100%
100%
S4 Full
-
-
Services Logiciels
France
Equity (3)
66.6%
66.6%
Equity (3)
66.6%
66.6%
Services Logiciels
d'Intégration Boursière
(Portugal branch)
Portugal
Equity (3)
66.6%
66.6%
E2
BNP Paribas, a société an onyme (Public Limited Company), registered in France, is the Group's lead company, which holds key positions in its three
operating divisions: Corporate & Institutional Banking (CIB), Commercial, Personal Banking & Services (CPBS) and Investment & Protection Services (IPS).
During the yea r, t he parent company did not change its name. BNP Paribas has its principal place of business in France and its head office is located at
16 boulevard des Italiens 75009 Paris, France.
9.k SCOPE OF CONSOLIDATION
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
SNC Taitbout Participation 3
France
Full
100%
100%
Full
100%
100%
Société Orbaisienne de
Participations
France
Full
100%
100%
Uptevia SA
France
Equity (3)
50.0%
50.0%
E3
Verner Investissements
France
S4
BNPP US Investments Inc
Verner Investissements
NewCo1
France
S4
Corp
Verner Investissements
NewCo2
France
S4
BNPP VPG Brookline Cre LLC(s)
Other European countries
Allfunds Group PLC
UK
Equity
12.1%
12.0%
Equity
12.1% 12.0% V2
Aquarius + Investments PLC(t)
Ireland
S3
BNPP VPG Express LLC(s)
Aries Capital DAC
Ireland
Full
100%
100%
AssetMetrix
Germany
Equity
22.3%
22.3%
V4 Equity
20.8% 20.8% V4
Auseter Real Estate
Opportunities SARL(t)
Luxembourg
S2
BNPP VPG IV LLC(s)
BNP PUK Holding Ltd
UK
Full
100%
100%
Full
100%
100%
Full
Full
BNPP Bank JSC
Russia
Full
100%
100%
Full
100%
100%
BNPP Emissions Und
Handels GmbH
Germany
Full
100%
100%
Full
100%
100%
BNPP Fund Administration
Services Ireland Ltd
Ireland
Full
100%
100%
Full
100%
100%
BNPP Invest Holdings BV
Netherlands
S1
BNPP Ireland Unlimited Co
Ireland
Full
100%
100%
Full
100%
100%
BNPP Islamic Issuance BV
Netherlands
Full
100%
100%
Full
100%
100%
BNPP Issuance BV
Netherlands
Full
100%
100%
Full
100%
100%
BNPP Net Ltd
UK
Full
100%
100%
Full
100%
100%
BNPP Prime Brokerage
International Ltd
Ireland
Full
100%
100%
Full
100%
100%
BNPP Suisse SA
Switzerland
Full
100%
100%
Full
100%
100%
BNPP Suisse SA (Guernsey
branch)
Guernsey
Full
100%
100%
Full
100%
100%
BNPP Technology LLC
Russia
Full
100%
100%
Full
100%
100%
BNPP Trust Corp UK Ltd
UK
Full
100%
100%
Full
100% 100% E1
BNPP Vartry Reinsurance DAC
Ireland
Full (2)
100%
100%
Full (2)
100%
100%
100%
100%
Diamante Re SRL
Italy
Full
100%
100%
Full
100%
100%
Full
100%
100%
Full
100%
100%
Ejesur SA
Spain
S1 Full
100%
100%
Ellipsis AM Suisse SARL
Switzerland
S2
Private Ltd
Exane Solutions
Luxembourg SA
Luxembourg
Full
100%
100%
Full
100%
100%
Full
100%
100%
Full
100%
100%
Expo Atlantico
EAII Investimentos
Imobiliarios SA(s)
Portugal
Full (2)
-
-
Full
-
-
E2
BNPP Securities Japan Ltd
Expo Indico EIII Investimentos
Imobiliarios SA(s)
Portugal
Full (2)
-
-
Full
-
-
E2
BNPP Securities Korea Co Ltd
FScholen
Belgium
Equity (3)
50.0%
50.0%
Equity (3)
50.0%
50.0%
Greenstars BNPP
Luxembourg
Full (2)
100%
100%
Full (2)
100%
100%
Kantox European Union SL
Spain
Full
100%
100%
V1/
D8
Kantox Holding Ltd
UK
Full
100%
100%
V1/
D8 Equity
9.5%
9.5%
Kantox Ltd
UK
Full
100%
100%
V1/
D8
Madison Arbor Ltd(t)
Ireland
Full
-
-
Full
-
-
Banque de Wallis et Futuna
Matchpoint Finance PLC(t)
Ireland
Full
-
-
Full
-
-
BNPP Antilles Guyane
Ribera Del Loira Arbitrage
Spain
Full
100%
100%
Full
100%
100%
Securasset SA
Luxembourg
Full
100%
100%
Full
100%
100%
Single Platform Investment
Repackaging Entity SA
Luxembourg
Utexam Logistics Ltd
Ireland
S3 Full
100%
100%
Utexam Solutions Ltd
Ireland
S3 Full
100%
100%
Middle East
BNPP Investment Co KSA
Saudi Arabia
Full
100%
100%
Full
100%
100%
AMERICAS
Banco BNPP Brasil SA
Brazil
Full
100%
100%
Full
100%
100%
BNPP Canada Corp
Canada
Full
100%
100%
Full
100%
100%
BNPP Capital Services Inc
USA
Full
100%
100%
Full
100%
100%
BNPP Colombia Corporacion
Financiera SA
Colombia
Full
100%
100%
BNPP EQD Brazil Fund
Fundo de Investmento
Multimercado(s)
Brazil
Full
-
-
Full
-
-
Paylib Services
BNPP Financial Services LLC
USA
BNPP FS LLC
USA
Full
100%
100%
Full
100%
100%
BNPP IT Solutions Canada Inc
Canada
Full
100%
100%
Full
100%
100%
BNPP Mexico Holding
Mexico
Full
100%
100%
Full
100%
100%
BNPP Mexico SA Institucion
de Banca Multiple
Mexico
Full
100%
100%
Full
100%
100%
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%) Ref.
Method
Voting Interest
(%)
(%) Ref.
BNPP Proprietario Fundo de
Investimento Multimercado(s)
Brazil
Full
-
-
Full
-
-
Full
100%
100%
BNPP RCC Inc
USA
Full
100%
100%
Full
100%
100%
BNPP Securities Corp
USA
Full
100%
100%
Full
100%
100%
USA
Full
100%
100%
Full
100%
100%
BNPP US Wholesale Holdings
USA
Full
100%
100%
Full
100%
100%
BNPP USA Inc
USA
Full
100%
100%
Full
100%
100%
USA
Full
-
-
Full
-
-
BNPP VPG EDMC
Holdings LLC(s)
USA
Full
-
-
Full
-
-
USA
Full
-
-
Full
-
-
Full
BNPP VPG I LLC(s)
USA
Full
-
-
Full
-
-
BNPP VPG II LLC(s)
USA
Full
-
-
Full
-
-
BNPP VPG III LLC(s)
USA
Full
-
-
Full
-
-
USA
Full
-
-
E2
BNPP VPG Master LLC(s)
USA
-
-
-
-
Dale Bakken Partners 2012 LLC
USA
S2 FV
4.9% 23.8% V3
Decart Re Ltd
Bermuda
Full (2)
100%
100%
Full
100%
100%
Exane Inc
USA
S1
FSI Holdings Inc
USA
Full
100%
100%
Full
100%
100%
Starbird Funding Corp(t)
USA
Full
-
-
Full
-
-
PACIFIC ASIA
Andalan Multi Guna Pt
Indonesia
Full
100%
100%
Full
100% 100% D1
Bank BNPP Indonesia Pt
Indonesia
Full
100%
100%
Full
100%
100%
BNPP Arbitrage Hong Kong Ltd
Hong Kong
Full
100%
100%
Full
100%
100%
BNPP China Ltd
China
Full
100%
100%
Full
100%
100%
BNPP Finance Hong Kong Ltd
Hong Kong
Full
100%
100%
Full
100%
100%
BNPP Fund Services
Australasia Pty Ltd
Australia
Full
100%
100%
Full
100%
100%
BNPP Fund Services
Australasia Pty Ltd (New
Zealand branch)
New Zealand
Full
100%
100%
Full
100%
100%
BNPP Global Securities
Operations Private Ltd
India
S4 Full
BNPP India Holding Private Ltd
India
BNPP India Solutions
India
Full
100%
100%
Full
100%
100%
BNPP Malaysia Berhad
Malaysia
Full
100%
100%
Full
100%
100%
BNPP Securities Asia Ltd
Hong Kong
BNPP Securities India
Private Ltd
India
Full
100%
100%
Full
100%
100%
Japan
Full
100%
100%
Full
100%
100%
Rep. of Korea
Full
100%
100%
Full
100%
100%
BNPP Securities Taiwan Co Ltd
Taiwan
Full
100%
100%
Full
100%
100%
BNPP Sekuritas Indonesia Pt
Indonesia
Full
100%
100%
Full
100%
100%
V4
BPP Holdings Pte Ltd
Singapore
Full
100%
100%
Full
100%
100%
COMMERCIAL, PERSONAL BANKING & SERVICES
COMMERCIAL & PERSONAL BANKING IN THE EUROZONE
Commercial & Personal Banking in France
2SF - Société des Services
Fiduciaires
France
Equity (3)
33.3%
33.3%
Equity (3)
33.3% 33.3% E2
France
Full (1)
51.0%
51.0%
Full (1)
51.0%
51.0%
France
Full (1)
100%
100%
Full (1)
100%
100%
BNPP Développement
France
Full
100%
100%
Full
100%
100%
BNPP Développement Oblig
France
Full
100%
100%
Full
100%
100%
BNPP Factor
France
Full (1)
100%
100%
Full (1)
100%
100%
Full
100%
100%
Full
100%
100%
BNPP Factor (Portugal branch)
Portugal
Full (1)
100%
100%
E2
BNPP Factor (Spain branch)
Spain
Full (1)
100%
100%
Full (1)
100%
100%
BNPP Factor Sociedade
Financeira de Credito SA
Portugal
S4 Full
100%
100%
BNPP Nouvelle Calédonie
France
Full (1)
100%
100%
Full (1)
100%
100%
BNPP Réunion
France
Full (1)
100%
100%
Full (1)
100%
100%
Compagnie pour le
Financement des Loisirs
France
Full (1)
100%
100%
Full
100%
100%
V1/
D3
Copartis
France
Full
100%
100%
Full
100%
100%
Euro Securities Partners
France
S2 Equity (3)
50.0%
50.0%
Full
100%
100%
GIE Ocean
France
Full
100%
100%
Full
100%
100%
Jivago Holding
France
Full
100%
100%
Full
100%
100%
Partecis
France
Equity (3)
50.0%
50.0%
Equity (3)
50.0%
50.0%
France
Equity 14.3%
14.3%
Equity 14.3%
14.3%
Full
100%
100%
Full
100%
100%
Portzamparc
France
Full (1)
100%
100%
Full (1)
100%
100%
Société Lairoise de
Participations
France
S4
BNL banca commerciale
Artigiancassa SPA
Italy
Full
100%
100%
V1 Full
73.9%
73.9%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
Banca Nazionale Del
Lavoro SPA
Italy
Full
100%
100%
Full
100%
100%
EMF IT 2008 1 SRL(t)
Italy
-
-
-
-
Côte d'Ivoire
Ivory Coast
Era Uno SRL(t)
Italy
Full
-
-
Full
-
-
Eutimm SRL
Italy
Full
100%
100%
Full
100%
100%
Financit SPA
Italy
Full
60.0%
60.0%
Full
60.0%
60.0%
Immera SRL(t)
Italy
Full
-
-
Full
-
-
Commerce et l'Industrie
International Factors Italia SPA
Italy
Full
99.7%
99.7%
Full
99.7%
99.7%
Permicro SPA
Italy
Equity
21.9%
21.9%
Equity
21.9% 21.9% V4
Servizio Italia SPA
Italy
Full
100%
100%
Full
100%
100%
Sviluppo HQ Tiburtina SRL
Italy
Full
100%
100%
Full
100%
100%
Tierre Securitisation SRL(t)
Italy
Full
-
-
Full
-
-
BDSI
Vela Home SRL(t)
Italy
S3
BGZ Poland ABS1 DAC(t)
Vela Mortgages SRL(t)
Italy
S3
BICI Bourse
Ivory Coast
Vela OBG SRL(t)
Italy
Full
-
-
Full
-
-
BMCI Leasing
Vela RMBS SRL(t)
Italy
S3 Full
-
-
BNPP Bank Polska SA
Worldline Merchant Services
Italia SPA
Italy
Equity
20.0%
20.0%
Equity
20.0% 20.0% D4
V2/
BNPP El Djazair
Commercial & Personal Banking in Belgium
Axepta BNPP Benelux
Belgium
Full
100%
99.9%
Full
100%
99.9%
Bancontact Paytoniq Company
Belgium
Equity
22.5%
22.5%
Equity
22.5%
22.5%
BNPP Group Service Center SA Poland
Banking Funding Company SA
Belgium
S3
BNPP IRB Participations
BASS Master Issuer NV(t)
Belgium
Full
-
-
Full
-
-
BNPP Solutions Spolka ZOO
Poland
Batopin
Belgium
Equity
25.0%
25.0%
Equity
25.0%
25.0%
Belgian Mobile ID
Belgium
Equity
12.2%
12.2%
Equity
12.2%
12.2%
BNPP Commercial Finance Ltd
UK
Full
100%
99.9%
Full
100%
99.9%
BNPP Factor AS
Denmark
Full
100%
99.9%
Full
100%
99.9%
BNPP Factor GmbH
Germany
Full
100%
99.9%
Full
100%
99.9%
BNPP Factoring Support
Netherlands
Full
100%
99.9%
Full
100%
99.9%
Full
Full
BNPP Fortis
Belgium
Full
99.9%
99.9%
Full
99.9%
99.9%
Full
Full
BNPP Fortis (Spain branch)
Spain
Full
99.9%
99.9%
Full
99.9%
99.9%
Full
100%
72.5%
BNPP Fortis (United States
branch)
USA
Full
99.9%
99.9%
Full
99.9%
99.9%
BNPP Fortis Factor NV
Belgium
Full
100%
99.9%
Full
100%
99.9%
BNPP Fortis Film Finance
Belgium
Full
100%
99.9%
Full
100%
99.9%
Full
Full
BNPP Fortis Funding SA
Luxembourg
Full
100%
99.9%
Full
100%
99.9%
Full
Full
BNPP FPE Belgium
Belgium
Full
100%
99.9%
Full
100%
99.9%
BNPP FPE Expansion
Belgium
Full
100%
99.9%
Full
100%
99.9%
100%
100%
BNPP FPE Management
Belgium
Full
100%
99.9%
Full
100%
99.9%
Bpost Banque
Belgium
Full
100%
99.9%
Full
100% 99.9% D5
V1/
Trust ERC Subaccount(s)
USA
Credissimo
Belgium
Full
100%
99.9%
100%
99.9%
Credissimo Hainaut SA
Belgium
Full
99.7%
99.7%
Full
99.7%
99.7%
Crédit pour Habitations
Sociales
Belgium
Full
81.7%
81.6%
81.7%
81.6%
Demetris NV
Belgium
Full
100%
99.9%
Full
100%
99.9%
E1
Epimede(s)
Belgium
Equity
Equity
Esmee Master Issuer(t)
Belgium
Full
-
-
Full
-
-
Immobilière Sauveniere SA
Belgium
Full
100%
99.9%
100%
99.9%
Isabel SA NV
Belgium
Equity
25.3%
25.3%
Equity
25.3%
25.3%
Microstart
Belgium
Full
42.3%
76.8%
Full
42.3%
76.8%
Private Equity Investments (a)
BE/FR/LU
FV
-
-
FV
-
-
Canada Inc
Canada
Sagip
Belgium
Full
100%
100%
Full
100%
100%
Sowo Invest SA NV
Belgium
Full
87.5%
87.5%
Full
87.5%
87.5%
Commercial & Personal Banking in Luxembourg
BGL BNPP
Luxembourg
Full
66.0%
65.9%
Full
66.0%
65.9%
BGL BNPP (Germany branch)
Germany
Full
66.0%
65.9%
Full
66.0%
65.9%
BNPP Lease Group
Luxembourg SA
Luxembourg
Full
100%
65.9%
Full
100%
65.9%
BNPP SB Re
Luxembourg
Full (2)
100%
100%
Full (2)
100%
100%
100%
100%
Cofhylux SA
Luxembourg
S4 Full
100%
65.9%
Compagnie Financière
Ottomane SA
Luxembourg
Full
97.3%
97.3%
Full
97.3%
97.3%
Le Sphinx Assurances
Luxembourg SA
Luxembourg
Full (2)
100%
100%
Full (2)
100%
100%
Lion International
Investments SA
Luxembourg
S4
Alpha Crédit SA
Luxhub SA
Luxembourg
Equity
28.0%
18.5%
Equity
28.0%
18.5%
Visalux
Luxembourg
Equity
25.2%
16.6%
V3 Equity
25.3%
16.7%
COMMERCIAL & PERSONAL BANKING OUTSIDE THE EUROZONE
Europe-Mediterranean
Bank of Nanjing
China
Equity
13.8%
13.8%
V3 Equity
13.9% 13.9% V3
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%) Ref.
Method
Voting Interest
(%)
(%) Ref.
Banque Internationale pour le
Commerce et l'Industrie de la
Full
Full
S2 Full
59.8%
59.8%
Banque Internationale pour
le Commerce et l'Industrie
du Sénégal
Senegal
S2 Full
54.1%
54.1%
Banque Marocaine pour le
Morocco
Full
67.0%
67.0%
Full
67.0%
67.0%
Banque Marocaine pour le
Commerce et l'Industrie
Banque Offshore
Morocco
Full
100%
67.0%
Full
100%
67.0%
Bantas Nakit AS
Türkiye
Equity (3)
33.3%
16.7%
Equity (3)
33.3%
16.7%
Morocco
Full
100%
96.4%
Full
100%
96.4%
Ireland
Full
-
-
Full
-
-
S2 Full
90.0%
52.0%
Morocco
Full
86.9%
58.2%
Full
86.9%
58.2%
Poland
Full
87.3%
87.3%
V3 Full
87.4%
87.4%
Algeria
Full
100%
100%
Full
100%
100%
BNPP Faktoring Spolka ZOO
Poland
Full
100%
100%
Full
100%
100%
BNPP Fortis Yatirimlar
Holding AS
Türkiye
Full
100%
99.9%
Full
100%
99.9%
Full
100%
87.3%
V3 Full
100%
87.4%
E1
France
Full
100%
100%
Full
100%
100%
S3
BNPP Yatirimlar Holding AS
Türkiye
Full
100%
100%
Full
100%
100%
Dreams Sustainable AB
Sweden
Full
57.5%
57.5%
Full
57.5% 57.5% E3
Joint Stock Company
Ukrsibbank
Ukraine
Equity
60.0%
60.0%
Equity
60.0%
60.0%
D1
TEB ARF Teknoloji Anonim
Sirketi
Türkiye
100%
72.5%
100%
72.5%
TEB Faktoring AS
Türkiye
100%
72.5%
100%
72.5%
TEB Finansman AS
Türkiye
V3 Full
100%
92.8%
TEB Holding AS
Türkiye
Full
50.0%
50.0%
Full
50.0%
50.0%
TEB SH A
Kosovo
Full
100%
50.0%
Full
100%
50.0%
TEB Yatirim Menkul
Degerler AS
Türkiye
100%
72.5%
100%
72.5%
Turk Ekonomi Bankasi AS
Türkiye
100%
72.5%
100%
72.5%
BancWest
BancWest Holding Inc
USA
S2 Full
D2
BancWest Holding Inc Grantor
S2 Full
-
-
D2
Bancwest Holding Inc
Full
Umbrella Trust(s)
USA
S2 Full
-
-
D2
BancWest Investment
Services Inc
USA
S2 Full
100%
100%
D2
Full
Bank of the West
USA
S2 Full
100%
100%
D2
Bank of the West Auto Trust
-
-
-
-
2018-1(t)
USA
S1
Bank of the West Auto Trust
Full
2019-1(t)
USA
S2 Full
-
-
D2
Bank of the West Auto Trust
2019-2(t)
USA
S2 Full
-
-
D2
BNPP Leasing Solutions
S2 Full
100%
100%
D2
BOW Auto Receivables LLC(t)
USA
S2 Full
-
-
D2
BWC Opportunity Fund 2 Inc(t)
USA
S2 Full
-
-
D2
BWC Opportunity Fund Inc(t)
USA
S2 Full
-
-
D2
CFB Community Development
Corp
USA
S2 Full
100%
100%
D2
Claas Financial Services LLC
USA
S2 Full
51.0%
51.0%
D2
Commercial Federal Affordable
Housing Inc
USA
S2 Full
D2
First Santa Clara Corp(s)
USA
S2 Full
-
-
D2
United California Bank Deferred
Compensation Plan Trust(s)
USA
S2 Full
-
-
D2
Ursus Real Estate Inc
USA
S2 Full
100%
100%
D2
SPECIALISED BUSINESSES
Personal Finance
Belgium
Full
100%
99.9%
Full
100%
99.9%
Auto ABS UK Loans PLC(t)
UK
Full
-
-
E3
AutoFlorence 1 SRL(t)
Italy
Full
-
-
Full
-
-
AutoFlorence 2 SRL(t)
Italy
Full
-
-
Full
-
-
AutoFlorence 3 SRL(t)
Italy
Full
-
-
E2
Autonoria 2019(t)
France
Full
-
-
Full
-
-
Autonoria DE 2023(t)
France
Full
-
-
E2
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%) Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
Autonoria Spain 2019(t)
Spain
Full
Autonoria Spain 2021 FT(t)
Spain
Full
-
-
Full
-
-
Opel Finance BV
Belgium
Autonoria Spain 2022 FT(t)
Spain
Full
-
-
-
-
E2
Opel Finance NV
Netherlands
Autonoria Spain 2023 FT(t)
Spain
Full
-
-
E2
Autop Ocean Indien
France
S4
Axa Banque Financement
France
Equity
35.0%
35.0%
Equity
35.0%
35.0%
Banco Cetelem SA
Brazil
S4 Full
100%
100%
Banco Cetelem SA
Spain
BGN Mercantil E Servicos Ltda
Brazil
Full
100%
100%
Full
100%
100%
BNPP Personal Finance
France
Full
100%
100%
100%
100%
BNPP Personal Finance
(Austria branch)
Austria
BNPP Personal Finance
(Bulgaria branch)
Bulgaria
S1 Full
100%
100%
BNPP Personal Finance (Czech
Republic branch)
Czech Rep.
Full
100%
100%
Full
100%
100%
BNPP Personal Finance
(Portugal branch)
Portugal
Full
100%
100%
Full
100%
100%
BNPP Personal Finance
(Romania branch)
Romania
Full
100%
100%
Full
100%
100%
BNPP Personal Finance
(Slovakia branch)
Slovakia
Full
100%
100%
Full
100%
100%
BNPP Personal Finance BV
Netherlands
Full
100%
100%
Full
100%
100%
BNPP Personal Finance South
Africa Ltd
South Africa
Full
100%
100%
Full
100%
100%
BON BNPP Consumer Finance
Co Ltd
China
33.1%
33.1%
V4 Equity
V1/
Equity
18.0% 18.0% V1
Cafineo
France
Full (1)
51.0%
50.8%
Full (1)
51.0%
50.8%
Carrefour Banque
France
Equity
40.0%
40.0%
Equity
40.0%
40.0%
Central Europe Technologies
SRL
Romania
Full
100%
100%
Full
100%
100%
Cetelem America Ltda
Brazil
Full
100%
100%
Full
100%
100%
Cetelem Business Consulting
Shanghai Co Ltd
China
Full
100%
100%
Full
100% 100% E1
Cetelem Gestion AIE
Spain
Full
100%
96.0%
Full
100%
96.0%
Spain
Cetelem SA de CV
Mexico
Full
100%
100%
Full
100%
100%
Cetelem Servicios
Informaticos AIE
Spain
Full
100%
81.0%
Full
100%
81.0%
Cetelem Servicios SA de CV
Mexico
S4
Inmobiliarios SA
Cetelem Servicos Ltda
Brazil
Full
100%
100%
Full
100%
100%
Cofica Bail
France
Full (1)
100%
100%
Full (1)
100%
100%
Cofiplan
France
Full (1)
Full (1)
100%
100%
Creation Consumer
Finance Ltd
UK
Full
100%
99.9%
V3 Full
100%
100%
Creation Financial Services Ltd
UK
Full
100%
99.9%
V3 Full
100%
100%
Crédit Moderne Antilles
Guyane
France
Full (1)
100%
100%
Full (1)
100%
100%
Crédit Moderne Océan Indien
France
Full (1)
97.8%
97.8%
Full (1)
97.8%
97.8%
Domofinance
France
Full (1)
55.0%
55.0%
Full (1)
55.0%
55.0%
Domos 2017(t)
France
S1
Arval AS
E Carat 10(t)
France
S1 Full
-
-
Arval AS Norway
E Carat 10 PLC(t)
UK
S3
Arval Austria GmbH
E Carat 11 PLC(t)
UK
S3 Full
-
-
Arval Belgium NV SA
E Carat 12 PLC(t)
UK
Full
-
- Full
-
-
Arval Benelux BV
Netherlands
Ekspres Bank AS
Denmark
Ekspres Bank AS (Norway
branch)
Norway
Full
100%
100%
Full
100%
100%
Ekspres Bank AS (Sweden
branch)
Sweden
Full
100%
100%
Full
100%
100%
Eos Aremas Belgium SA NV
Belgium
Equity
50.0%
49.9%
Equity
50.0%
49.9%
Evollis
France
Equity
49.2%
49.2%
V4 Equity
41.0%
41.0%
Findomestic Banca SPA
Italy
Full
100%
100%
Full
100%
100%
Florence Real Estate
Developments SPA
Italy
Full
100%
100%
Full
100%
100%
Florence SPV SRL(t)
Italy
Full
-
-
Full
-
-
Arval OY
GCC Consumo Establecimiento
Financiero de Credito SA
Spain
Full
51.0%
51.0%
Full
51.0%
51.0%
Genius Auto Finance Co Ltd
China
Equity (3)
25.0% 25.0% V1 Equity (3)
20.0%
20.0%
International Development
Resources AS Services SA
Spain
Full
100%
100%
Full
100%
100%
Iqera Services
France
S2 Equity
24.5%
24.5%
France
Loisirs Finance
France
Full (1)
51.0%
51.0%
Full (1)
51.0%
51.0%
Magyar Cetelem Bank ZRT
Hungary
Full
100%
100%
Full
100%
100%
Neuilly Contentieux
France
Full
95.9%
95.6%
Full
95.9%
95.6%
Noria 2018-1(t)
France
S1 Full
-
-
Noria 2020(t)
France
S1 Full
-
-
SP ZOO
Noria 2021(t)
France
Full
-
-
Full
-
-
Noria 2023(t)
France
-
-
E2
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%) Ref.
Method
Voting Interest
(%)
(%) Ref.
-
-
Full
-
-
Noria Spain 2020 FT(t)
Spain
Full
-
-
Full
-
-
S3
Full
S3 Full
100%
50.0%
Opel Finance SA
Switzerland
Full
100%
50.0%
Full
100%
50.0%
PBD Germany Auto Lease
Master SA(t)
Luxembourg
Full
-
-
E3
Personal Finance Location
France
Full
100%
100%
Full
100%
100%
Full
100%
100%
Full
100%
100%
PF Services GmbH
Germany
Full
100%
100%
Full
100%
100%
Phedina Hypotheken
Full
2010 BV(t)
Netherlands
Full
-
-
Full
-
-
RCS Botswana Pty Ltd
Botswana
Full
100%
100%
Full
100%
100%
Full
100%
100%
Full
100%
100%
RCS Cards Pty Ltd
South Africa
Full
100%
100%
Full
100%
100%
RCS Investment Holdings
Namibia Pty Ltd
Namibia
Full
100%
100%
Full
100%
100%
Securitisation funds Genius
(d)(t)
China
Equity (3)
-
-
E3
Securitisation funds UCI and
RMBS Prado (b)(t)
Spain
Equity (3)
-
-
Equity (3)
-
-
Securitisation funds Wisdom
(e)(t)
China
Equity (3)
-
-
E3
Servicios Financieros Carrefour
EFC SA
Spain
Equity
37.3%
40.0%
Equity
37.3%
40.0%
Stellantis Bank SA (Ex- Opel
Bank)
France
Full
50.0%
50.0%
Full
50.0%
50.0%
Stellantis Bank SA (Austria
branch) (Ex- Opel Bank (Austria
branch))
Austria
Full
50.0%
50.0%
Full
50.0%
50.0%
Stellantis Bank SA (Germany
branch) (Ex- Opel Bank
(Germany branch))
Germany
Full
50.0%
50.0%
Full
50.0%
50.0%
Stellantis Bank SA (Italy
branch) (Ex- Opel Bank (Italy
branch))
Italy
S1 Full
50.0%
50.0%
Stellantis Bank SA (Spain
branch) (Ex- Opel Bank (Spain
branch))
S1 Full
50.0%
50.0%
Stellantis Financial Services
UK Ltd
UK
Full
100%
50.0%
E3
Union de Creditos
Spain
Equity (3)
50.0%
50.0%
Equity (3)
50.0%
50.0%
United Partnership
France
Equity (3)
50.0%
50.0%
Equity (3)
50.0%
50.0%
Vauxhall Finance Ltd (Ex-
100%
100%
Vauxhall Finance PLC)
UK
Full
100%
50.0%
Full
100%
50.0%
XFERA Consumer Finance
EFC SA
Spain
Full
51.0%
51.0%
Full
51.0%
51.0%
Zhejiang Wisdom Puhua
Financial Leasing Co Ltd
China
Equity (3)
25.0% 25.0% V1 Equity (3)
20.0%
20.0%
Arval
Artel
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval AB
Sweden
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Denmark
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Norway
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Austria
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Belgium
Full (2)
100%
99.9%
Full (2)
100%
99.9%
S4
Full
100%
100%
Full
100%
100%
Arval Brasil Ltda
Brazil
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval BV
Netherlands
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval CZ SRO
Czech Rep.
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Deutschland GmbH
Germany
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Fleet Services
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Hellas Car Rental SA
Greece
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval LLC
Russia
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Luxembourg SA
Luxembourg
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Magyarorszag KFT
Hungary
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Maroc SA
Morocco
Full (2)
Full (2)
100%
89.0%
100%
89.0%
Finland
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Relsa Colombia SAS
Colombia
Full (2)
100%
99.9%
V1/
D7
Arval Relsa SPA
Chile
Full (2)
100%
99.9%
V1/
D7 Equity
50.0%
50.0%
Arval Schweiz AG
Switzerland
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease Aluger
Operational Automoveis SA
Portugal
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease Italia SPA
Italy
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease Polska
Poland
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease Romania
Full
SRL
Romania
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Service Lease SA
Spain
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
Arval Slovakia SRO
Slovakia
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval Trading
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval UK Group Ltd
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval UK Leasing Services Ltd
UK
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Arval UK Ltd
UK
Full (2)
100%
99.9%
Full (2)
100%
99.9%
BNPP Fleet Holdings Ltd
UK
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Cent ASL
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Cofiparc
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Comercializadora de
Vehiculos SA
Chile
Full (2)
100%
99.9%
V1/
D7
FCT Pulse France 2022(t)
France
Full (2)
-
-
Full (2)
-
-
E2
(Poland branch)
Greenval Insurance DAC
Ireland
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Locadif
Belgium
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Louveo
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Personal Car Lease BV
Netherlands
S4 Full
(2)
100%
99.9% E3
Netherlands
Full
Full
Public Location Longue Durée
France
Full (2)
100%
99.9%
Full (2)
100%
99.9%
Rentaequipos Leasing Peru SA
Peru
Full (2)
100%
99.9%
V1/
D7
Rentaequipos Leasing SA
Chile
Full (2)
100%
99.9%
Full
100%
99.9%
Full
100%
99.9%
V1/
D7
TEB Arval Arac Filo Kiralama AS
Türkiye
Full (2)
100%
75.0%
Full (2)
100%
75.0%
Full
Full
Terberg Busines Lease
Group BV
Netherlands
S4 Full
(2)
100%
99.9% E3
Terberg Leasing Justlease
Belgium BV
Belgium
Full (2)
100%
99.9%
Full (2)
100%
99.9%
E3
Fortis Lease
Leasing Solutions
Aprolis Finance
France
Full
51.0%
42.3%
Full
51.0%
42.3%
Artegy
France
Full
100%
83.0%
BNL Leasing SPA
Italy
Full
100%
95.5%
100%
95.5%
BNPP 3 Step IT
France
Full
51.0%
42.3%
51.0%
42.3%
BNPP 3 Step IT (Belgium
branch)
Belgium
Full
51.0%
42.3%
Full
51.0%
42.3%
Full
Full
BNPP 3 Step IT (Germany
branch)
Germany
Full
51.0%
42.3%
Full
51.0%
42.3%
BNPP 3 Step IT (Italy branch)
Italy
Full
51.0%
42.3%
Full
51.0%
42.3%
BNPP 3 Step IT (Netherlands
branch)
Netherlands
Full
51.0%
42.3%
Full
51.0%
42.3%
Full
Full
BNPP 3 Step IT (Spain branch)
Spain
Full
51.0%
42.3%
E2
BNPP 3 Step IT (United Kingdom
branch)
UK
Full
51.0%
42.3%
Full
51.0%
42.3%
BNPP Finansal Kiralama AS
Türkiye
Full
100%
82.5%
Full
100%
82.5%
BNPP Lease Group
France
Full (1)
100%
83.0%
Full (1)
100%
83.0%
BNPP Lease Group (Germany
branch)
Germany
Full (1)
100%
83.0%
Full (1)
100%
83.0%
BNPP Lease Group (Italy
branch)
Italy
Full (1)
100%
83.0%
BNPP Lease Group (Portugal
branch)
Portugal
Full (1)
100%
83.0%
Full (1)
100%
83.0%
BNPP Lease Group (Spain
branch)
Spain
Full (1)
100%
83.0%
Full (1)
100%
83.0%
BNPP Lease Group Belgium
Belgium
Full
100%
83.0%
Full
100%
83.0%
BNPP Lease Group Leasing
Solutions SPA
Italy
100%
95.5%
100%
95.5%
BNPP Lease Group PLC
UK
Full
100%
83.0%
Full
100%
83.0%
BNPP Lease Group SP ZOO
Poland
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Services
Poland
Full
100%
87.3%
V3 Full
100%
87.4%
BNPP Leasing Solution AS
Norway
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions
Luxembourg
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions AB
Sweden
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions AS
Denmark
Full
100%
83.0%
Full
100%
83.0%
E1
Electroniques (Spain branch)
Full
Full
BNPP Leasing Solutions GmbH
(Ex- All In One Vermietung)
Austria
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions IFN SA Romania
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions Ltd
UK
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions NV
Netherlands
Full
100%
83.0%
Full
100%
83.0%
BNPP Leasing Solutions
Suisse SA
Switzerland
Full
100%
83.0%
Full
100%
83.0%
BNPP Rental Solutions Ltd
UK
S3 Full
100%
83.0%
BNPP Rental Solutions SPA
Italy
Full
100%
83.0%
100%
83.0%
Claas Financial Services
France
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
Claas Financial Services
(Germany branch)
Germany
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
Full
Full
Claas Financial Services (Italy
branch)
Italy
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
Claas Financial Services
(Poland branch)
Poland
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Claas Financial Services (Spain
branch)
Spain
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
UK
Claas Financial Services Ltd
UK
Full 51.0%
42.3%
Full 51.0%
42.3%
CNH Industrial Capital Europe
France
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital Europe
(Belgium branch)
Belgium
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital Europe
(Germany branch)
Germany
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital Europe
(Italy branch)
Italy
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital Europe
Poland
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital Europe
(Spain branch)
Spain
Full (1)
50.1%
41.6%
Full (1)
50.1%
41.6%
CNH Industrial Capital
Europe BV
100%
41.6%
100%
41.6%
CNH Industrial Capital
Europe GmbH
Austria
Full
100%
41.6%
Full
100%
41.6%
CNH Industrial Capital
Europe Ltd
UK
Full
100%
41.6%
Full
100%
41.6%
ES Finance
Belgium
FL Zeebrugge(s)
Belgium
-
-
-
-
Folea Grundstucksverwaltungs
und Vermietungs GmbH
& Co(s)
Germany
S1
France
Full (1)
100%
83.0%
Full (1)
100%
83.0%
Fortis Lease Belgium
Belgium
Full
100%
83.0%
Full
100%
83.0%
Fortis Lease
Full
100%
83.0%
Deutschland GmbH
Germany
S3 Full
100%
83.0%
Full
Fortis Lease Iberia SA
Spain
S1 Full
100%
86.6%
Full
Fortis Lease Portugal
Portugal
S1 Full
100%
83.0%
Fortis Lease UK Ltd
UK
Full
100%
83.0%
Full
100%
83.0%
Fortis Vastgoedlease BV
Netherlands
100%
83.0%
100%
83.0%
Heffiq Heftruck Verhuur BV
Netherlands
Full
50.1%
41.5%
Full
50.1%
41.5%
JCB Finance
France
Full (1)
100%
41.6%
Full (1)
100%
41.6%
JCB Finance (Germany branch)
Germany
Full (1)
100%
41.6%
Full (1)
100%
41.6%
JCB Finance (Italy branch)
Italy
Full (1)
100%
41.6%
Full (1)
100%
41.6%
JCB Finance Holdings Ltd
UK
50.1%
41.6%
50.1%
41.6%
Manitou Finance Ltd
UK
Full
51.0%
42.3%
Full
51.0%
42.3%
MGF
France
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
MGF (Germany branch)
Germany
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
MGF (Italy branch)
Italy
Full (1)
51.0%
42.3%
Full (1)
51.0%
42.3%
Natio Energie 2
France
Full
100%
100%
Full
100%
100%
Natiocredibail
France
Full (1)
100%
100%
Full (1)
100%
100%
Pixel 2021(t)
France
Full
-
-
Full -
-
Full (1)
100%
83.0%
Same Deutz Fahr Finance
France
Full (1)
100%
83.0%
Full (1)
100%
83.0%
SNC Natiocredimurs
France
Full (1)
100%
100%
Full (1)
100%
100%
New Digital Businesses
Financière des Paiements
Electroniques
France
Full
95.0%
95.0%
Full
95.0%
95.0%
Financière des Paiements
Electroniques (Belgium
Full
Full
branch)
Belgium
Full
95.0%
95.0%
Full
95.0%
95.0%
Financière des Paiements
Electroniques (Germany
branch)
Germany
Full
95.0%
95.0%
Full
95.0%
95.0%
E2
Financière des Paiements
Electroniques (Portugal
branch)
Portugal
Full
95.0%
95.0%
Full
95.0%
95.0%
Financière des Paiements
Spain
95.0%
95.0%
95.0%
95.0%
Floa
France
Full (1)
100%
100%
Full
100%
100%
E3
Lyf SA
France
Equity (3)
43.8%
43.8%
Equity (3)
43.8%
43.8%
Lyf SAS
France
Equity (3)
50.0%
50.0%
V4 Equity (3)
49.9% 49.9% V4
Personal Investors
Espresso Financial Services
Private Ltd
India
Full
100%
100%
Full
100%
100%
Geojit Technologies Private Ltd
India
Equity
35.0%
35.0%
Equity
35.0%
35.0%
Human Value Developers
Full
Private Ltd
India
Full
100%
100%
Full
100%
100%
Sharekhan BNPP Financial
Services Ltd
India
Full
100%
100%
Full
100%
100%
Sharekhan Ltd
India
100%
100%
100%
100%
INVESTMENT & PROTECTION SERVICES
Insurance
AEW Immocommercial(s)
France
FV
-
-
FV
-
-
AG Insurance
Belgium
Equity
25.0%
25.0%
Equity
25.0%
25.0%
Agathe Retail France
France
FV
33.3%
33.3%
FV
33.3%
33.3%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%) Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
AM Select
Luxembourg
Full
-
-
E1
Astridplaza
Belgium
100%
98.5%
100%
98.5%
Batipart Participations SAS
Luxembourg
FV
29.7%
29.7%
FV
29.7%
29.7%
Becquerel(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Actions Croissance(s)
France
Full (4)
-
-
Full (4)
-
-
(Netherlands branch)
BNPP Actions
Entrepreneurs(s)
France
S3
branch)
BNPP Actions Euro(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Actions Monde(s)
France
Full (4)
-
-
Full (4)
-
-
branch)
BNPP Actions PME(s)
France
S3
BNPP Actions PME ETI(s)
France
Full (4)
-
-
Full (4)
-
-
branch)
BNPP Aqua(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Best Selection Actions
Euro(s)
France
Full (4)
Full
(4)
-
-
v
-
-
BNPP Cardif
France
Full (2)
100%
100%
Full (2)
100%
100%
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Cardif BV
Netherlands
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Cardif Compania de
Seguros y Reaseguros SA
Peru
Equit y*
100%
100%
Equit y*
100%
100%
BNPP Cardif Emeklilik AS
Türkiye
Full (2)
100%
100%
BNPP Cardif General Insurance
Co Ltd
Rep. of Korea
S2
Divers (Belgium branch)
BNPP Cardif Hayat Sigorta AS
Türkiye
Equit y*
Equity
100%
100%
*
100%
100%
BNPP Cardif Livforsakring AB
Sweden
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Cardif Livforsakring AB
(Denmark branch)
Denmark
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Cardif Livforsakring AB
(Norway branch)
Norway
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Cardif Pojistovna AS
Czech Rep.
Full (2)
100%
100%
BNPP Cardif Seguros de
Vida SA
Chile
Full (2)
100%
100%
BNPP Cardif Seguros
Generales SA
Chile
Full (2)
100%
100%
BNPP Cardif Services SRO
Czech Rep.
Equit y*
100%
100%
Equit y*
100%
100%
BNPP Cardif Servicios y
Asistencia Ltda
Chile
Equit y*
100%
100%
Equit y*
100%
100%
BNPP Cardif Sigorta AS
Türkiye
Equit y*
100%
100%
Equit y*
100%
100%
BNPP Cardif TCB Life Insurance
Co Ltd
Taiwan
Equity
49.0%
49.0%
Equity
49.0%
49.0%
BNPP Cardif Vita Compagnia
di Assicurazione E
Riassicurazione SPA
Italy
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Convictions(s)
France
Full (4)
-
-
Full (4)
-
-
ZRT
BNPP CP Cardif Alternative(s)
France
S3
Bond(s)
BNPP CP Cardif Private Debt(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP CP Infrastructure
Investments Fund(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Deep Value(s)
France
S3 Full
(4)
-
-
Investissement N 3) (s)
BNPP Développement
Humain(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Diversiflex(s)
France
Full (4)
-
-
Full (4)
-
-
E1
BNPP Diversipierre(s)
France
Full (2)
-
-
Full (2)
-
-
France
Full (2)
-
-
Full (2)
-
-
BNPP France Crédit(s)
France
Full (2)
-
-
Full (2)
-
-
BNPP Global Senior Corporate
Loans(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Indice Amerique du
Nord(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Moderate Focus Italia(s)
S3 Full
(4)
BNPP Monétaire Assurance(s)
France
S1 Full
(4)
-
-
BNPP Multistratégies
Protection 80(s)
France
Full (4)
-
-
Full (4)
-
-
N 5)(s)
BNPP Next Tech(s)
France
S3 Full
(4)
-
-
BNPP Protection Monde(s)
France
S3 Full
(4)
-
-
World(s)
France
BNPP Sélection Dynamique
Monde(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Sélection Flexible(s)
France
S3
Euro(s)
BNPP Smallcap Euroland(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Social Business
France(s)
France
Full (4)
-
-
Full (4)
-
-
BOB Cardif Life Insurance
Co Ltd
China
Equity
50.0%
50.0%
Equity
50.0%
50.0%
C Santé(s)
France
FV
-
-
FV
-
-
D1
Camgestion Obliflexible(s)
France
S1 FV
-
-
D1
Garantias SA
Capital France Hotel
France
Full (2)
98.5%
98.5%
Full (2)
98.5%
98.5%
Cardif Alternatives Part I(s)
France
Full (2)
-
-
Full (2)
-
-
Previdencia SA
Full (2)
Full (2)
Cardif Assurance Vie
France
Full (2)
100%
100%
Full (2)
100%
100%
France
Full (2)
Cardif Assurance Vie (Austria
branch)
Austria
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Belgium
branch)
Belgium
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Bulgaria
branch)
Bulgaria
Full (2)
100%
100%
Full (2)
100%
100%
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Cardif Assurance Vie (Germany
Full (2)
Full (2)
branch)
Germany
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Italy
branch)
Italy
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie
Netherlands
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Portugal
Portugal
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Romania
Romania
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Spain
Spain
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie
(Switzerland branch)
Switzerland
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurance Vie (Taiwan
branch)
Taiwan
Cardif Assurances Risques
Divers
France
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Full (2)
100%
100%
Divers (Austria branch)
Austria
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Belgium
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Bulgaria branch)
Bulgaria
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Germany branch)
Germany
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Italy branch)
Italy
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Full (2)
100%
100%
Divers (Netherlands branch)
Netherlands
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Full (2)
100%
100%
Divers (Poland branch)
Poland
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Full (2)
100%
100%
Divers (Portugal branch)
Portugal
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Romania branch)
Romania
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Spain branch)
Spain
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Switzerland branch)
Switzerland
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Assurances Risques
Divers (Taiwan branch)
Taiwan
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Biztosito Magyarorszag
Hungary
Equit y*
100%
100%
Equit y*
100%
100%
Cardif BNPP AM Emerging
France
Full (2)
-
-
Full (2)
-
-
Cardif BNPP AM Euro Paris
Climate Aligned
(Ex-Natio Fonds Collines
France
FV
-
-
FV
-
-
D1
Cardif BNPP AM Global
Environmental Equity
(Ex- Natio Fonds Colline
International)(s)
Cardif BNPP AM Global Senior
Corporate Loans(s)
France
S3 Full
(4)
-
-
Cardif BNPP AM Sustainable
Euro Equity (Ex- Natio Fonds
Collines Investissement
France
-
-
N 1)(s)
France
FV
-
-
FV
-
-
D1
Cardif BNPP AM Sustainable
Europe Equity (Ex- Natio Fonds
Athenes Investissement
France
FV
-
-
FV
-
-
D1
Cardif BNPP IP Convertibles
S3
Cardif BNPP IP Signatures(s)
France
Full (2)
-
-
Full (2)
-
-
Cardif BNPP IP Smid Cap
France
Full (2)
-
-
Full (2)
-
-
Cardif BNPP IP Smid Cap
Europe(s)
France
S3
Cardif Colombia Seguros
Generales SA
Colombia
Full (2)
100%
100%
Full (2)
100%
100%
Cardif CPR Global Return(s)
France
Full (2)
-
-
Full (2)
-
-
Cardif do Brasil Seguros e
Brazil
Full (2)
100%
100%
Full (2)
100%
100%
Cardif do Brasil Vida e
Brazil
100%
100%
100%
100%
Cardif Edrim Signatures(s)
-
-
Full0 (2)
-
-
Cardif El Djazair
Algeria
Equit y*
100%
100%
Equit y*
100%
100%
Cardif Forsakring AB
Sweden
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Forsakring AB (Denmark
branch)
Denmark
Full (2)
100%
100%
Full (2)
100%
100%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
Cardif Forsakring AB (Norway
branch)
Norway
Full (2)
100%
100%
Full (2)
100%
100%
100%
100%
100%
100%
Cardif IARD
France
Full (2)
66.0%
66.0%
Full (2)
66.0%
66.0%
Cardif Insurance Co LLC
Russia
S2 Full
(2)
100%
100%
Immobilier 1
Cardif Insurance Holdings PLC
(Ex- Cardif Pinnacle Insurance
Holdings PLC)
UK
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Life Insurance Co Ltd
Rep. of Korea
Full (2)
85.0%
85.0%
85.0%
85.0%
Cardif Life Insurance Japan
Japan
Full (2)
75.0%
75.0%
75.0%
75.0%
Cardif Ltda
Brazil
Equit y*
100%
100%
Equit y*
100%
100%
Cardif Lux Vie
Luxembourg
Full (2)
100%
88.6%
Full (2)
100%
88.6%
Cardif Mexico Seguros de
Vida SA de CV
Mexico
Equit y*
100%
100%
Equit y*
100%
100%
Cardif Mexico Seguros
Generales SA de CV
Mexico
Equit y*
100%
100%
Equit y*
100%
100%
Cardif Non Life Insurance
Japan
Japan
Full (2)
100%
75.0%
Full (2)
100%
75.0%
Cardif Nordic AB
Sweden
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Pinnacle Insurance
Management Services PLC
UK
S2
Fund(s)
Cardif Polska Towarzystwo
Ubezpieczen Na Zycie SA
Poland
Equit y*
100%
100%
Equit y*
100%
100%
Equity
24.7%
24.7%
Cardif Retraite
France
Full (2)
100%
100%
Full (2)
100% 100% E1
100%
100%
100%
100%
Cardif Seguros SA
Argentina
S2
Equity
*
100%
100%
Cardif Services AEIE
Portugal
Full (2)
100%
100%
Full (2)
100%
100%
Cardif Servicios SAC
Peru
Equit y*
100%
100%
Equit y* 100%
100%
Rubin SARL
Cardif Support Unipessoal Lda
Portugal
Full (2)
100%
100%
E1
Cardif Vita Convex Fund Eur(s)
France
S1 Full
(2)
-
-
SAS HVP
Cardimmo
France
Full (2)
100%
100%
Full (2)
100%
100%
Carma Grand Horizon SARL
France
Full (2)
100%
100%
Full (2)
100%
100%
Cedrus Carbon Initiative
Trends(s)
France
Full (2)
-
-
Full (2)
-
-
France
Full (2)
Full (2)
Centre Commercial Francilia
France
FV
21.7%
21.7%
FV
21.7% 21.7% E3
France
FV
FV
CFH Alexanderplatz Hotel SARL Luxembourg
Full (2)
100%
93.5%
E2
CFH Algonquin Management
Partners France Italia
Italy
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Bercy
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Bercy Hotel
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Bercy Intermédiaire
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Berlin GP GmbH
Germany
Full (2)
100%
98.5%
E2
CFH Berlin Holdco SARL
Luxembourg
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Boulogne
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Cap d'Ail
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Hostel Berlin SARL
Luxembourg
Full (2)
100%
93.5%
E2
CFH Hotel Project SARL
Luxembourg
Full (2)
100%
93.5%
E2
Full (2)
100%
100%
Full (2)
100%
100%
CFH Milan Holdco SRL
Italy
Full (2)
100%
98.5%
Full (2)
100%
98.5%
Full (2)
100%
100%
Full (2)
100%
100%
CFH Montmartre
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
CFH Montparnasse
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
Corosa
France
Full (2)
100%
100%
Full (2)
100%
100%
Darnell DAC
Ireland
Full (2)
100%
100%
Full (2)
100%
100%
Défense CB3 SAS
France
FV
25.0%
25.0%
FV
25.0%
25.0%
Diversipierre DVP 1
France
Full (2)
100%
93.4%
V4 Full
(2)
100%
88.1% V3
SCI Pantin Les Moulins
Diversipierre Germany GmbH
Germany
Equit y*
100%
93.4%
V4 Equity*
100% 88.1% V3
DVP European Channel
France
Equit y*
100%
93.4%
V4 Equity*
100% 88.1% V3
DVP Green Clover
France
Equit y*
100%
93.4%
V4 Equity*
100% 88.1% V3
DVP Haussmann
France
Equit y*
100%
93.4%
V4 Equity*
100% 88.1% V3
DVP Heron
France
Equit y*
100%
93.4%
V4 Equity*
100% 88.1% V3
France
Equity
Equity
Eclair(s)
France
S3 Full
(4)
-
-
France
EP L(s)
France
Full (2)
-
-
Full
-
-
SCI Rueil Caudron
EP1 Grands Moulins(s)
France
Equit y*
-
-
Equit y*
-
-
SCI Saint Denis Landy
FDI Poncelet
France
Full (2)
100%
100%
Full (2)
100%
100%
Fleur SAS
France
FV
33.3%
33.3%
FV
33.3%
33.3%
Foncière Partenaires(s)
France
FV
-
-
FV
-
-
SCI SCOO
Fonds d'Investissements
Immobiliers pour le Commerce
et la Distribution
France
FV
25.0%
25.0%
FV
25.0%
25.0%
FP Cardif Convex Fund USD(s)
France
Full (2)
-
-
Full (2)
-
-
Fundamenta(s)
Italy
Full (2)
-
-
Full (2)
-
-
Holding SARL
G C Thematic
Opportunities II(s)
Ireland
S1 Full
(2)
-
-
GIE BNPP Cardif
France
Full (2)
99.7%
99.7%
V2 Full
(2)
100%
100% V4
Objekt GmbH
GPinvest 10
France
FV 50.0%
50.0% FV
50.0%
50.0%
Harewood Helena 2 Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
Harmony Prime(s)
France
Full (4)
-
-
Full (4)
-
-
E1
Hemisphere Holding
France
Equity Equity
20.0%
20.0%
20.0%
20.0%
Hibernia France
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
Horizon Development GmbH
FV 66.7%
62.9% FV
66.7%
62.9%
Icare
France
Full (2)
100%
100%
Full (2)
100%
100%
Icare Assurance
France
Full (2)
100%
100%
Full (2)
100%
100%
ID Cologne A1 GmbH
Germany
Equit y*
89.2% 86.2% V1 Equity*
79.2%
74.1%
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
ID Cologne A2 GmbH
Germany
Equit y*
89.2% 86.2% V1 Equity*
79.2%
74.1%
Karapass Courtage
France
Equit y*
Equit y*
Korian et Partenaires
France
FV
24.5%
24.5%
FV
24.5%
24.5%
Korian et Partenaires
Immobilier 2
France
FV
24.5%
24.5%
FV
24.5%
24.5%
Luizaseg Seguros SA
Full (2)
(Ex- Luizaseg)
Brazil
Full (2)
100%
100%
V1/
D9 Equity
50.0%
50.0%
Full (2)
Natio Assurance
France
Full (2)
100%
100%
Full (2)
100%
100%
Natio Fonds Ampère 1(s)
France
Full (4)
-
-
Full (4)
-
-
NCVP Participacoes
Societarias SA
Brazil
Full (2)
100%
100%
Full (2)
100%
100%
New Alpha Cardif Incubator
Fund(s)
France
Full (2)
-
-
Full (2)
-
-
OC Health Real Estate GmbH
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Opéra Rendement(s)
France
Full (2)
-
-
Full (2)
-
-
Paris Management Consultant
Co Ltd
Taiwan
Equit y*
100%
100%
Equit y*
100%
100%
Permal Cardif Co Investment
France
Full (2)
-
-
Full (2)
-
-
Pinnacle Insurance PLC
UK
S2
Pinnacle Pet Holding Ltd
UK
V3 Equity
30.0%
30.0%
E3
Poistovna Cardif Slovakia AS
Slovakia
Equit y*
Equit y*
Preim Healthcare SAS(s)
France
FV
-
-
FV
-
-
PWH
France
FV
47.5%
47.5%
FV
47.5%
47.5%
Reumal Investissements
France
Full (2)
100%
100%
Full (2)
100%
100%
Luxembourg
FV 50.0%
50.0%
FV 50.0%
50.0%
Rueil Ariane
France
Full (2)
100%
100%
Full (2)
100%
100%
France
Full (2)
100%
98.5%
Full (2)
100%
98.5%
Schroder European Operating
Hotels Fund 1(s)
Luxembourg
FV
-
-
FV
-
-
SCI 68/70 rue de Lagny -
Montreuil
99.9%
99.9%
99.9% 99.9% V3
SCI Alpha Park
50.0%
50.0%
50.0%
50.0%
SCI Batipart Chadesrent
France
FV
20.0%
20.0%
FV
20.0%
20.0%
SCI Biv Malakoff
France
FV
23.3%
23.3%
FV
23.3%
23.3%
SCI BNPP Pierre I
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI BNPP Pierre II
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Bobigny Jean Rostand
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Bouleragny
France
FV
50.0%
50.0%
FV
50.0%
50.0%
SCI Cardif Logement
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Citylight Boulogne
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Clichy Nuovo
France
FV
50.0%
50.0%
FV
50.0%
50.0%
SCI Défense Etoile
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Défense Vendôme
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Etoile du Nord
France
SCI Fontenay Plaisance
France
SCI Imefa Velizy
France
FV
21.8%
21.8%
FV
21.8%
21.8%
SCI Le Mans Gare
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Nanterre Guilleraies
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Nantes Carnot
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Odyssée
France
Full (2)
100%
100%
Full (2)
100%
100%
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Paris Batignolles
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Paris Cours de Vincennes
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Paris Grande Armée
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Paris Turenne
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Portes de Claye
45.0%
45.0%
45.0%
45.0%
SCI Rue Moussorgski
Full (2)
100%
100%
Full (2)
100%
100%
France
Full (2)
100%
100%
Full (2)
100%
100%
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Saint Denis Mitterrand
France
Full (2)
100%
100%
Full (2)
100%
100%
SCI Saint-Denis Jade
France
Full (2)
100%
100%
Full (2)
100%
100%
France
FV
46.4%
46.4%
FV
46.4%
46.4%
D1
SCI Vendôme Athènes
France
FV
50.0%
50.0%
FV
50.0%
50.0%
SCI Villeurbanne Stalingrad
France
Full (2)
100%
100%
Full (2)
100%
100%
Secar
France
FV
55.1%
55.1%
FV
55.1%
55.1%
Seniorenzentren Deutschland
Luxembourg
FV
20.0%
17.7%
FV
20.0%
17.7%
Seniorenzentren Reinbeck
Oberursel München
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Seniorenzentrum Butzbach
Objekt GmbH
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Seniorenzentrum Heilbronn
Objekt GmbH
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Seniorenzentrum Kassel
Germany
Objekt GmbH
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Seniorenzentrum
Wolfratshausen Objekt GmbH
Germany
FV
35.0%
31.0%
FV
35.0%
31.0%
Services Epargne Entreprise
France
Equity
35.6%
35.6%
Equity
35.6%
35.6%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
SNC Batipart Mermoz
France
FV
25.0%
25.0%
FV
25.0%
25.0%
SNC Batipart Poncelet
France
FV
25.0%
25.0%
FV
25.0%
25.0%
Société Francaise
d'Assurances sur la Vie
France
Equity
50.0%
50.0%
Equity
50.0%
50.0%
Société Immobilière du Royal
Building SA
Luxembourg
Full (2)
100%
88.6%
Full (2)
100%
88.6%
Theam Quant Europe Climate
Carbon Offset Plan(s)
France
Full (4)
-
-
Full (4)
-
-
E1
Gambit Financial Solutions
Tikehau Cardif Loan Europe(s)
France
Full (2)
-
-
Full (2)
-
-
Valeur Pierre Epargne
France
Full (2)
100%
100%
Full (2)
100%
100%
Valtitres FCP(s)
France
FV
-
-
FV
-
-
D1
Harewood Helena 1 Ltd
Velizy Holding
France
FV
33.3%
33.3%
FV
33.3%
33.3%
Wealth Management
BNPP Wealth Management
DIFC Ltd
Emirates
United Arab
S3
Group PLC
BNPP Wealth Management
Monaco
Monaco
Full (1)
100%
100%
Full (1)
100%
100%
Asset Management
Alfred Berg
Kapitalforvaltning AS
Norway
Full
100%
73.7%
V2 Full
100%
98.2%
100%
100%
100%
100%
Alfred Berg
Kapitalforvaltning AS (Sweden
branch)
Sweden
Full
100%
73.7%
V3 Full
100%
98.2%
100%
100%
100%
100%
Bancoestado Administradora
General de Fondos SA
Chile
Equity
50.0%
49.1%
Equity
50.0%
49.1%
Baroda BNPP AMC Private Ltd
India
Equity (3)
49.9%
49.0%
Equity (3)
49.9% 49.0% D6
V3/
BNPP ABC Wealth
Management Co Ltd
China
Equity (3)
51.0%
50.1%
E2
BNPP Agility Capital
France
S4 Full
100%
100%
BNPP Agility Fund Equity
SLP(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Agility Fund Private
Debt SLP(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP AM International
Hedged Strategies(s)
France
Full (4)
-
-
Full (4)
-
-
BNPP Asset Management
Asia Ltd
Hong Kong
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
Be Holding
Belgium
100%
98.2%
100%
98.2%
BNPP Asset Management
Belgium
Belgium
S4
Italy SPA
BNPP Asset Management
Brasil Ltda
Brazil
Full
100%
99.5%
100%
99.5%
BNPP Asset Management
France
France
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
France (Austria branch)
Austria
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
France (Belgium branch)
Belgium
Full
100%
98.2%
Full
100%
98.2%
E2
BNPP Asset Management
France (Germany branch)
Germany
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
France (Italy branch)
Italy
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
France (Netherlands branch)
Netherlands
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
Holding
France
99.9%
98.2%
99.9%
98.2%
BNPP Asset Management
Japan Ltd
Japan
100%
98.2%
100%
98.2%
BNPP Asset Management
Luxembourg
Luxembourg
99.7%
97.9%
99.7%
97.9%
BNPP Asset Management NL
Holding NV
Netherlands
S1 Full
100%
98.2%
BNPP Asset Management Pt
Indonesia
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management
Services Grouping
France
S1 Full
100%
98.2%
BNPP Asset Management
Taiwan Co Ltd
Taiwan
100% 98.2% E1
BNPP Asset Management
UK Ltd
UK
Full
100%
98.2%
Full
100%
98.2%
BNPP Asset Management USA
Holdings Inc
USA
Full
100%
100%
Full
100%
100%
BNPP Asset Management
USA Inc
USA
Full
100%
100%
Full
100%
100%
BNPP B Institutional II(s)
Belgium
Full (4)
-
-
Full (4)
-
-
BNPP Dealing Services
France
Full
100%
98.2%
Full
100%
98.2%
BNPP Easy(s)
Luxembourg
Full
-
-
Full (4)
-
-
E1
BNPP European SME Debt
Fund 2 SCSp RAIF(s)
Luxembourg
S2
BNPP Flexi I(s)
Luxembourg
Full (4)
-
-
Full (4)
-
-
Management Luxembourg SA
BNPP Funds(s)
Luxembourg
Full (4)
-
-
Full (4)
-
-
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
BNPP Multigestion(s)
France
S3
Drypnir AS
Norway
Full
100%
0.1%
V4 Full
100%
Dynamic Credit Group BV
Netherlands
Full
75.0%
73.6%
E3
EAB Group PLC
Finland
S2
Fundquest Advisor
France
S4
Fundquest Advisor (United
Kingdom branch)
UK
S1
Belgium
Full
100%
98.2%
Full
100%
98.2%
Haitong Fortis Private Equity
Fund Management Co Ltd
China
Equity
33.0%
32.4%
Equity
33.0%
32.4%
UK
Full
100%
100%
Full
100%
100%
HFT Investment Management
Co Ltd
China
Equity
49.0%
48.1%
Equity
49.0%
48.1%
Impax Asset Management
UK
Equity
13.8%
13.5%
Equity
13.8%
13.5%
SME Alternative Financing
DAC(s)
Ireland
Full
-
-
Full
-
-
Theam Quant(s)
Luxembourg
Full (4)
-
-
Full (4)
-
-
Real Estate
Auguste Thouard Expertise
France
Full (2)
Full (2)
BNPP Immobilier Promotion
(Ex- BNPP Immobilier
Résidentiel)
France
Full (2)
Full (2)
BNPP Immobilier Promotion
Immobilier d'Entreprise
France
S4
BNPP Immobilier Résidences
Services
France
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Immobilier Résidentiel
Service Clients
France
S4
BNPP Real Estate
France
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate (United Arab
Emirates branch)
United Arab
Emirates
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Advisory
& Property Management
Luxembourg SA
Luxembourg
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Advisory &
Property Management UK Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Advisory
and Property Management
Full
Full
Ireland Ltd
Ireland
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Advisory
Italy
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Advisory
Full
Netherlands BV
Netherlands
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Belgium SA
(Ex- BNPP Real Estate Holding
Benelux SA)
Belgium
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Conseil
Habitation & Hospitality
France
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Consult
France
France
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate
Consult GmbH
Germany
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Facilities
Management Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Financial
Partner
France
Full (2)
100%
100%
Full (2)
100%
100%
Full
Full
BNPP Real Estate GmbH
Germany
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate
Full
Full
Holding GmbH
Germany
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Investment
Full
Full
Management Belgium
Belgium
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Investment
Management France
France
Full
100%
100%
Full
100%
100%
BNPP Real Estate Investment
Management Germany GmbH
Germany
Full
94.9%
94.9%
Full
94.9%
94.9%
BNPP Real Estate Investment
Management Germany GmbH
Full
(Italy branch)
Italy
Full
94.9%
94.9%
Full
94.9%
94.9%
BNPP Real Estate Investment
Management Germany GmbH
(Spain branch)
Spain
Full
94.9%
94.9%
Full
94.9%
94.9%
BNPP Real Estate Investment
Management Germany GmbH
Lisbon Representative Office
Portugal
Full
94.9%
94.9%
Full
94.9%
94.9%
E2
BNPP Real Estate Investment
Management Italy SPA
Italy
Full
100%
100%
Full
100%
100%
BNPP Real Estate Investment
Management Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Investment
Luxembourg
Full 100%
100%
Full 100%
100%
Name
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
Name
BNPP Real Estate Investment
Management Luxembourg SA
(Italy branch)
Italy
Full
100%
100%
E2
Full
100%
100%
Full
100%
100%
BNPP Real Estate Investment
Management Spain SA
Spain
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Investment
Management UK Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Italy SRL
Italy
S4
Belgium
BNPP Real Estate Poland
SP ZOO
Poland
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Portugal
Unipersonal LDA
Portugal
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate
Property Development &
Services GmbH
Germany
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Property
Development UK Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Property
Developpement Italy SPA
Italy
S4
BNPP Real Estate Property
Management France SAS
France
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Property
Management GmbH
Germany
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Property
Management Italy SRL
Italy
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Singapore
Pte Ltd
Singapore
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Spain SA
Spain
Full (2)
100%
100%
Full (2)
100%
100%
BNPP Real Estate Transaction
France
France
Full (2)
97.2%
97.2%
V1 Full
(2)
96.8%
96.8% V1
BNPP Real Estate Valuation
France
France
Full (2)
100%
100%
Full (2)
100%
100%
Cariboo Development SL
Spain
Equity 65.0%
65.0%
Equity 65.0%
65.0%
Construction-Sale Companies
(c)
France
Full/
Equity (2)
Full/
-
-
Equity (2)
-
-
Exeo Aura & Echo Offices Lda
Portugal
Equity
31.9%
31.9%
Equity
31.9% 31.9% E2
GIE BNPP Real Estate
France
Full (2)
100%
100%
Full (2)
100%
100%
Horti Milano SRL
Italy
Full (2)
100%
100%
Full (2)
100%
100%
Nanterre Arboretum
France
Full (2)
100%
100%
Full (2)
100%
100%
Parker Tower Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
Partner's & Services
France
Full (2)
100%
100%
Full (2)
100%
100%
REPD Parker Ltd
UK
Full (2)
100%
100%
Full (2)
100%
100%
Sviluppo Residenziale
Italia SRL
Italy
Full (2)
100%
100%
Full (2)
100%
100%
Wapiti Development SL
Spain
Equity
65.0%
65.0%
Equity
65.0%
65.0%
Country
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Method
Voting Interest
(%)
(%)
Ref.
Method
Voting Interest
(%)
(%) Ref.
OTHER BUSINESS UNITS
Property Companies (Property Used In Operations) and Others
Antin Participation 5
France
BNPP Home Loan SFH
France
Full (1)
100%
100%
Full (1)
100%
100%
BNPP Partners for Innovation
France
Full
100%
100%
Full
100%
100%
BNPP Partners for Innovation
Belgium
Full
100%
100%
Full
100%
100%
BNPP Partners for Innovation
Italia SRL
Italy
Full
100%
100%
Full
100%
100%
BNPP Procurement Tech
France
Full
100%
100%
Full
100%
100%
BNPP Public Sector SA
France
Full
100%
100%
Full
100%
100%
Euro Secured notes Issuer(s)
France
S3
FCT Lafayette 2021(t)
France
Full
-
-
Full
-
-
FCT Laffitte 2021(t)
France
Full
-
-
Full
-
-
FCT Opéra 2014(t)
France
S1 Full
-
-
FCT Opera 2023(t)
France
Full
-
-
E2
FCT Pyramides 2022(t)
France
Full
-
-
Full
-
-
E2
GIE Groupement Auxiliaire
de Moyens
France
Full
100%
100%
Full
100%
100%
GIE Groupement d'Etudes et
de Prestations
France
Full
100%
100%
Full
100%
100%
Transvalor
France
S2 Equity
20.2%
20.2%
(a) At 31 December 2023, 14 Private Equity investment entities versus 14 Private Equity investment entities at
31 December 2022.
(b) At 31 December 2023, the securitisation funds UCI and RMBS Prado include 13 funds (FCC UCI 11, 12, 14 to 17,
RMBS Prado VII to XI, Green Belem I and RMBS Belem No 2) versus 14 funds (FCC UCI 11, 12, 14 to 17, RMBS Prado
V to X, Green Belem I and RMBS Belem No 2) at 31 December 2022.
(c) At 31 December 2023, 117 Construction-sale companies (82 Full and 35 Equity) versus 125 Construction-sale
companies (91 Full and 34 Equity) at 31 December 2022.
(d) At 31 December 2023, the securitisation funds Genius include 11 funds (Generation 2021-4 Retail Auto Mortgage
Loan Securitisation, Generation 2022-1 to 5 Retail Auto Mortgage Loan Securitisation, Generation 2023-1 to 5
Retail Auto Mortgage Loan Securitisation).
(e) At 31 December 2023, the securitisation funds Wisdom include 13 funds (Wisdom Puhua Leasing 2021-2 & 3
Asset-Backed Securities, Wisdom Puhua Leasing 2022-1 Asset-Backed notes, Wisdom Puhua Leasing 2022-1
to 3 Asset-Backed Securities, Wisdom Puhua Leasing 2023-1 & 2 Asset-Backed notes, Wisdom Puhua Leasing
2023-1 & 2 Asset-Backed securities, Wisdom Puhua Leasing Zhixing 2023-1 & 2 Asset-Backed notes, Wisdom
Puhua Leasing Xinghe 2023-1 Asset-Backed Securities).
As requested by the ANC 2016 regulation, the list of entities that are controlled by the Group, jointly controlled or under significant influence, but
excluded from the scope of consolidation since their contribution to the consolidated financial statements would be immaterial to the Group, and the
list of equity investments, are available on the "Regulated Information" page of the https://invest.bnpparibas.com website.
Changes in the scope of consolidation
New entries (E) in the scope of consolidation
E1
Passing qualifying thresholds
E2 Incorporation
E3 Purchase,gain of control or significant influence
Removals (S) from the scope of consolidation
S1 Cessation of activity (dissolution, liquidation, etc.)
S2 Disposal,loss of control or loss of significant influence
S3 Passing qualifying thresholds
S4 Merger,Universal transfer of assets and liabilities
Variance (V) in voting or ownership interest
V1 Additional purchase
V2 Partial disposal
V3 Dilution
V4 Increase in %
Miscellaneous
D1 Consolidation method change not related to fluctuation in voting or ownership interest
D2 Entities of a business held for sale
D3 Following the additional purchase of interest by BNP Paribas Group in 2022, Compagnie pour le Financement
des Loisirs was fully consolidated.
D4 Following the partial disposal by the Group in 2022, Worldline Merchant Services Italia SPA was consolidated
under the equity method
D5 Following the additional purchase of interest by BNP Paribas Group in 2022, bpost bank was fully consolidated.
D6 Following the partial disposal by the Group in 2022, Baroda BNPP AMC Private Ltd was consolidated under the
equity method
D7 Following the additional acquisition carried out by the Group, Arval Relsa and its subsidiaries are now
fullyconsolidated.
D8 Following the additional acquisition carried out by the Group, Kantox Holding and its subsidiaries are now
fullyconsolidated.
D9 Following the additional purchase of interest by the Group on 16 October 2023, Luizaseg Seguros SA is now fully
consolidated.
Equit y* Controlled but non-material entities consolidated under the equity method as associates
FV Joint control or investment in associates measured at fair value through profit or loss
(s) Structured entities
(t) Securitisation funds
Prudential scope of consolidation
(1) French subsidiaries for which supervision of prudential requirements is complied with through the supervision
on a consolidated basis of BNP Paribas SA, in accordance with article 7.1 of Regulation n°575/2013 of the
European Parliament and of the Council.
(2) Entities consolidated under the equity method in the prudential scope.
(3) Jointly controlled entities under proportional consolidation in the prudential scope.
(4) Collective investment undertaking excluded from the prudential scope.
9.l FEES PAID TO THE STATUTORY AUDITORS
Year to 31 Dec. 2023
Excluding tax, in thousands of euros
Deloitte PricewaterhouseCoopers
Mazars
TOTAL
Total
%
Total
%
Total
%
Total
%
Statutory audits and contractual audits,
including
20,696
75%
17,142
62%
10,994
87%
48,832
72%
Issuer
5,505
5,627
3,083
14,215
Consolidated subsidiaries
15,191
11,515
7,911
34,617
Services other than those required for their
statutory audit engagement, including
6,731
25%
10,703
38%
1,629
13%
19,063
28%
Issuer
3,385
6,815
736
10,936
Consolidated subsidiaries
3,346
3,888
893
8,127
TOTAL
27,427
100%
27,845
100%
12,623
100%
67,895
100%
of which fees paid to statutory auditors
in France for the statutory audit and
contractual audit
7,551
6,080
4,406
18,037
of which fees paid to statutory auditors in
France for services other than those required
for their statutory audit engagements
2,014
4,179
1,130
7,323
Year to 31 Dec. 2022
Excluding tax, in thousands of euros
Deloitte PricewaterhouseCoopers
Mazars
TOTAL
Total
%
Total
%
Total
%
Total
%
Statutory audits and contractual audits,
including
17,529
74%
19,920
72%
11,565
88%
49,014
76%
Issuer
4,501
5,870
2,919
13,290
Consolidated subsidiaries
13,028
14,050
8,646
35,724
Services other than those required for their
statutory audit engagement, including
6,142
26%
7,669
28%
1,606
12%
15,417
24%
Issuer
2,062
2,021
897
4,980
Consolidated subsidiaries
4,080
5,648
709
10,437
TOTAL
23,671
100%
27,589
100%
13,171
100%
64,431
100%
of which fees paid to statutory auditors
in France for the statutory audit and
contractual audit
6,509
6,216
5,359
18,084
of which fees paid to statutory auditors
in France for services other than those
required for their statutory audit
engagements
1,739
2,353
1,046
5,138
Audit fees paid to external auditors who are not part of the network of the external auditors certifying the individual and consolidated financial statements
of BNP Paribas SA, as mentioned in the above table, amount to EUR 3,990 thousand for the year 2023 (EUR 786 thousand in 2022). Variation is mainly
explained by the appointment of BDO as joint external auditor of the Personal Finance Business Line entities in 2023.
This yea r, s ervices other than the ones required for the statutory audit mainly refer to issuance of attestation of accounting and financial information,
review of the quality of the internal control as per the international standards (such as ISAE 3402) within the framework of services provided to customers,
especially in the Securities and the Asset Management Business Lines, expertise on the Bank's transformation projects, technical consultations on specific
issues and assessment of the compliance of the entity's framework with Law/Regulation.
4.7 Statutory Auditors' report on the consolidated
financial statements
This is a free translation into English of the Statutory Auditors' report issued in French and is provided solely for the convenience of English speaking
readers. This report includes information specifically required by European regulations or French law, such as information about the appointment of
Statutory Auditors. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards
applicable in France.
For the year ended 31 December 2023
To the Shareholders,
Opinion
In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying consolidated financial statements
of BNP Paribas SA for the year ended 31 December 2023.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group
at 31 December 2023 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as
adopted by the European Union.
The audit opinion expressed above is consistent with our report to the Financial Statements Committee.
Basis for opinion
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Our responsibilities under these standards are further described in the Responsibilities of the Statutory Auditors relating to the audit of the consolidated
financial statements section of our report.
Indépendance
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code (Code de commerce) and
the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from 1 January 2023 to the date of our report, and, in particula r,
we did not provide any non-audit services prohibited by article 5(1) of Regulation (EU) No. 537/2014.
Emphasis of matter
Without qualifying our opinion, we draw your attention to the impact of the change in accounting policy relative to the application as from 1 January 2023
of IFRS 17 "Insurance Contracts" and IFRS 9 "Financial Instruments" on portfolios of financial instruments of insurance businesses as presented in Notes
1a, 1g, 1p and 2 as well as in the other notes to the consolidated financial statements presenting quantified data related to the impact of these changes.
Justification of assessments – Key audit matters
In accordance with the requirements of articles L.821-53 and R.821-180 of the French Commercial Code relating to the justification of our assessments,
we inform you of the key audit matters relating to the risks of material misstatement that, in our professional judgement, were the most significant in
our audit of the consolidated financial statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the consolidated financial statements as a whole, and therefore contributed to the opinion we
formed as expressed above. We do not provide a separate opinion on specific items of the consolidated financial statements.
Assessment of credit risk and measurement of impairment losses (stages 1, 2 and 3) on customer loan portfolios
(See Notes 1.f.5, 1.f.6, 1.p, 3.g, 5.e, 5.f, 5.n and 9.e to the consolidated financial statements)
Description of risk
How our audit addressed this risk
BNP Paribas recognises impairment losses to hedge the credit risks
inherent to its banking intermediation activities. In a context still marked
by considerable uncertainty relating to the macro-economic environment,
the measurement of expected credit losses for customer loan portfolios
required the BNP Paribas Group to exercise greater judgement and to
take into account assumptions, in particular in order to:
■ assess the significant deterioration in credit risk to classify outstandings
in stage 1, stage 2, or stage 3 according to geographical region
and industry. As specified in Note 3.g to the consolidated financial
statements, the bank continued to develop its criteria for assessing
the material increase in credit risk in line with the recommendations
issued by the European Banking Authority and the European Central
Bank;
■ prepare macro-economic projections which are integrated into both
the criteria for recognising the deterioration and in the measurement
of expected credit losses;
■ estimate the amount of expected credit losses according to the
different stages and taking into account the current macro-economic
environment and the absence of any comparable historical situation.
In particula r, a s specified in Note 3.g, certain additional adjustments
or forecasts not included in the models in a generic approach are
made to take into account the impacts of inflation, rate hikes and
rising commercial property prices where these effects are not directly
estimated by the models.
At 31 December 2023, total outstanding customer loans exposed to credit
risk amounted to EUR 877 billion, while total impairment losses stood
at EUR 18 billion.
We deemed the assessment of credit risk and the measurement of
impairment losses to be a key audit matter insofar as management is
required to exercise judgement and make estimates as regards credit
granted to companies, particularly in the context of persistent uncertainty
caused by geopolitical tensions, particularly the war in Ukraine and the
Middle East and economic tensions, with inflation and interest rates that
remained high in 2023.
We assessed the relevance of BNP Paribas' internal control system,
particularly its adaptation to the uncertain environment, and tested
the manual and computerised controls for assessing credit risk and
measuring expected losses.
During our work, we focused on:
■ classification of outstandings by stage: we assessed whether the
change of risks was taken into account in estimating the indicators
applicable to the various business lines to measure the significant
deterioration in credit risk;
■ measurement of expected losses (stages 1, 2 and 3):
■
assisted by our credit risk experts and relying on the internal
system for independent validation of BNP Paribas' models, we
assessed the methodologies as well as the assumptions underlying
the macro-economic projections used by BNP Paribas across the
various business lines, the proper integration of said projections into
the information system and the effectiveness of the data quality
controls;
■
we paid particular attention to the additional provisions recognised
to take account of the uncertainties described above. we assessed
the reasonableness of the methodologies used, the underlying
assumptions, the relevance of the results obtained and the control
procedures implemented;
■
with regard to impairment losses on outstanding loans to companies
classified in stage 3, we verified that a periodic review of the credit
risk of counterparties under surveillance had been carried out by
BNP Paribas and, based on a sample of counterparties, assessed
the assumptions and data used by management to estimate
impairment.
In addition, we examined the disclosures in the notes to the consolidated
financial statements with respect to credit risk and particularly the
disclosures required by IFRS 9 and IFRS 7.
Valuation of financial instruments
(See Notes 1.f.7, 1.f.10, 1.p, 3.a, 3.c, 5.a and 5.d to the consolidated financial statements)
Description of risk
How our audit addressed this risk
As part of its trading activities, BNP Paribas holds financial instruments
(assets and liabilities) which are recognised in the balance sheet at
market value.
Market value is determined according to different approaches, depending
on the type of instrument and its complexity: (i) using directly observable
quoted prices (instruments classified in level 1 of the fair value
hierarchy); (ii) using valuation models whose main inputs are observable
(instruments classified in level 2); and (iii) using valuation models whose
main inputs are unobservable (instruments classified in level 3).
The valuations obtained may be subject to additional value adjustments
to take into account certain specific trading, liquidity or counterparty
risks.
The techniques adopted by management to measure these instruments
may therefore involve significant judgement as regards the models and
data used.
At 31 December 2023, financial instruments represented EUR 719 billion
(of which EUR 7 billion for level 3 instruments) under assets and EUR 655
billion (of which EUR 10 billion for level 3 instruments) under liabilities.
In light of the materiality of the outstandings and the judgement used
to determine market value, we deemed the measurement of financial
instruments to be a key audit matte r, i n particular the measurement of
level 3 instruments given the use of unobservable inputs.
Assisted by our valuation experts, we verified that the key controls used
by BNP Paribas with respect to the valuation of financial instruments
function properly, in particular those relating to:
■ the approval and regular review by management of the risks of the
valuation models;
■ the independent verification of the valuation inputs;
■ the determination of value adjustments.
Based on a sample, our valuation experts:
■ analysed the relevance of the assumptions and inputs used;
■ analysed the results of the independent review of the inputs by BNP
Paribas;
■ performed independent counter valuations using our own models.
We also analysed, on a sample basis, any differences between the
valuations obtained and collateral calls with counterparties.
In addition, we examined the disclosures in the notes to the consolidated
financial statements with respect to the valuation of financial instruments.
General IT controls
Description of risk
How our audit addressed this risk
The reliability and security of IT systems plays a key role in the
preparation of BNP Paribas SA's consolidated financial statements.
We thus deemed the assessment of the general IT controls of the
infrastructures and applications that contribute to the preparation of
accounting and financial information to be a key audit matte r.
In particula r, a s ystem for controlling access rights to IT systems
and authorisation levels based on employee profiles represents a key
control for limiting the risk of inappropriate changes to application
settings or underlying data.
For the main systems used to prepare accounting and financial information,
assisted by our IT specialists, our work consisted primarily in:
■ obtaining an understanding of the systems, processes and controls which
underpin accounting and financial data;
■ assessing the general IT controls (application and data access
management, application changes/developments management and
IT operations management) on key systems (in particular accounting,
consolidation and automatic reconciliation applications);
■ examining the control for the authorisation of manual accounting entries;
■ performing additional audit procedures, where appropriate;
■ taking into account the cybersecurity risk increased by the crisis in
Ukraine and the widespread use of remote working.
Impact of the first-time application of IFRS 17 "Insurance Contracts"
and valuation of insurance contract liabilities in the "Retirement savings" businesses
(See Notes 1.a, 1.g, 1p, 2 and 6 to the consolidated financial statements)
Description of risk
How our audit addressed this risk
The entry into force of IFRS 17 "Insurance Contracts" as from 1 January
2023 has resulted in significant changes to the rules for measuring and
recognising insurance liabilities as well as changes in presentation of the
financial statements The standard applies retrospectively to insurance
contracts outstanding at the transition date of 1 January 2022.
The first-time application of IFRS 17 resulted in an impact of a negative
EUR 2.1 billion on opening equity at 1 January 2022 for the BNP Paribas
Group (refer to the Statement of changes in shareholders' equity) and led
to the recognition of a contractual service margin of EUR 18.6 billion. Note
1.a to the consolidated financial statements describes the accounting
methods chosen (mainly application of the modified retrospective
approach (MRA) by BNP Paribas) and the specific assumptions made
by the Group at the transition date, depending on the type of contract
(Protection or Retirement-savings) and the methods used for the
valuation of liabilities under IFRS 17 (general model, simplified model
or variable fee approach).
At 31 December 2023, insurance liabilities measured in accordance with
IFRS 17 represented a net amount of EUR 217 billion, compared with
EUR 209 billion at 31 December 2022 (see Note 6.d). The accounting
methods and assumptions used by the Group to estimate insurance
liabilities are described in Note 1.g.2, which specifies that insurance
contracts in the Retirement-savings segment, known as participating
contracts, are valued using the variable fee accounting model. These
contracts represent most of the insurance liabilities (EUR 212 billion at
31 December 2023 compared with EUR 204 billion at 31 December 2022)
as indicated in Note 6.e.
In determining the impact of the transition, management's judgements
and assumptions focused in particular on the justification for using the
modified retrospective approach and the simplifying methodologies and
assumptions used to estimate the contractual service margin and the
non-financial risk adjustment at the transition date.
Insurance liabilities include the determination of the best estimate of the
present value of cash flows to be paid or received to meet contractual
obligations to policyholders, a non-financial risk adjustment based
on a confidence level adopted by the Group and taking into account
risk diversification, and a contractual service margin representing
the unearned profit that will be recognised as services are rendered.
The valuation of these insurance liabilities according to the variable
fee approach is based on complex actuarial models using data and
assumptions relating to future periods, such as determining the discount
rate, policyholder behaviour laws, future management decisions, non-
financial risk adjustment and the definition of assumptions for returns
on so-called real-world assets, used for the release to income of the
contractual service margin. Changes and updates to the inputs used are
likely to have a significant impact on the amount of insurance liabilities
in the Retirement-savings segment.
The significant changes in the measurement and recognition of insurance
liabilities introduced by the application of this new accounting standard
and the significant judgements made by management described above
led us to deem the impact of the first-time application of IFRS 17
"Insurance Contracts" and valuation of insurance contract liabilities in
the "Retirement savings" businesses as a key audit matte r.
With the assistance of our actuarial modelling specialists, our audit
procedures mainly consisted in:
■ reviewing and assessing the relevance of the method deployed by the
BNP Paribas Group to implement IFRS 17 and the adaptation of the
governance responsible for validating IFRS 17 models, the inputs and
assumptions to be applied at the closing date and the financial impact
on the estimate of net insurance liabilities;
■ reviewing and assessing the relevance of the processes and controls
defined by management to determine the impact of the adoption of
IFRS 17 on the consolidated financial statements at 1 January 2022
and on the comparative financial statements at 31 December 2022;
■ assessing the compliance of the accounting policies applied by the
Group with the provisions of IFRS 17. We paid particular attention to
the simplifying assumptions used to apply the modified retrospective
approach at the transition date;
■ examining the eligibility of retirement savings contracts for the
variable fee approach and ensuring it is correctly applied;
■ analysing the main inputs used at the closing date to calculate the
insurance assets and liabilities of retirement savings contracts, and
assessing their relevance in light of the external information available
and the Group's own management data. These procedures include
assessing the adequacy of any changes in assumptions, inputs or
modelling;
■ testing, using sampling techniques, the reliability of the underlying
data used in the projection models and calculations of insurance
liabilities;
■ examining the internal control environment of the IT systems used
to calculate the insurance assets and liabilities of retirement savings
contracts;
■ testing the key controls implemented by the Group (including data
quality at each calculation stage) to guarantee the reliability of the
financial information produced;
■ carrying out an independent calculation of the best estimate of
the cash flows based on a sample of retirement savings insurance
liabilities;
■ implementing procedures for the analytical review of model outputs.
In addition, we examined the information disclosed in the notes to the
financial statements, including information on risk sensitivity.
Specific verifications
As required by legal and regulatory provisions and in accordance with professional standards applicable in France, we performed the specific verifications
on the information pertaining to the Group presented in the Board of Directors' management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
We attest that the Group management report includes the consolidated non-financial information statement required under article L.225-102-1 of
the French Commercial Code. Howeve r, i n accordance with article L.823-10 of the French Commercial Code, we have not verified the fair presentation
and consistency with the consolidated financial statements of the information given in that statement, which will be the subject of a report by an
independent third party.
Other verifications and information pursuant to legal and regulatory requirements
Presentation of the consolidated financial statements included in the annual financial report
In accordance with professional standards applicable to the Statutory Auditors' procedures for annual and consolidated financial statements presented
according to the European single electronic reporting format, we have verified that the presentation of the financial statements to be included in the
annual financial report referred to in paragraph I of article L.451-1-2 of the French Monetary and Financial Code (Code monétaire et financier) and
prepared under the Chief Executive Officer's responsibility, complies with this format, as defined by European Delegated Regulation No. 2019/815 of
17 December 2018. As it relates to the consolidated financial statements, our work included verifying that the markups in the financial statements
comply with the format defined by the aforementioned Regulation.
On the basis of our work, we conclude that the presentation of the consolidated financial statements to be included in the annual financial report
complies, in all material respects, with the European single electronic reporting format.
Due to the technical limitations inherent to block tagging the consolidated financial statements in the European single electronic reporting format, the
content of some of the tags in the notes may not be rendered identically to the accompanying consolidated financial statements.
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of BNP Paribas SA by the Annual General Meetings held on 23 May 2006 for Deloitte & Associés, 26 May 1994 for
PricewaterhouseCoopers Audit and 23 May 2000 for Mazars.
At 31 December 2023, Deloitte & Associés, PricewaterhouseCoopers Audit and Mazars were in the eighteenth, the thirtieth and the twenty-fourth
consecutive year of their engagement, respectively.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for preparing consolidated financial statements giving a true and fair view in accordance with International Financial
Reporting Standards as adopted by the European Union and for implementing the internal control procedures it deems necessary for the preparation
of consolidated financial statements that are free of material misstatement, whether due to fraud or erro r.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting, unless it expects to liquidate the Company
or to cease operations.
The Financial Statements Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risk
management systems, as well as, where applicable, any internal audit systems, relating to accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board of Directors.
Responsibilities of the Statutory Auditors relating to the audit of the consolidated financial statements
Objective and audit approach
Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free of material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
taken by users on the basis of these consolidated financial statements.
As specified in article L.821-55 of the French Commercial Code, our audit does not include assurance on the viability or quality of the Company's
management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise professional judgement
throughout the audit.
They also:
■ identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud or erro r, d esign and perform
audit procedures in response to those risks, and obtain audit evidence considered to be sufficient and appropriate to provide a basis for their opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from erro r, a s fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control;
■ obtain an understanding of the internal control procedures relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control;
■ evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management and the related
disclosures in the notes to the consolidated financial statements;
■ assess the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. This
assessment is based on the audit evidence obtained up to the date of the audit report. Howeve r, f uture events or conditions may cause the Company
to cease to continue as a going concern. If the Statutory Auditors conclude that a material uncertainty exists, they are required to draw attention in
the audit report to the related disclosures in the consolidated financial statements o r, i f such disclosures are not provided or are inadequate, to issue
a qualified opinion or a disclaimer of opinion;
■ evaluate the overall presentation of the consolidated financial statements and assess whether these statements represent the underlying transactions
and events in a manner that achieves fair presentation;
■ obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an
opinion on the consolidated financial statements. The Statutory Auditors are responsible for the management, supervision and performance of the
audit of the consolidated financial statements and for the opinion expressed thereon.
Report to the Financial Statements Committee
We submit a report to the Financial Statements Committee which includes, in particula r, a d escription of the scope of the audit and the audit programme
implemented, as well as the results of our audit. We also report any significant deficiencies in internal control that we have identified regarding the
accounting and financial reporting procedures.
Our report to the Financial Statements Committee includes the risks of material misstatement that, in our professional judgement, were the most
significant for the audit of the consolidated financial statements and which constitute the key audit matters that we are required to describe in this report.
We also provide the Financial Statements Committee with the declaration provided for in article 6 of Regulation (EU) No. 537/2014, confirming our
independence within the meaning of the rules applicable in France, as defined in particular in articles L.821-27 to L.821-34 of the French Commercial
Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our independence and the related safeguard
measures with the Financial Statements Committee.
Paris La Défense, Neuilly-sur-Seine and Courbevoie, 15 March 2024
The Statutory Auditors
PricewaterhouseCoopers Audit
Deloitte & Associés
Mazars
Patrice Morot
Laurence Dubois
Virginie Chauvin
5
303
RISKS AND CAPITAL ADEQUACY –
PILLAR 3
5.1
Annual risk survey
307
Key figures
307
Risk factors
311
Top and emerging risks
325
5.2
Capital management and capital adequacy
329
Scope of application
329
Regulatory capital
340
Capital requirement and risk-weighted assets
346
Capital adequacy and capital planning
350
Capital management [Audited]
361
5.3
Risk management [Audited]
363
Governance
363
Risk management organisation
365
Risk culture
366
Risk Appetite
367
Stress testing
369
5.4
Credit risk
372
Exposure to credit risk
372
Credit risk management policy
376
Credit risk diversification
380
Risk-weighted assets
386
Credit risk: Internal Ratings-Based Approach (IRBA)
388
Credit risk: standardised approach
420
Credit risk: equities under the simple weighting method
425
Exposures, provisions and cost of risk [Audited]
427
Restructured loans [Audited]
445
Credit risk mitigation techniques
446
5.5
Securitisation in the banking book
452
BNP Paribas securitisation activities
452
Accounting methods [Audited]
457
Securitisation risk management
458
Securitisation positions
459
Risk-weighted assets
460
5.6
Counterparty credit risk
465
Counterparty credit risk valuation
465
Exposure to counterparty credit risk
468
Bilateral counterparty credit risk
469
Counterparty credit risk for exposures to central counterparties associated with clearing activities
473
CVA risk
474
Counterparty credit risk management
475
Credit derivative exposures
476
Capital requirement and risk-weighted assets
477
5.7
Market risk
478
Capital requirements and risk-weighted assets
478
Market risk related to trading activities
481
Market risk related to banking activities
492
5.8
Liquidity risk
497
Liquidity risk management policy [Audited]
497
Liquidity risk management and supervision
498
Encumbrance of group assets and assets received by the Group
511
5.9
Operational risk
515
Regulatory framework
515
Organisation and oversight mechanism
516
Specific components linked to operational risk
517
Operational risk exposure
520
Capital requirement calculation
520
5.10
Insurance risks [Audited]
522
BNP Paribas Cardif Group Risk Management system
522
Market risk
523
Insurance underwriting risk
525
5.11
Environmental, social and governance risk
526
Business strategy and processes
527
Governance
528
Environmental, social and governance risk management framework
529
Appendix 1: Sovereign exposures
557
Appendix 2: Regulatory capital – Detail
559
Appendix 3: Countercyclical capital buffer and G-SIB buffer
564
Countercyclical capital buffer
564
G-SIB buffer
566
Appendix 4: Capital requirements of significant subsidiaries
567
BNP Paribas Fortis Group
567
BNL Group
568
BNP Paribas Personal Finance Group
569
BGL BNP Paribas Group
570
Appendix 5: Environmental, social and governance risk
571
ESG Assessment (ESG-A)
571
Risk Identification & assessment process ("Risk ID")
572
Appendix 6: List of tables and figures
576
Appendix 7: Acronyms
579
The purpose of Pillar 3 relative to market discipline is to complement
the minimum capital requirements (Pillar 1) and the supervisory review
process (Pillar 2) with a set of disclosures completing the usual financial
disclosures.
Chapter 5 presents the information relative to the BNP Paribas Group's
risks and in this respect meets:
■ the requirements of eighth part of Regulation (EU) No. 2019/876 of
20 May 2019 on prudential requirements(1) for credit institutions and
investment firms. This regulation is set out in the various technical
standards published by the European Commission and European
Banking Authority aimed at improving the comparability of information
published by the institutions. The format and references of the Pillar 3
tables are in line with the entry into application on 28 June 2021 of
Implementing Regulation (EU) No. 2021/637;
■ the accounting standards requirements relating to the nature and the
extent of the risks. Some information required by accounting standards
IFRS 7, IFRS 4 and IAS 1 is included in this chapter and covered by
the opinion of the Statutory Auditors on the consolidated financial
statements. This information is identified by the mention "[Audited]"
and should be read as being part of the notes to the consolidated
financial statements;
■ the transparency and disclosure requirements for prudential
information on the management of ESG risks and, in particula r, t he
physical and transition risks related to climate change, in accordance
with article 449a of Regulation (EU) No. 2019/876 (CRR 2) and in
accordance with the content provided by the European Banking
Authority (EBA) in the technical implementation standard (ITS) adopted
on 28 November 2022.
The Basel current measures (known as Basel 3), approved in
November 2010, strengthen the ability of banks to withstand economic
and financial shocks of all kinds by introducing a series of regulatory
provisions. The content of this reform was transposed into European
law in Directive 2013/36/EU (CRD 4) and Regulation (EU) No. 575/2013
of 26 June 2013 (CRR), supplemented in June 2019 by Directive (EU)
No. 2019/878 (CRD 5) and Regulation (EU) No. 2019/876 (CRR 2).
The regulatory framework of Basel 3 had the following main impacts:
■ strengthened solvency:
The Basel 3 rules lead to harmonise the definition of capital and
strengthen the ability of financial institutions to absorb losses.
A detailed description of the composition of regulatory capital is
given under Regulatory capital in section 5.2 Capital management
and capital adequacy.
Rules on calculating risk-weighted assets were also revised to
strengthen related capital requirements. These calculation rules are
detailed by risk type in the corresponding sections.
Strengthened solvency is implemented through the Single Supervisory
Mechanism (SSM) overseen by the ECB and the application of the
European Banking Authority (EBA) Supervisory Review and Evaluation
Process (SREP) guidelines.
The BNP Paribas Group, identified as a "financial conglomerate", is
subject to additional supervision. As a financial conglomerate, the
Group's own funds cover the capital requirements for banking activities
as well as insurance activities (see Capital adequacy and capital
planning in section 5.2 Capital management and capital adequacy);
■ monitoring of a leverage ratio:
The main purpose of the leverage ratio is to act as a supplementary
measure to the risk-based capital requirements (backstop principle).
The minimum requirement is applicable since 1 January 2024 and was
proceeded by intermediate requirements applicable since 28 June 2021
and 1 January 2023.
The minimum requirement applicable and the Group's leverage ratio
are presented under Capital management and capital planning in
section 5.2 Capital management and capital adequacy;
■ liquidity management:
The implementation of liquidity requirements with the introduction of
a short-term liquidity ratio (Liquidity Coverage Ratio – LCR) and a long-
term liquidity ratio (Net Stable Funding Ratio – NSFR) is presented in
section 5.8 Liquidity risk.
The minimum liquidity coverage ratio has been set at 100% of total
net cash outflows during the 30-day stress period;
■ monitoring of the bank resolution scheme:
The monitoring of bank resolution scheme introduced on 1 January
2016 has been accompanied, since 27 June 2019, by a TLAC (Total Loss
Absorbing Capacity) minimum ratio applicable to global systemically
important banks (G-SIBs).
This requirement is supplemented in Europe by the introduction
of an MREL (Minimum Requirement for own funds and Eligible
Liabilities) ratio applicable since 1 January 2024, with an intermediate
requirement applicable since 1 January 2022 (see Capital adequacy
and capital planning in section 5.2 Capital management and capital
adequacy).
Furthermore, on 7 December 2017, the Group of Governors and Heads of
Supervision (GHOS) approved the reforms finalising the Basel 3 regulatory
framework. They consist of a revision of the framework for credit risk,
credit valuation adjustment (CVA – Credit Value Adjustment) risk, and
operational risk, as well as the introduction of a floor for the calculation
of risk-weighted assets when an internal method is used. These proposals
were supplemented by the fundamental review of the trading book (FRTB)
in January 2019 and the CVA risk in July 2020. Transposition of Basel 3
finalisation into European law was initiated by the European Commission
with the publication on 27 October 2021 of draft CRR 3 and CRD 6
amendments providing for gradual entry into force from 1 January 2025.
In chapter 5, the figures shown may not appear to add up in certain
columns and rows due to rounding.
(1) The disclosures required under article 450 concerning the Group's compensation policy are available in the Compensation of regulated employees section of the Investor Relations
website: https://invest.bnpparibas.com/en/compensation-regulated-employees.
Certification and governance
I, the undersigned, Lars Machenil, Chief Financial Officer (CFO) of the BNP Paribas Group, hereby confirm that the information contained in chapter 5 Risks
and capital adequacy – Pillar 3 is, to the best of my knowledge, compliant with the requirements of eighth part of Regulation (EU) No. 2019/876 (CRR 2).
Paris, 15 March 2024.
The BNP Paribas Group operates all of its activities within the framework of a robust internal control system.
Control plans and procedures are in place within the Group to ensure the proper compliance of the information contained in the management report.
A committee, chaired by the Deputy Chief Financial Office r, h as examined chapter 5 and verified that the controls have been carried out and that the
regulatory requirements in terms of publication have been complied with, including the provisions of article 432 of Regulation (EU) No. 2019/876 (CRR 2)
relating to non-material, sensitive and confidential information.
5.1 Annual risk survey
Since 1 January 2023, the Group's insurance entities have applied IFRS 17 "Insurance Contracts" and IFRS 9, deferred for these entities until
IFRS 17 comes into force. The non-materiality of this first application to equity (see note 2 IFRS 17 and IFRS 9 first time application impacts to
the consolidated financial statements) and the treatment of insurance entities under the equity method in the prudential scope lead to a limited
impact on the information in chapter 5.
On 1 February 2023, the Group announced the closing of the sale of its retail and commercial banking activities in the United States operated by
Bank of the West to BMO Financial Group for total consideration of USD 16.3 billion. The transaction generated an exceptional capital gain (net of
tax) of EUR 2.9 billion and a positive impact on the Group's Common Equity Tier 1 (CET1) ratio of 170 basis points, i.e. a EUR 11.6 billion release
of Tier 1 capital. At 31 December 2022, Bank of the West contributed mainly to the Group's credit risk and operational risk for EUR 47.9 billion
and EUR 3.7 billion respectively of risk-weighted assets.
In 2023, the Group carried out a share buyback programme for a total amount of EUR 5 billion, including EUR 4 billion in order to offset the effect
of the dilution of net earnings per share due to the sale of the commercial banking activities in the United States operated by Bank of West.
At 31 December 2023, the programme was fully implemented and the shares acquired were all cancelled. BNP Paribas' share capital was thus
reduced by 7% compared to 31 December 2022.
KEY FIGURES
REGULATORY RATIOS
Change in Group solvency
The Group has a solid financial structure. The CET1 ratio stands at 13.2%(1)
as at 31 December 2023, increasing by 90 basis points compared to
31 December 2022. This is explained by:
■ the closing of the sale of Bank of the West on 1 February 2023, net
of the share buyback programme and redeployed capital (+100 bps);
■ the effect of the adjustment in distributable net income (-30 bps);
■ the 2023 results after taking a 60% payout ratio into account, net of
the change in risk-weighted assets and their optimisation (+30 bps);
■ the impact of the application of IFRS 17 and the updating of models
and regulations(2) in the 1st quarter (-10 bps);
■ the other effects, which are limited overall on the ratio.
The Group's CET1 ratio is significantly higher than requirements at
31 December 2023 at 9.79% and as well requirements notified by the
European Central Bank at 10.20 % applicable from 2 January 2024.
The capital structure is solid and the trajectory of the CET1 ratio is in line
with the target of 12% after implementation of the new CRR3 regulation.
The leverage ratio stands at 4.58% at 31 December 2023, compared
to 4.36% at 31 December 2022, an increase of +22 bps. It is well
above the 3.75% leverage requirement in force at 31 December 2023.
This requirement has been 3.85% (excluding Pillar 2 guidance) since
1 January 2024.
As at 31 December 2023, the Group's TLAC ratio stands at 28.15% of
risk-weighted assets, without using the preferred senior debt eligible
within the limit of 3.5% of the risk-weighted assets. The Group is thus
above the applicable minimum level of requirement which is 22.40% at
31 December 2023 and 22.58% at 2 January 2024.
As at 31 December 2023, the Group TLAC ratio stands at 8.44% of
the leverage exposure. This ratio should be compared to a minimum
requirement of 6.75% at 2 January 2024.
As at 31 December 2023, the Group MREL ratio stands at 30.92% of
the risk-weighted assets. This ratio should be compared to a minimum
requirement of 26.55% at 2 January 2024.
As at 31 December 2023, the Group MREL ratio stands at 9.27% of
the leverage exposure. This ratio should be compared to a minimum
requirement of 5.91% at 2 January 2024.
As at 31 December 2023, the Group subordinated MREL ratio stands at
28.15% of the risk-weighted assets. This ratio should be compared to a
minimum requirement of 20.47% at 2 January 2024.
As at 31 December 2023, the Group subordinated MREL ratio stands
at 8.44% of the leverage exposure. This ratio should be compared to a
minimum requirement of 5.82% at 2 January 2024.
The evolution of these ratios illustrates the Group's ability to continuously
adapt and the strengh of its balance sheet.
Key regulatory ratios
The capital ratio data below take into account the transitional provisions
relating to the introduction of IFRS 9 (Article 473a of Regulation (EU)
No. 2017/2395 and Regulation (EU) No. 2020/873). The impact of these
transitional measures on regulatory capital and regulatory ratios is
presented under Regulatory capital in section 5.2 Capital management
and capital adequacy (see T a ble 16 IFRS9-FL).
(1) CRD 5; including IFRS 9 transitional provisions.
(2) Including IFRS 9 phasing.
➤
TABLE 1: KEY INDICATORS (EU KM1)
a
b
c
d
e
In millions of euros
31 December 2023
30 September 2023
30 June 2023
31 March 2023
31 December 2022
Available own funds
1
Common Equity Tier 1 (CET1) capital
92,857
93,983
95,036
94,098
91,828
2
Tier 1 capital
107,501
108,716
108,345
107,380
103,445
3
Total capital
121,744
124,497
124,347
124,179
120,562
Risk-weighted assets
4
Total risk-weighted assets
703,694
699,257
697,533
694,407
744,851
Capital ratios (as a percentage of risk-weighted assets)
5
Common Equity Tier 1 ratio
13.20%
13.44%
13.62%
13.55%
12.33%
6
Tier 1 ratio
15.28%
15.55%
15.53%
15.46%
13.89%
7
Total capital ratio
17.30%
17.80%
17.83%
17.88%
16.19%
Additional own funds requirements in relation to on SREP (Pillar 2 requirement as a percentage of risk-weighted assets)
EU 7a
Total Pillar 2 requirements
1.57%
1.57%
1.57%
1.57%
1.39%
EU 7b
of which Additional CET1 SREP requirements
0.88%
0.88%
0.88%
0.88%
0.78%
EU 7c
of which Additional AT1 SREP requirements
1.18%
1.18%
1.18%
1.18%
1.04%
EU 7d
Total SREP own funds requirements
9.57%
9.57%
9.57%
9.57%
9.39%
Combined buffer requirement (as a percentage of risk-weighted assets)
8
Capital conservation buffer
2.50%
2.50%
2.50%
2.50%
2.50%
EU 8a
Conservation buffer due to macro-prudential or systemic risk
identified at the level of a Member State (%)
9
Countercyclical capital buffer
0.40%
0.41%
0.35%
0.14%
0.09%
EU 9a Systemic risk buffer(1)
0.00%
0.00%
0.00%
0.07%
0.08%
10
Global Systemically Important Institution buffer (G-SIB)
1.50%
1.50%
1.50%
1.50%
1.50%
EU 10a
Other Systemically Important Institution buffer (D-SIB)
1.50%
1.50%
1.50%
1.50%
1.50%
11
Combined buffer requirement(2)
4.40%
4.41%
4.35%
4.21%
4.17%
EU 11a Total overall capital requirements(3)
13.97%
13.98%
13.92%
13.78%
13.56%
12 CET1 available after meeting the total SREP own funds requirements
7.73%
8.06%
8.24%
8.17%
6.80%
Leverage ratio
13
Leverage ratio total exposure measure
2,346,500
2,423,620
2,405,785
2,464,153
2,373,844
14
Leverage ratio
4.58%
4.49%
4.50%
4.36%
4.36%
Additional own funds requirements to address risks of excessive leverage (as a percentage of leverage ratio total exposure measure)
EU 14a
Additional requirements to address risk of excessive leverage
0.00%
0.00%
0.00%
0.00%
0.00%
EU 14b
of which Additional AT1 leverage ratio requirements (%)
0.00%
0.00%
0.00%
0.00%
0.00%
EU 14c
Total SREP leverage ratio requirements
3.00%
3.00%
3.00%
3.00%
3.00%
Buffer and total leverage ratio requirement (as a percentage of leverage ratio total exposure measure)
EU 14d
Applicable leverage buffer
0.75%
0.75%
0.75%
0.75%
0.00%
EU 14e
Overall leverage ratio requirements
3.75%
3.75%
3.75%
3.75%
3.00%
Liquidity Coverage Ratio
15
Total high-quality liquid assets (HQLA) (Weighted value – average)
408,476
420,636
436,951
446,763
454,812
EU 16a
Cash outflows – Total weighted value
519,311
532,522
544,367
557,137
566,963
EU 16b
Cash inflows – Total weighted value
219,452
219,522
217,017
220,069
223,055
16
Total net cash outflows (adjusted value)
299,859
313,001
327,349
337,068
343,909
17
Liquidity coverage ratio
136.47%
134.61%
133.74%
132.63%
132.26%
Net Stable Funding Ratio
18
Total available stable funding
984,120
975,976
977,327
1,004,613
1,043,285
19
Total required stable funding
848,977
846,468
838,082
864,714
906,821
20
Net Stable Funding Ratio
115.92%
115.30%
116.61%
116.18%
115.05%
(1) Since 30 June 2023, non-applicability of the sectoral systemic risk buffer (SyRB) on mortgage portfolios in Belgium at BNP Paribas Group consolidated level.
(2) The buffer requirements take into account the highest buffer between G-SIB and D-SIB.
(3) Excluding non-public Pillar 2 guidance (P2G).
The minimum requirement for LCR and NSFR ratios is 100%.
➤
TABLE 2: TLAC RATIO (EU KM2)
In millions of euros
31 December 2023
30 September 2023
30 June 2023
31 March 2023
31 December 2022
1
Total capital and other
TLAC-eligible liabilities
198,082
203,100
201,683
202,664
199,176
2
Risk-weighted assets
703,694
699,257
697,533
694,407
744,851
3
TLAC RATIO (in percentage
of risk weighted assets)
28.15%
29.05%
28.91%
29.19%
26.74%
4
Leverage ratio total exposure
measure
2,346,500
2,423,620
2,405,785
2,464,153
2,373,844
5
TLAC RATIO (in percentage of leverage
ratio total exposure measure)
8.44%
8.38%
8.38%
8.22%
8.39%
6a
Application of the exemption
provided by Article 72b(4)
of EU Regulation 2019/876(*)
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
6b
In case of application of Article 72b,
paragraph 3 of Regulation (UE)
No. 2019/876: total amount
of preferred senior debt eligible
to TLAC ratio(*)
Not applied
Not applied
Not applied
Not applied
Not applied
6c
In case of application of Article 72b,
paragraph 3 of Regulation (UE)
No. 2019/876: proportion
of preferred senior debt used in
the calculation of the TLAC ratio(*)
Not applied
Not applied
Not applied
Not applied
Not applied
(*) In accordance with Regulation (EU) No. 2019/876, article 72b paragraphs 3 and 4, some preferred senior debt instruments (amounting to
EUR 19.485 million as at 31 December 2023) are eligible within the limit of 3.5% of risk-weighted assets. The Group did not opt for this option as at
31 December 2023.
T a bles providing details of instruments recognised as capital (CET1, AT1 and Tier 2), as well as debt instruments eligible for TLAC ratio (senior
non-preferred debt) are available in the BNP Paribas Debt section of the Investor Relations website: https://invest.bnpparibas/en/search/debt/documents/
documentation-on-programs-and-issuances.
RIS K-WEIGHTED ASSETS BY RISK TYPE AND BY BUSINESS LINE
➤
FIGURE 1: RISK-WEIGHTED ASSETS BY RISK TYPE(*)
77%
6%
2%
4%
8%
Credit risk
Counterparty
credit risk
Securitisation
in the banking book
3%
Market risk
Operational risk
Amounts below the
thresholds for deduction
(subject to 250% risk weight)
(*) Breakdown at 31 December 2023.
Most of the Group's exposures are subject to credit risk. Market risk is limited to 4% of the Group's risk-weighted assets as at 31 December 2023.
➤
FIGURE 2: RISK-WEIGHTED ASSETS BY BUSINESS LINE(*)
6%
Other Activities
5%
1%
New Digital Business & Personal Investors
6%
6%
WAM
Insurance & WAM
12%
Personal Finance
14%
14%
Global Markets
and Securities Services
6%
20%
Global Banking
1%
CPBF
BNL bc
8%
CPBB
CPBL
54%
Arval & Leasing Solutions
7%
Europe-Mediterranean
34%
CIB
36%
CPBS
Commercial
& Personal
Banking
18%
CPBS Specialised
Businesses
(*) Breakdown at 31 December 2023.
As at 31 December 2023, the Group's risks are well spread and no single business makes up more than 20% of the Group's risk-weighted assets.
Commercial, Personal Banking & Services account for 54% of risk-weighted assets.
OTHER KEY FIGURES
➤
FIGURE 3: CREDIT RISK EXPOSURE BREAKDOWN
BY GEOGRAPHIC REGION(*)
30%
France
7%
20%
Asia Paciꢀc
20%
Other European
10%
countries
15%
Belgium & Luxembourg
9%
Italy
8%
Rest of the world
11%
North America
As at 31 December 2023, the Group's exposure was mainly concentrated
in Europe (74%). See the section Credit risk diversification in section 5.4
Credit risk for more details about the diversification of the Group's
exposures.
➤
FIGURE 4: CREDIT RISK EXPOSURE BREAKDOWN
BY ASSET CLASS(*)
28%
40%
2%
Central governments
and central banks
Credit institutions
Other ꢀnancial
corporations
Non-ꢀnancial
corporations
Households
(*) Breakdown at 31 December 2023.
(*) Breakdown at 31 December 2023.
Exposure to central governments and central banks, credit institutions,
other financial corporations and non-financial corporations represented
80% of total exposure as at 31 December 2023, versus 79% as at
31 December 2022.
➤
TABLE 3: DOUBTFUL LOANS ON GROSS OUTSTANDINGS RATIO
31 December 2023
31 December 2022
DOUBTFUL LOANS(*)/LOANS(**)
1.7%
1.7%
(*) Impaired loans (stage 3) to customers and credit institutions, not netted of guarantees, on-balance sheet and off-balance sheet and including debt
securities measured at amortised cost or at fair value through shareholders' equity (excluding insurance).
(**) Gross outstanding loans to customers and credit institutions, on-balance sheet and off-balance sheet and including debt securities measured
at amortised cost or at fair value through shareholders' equity (excluding insurance).
➤
TABLE 4: STAGE 3 COVERAGE RATIO
In billions of euros
31 December 2023
31 December 2022
Stage 3 provisions
13.8
14.0
Doubtful loans(*)
19.2
19.3
STAGE 3 COVERAGE RATIO
71.7%
72.5%
(*) Impaired loans (stage 3) to customers and credit institutions, on-balance sheet and off-balance sheet, netted of guarantees received, including debt
securities measured at amortised cost or at fair value through shareholders' equity (excluding insurance).
➤
TABLE 5: COST OF RISK ON OUTSTANDINGS
In annualised basis points
31 December 2023
31 December 2022
COST OF RISK/CUSTOMER LOANS
32
31
(*) Cost of risk divided by customer loans at the beginning of the period (see section 3.8 Alternative performance measures (APM) – Article 223-1 of the AMF's
General Regulation).
➤
TABLE 6: IMMEDIATELY AVAILABLE LIQUIDITY RESERVE
In billions of euros
31 December 2023
31 December 2022
IMMEDIATELY AVAILABLE LIQUIDITY RESERVE(*)
474
461
(*) Liquid market assets or eligible to central banks ("counterbalancing capacity") taking into account prudential standards, notably US standards, minus
intra-day payment systems needs.
RISK FACTORS
The main categories of risks inherent in the BNP Paribas Group's business
are presented below and defined in the sections of chapter 5. They can
be measured through risk-weighted assets or other quantitative or
qualitative indicators, to the extent risk-weighted assets are not relevant
(for example, for liquidity and funding risk).
As a reminde r, t he financial and other information as at 31 December 2022
contained in these risk factors comprise, unless otherwise indicated,
the results of Bank of the West based on a prudential vision. They are
therefore presented excluding the effect of the application of IFRS 5 on
groups of assets and liabilities held for sale. The financial and other
information as at 31 December 2023 contained in these risk factors do
not include the activities operated by of Bank of the West, which was sold
on 1 February 2023.
In billions of euros
RWA
31 December 2023
31 December 2022
Credit risk
535
580
Counterparty credit risk
45
42
Securitisation risk in the banking book
17
16
Operational risk
59
62
Market risk
29
26
Amounts below the thresholds for deduction (subject to 250% risk weight)
19
20
TOTAL
704
745
More generally, the risks to which the BNP Paribas Group is exposed
may arise from a number of factors related, among others, to changes
in its macroeconomic or regulatory environment or factors related to the
implementation of its strategy and its business.
The material risks specific to the BNP Paribas Group's business,
determined based on the circumstances known to the management as
of the date of this document, are thus presented below under seven
principal categories, in accordance with article 16 of Regulation (EU)
No. 2017/1129, known as "Prospectus 3" of 14 June 2017, the provisions
of which relating to risk factors came into force on 21 July 2019: credit
risk, counterparty risk and securitisation risk in the banking book;
operational risk; market risk; liquidity and funding risk; risks related to
the macroeconomic and market environment; regulatory risks; and risks
related to the BNP Paribas Group's growth in its current environment.
The Group's risk management policies have been taken into account in
assessing the materiality of these risks; in particula r, r isk-weighted assets
factor in risk mitigation elements to the extent eligible in accordance with
applicable banking regulations.
1. CREDIT RISK, COUNTERPARTY
RISK AND SECURITISATION RISK
IN THE BANKING BOOK
At 31 December 2023, the BNP Paribas Group's credit risk exposure broke
down as follows: corporates (43%), central governments and central
banks (25%), retail customers (24%), credit institutions (4%), other risk
assets (2%) and equities (1%). At 31 December 2023, 33% of the Bank's
credit exposure was comprised of exposures in France, 16% in Belgium
and Luxembourg, 10% in Italy, 21% in other European countries, 9% in
North America, 6% in Asia and 5% in the rest of the world. The BNP Paribas
Group's risk-weighted assets subject to this type of risk amounted to
EUR 535 billion at 31 December 2023, or 77% of the total risk-weighted
assets of the BNP Paribas Group, as compared to EUR 580 billion at
31 December 2022, representing 78% of the total risk-weighted assets
of the BNP Paribas Group.
At 31 December 2023, BNP Paribas Group's exposure to counterparty risk
was: 37% to the corporate secto r, 1 2% to governments and central banks,
23% to credit institutions and investment firms, and 28% to clearing
houses. By product, BNP Paribas Group's exposure at 31 December
2023, excluding CVA ("Credit Valuation Adjustment") risk, is comprised
of: 41% in OTC derivatives, 40% in repurchase transactions and securities
lending/borrowing, 9% in listed derivatives and 10% in contributions to the
clearing houses' default funds. The level of this counterparty risk varies
over time, depending on fluctuations in market parameters affecting
the potential future value of the covered transactions. In addition,
CVA risk measures the risk of losses related to CVA volatility resulting
from fluctuations in credit spreads associated with the counterparties
to which the BNP Paribas Group is subject to risk. The risk-weighted
assets subject to counterparty credit risk amounted to EUR 45 billion
at 31 December 2023, or 6% of the total risk-weighted assets of the
BNP Paribas Group, as compared to EUR 42 billion at 31 December 2022,
or 6% of the total risk-weighted assets of the BNP Paribas Group. With
regard to risk related to securitisation of the banking book, the bulk of
the BNP Paribas Group's
commitments are recorded in the prudential banking portfolio. Securitised
exposures are essentially those generated by the BNP Paribas Group.
Thus, the securitisation positions held or acquired by the BNP Paribas
Group may be categorised by its role in the securitisation transaction:
of the exposures as at 31 December 2023, the BNP Paribas Group was
originator of 42%, was sponsor of 35% and was investor of 23%. The
risk-weighted assets subject to this type of risk amounted to EUR 17 billion
at 31 December 2023, i.e. 2% of the total risk-weighted assets for the BNP
Paribas Group, compared to EUR 16 billion at 31 December 2022, or 2%
of the total risk-weighted assets for the BNP Paribas Group.
1.1 A substantial increase in new provisions
or a shortfall in the level of previously
recorded provisions exposed to credit risk
and counterparty risk could adversely affect
the BNP Paribas Group's results of operations
and financial condition.
Credit risk and counterparty risk impact the BNP Paribas Group's
consolidated financial statements when a customer or counterparty
is unable to honour its obligations and when the book value of these
obligations in the BNP Paribas Group's records is positive. The customer
or counterparty may be a bank, a financial institution, an industrial
or commercial enterprise, a government or a government entity, an
investment fund, or a natural person. If the default rate of customers
or counterparties increases, the BNP Paribas Group may have to record
increased charges or provisions in respect of irrecoverable or doubtful
loans (Stage 3) or performing loans (Stages 1 and 2), in response to a
deterioration in economic conditions or other factors, which may affect
its profitability.
As a result, in connection with its lending activities, the BNP Paribas
Group regularly establishes provisions, which are recorded on its
income statement in the line item Cost of Risk. In 2023, these provisions
amounted to EUR 2,907 million compared to EUR 3,003 million in 2022.
This amount reflects write-backs of provisions on performing loans
in an amount of EUR 517 million in 2023, and provisions on doubtful
loans of EUR 1,833 million, excluding Personal Finance's cost of risk.
At 31 December 2023, the cost of risk does not include other net charges
for risk on financial instruments (i.e. charges relating to risks that call
into question the validity or enforceability of financial instruments). These
charges amount to EUR 775 million as at 31 December 2023, and in 2023
they included the extraordinary impact of provisions for litigation relating
to mortgage loans in Poland (EUR 450 million), provisions for litigation
relating to Personal Finance (EUR 221 million) and provisions for credit
risk (EUR 104 million).
The BNP Paribas Group's overall level of provisions is based on its
assessment of prior loss experience, the volume and type of lending being
conducted, industry standards, past due loans, economic conditions and
other factors related to the recoverability of various loans or statistical
analysis based on scenarios applicable to asset classes. The BNP Paribas
Group seeks to establish an appropriate level of provisions.
Although the BNP Paribas Group seeks to establish an appropriate level
of provisions, its lending businesses may have to substantially increase
their provisions for loan losses or sound receivables in the future as a
result of deteriorating economic conditions or other causes.
For example, provisions increased in 2020 primarily due to the early
ex-ante recognition of potential losses related to the effects of the health
crisis (Stages 1 and 2 provisions on performing loans in accordance
with IFRS 9). Any significant increase in provisions for loan losses or a
significant change in the BNP Paribas Group's estimate of the risk of loss
inherent in its portfolio of non-impaired loans, as well as the occurrence
of loan losses in excess of the related provisions, could have a material
adverse effect on the BNP Paribas Group's results of operations and
financial condition.
For reference, at 31 December 2023, the ratio of doubtful loans to total
loans outstanding was 1.7% and the coverage ratio of these doubtful
commitments (net of guarantees received) by provisions was 71.7%,
against 1.7% and 72.5%, respectively, as at 31 December 2022.
While the BNP Paribas Group seeks to reduce its exposure to credit
risk and counterparty risk by using risk mitigation techniques such as
collateralisation, obtaining guarantees, entering into credit derivatives
and entering into netting agreements, it cannot be certain that these
techniques will be effective to offset losses resulting from counterparty
defaults that are covered by these techniques. Moreove r, t he BNP Paribas
Group is also exposed to the risk of default by the party providing the
credit risk coverage (such as a counterparty in a derivative or a loan
insurance contract) or to the risk of loss of value of any collateral. In
addition, only a portion of the BNP Paribas Group's overall credit risk
and counterparty risk is covered by these techniques. Accordingly, the
BNP Paribas Group has very significant exposure to these risks.
1.2 The soundness and conduct of other financial
institutions and market participants could
adversely affect the BNP Paribas Group.
The BNP Paribas Group's ability to engage in financing, investment and
derivative transactions could be adversely affected by the soundness of
other financial institutions or market participants. Financial institutions
are interrelated as a result of trading, clearing, counterparty, funding
or other relationships. As a result, defaults by one or more States or
financial institutions, or even rumours or questions about one or more
financial institutions, or the financial services industry generally, may
lead to market-wide liquidity problems and could lead to further losses
or defaults. The BNP Paribas Group has exposure to many counterparties
in the financial industry, directly and indirectly, including clearing houses,
brokers and dealers, commercial banks, investment banks, mutual and
alternative investment funds, and other institutional clients with which
it regularly executes transactions. The BNP Paribas Group may also be
exposed to risks related to the increasing involvement in the financial
sector of players and the introduction of new types of transactions
subject to little or no regulation (e.g. unregulated funds, trading venues
or crowdfunding platforms). Credit and counterparty risks could be
exacerbated if the collateral held by the BNP Paribas Group cannot be
realised, it decreases in value or it is liquidated at prices not sufficient
to recover the full amount of the loan or derivative exposure due to the
BNP Paribas Group or in the event of the failure of a significant financial
market participant such as a central counterparty.
For reference, counterparty risk exposure related to financial institutions
was EUR 45 billion at 31 December 2023, or 23% of the BNP Paribas
Group's total counterparty risk exposure, and counterparty risk exposure
related to clearing houses was EUR 56 billion, or 28% of the BNP Paribas
Group's total counterparty risk exposure, compared with rates of 13% and
33%, respectively, as at 31 December 2022.
In addition, fraud or misconduct by financial market participants can
have a material adverse effect on financial institutions due in particular
to the interrelated nature of the financial markets. An example is the
fraud perpetrated by Bernard Madoff that came to light in 2008, as a
result of which numerous financial institutions, including the BNP Paribas
Group, announced losses or exposure to losses in substantial amounts.
The BNP Paribas Group remains the subject of various claims in
connection with the Madoff matter; see note 9.c Legal proceedings and
arbitration to its consolidated financial statements for the year ended
31 December 2023.
Losses resulting from the risks summarised above could materially and
adversely affect the BNP Paribas Group's results of operations.
2. OPERATIONAL RISK
The BNP Paribas Group's risk-weighted assets subject to operational risk
amounted to EUR 59 billion euros at 31 December 2023, or 8% of the
total risk-weighted assets of the BNP Paribas Group, and EUR 62 billion
at 31 December 2022, or 8% of the total risk-weighted assets of the
BNP Paribas Group. The breakdown of losses by type of operational risk for
the 2015-2023 period is rebalanced following the exit from the reference
period of the comprehensive settlement with the US authorities in 2014.
The main type of operational risk incidents remains the "Clients, products
and business practices" category, followed by process failures, including
errors in executing or processing transactions, and then external fraud.
Between 2015 and 2023, other types of risk in operational risk consisted
of external fraud (22%), business disruption and systems failure (4%),
employment practices and workplace safety (3%), internal fraud (1%)
and damage to physical assets (1%).
2.1 The BNP Paribas Group's risk management
policies, procedures and methods may leave
it exposed to unidentified or unanticipated
risks, which could lead to material losses.
The BNP Paribas Group devotes significant resources to developing its
risk management policies, procedures and assessment methods and
intends to continue to do so in the future. Nonetheless, the BNP Paribas
Group's risk management techniques and strategies may not be fully
effective in mitigating its risk exposure in all economic and market
environments within which the BNP Paribas Group operates. These
techniques and strategies could also prove to be ineffective against all
types of risk, particularly risks that the BNP Paribas Group may have
failed to identify or anticipate. The BNP Paribas Group's ability to assess
the creditworthiness of its customers, or risk parameters, such as the
value of its assets and the effectiveness of its hedges, or to measure
risks adequately if, as a result of market turmoil or in certain market
environments such as those experienced in recent years, the models and
approaches it uses become less predictive of future behaviou r, v aluations,
assumptions or estimates. Some of the BNP Paribas Group's qualitative
tools and metrics for managing risk are based on its use of observed
historical market behaviou r. T he BNP Paribas Group applies statistical
and other tools to these observations to arrive at quantifications of its
risk exposures. The process the BNP Paribas Group uses to estimate
losses inherent in its credit exposure or estimate the value of certain
assets requires difficult, subjective, and complex judgments, including
forecasts of economic conditions and how these economic predictions
might impair the ability of its borrowers to repay their loans or impact
the value of assets, which may, during periods of market disruption or
substantial uncertainty, be incapable of accurate estimation and, in turn,
impact the reliability of the process. These tools and metrics may fail
to predict future risk exposures, e.g. if the BNP Paribas Group does not
anticipate or correctly evaluate certain factors in its statistical models, or
upon the occurrence of an event deemed extremely unlikely by the tools
and metrics. This would limit the BNP Paribas Group's ability to manage
its risks. The BNP Paribas Group's losses could therefore be significantly
greater than the historical measures indicate. In addition, the BNP Paribas
Group's quantified modelling does not take all risks into account. Its more
qualitative approach to managing certain risks could prove insufficient,
exposing it to material unanticipated losses.
2.2 An interruption in or a breach
of the BNP Paribas Group's information
systems may cause substantial losses of client
or customer information, damage to the
BNP Paribas Group's reputation and result
in financial losses.
As with most other banks, the BNP Paribas Group relies heavily on
communications and information systems to conduct its business. This
dependency has increased with the spread of mobile and online banking
services, the development of cloud computing, and more generally
the use of new technologies. Any failure or interruption or breach in
security of these systems could result in failures or interruptions in the
BNP Paribas Group's customer relationship management, general ledge r,
deposit, servicing and/or loan organisation systems or could cause the
BNP Paribas Group to incur significant costs in recovering and verifying
lost data. The BNP Paribas Group cannot provide assurances that such
failures or interruptions will not occur o r, i f they do occu r, t hat they will
be adequately addressed.
In addition, the BNP Paribas Group is subject to cybersecurity risk, or
risk caused by a malicious and/or fraudulent act, committed virtually,
with the intention of manipulating information (confidential data, bank/
insurance, technical or strategic), processes and users, in order to cause
material losses to the BNP Paribas Group's subsidiaries, employees,
partners and clients and/or for the purpose of extortion (ransomware).
An increasing number of companies (including financial institutions)
have in recent years experienced intrusion attempts or even breaches
of their information technology security, some of which have involved
sophisticated and highly targeted attacks on their computer networks.
Because the techniques used to obtain unauthorised access, disable or
degrade service, steal confidential data or sabotage information systems
have become more sophisticated, change frequently and often are not
recognised until launched against a target, the BNP Paribas Group and
its third-party service providers may be unable to anticipate these
techniques or to implement in a timely manner effective and efficient
countermeasures. Any failures of or interruptions in the BNP Paribas
Group's information systems or those of its providers and any subsequent
disclosure of confidential information related to any client, counterpart or
employee of the BNP Paribas Group (or any other person) or any intrusion
or attack against its communication system could cause significant losses
and have an adverse effect on the BNP Paribas Group's reputation,
financial condition and results of operations. Regulatory authorities now
consider cybercriminality to be a growing systemic risk for the financial
secto r. T hey have stressed the need for financial institutions to improve
their resilience to cyber-attacks by strengthening internal IT monitoring
and control procedures. A successful cyber-attack could therefore expose
the Group to a regulatory fine, especially should any personal customer
data be lost.
Moreove r, t he BNP Paribas Group is exposed to the risk of operational
failure or interruption of a clearing agent, foreign markets, clearing houses,
custodian banks or any other financial intermediary or external service
provider used by the BNP Paribas Group to execute or facilitate financial
transactions. Due to its increased interaction with clients, the BNP Paribas
Group is also exposed to the risk of operational malfunction of the latter's
information systems. The BNP Paribas Group's communications and data
systems and those of its clients, service providers and counterparties may
also be subject to malfunctions or interruptions as a result of cyber-crime
or cyber-terrorism. The BNP Paribas Group cannot guarantee that these
malfunctions or interruptions in its own systems or those of other parties
will not occur or that in the event of a cyber-attack, these malfunctions
or interruptions will be adequately resolved.
2.3 Reputational risk could weigh
on the BNP Paribas Group's financial
strength and diminish the confidence
of clients and counterparties in it.
Considering the highly competitive environment in the financial services
industry, a reputation for financial strength and integrity is critical to
the BNP Paribas Group's ability to attract and retain customers. The
BNP Paribas Group's reputation could be harmed if the means it uses
to market and promote its products and services were to be deemed
inconsistent with client interests. The BNP Paribas Group's reputation
could also be damaged if, as it increases its client base and the scale of
its businesses, its overall procedures and controls dealing with conflicts
of interest fail, or appear to fail, to address them properly. Moreove r,
the BNP Paribas Group's reputation could be damaged by employee
misconduct, fraud or misconduct by financial industry participants to
which the BNP Paribas Group is exposed, a restatement of, a decline in, or
corrections to its results, as well as any adverse legal or regulatory action,
such as the settlement the BNP Paribas Group entered into with the US
authorities in 2014 for violations of US laws and regulations regarding
economic sanctions. The loss of business that could result from damage
to the BNP Paribas Group's reputation could have an adverse effect on
its results of operations and financial position.
3. MARKET RISK
BNP Paribas Group is exposed to market risk mainly through trading
activities carried out by the business lines of its Corporate & Institutional
Banking (CIB) operating division, in particular in Global Markets, which
represented 17% of the BNP Paribas Group's revenue in 2023. BNP Paribas
Group's trading activities are directly linked to economic relations with
clients of these business lines, or indirectly as part of its market making
activity. In addition, the market risk relating to the BNP Paribas Group's
banking activities covers its interest rate and foreign exchange rate risks
in connection with its activities as a banking intermediary. The "operating"
foreign exchange risk exposure relates to net earnings generated by
activities conducted in currencies other than the functional currency of
the entity concerned. The "structural" foreign exchange risk position of an
entity relates to investments in currencies. The BNP Paribas Group uses
the concepts of standard rate risk and structural rate risk in measuring
interest rate risk. Standard rate risk corresponds to the general case
for a given transaction. Structural rate risk is the interest rate risk
relating to own funds and non-interest-bearing current accounts. If the
BNP Paribas Group's hedging strategies prove ineffective or provide only
a partial hedge, the BNP Paribas Group could incur losses which could
have a negative impact on its operating results as well as its financial
condition. BNP Paribas' market risk based on its activities is measured
by "Value at Risk" (VaR), and various other market indicators (stressed
VaR, Incremental Risk Charge, Comprehensive Risk Measure for credit
correlation portfolio) as well as by stress tests and sensitivity analysis
compared with market limits.
The risk-weighted assets subject to this type of risk amounted to
EUR 29 billion at 31 December 2023, or almost 4% of the BNP Paribas
Group's total risk-weighted assets, compared to EUR 26 billion at
31 December 2022, or 3% of the total risk-weighted assets of the
BNP Paribas Group.
3.1 The BNP Paribas Group may incur significant
losses on its trading and investment activities
due to market fluctuations and volatility.
The BNP Paribas Group maintains trading and investment positions in the
debt, currency, commodity and equity markets, and in unlisted securities,
real estate and other asset classes, including through derivative contracts.
These positions could be adversely affected by extreme volatility in these
markets, i.e. the degree to which prices fluctuate over a particular period
in a particular market, regardless of market levels. Moreove r, v olatility
trends that prove substantially different from the BNP Paribas Group's
expectations may lead to losses relating to a broad range of other
products that the BNP Paribas Group uses, including swaps, forward
and future contracts, options and structured products.
To the extent that the BNP Paribas Group owns assets, or has net long
positions, in any of those markets, a market downturn could result in
losses from a decline in the value of its positions. Conversely, to the
extent that the BNP Paribas Group has sold assets that it does not own,
or has net short positions in any of those markets, a market upturn could,
in spite of the existing limitation of risks and control systems, expose
the BNP Paribas Group to potentially substantial losses as it attempts
to cover its net short positions by acquiring assets in a rising market.
The BNP Paribas Group may from time to time hold a long position in one
asset and a short position in anothe r, i n order to hedge transactions with
clients and/or in view of benefitting from changes in the relative value of
the two assets. If, howeve r, t he relative value of the two assets changes
in a direction or manner that the BNP Paribas Group did not anticipate
or against which its positions are not hedged, it might realise a loss on
those paired positions. Such losses, if significant, could adversely affect
the BNP Paribas Group's results and financial condition. In addition, the
BNP Paribas Group's hedging strategies may not be suitable for certain
market conditions.
If any of the variety of instruments and strategies that the BNP Paribas
Group uses to hedge its exposure to various types of risk in its businesses
is not effective, the Group may incur losses. Many of its strategies are
based on historical trading patterns and correlations. For example, if
the BNP Paribas Group holds a long position in an asset, it may hedge
that position by taking a short position in another asset where the short
position has historically moved in a direction that would offset a change
in the value of the long position. Howeve r, t he hedge may only be partial,
or the strategies used may not protect against all future risks or may
not be fully effective in mitigating the BNP Paribas Group's risk exposure
in all market environments or against all types of risk in the future.
Unexpected market developments may also reduce the effectiveness
of the BNP Paribas Group's hedging strategies. In addition, the manner
in which gains and losses resulting from certain ineffective hedges are
recorded may result in additional volatility in the BNP Paribas Group's
reported earnings.
The BNP Paribas Group uses a "Value at Risk" (VaR) model to quantify
its exposure to potential losses from market risks, and also performs
stress testing with a view to quantifying its potential exposure in
extreme scenarios (see Market Risk Stress T e sting Framework in
section 5.7 Market risk of BNP Paribas' Universal registration document
at 31 December 2023). Howeve r, t hese techniques rely on statistical
methodologies based on historical observations, which may turn out
to be unreliable predictors of future market conditions. Accordingly, the
BNP Paribas Group's exposure to market risk in extreme scenarios could
be greater than the exposures predicted by its quantification techniques.
More generally, the volatility of financial markets resulting from
disruptions or deteriorations in macroeconomic conditions could
adversely affect the BNP Paribas Group's trading and investment
positions in the debt, currency, commodity and equity markets, as well
as its positions in other investments such as commercial real estate. For
reference, and as indicated below, the revenues of Global Markets , the
main business line of the Corporate & Institutional Banking (CIB) division,
which handles the BNP Paribas Group's trading activities, accounted
for 17% of the BNP Paribas Group's revenues in 2023. Severe market
disruptions and extreme market volatility have occurred often in recent
years (including in 2023) and may persist or resurface, which could result
in significant losses for the BNP Paribas Group. Such losses may extend to
a broad range of trading and hedging products, including swaps, forward
and future contracts, options and structured products. The volatility of
financial markets makes it difficult to predict trends and implement
effective trading strategies. It also weighs on the primary equity and
bond markets, as in 2022 and 2023, affecting the activity of Corporate
& Institutional Banking.
3.2 The BNP Paribas Group may generate lower
revenues from commission and fee-based
businesses during market downturns
and declines in activity.
Commissions received by the BNP Paribas Group represented 21% of its
revenues in 2023. Financial and economic conditions affect the number
and size of transactions for which the BNP Paribas Group provides
securities underwriting, financial advisory and other Investment Banking
services. These revenues, which include fees from these services, are
directly related to the number and size of the transactions in which the
BNP Paribas Group participates and can thus be significantly affected by
economic or financial changes that are unfavourable to its Investment
Banking business and clients. In addition, because the fees that the
BNP Paribas Group charges for managing its clients' portfolios are in many
cases based on the value or performance of those portfolios, a market
downturn that reduces the value of its clients' portfolios or increases the
amount of withdrawals would reduce the revenues it receives from its
asset management, equity derivatives and Private Banking businesses.
Independently of market changes, the development of index portfolios
or the below-market performance by the BNP Paribas Group's mutual
funds may lead to reduced revenues from the BNP Paribas Group's
asset management business, and increased withdrawals and reduced
inflows for these vehicles. A reduced level of net banking income from
the abovementioned commission and fee-based businesses may have a
material adverse impact on the BNP Paribas Group's financial results.
3.3 Adjustments to the carrying value of the
BNP Paribas Group's securities and derivatives
portfolios and the BNP Paribas Group's own
debt could have an adverse effect on its net
income and shareholders' equity.
The carrying value of the BNP Paribas Group's securities and derivatives
portfolios and certain other assets, as well as its own debt, in its
balance sheet, is adjusted as of each financial statement date. As at
31 December 2023, on the assets side of the BNP Paribas Group's
balance sheet, financial instruments at fair value through profit or
loss, derivative financial instruments used for hedging purposes and
financial assets at fair value through shareholders' equity amounted to
EUR 731 billion, EUR 22 billion and EUR 53 billion respectively. In the
liabilities column, financial instruments at fair value through profit or loss
and derivative financial instruments used for hedging purposes amounted
to EUR 741 billion and EUR 38 billion, respectively, at 31 December 2023.
Most of the adjustments are made on the basis of changes in fair value
of the BNP Paribas Group's assets or debt during an accounting period,
with the changes recorded either in the income statement or directly in
shareholders' equity. Changes that are recorded in the income statement,
to the extent not offset by opposite changes in the value of other assets,
affect the BNP Paribas Group's consolidated revenues and, as a result, its
net income. A downward adjustment of the fair value of the BNP Paribas
Group's securities and derivatives portfolios may lead to reduced
shareholders' equity and, to the extent not offset by opposite changes in
the value of the BNP Paribas Group's liabilities, the BNP Paribas Group's
capital adequacy ratios may also be lowered. The fact that fair value
adjustments are recorded in one accounting period does not mean that
further adjustments will not be needed in subsequent periods.
4. LIQUIDITY AND FUNDING RISK
The liquidity risk of the BNP Paribas Group can be assessed through
its short-term liquidity ratio ("Liquidity Coverage Ratio – LCR") which
analyses the coverage of net cash outflows at 30 days in a stress scenario.
The Group's period end LCR was 148% as at 31 December 2023. The
liquidity reserve was EUR 474 billion as at 31 December 2023.
4.1 The BNP Paribas Group's access to and cost
of funding could be adversely affected by
a resurgence of financial crises, worsening
economic conditions, rating downgrades,
increases in sovereign credit spreads
or other factors.
The financial crisis, the Eurozone sovereign debt crisis as well as the
general macroeconomic environment, at times during a period around
fifteen years ago adversely affected the availability and cost of funding
for European banks. This was due to several factors, including a sharp
increase in the perception of bank credit risk due to exposure to sovereign
debt in particula r, c redit rating downgrades of sovereigns and of banks,
and debt market speculation. Many European banks, including the
BNP Paribas Group, at various points during these periods experienced
restricted access to wholesale debt markets for institutional investors
and to the interbank market, as well as a general increase in their cost of
funding. More recently, in the context of the health crisis, the European
Central Bank (ECB) also set up refinancing facilities designed to foster
the banks' financing of the economy (T a rgeted Longer-T e rm Refinancing
Options or "TLTRO"), on which the BNP Paribas Group has drawn. Such
adverse credit market conditions may reappear in the event of a change
in monetary policy (as seen, for example, with the worsening inflation
and rapid rise of interest rates, as well as the end of "quantitative easing"
and the changes to the TLTRO terms and conditions, in 2022 and 2023),
a recession, prolonged stagnation of growth, deflation, "stagflation"
(sluggish growth accompanied by inflation), another sovereign debt crisis,
new forms of financial crises, factors relating to the financial industry
or the economy in general (including the economic consequences of
the invasion of Ukraine or the conflict in the Middle East) or to the
BNP Paribas Group in particula r. I n such a case, the effect on the liquidity,
balance sheet strength and cost of funding of European financial
institutions in general or the BNP Paribas Group in particular could
be materially adverse and have a negative impact on the BNP Paribas
Group's results of operations and financial condition.
4.2 Protracted market declines can reduce the
BNP Paribas Group's liquidity, making it harder
to sell assets and possibly leading to material
losses. Accordingly, the BNP Paribas Group
must ensure that its assets and liabilities
properly match in order to avoid exposure
to losses.
In some of the BNP Paribas Group's businesses, particularly Global
Markets (which represented 17% of the BNP Paribas Group's revenue in
2023) and Asset/Liability Management, protracted market movements,
particularly asset price declines, can reduce the level of activity in the
market or reduce market liquidity. These developments can lead to
material losses if the BNP Paribas Group cannot close out deteriorating
positions in a timely way. This is particularly true for assets that are
intrinsically illiquid. Assets that are not traded on stock exchanges or
other public trading markets, such as certain derivative contracts between
financial institutions, may have values that the BNP Paribas Group
calculates using models rather than publicly-quoted prices. Monitoring
the deterioration of prices of assets like these is difficult and could lead to
significant unanticipated losses (see section 5.8 Liquidity risk, paragraph
Stress tests and liquidity reserve of BNP Paribas' Universal registration
document at 31 December 2023).
The BNP Paribas Group is exposed to the risk that the maturity, interest
rate or currencies of its assets might not match those of its liabilities.
The timing of payments on certain of the BNP Paribas Group's assets is
uncertain and, if the BNP Paribas Group receives lower revenues than
expected at a given time, it might require additional market funding in
order to meet its obligations on its liabilities. While the BNP Paribas Group
imposes strict limits on the gaps between its assets and its liabilities as
part of its risk management procedures, it cannot be certain that these
limits will be fully effective to eliminate potential negative effects arising
from asset and liability mismatches.
4.3 Any downgrade of the Group's credit ratings
could weigh heavily on the profitability
of the Group.
Credit ratings have a significant impact on the BNP Paribas Group's
liquidity. The BNP Paribas Group is rated by four ratings agencies:
Standard & Poor's, Moody's, Fitch and DRBS. On 24 April 2023, Standard
& Poor's confirmed the long-term rating of BNP Paribas SA's deposits and
senior preferred debt rating as A+, and its short- term rating as A-1 with
a stable outlook. On 3 July 2023, Fitch maintained its long-term deposits
and senior preferred debt rating for BNP Paribas SA at AA- and its short
term deposits and senior preferred debt rating for BNP Paribas SA at F1+
and revised its outlook to stable. On 15 February 2024, Moody's confirmed
its long-term deposits and senior preferred debt rating as Aa3, and its
short-term rating as P-1, with a stable outlook. On 21 June 2023, DBRS
confirmed BNP Paribas SA's senior preferred debt rating as AA(low), and
its short-term rating as R-1(middle), with a stable outlook. A downgrade
in the BNP Paribas Group's credit rating could affect the liquidity and
competitive position of the Group. It could also increase the BNP Paribas
Group's borrowing costs, limit access to the capital markets or trigger
additional obligations under its covered bonds or under certain bilateral
provisions in some trading, derivative or collateralised financing contacts.
In addition, the BNP Paribas Group's cost of obtaining long-term
unsecured funding from market investors is also directly related to its
credit spreads, which in turn depend to a certain extent on its credit
ratings. Increases in credit spreads can significantly increase the
BNP Paribas Group's cost of funding. Changes in credit spreads are
continuous, market-driven, and subject at times to unpredictable and
highly volatile movements. Credit spreads are also influenced by market
perceptions of the BNP Paribas Group's creditworthiness. Furthermore,
credit spreads may be influenced by movements in the cost to purchasers
of credit default swaps referenced to the BNP Paribas Group's debt
obligations, which are influenced both by the credit quality of those
obligations, and by a number of market factors that are beyond the
control of the BNP Paribas Group.
5. RISKS RELATED TO THE
MACROECONOMIC AND MARKET
ENVIRONMENT
5.1 Adverse macroeconomic and financial
conditions have in the past had and may in the
future significantly affect on the BNP Paribas
Group and the markets in which it operates.
The BNP Paribas Group's business is affected by changes in the financial
markets and more generally by trends in economic conditions in France
(25% of the Group's revenues at 31 December 2023), other countries
in Europe (52% of the Group's revenues at 31 December 2023) and the
rest of the world (23% of the Group's revenues at 31 December 2023).
A deterioration in the markets and the economic environment in the
countries where the BNP Paribas Group operates has in the past had, and
could again in the future have, various impacts including the following:
■ adverse economic conditions affecting the business and operations
of the BNP Paribas Group's customers, reducing credit demand and
trading volume and resulting in an increased rate of default on loans
and other client receivables, in part as a result of the deterioration
of the financial capacity of companies and households. Since the
beginning of 2024, this risk has materialised in the form of slow or
weak growth in various regions of the world and a risk of recession in
certain regions (including the Eurozone) as a result, in particula r, o f
the 2022 and 2023 interest rate increases as well as specific effects
(e.g. the real estate crisis in China and the commercial real estate crisis
in the United States), in line with the central scenario drawn up by the
BNP Paribas Group's Economic Research unit, forecasting an average
annual increase in world GDP of 2.8% for 2023 (versus 3.3% in 2022)
and increases in Eurozone and US GDP of 0.5% and 2.3% respectively
for 2023 and around 1% for these two zones for 2024. Finally, in 2024,
as in 2023, the global and Eurozone economies will be particularly
sensitive to inflation and, consequently, to interest rates, as well as
to the impact of geopolitical events;
■ a decline in market prices (or an increase in volatility) of bonds,
equities and commodities affecting the businesses of the BNP Paribas
Group, including in particular trading, Investment Banking and asset
management revenues. Indeed, high volatility over a long period can
lead to financial asset market corrections (particularly the riskiest
assets) and thus generate losses for the BNP Paribas Group. In
addition, a sudden change in the level and structure of volatility, or
the rapid alternation of periods of strong market rises and falls over
a shorter period, may make it difficult or more costly to hedge certain
structured products, thereby increasing the risk of loss for the BNP
Paribas Group;
■ macroeconomic or monetary policies adopted in response to actual or
anticipated economic conditions could have consequences, anticipated
or not, on market parameters such as interest rates and foreign
exchange rates, which in turn can affect the BNP Paribas Group's
businesses that are most exposed to market risk. This risk, which
is pronounced in 2023 due to the significant and rapid monetary
tightening carried out by central banks in 2022 and 2023, remains
relevant in 2024 (see section 5.2 Significant interest rate changes, and
in particular the interest rate increases in 2022 and 2023 following
a prolonged period of low interest rates, could adversely affect the
BNP Paribas Group's results of operations and financial condition);
■ the favourable perception of economic conditions, whether globally
or in specific sectors, can lead to the formation of speculative asset
bubbles, and corrections when conditions change. This risk persists
in 2024 after the recent monetary tightening, particularly in specific
sectors such as commercial real estate and leveraged finance (see
section 5.2 Significant interest rate changes, and in particular the rise
in interest rates in 2022 and 2023 following a prolonged period of low
interest rates, could adversely affect the BNP Paribas Group's results of
operations and financial condition). For example, falling valuations and
fewer transactions in the commercial real estate sector are tightening
financing conditions and increasing investor uncertainty in this market,
which may affect the financial strength of market participants and
hence asset quality. The BNP Paribas Group's gross on- and off-balance
sheet exposure to commercial real estate represented 3.9% of its total
on- and off-balance sheet exposure as at 31 December 2023 and the
BNP Paribas Group's Exposure-at-default (EAD) represented 3.8% of
its total EAD as at 31 December 2023. With regard to commercial real
estate in the United States, the BNP Paribas Group's EAD represented
0.09% of its total EAD as at 31 December 2023; and
■ significant one-off economic disruptions related to, or adverse
economic consequences resulting from, various specific adverse
political or geopolitical events (such as the global financial crisis
of 2008, the European sovereign debt crisis of 2011, the recession
caused, in 2020 and 2021, by the Covid-19 pandemic, or high inflation
and rising interest rates as well as geopolitical shocks, for example,
the invasion of Ukraine in 2022 and the emergence of conflict in
the Middle East in 2023) having a substantial impact on all of the
BNP Paribas Group's businesses, in particular by increasing the
volatility and costs of funding sources, deteriorating asset quality and
financial market corrections, potentially exacerbated by a reduction
in market liquidity and hence the ability to sell certain categories of
assets at fair market value or at all. These disruptions could also entail,
in particula r, a d ecline in transaction commissions and consumer loans
by the effect, whether temporary or permanent, of geopolitical events
on the economic conditions in which the BNP Paribas Group operates.
While by definition the occurrence of such adverse geopolitical events
is difficult to predict, in 2024 they could include the worsening or
extension of the conflict resulting from the invasion of Ukraine and in
the Middle East, which could in particular affect the energy market and/or
supply chains generally, the occurrence of a sovereign debt crisis (high
level of public debt post-pandemic, rapid increase in (re)financing costs,
aggravating exchange rate effects, particularly for borrowers exposed
to the US dollar) and the materialisation of various political risks such
as, for example, a deadlock in the US Congress or uncertainty linked to
elections (2024 being a busy election year).
5.2 Significant interest rate changes, and
in particular the interest rate increases in
2022 and 2023 following a prolonged period
of low interest rates, could adversely affect
the BNP Paribas Group's results of operations
and financial condition.
Interest rates rose significantly in 2022 and 2023 after many years of
low interest rates. In this context, the BNP Paribas Group's results have
been, and could continue to be significantly affected in a number of
ways. The increase in interest rates increases the cost of funding for
the Group through higher interest rates on liabilities such as short-term
deposits, commercial paper and bonds, as well as the risk of arbitrage by
customers between non-interest-bearing deposits and interest-bearing
deposits (compounded in France by policy decisions to increase rates on
regulated savings, including to levels above the return received by banks
on the same deposits). This increase in the cost of funding could create
an imbalance and a reduction in net interest margin as a result of the
BNP Paribas Group holding a significant portfolio of loans originated in
a low interest rate environment. The Group may also have difficulty (in
particular due to the usury rate in France) promptly reflecting higher
interest rates in new mortgage or other fixed-rate consumer or corporate
loans, while the cost of customer deposits and hedging costs would
increase more rapidly. In addition, the ECB modified in 2022 and 2023
the instruments it used previously to implement "quantitative easing"
and enhance bank liquidity e.g. the creation of a "transmission protection
instrument" and the amendment of the conditions of its longer-term
refinancing operations (TLTRO III); as the Group hedges its overall interest
rate position, any change in the terms and conditions affecting these
instruments may lead to adjustments in this hedge, which has had and
could have an adverse impact on the results of the BNP Paribas Group.
As a result of these adjustments, the BNP Paribas Group recorded an
extraordinary charge of EUR 938 million against its net banking income
at 31 December 2023.
Moreove r, a p ortfolio comprising significant amounts of lower-interest
loans and fixed-income assets as a result of an extended period of low
interest rates would (in a rapidly rising market interest-rate environment)
be expected to decline in value. If the Group's hedging strategies are
ineffective or provide only a partial hedge against such a change in value,
it could incur significant losses.
Higher interest rates increase financial expense for borrowers and may
strain their ability to meet their debt obligations. Moreove r, a ny rate
increase that is sharper or more rapid than expected could threaten
economic growth in the European Union, the United States and elsewhere.
These effects could test the resilience of the BNP Paribas Group's loan
and bond portfolios, which could lead to an increase in doubtful loans and
defaults. More generally, the end of accommodating monetary policies,
in particular by the US Federal Reserve and the ECB, has led, and could
continue to lead, to sharp corrections in certain markets or assets (e.g.,
non-investment grade corporate and sovereign borrowers, certain sectors
of equities and real estate, particularly commercial, and leveraged
finance) that particularly benefitted from the prolonged period of low
interest rates and high liquidity and adversely affect market participants.
For example, in early 2024, the commercial real estate crisis affected
the share prices of many US regional banks, as well as the financial
condition of some major real estate developers. More generally, such
corrections could potentially be contagious to financial markets generally,
including by the effect of substantially increased volatility and heightened
investor mistrust, generally or in relation to certain sectors, including the
banking sector due to its exposure to the commercial real estate market
or other sectors particularly affected by rising interest rates. The BNP
Paribas Group's operations could as a result be significantly disrupted
with a consequential material adverse effect on its business, results of
operations and financial condition.
5.3 Given the global scope of its activities, the
BNP Paribas Group is exposed to country risk
and to changes in the political, macroeconomic
or financial contexts of a region or country.
The BNP Paribas Group monitors country risk and takes it into account
in the fair value adjustments and cost of risk recorded in its financial
statements. Howeve r, a s ignificant change in political or macroeconomic
environments may require it to record additional charges or to incur
losses beyond the amounts previously written down in its financial
statements. In addition, factors specific to a country or region in which
the BNP Paribas Group operates could make it difficult for it to carry out
its business and lead to losses or impairment of assets.
At 31 December 2023, the BNP Paribas Group's loan portfolio consisted
of receivables from borrowers located in France (33%), Belgium and
Luxembourg (16%), Italy (10%), other European countries (21%), North
America, (9%), Asia (6%) and the rest of the world (5%). Adverse economic
or regulatory conditions that particularly affect these countries and
regions would have a significant impact on the BNP Paribas Group. For
example, the introduction by the Polish government in July 2022 of a law
allowing borrowers under mortgage loans, generally at variable rates,
to suspend payments for eight months in the 2022-2024 period led the
Group (operating in Poland through BNP Paribas Bank Polska) to record
an exceptional negative impact of EUR 204 million in the third quarter of
2022. As another example, hyperinflation in Türkiye negatively affected
the 2023 results of the BNP Paribas Group. Moreove r, t he BNP Paribas
Group has significant exposures in countries outside the OECD, which are
subject to risks that include political instability, unpredictable regulation
and taxation, expropriation and other risks that are less present in more
developed economies.
In addition, the BNP Paribas Group is present in Ukraine, through its
subsidiary UkrSibbank in which it holds a 60% stake alongside the
European Bank for Reconstruction and Development (40%). In the context
of the conflict in Ukraine, the Group reassessed the nature of the control
exercised over its subsidiary and concluded to the loss of exclusive
control, and the maintain of a significant influence. This situation led
the Group to consolidate this entity using the equity method as from
1 March 2022 as described in note 9.d Business combinations and loss of
control or significant influence to the consolidated financial statements
for the year ended 31 December 2023. At 31 December 2023, the Group's
exposure resulting from UkrSibbank's business, was insignificant.
With regard to Russia, which is subject to extensive economic sanctions
imposed in particular by the European Union, the United States and
the United Kingdom, gross on- and off- balance sheet exposures
of the BNP Paribas Group to this country represented 0.03% of the
BNP Paribas Group's gross exposures on- and off- balance sheet at
31 December 2023. The Group is diligently monitoring developments
in the situation in conjunction with the authorities concerned and, in
particula r, t he reactions of the international community with regard to
economic sanctions.
6. REGULATORY RISKS
6.1 Laws and regulations adopted in recent
years, as well as current and future
legislative and regulatory developments, may
significantly impact the BNP Paribas Group
and the financial and economic environment
in which it operates.
Laws and regulations taking effect in recent years in the jurisdictions in
which the BNP Paribas Group operates (in particular in France, Europe
and the United States) have substantially changed, and in the future
could potentially continue to substantially change, the environment in
which the BNP Paribas Group and other financial institutions operate.
The most recent measures applicable to financial institutions such as
the BNP Paribas Group adopted include in particular:
■ More stringent "prudential" (i.e. capital solvency, liquidity)
requirements, in particular for global systemically important banks,
such as the BNP Paribas Group, and under the 26 June 2013 Regulation
of the European Parliament and Council (as amended from time to time,
the "CRR"), as well as changes to the risk-weighting methodologies
and methods of using internal models that have led and could lead
to increased capital requirements.
■ In respect of minimum capital requirements in October 2021, the
European Commission adopted a legislative package to finalise the
implementation within the European Union of the Basel III agreement
adopted by the Group of Central Governors and Heads of Supervision
(GHOS). In the impact assessment accompanying this legislative
package, the European Commission estimated, on the basis of an
EBA impact study dated December 2020 and of additional European
Commission estimates for some EU specific adjustments, that the
implementation of the final Basel III standards may result in an
average increase in total minimum capital requirements ranging
between 6.4% and 8.4% after full implementation of the reform. On
the basis of the EBA's updated impact analysis taking into account the
combined effect of the reform and the potential consequences of the
health crisis, the European Commission opted to apply the new capital
requirements to EU banks as from 1 January 2025, with a phase-in
period during which the requirements will be gradually increased
through 2030 (and 2032 for certain requirements). On this basis, the
Group has indicated a potential increase of 7% in its risk-weighted
assets at the date of the first application announced for 1 January
2025, which implies a potential 7% increase in total minimum capital
requirements resulting from the finalisation of Basel 3 fully loaded.
This estimate is subject to change depending on potential changes
in the draft text, in the Group and the macroeconomic context. In
June 2023, negotiations resulted in a provisional agreement between
the Council and the European Parliament, which was validated in
December 2023, and should be formally adopted by the European
Parliament in the second quarter of 2024.
■ Strengthening of the powers of existing supervisory bodies and the
creation of new supervisory authorities, for example under the Single
Resolution Mechanism (the SRM) placing the BNP Paribas Group under
the direct supervision of the ECB.
■ Enhancement of recovery and resolution regimes, in particular the
adoption of the Bank Recovery and Resolution Directive of 15 May 2014,
as amended from time to time (the "BRRD"), in order to ensure that
losses are borne largely by creditors and shareholders of banks and
to thus minimise losses borne by taxpayers.
■ Establishment of national resolution funds by the BRRD and the creation
of the Single Resolution Board (the SRB) by the European Parliament
and Council of the European Union in a resolution dated 15 July 2014
(as amended from time to time, the "SRM Regulation"), which is
authorised to initiate resolution proceedings for banking institutions
such as the BNP Paribas Group, and the Single Resolution Fund (the
SRF), funded via annual contributions from financial institutions. In
2023, the BNP Paribas Group's contribution was EUR 1,002 million.
■ Restrictions on certain types of activities by commercial banks (in
particular proprietary trading) considered as speculative and thus
either prohibited or having to be ring-fenced in subsidiaries, and
subject to specific capital and funding requirements.
■ Prohibitions or restrictions on fees for certain types of financial
products or activities.
■ Establishment of national deposit guarantee schemes and a proposed
European deposit guarantee scheme or deposit insurance which will
gradually cover all or part of the guarantee schemes of participating
countries.
■ Increased internal control, risk management and reporting
requirements with respect to certain activities.
■ Implementation of regulatory stress tests (including in relation to
climate change risk) which could lead to additional regulatory capital
requirements (see Market Risk Stress T e sting Framework in section 5.7
Market risk of BNP Paribas' Universal registration document at
31 December 2023).
■ Greater powers granted to the relevant authorities to combat money
laundering and terrorism financing, in particular through the creation
of a new European authority for countering money laundering and
financing of terrorism, endorsed by the Council and the European
Parliament under a provisional agreement dated 13 December 2023.
■ More stringent governance and conduct of business rules and
restrictions and increased taxes on employee compensation over
specified levels.
■ Changes in securities regulation, in particular of financial instruments
(including shares and other securities issued by entities of the
BNP Paribas Group); measures to improve the transparency, efficiency
and integrity of financial markets and in particular the regulation
of high frequency trading, more extensive market abuse regulations,
increased regulation of certain types of financial products including
mandatory reporting of derivative and securities financing transactions,
requirements either to mandatorily clea r, o r otherwise mitigate risks in
relation to over-the-counter derivative transactions (including through
posting of collateral in respect of non-centrally cleared derivatives).
■ Regulations of market infrastructures such as trading platforms,
clearing houses, central depositories and securities delivery and
settlement systems.
■ Introduction of enhanced disclosure requirements, including through
the introduction of new disclosure requirements (i) on how banking
groups providing asset management services such as the BNP Paribas
Group integrate sustainability risks or negative impacts, sustainable
investment objectives or the promotion of environmental or social
attributes when making investment decisions, (ii) on how and to
what extent banking groups themselves finance or develop economic
activities that can be considered environmentally sustainable as
defined in the European T a xonomy and (iii) in terms of sustainability,
certified by an independent third party, making it possible to analyse
the impact of the BNP Paribas Group's business on ESG issues and
the manner in which these issues affect its business, its results of
operations and its financial condition, in accordance with the texts
transposing the Corporate Sustainability Reporting Directive ("CSRD"),
applicable progressively since 1 January 2024.
■ Strengthened transparency and disclosure requirements on CSR risk
management, including physical and transitional risks related to
climate change, and the introduction of new requirements for the
integration of climate risk into the risk measurement and management
systems of banking groups, including through the publication of
proposals for banks to manage and disclose climate risk.
■ Multiplication of measures that are not specific to financial institutions,
such as measures relating to the investment fund sector or those
promoting technological innovation such as "open data" access, the
development of the regulation of payment services, crowdfunding and
fintechs.
Existing measures, as well as those (by definition unpredictable) which
could be adopted in the future, could in particular reduce the BNP Paribas
Group's ability to allocate and apply its capital and financing resources,
limit its ability to diversify its risks, reduce the availability of certain
financing and liquidity resources, increase the cost of financing, increase
the cost of compliance, increase the cost or reduce the demand for its
products and services, require it to effect internal reorganisations,
structural changes or reallocations, affect its ability to conduct certain
activities or to attract and/or retain talent, facilitate the entry of new
players in the financial services sector or affect the business model of
the BNP Paribas Group and, more generally, affect its competitiveness
and profitability, which could have a significant impact on its business,
financial condition and results of operations.
6.2 The BNP Paribas Group may incur substantial
fines and other administrative and criminal
penalties for non-compliance with applicable
laws and regulations, and may also incur
losses in related (or unrelated) litigation
with private parties.
The BNP Paribas Group is subject to regulatory compliance risk. This
risk is exacerbated by the adoption by different countries of multiple
and occasionally diverging and even conflicting legal or regulatory
requirements. Besides damage to the BNP Paribas Group's reputation
and private rights of action (including class actions), non-compliance
could lead to material legal proceedings, fines and expenses (including
fines and expenses in excess of recorded provisions), public reprimand,
enforced suspension of operations o r, i n extreme cases, withdrawal by
the authorities of operating licences. This risk is further exacerbated
by continuously increasing regulatory scrutiny of financial institutions
as well as substantial increases in the quantum of applicable fines
and penalties. Moreove r, l itigation by private parties against financial
institutions has substantially increased in recent years. Accordingly,
the BNP Paribas Group faces significant legal risk in its operations.
The volume and amount of damages claimed in litigation, regulatory
proceedings and other adversarial proceedings against financial services
firms have substantially increased in recent years and may increase
furthe r. T he BNP Paribas Group may record provisions in this respect
as indicated in note 5.n Provisions for contingencies and charges to the
consolidated financial statements for the year ending 31 December 2023.
Regarding the Cease and Desist Order issued jointly by the French Autorité
de contrôle prudentiel et de résolution and the US Federal Reserve Board
of Governors on 30 June 2014, related to violations by the Bank of US
laws and regulations on economic sanctions (which resulted among
other things in a fine of USD 8.9 billion) the Secrétariat Général de
l''A utorité de contrôle prudentiel et de résolution informed BNP Paribas
on 19 January 2024 of its conclusion that the Group had fully complied
with the provisions of the Cease and Desist Order and that it would no
longer monitor the BNP Paribas Group's compliance. On 6 February 2024,
the Federal Reserve Board of Governors also announced the termination
of the Cease and Desist Order and a related enforcement action.
The BNP Paribas Group is also currently involved in various litigations
and investigations as summarised in note 9.c Legal proceedings and
arbitration to the consolidated financial statements for the year ended
31 December 2023. It may become involved in other litigation or
investigations at any time. No assurance can be given that an adverse
outcome in one or more of such matters would not have a material
adverse effect on the BNP Paribas Group's operating results for any
particular period.
6.3 The BNP Paribas Group could experience an
unfavourable change in circumstances, causing
it to become subject to a resolution proceeding
or a restructuring outside of resolution:
BNP Paribas Group security holders could
suffer losses as a result.
The BRRD, the Ordinances of 20 August 2015 and 21 December 2020
transposing it, and the SRM Regulation as amended from time to time,
confer upon the ACPR or the SRB the power to commence resolution
proceedings for a banking institution, such as the BNP Paribas Group,
with a view to ensure the continuity of critical functions, to avoid the
risks of contagion and to recapitalise or restore the viability of the
institution. These powers must be implemented so as to ensure that
losses, subject to certain exceptions, are borne first by shareholders,
then by holders of additional capital instruments qualifying as Tier 1
(such as super subordinated bonds) and Tier 2 (such as subordinated
bonds), then by the holders of senior non-preferred debt and finally
by the holders of senior preferred debt, all in accordance with the
insolvency ranking in normal insolvency proceedings. For reference,
the BNP Paribas Group's medium- to long-term wholesale financing at
31 December 2023 consisted of the following: EUR 14.9 billion in hybrid
Tier 1 debt, EUR 20.7 billion in Tier 2 subordinated debt, EUR 1.6 billion
in subordinated debt not included in own funds, EUR 73.5 billion in senior
unsecured non-preferred debt, EUR 91.5 billion in senior unsecured
preferred debt and EUR 15.5 billion in senior secured debt.
Resolution authorities have broad powers to implement resolution
measures with respect to institutions and groups subject to resolution
proceedings, which may include (without limitation): the total or partial
sale of the institution's business to a third party or a bridge institution,
the separation of assets, the replacement or substitution of the institution
as obligor in respect of debt instruments, the full or partial write-down
of capital instruments, the dilution of capital instruments through the
issuance of new equity, the full or partial write-down or conversion into
equity of debt instruments, modifications to the terms of debt instruments
(including altering the maturity and/or the amount of interest payable
and/or imposing a temporary suspension on payments), discontinuing the
listing and admission to trading of financial instruments, the dismissal
of managers or the appointment of a special manager (administrateur
spécial).
Certain powers, including the full or partial write-down of capital
instruments, the dilution of capital instruments through the issuance
of new equity, the full or partial write-down or conversion into
equity of additional capital instruments qualifying as Tier 1 (such as
super subordinated bonds) and Tier 2 (such as subordinated bonds), can
also be exercised outside of resolution proceedings and/or pursuant to the
European Commission's State Aid framework if the institution requires
exceptional public financial support.
The implementation of these tools and powers with respect to the
BNP Paribas Group may result in significant structural changes to the
BNP Paribas Group (including as a result of asset or business sales or
the creation of bridge institutions) and in a partial or total write-down,
modification or variation of claims of shareholders and creditors. Such
powers may also result, after any transfer of all or part of the BNP Paribas
Group's business or separation of any of its assets, in the holders of
securities (even in the absence of any such write-down or conversion)
being left as the creditors of the BNP Paribas Group whose remaining
business or assets are insufficient to support the claims of all or any of
the creditors of the Group.
7. RISKS RELATED TO THE BNP PARIBAS
GROUP'S GROWTH IN ITS CURRENT
ENVIRONMENT
7.1 Should the BNP Paribas Group fail to
implement its strategic objectives or to
achieve its published financial objectives,
or should its results not follow stated expected
trends, the trading price of its securities could
be adversely affected.
In connection with the publication of its results for the year ended
31 December 2021, the BNP Paribas Group announced its 2025 strategic
plan. The plan includes financial and operational objectives. In connection
with the publication of its results for the year ended 31 December 2023
the Group revised its objectives for 2025 to take into account the
deterioration of the macroeconomic environment, particularly in Europe,
the negative effect of European public policy decisions and the trajectory
of certain business lines particularly affected by the current cycle. The
BNP Paribas Group's actual results could vary significantly from these
trends for a number of reasons, including the materialisation of one or
more of the risks described in this section. If the BNP Paribas Group's
results do not follow these trends, its financial condition and the price of
its securities, as well as its financing costs, could be affected.
Additionally, the Group is pursuing an ambitious corporate social
responsibility (CSR) policy and is committed to making a positive impact
on society with concrete achievements. In 2022, the BNP Paribas Group
strengthened its commitment to a sustainable economy and accelerated
decarbonation strategies, with the signing of the Net-Zero Banking Alliance,
the Net-Zero Asset Owner Alliance, and the Net-Zero Asset Manager
initiative. The Group is thus taking strong positions, as a founding member
of the United Nations Principles for Responsible Banking, which commits
it to align its strategy with the Paris Agreement and the Sustainable
Development Goals (SDGs). As part of the Group's 2022-2025 strategic
plan, it aims to mobilise EUR 350 billion in ESG- related loans and bond
issuances (loans to companies, institutions and individuals covering
environmental and social issues and annual sustainable bonds issuances)
and to have EUR 300 billion in sustainable responsible investments under
management by 2025 (BNP Paribas Asset Management European open
funds classified articles 8 and 9 as defined by SFDR). In addition, in 2019,
as part of the fight against climate change, the BNP Paribas Group made
new commitments to reduce its exposure to thermal coal to zero by 2030
in the OECD and by 2040 for the rest of the world. At the end of 2022, the
BNP Paribas Group published its first climate alignment report and its
targets for reducing carbon emission intensity by 2025 and is taking the
necessary measures to align its credit portfolios with its carbon neutrality
commitments. Finally, in January 2023, the Group strengthened its social
commitment policy and is working alongside its clients as part of a global
approach to the transition to a sustainable, low-carbon economy. Building
on the expertise developed through the Low-Carbon Transition Group,
the Group announced new objectives that will result in an acceleration
in the financing of low-carbon energy production and a reduction in the
financing of fossil fuel production by 2030. If the Group fails to meet
these targets, which depend in part on factors beyond its control, its
reputation could be affected.
7.2 The BNP Paribas Group may experience
difficulties integrating businesses following
acquisition transactions and may be unable
to realise the benefits expected from
such transactions.
The BNP Paribas Group regularly undertakes merger and acquisition
transactions. It has in particular announced its intention to allocate
part of the proceeds from the sale of Bank of the West to acquisitions.
The BNP Paribas Group's most recent major such transactions were the
integration of Deutsche Bank's Prime Brokerage & Electronic Execution
platform in 2019, the acquisition of 100% of Exane, previously 50%
owned by BNP Paribas, in 2021, the acquisition of 100% of Floa in 2022
and the acquisition of Kantox in 2023. Successful integration and the
realisation of synergies require, among other things, proper coordination
of business development and marketing efforts, retention of key members
of management, policies for effective recruitment and training as
well as the ability to adapt information and computer systems. Any
difficulties encountered in combining operations could result in higher
integration costs and lower savings or revenues than expected. There
will accordingly be uncertainty as to the extent to which anticipated
synergies will be achieved and the timing of their realisation. Moreove r,
the integration of the BNP Paribas Group's existing operations with those
of the acquired operations could interfere with its respective businesses
and divert management's attention from other aspects of the BNP Paribas
Group's business, which could have a negative impact on the BNP Paribas
Group's business and results. In some cases, moreove r, d isputes relating
to acquisitions may have an adverse impact on the integration process or
have other adverse consequences, including financial ones.
Although the BNP Paribas Group undertakes an in-depth analysis of the
companies it plans to acquire, such analyses often cannot be complete or
exhaustive. In the event that the BNP Paribas Group is unable to conduct
comprehensive due diligence prior to an acquisition, it may acquire
doubtful or troubled assets or businesses that may be unprofitable or
have certain potential risks that only materialise after the acquisition, The
acquisition of an unprofitable business or a business with materialised
risks may have a significant adverse effect on the BNP Paribas Group's
overall profitability and may increase its liabilities.
7.3 The BNP Paribas Group's current environment
may be affected by the intense competition
amongst banking and non-banking operators,
which could adversely affect the BNP Paribas
Group's revenues and profitability.
Competition is intense in all of the BNP Paribas Group's primary business
areas in France and the other countries in which it conducts a substantial
portion of its business, including other European countries and the
United States. Competition in the banking industry could intensify as
a result of consolidation in the financial services area, as a result of
the presence of new players in the payment and the financing services
area or the development of crowdfunding platforms, as well as the
continuing evolution of consumer habits in the banking secto r. W hile
the BNP Paribas Group has launched initiatives in these areas, such as
the debut of Hello bank! and its acquisition of Nickel or Floa, competitors
subject to less extensive regulatory requirements or to less strict capital
requirements (e.g. debt funds, shadow banks), or benefiting from
economies of scale, data synergies, technological innovation (e.g. Internet
and mobile operators, digital platforms, fintechs), or free access to
customer financial data could be more competitive by offering lower prices
and more innovative services to address the new needs of consumers.
New technologies that facilitate or transform transaction processes and
payment systems, such as blockchain technologies and related services,
or that could significantly impact the fundamental mechanisms of the
banking system, such as central bank digital currencies, have been
developed in recent years or could be developed in the near future.
While it is difficult to predict the effects of these developments and
the regulations that apply to them, the use of such technology could
nevertheless reduce the market share of banks, including the BNP Paribas
Group, secure investments that otherwise would have used technology
used by more established financial institutions, such as the BNP Paribas
Group o r, m ore broadly, lead to the emergence of a different monetary
system in which the attractiveness of using established financial
institutions such as the BNP Paribas Group would be affected. If such
developments continue to gain momentum, particularly with the support
of governments and central banks, if the BNP Paribas Group is unable to
respond to the competitive environment in France or in its other major
markets by offering more attractive, innovative and profitable product
and service solutions than those offered by current competitors or new
entrants or if some of these activities were to be carried out by institutions
other than banks, it may lose market share in key areas of its business
or incur losses on some or all of its activities. In addition, downturns
in the economies of its principal markets could add to the competitive
pressure, through, for example, increased price pressure and lower
business volumes for the BNP Paribas Group and its competitors. It is also
possible that the imposition of more stringent requirements (particularly
capital requirements and business restrictions) on large or systemically
significant financial institutions that new players may not be subject to
could lead to distortions in competition in a manner adverse to large
private-sector institutions such as the BNP Paribas Group.
7.4 The BNP Paribas Group could experience
business disruption and losses due to
risks related to environmental, social and
governance ("ESG") issues, particularly
relating to climate change, such as transition
risks, physical risks or liability risks.
The BNP Paribas Group is exposed to risks related to climate change,
either directly through its own operations or indirectly through its
financing and investment activities. There are two main types of
risks related to climate change: (i) transition risks, which result from
changes in the behaviour of economic and financial actors in response
to the implementation of energy policies or technological changes for a
transition to a low-carbon economy; and (ii) physical risks, which result
from the direct impact of climate change on people and property through
extreme weather events or long-term risks such as rising water levels or
increasing temperatures. Physical risk can spread throughout the value
chain of the BNP Paribas Group's clients, which can lead to a payment
default and thus generate financial losses, while the process of reducing
emissions is likely to have a significant impact on all sectors of the
economy by affecting the value of financial assets and corporate profits.
In addition, liability risks may flow from both categories of risk. They
correspond to the financial compensation that can be claimed by
individuals, companies, governments or non-governmental organisations
(NGOs) that may affected by climate change events, activities or effects
and who would seek to hold actors in the financial sector accountable for
financing, facilitating or otherwise contributing to such events, activities,
or effects. In recent years, activism by shareholders, activist funds,
NGOs and others, particularly on ESG issues, has been directed against
many public companies. These initiatives include requiring companies
to disclose material information about their ESG-related actions and
commitments and, in some cases, seeking to force them to make strategic
and business changes. In some jurisdictions, financial sector actors may
also face legal action from individuals, companies, governments or NGOs,
groups or private persons.
Policy and regulatory initiatives and frameworks, including at the French,
European Union and international levels, concerning climate change
and sustainability, as well as voluntary and joint commitments through
industry alliances, create increasing legal, regulatory and reputational
risks. The ESG regulatory framework is constantly changing, evolving
and continuing to evolve rapidly. It includes, among other things,
requirements in terms of disclosure and the integration of climate
risks into risk measurement and management systems, as well as a
general duty of care (see section 6.1 Laws and regulations adopted in
recent years, as well as current and future legislative and regulatory
developments, may significantly impact the BNP Paribas Group and
the financial and economic environment in which it operates). These
initiatives and frameworks overlap in some respects and are not always
consistent in their objectives, resulting in regulatory complexity and,
in some cases, a lack of clarity and difficulty in interpretation. Non-
compliance by the Group in its business and disclosure with these
and other regulatory requirements, as well as any other regulations
concerning the transition to a lower carbon economy, climate change,
sustainability or energy-related investments, could have a negative
impact on its business, the value of its investments and its reputation.
BNP Paribas does not consider ESG risks as a stand-alone risk category,
but rather as factors affecting various risk categories such as credit,
market and operational risks. Accordingly, BNP Paribas is progressively
integrating the assessment of these risks into its risk management
system. As explained in detail in section 7 of BNP Paribas' Universal
registration document at 31 December 2023, ESG risk factors, including
the subset of climate and environmental risk factors, are among the
risk factors taken into account by contributors to the Group's risk
identification process and to which they apply a risk assessment based
on short to medium-term (three or four years) as well as longer-term
scenarios. In 2022, the Group identified several major risk factors that are
directly or indirectly linked to climate change, including possible changes
in the insurance and reinsurance markets; customer expectations and the
impact of consumerism; investors' financial expectations; climate change
and the energy transition; threats to health and the environment; and the
focus on banks' role in ESG matters generally. The Group monitors these
risks in the conduct of its business, in the conduct of its counterparties'
business, and in its investments on its own behalf and on behalf of third
parties. In this respect, the specific credit policies and the General Credit
Policy have been enhanced as from 2012 and 2014, respectively, with the
addition of clauses relating to social and environmental responsibility. In
addition, the development of regulatory requirements in this area could
lead to an increase in litigation against financial institutions in relation
to climate change and other related issues. The Group could thus be held
liable for transaction execution failings such as inadequate assessment
of the environmental, social and governance criteria of certain financial
products.
In addition, sector-specific policies including to rule out financing certain
sectors defined by ESG criteria have also been implemented and the
BNP Paribas Group will have to adapt its business and in particular
its counterparty screening accordingly in order to achieve its strategic
objectives (see section 7.1 Should the BNP Paribas Group fail to implement
its strategic objectives or to achieve its published financial objectives, or
should its results not follow stated expected trends, the trading price of
its securities could be adversely affected). Specifically, by way of example,
the results of the Group's ESG analysis may lead it to withdraw from a
client relationship (unsatisfactory results), place a client relationship
under review and regular monitoring (intermediate results), or enter
into a new (or continue an existing) client relationship (satisfactory
results). Similarly, the Group's assessment of the effectiveness of ESG
risk management at the investee entity may lead it to divest from existing
investments or affect its decision whether to make new investments.
Notwithstanding its efforts to combat climate change and monitor the
related risks, the physical, transitional or liability risks related to climate
change, or any delay or failure to implement ESG risk management,
could have a material adverse effect on the Group's business, financial
condition or reputation.
7.5 Changes in certain holdings in credit
or financial institutions could have an impact
on the BNP Paribas Group's financial position.
Certain classes of assets may carry a high risk-weight of 250%. They
include: credit or financial institutions consolidated under the equity
method within the prudential scope (excluding insurance); significant
financial interest in credit or financial institutions in which the
BNP Paribas Group holds a stake of more than 10%; and deferred
tax assets that rely on future profitability and arise from temporary
differences.
The risk-weighted assets carrying a risk-weight of 250% amounted to
EUR 19 billion at 31 December 2023, or 3% of the total risk-weighted
assets of the BNP Paribas Group. They amounted to EUR 20 billion at
31 December 2022, or 3% of the Group's total risk-weighted assets.
If the BNP Paribas Group increases the amount of high risk-weighted
assets (either by increasing the proportion of such high risk-weighted
assets in its overall asset portfolio or due to an increase of the regulatory
risk-weighting applicable to these assets), its capital adequacy ratios
may be lowered.
TOP AND EMERGING RISKS
The identification and monitoring of top and emerging risks are central
to BNP Paribas' approach to risk management.
These risks are identified, analysed and managed thanks to different
work and analyses carried out by the RISK Function, the divisions and the
businesses, and through several committees. They notably give rise to:
■ a close follow-up of macroeconomic and financial conditions with
the objective of organising them into a hierarchy with regard to the
consequences for Group portfolio and designing adverse scenarios. This
close monitoring is delivered quarterly to the General Management
as well as to the Internal Control, Risk Management and Compliance
Committee (CCIRC) through a dashboard presented by RISK;
■ a close monitoring of the risk profile in accordance with the directives
and thresholds approved by the Board of directors;
■ cross-functional policies on concentration or corporate social
responsibility among others;
■ market and liquidity risk decisions made by Group ALM Treasury
Committee (or Group ALCo, see Governance in section 5.3 Risk
management) and the Financial Markets Risk Committee (FMRC);
■ key decisions made by committees with respect to specific transactions
at the highest level;
■ proposals for new activities or new products;
■ portfolio and businesses reviews by Risk & Development Policy
Committees (RDPC), on topics selected by the Group's Executive
Management for the upcoming year;
■ proactive and forward-looking discussions on emerging risks and their
impacts on the Bank's risk profile in the Risk Anticipation Committee;
■ an analysis and a monitoring of changes to the regulatory framework
and their consequences on the Bank's capital and liquidity management
as well as on its activities.
■ the Group's sustainable finance strategy and commitments validated
by the Sustainable Finance Strategic Committee (SFSC). This
committee also decides on the main lines of sustainable finance's
commercial policy and monitors their operational implementation.
Where necessary, it also validates cross-functional infrastructure
choices ensuring the expertise and consistency of the implementation
of regulatory requirements and the commitments made by the Group
in methods, analyses, risk management, data, tools, standards and
reporting related to sustainable finance.
TOP RISKS
A top risk is defined as having:
■ the potential to have a material impact, across a business area or
geographical area, on the financial results, reputation or sustainability
of the Group;
■ the potential to occur in the near future.
The top risks to which the Group is exposed are described below.
Macroeconomic environment
Given the nature of the Bank's business, the Bank and its results are
particularly sensitive to macroeconomic and market conditions in Europe.
Global activity decelerated in 2023, in a context of still high interest rates
and inflation. According to the latest IMF projections of January 2024,
global GDP grew by only 3.1% (compared with 3.5% in the previous year),
mainly reflecting weakening of European economies. In the Eurozone,
activity growth indeed decelerated with a growth of 0.5% (compared
with +3.4% in the previous year), reflecting much less dynamic domestic
demand, both in terms of consumption and investment.
While inflation has receded at a quite rapid pace in the course of 2023, it
has remained significantly above central bank targets in many countries.
This high inflation environment has pushed central banks to implement
the most pronounced monetary tightening in recent decades.
The main central banks have most likely completed their interest
rate hiking cycle in the second half of 2023. Both short-term and
long-term interest rates have reached levels not seen since the years
2000 and are expected to remain relatively high for some time. These rate
conditions should thus continue to weigh on activity in 2024.
In this context, the following risk categories can be identified:
Risks related to high inflation, supply chain
disruptions and tensions on commodity markets
Inflation has receded at a quite rapid pace since late 2022 and is generally
expected to continue to moderate in 2024, reflecting both reduced
tensions in some specific sectors (energy, food) and a modest pace of
activity growth. Howeve r, t he risk that inflation remains durably above
central bank targets remains. In the short term, key factors developments
seem worth monitoring from this point of view, such as the possible
impacts of geopolitical tensions, the risk of shocks on commodity prices,
and labour market developments. In a medium-term perspective, the
energy transition also carries inflationary risks.
The risks of supply chain disruptions and shortages of inputs are likely
to remain key themes in the years ahead. First, geopolitical tensions
generate risks from this point of view (e.g. enforcement of sanctions).
Second, the transition towards a low-carbon economy increases the
competition for commodities that may not be easily available in sufficient
quantities. These difficulties could lead to price volatility. They could also
directly affect activity (lack of inputs or unprofitable production) and lead
to difficulties in the most exposed sectors (losses, defaults).
Risks linked to the impact of higher interest rates,
in particular for the real estate sector and indebted
economic agents
The high levels of interest rates generate risks for the economy and
the financial system and are susceptible to trigger unfavourable market
reactions (equity market, foreign exchange, capital flows).
Interest-rate sensitive sectors are more exposed than others. In particula r,
the downward trend in the real estate sector (residential and commercial)
has materialised in many countries and has not come to an end yet in
most cases (additional price corrections expected in the coming quarters).
More generally, in the private secto r, s ome economic agents with high
levels of debt may find it more difficult to pay off their debt, especially
when variable interest rates are applied. The modest growth environment
adds to such risks, notably through weaker expected labour market
developments.
The combination of low growth and higher interest rates also increases
pressures on public finances, especially given the increase in public debt
observed in many countries in recent years, due to the health crisis and
the high inflation environment. In this context, fiscal policy is expected
to contribute less to growth in the near future than in previous years. The
related tensions (higher sovereign spreads) are a risk in the presence of
less favourable deficit trajectories than previously anticipated.
The vulnerability of some economies of emerging countries to these risks
could lead to a deterioration in the rating of these countries by agencies,
which can be followed by an increase in risk premiums and debt servicing.
The Group's exposure in emerging countries is limited.
Geopolitical and geoeconomic fragmentation risks
Geopolitical risks have increased significantly in recent years. Beyond the
invasion of Ukraine and its economic consequences (e.g. gas prices, food
prices), the situation in the Middle East seems susceptible to generate
significant risks for the global economy, depending on developments.
These conflicts, combined with other geopolitical tensions between the
US and China, are contributing to some fragmentation of the global
economy.
Türkiye holds a key position in this context, due to its geographical
location and complex and variable relationships with various major
actors. The worsening of the situation in the Middle East adds another
dimension. These geopolitical risks combine with economic risks related
to high inflation and the associated depreciation of its currency over the
recent period. The Group presence in Türkiye is primarily through its TEB
subsidiary. At 31 December 2023, the Group generated 2.0% of its pre-tax
operating income in this country (see section 8.6 Profit and loss account
items and headcount by country in chapter 8 General information).
Geopolitical tensions can weigh on the global economy through various
channels, including shocks on commodity prices, financial markets,
business confidence, supply chains and trade. Such developments are
susceptible to lead to higher inflation developments and weaker activity
developments simultaneously, complicating the task of central banks.
The growing use of international sanctions also increases the possible
magnitude of consequences of such events.
Laws and regulations applicable to financial
institutions
Recent and future changes in the laws and regulations applicable to
financial institutions may have a significant impact on the Bank. Measures
recently adopted or of which implementing measures are still under
elaboration, that have or are likely to have an impact on the Bank
notably include prudential regulations with the finalisation of Basel 3
published by the Basel Committee in December 2017, supplemented by
the Fundamental Review of the Trading Book (FRTB) in January 2019
and of CVA risk (Credit Value Adjustment) in July 2020, which introduces
a revision of the credit risk, operational risk, market risk and CVA risk
measurement in the calculation of risk-weighted assets. The new Basel
framework also provides for the gradual introduction of an overall floor
which will be based on standardised approaches. These measures are
due to come into force once they are transposed into European law. To
this end, on 27 October 2021, the European Commission published a draft
transposition of the Basel Accord in the form of amendments to the CRR
and CRD. The European Union Council and the European Parliament have
settled their positions. Negotiations between the three institutions have
been completed and adoption of the finalised text is expected to take
place in the first half of 2024. This text also provides for the issuance by
the EBA of a number of regulatory or implementing technical standards
as well as guidelines.
For a more detailed description, see risk factor 6.1 Laws and regulations
adopted in recent years, as well as current and future legislative and
regulatory developments, may significantly impact the BNP Paribas
Group and the financial and economic environment in which it operates.
Moreove r, i n this strengthened regulatory context, the risk of
non-compliance with existing laws and regulations, in particular those
relating to the protection of the interests of customers and personal
data, is a significant risk for the banking industry, potentially resulting in
significant losses and fines(1). In addition to its compliance system, which
specifically covers this type of risk, the Group places the interest of its
customers, and more broadly that of its stakeholders, at the heart of its
mechanism. Thus, the Code of conduct adopted by the Group in 2016,
updated in 2021, sets out detailed values and rules of conduct in this area.
(1) Risk factors: 6.2 The BNP Paribas Group may incur substantial fines and administrative and other criminal penalties for non-compliance with applicable laws and regulations and
may also incur losses in related (or unrelated) litigation with private parties.
Environmental risks
The BNP Paribas Group is exposed to risks related to climate change,
based on a double materiality approach, either directly through its own
operations or for certain of its assets or indirectly through its financing
and investment activities.
The main risk factors related to climate change are as follows:
■ transition risk factors resulting from a change in the behaviour of
economic and financial agents in response to the implementation of
energy policies, change in regulation, technological innovations or
changes in consumer preferences;
■ physical risk factors resulting from the direct impact of climate change
on people, corporates and assets due to extreme weather events or
long-term shifts in climate patterns such as rising sea levels or rising
temperatures;
■ in addition, consequences in terms of reputation and liability may arise
from these risk factors as a consequence of potential negative impacts
that the Group may have either directly or indirectly on the climate or if
its public commitments or disclosures are not perceived as accurate by
some of its stakeholders. They may end up with potential disputes, claims
for compensation, legal proceedings brought against a company, a State
or a financial institution that could be held liable by any stakeholder or
citizen who has suffered from climate change. In line with international
work and in particular that of the Network of Supervisors and Central
Banks for Greening the Financial System (NGFS), BNP Paribas considers
the risks associated with the emergence of legal proceedings related to
climate change for companies and investors, including liability risks, as
a subset of physical and transition risks.
BNP Paribas has set up a monitoring on the potential impact of these
risk factors in the conduct of its business, in that of its counterparties
or in its investments on its own behalf or on behalf of third parties. The
Group thus integrates these risk factors into its risk management process
and gradually strengthens their assessment, as the methodologies for
measuring and analysing these factors and their impact on traditional
risks, in particula r, t hose relating to credit quality, are developed.
For more details, please see risk factor 7.4 The BNP Paribas Group
could experience business disruption and losses due to risks related
to environmental, social and governance ("ESG") issues, particularly
relating to climate change, such as transition risks, physical risks or
liability risks as well as the measures taken and commitments made by
the Group in this area in paragraph Commitment 3: Robust management
of Environmental, social and governance risks of chapter 7.
Cyber security and technology risk
BNP Paribas' ability to do business is intrinsically tied to the fluidity
of electronic transactions as well as the protection and security of
information and technology assets.
The technological change is accelerating with the digital transformation
and the resulting increase in the number of communications circuits,
dependency on systemic technological infrastructure, proliferation in
data sources, growing process automation, and greater use of electronic
banking transactions.
The progress and acceleration of the technological changes needed to
respond to customer requirements are giving cybercriminals new options
for altering, stealing and disclosing data. Attacks are more frequent, with
a bigger reach and sophistication across all sectors, including financial
services. Besides, in the current context of geopolitical tensions and
development of hybrid wa r, c yber threat is heightened.
The outsourcing of a number of processes also is likely to expose the
Group to structural cybersecurity and technology risks which can lead to
the appearance of potential attack vectors that cybercriminals can exploit.
In this context, the Group has reinforced its lines of defence dedicated
to managing technological and cybersecurity risks (see the paragraph
Cybersecurity and technology in section 5.9 Operational Risk) and
operational standards are regularly adapted to support the Bank's digital
evolution and innovation while managing existing and emerging threats
(such as cyber-crime, espionage, etc.).
EMERGING RISKS
An emerging risk is defined as a new or evolving risk which potential
impact could be material in the future but is currently not fully known
or is difficult to quantify.
The Group identified emerging risks related to insurance and reinsurance
markets technological innovations, the evolving regulatory environment,
as well as certain health, demographic and societal risks.
Evolutions in insurance and reinsurance markets
Insurance and re-insurance play a critical role in the financial
management of disaster risks, organising mutualisation, absorbing the
costs of damage and losses and supporting post-disaster economic
recovery by providing a source of funds for recovery and reconstruction.
With the intensification of extreme weather events associated with
climate change and the progression of the claims' frequency and severity,
one can already observe structural changes there is a risk, over the
coming years that:
■ substantial increase of insurance deductibles and premiums;
■ multiplication of exceptions in insurance contracts;
■ certain risks becoming non-insurable;
■ difficulties of reinsurance facing catastrophic risks progression.
In this context, financial institutions have to develop a particular vigilance
with regard to the effectiveness of insurance protections from which they,
directly or indirectly, benefit.
Technological innovations
Technological developments related to the growing use of data in all
production, marketing, and distribution processes, and to data sharing
among economic players (producers, suppliers, and customers) will
impact the economic models of clients and counterparties in a lasting
way. These impacts, which are sometimes hard to assess in a context
where new standards, economic balances, and regulatory entities are
in the process of evolving and adapting, are being analysed internally
by industry experts focused on the economic sectors most exposed to
this evolution.
In addition, the use of algorithms and artificial intelligence techniques,
which are becoming increasingly sophisticated, combined with the
spectacular development of computing power (with the emblematic
emergence of quantum computing), considerably modifies decision-
making and exposes people to risks of a new nature with, notably, a
modified relationship with information and truth (appearance of
"post-truth" concept) and even reality and standardised behaviour that
can quickly affect certain markets. The emergence of decentralised
finance and digital assets based on distributed ledger technologies
(blockchain) and the development of digital currencies of central banks
are changes that may ultimately have a structural impact on the banking
secto r.
Furthermore, in this regard, the Group's competitive environment is
undergoing profound change, with the presence of fintech, emerging new
players in the activities of the financial sector as GAFAM (Google, Apple,
Facebook, Amazon, Microsoft, actors that concentrate a very substantial
part of numerical power) and technological innovations which disrupt
the traditional value chains of Group businesses, and place the quality
of the customer experience, and the use of new technologies to reduce
the cost of low added-value operations, as their competitive factors.
Maintenance of the Group's information systems must be done in this
context of evolving value chains and increasing protection needs (of
systems, data, etc.). The Group is deploying a proactive strategy in this
area to adapt its activities to these major technological developments and
promote some industrial cooperation with fintech players. This strategy
and the initiatives developed could nevertheless prove to be insufficient
and introduce a risk of a competitive nature.
Evolving regulatory environments
In addition to the regulatory measures recently adopted or pending
adoption, and already cited as top risks, the trend towards growing
complexity and regional differences in the bank regulatory environment
and related supervision is creating relative uncertainty over future
developments, compliance costs, and proper performance risk concerning
the various measures. The Group has established an active monitoring
system for its regulatory environment, enabling it to minimise these risks.
Possible future divergence by type of regulated entity, for example,
depending on their degree of innovation, may introduce risk of a
competitive nature.
Health risks
The threat presented by bacteria, viruses, parasites or fungi that cause
uncontrolled spread of infectious diseases leading to widespread fatalities
and economic disruption, is a growing concern. It is aggravated by the
resistance developed by bacteria to antibiotics, by viruses to antivirals
or by fungi to antifungals, a situation that heightens the probability of
large-scale health problems.
Furthermore, sanitary risk perspectives are clouded by the possible effects
of climate change and man-made nature damages that are heightening
the risk of emergence and re-emergence of diseases or pathogenic agents,
known or new, leading to wide-spread infections or pandemics, thus
pushing healthcare systems to the brink of failure.
In this context, a new widespread infection or pandemic, with a bacterial,
viral or fungal origin, potentially resistant to antibiotics, antiviral drugs
or other treatments, and therefore difficult to eradicate, is an increasing
concern, and that becomes more and more preoccupying.
Despite the experience gained with health crisis linked to the Covid-19,
such an infection could lead to new failures in infrastructure and
production chains, with significant consequences for all stakeholders.
Demographic risk
Demographic transition (decrease in fertility rate, increase in life
expectancy) is a major underlying development in many countries. In the
years and decades to come, it will have a significant impact on economic
growth, but also on health and retirement budgets, and on savings and
consumption behaviou r.
Societal issues
In addition to responses designed to meet its customers' changing needs,
the Group is, on a more general basis, adapting its responses to the
expectations of the society in which it operates in terms of how it conducts
its business, respect for human rights and environmental protection.
Thus, in a context where societal fragmentation and polarisation risks
grow, banks must deal with the increasing sensitivity of their customers
and partners to environmental, social and governance issues.
The BNP Paribas Group Code of conduct defines standards of conduct in
line with the values and missions determined by the Bank.
The risks associated with changes in the macroeconomic and market
environment are described in the following section Risk factors(1).
The analyses relating to certain sectors are set out in the Exposures,
provisions and cost of risk paragraph in section 5.4 Credit risk.
The risk principles are presented in the Risk Appetite Statement
approved by the Board of directors (see Risk Appetite in section 5.3 Risk
management).
(1) In particula r, r isk factor 5.3 Given the global scope of its activities, the BNP Paribas Group is exposed to country risk and to changes in the political, macroeconomic or financial
contexts of a region or country.
5.2 Capital management and capital adequacy
SCOPE OF APPLICATION
The prudential scope of application defined in Regulation (EU)
No. 575/2013 on capital requirements is not the same as the accounting
scope of consolidation whose composition concerns the application of
IFRS as adopted by the European Union. The notes to the consolidated
financial statements cover the accounting consolidation scope.
The consolidation principles and the scope of consolidation in accordance
with the accounting consolidation method used are described respectively
in notes 1.b Consolidation and 9.k Scope of consolidation to the
consolidated financial statements.
PRUDENTIAL SCOPE
In accordance with banking regulation, BNP Paribas Group has defined a
prudential scope to monitor capital ratios calculated on a consolidated
basis. Its specificities are as follows:
■ insurance companies (primarily BNP Paribas Cardif and its
subsidiaries) that are fully consolidated within the accounting scope
are consolidated under the equity method in the prudential scope;
■ unregulated entities of the real estate services (BNP Paribas Real
Estate) and long-term vehicle leasing (Arval(1)) businesses that are
fully consolidated within the accounting scope are consolidated under
the equity method within the prudential scope;
■ jointly controlled entities are consolidated under the equity method in
the accounting scope and under the proportional consolidation method
in the prudential scope.
As a reminde r, o n 31 December 2022, the Bank of the West entities sold
to BMO financial group were fully consolidated without the application of
IFRS 5 (see note 9.e Discontinued activities to the consolidated financial
statements).
(1) As from 1 July 2024, the entities, under exclusive control, of the Arval business line will be fully consolidated within the prudential scope.
The differences between the accounting and prudential scopes of consolidation are summarised in the table below.
➤
TABLE 7: DIFFERENCES BETWEEN THE ACCOUNTING AND PRUDENTIAL SCOPES (EU LI3)
Name of the entity
31 December 2023
Method of
accounting
consolidation consolidation
Method of regulatory consolidation
Neither
consolidated
nor deducted
from own
funds
Description
of the entity
Full
Proportional
consolidation
Equity
method
BNP Paribas Cardif and its
subsidiaries(*)
Full consolidation
x
Insurance
BNPP SB Re
Full consolidation
x
Insurance
BNPP Vartry Reinsurance DAC
Full consolidation
x
Insurance
Darnell DAC
Full consolidation
x
Insurance
Decart Re Ltd
Full consolidation
x
Insurance
Greenstars BNPP
Full consolidation
x
Insurance
Greenval Insurance DAC
Full consolidation
x
Insurance
Le Sphinx Assurances
Luxembourg SA
Full consolidation
x
Insurance
BNP Paribas Real Estate and
its non-regulated subsidiaries(*)
Full consolidation
x
Real Estate services
Arval and its non-regulated
subsidiaries(*)
Full consolidation
x
Long-term car
leasing
Collective investment funds(**)
Full consolidation
x
Asset management
2SF – Société des Services
Fiduciaires
Equity method
x
Retail Banking
Bantas Nakit AS
Equity method
x
Retail Banking
Euro Securities Partners
Equity method
x
Retail Banking
Partecis
Equity method
x
Retail Banking
Baroda BNPP AMC Private Ltd
Equity method
x
Asset Management
BNPP ABC Wealth Management
Co Ltd
Equity method
x
Asset Management
FScholen
Equity method
x
Corporate &
Institutional Banking
Uptevia SA
Equity method
x
Corporate &
Institutional Banking
Lyf SA
Equity method
x
Internet financial
services
Lyf SAS
Equity method
x
Internet financial
services
Services Logiciels d'Intégration
Boursière
Equity method
x
Securities custody
Securitisation funds UCI
and RMBS Prado
Equity method
x
Specialised loans
Securitisation funds Genius
Equity method
x
Specialised loans
Securitisation funds Wisdom
Equity method
x
Specialised loans
Genius Auto Finance Co Ltd
Equity method
x
Specialised loans
Union de Creditos
Inmobiliarios SA
Equity method
x
Specialised loans
United Partnership
Equity method
x
Specialised loans
Zhejiang Wisdom Puhua
Financial Leasing Co Ltd
Equity method
x
Specialised loans
(*) BNP Paribas Cardif, BNP Paribas Real Estate and Arval subsidiaries are identified in the note 9.k Scope of consolidation to the consolidated financial
statements (footnote (2)).
(**) Collective investment funds are identified in the note 9.k Scope of consolidation to the consolidated financial statements (footnote (4)).
The table below shows the restatements between the accounting and prudential scopes of consolidation for each balance sheet item.
➤
TABLE 8: CONSOLIDATED BALANCE SHEET TO PRUDENTIAL BALANCE SHEET RECONCILIATION (EU LI1/EU CC2)
In millions of euros
31 December 2023
scope
Adjustment
Accounting of insurance consolidation Prudential
companies
Other
adjustments
related to
methods(*)
Reference
to capital
table (see
scope Appendix 2)
ASSETS
Cash and amounts due from central banks
288,259
11
288,270
Financial instruments at fair value through profit or loss
Securities
211,634
598
(105)
212,127
of which own funds instruments in credit or financial
institutions more than 10%-owned
344
590
934
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
3,606
1
3,606
2
Loans and repurchase agreements
227,175
188
(325)
227,038
Derivative financial instruments
292,079
764
(89)
292,754
Derivatives used for hedging purposes
21,692
(49)
171
21,814
Financial assets at fair value through equity
Debt securities
50,274
2,693
52,967
of which own funds instruments in credit or financial
institutions more than 10%-owned
2,690
2,690
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
2
Equity securities
2,275
2,275
of which own funds instruments in credit or financial
institutions more than 10%-owned
766
766
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
894
894
2
Financial assets at amortised cost
Loans and advances to credit institutions
24,335
(80)
24,255
of which own funds instruments in credit or financial
institutions more than 10%-owned
177
177
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
2
Loans and advances to customers
859,200
5,050
27,556
891,806
of which own funds instruments in credit or financial
institutions more than 10%-owned
150
25
(150)
25
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
1
1
2
Debt securities
121,161
(179)
120,982
of which own funds instruments in credit or financial
institutions more than 10%-owned
100
100
1
of which own funds instruments in credit or financial
institutions less than 10%-owned
2
Remeasurement adjustment on interest-rate risk hedged
portfolios
(2,661)
(2,661)
Investments and other assets of insurance activities
257,098
(257,098)
Current and deferred tax assets
6,556
(104)
(128)
6,324
Accrued income and other assets
170,758
(1,998)
(4,460)
164,300
Equity-method investments
6,751
3,789
3,811
14,351
of which investments in credit or financial institutions
6,076
3,563
(798)
8,841
1
of which goodwill
512
226
923
1,661
3
Property, plant and equipment and investment property
45,222
(581)
(34,937)
9,704
Intangible assets
4,142
(462)
(164)
3,516
of which intangible assets excluding mortgage
servicing rights
4,142
(462)
(164)
3,516
3
Goodwill
5,549
(225)
(922)
4,402
3
TOTAL ASSETS
2,591,499
(247,435)
(9,840)
2,334,224
In millions of euros
31 December 2023
scope
Adjustment
Accounting of insurance consolidation Prudential
companies
Other
adjustments
related to
methods(*)
Reference
to capital
table (see
scope Appendix 2)
LIABILITIES
Deposits from central banks
3,374
3,374
Financial instruments at fair value through profit or loss
Securities
104,910
104,910
Deposits and repurchase agreements
273,614
260
273,874
Issued debt securities
83,763
21
(441)
83,343
of which liabilities qualifying for additional Tier 1 capital
4
of which liabilities qualifying for additional Tier 2 capital
18
18
5
Derivative financial instruments
278,892
638
(84)
279,446
Derivatives used for hedging purposes
38,011
(65)
(35)
37,911
Financial liabilities at amortised cost
Deposit from credit institutions
95,175
(8,510)
(1,075)
85,590
Deposit from customers
988,549
1,193
4,133
993,875
Debt securities
191,482
12
(6,822)
184,672
Subordinated debt
24,743
(1,780)
2
22,965
of which liabilities qualifying for additional Tier 1 capital(**)
1,352
1,352
4
of which liabilities qualifying additional for Tier 2 capital(***)
22,433
22,433
5
Remeasurement adjustment on interest-rate risk
hedged portfolios
(14,175)
(14,175)
Current and deferred tax liabilities
3,821
533
(751)
3,603
Accrued expenses and other liabilities
143,673
(2,965)
(3,818)
136,890
Liabilities related to insurance contracts
218,043
(218,043)
Financial liabilities related to insurance activities
18,239
(18,239)
Provisions for contingencies and charges
10,518
(348)
(949)
9,221
TOTAL LIABILITIES
2,462,632
(247,293)
(9,840)
2,205,499
EQUITY
Share capital, additional paid-in capital and retained
earnings
115,809
5
115,814
6
Net income Group share for the period
10,975
10,975
7
Total capital, retained earnings and net income Group share
for the period
126,784
-
5
126,789
Changes in assets and liabilities recognised directly in equity
(3,042)
1
(3,041)
Shareholders' equity
123,742
-
6
123,748
Minority interests
5,125
(142)
(6)
4,977
8
TOTAL CONSOLIDATED EQUITY
128,867
(142)
-
128,725
TOTAL LIABILITIES AND EQUITY
2,591,499
(247,435)
(9,840)
2,334,224
(*) Adjustment of jointly controlled entities under proportional consolidation for prudential scope, which are consolidated using the equity method within
the accounting scope, and of the unregulated entities of BNP Paribas Real Estate and Arval consolidated using the equity method within the prudential
scope which are fully consolidated within the accounting scope.
(**) Debt eligible as additional Tier 1 capital includes undated super subordinated notes and contingent convertible notes recognised respectively in equity
and debt.
(***)D ebt eligible as additional Tier 2 capital is presented at its notional value (excluding accrued interest and revaluation of the hedged component).
In millions of euros
31 December 2022
Adjustment
Accounting of insurance consolidation
scope(****) companies
Other
adjustments
related to
methods(*)
FinRep
scope(****)
Adjustment
related to
prudential the impact of
IFRS 5(*****)
Prudential
Reference
to capital
table (see
scope(****) Appendix 2)
ASSETS
Cash and amounts due from central banks
318,560
9
318,569
2,751
321,320
Financial instruments at fair value through profit or loss
Securities
166,077
591
278
166,946
840
167,786
of which own funds instruments in credit or
financial institutions more than 10%-owned
241
591
832
832
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
3,022
3,022
18
3,040
2
Loans and repurchase agreements
191,125
1,239
(340)
192,024
6
192,030
Derivative financial instruments
327,932
643
(217)
328,358
349
328,707
Derivatives used for hedging purposes
25,401
(62)
342
25,681
6
25,687
Financial assets at fair value through equity
Debt securities
35,878
2,692
38,570
4,503
43,073
of which own funds instruments in credit or
financial institutions more than 10%-owned
44
2,690
2,734
2,734
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
2
Equity securities
2,188
2,188
2,188
of which own funds instruments in credit or
financial institutions more than 10%-owned
788
788
788
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
812
812
812
2
Financial assets at amortised cost
Loans and advances to credit institutions
32,616
(142)
32,474
144
32,618
of which own funds instruments in credit or
financial institutions more than 10%-owned
252
(75)
177
177
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
2
Loans and advances to customers
857,020
4,752
25,895
887,667
56,084
943,751
of which own funds instruments in credit or
financial institutions more than 10%-owned
73
25
(73)
25
25
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
2
Debt securities
114,014
(303)
113,711
16,779
130,490
of which own funds instruments in credit or
financial institutions more than 10%-owned
100
100
100
1
of which own funds instruments in credit or
financial institutions less than 10%-owned
74
74
74
2
Remeasurement adjustment on interest-rate risk
hedged portfolios
(7,477)
(7,477)
(7,477)
Financial investments and other assets of insurance activities
247,403
(247,403)
Current and deferred tax assets
5,893
(166)
(114)
5,613
408
6,021
Accrued income and other assets
209,092
(4,011)
(3,611)
201,470
1,607
203,077
Equity-method investments
6,263
3,422
3,350
13,035
13,035
of which investments in credit or financial
institutions
5,629
3,216
(724)
8,121
8,121
1
of which goodwill
503
208
918
1,629
1,629
3
Property, plant and equipment and investment property
38,468
(478)
(27,913)
10,077
452
10,529
Intangible assets
3,790
(293)
(138)
3,359
215
3,574
of which intangible assets excluding mortgage
servicing rights
3,790
(293)
(138)
3,359
192
3,551
3
Goodwill
5,294
(207)
(919)
4,168
2,695
6,863
3
Assets held for sale(*****)
86,839
86,839
(86,839)
TOTAL ASSETS
2,666,376
(239,281)
(3,823)
2,423,272
-
2,423,272
In millions of euros
31 December 2022(****)
scope companies
Adjustment
Accounting of insurance consolidation prudential
Other
adjustments
related to
methods(*)
FinRep
scope
Adjustment
related to
the impact of
IFRS 5(*****)
Prudential
Reference
to capital
table (see
scope Appendix 2)
LIABILITIES
Deposits from central banks
3,054
3,054
3,054
Financial instruments at fair value through profit or loss
Securities
99,155
99,155
99,155
Deposits and repurchase agreements
234,076
234,076
234,076
Issued debt securities
70,460
(4,856)
(195)
65,409
65,409
of which liabilities qualifying for additional Tier 1 capital
4
of which liabilities qualifying for additional Tier 2 capital
20
20
20
5
Derivative financial instruments
300,121
1,023
(208)
300,936
461
301,397
Derivatives used for hedging purposes
40,001
(58)
59
40,002
307
40,309
Financial liabilities at amortised cost
Deposit from credit institutions
124,718
(7,009)
(995)
116,714
260
116,974
Deposit from customers
1,008,054
1,115
5,398
1,014,567
74,202
1,088,769
Debt securities
154,143
1,222
(3,175)
152,190
101
152,291
Subordinated debt
24,156
(1,769)
1
22,388
22,388
of which liabilities qualifying for additional Tier 1 capital(**)
4
of which liabilities qualifying for additional Tier 2 capital(***)
23,865
23,865
23,865
5
Remeasurement adjustment on interest-rate risk
hedged portfolios
(20,201)
(20,201)
(20,201)
Current and deferred tax liabilities
3,054
656
(550)
3,160
85
3,245
Accrued expenses and other liabilities
185,456
(2,427)
(3,725)
179,304
1,385
180,689
Technical reserves and other insurance liabilities
226,532
(226,532)
Provisions for contingencies and charges
10,040
(510)
(433)
9,097
201
9,298
Liabilities associated with assets held for sale(*****)
77,002
77,002
(77,002)
TOTAL LIABILITIES
2,539,821
(239,145)
(3,823)
2,296,853
2,296,853
EQUITY
Share capital, additional paid-in capital and retained
earnings
115,149
1
(1)
115,149
115,149
6
Net income Group share for the period
10,196
10,196
10,196
7
Total capital, retained earnings and net income Group
share for the period
125,345
1
(1)
125,345
125,345
Changes in assets and liabilities recognised directly
in equity
(3,553)
(1)
1
(3,553)
(3,553)
Shareholders' equity
121,792
121,792
121,792
Minority interests
4,763
(136)
4,627
4,627
8
TOTAL CONSOLIDATED EQUITY
126,555
(136)
126,419
126,419
TOTAL LIABILITIES AND EQUITY
2,666,376
(239,281)
(3,823)
2,423,272
-
2,423,272
(*)
Adjustment of jointly controlled entities under proportional consolidation for prudential scope, which are consolidated using the equity method within the
accounting scope, and of the unregulated entities of BNP Paribas Real Estate and Arval consolidated using the equity method within the prudential scope which
are fully consolidated within the accounting scope.
(**)
Debt eligible as additional Tier 1 capital is recognised in equity.
(***) Debt eligible as additional Tier 2 capital is presented as its notional value (excluding accrued interest and revaluation of the hedged component).
(****) Unadjusted data from the first application of IFRS 17.
(*****) See note 9.e Discontinued activities to the consolidated financial statements at 31 December 2023.
The following table shows the breakdown of the different categories of assets and liabilities recognised on the Bank's prudential balance sheet by
regulatory risk type. The sum of the amounts thus broken down is not necessarily equal to the net carrying values of the prudential scope, because
some items may be subject to capital requirements for several types of risk.
➤
TABLE 9: PRUDENTIAL BALANCE SHEET BY RISK TYPE (EU LI1-B)
In millions of euros
31 December 2023
Net carrying
values:
scope framework
Items subject to:
Counterparty Not subject to capital
framework deducted from capital
prudential Credit risk
credit risk
framework framework
Securitisation Market risk requirements or
ASSETS
Cash and amounts due from central banks
288,270
288,270
Financial instruments at fair value through
profit or loss
Securities
212,127
9,467
7,565
73
202,064
537
Loans and repurchase agreements
227,038
2,296
216,332
224,716
Derivative financial instruments
292,754
292,754
291,603
Derivatives used for hedging purposes
21,814
21,814
Financial assets at fair value through equity
55,242
52,028
39
435
2,779
Financial assets at amortised cost
Loans and advances to credit institutions
24,255
19,081
4,997
177
Loans and advances to customers
891,806
807,137
27,480
55,716
1,473
Debt securities
120,982
106,771
474
20,125
(5,645)
Remeasurement adjustment on interest-rate
risk hedged portfolios
(2,661)
(2,661)
Current and deferred tax assets
6,324
6,302
22
Accrued income and other assets
164,300
30,775
120,337
11,818
3,078
Equity-method investments
14,351
12,690
1,661
Property, plant and equipment
and investment property
9,704
9,349
355
Intangible assets
3,516
1,284
2,232
Goodwill
4,402
4,402
TOTAL ASSETS
2,334,224
1,345,450
691,792
76,349
730,201
8,410
In millions of euros
31 December 2023
Net carrying
values:
scope framework
Items subject to:
Not subject to capital
requirements or
framework deducted from capital
prudential Credit risk
Counterparty
credit risk
framework framework
Securitisation Market risk
LIABILITIES
Deposits from central banks
3,374
3,374
Financial instruments at fair value through
profit or loss
Securities
104,910
104,910
Deposits and repurchase agreements
273,874
266,720
266,720
7,153
Issued debt securities
83,343
83,343
Derivative financial instruments
279,446
279,446
277,708
Derivatives used for hedging purposes
37,911
37,911
Financial liabilities at amortised cost
Deposit from credit institutions
85,590
21,567
64,023
Deposit from customers
993,875
1,289
992,586
Debt securities
184,672
184,672
Subordinated debt
22,965
22,965
Remeasurement adjustment on interest-rate
risk hedged portfolios
(14,175)
(14,175)
Current and deferred tax liabilities
3,603
3,603
Accrued expenses and other liabilities
136,890
91,406
2,289
43,617
Provisions for contingencies and charges
9,221
884
8,338
TOTAL LIABILITIES
2,205,499
884
698,339
-
651,627
1,399,499
TOTAL CONSOLIDATED EQUITY
128,725
-
-
-
-
128,725
TOTAL LIABILITIES AND EQUITY
2,334,224
884
698,339
-
651,627
1,528,224
In millions of euros
31 December 2022
Net carrying
values:
scope framework
Items subject to:
Not subject to capital
requirements or
framework deducted from capital
prudential Credit risk
Counterparty
credit risk
framework framework
Securitisation Market risk
ASSETS
Cash and amounts due from central banks
321,320
321,320
Financial instruments at fair value
through profit or loss
Securities
167,786
10,493
6,274
95
156,668
531
Loans and repurchase agreements
192,030
3,918
181,713
188,005
Derivative financial instruments
328,707
328,707
327,132
Derivatives used for hedging purposes
25,687
25,687
Financial assets at fair value through equity
45,261
41,905
75
533
2,823
Financial assets at amortised cost
Loans and advances to credit institutions
32,618
25,300
7,141
177
Loans and advances to customers
943,751
869,303
23,258
49,374
1,816
Debt securities
130,490
121,033
1,410
18,046
(8,589)
Remeasurement adjustment on interest-rate
risk hedged portfolios
(7,477)
(7,477)
Current and deferred tax assets
6,021
5,866
156
Accrued income and other assets
203,077
33,782
154,532
15,351
3,007
Equity-method investments
13,035
11,406
1,628
Property, plant and equipment
and investment property
10,529
10,070
459
Intangible assets
3,574
1,260
2,314
Goodwill
6,863
6,863
TOTAL ASSETS
2,423,272
1,455,656
728,797
68,048
687,156
3,708
In millions of euros
31 December 2022
Net carrying
values:
scope framework
Items subject to:
Not subject to capital
requirements or
framework deducted from capital
prudential Credit risk
Counterparty
credit risk
framework framework
Securitisation Market risk
LIABILITIES
Deposits from central banks
3,054
3,054
Financial instruments at fair value
through profit or loss
Securities
99,155
99,057
99
Deposits and repurchase agreements
234,076
225,481
225,523
8,595
Issued debt securities
65,409
65,409
Derivative financial instruments
301,397
301,397
299,061
Derivatives used for hedging purposes
40,309
40,309
Financial liabilities at amortised cost
Deposit from credit institutions
116,974
1,408
115,566
Deposit from customers
1,088,769
3,840
1,084,929
Debt securities
152,291
152,291
Subordinated debt
22,388
22,388
Remeasurement adjustment on interest-rate
risk hedged portfolios
(20,201)
(20,201)
Current and deferred tax liabilities
3,245
3,245
Accrued expenses and other liabilities
180,689
126,480
7,610
50,850
Provisions for contingencies and charges
9,298
1,060
8,238
TOTAL LIABILITIES
2,296,853
1,060
698,915
-
631,251
1,494,463
TOTAL CONSOLIDATED EQUITY
126,419
-
-
-
-
126,419
TOTAL LIABILITIES AND EQUITY
2,423,272
1,060
698,915
-
631,251
1,620,882
The following table shows the main differences between the amounts of accounting exposure on the prudential balance sheet (see previous table) and
the amounts of exposure used for regulatory purposes, based on the different types of risk, except market risk. Indeed, for the latte r, t he main regulatory
measure used by the Group is Value at Risk (VaR), which reflects the sensitivity of the Bank's trading book to the different market parameters (see
Market risk exposure section 5.7 Market risk). Therefore the VaR amount does not relate directly to the net carrying value of the assets and liabilities
subject to market risk.
➤
TABLE 10: RECONCILIATION BETWEEN NET CARRYING VALUES UNDER THE PRUDENTIAL SCOPE AND THE EXPOSURE
AMOUNTS CONSIDERED FOR REGULATORY PURPOSES (EU LI2)
In millions of euros
31 December 2023
Credit risk
framework
Counterparty
credit risk
framework
Securitisation
framework
Market risk
framework
ASSETS NET CARRYING VALUE
1,345,450
691,792
76,349
730,201
Liabilities net carrying value
(698,339)
Off-balance sheet amounts net of depreciation
466,318
24,642
Credit risk depreciation amounts
18,167
35
Amounts below the thresholds for deduction
(subject to 250% risk-weight)(*)
(7,701)
Differences in valuations due to the use of internal models(**)
205,836
Other adjustments
6,960
EXPOSURE AMOUNTS CONSIDERED FOR REGULATORY PURPOSES
1,829,194
199,289
101,026
(*) Includes deferred tax assets depending on future profits and significant participations in financial sector entities, subject to 250% risk-weight.
(**) The main regulatory measure used by the Group for counterparty risk is the EEPE (Effective Expected Positive Exposure). The features of the valuation
model are described in the paragraph Counterparty risk measurement in section 5.6 Counterparty risk.
In millions of euros
31 December 2022
Credit risk
framework
Counterparty
credit risk
framework
Securitisation
framework
Market risk
framework
ASSETS NET CARRYING VALUE
1,455,656
728,797
68,048
687,156
Liabilities net carrying value
(698,915)
Off-balance sheet amounts net of depreciation
481,773
23,946
Credit risk depreciation amounts
19,780
44
Amounts below the thresholds for deduction
(subject to 250% risk-weight)(*)
(7,958)
Differences in valuations due to the use of internal models(**)
191,988
Other adjustments
7,138
EXPOSURE AMOUNTS CONSIDERED FOR REGULATORY PURPOSES
1,956,389
221,870
92,038
(*) Includes deferred tax assets depending on future profits and significant participations in financial sector entities, subject to 250% risk-weight.
(**) The main regulatory measure used by the Group for counterparty risk is the EEPE (Effective Expected Positive Exposure). The features of the valuation
model are described in the paragraph Counterparty risk measurement in section 5.6 Counterparty risk.
The exposure amounts used for regulatory purposes are presented:
■ in section 5.4 for credit risk;
■ in section 5.5 for securitisation positions in the banking book;
■ in section 5.6 for counterparty credit risk;
■ in section 5.7 for market risk.
SIGNIFICANT SUBSIDIARIES
Aggregate information on the risk-weighted assets of BNP Paribas'
significant subgroups and subsidiaries are given as Group contribution
in Appendix 4 to this chapte r.
The following subgroups are considered significant, based on the criterion
that their risk-weighted assets amount to more than 3% of the Group's
total risk-weighted assets (excluding entities consolidated under the
equity method) at 31 December 2023:
■ BNP Paribas Fortis;
■ Banca Nazionale del Lavoro (BNL);
■ BNP Paribas Personal Finance;
■ BGL BNP Paribas.
The risk-weighted assets reported correspond to the sub-consolidation
scope of the four subgroups. Thus, BGL BNP Paribas subgroup is also
included in BNP Paribas Fortis. subgroups respectively.
The significant restrictions relating to the Group's ability to transfer cash
within the entities are described in note 9.f Significant restrictions in
subsidiaries, joint ventures and associates to the consolidated financial
statements.
Subsidiaries whose prudential requirements are supervised as part of
the consolidated supervision of BNP Paribas SA, in accordance with
article 7.1 of Regulation (EU) No. 575/2013, are identified in the scope
of consolidation in note 9.k Scope of consolidation to the consolidated
financial statements, under reference (1).
Compliance with capital requirements at the individual level of each
entity that does not have an exemption is verified at the level of their
respective division or business line. As at 31 December 2023, the Group's
entities had a capital level that complied with regulatory requirements.
REGULATORY CAPITAL
The BNP Paribas Group is required to comply with the French regulation
that transposes European Directives on "A ccess to the activity of credit
institutions and the prudential supervision of credit institutions and
investment firms" and "Financial Conglomerates".
In the various countries in which the Group operates, BNP Paribas also
complies with specific regulatory ratios in line with procedures controlled
by the relevant supervisory authorities. These ratios mainly address the
issues of capital adequacy, risk concentration, liquidity and asset/liability
mismatches.
As at 1 January 2014, Regulation (EU) No. 575/2013, establishing the
methods for calculating the solvency ratio, defines it as the ratio between
the regulatory capital and the sum of:
■ the amount of risk-weighted assets for credit and counterparty risks,
calculated using the standardised approach or the Internal Ratings-
Based Approach (IRBA) depending on the particular entity or the
activity of the Group concerned;
■ capital requirements for market risk, for credit valuation adjustment
risk and for operational risk, multiplied by a factor of 12.5.
BREAKDOWN OF REGULATORY CAPITAL
Regulatory capital is divided into three categories (Common Equity Tier 1
capital, Additional Tier 1 capital and Tier 2 capital), which consist of
equity and debt instruments, to which regulatory adjustments have been
made.
Common Equity Tier 1 capital
Common Equity Tier 1 capital instruments mainly comprise:
■ the consolidated equity attributable to shareholders restated for the
anticipated distribution of result and undated super subordinated
notes, which are ineligible for this category;
■ minority interest reserves of regulated entities, adjusted for their
capitalisation surplus.
The main regulatory adjustments are as follows:
■ gains and losses generated by cash flow hedges;
■ adjustments to the value of instruments measured at fair value
required by prudent valuation;
■ goodwill and other intangible assets, net of deferred tax liabilities. Since
31 December 2020, in accordance with Regulation (EU) No. 2020/2176,
certain software products have benefited from a specific prudential
amortisation allowing the application of a preferential weighting
instead of a deduction from CET1 capital;
■ net deferred tax assets that rely on future profitability and arising from
tax loss carry-forwards;
■ expected losses on equity exposures;
■ share of expected losses on outstanding loans measured using the
Internal Ratings-Based Approach (IRBA) which is not covered by
provisions and other value adjustments;
■ negative difference between the amount of the provision recognised for
each non-performing exposure and the minimum provisioning level as
defined in article 47a of Regulation (EU) No. 2019/630;
■ securitisation tranches for which the Group has opted for the own
funds deduction instead of a 1,250% weighting.
Treasury shares held or granted a buy-back authorisation are deducted
from this category.
➤
TABLE 11: TRANSITION FROM CONSOLIDATED EQUITY TO COMMON EQUITY TIER 1 (CET1) CAPITAL
In millions of euros
31 December 2023
31 December 2022
Consolidated equity(*)
128,725
126,419
Undated super subordinated notes ineligible in CET1
(13,549)
(11,800)
Proposed distribution(**)
(6,329)
(5,773)
Ineligible minority interests
(2,852)
(2,891)
Changes in the fair value of hedging instruments recognised directly in equity
(293)
(12)
Additional value adjustments linked to prudent valuation requirements
(1,817)
(1,514)
Goodwill and other intangible assets
(8,055)
(10,559)
Net deferred tax assets arising from tax loss carry-forwards
(311)
(160)
Negative amounts resulting from the calculation of expected losses
(837)
(420)
Other prudential adjustments
(1,824)
(1,462)
COMMON EQUITY TIER 1 (CET1) CAPITAL
92,857
91,828
(*) In 2023, the Group carried out a share buyback programme for a total amount of EUR 5 billion, including EUR 4 billion to offset the effect of the dilution
of net earnings per share related to the sale of 100% of its commercial banking activities in the United States by Bank of the West. At 31 December
2023, the shares acquired under this repurchase programme were all cancelled. BNP Paribas' share capital was thus reduced by 7% compared to
31 December 2022.
(**) The ordinary distribution as at 31 December 2022 included -EUR 962 million under a share buyback programme carried out in 2023. The planned
ordinary distribution at 31 December 2023 takes into account -EUR 1,055 million in respect of the distribution in the form of a share buyback
programme initiated on 4 March 2024, after receiving authorisation from the European Central Bank.
The table below shows the calculation of value adjustments applied to instruments measured at fair value, related to the prudent valuation requirements
subject to a deduction from Common Equity Tier 1 capital.
➤
TABLE 12: VALUE ADJUSTMENTS RELATED TO PRUDENT VALUATION (PVA) (EU PV1)
a
b
c
d
e
EU e1
EU e2
f
g
h
In millions of euros
31 December 2023
Risk category
Category level AVA –
Valuation uncertainty
Total category level
post-diversification
Interest Foreign
Equity Rates exchange Credit
Unearned
credit Investment and
Commodities spreads AVA funding costs AVA
Of which:
Total core
approach in
the trading
book
Of which:
Total core
approach in
the banking
book
1
Market price uncertainty
1,138
176
16
181
22
35
30
645
172
473
3
Close-out cost
386
295
32
210
27
438
391
47
4
Concentrated positions
238
135
12
44
7
436
328
107
5
Early termination
6
1
-
1
9
8
1
6
Model risk
105
107
8
77
130
130
130
7
Operational risk
10 Future administrative costs
82
6
33
37
159
159
12 (AVAS)
1,817
TOTAL ADDITIONAL
VALUATION ADJUSTMENTS
1,188
629
a
b
c
d
e
EU e1
EU e2
f
g
h
In millions of euros
31 December 2022
Risk category
Category level AVA –
Valuation uncertainty
Total category level
post-diversification
Interest Foreign
Equity Rates exchange Credit
Unearned
credit Investment and
Commodities spreads AVA funding costs AVA
Of which:
Total core
approach in
the trading
book
Of which:
Total core
approach in
the banking
book
1
Market price uncertainty
474
195
17
179
47
64
23
431
194
238
3
Close-out cost
341
263
27
220
31
297
264
33
4
Concentrated positions
161
127
14
47
8
358
288
69
5
Early termination
169
1
1
171
170
1
6
Model risk
114
78
4
41
174
121
121
7
Operational risk
10 Future administrative costs
80
26
6
24
136
136
12 (AVAS)
1,514
TOTAL ADDITIONAL
VALUATION ADJUSTMENTS
1,173
341
Additional Tier 1 capital
Additional Tier 1 capital is mainly composed of subordinated debt
instruments with the following characteristics:
■ they are perpetual and include no redemption incentive;
■ they are not held by the bank, its subsidiaries or any company in which
the Group holds 20% or more of the capital;
■ they have a capacity to absorb losses;
■ they may include a buy back option, five years after the issue date
at the earliest, exercisable at the issuer's discretion (subject to
authorisation by the supervisor);
■ they have remuneration arising from distributable elements that may
be cancelled, with no requirements for the bank.
This category is also composed of non-eligible minority reserves in
common equity within their limit of eligibility.
Authorisations to redeem Additional Tier 1 own capital instruments are
deducted from this category.
Tier 2 capital
Tier 2 capital is composed of subordinated debt with no buy back
incentive, as well as non-eligible minority reserves in Tier 1 capital
within their limit of eligibility. A prudential discount is applied to the
subordinated debt with less than five years of residual maturity.
Prudential deductions from Tier 2 capital primarily concern:
■ Tier 2 capital components in significant financial entities;
■ Tier 2 own capital instrument buy back authorisations.
Composition and evolution of regulatory capital
The detail of regulatory capital and regulatory adjustments is presented
in Appendix 2 Regulatory capital – Detail.
The table presenting the details of the debt instruments recognised as
capital, as well as their characteristics, in accordance with the template
(EU CCA) required by implementing Regulation No. 2021/637, is available
in the BNP Paribas Debt section of the Investor Relations website:
https://invest.bnpparibas/en/search/debt/documents/documentation-
on-programs-and-issuances.
➤
TABLE 13: REGULATORY CAPITAL
In millions of euros
31 December 2023
31 December 2022
Common Equity Tier 1 (CET1) capital: instruments and reserves
Capital instruments and the related share premium accounts(*)
21,253
26,236
of which ordinary shares(*)
21,253
26,236
Retained earnings
82,257
77,751
Accumulated other comprehensive income (and other reserves, to include unrealised gains
and losses under the applicable accounting standards)
(2,809)
(3,319)
Minority interests (amount allowed in consolidated CET1)
2,048
1,736
Independently reviewed interim profits net of any foreseeable charge or distribution(**)
3,970
4,933
COMMON EQUITY TIER 1 (CET1) CAPITAL BEFORE REGULATORY ADJUSTMENTS
106,719
107,337
Common Equity Tier 1 (CET1) capital: regulatory adjustments(***)
(13,862)
(15,508)
COMMON EQUITY TIER 1 (CET1) CAPITAL
92,857
91,828
Additional Tier 1 (AT1) capital: instruments
15,150
12,103
Additional Tier 1 (AT1) capital: regulatory adjustments
(506)
(487)
ADDITIONAL TIER 1 (AT1) CAPITAL
14,644
11,616
TIER 1 CAPITAL (T1 = CET1 + AT1)
107,501
103,445
Tier 2 (T2) capital: instruments and provisions(****)
17,476
20,692
Tier 2 (T2) capital: regulatory adjustments
(3,233)
(3,575)
TIER 2 (T2) CAPITAL(****)
14,243
17,117
TOTAL CAPITAL (TC = T1 + T2)(****)
121,744
120,562
(*)
Including -EUR 5 billion in capital reduction related to the cancellation in 2023 of shares acquired in connection with the implementation of the
2023 share repurchase programme carried out in full in 2023.
(**) T a king into account an anticipated distribution of 60% (of which -EUR 1,055 million in the form of share buyback) in respect of distributable income after
taking into account the compensation cost of undated super subordinated notes and subject to customary conditions.
(***) Including the ordinary distribution policy adjustment of 2022 net income in the form of a share repurchase of -EUR 962 million as at 31 December 2022.
(****) In accordance with the applicable eligibility rules for grandfathered debt in Tier 2 capital.
➤
TABLE 14: CHANGE IN REGULATORY CAPITAL
In millions of euros
31 December 2023
COMMON EQUITY TIER 1 (CET1) CAPITAL
31 December 2022
91,828
Common Equity Tier 1 capital: instruments and reserves
(618)
Capital instruments and the related share premium accounts
(4,983)
of which ordinary shares
(427)
Retained earnings
4,507
Accumulated other comprehensive income
510
Minority interests (amounts allowed in consolidated CET1)
311
Independently reviewed interim profits net of any foreseeable charge or distribution(*)
3,970
Common Equity Tier 1 (CET1) capital: regulatory adjustments
1,647
of which additional value adjustments
(303)
of which intangible assets
2,504
of which net deferred tax assets depending on future profits excluding these arising from temporary differences
(151)
of which fair value reserves related to gains or losses on cash flow hedges
(282)
of which negative amounts resulting from the calculation of expected loss amounts
(301)
of which gains or losses on liabilities valued at fair value resulting from changes in own credit standing
(28)
of which securitisation positions deducted from own funds
(61)
of which other adjustments
269
31 December 2023
92,857
ADDITIONAL TIER 1 CAPITAL(**)
31 December 2022
11,616
Additional Tier 1 (AT1) capital: instruments(**)
3,047
Additional Tier 1 (AT1) capital: regulatory adjustments
(19)
Loans to credit or financial institutions more than 10%-owned
Others
(19)
31 December 2023
14,644
TIER 2 CAPITAL(**)
31 December 2022
17,117
Tier 2 (T2) capital: instruments and provisions(**)
(3,217)
Tier 2 (T2) capital: regulatory adjustments
343
Loans to credit or financial institutions more than 10%-owned
Others
343
31 December 2023
14,243
(*)
T a king into account a distribution proposal, subject to the usual conditions, of 60% of distributable income (including -EUR 1,055 million in share
buyback) adjusted for the interest expense on undated super subordinated notes.
(**) In accordance with the eligibility rules for grandfathered debt in additional Tier 1 and Tier 2 capital applicable.
➤
TABLE 15: CHANGE IN ELIGIBLE DEBT FOR THE CONSTITUTION OF EQUITY
In millions of euros
Tier 1
Tier 2
31 December 2022
11,800
20,470
New issues
3,164
105
Redemptions
(333)
Prudential discount
(1,834)
Others
(63)
(1,123)
31 December 2023
14,901
17,286
Transitional arrangements relating
to regulatory capital
Under Regulation (EU) No. 575/2013 (CRR), the calculation methods
introduced by Basel 3 were implemented gradually until 1 January 2022.
Since 2019, the items still subject to these transitional arrangements
were subordinated debt issued prior to 31 December 2011, eligible under
prior regulations but not eligible under Basel 3, to which a declining
eligibility threshold applied. These transitional arrangements expired on
1 January 2022, and the instruments concerned were all called before
31 December 2021, with the exception of one Tier 1 instrument and of
six Tier 2 instruments, all of which having no prudential value as at
31 December 2023.
Regulation (EU) No. 2019/876 (CRR 2), which came into force on
27 June 2019, introduces additional eligibility criteria for Tier 1 and 2
regulatory capital which supplement those provided for by Regulation
(EU) No. 575/2013. Instruments that were previously eligible under CRR,
although not fulfilling these additional requirements may, eventually, be
recognised in a less subordinated category, for a transitional period that
may extend up to 2025. A Tier 2 capital instrument of EUR 31 million lost
its eligibility on 1 January 2022, as issued by an ad hoc entity (article 63(a)
CRR). In addition, at 31 December 2023, there were no longer any Tier 1
capital instruments eligible for the transitional arrangements in force
until June 2025, because they were issued under the law of countries
outside the European Union without a bail-in clause (articles 52(1)(p)
and 63(n) CRR); the stock of Tier 2 capital instruments eligible for the
same provisions amounted to EUR 2.3 billion.
The details of the instruments concerned by these transitional provisions,
describing their eligibility period and the main characteristics in relation
to the CRR/CRR 2 Regulations and the EBA's opinion published on
21 October 2020, on the appropriate treatment of instruments ineligible
at the end of 2021 in relation to the CRR criteria, are available on the
Group's investor relations website: https://invest.bnpparibas/en/search/
debt/documents/documentation-on-programs-and-issuances.
Regulation (EU) No. 2017/2395 and Regulation (EU) No. 2020/873 define
the transitional measures relating to the introduction of IFRS 9. These
measures mitigate the impact of the increase in expected credit losses
related to the application of new standard on CET1 capital until 2024.
The Group has been applying these transitional measures since 31 March
2020 in accordance with the ECB recommendation. The Bank has opted
for the arrangements relating to the calculation of the exposure value
calculated under the standardised approach, defined in paragraph 4 and
paragraph 7 point b) in article 473a.
➤
TABLE 16: EFFECT OF THE APPLICATION OF TRANSITIONAL ARRANGEMENTS
FOR IFRS 9 ACCOUNTING STANDARD (EU IFRS9-FL)
In millions of euros
31 December 2023
31 December 2022
Available capital
1
Common Equity Tier 1 (CET1) capital
92,857
91,828
2
Common Equity Tier 1 (CET1) capital as if IFRS 9 transitional arrangements had not been applied
92,857
91,444
3
Tier 1 capital
107,501
103,445
4
Tier 1 capital as if IFRS 9 transitional arrangements had not been applied
107,501
103,060
5
Total capital
121,744
120,562
6
Total capital as if IFRS 9 transitional arrangements had not been applied
121,744
120,484
Risk-weighted assets
7
Risk-weighted assets
703,694
744,851
8
Risk-weighted assets as if IFRS 9 transitional arrangements had not been applied
703,694
745,046
Capital ratios
9
Common Equity Tier 1 (CET1) capital
13.20%
12.33%
10 Common Equity Tier 1 (CET1) capital as if IFRS 9 transitional arrangements had not been applied
13.20%
12.27%
11 Tier 1 capital
15.28%
13.89%
12 Tier 1 capital as if IFRS 9 transitional arrangements had not been applied
15.28%
13.83%
13 Total capital
17.30%
16.19%
14 Total capital as if IFRS 9 transitional arrangements had not been applied
17.30%
16.17%
Leverage ratios
15 Leverage ratio total exposure measure
2,346,500
2,373,844
16 Leverage ratio
4.58%
4.36%
17 Leverage ratio as if IFRS 9 transitional arrangements had not been applied
4.58%
4.34%
The Group did not apply the provisions pursuant to article 468 of the
Regulation (EU) No. 2020/873 relating to the temporary treatment of
unrealised gains or losses on financial instruments at fair value through
equity issued by central, regional or local governments. These provisions
ended on 1 January 2023.
CAPITAL REQUIREMENT AND RIS K-WEIGHTED ASSETS
The table below shows risk-weighted assets and capital requirement by risk type. Capital requirements make up 8% of risk-weighted assets.
➤
TABLE 17: OVERVIEW OF RISK-WEIGHTED EXPOSURE AMOUNTS (EU OV1)
a
b
c
In millions of euros
RWAs
Capital
requirements
31 December 2023
31 December 2022
31 December 2023
1
Credit risk
535,141
579,635
42,811 Details in section 5.4
2
of which standardised approach
188,191
231,375
15,055
3
of which foundation IRB (FIRB) approach
4
of which slotting approach
EU 4a
of which equities under the simple weighting
approach
45,941
41,192
3,675
5
of which advanced IRB (A-IRB) approach
287,009
307,068
22,961
of which other risk exposure
14,000
1,120
6
Counterparty credit risk
45,025
42,320
3,602 Details in section 5.6
7
of which SACCR (Derivatives)
3,287
1,208
263
8
of which internal model method (IMM)
28,904
31,072
2,312
EU 8a
of which exposures to CCP related to clearing
activities
7,193
2,541
575
EU 8b
of which CVA
5,189
6,464
415
9
of which other
452
1,035
36
15
Settlement risk
8
9
1
16
Securitisation exposures in the banking book
16,589
15,794
1,327 Details in section 5.5
17
of which internal ratings-based approach (SEC-IRBA)
8,829
8,770
706
18
of which external ratings-based approach (SEC-ERBA)
1,258
1,132
101
19
of which standardised approach (SEC-SA)
6,502
5,892
520
of which exposures weighted at 1,250%
EU 19a(or deducted from own funds)(1)
20
Market risk
28,783
25,543
2,303 Details in section 5.7
21
of which standardised approach
9,768
6,622
781
22
of which internal model approach (IMA)
19,015
18,921
1,521
23
Operational risk
58,897
61,656
4,712 Details in section 5.9
EU 23a
of which basic indicator approach
3,911
4,280
313
EU 23b
of which standardised approach
10,215
12,073
817
EU 23c
of which advanced measurement approach (AMA)
44,771
45,302
3,582
24
Amounts below the thresholds for deduction
(subject to 250% risk weight)
19,252
19,895
1,540
29
TOTAL
703,694
744,851
56,296
(1) The Group opted for the deductive approach rather than a weighting of 1,250%. The amount of securitisation exposures in the
banking book deducted from own funds stood at EUR 270 million at 31 December 2023 (EUR 214 million at 31 December 2022).
The Group's total risk-weighted assets amounted to EUR 703.7 billion
at 31 December 2023 compared with EUR 744.9 billion at 31 December
2022. At 31 December 2023, risk-weighted assets calculated using the
internal model represented 58% of the Group's risk-weighted assets.
The breakdown of risk-weighted assets by risk type is presented in the
various appropriate sections.
Amounts below the thresholds for prudential capital deduction are assets
weighted at 250% pursuant to article 48 of Regulation (EU) No. 575/2013.
These mainly include:
■ credit or financial institutions consolidated under the equity method,
except for insurance entities consolidated under the equity method in
the prudential scope, which are weighted using the simple weighting
method;
■ significant financial interests in credit or financial institutions in which
the Group holds a stake of more than 10%;
■ deferred tax assets that rely on future profitability and arise from
temporary differences.
Settlement risk is defined in article 378 of Regulation (EU) No. 575/2013
as the risk of loss of value related to a delay in the settlement of securities
transactions. As at 31 December 2023, the risk-weighted assets with
respect to this risk are not significant for the Group at EUR 8 million.
RIS K-WEIGHTED ASSETS MOVEMENTS
IN 2023
The change in risk-weighted assets can be broken down into the following
effects:
■ asset size effect: impact stemming from the variation in exposures
(EAD) and impact related to the efficient securitisation programmes
and credit insurance initiated by the Group;
■ asset quality effect: impact stemming from the change in risk
parameters (Probability of Default, Loss Given Default for the internal
ratings-based approach, and risk weighting for the standardised
approach, etc.);
■ model update effect: impact stemming from changes in the use of
internal models (introduction of a new model, deployment on a new
exposure scope, annual recalibration or review of risk parameters,
application of add-ons, etc.);
■ methodology and policy effect: impact stemming from changes in
methodology and the establishment of new regulatory requirements
having an impact on the calculation of risk-weighted assets;
■ acquisition and disposal effect: impact stemming from changes in the
scope of consolidation;
■ currency effect: impact stemming from fluctuations in foreign exchange
rates on exposures.
➤
TABLE 18: RISK-WEIGHTED ASSETS MOVEMENTS BY KEY DRIVER
RWAs
In millions of euros
31 December
Key driver
Variation
Total 31 December
2022 Asset size quality
2023
Asset
Model Methodology
updates
and policy
and disposals
Acquisitions
Currency Other
Credit risk
579,635
4,494
(11,150)
3,226
(2,588)
(44,794)
(3,577)
9,895
(44,494)
535,141
Counterparty credit risk
42,320
1,625
(741)
701
3,111
(159)
(87)
(1,746)
2,704
45,025
Settlement risk
9
(1)
(1)
8
Banking book
securitisation
positions
15,794
917
79
(172)
(29)
795
16,589
Market risk
25,543
1,468
1,101
(1,682)
264
2,089
3,241
28,783
Operational risk
61,656
1,463
(281)
(110)
(3,852)
22
(2,758)
58,897
Amounts below
the thresholds for
deduction (subject to
250% risk weight)
19,895 (1,298)
(15)
352
(166)
484
(643)
19,252
TOTAL
744,851
8,668
(11,006)
5,247
(2,236)
(48,708)
(3,836)
10,715
(41,156)
703,694
The main reasons explaining the -EUR 41 billion decrease in risk-
weighted assets in 2023 are:
■ a -EUR 49 billion decrease related to perimeter effects, linked to Bank
of the West disposal net of Stellantis acquisition;
■ a +EUR 19 billion increase in line with business activity net of the
impact of the efficient securitisation transactions initiated by the
Group;
■ a -EUR 11 billion decrease induced by improvement of risk parameters;
■ a -EUR 4 billion decrease due to currency effects, linked to the
depreciation of the US dollar and of the Turkish lira compared to
the euro.
Comments on the main changes in 2023 for each type of risk are detailed
in the various appropriate sections.
BREAKDOWN OF RIS K-WEIGHTED ASSETS BY BUSINESS LINE
➤
TABLE 19: RISK-WEIGHTED ASSETS BY RISK TYPE AND BUSINESS
RWAs
In millions of euros
31 December 2023
Corporate & Institutional Banking
Commercial, Personal
Banking & Services
Investment
Specialised &Protection Corporate
Services
center
Total
Global
Banking
Global Securities
Markets Services
Commercial
& Personal
Banking Businesses
Credit risk
117,212
11,521
4,291
223,157
108,619
35,962
34,378
535,141
of which standardised approach
9,858
2,712
826
78,162
80,327
12,360
3,946
188,191
of which advanced IRB approach
106,062
7,584
3,347
139,300
15,399
4,637
10,681
287,009
of which equity positions under
the simple weighting method
1,292
1,226
119
5,696
12,893
18,965
5,751
45,941
of which other risk exposure
14,000
14,000
Counterparty credit risk
1,022
39,817
1,743
2,038
143
285
(22)
45,025
of which SACCR (Derivatives)
5
2,242
701
89
242
7
3,287
of which internal model method (IMM)
432
26,228
1,117
1,253
(126)
28,904
of which exposures to CCP related
to clearing activities
469
6,044
607
73
7,193
of which CVA
83
4,886
16
84
53
42
24
5,189
of which other
33
416
3
452
Settlement risk
-
8
-
-
-
-
-
8
Securitisation exposures
in the banking book
7,713
5,411
-
2,836
241
100
289
16,589
of which internal ratings based
approach (SEC-IRBA)
4,474
1,568
2,742
45
8,829
of which standardised approach
(SEC-SA)
3,082
3,316
93
10
6,502
of which external ratings based
approach (SEC-ERBA)
157
526
196
100
279
1,258
Market risk
4,668
19,279
140
2,936
219
199
1,343
28,783
of which standardised approach
4,592
1,654
5
1,791
219
163
1,343
9,768
of which internal model approach (IMA)
76
17,624
135
1,145
36
19,015
Operational risk
10,113
13,956
4,081
16,981
10,090
3,659
18
58,897
of which basic indicator approach
343
419
233
1,725
902
315
(25)
3,911
of which standardised approach
1,470
1,502
363
2,928
3,318
426
209
10,215
of which advanced measurement
approach (AMA)
8,299
12,035
3,485
12,328
5,870
2,918
(166)
44,771
Amounts below the thresholds
for deduction (subject to 250%
risk weight)
4
98
331
8,034
2,855
903
7,027
19,252
TOTAL
140,482
90,088
10,586
255,983
122,167
41,107
43,032
703,694
RWAs
In millions of euros
31 December 2022
Corporate & Institutional Banking
Commercial, Personal
Banking & Services
Investment
Specialised &Protection Corporate
Services
center
Total
Global
Banking
Global Securities
Markets Services
Commercial
& Personal
Banking Businesses
Credit risk
125,017
11,740
3,869
277,059
98,401
35,556
27,993
579,635
of which standardised approach
9,065
2,513
487
128,492
72,452
12,864
5,502
231,375
of which advanced IRB approach
114,933
8,056
3,260
143,699
14,954
4,817
17,348
307,068
of which equity positions under the
simple weighting method
1,018
1,171
122
4,869
10,995
17,874
5,143
41,192
Counterparty credit risk
418
37,297
1,909
1,907
1
326
463
42,320
of which SACCR (Derivatives)
0
416
497
286
8
1,208
of which internal model method (IMM)
236
28,195
1,027
1,225
388
31,072
of which exposures to CCP related
to clearing activities
80
1,551
872
39
2,541
of which CVA
102
6,099
10
185
1
39
28
6,464
of which other
1,035
1,035
Settlement risk
9
9
Securitisation exposures
in the banking book
7,190
5,259
2,579
367
106
294
15,794
of which internal ratings based
approach (SEC-IRBA)
4,328
1,839
2,449
154
8,770
of which standardised approach
(SEC-SA)
2,621
3,129
129
13
5,892
of which external ratings based
approach (SEC-ERBA)
241
291
1
213
106
281
1,132
Market risk
4,062
18,913
238
1,670
338
61
261
25,543
of which standardised approach
3,315
1,524
14
1,114
338
55
261
6,622
of which internal model approach (IMA)
747
17,388
224
556
5
18,921
Operational risk
9,613
14,397
3,588
20,363
10,177
3,706
(187)
61,656
of which basic indicator approach
364
794
160
1,701
1,103
297
(139)
4,280
of which standardised approach
1,136
1,206
334
6,219
2,520
550
109
12,073
of which advanced measurement
approach (AMA)
8,112
12,397
3,094
12,443
6,554
2,860
(157)
45,302
Amounts below the thresholds
for deduction (subject to 250%
risk weight)
10
133
339
7,932
2,273
917
8,290
19,895
TOTAL
146,310
87,746
9,943
311,510
111,557
40,671
37,114
744,851
The breakdown of risk-weighted assets by domain reflects the Group's
diversified business mix, with 54% devoted to Commercial, Personal
Banking & Services (Including 36% for Commercial & Personal Banking and
18% for Specialised Businesses), 34% to Corporate & Institutional Banking,
6% to Investment & Protection Services and 6% to Corporate Cente r.
The decrease in the Group's risk-weighted assets was EUR 41.2 billion
over 2023, with:
■ a EUR 55.5 billion decrease in Commercial & Personal Banking risk-
weighted assets, mainly linked to the sale of Bank of the West;
■ a EUR 2.6 billion decrease in Corporate & Institutional Banking,
including EUR 5.8 billion in Global Banking;
■ a EUR 10.6 billion increase in Specialised Businesses, driven by
Personal Finance;
■ a EUR 0.4 billion increase in Investment & Protection Services.
Transitional arrangements relating
to risk-weighted assets
Since 31 March 2020, the Group applies the provisions of Regulation (EU)
No. 2017/2395 on transitional measures relating to the introduction of
IFRS 9 for the calculation of risk-weighted assets for credit risk. Since
30 June 2020, the Group has also applied the provisions of Regulation
(EU) No. 2020/875 supplementing these transitional measures (see
T a ble 16: Effect of the application of the transitional arrangements for
IFRS 9 accounting standard).
CAPITAL ADEQUACY AND CAPITAL PLANNING
CAPITAL ADEQUACY
The BNP Paribas Group is required to comply with a range of regulations:
■ European banking regulations under the CRR and CRD, which also
cover banking supervision;
■ regulation relating to financial conglomerates in respect of additional
supervision of its banking and insurance activities. BNP Paribas'
insurance business is governed by Solvency II insurance regulations.
Within the context of the Single Supervisory Mechanism, the ECB thus
became the direct supervisor of BNP Paribas as of 4 November 2014.
The ECB draws on the competent national supervisory authorities in
fulfilling this role.
Requirements under banking regulations
and supervision
With respect to Pillar 1, the Group is required to meet:
■ a minimum Common Equity Tier 1 (CET1) capital ratio of 4.5%;
■ a minimum Tier 1 capital ratio of 6%;
■ a minimum Total capital ratio of 8%.
Additional requirements known as buffers
In addition to the minimum capital requirements regarding Pillar 1,
BNP Paribas has to maintain additional CET1 capital buffers:
■ the capital conservation buffer is equal to 2.5% of the risk-weighted
assets. The aim of this buffer is to absorb losses in a situation of
intense economic stress;
■ the following two buffers were defined to limit systemic institutions
failure risk. Only the highest of these two buffers is applicable:
■
the buffer for Global Systemically Important Banks (G-SIBs) consists
of a surcharge of CET1 capital defined by the Financial Stability
Board based on the methodology developed by the Basel Committee,
which corresponds to the global systemic importance of banks.
Global systemic importance is measured in terms of the impact
a bank's failure can have on the global financial system and the
wider economy.
The measurement approach of the global systemic importance is
indicator-based. The selected indicators reflect the size of banks,
their interconnectedness, the use of banking information systems
for the services they provide, their global cross-jurisdictional activity
and their complexity. The methodology is described in the document
published in July 2013 by the Basel Committee, entitled Global
systemically important banks: updated assessment methodology
and the higher loss absorbency requirement (BCBS 255).
The values of G-SIBs indicators at 31 December 2023 are presented
in GSIB1 format in Appendix 3 Countercyclical capital buffers and
G-SIB buffer.
The Group received the notification from the Autorité de contrôle
prudentiel et de résolution (ACPR), dated 27 November 2023, that
it was on the 2023 list of global systemically important financial
institutions in sub-category 2, corresponding to its score in the
database at end 2022.
As a result, the G-SIB buffer requirement for the Group applying
from 1 January 2024 remain unchanged compared to the previous
requirement at 1.5% of the total amount of risk exposures.
The next update of the Group's G-SIBs at 31 December 2023 will
be published in April 2024 and in the 1st update to the Universal
registration document;
■
the buffer for Domestic Systemically Important Banks (D-SIBs) aims
to strengthen the capital requirements for institutions whose failure
would have an impact on their national economy. The D-SIBs buffer
for BNP Paribas is set at 1.5% until to 2024;
■ the systemic risk buffer aims to limit systemic or macro prudential
non-cyclical risks in the long term. This is not significant for the Group;
■ the countercyclical capital buffer is defined as a surcharge of CET1
capital whose purpose is to adjust over time to increase the capital
requirements in periods when credit growth is accelerating and reduce
them in slower periods. A rate may be activated in each country by
a discretionary decision from the appointed national authority. In
view of the notified rates by country, the BNP Paribas countercyclical
capital buffer is 0.40% at 31 December 2023 and 0.58% from 2 January
2024 compared with 0.09% at 31 December 2022 (see Appendix 3
Countercyclical Capital Buffer and G-SIB Buffer).
Pillar 2 requirement
With respect to supervision, the second Pillar of the Basel Agreement
provides that the supervisor shall determine whether the policies,
strategies, procedures and arrangements implemented by the Group on
the one hand, and the capital held on the other hand, are adequate for
risk management and risk coverage purposes. This evaluation exercise
by the supervisors to determine the adequacy of mechanisms and capital
with respect to bank risk levels is designated in the regulations under the
term SREP (Supervisory Review and Evaluation Process).
ICAAP (Internal Capital Adequacy Assessment Process) is the process
by which institutions assess the adequacy of their own funds with their
internal measurements of the capital needed to cover the risks generated
by their usual activities. ICAAP is used for the annual SRE P.
Within the BNP Paribas Group, the ICAAP is based on two key principles,
as articulated in the European Central Bank's Guide on ICAAP: the
assessment of the Group's adequate level of available capital to cover
the capital needed in the internal perspective, and the forward-looking
capital planning.
In the ICAA P, t he adequacy of available capital to the risks borne by the
Group is assessed in the internal perspective, using a comprehensive
quantification of the capital needs generated by the Pillar 1 risks specified
by Basel regulations, as well as by the Pillar 2 risks identified as material
within the framework of the Group's risk identification system. In this
perspective, capital needs to cover Pillar 1 and Pillar 2 risks are assessed
using internal quantitative approaches, supplemented, as necessary, by
qualitative approaches and dedicated monitoring frameworks.
Capital planning is based on the most recent actual and estimated
financial data available at the time. This data is used to project future
capital resources and requirements, in particular by taking into account
regulatory requirements, factoring in the Group's goal of maintaining a
first-class credit rating to protect its origination capability, its business
development targets and anticipated regulatory changes.
Capital planning consists in comparing regulatory requirements and the
capital ratio targets defined by the Group with future projected capital
requirements, then testing their robustness in different scenarios,
including stressed macroeconomic environments.
Notification of SREP results
The results of the SREP process are notified annually to BNP Paribas
Executive Management by the ECB. The requirements applying for the
year 2024 were notified on 1 December 2023.
The SREP decision comprises two items: a requirement known as the
"Pillar 2 requirement" ("P2R"), and a non-public guidance called "Pillar 2
guidance" ("P2G"). Following the SREP assessment conducted by the ECB
in 2023, the requirements that the Group must meet under Pillar 2 since
1 January 2024 are the following:
■ 1.11% for CET1 capital;
■ 1.40% for Tier 1 capital;
■ 1.77% for total capital.
The leverage ratio requirement that the Group must comply with on
a consolidated basis from 1 January 2024 is 3.85% (excluding Pillar 2
guidance) including a P2R of 0.10%.
Capital requirements
The Group's CET1 ratio, Tier 1 ratio and total capital ratio must at
all times satisfy the following requirements corresponding to the
limits of applicable distribution restrictions (Maximum Distributable
Amount – MDA):
■ the minimum CET1 ratio, Tier 1 ratio and total capital ratio, respectively,
in accordance with article 92 (1) points a), b) and c) of the CRR;
■ the Pillar 2 requirement;
■ the combined buffer requirement defined in article 128 (6) of CRD 5,
as transposed into the respective national law.
➤
TABLE 20: OVERALL CAPITAL REQUIREMENTS
31 December 2023
31 December 2024
CET1: Minimum requirements (Pillar 1)
4.50%
4.50%
CET1: Pillar 2 requirement(*)
0.88%
1.11%
Combined Buffer Requirement
4.40%
4.69%
of which capital conservation buffer
2.50%
2.50%
of which G-SIBs buffer
1.50%
1.50%
of which Countercyclical capital buffer(**)
0.40%
0.69%
of which Systemic capital buffer(***)
0.00%
0.00%
OVERALL CET1 CAPITAL REQUIREMENT
9.79%
10.31%
Tier 1 (CET1 + AT1): Minimum requirement (Pillar 1)
6.00%
6.00%
Tier 1: Pillar 2 requirement(*)
1.18%
1.40%
Combined Buffer Requirement
4.40%
4.69%
OVERALL TIER 1 CAPITAL REQUIREMENT
11.58%
12.09%
Total capital: Tier 1 (CET1 + AT1): Minimum requirement (Pillar 1)
8.00%
8.00%
Total capital: Pillar 2 requirement(*)
1.57%
1.77%
Combined Buffer Requirement
4.40%
4.69%
OVERALL TOTAL CAPITAL REQUIREMENT
13.97%
14.46%
(*) Only the Pillar 2 requirement is made public. Since 2020, the P2R has taken into account the application of Article 104a of Directive (EU) No 2019/878.
(**) Countercyclical capital buffers as at 31 December 2023 and anticipated as at 31 December 2024 take into account the applicable rate increases
applicable in 2023 (see Appendix 3: Countercyclical capital buffer and G-SIB buffer).
(***)S ince 30 June 2023, non-applicability of the sectoral systemic risk buffer (SyRB) on mortgage portfolios in Belgium at BNP Paribas Group consolidated
level.
The CET1 capital requirement is 9.79% at 31 December 2023 (excluding
Pillar 2 guidance), in view of the capital conservation buffer at 2.5%, a
G-SIB buffer at 1.5%, the countercyclical buffer at 0.40% and a Pillar 2
requirement at 0.88%.
At 31 December 2023, BNP Paribas' CET1 ratio stands at 13.20%(1), well
above the minimum requirement level applicable in 2023 notified by
the European Central Bank. Compared to 31 December 2022, the CET1
ratio increased by around 90 basis points as at 31 December 2023, is
mainly explained by:
■ the closing of the sale of Bank of the West on 1 February 2023, net
of the share buyback programme and redeployed capital (+100 bps);
■ the effect of the adjustment in distributable net income (-30 bps);
■ the 2023 results after taking a 60% payout ratio into account, net of
the change in risk-weighted assets and their optimisation (+30 bps);
■ The impact of the application of IFRS 17 and the updating of models
and regulations(2) at the 1st quarter (-10 bps);
■ the other effects, which are limited overall on the ratio.
(1) CRD 5, including IFRS 9 transitional arrangements.
(2) Including IFRS 9 phasing.
➤
FIGURE 5: MDA RESTRICTION THRESHOLD
CET1
Tier 1
Total Capital
Leverage
Countercyclical buffer
G-SIB buffer
Conservation buffer
Pillar 2 requirement
Pillar 1
0.40%
4.50%
2.50%
1.18%
0.88%
1.50%
2.50%
6.00%
0.40%
1.50%
8.00%
2.50%
1.57%
1.50%
BNP Paribas Capital ratios as at 31 December 2023
13.2%
15.3%
9.79%
11.58%
0.40%
3.75%
17.3%
Distance as at 31 December 2023 to Maximum
Distributable Amount restrictions
340 bps
€24.0 bn
370 bps
€26.0 bn
330 bps
€23.4 bn
Capital and leverage
requirements as
at 31.12.23
13.97%
4.6%
80 bps
€19.5 bn
Leverage ratio
based on
leverage
exposure
Capital
ratios
based
on RWA
As a reminde r, s ince 1 January 2022, the Group is subject to a restriction
threshold applicable to distributions on the basis of the MREL requirement
(M-MDA, see paragraph MREL). This constraint is non-biding because it
is higher than the distance to the distribution restriction thresholds.
Since 1 January 2023, the Group is subject to a restriction threshold
applicable to distributions on the basis of the leverage ratio requirement
(L-MDA, see paragraph Leverage ratio).
The capital surplus over the thresholds for distribution restriction is the
lesser of the four amounts calculated respectively in relation to CET1,
Tier 1, total capital and leverage ratio requirements based on exposure.
At 31 December 2023, the excess of total capital over the restriction
thresholds applicable to distributions was EUR 19.5 billion.
BNP Paribas ratios are monitored and managed centrally, on a
consolidated basis. Where a French or international entity is required
to comply with banking regulations at its own level, its ratios are also
monitored and managed directly by the entity (see paragraph Capital
management at local level).
Requirements applicable to the Insurance business
BNP Paribas' insurance business is governed by Solvency II, the standard
for calculating the solvency coverage ratio (Directive 2009/138/EC as
transposed into French law).
The objective of Solvency II is to:
■ integrate the concepts of risks and risk appetite;
■ harmonise the insurance regulatory regimes across Europe;
■ give more power to supervisory authorities.
Solvency II is divided into three pillars aiming to:
■ Pillar 1: assess solvency using what is known as an economic capital-
based approach;
■ Pillar 2: implement qualitative requirements, i.e. governance and risk
management rules that include a forward-looking approach to risk
assessment. This assessment is called ORSA (Own Risk & Solvency
Assessment);
■ Pillar 3: improve the transparency of the insurance business by
making solvency the cornerstone of disclosures to the public and the
supervisory authority.
The BNP Paribas Cardif group complies with this regulation both in
terms of risk management and governance, as well as calculation
and reporting. Solvency II-related data as at 31 December 2022 are
available in the Solvency and Financial Condition Report (SFCR) for
the BNP Paribas Cardif group, published on the institutional website
https://www.bnpparibascardif.com/en.
Insurance risks are introduced in section 5.10 Insurance risks.
Solvency II sets out two capital requirements:
■ the Solvency Capital Requirement (SCR);
■ the Minimum Capital Required (MCR) o r, f or groups, the SCR Group
Minimum.
The SCR (Solvency Capital Requirement) is the level of own funds required
to absorb a full series impacts after accounting for the correlation
between risks. It is calibrated to cover such an event with a return period
of 200 years within a one-year timescale (Value at Risk at 99.5%). The
BNP Paribas Cardif SCR is evaluated by means of the standard formula
laid down by the regulation.
The capital management policy of BNP Paribas Cardif aims notably to
ensure that the prudential solvency requirements are met, to cover at
least 100% of the SCR defined within the scope of the ORSA assessment
and to structure own funds so that the best balance can be found between
the share capital, subordinated debt and other own funds elements,
complying with the limits and levels laid down by regulations.
At 31 December 2022, own funds eligible for the Solvency Capital
Requirement stood at EUR 15,882 million. The amount of SCR was
EUR 9,717 million and the SCR coverage ratio was 163%. Eligible own
funds for the SCR Group Minimum amounted to EUR 12,329 million. The
amount of SCR Group Minimum was EUR 3,611 million, and the SCR
Group Minimum coverage ratio was 341%.
The Solvency Report at 31 December 2023 will be published on 17 May 2024.
Compliance with the regulation on the additional
supervision of financial conglomerates
As a bancassure r, t he BNP Paribas Group is also subject to additional
supervision as a financial conglomerate, pursuant to European
Directive 2002/87/EU, supplemented by Delegated Regulation 342/2014
of the European Commission and implemented into French law by the
Order of 3 November 2014.
The financial conglomerates directive has established additional
prudential supervision, added to the rules existing in the banking and
insurance sectors, because it has introduced additional constraints on
capital adequacy, the monitoring of large exposures, and intragroup
transactions.
A financial conglomerate is required to meet additional capital adequacy
requirements on a consolidated basis. The purpose is to require sufficient
capital to cover both banking sector and insurance sector risks, while
eliminating multiple gearing.
The capital surplus or shortfall results from the difference between the
financial conglomerate's equity capital and the solvency requirements
applicable to the banking and insurance industries:
■ the financial conglomerate's capital is determined based on the
sector's solvency rules (CRR for the banking sector and Solvency II
for the insurance sector);
■ the requirements for the financial conglomerate are determined on
the basis of banking sector requirements, calculated according to the
CRR 2 and CRD 5 rules, including all capital buffers as well as the
requirement resulting from the SREP 2022 applicable in 2023, and on
the basis of the solvency capital requirement (SCR) for the insurance
secto r, c alculated in accordance with the Solvency II regulation.
In calculating the financial conglomerate's capital adequacy, the
requirements and deductions of insurance entities are treated in
compliance with Solvency II rules in replacement of the rules defined in
the CRR. The latter consist primarily of a 370% weighting of investments
in equities treated according to the simple weighting method (see Equities
under the simple weighting method in section 5.4 Credit risk).
Governance for the prudential supervision of financial conglomerates falls
to the Capital Committee, which meets quarterly under the Chairmanship
of the Chief Financial Office r.
As at 31 December 2023, BNP Paribas Group, as a financial conglomerate,
had capital of EUR 134.1 billion compared to a total requirement of
EUR 105.0 billion, which represents a capital surplus of EUR 29.2 billion.
➤
TABLE 21: FINANCIAL CONGLOMERATES – OWN FUNDS AND CAPITAL ADEQUACY RATIO (EU INS2)
a
a
In millions of euros
31 December 2023
31 December 2022
1
Supplementary own fund requirements of the financial conglomerate (amount)
29,177
26,250
2
Capital adequacy ratio of the financial conglomerate (%)
127.80%
123.91%
RECOVERY AND RESOLUTION
Following the 2008/2009 financial crisis, international banking
regulatory bodies adopted a series of regulations and directives based
on the recommendations of the Financial Stability Board to facilitate
the authorities' management of crises involving financial institutions
and limit the impact of a potential collapse on the economy and public
finances. They provide for:
■ powers and instruments for the supervisory authorities to allow for
better anticipation and oversight of the recovery of banks in difficulty,
particularly by means of recovery plans;
■ powers and instruments for the resolution authorities in order to
implement orderly resolution of a bank that would not have been able
to recover by itself and would be placed in resolution. This is based
among other things on the resolution documents and detailed reports
required from banks to enable authorities to prepare resolution plan;
■ the addition of further regulatory requirements for institutions. These
requirements, which overlap quite widely, aim to ensure a sufficient
quantity of liabilities able to absorb losses or be converted into equity.
In particula r, t hey consist of:
■
a TLAC (Total Loss Absorbing Capacity) ratio for Global Systemically
Important Banks (G-SIBs),
■
a MREL (Minimum Requirement for own funds and Eligible
Liabilities) ratio applicable to all European institutions;
■ bail-in rules for banks, with a review of the ranking of creditors
including a category of TLAC and MREL eligible debt (non-preferred
senior) created in 2016, plus the creation in 2014 of the Single
Resolution Fund, at European level, financed by the banks, with the
aim of avoiding any recourse to public assistance.
The recommendations of the Financial Stability Board were transposed
into French banking law in July 2013, introducing in particular the
obligation to create recovery and resolution plans, and giving resolution
powers for the ACPR (Autorité de contrôle prudentiel et de résolution).
On a European level, Directive 2014/59/EU (BRRD – Bank Recovery and
Resolution Directive) was passed in 2014 and has been transposed into
the law of all European Union Member States. This directive, as well
as Regulation (EU) No. 806/2014 (SRM Regulation – Single Resolution
Mechanism Regulation) of 2014 and various additional delegated
regulations, form all of the current regulations governing the recovery
and resolution of European financial institutions. Following the European
Commission proposal of November 2016, the amendments contained
in the BRRD2 and in the SRMR2 were approved and published in the
Official Journal on 7 June 2019. In France, the transposition of the BRRD2
directives was finalised on 21 December 2020.
Recovery Plan
The recovery plan, prepared at Group level, describes the possible
recovery options if the Group were to find itself in a distressed situation. It
contains information needed by the authorities to understand the Group's
operations, resilience and capacity to absorb losses.
BNP Paribas submitted its updated Recovery Plan to its superviso r, t he
ECB, in September 2023. The Single Resolution Board (SRB) and other
authorities can obtain the Recovery Plan from the ECB.
Prepared in accordance with the Financial Stability Board's
recommendations and the provisions of the French Monetary and
Financial Code, this Recovery Plan was submitted to the Board of
director's Internal Control, Risk Management and Compliance Committee
(CCIRC) for review and then to the Board of directors for approval (see
chapter 2 Corporate governance and internal control).
The new version of the Plan includes updated figures and takes account
of changes in the Group's organisation and activities. It is accompanied
by a detailed description of the recovery scenarios used and the impacts
of the recovery options identified. It also takes account of the comments
of the ECB and the Recovery College's participating authorities, which
met in March 2023, as well as developments in European regulations. It
also incorporates lessons learned from dry runs conducted regularly by
BNP Paribas on certain aspects of the plan with the participation of the
Executive Management and the ECB.
This Recovery College, organised under the auspices of the ECB, brings
together the authorities of the member countries of the European Union
in which BNP Paribas has a presence, as well as the European Banking
Authority.
Resolution documentation
In 2023, the Group submitted a set of documents to the Autorité de
contrôle prudentiel et de résolution (ACPR) to be forwarded to the
Single Resolution Board (SRB). These documents contain information
needed by the authorities to prepare a plan for the potential resolution
of BNP Paribas.
Since 2016, the Group provides annually a series of documents.
These include an analytical declaration of the BNP Paribas SA and its
subsidiaries' liabilities (Liability Data Report), required by the SRB to
carry out its analyses of future requirements for liabilities eligible for
bail-in, as well as various financial analyses, a presentation on the
Group's organisational structure and analyses of its critical functions
and operational continuity in resolution. These statements are in line with
the requirements formalised by the EBA (on behalf of the Commission).
In 2023, BNP Paribas took also part in a series of working meetings of
the SRB, the ACPR and other EU bank resolution authorities, under the
auspices of the SRB. The purpose of these meetings, is to deepen the
SRB's analyses of the Group's capacity to deal with a potential resolution.
The Crisis Management Group (CMG) and the Resolution College met in
January 2024 in view to approve the resolution plan drafted by the SRB.
The resolution strategy privileged by the SRB for major institutions such
as the Group includes "bail-in" which, in contrast to "bail-out", involves
the absorption of losses through BNP Paribas SA's internal resources. This
implies the cancellation or reduction in the nominal value of a debt and/
or its complete or partial conversion into equity. For major centralised
banking institutions such as the Group, this resolution strategy is applied
at a Single Point of Entry (SPE), i.e. BNP Paribas SA, regardless of where
the losses occur within the Group.
With regard to the US authorities, the Group presented a resolution plan
for its activities in the United States, pursuant to Rule 165(d) of the Dodd-
Frank Act in December 2021. The next version of the resolution plan will
be submitted at end-March 2025.
TLAC
In accordance with Regulation (EU) No. 2019/876, Global Systemically
Important Banks (G-SIBs) have been subject to a two-fold TLAC
requirement since 27 June 2019. This requirement includes, on the one
hand, a minimum ratio expressed as a percentage of the risk-weighted
assets, and, on the other hand, a minimum ratio expressed as a
percentage of the leverage ratio exposure.
At 31 December 2023, the minimum TLAC requirement for the Group
stood at 22.40% of the risk-weighted assets taking into account:
■ a 18% TLAC minimum requirement;
■ a 4.40% combined buffer requirement, in view of the capital
conservation buffer at 2.5%, the G-SIBs buffer at 1.5% and the
countercyclical capital buffer at 0.40%.
From 1 January 2022, the Group's minimum TLAC requirement amounts
to 6.75% of leverage exposure.
➤
TABLE 22: COMPOSITION OF TLAC RATIO (EU TLAC1)
In millions of euros
31 December 2023
31 December 2022
Regulatory capital
1
Common Equity Tier 1 capital (CET1)
92,857
91,828
2
Additional Tier 1 capital (AT1)
14,644
11,616
6
Tier 2 capital (Tier 2)
14,243
17,117
11
Total TLAC eligible capital
121,744
120,562
Other TLAC eligible liabilities
12
Non-preferred senior debt issued directly by the resolution entity (not grandfathered)(*)
72,301
75,204
Non-preferred senior debt issued by other entities within the resolution group
EU-12a (not grandfathered)
EU-12b Non-preferred senior debt issued prior to 27 June 2019 (grandfathered)
EU-12c Amortised portion of Tier 2 instruments with remaining maturity over one year
4,399
3,410
13
Preferred senior debt (not grandfathered before application of 3.5% RWA limit)
Option not applied
Option not applied
Preferred senior debt issued prior to 27 June 2019 (grandfathered before application of 3.5%
EU-13a RWA limit)
Option not applied
Option not applied
14
Preferred senior debt (after application of the 3.5% RWA limit)
Option not applied
Option not applied
17
TLAC eligible liabilities items before adjustments
76,337
78,614
EU-17a
of which subordinated
76,337
78,614
Own funds and TLAC eligible liabilities: Adjustments to non-regulatory capital elements
18
Total capital and other TLAC eligible liabilities before regulatory adjustments
198,082
199,176
19
Deduction of exposures between MPE resolution groups
20
Deduction of investments in other TLAC eligible liabilities instruments
22
Total capital and other TLAC eligible liabilities after regulatory adjustments
198,082
199,176
Risk-weighted assets and leverage ratio total exposure measure
23
Risk-weighted assets (RWAs)
703,694
744,851
24
Leverage ratio total exposure measure
2,346,500
2,373,844
25
TLAC RATIO (as a percentage of risk-weighted assets)
28.15%
26.74%
26
TLAC RATIO (as a percentage of leverage ratio total exposure measure)
8.44%
8.39%
27
CET1 (as a percentage of RWAs) available after meeting the resolution group's requirements
7.73%
6.80%
28
Combined buffer requirement
4.40%
4.17%
29
of which capital conservation buffer
2.50%
2.50%
30
of which countercyclical buffer
0.40%
0.09%
31
of which systemic risk buffer
0.00%
0.08%
EU-31a
of which G-SIBs or D-SIBs buffers
1.50%
1.50%
Total amount of excluded liabilities referred to in Article 72a(2) of the Regulation (EU)
EU-32 No.575/2013
1,685,403
1,772,802
(*) Outstanding principal amount.
At 31 December 2023, the Group's TLAC ratio broadly exceeds the
applicable minimum level of requirement.
This ratio stood at 28.15% of risk-weighted assets, without using senior
preferred debt, which are eligible up to a limit of 3.5% of risk-weighted
assets. It amounted to 8.44% of leverage ratio total exposure measure.
The debts issuance targets aiming at satisfying these requirements and
their nature are described in the section Wholesale funding trends based
on regulatory changes in section 5.8 Liquidity risk.
➤
TABLE 23: CREDITOR RANKING OF THE RESOLUTION ENTITY BNP PARIBAS SA(*) (EU TLAC3)
In millions of euros
1
31 December 2023
Insolvency ranking
2
4(**)
3
7
TOTAL
1
Description of insolvency ranking
CET1
capital(***) capital(***)
AT1
T2 capital –
participating
notes(***)
T2 capital –
subordinated
debt(***)
Non-preferred
senior
debt(****)
2
Regulatory capital instruments and debt
instruments
116,227
14,823
225
22,658
80,276
234,209
3
of which excluded instruments
-
4
Non-excluded regulatory capital instruments
and debt instruments
116,227
14,823
225
22,658
80,276
234,209
5
of which instruments eligible for the TLAC
ratio
116,227
14,823
-
21,392
72,301
224,743
6
of which residual maturity ≥ 1 year
and < 2 years
2,850
7,510
10,361
7
of which residual maturity ≥ 2 years
and < 5 years
5,565
30,558
36,123
8
of which residual maturity ≥ 5 years
and < 10 years
9,420
26,259
35,679
9
of which residual maturity ≥ 10 years
(excluding perpetual)
3,557
7,973
11,530
10
of which perpetual instruments
116,227
14,823
131,050
(*) The data presented correspond to the scope of the resolution entity, BNP Paribas SA.
(**) According to the Appendix on insolvency ranking in the jurisdictions of the Banking Union published by the Single Resolution Board, participating notes
are classified in rank 4. Howeve r, t he ranking clauses of BNP Paribas SA's deeply subordinated notes (AT1) indicate that these notes are subordinated to
participating notes. The participating notes are thus presented between ranks 2 and 3.
(***)A mounts before regulatory adjustments.
(****) Outstanding principal amount.
In millions of euros
1
31 December 2022
Insolvency ranking
2
4(**)
3
7
TOTAL
1
Description of insolvency ranking
CET1
capital(***)
AT1 participating subordinated
capital(***)
T2 capital –
notes(***)
T2 capital –
debt(***)
Non-preferred
senior
debt(****)
2
Regulatory capital instruments and debt
instruments
121,296
11,800
225
23,474
81,044
237,839
3
of which excluded instruments
-
4
Non-excluded regulatory capital instruments
and debt instruments
121,296
11,800
225
23,474
81,044
237,839
5
of which instruments eligible for the TLAC
ratio
121,296
11,800
225
23,466
75,204
231,991
6
of which residual maturity ≥ 1 year
and < 2 years
937
5,751
6,688
7
of which residual maturity ≥ 2 years
and < 5 years
8,239
28,687
36,926
8
of which residual maturity ≥ 5 years
and < 10 years
7,772
31,851
39,623
9
of which residual maturity ≥ 10 years
(excluding perpetual)
6,012
8,915
14,927
10
of which perpetual instruments
121,296
11,800
225
506
133,827
(*) The data presented correspond to the scope of the resolution entity, BNP Paribas SA.
(**) According to the Appendix on the insolvency ranking in the jurisdictions of the Banking Union published by the Single Resolution Board, participating
notes are classified in rank 4. Howeve r, t he ranking clauses of BNP Paribas SA's deeply subordinated notes (AT1) indicate that these notes are
subordinated to participating notes. The participating notes are thus presented between ranks 2 and 3.
(***)A mounts before regulatory adjustments.
(****) Outstanding principal amount.
MREL
The total Minimum Requirement for own funds and Eligible Liabilities
(MREL) applies to all European Union credit institutions and investment
firms from 1 January 2024.
In accordance with the regulations (BRRD, Article 45i(3) and implementing
regulation EU 2021/763 Recital 10 and Articles 9 and 10) Institutions are
required to publish the MREL requirements to which they are subject and
the liabilities with which they comply since 1 January 2024.
The resolution authorities have notified the Group of an intermediate
MREL which applies from 1 January 2022. At 31 December 2023, the
Group exceeded the expected intermediate MREL requirement and the
distance above the minimum requirement ("M-MDA") was greater than
the distance applicable to the distribution restriction thresholds ("MDA")
calculated in relation to the capital requirements (see paragraph Overall
capital requirements).
At 31 December 2023, the Group's MREL ratio stood at 30.92% of
risk-weighted assets. The Group was thus above the minimum
requirement level of 26.55% applicable on 2 January 2024.
At 31 December 2023, the Group's MREL ratio stood at 9.27% of leverage
exposures. This ratio is to be compared to a minimum requirement of
5.91% applicable on 2 January 2024.
At 31 December 2023, the Group's subordinated MREL ratio stood at
28.15% of risk-weighted assets, compared to a minimum requirement of
20.47% applicable on 2 January 2024.
At 31 December 2023, the Group's MREL ratio stood at 8.44% of leverage
exposures, compared to a minimum requirement of 5.82% applicable on
2 January 2024.
Changes in regulations
BNP Paribas closely tracks the regulatory developments relating to banks
recovery and resolution.
It noted in particular the Eurogroup statement of June 2022(1) that
required a targeted review of the Crisis Management and Deposit
Insurance (CMDI) framework (BRRD, SRMR and DGSD), the Commission
published a proposal on 18 April 2023. This proposal is currently being
discussed by the European Parliament and the Council. BNP Paribas
closely follows these discussions. At this stage, the legislative process is
expected to be completed by 2025 or even 2026.
LEVERAGE RATIO
The leverage ratio's main objective is to serve as a complementary
measure to the risk-based capital requirements (back-stop principle).
It is calculated as the ratio between Tier 1 capital and an exposure
measure calculated using on- and off-balance sheet commitments valued
using a prudential approach. In particula r, d erivatives and repurchase
agreements are also adjusted.
At European level, the leverage ratio requirement is applied gradually in
accordance with the provisions contained in the CRR:
■ up to 28 June 2021, the leverage ratio was the subject of a statement
submitted to the ECB and a disclosure requirement under Pillar 3;
■ from 29 June 2021 to 31 December 2022, institutions were subject to
a minimum leverage ratio requirement of 3%;
■ From 1 January 2023, Global Systemically Important Banks (G-SIBs) are
subject to an additional leverage requirement of 50% of the institution's
G-SIBs buffer (see paragraph Capital adequacy) and a new distribution
threshold applying to the leverage ratio. The distance applicable to
the distribution restriction thresholds ("L-MDA") is calculated in
relation to the capital requirements (see paragraph Overall capital
requirements). The leverage ratio requirement thus stood at 3.75% at
31 December 2023, compared with 3% at 31 December 2022.
Processes used to manage the risk
of excessive leverage
Monitoring of the leverage ratio is one of the responsibilities of the Capital
Committee (as described in the section Capital management hereafter).
Factors that had an impact on the leverage ratio
during the period to which the disclosed leverage
ratio refers
The leverage ratio stood at 4.58% at 31 December 2023 compared
to 4.36% at 31 December 2022. It was well above the 3.75% leverage
requirement in force at 31 December 2023, as well as that applicable
from 1 January 2024 of 3.85%.
(1) Eurogroup statement on the future of the Banking Union of 16 June 2022 – Consilium (europa.eu).
➤
TABLE 24: LEVERAGE RATIO – ITEMISED
➤ Summary reconciliation of accounting assets and leverage ratio exposures (LR1)
a
In millions of euros
31 December 2023
31 December 2022
1
Total assets as per published financial statements
2,591,499
2,666,376
2
Adjustment for entities which are consolidated for accounting purposes but are outside
the scope of regulatory consolidation
(257,275)
(243,105)
3
(Adjustment for securitised exposures that meet the operational requirements
for the recognition of risk transference)
(4,003)
(3,594)
4
(Adjustment for temporary exemption of exposures to central bank (if applicable))
5
(Adjustment for fiduciary assets recognised on the balance sheet pursuant to the applicable
accounting framework but excluded from the leverage ratio total exposure measure
in accordance with point (i) of Article 429a(1) CRR)
6
Adjustment for regular-way purchases and sales of financial assets subject to trade
date accounting
7
Adjustment for eligible cash pooling transactions
8
Adjustments for derivative financial instruments
(100,967)
(136,719)
9
Adjustment for securities financing transactions (SF T s)(*)
21,586
26,619
10
Adjustment for off-balance sheet items (ie conversion to credit equivalent amounts
of off-balance sheet exposures)
207,680
207,155
11
(Adjustment for prudent valuation adjustments and specific and general provisions
which have reduced Tier 1 capital)
(2,472)
(2,495)
11a
(Adjustment for exposures excluded from the leverage ratio total exposure measure
in accordance with point (c) of Article 429a(1) CRR)
11b
(Adjustment for exposures excluded from the leverage ratio total exposure measure
in accordance with point (j) of Article 429a(1) CRR)
(16,703)
(14,531)
12
Other adjustments
(92,846)
(125,864)
13
LEVERAGE RATIO TOTAL EXPOSURE MEASURE
2,346,500
2,373,844
(*) Securities Financing T r ansactions: repurchase agreements and securities borrowing/lending.
➤ Leverage ratio common disclosure (EU LR2)
a
b
In millions of euros
31 December 2023
31 December 2022
On-balance sheet exposures (excluding derivatives and SF T s(*))
1
On-balance sheet items (excluding derivatives, SF T s(*), but including collateral)
1,763,655
1,821,751
2
Gross-up for derivatives collateral provided where deducted from the balance sheet assets
pursuant to the applicable accounting framework
3
(Deductions of receivables assets for cash variation margin provided in derivatives
transactions)
(40,530)
(48,796)
4
(Adjustment for securities received under securities financing transactions that are
recognised as an asset)
5
(General credit risk adjustments to on-balance sheet items)
6
(Asset amounts deducted in determining Tier 1 capital)
(14,368)
(15,032)
7
Total on-balance sheet exposures (excluding derivatives and SF T s(*))
1,708,757
1,757,923
Derivative exposures
8
Replacement cost associated with SA-CCR derivatives transactions (ie net of eligible cash
variation margin)
58,593
76,968
8a
Derogation for derivatives: replacement costs contribution under the simplified standardised
approach
9
Add-on amounts for potential future exposure associated with SA-CCR derivatives transactions
133,250
127,968
9a
Derogation for derivatives: Potential future exposure contribution under the simplified
standardised approach
9b
Exposure determined under Original Exposure Method
a
b
In millions of euros
31 December 2023
31 December 2022
10
(Exempted CCP leg of client-cleared trade exposures) (SA-CCR)
(1,309)
(4,897)
10a
(Exempted CCP leg of client-cleared trade exposures) (simplified standardised approach)
10b
(Exempted CCP leg of client-cleared trade exposures) (original exposure method)
11
Adjusted effective notional amount of written credit derivatives
404,326
474,397
12
(Adjusted effective notional offsets and add-on deductions for written credit derivatives)
(381,259)
(456,761)
13
Total derivatives exposures
213,601
217,675
Securities financing transaction (SFT) exposures(*)
14
Gross SFT(*) assets (with no recognition of netting), after adjustment for sales accounting
transactions
457,137
331,761
15
(Netted amounts of cash payables and cash receivables of gross SFT(*) assets)
(235,392)
(143,306)
16
Counterparty credit risk exposure for SFT(*) assets
21,505
26,362
16a
Derogation for SF T s(*): Counterparty credit risk exposure in accordance with Articles 429e(5)
and 222 CRR
17
Agent transaction exposures
81
258
17a
(Exempted CCP leg of client-cleared SFT exposure)
18
Total securities financing transaction exposures
243,331
215,074
Other off-balance sheet exposures
19
Off-balance sheet exposures at gross notional amount
498,249
506,724
20
(Adjustments for conversion to credit equivalent amounts)
(290,569)
(299,569)
21
(General provisions deducted in determining Tier 1 capital and specific provisions associated
with off-balance sheet exposures)
(655)
(981)
22
Off-balance sheet exposures
207,026
206,174
Excluded exposures
22a
(Exposures excluded from the leverage ratio total exposure measure in accordance with
point (c) of Ar ticle 429a(1) CRR)
22b
(Exposures exempted in accordance with point (j) of Article 429a (1) CRR
(on and off-balance sheet))
(16,703)
(14,531)
22c
(Excluded exposures of public development banks – Public sector investments)
22d
(Excluded exposures of public development banks (or units) – Promotional Loans)
22e
(Excluded passing-through promotional loan exposures by non-public development banks
(or units))
22f
(Excluded guaranteed parts of exposures arising from export credits)
(9,512)
(8,471)
22g
(Excluded excess collateral deposited at triparty agents)
22h
(Excluded CSD related services of CSD/institutions in accordance with point (o)
of Article 429a(1) CRR)
22i
(Excluded CSD related services of designated institutions in accordance with point (p)
of Article 429a(1) CRR)
22j
(Reduction of the exposure value of pre-financing or intermediate loans)
22k
(Total exempted exposures)
(26,215)
(23,003)
Capital and total exposure measure
23
Tier 1 capital
107,501
103,445
24
Leverage ratio total exposure measure
2,346,500
2,373,844
25
LEVERAGE RATIO
4.58%
4.36%
Leverage ratio (without the adjustment due to excluded exposures of public development
EU-25 banks– Public sector investments) (%)
4.58%
4.36%
25a
Leverage ratio (excluding the impact of any applicable temporary exemption of central
bank reserves) (%)
4.58%
4.36%
Leverage requirement
26
Regulatory minimum leverage ratio requirement (%)
3.00%
3.00%
a
b
In millions of euros
31 December 2023
31 December 2022
26a
Additional leverage ratio requirements (%)
0.00%
0.00%
26b
of which: to be made up of CET1 capital
0.00%
0.00%
27
Leverage ratio buffer requirement (%)
0.75%
0.00%
27a
Overall leverage ratio requirement (%)
3.75%
3.00%
Choice on transitional arrangements and relevant exposures
EU-27 b C hoice on transitional arrangements for the definition of the capital measure
Transitional
Transitional
Disclosure of mean values
28
Mean of daily values of gross SFT(*) assets, after adjustment for sale accounting
transactions and netted of amounts of associated cash payables and cash receivable
294,819
250,964
29
Quarter-end value of gross SFT(*) assets, after adjustment for sale accounting transactions
and netted of amounts of associated cash payables and cash receivables
221,745
188,455
30
Total exposure measure (including the impact of any applicable temporary exemption
of central bank reserves) incorporating mean values from row 28 of gross SFT(*) assets
(after adjustment for sale accounting transactions and netted of amounts of associated
cash payables and cash receivables)
2,419,574
2,436,353
30a
Total exposure measure (excluding the impact of any applicable temporary exemption
of central bank reserves) incorporating mean values from row 28 of gross SFT(*) assets
(after adjustment for sale accounting transactions and netted of amounts of associated
cash payables and cash receivables)
2,419,574
2,436,353
31
Leverage ratio (including the impact of any applicable temporary exemption of
central bank reserves) incorporating mean values from row 28 of gross SFT(*) assets
(after adjustment for sale accounting transactions and netted of amounts of associated
cash payables and cash receivables)
4.44%
4.25%
31a
Leverage ratio (excluding the impact of any applicable temporary exemption of
central bank reserves) incorporating mean values from row 28 of gross SFT(*) assets
(after adjustment for sale accounting transactions and netted of amounts of associated
cash payables and cash receivables)
4.44%
4.25%
(*) Securities Financing T r ansactions: repurchase agreements and securities lending/borrowing operations.
➤ Split of on-balance sheet exposures (excluding derivatives, SFTs(*) and exempted exposures) (EU LR3)
a
In millions of euros
31 December 2023
31 December 2022
EU-1
Total on-balance sheet exposures (excluding derivatives, SF T s(*), and exempted
exposures), of which:
1,696,910
1,749,953
EU-2
Trading book exposures
211,023
164,340
EU-3
Banking book exposures, of which:
1,485,887
1,585,613
EU-4
Covered bonds
EU-5
Exposures treated as sovereigns
442,944
483,668
EU-6
Exposures to regional governments, MDB, international organisations and PSE
not treated as sovereigns
37,386
38,724
EU-7
Institutions
27,376
29,795
EU-8
Secured by mortgages of immovable properties
184,067
205,730
EU-9
Retail exposures
228,618
246,598
EU-10
Corporate
355,974
383,742
EU-11
Exposures in default
13,369
12,844
EU-12
Other exposures (e.g. equity, securitisations, and other non-credit obligation assets)
196,154
184,511
(*) Securities Financing T r ansactions: repurchase agreements and securities borrowing/lending
Pursuant to article R.511-16-1 of French Monetary and Financial Code, BNP Paribas' asset yield (i.e. net accounting income divided by the total balance
sheet on a consolidated basis) was 0.42% in 2023 compared to 0.38% in 2022.
CAPITAL MANAGEMENT [Audited]
To ensure the Group's sustainability, the Bank must maintain an adequate
level of capital with respect to the risks to which it is exposed in the
course of its activities and strategy. Capital is a rare and strategic
resource, which requires stringent, clearly defined, rigorous management
according to an approach, which takes account of the needs and demands
of stakeholders, including shareholders, supervisors, creditors and
depositors.
OBJECTIVES
BNP Paribas' capital management:
■ is governed by policies and procedures which make it possible to
understand, document and supervise capital management practices
throughout the Bank;
■ takes risk measurement into account to determine the use of the
capital;
■ considers capital requirements and resources under normal operating
conditions, as well as under situations of severe, but plausible stress;
■ presents a forward-looking vision of the Bank's capital adequacy to
the Executive Management;
■ allocates the capital constraint to the business lines in keeping with
their strategic objectives;
■ complies with the Internal Capital Adequacy Assessment Process
(ICAAP) and is consistent with the Risk Appetite Framework;
■ is monitored by an appropriate governance.
CAPITAL MANAGEMENT AT CENTRAL
LEVEL
BNP Paribas' capital management aims to ensure and verify that the
Group has adequate capital to comply with the regulatory capital ratios,
as well as specific requirements, for instance to operate as a Global
Systemically Important Bank. To ensure its capital adequacy, the Group
abides by the following principles:
■ maintaining the capital at an appropriate level in view of BNP Paribas'
activities, risk appetite, growth and strategic initiatives;
■ maintaining BNP Paribas' capital at a level which complies with
regulatory requirements;
■ keeping a balance between capital adequacy and return on capital;
■ meeting its obligations to creditors and counterparties, at each due
date;
■ continuing to operate as a financial intermediary.
Governance
The governance of the development, approval and update of the capital
planning process is handled by two committees:
■ the Risk-Weighted Assets Committee: it is jointly chaired by the
Chief Financial Officer and the Chief Risk Office r, a nd comprises the
operational divisions' Chief Financial Officers and Chief Risk Officers.
The committee meets quarterly to examine forecasts of the Group's
risk-weighted assets in the context of the budget cycle and updating
of its estimates.
The Risk-Weighted Assets Committee is tasked with:
■
monitoring and discussing the forecasts of the Group's risk-weighted
assets for each business line,
■
identifying the main assumptions underlying these forecasts and
checking their accuracy,
■
identifying any evolution factors and quantifying their impacts,
■
proposing adjustments if required;
■ the Capital Committee: it meets at least quarterly and is chaired by the
Group Chief Financial Office r. T he committee's mission is to validate
the Group's targets in terms of solvency ratios and loss absorbing
capacity requirements in case of resolution (TLAC and MREL) as well
as the trajectory to achieve these targets; monitor compliance with
this trajectory; and, where necessary, propose corrective measures,
consistent with the Group's Risk Appetite Statement. The committee
ensures, in this respect, internal capital adequacy is taken into
account in the ICAAP as well as in the results of the global stress
tests processes.
The Capital Committee is tasked with:
■
monitoring, validating and anticipating changes in the business
lines' risk-weighted assets as well as changes in the Group's
prudential ratios, in central scenario and adverse scenario, and
monitoring these indicators relative to the Group's Risk Appetite,
which is stated in the Risk Appetite Statement. This includes
solvency ratios, leverage ratio, TLAC/MREL ratios, capital adequacy
of the financial conglomerate, etc.,
■
identifying any evolution factors and quantifying their impacts,
■
defining trends in short and medium terms capital consumption (at
least 3 years) and proposing or reporting the ensuing arbitrages to
the Group's Executive Committee,
■
monitoring internal capital adequacy as part of the ICAA P,
■
monitoring potential regulatory changes,
monitoring the sensitivity of the CET1 ratio to changes in exchange
■
rates,
■
validating management buffers applicable to the aforementioned
ratios,
■
monitoring the impacts of global stress test results,
■
monitoring the implementation of the supervisor's decisions that
have an impact on the Group's solvency ratio or the amount of its
risk-weighted assets.
The Capital Committee is also the Group's competent Executive
Management authority for all issues related to the internal credit and
operational risk model and the methodologies used in the ICAA P.
Monitoring indicators
Capital management at the consolidated level rests on the following
indicators:
■ the solvency ratios:
BNP Paribas uses the CET1 ratio as its main internal capital
management indicator;
■ risk-weighted assets:
The risk-weighted assets are calculated per business line and per
type of risk. The change in risk-weighted assets is analysed per type
of effect (in particular: volume effect, parameters effect, perimeter
effect, currency effect and method effect);
■ the leverage ratio:
It reports the amount of Tier 1 capital to a measure of both on- and
off-balance sheet exposures using a prudential approach. In particula r,
derivatives and repurchase agreements are adjusted;
■ notional equity:
The capital allocation transfers the capital constraints to all Group
divisions and thus represents a major constraint concerning the
Group's development and management. The evaluation of the business
lines' performance includes the analysis of their pre-tax Return On
Notional Equity (RONE) indicators. The equity component of this
ratio is the notional equity, which corresponds to the business lines'
consumption of capital.
This management rests on two major processes which are closely linked:
■ a detailed quarterly analysis of actual capital consumption by
divisions/business lines and of the Group's solvency ratios, as well as
quarterly forecasts of these indicators throughout the year;
■ the yearly budget process, which plays a central role in the strategic
planning process.
CAPITAL MANAGEMENT AT LOCAL LEVEL
The Group has to allocate available capital among its different entities.
To ensure a free and efficient flow of capital throughout the Group,
the capital allocation process within the Group is centralised at head
office level. It is mainly based on two principles: compliance with local
regulatory requirements and analysis of the local business needs of the
entity and growth prospects. In line with these two principles, the aim
is to minimise capital dispersion.
Local Chief Financial Officers are responsible for the daily management
and reporting of their subsidiaries' capital requirements. When a capital
need arises, it is analysed on a case-by-case basis by dedicated teams at
Group level, taking into consideration the subsidiary's present position,
its future strategy as well as the Group's one in the relevant country,
the entity's growth prospects and the macroeconomic environment.
Furthermore, each yea r, t he Group manages the subsidiaries' earnings
repatriation process. The Group general policy stipulates that the entire
distributable profit of every entity, including retained earnings, must be
paid out. This policy ensures that the capital remains centralised at
the BNP Paribas SA level and also contributes to reducing the foreign
exchange risk. Exceptions are considered on a case-by-case basis.
Local Chief Executive Officers are responsible for ensuring the subsidiary's
ongoing financial viability and competitiveness in terms of capital,
where relevant. Howeve r, a ny capital action requested by a subsidiary is
assessed by and subject to authorisation from head office.
In addition, every year the Group examines the branches' capital
allocations in order to maintain an adequate level of capital in light of
the different regulations.
5.3 Risk management [Audited]
GOVERNANCE
The specialised committees of the Board of directors (see part 2.1.2,
Corporate governance of BNP Paribas of chapter 2 Corporate governance
and internal control), which examine the risks taken and the risk policies
on a Group scale, are:
■ the Internal control, risk management and compliance Committee
(CCIRC);
■ the Joint Committee that combines the CCIRC and the Financial
statements Committee;
■ the Corporate governance, ethics, nominations and CSR Committee
(CGEN).
In line with the Group's Risk Appetite Statement, Executive Management
provides broad guidelines for risk management through Group-level
governance bodies of which the main ones are shown in the diagram
below:
➤
FIGURE 6: OVERVIEW OF GROUP LEVEL GOVERNING BODIES COVERING RISK-RELATED TOPICS
Specialised
Committees
of the Board of
directors
Coverage
of risk-related
topics by the
General Managment
Compliance, Risk and Finance
Committee (CRIF)
Joint meeting of CCIRC
and
Financial statements
Committee
Internal Control,
Risk management
and Compliance
Committee (CCIRC)
Financial statements
Committee
Committee
Corporate Governance,
Ethics, Nominations
and CSR Committee
(CGEN)
Compensation
Group Executive Committee
Non-compliance risk
Legal risk
Credit, market
and operational risks
Liquidity and
rates risks
Group Supervision and Control Committee (GSCC)
Acquisitions Committee
General Management Credit Committee (CCDG)
Sustainable Finance Strategic Committee (SFSC)
General Management Doubtful Committee (CDDG)
Financial Markets Risk Committee (FMRC)
Country Envelope Committee
Risk & Development Policy Committee (RDPC)
Group IT Risk
Committee
Capital Committee
Budgetary Committees
ALCo Group
Main Group-level governance bodies have the following roles:
■ Capital Committee, described under Capital management in section 5.2
Capital management and capital adequacy, validates the Group's
objectives in terms of solvency ratios and Total Loss Absorbing
Capacity (TLAC and MREL) requirements in case of resolution as well
as the trajectory to achieve these targets, monitors the compliance
with this trajectory and, when relevant, proposes corrective actions
to achieve target solvency ratios. As the Group's competent Executive
Management authority for all issues related to the internal credit
and operational risks model, the Capital Committee is informed of
decisions made in the MARCo Committees (Model Approval and Review
Committee);
■ Group ALM Treasury Committee (Group ALCo) is responsible for the
management of the liquidity risk, interest rate risk in the banking book
and structural foreign exchange risk over the whole Group.
■ Group Supervision and Control Committee (GSCC) brings together the
Group's control functions at Executive Management level and takes a
Group-wide approach to tackling all aspects of risk exposure;
■ Acquisitions Committee decides on acquisitions, disposals and external
partnerships for operations under its jurisdiction as part of the Group's
general investment approval procedure. The Acquisitions Committee
reviews the strategic relevance of the proposed projects from the
Group's point of view, as well as the various components of the
business plans, including synergies and execution risks. In particula r,
it ensures the intrinsic profitability of projects (measured by Return on
Investment), as well as the impact on the Group's solvency, liquidity
and profitability, and their adequacy with the Group's Risk Appetite
Statement.
■ the Sustainable Finance Strategic Committee (SFSC) aims to validate
the Group's sustainable finance strategy and commitments in this area.
It approves the overall strategy in terms of sustainable finance, decides
the main focuses of sustainable finance commercial policies and
monitors their operational implementation. Where necessary, it also
validates cross-functional infrastructure choices ensuring expertise
and consistency in the implementation of regulatory requirements
and the Group's commitments in methods, analyses, risk management,
data, tools, standards and reporting related to sustainable finance.
■ the General Management Credit Committee (CCDG) is the Group's
highest authority concerning credit and counterparty risks. This
committee decides primarily on credit requests exceeding the
amount of individual delegations attributed to divisions and business
lines or relating to transactions of a specific nature or which would
deviate from the principles of the General Credit Policy. A Compliance
representative may attend CCDG meetings when an opinion on
financial security is needed;
■ the General Management Doubtful Committee (CDDG) is the Group's
highest level decision-making committee in terms of specific
provisioning and recognitions of losses relative to the Group's
customer exposures;
■ the Financial Markets Risk Committee (FMRC) is the body which
governs the Group's risk profile of the capital markets activities; its
tasks include, among others, analysing market and counterparty risks
and setting limits for capital markets activities;
■ the Country Envelope Committees determine the Group's risk appetite
by setting limits for medium-to-high-risk countries in view of risk in
relation to country, market conditions, business strategies and aspects
of risk and compliance;
■ the Risk & Development Policy Committees (RDPC) have the dual
objective of defining an appropriate risk policy for any given subject
which may be a business activity, a product, a geographic area
(region or country), a customer segment or economic secto r, a nd of
investigating development opportunities in relation to the subject in
question;
■ the Group IT Risk Committee (GITRC) defines and oversees the Group's
IT risk profile. This is the highest authority in terms of technological
and cybersecurity risk management.
RISK MANAGEMENT ORGANISATION
POSITION OF THE CONTROL FUNCTIONS
Risk management is central to the banking business and is one of the
cornerstones of operations for the BNP Paribas Group. BNP Paribas has
an internal control system covering all types of risks to which the Group
may be exposed, organised around three lines of defence (see section 2.4
Internal Control in chapter 2 Corporate governance and internal control):
■ as the first line of defence, internal control is the business of every
employee, and the heads of the operational activities are responsible
for establishing and running a system for identifying, assessing and
managing risks according to the standards defined by the functions
exercising an independent control in respect of the second line of
defence;
■ the main control functions within BNP Paribas ensuring the second
line of defence are the Compliance, RISK and LEGAL Functions. Their
Heads report directly to Chief Executive Officer and account for
the performance of their missions to the Board of directors via its
specialised committees;
■ General Inspection provides a third line of defence. It is responsible
for the periodic control.
GENERAL RESPONSIBILITIES OF THE RISK
AND COMPLIANCE FUNCTIONS
Responsibility for managing risks primarily lies with the divisions and
business lines that are at the origin of the underlying transactions. RISK
continuously performs a second-line control over credit and counterparty
risks, market risk, interest rate and foreign exchange rate risks on the
banking book, liquidity risks, insurance risks, and operational risk, including
technological and cybersecurity risks, over data protection risks, modelling
risks and environmental and social risk factors, as well as the associated
governance risks. As part of this role, it must ascertain the soundness
and sustainability of the business commercial developments and their
overall alignment with the risk appetite target set by the Group. RISK's
remit includes formulating recommendations on risk policies, analysing
the risk portfolio on a forward-looking basis, approving customers loans
and trading limits, guaranteeing the quality and effectiveness of monitoring
procedures, controlling the maturity of the processes and underlying
operational risks and defining or validating risk measurement methods.
RISK is also responsible for ensuring that all the risk implications of new
businesses or products have been adequately assessed.
Compliance deals identically with risks related to financial security
(money laundering, terrorist financing, corruption and influence peddling),
market integrity, protection of clients, professional ethics, tax regulations
applicable to customers and laws governing banking activities.
Its mission is to provide, through its opinions and decisions, as well as
through its supervision and second level-controls, a reasonable assurance
as to the effectiveness and consistency of the compliance system over
operations and the protection of its reputation.
ORGANISATION OF THE RISK
AND COMPLIANCE FUNCTIONS
Approach
The RISK organisation fully complies with the principles of independence,
vertical integration, and decentralisation issued by the Group's
Management for the Group's main control functions (Compliance, RISK,
LEGAL, and a third line of defence, General Inspection). Hence within RISK:
■ all the teams in charge of risks, including those in operating entities
have been integrated in the function with reporting lines to the Chief
Risk Officers of these entities;
■ the Chief Risk Officers of the entities report to RISK.
This organisation enables the governance of risk management activities
to be strengthened, especially regarding model risk management, through
RISK Independent Review and Control (RISK IRC) team, reporting directly to
the Chief Risk Officer (CRO) which groups together the teams in charge of
the independent review of the risk methodologies and models. This team
is also in charge of the independent review of operational risk of RISK
Function, with the organisation described in section 5.9 Operational risk.
In accordance with international standards and French regulations,
Compliance manages the system for monitoring compliance and
reputation risks for all of the Group's businesses in France and abroad.
The system for monitoring non-compliance and reputation risks is
described in section 5.9.
Independent and hierarchically integrated on a global basis, Compliance
brings together all employees reporting to the function. Its organisation is
based on its guiding principles (independence, integration, decentralisation
and subsidiarity of the function, dialogue with the business lines) through
local teams (operating divisions, CPBS, IPS and CIB), areas of expertise, and
departments in charge of transverse missions.
Role of the Chief Risk Officer
The Group Chief Risk Officer reports directly to the Chief Executive
Officer and sits on the Executive Committee of BNP Paribas. He has line
authority over all RISK employees. He can veto the decisions which are
not in line with the Risk Appetite Statement, concerning the risks under
RISK competency. The Group Chief Risk Officer has no connection, in
terms of authority, with the Heads of Core Businesses, business lines
and territories. He also has direct and independent access to the Board
of directors of BNP Paribas, via the Internal Control, Risk management
and Compliance Committee (CCIRC).
This positioning serves the following purposes:
■ ensuring the objectivity of risk control, by removing any involvement
in commercial relationships;
■ making sure senior management is warned of any deterioration in risk
and is rapidly provided with objective and comprehensive information
on the status of risks;
■ enabling the dissemination, throughout the Bank, of high and uniform
risk management standards and practices;
■ ensuring the quality of risk assessment methods and procedures by
calling on professional risk managers in charge of evaluating and
enhancing these methods and procedures in light of the best practices
implemented by international competitors.
Role of the Chief Compliance Officer
The Chief Compliance Officer reports to the Chief Executive Officer and
is a member of the BNP Paribas Executive Committee. She has direct
and independent access to the Board of directors and in particular to
its specialised committee, the Internal Control, Risk management and
Compliance Committee (CCIRC), and can thus inform it of any event likely
to have a significant impact on the Group. Lastly, the CCIRC periodically
interviews he r, w ithout the effective managers being present.
The Chief Compliance Officer has no operational activity outside of the
non-compliance and reputation risk management framework and no
commercial activity, which guarantees her independence of action. She
exercises hierarchical supervision over all the Compliance teams within
the various business units, geographical areas and functions.
RISK CU L T URE
ONE OF THE GROUP'S CORE FOUNDING
PRINCIPLES
The BNP Paribas Group has a strong risk and compliance culture.
Executive Management has chosen to include the risk culture in three of
its key corporate culture documents:
■ Code of conduct:
The Group adopted a new Code of conduct in 2016. It applies to all
employees and defines the rules for our conduct in line with the core
values of our corporate culture. For example, employees are reminded
in the Code of conduct that the Group's interests are protected by
responsible risk-taking in a strict control environment. The Code of
conduct, updated in 2021, also includes rules for protecting customers'
interests, financial security, market integrity, professional ethics and
anti-bribery and corruption, which all play an important role in
mitigating non-compliance and reputation risks;
■ Responsibility Charter:
Executive Management drew up a formal Responsibility Charte r,
inspired by the Group's core values (the "BNP Paribas Way"),
management principles and Code of conduct. One of the four
commitments is "Being prepared to take risks, while ensuring close
risk control".
The Group sees rigorous risk control as part of its responsibility, both to
clients and to the financial system as a whole. The Bank's decisions on
the commitments it makes are reached after a rigorous and concerted
process, based on a strong, shared risk culture which pervades all
levels of the Group. This is true both for risks linked to lending
activities, where loans are granted only after in-depth analysis of the
borrower's situation and the project to be financed, and for market
risks arising from transactions with clients – these are assessed on
a daily basis, tested against stress scenarios, and subject to limits.
As a strongly diversified Group, both in terms of geography and
businesses, BNP Paribas is able to balance risks and their consequences
as they materialise. The Group is organised and managed in such a
way that any difficulties arising in one business area will not jeopardise
another in the Bank;
■ the Group's mission and commitments:
The mission of BNP Paribas is to finance the economy and advise its
clients, by supporting them with their projects, their investments, and
the management of their savings, guided by strong ethical principles.
Through these activities, BNP Paribas wants to have a positive impact
on stakeholders and on society, and be one of the most trustworthy
players in the secto r. B NP Paribas' 12 commitments as a Responsible
Bank include in particular the commitment to apply the highest
ethical standards and rigorously manage environmental, social, and
governance risks (see section 7.2 Economic Responsibility: financing
the economy in an ethical manner).
SPREADING THE RISK CU L T URE
Robust risk management and control is an integral part of the Bank's
principles. A culture of risk management and control has always been
one of its top priorities.
In addition to the various training programmes in support of this ambition,
there are numerous awareness and acculturation initiatives at global
and local level within different entities. These include some examples
of teams of experts dedicated to acculturating employees to new
developments in certain risk categories: cyber risks, ESG risks, legal risks.
BNP Paribas launched the Risk Culture, a Group-wide initiative, giving
it the objective of reinforcing the communication of the best practices
in risk management. Sponsored by four functions: Compliance, LEGAL,
Human Resources (HR), and RISK, Risk Culture is designed for the benefit
of all staff and intervenes on all types of risks to which the Group may be
exposed, including credit, market, liquidity, operational, non-compliance,
regulatory, environmental and social risks.
T a king an adaptive and participative approach, this initiative supports the
business lines and functions in their process of understanding risks, for
example in transformation projects or when onboarding new employees.
In particula r, i t takes special care to ensure that conduct and behaviour
requirements are well integrated, beyond the mission of transmitting
knowledge. It provides entities with resources that they can use for their
information, acculturation and support for employee skills development
in all aspects of the risk culture.
In conjunction with operating entities, Risk Culture actions mainly consist
of:
■ ensuring the dissemination of information and professional
development in the area of risk management, by means of conferences
and the publication of educational articles or videos;
■ facilitating the sharing of knowledge between the various players in
the Bank, in particular changes in the Bank's business lines, news on
regulatory requirements and new ways of working. The experts of
the Group are invited to expand documentary resources which can
be accessed by employees through various communication channels
available within the Group;
■ relay, if necessary by adapting from one entity to anothe r, a ctions to
raise awareness of good risk practices carried out on the initiative of
other entities.
In all its initiatives, Risk Culture promotes the six fundamental risk
management practices that are key to developing a robust risk culture.
They serve as a reminder to staff about the importance of clearly
understanding and anticipating risks with a long-term perspective, being
disciplined with risks taken and reporting swiftly and transparently on
risk management.
Lastly, the risk culture is also spread throughout the Group by linking
compensation to performance and risk (see chapter 7, section 7.3
A competitive compensation policy), under a system that was
strengthened in this area since 2015 for those employees whose decisions
entail a significant risk component.
RISK APPETITE
DEFINITION AND OBJECTIVES
The Group does not have a specific risk appetite target, but some risks are
inherent to its business and therefore to the achievement of its strategic
objectives. It has prepared a Risk Appetite Statement and Risk Appetite
Framework, which should be seen as the Group's formal statement of its
tolerance to the risks to which it is exposed as it implements its strategy.
The Risk Appetite Statement is approved on a yearly basis, or more
frequently if necessary, by the Board of directors on the proposal of
Executive Management. Consistent with the Group's strategy and in light
of the environment in which it operates, this document sets out the
qualitative risk principles it intends to follow in its business activities,
as well as a quantitative mechanism for supervising the Group's risk
profile indicators through quantitative metrics and thresholds. This
system covers both the quantifiable and non-quantifiable risks to which
it is exposed.
The Group's risk appetite is determined by Executive Management,
during various committees it chairs (CCDG, FMRC, Group ALCo, Capital
Committee), which are tasked with managing the Group's different types
of risk exposure. The Group's strategic processes, such as budget, capital
and liquidity management, are in line with the Risk Appetite Statement.
Certain Risk Appetite Statement indicators are included in the budget
exercise and their expected values in the budget are cross-checked
against the thresholds in the Risk Appetite Statement.
The Group's Risk Appetite Statement reflects the core values of its risk
culture. It states that the Group's risk culture and its commitments as a
responsible bank are at the heart of its strategy. The statement reaffirms
the Group's mission: to finance the economy, advise its clients and help
to finance their projects, guided by strong ethical principles. The Group's
strategy underpinning its risk appetite is founded on the core principles
that have guided its development: a balance between business activities
to deliver profitability and stability, a customer-focused business model
and an integrated banking model to optimise services to the latte r. T his
strategy also factors developments in the banking industry, including the
trend towards a digital model, and a macroeconomic situation marked
by higher inflation and interest rates than in recent years, in a context of
particularly critical geopolitical risk, while certain sectors of the economy
show higher levels of risk.
RISK PRINCIPLES
The risk principles aim to define the types of risk the Group is prepared
to accept in support of its business strategy.
They include the following in particular:
■ diversification and risk-adjusted profitability:
The Group seeks to generate sustainable, client-driven, risk adjusted
profits. Sustainable profitability will be achieved based on selectivity
and controlled evolution of BNP Paribas assets, and the pursuit of a
diversified business model. Whilst the Group accepts some level of
earnings volatility, it remains attentive to contain, at all times, the
level of maximum potential losses in an adverse scenario;
■ solvency and profitability:
BNP Paribas has sufficient capital to cope with stress scenarios and
to meet regulatory capitalisation standards in force. In the course of
serving its clients, BNP Paribas accepts exposure to risks when it earns
a proper return over an acceptable time frame, and when its potential
impacts seem acceptable;
■ funding and liquidity:
the Group ensures that the diversification of and balance between
its resources and uses of funds correspond to a conservative funding
strategy, allowing it to withstand adverse liquidity scenarios. The Group
makes sure that it complies with the regulatory liquidity ratios in force;
■ credit risk:
The Group only accepts exposure on customers it knows well, based on
comprehensive information, and pays close attention to the structure
of the financing it grants. The Group builds and maintains a diversified
risk portfolio, avoiding large concentrations (especially on single
names, industries and countries) and ensures that it complies with
the concentration policies in force;
■ market risk:
The Group manages market risks (interest rates, equities, currencies,
commodities) within the following framework:
■
for activities in the capital markets that are customer-focused,
BNP Paribas intends to keep its market risk profile in line with this
customer-focused business mode,
■
interest rate risk associated with its banking book with the aim
of stabilising its results on an ongoing basis to within acceptable
limits;
■ operational risk:
The Group aims to protect its customers, employees and shareholders
from operational risk. To do so it has developed a risk management
infrastructure based on identifying potential risks, strategies to mitigate
risk, and actions to raise awareness of these risks. Some specific risks
have resulted in the definition of dedicated principles, in particular:
■
non-compliance risk:
The Group is committed to compliance with all applicable laws and
regulations. It undertakes to implement a system to manage the risk
of non-compliance, including through special programs dedicated
to the most important regulations for its business,
■
information, communication and technology risk:
The Group endeavours to reduce the risks related to the security
of its information through various awareness actions, enhanced
supervision of outsourced activities, heightened protection of
terminals, incident monitoring, and a technology watch over IT
vulnerabilities and attacks;
■ insurance activities:
BNP Paribas Cardif is exposed mainly to credit, underwriting and
market risks. The entity closely monitors its exposures and profitability,
taking into account its risks and the adequacy of its capital with regard
to solvency rules. It endeavours to contain potential losses in adverse
scenarios at acceptable levels;
■ risk associated with social and environmental responsibility:
The Group is particularly sensitive to its customers' performance
in terms of social and environmental responsibility, believing that
this could have a material impact on its customers' risk profile
and, consequently, their solvency, in addition to being a major
reputational risk. BNP Paribas takes social and environmental risks
into consideration when assessing customer-related risks. The Group
also tracks these risks as part of the conduct of its own business, the
conduct of its counterparties' business and of its investments on its
own behalf or on behalf of third parties.
SUPERVISION OF RISK PROFILE INDICATORS
The Risk Appetite Statement sets out the indicators that measure the
Group's risk profile for its risk exposure categories.
Risk level thresholds are assigned to each metric. When these thresholds
are reached, they trigger an established process to inform Executive
Management and the Board of directors, and if need be, to implement
action plans.
These indicators are monitored quarterly in the risk dashboards
presented to the CCIRC.
For example, the following ratios (described in the Key figures of
section 5.1 Annual Risk survey) are included in the Risk Appetite
statement indicators:
■ the solvency ratios (CET1, Tier 1, total own funds, TLAC, MREL and
leverage ratio);
■ the balance of the breakdown of risk-weighted assets by business line;
■ the cost of risk on loans outstandings (in annualised basis points) and
doubtful loans on gross outstandings ratio;
■ the liquidity ratios (LCR and NSFR).
To ensure dynamic risk supervision and management, the Group has
implemented a comprehensive stress testing framework.
STRESS TESTING FRAMEWORK
The stress testing framework forms an integral part of the risk
management and financial monitoring system and is used with a
threefold objective of forward-looking risk management, planning of
regulatory resources and liquidity requirements, and optimisation of the
deployment of these resources within the Group, mainly through the
Group's and its main entities' ICAAP and ILAAP processes.
Different types of stress tests
There are two types of stress tests:
■ regulatory stress tests:
These involve primarily the stress tests requested by the European
Banking Authority, the European Central Banks, or any other supervisory
authority.
In 2023, BNP Paribas took part in the EU-wide stress test organized
by the European Banking Authority and the European Central Bank.
The exercise was conducted across a panel of 70 banks representing
75% of total assets of the banking system in the European Union. As
in previous years, macroeconomic scenarios and a certain number of
methodological assumptions were applied to all banks for comparison
purposes. A macroeconomic stress scenario was used to test the impact
on exposure to credit, market and operational risks, and revenue (net
interest income and commissions) and applied to the P&L account,
risk weighted assets and capital aggregates.
In 2022, the ECB had conducted a climate stress test among 104
financial institutions under its supervision. The ECB did not disclose
any bank-specific information. The exercise demonstrated the good
level of progress achieved by BNP Paribas in climate stress testing.
The Group recognises the revelance of scenario analysis to assess
the possible impacts of climate risk, given its forward-looking nature.
The Group however also considers that climate stress testing is a
developing activity, which is less mature than traditional stress tests
involving macro-economic or capital markets scenarios. Results of
climate scenarios analyses should be used in a way that reflects this
lesser maturity.
BNP Paribas has participated in early 2024 in the One-off Fit-for-55
climate risk scenario analysis organised by the European Banking
Authority under the mandate it received jointly with EIOPA and ESMA
from the European Commission to assess the ability of the European
financial sector to participate in the financing of energy transition, and
more specifically the level of investment required for the European
Union to meet its commitment of reducing greenhouse gas emissions
by 55% by 2030.
In 2024, BNP Paribas will also participate in the Cyber Resilience Stress
Test organised by the European Central Bank.
■ internal stress tests:
■
stress tests dedicated to risk anticipation: they contribute to the
forward-looking risk management, in particular of credit, market,
counterparty, interest rates in the banking book, operational, activity
and liquidity risks. The results of the transverse stress tests are
used, among other purposes, to formulate the Bank's risk appetite
and periodically measure its risk profile. They are periodically
submitted to Group Executive Management as well as the Board
of directors' Internal Control, Risk Management and Compliance
Committee (CCIRC) through the quarterly Group risk dashboard.
Moreove r, ad hoc stress testing is performed, when appropriate,
within Risk & Development Policy Committees, portfolio reviews
or Country Strategic Committees to identify and assess areas of
vulnerability within the Group's portfolios,
■
stress tests for the budget process: they contribute to three-year
capital planning. Stress tests are carried out annually as part of
the budget process and are included in the ICAAP and the ILAA P.
They are reviewed at divisional and business line level before being
consolidated at Group level to provide a comprehensive view of the
impact on the Bank's capital, liquidity and earnings.
The calculated final output is a range of projected Group's
solvency ratios, as well as possible adjustment measures. The
scenarios used, the outcomes of the stress tests and the proposed
possible adjustment measures (such as reducing exposures to a
sub-segment, cost reduction initiatives, or changes in funding or
liquidity policies, etc.) are included in the budget synthesis report
presented to the Group Executive Management and to the Board of
directors at the end of the budget process. In addition, in the Group's
ICAA P, i ts solvency can be analysed in adverse scenarios other than
an adverse budget scenario, defined by risk topics occasionally
identified by the Group,
■
reverse stress tests: they are conducted as part of the Bank's
recovery and resolution plan and ICAA P. R everse stress tests consist
of identifying scenarios likely to result in a drop in the Bank's
STRESS TESTING
solvency ratios to levels set in advance in line with the methods of
use in question. These exercises enable any areas where the Bank
is fragile in terms of changes in certain risk factors to be detected
and facilitate in-depth analyses of the remedial actions that could
be implemented by business lines or Group-wide.
Governance and implementation
This stress testing framework is based on a well-defined governance,
with responsibilities shared between the Group and operating entities
in order to encourage operational integration and relevance and in
particular to develop internal stress test practices required for proper
risk management and Group resource planning.
Finance, RISK and ALM Treasury functions have created a shared team,
Stress Testing and Financial Simulations ("STFS"), responsible for
developing stress testing, ICAA P, i nternal capital and capital planning
across the Group's entities and activities.
The STFS team is responsible in particular for:
■ the definition and the implementation of the Group's target structure
in terms of stress testing and ICAAP while covering the associated
organisational issues, modelisation, IT systems and governance;
■ the performance of all of the Group's stress testing exercises, relying
in particular on existing teams within the RISK and Finance Functions;
■ the support of the stress test and ICAAP initiatives of the Group's
business lines and legal entities in order to ensure overall consistency
and streamline procedures;
■ the coordination of the Group's financial simulation system and its
adaptation to the challenges of SREP;
■ the Group's risk identification process;
■ the production of the Group's ICAAP report and, for certain risks, the
quantification of internal capital.
Stress test methodologies are tailored to the main categories of risk and
subject to independent review.
Stress tests may be run at Group, business line or portfolio level,
dedicated to one or more risk types and on a more or less large number
of variables depending on the pursued objective. Where appropriate, the
results of quantitative models may be adjusted on the basis of expert
judgement.
Since its creation, the Group's stress testing framework has evolved
continuously in order to integrate the most recent developments in
stress tests, whether in terms of methodologies or improved operational
integration in the Group's management processes. The stress test
framework by type of risks is detailed in sections 5.4 Credit risk,
5.6 Counterparty credit risk and 5.7 Market risk. In this context, the Group
is engaged in the development of a climate stress testing infrastructure,
covering scenarios (see below), data and models and methodologies, as
well as encompassing both transition and physical risks, which are the
two main risk types into which climate risk materialises.
INTERNAL STRESS TEST SCENARIO
DEFINITION
In stress testing exercises, it is common practice to distinguish the baseline
scenario from one or several alternative scenarios. A macroeconomic
scenario is typically a set of macroeconomic and financial variables (GDP
and its components, inflation, employment and unemployment, interest
and exchange rates, stock prices, commodity prices, etc.) projected over
a given future period.
Macroeconomic stress tests
Baseline scenario
The baseline scenario is considered as the most likely scenario over
the projection horizon. The baseline scenario is constructed by Group
Economic Research in collaboration with various functions and business
lines possessing a specific expertise, in particular:
■ Group ALM Treasury for interest rates;
■ Wealth Management for equity indices;
■ BNP Paribas Real Estate regarding commercial real estate;
■ local economists when regional expertise is required;
■ Stress Testing & Financial Simulations (STFS) for coordination and
overall consistency of the scenario.
The global scenario is made up of regional and national scenarios
(Eurozone, France, Italy, Belgium, Spain, Germany, United Kingdom,
Poland, Türkiye, United States, Japan, China, India, Russia, etc.) consistent
with each othe r.
Alternative scenarios
Depending on the exercise, one or more alternative scenarios may be
used for stress tests.
STFS produces three types of alternative scenarios on a regular basis,
in collaboration with the same functions and business lines as those
requested in the central scenario: an adverse scenario, a severe scenario
and a favourable scenario.
■ The adverse scenario describes one or several potential shocks to
the economic and financial environment – i.e. the materialisation of
one or several risks to the baseline scenario – over the projection
horizon. An adverse scenario is thus always designed in relation to a
baseline scenario. The shocks associated with the adverse scenario
are translated in the set of macroeconomic and financial variables
listed above in the form of deviations from their value in the baseline
scenario.
■ The severe scenario is an aggravated version of the adverse scenario.
■ The favourable scenario reflects the impact of the materialisation of
risks with a positive effect on the economy.
Construction of scenarios
The baseline, adverse, severe and favourable scenarios are revised
quarterly to monitor the Bank's risk appetite metrics and credit provision
calculations within the framework of IFRS 9 (see note 2. IFRS 17 and
IFRS 9 first time application impacts to the consolidated financial
statements).
They are validated in meetings involving the Group Executive
Management for scenarios used in the Group's budget process (second
and third quarters of the year). For the other two quarterly exercises in
March and Decembe r, s cenarios are validated jointly by the Group Chief
Risk Officer and the Group Chief Financial Office r.
The scenarios are then used to calculate expected losses (or profit and
loss impact in the case of market risks) over the year for all Group
portfolios:
■ for portfolios exposed to credit or counterparty risk and for the equity
portfolio of the banking book: this calculation measures the impact of
the scenario on the cost of risk and risk-weighted assets due to the
deterioration of the portfolio quality resulting from the macroeconomic
scenario, or adverse moves in equity prices. Credit risk stress tests
are performed on the Bank's entire portfolio for all regions and all
prudential portfolios, namely Retail, Corporates and Institutions;
■ for market portfolios: the changes in value and their profit and loss
impact are calculated by simulating a one-time shock, which is
consistent with the overall scenario.
The above calculations and related methodologies for stress tests on
credit and market risks are coordinated centrally at Group level by STFS
team. They also involve various teams of experts at Group and territory's
levels in their implementation and design.
Lastly, in an adverse budget scenario, risks appertaining to the Group and
its business activities and not forming part of the adverse macroeconomic
scenario are added. They are identified and quantified either by the
Group's businesses or centrally for those likely to impact the Group as
a whole.
Climate stress tests
Beyond macroeconomic stress tests, the field of climate stress tests is
developing rapidly. In this context, the Group is engaged in the analysis,
adaptation and creation of transition and physical risk scenarios.
With regard to the risk of transition, the analysis and adaptation works
are based at this stage on the work of the NGFS (Network for Greening
the Financial System), pioneer in this field. For the Group's internal
requirements in terms of climate stress tests, the NGFS scenarios can
be adjusted and adapted, so that they are more in touch with most recent
developments (e.g. at the macroeconomic level) or that they are more
specifically adapted to the Group's portfolios. In addition, in collaboration
with other companies and institutions, the Group is taking part in the
Iris initiative to define transition scenarios with more precise sectoral
aspects that are relevant to assess transition risk.
The physical risk scenarios used by the Group at this stage focus on
geographies with significant Retail Banking activities in Europe.
5.4 Credit risk
Credit risk is the consequence resulting from the likelihood that a borrower or counterparty will fail to meet its obligations in accordance
with agreed terms. The probability of default and the expected recovery on the loan or receivable in the event of default are key components
of the credit quality assessment.
EXPOSURE TO CREDIT RISK
The following table shows the gross exposure of all of the BNP Paribas
Group's assets exposed to credit risk. The banking book securitisation
positions as well as derivatives and repurchase agreements exposed
to counterparty risk are excluded from this section and presented
respectively in section 5.5 and 5.6.
In accordance with Implementing Regulation (EU) No. 2021/637, equity
exposures under the standardised approach and using the simple
weighting method are included in this section.
The main differences between the carrying amounts of the prudential
balance sheet and the risk exposure amounts used for regulatory
purposes are presented in T a ble 10 in the Scope of Application section
of section 5.2 Capital management and capital adequacy.
These gross exposure amounts do not take into account guarantee and
collateral received by the Group in its normal credit risk management
operations (see section Credit risk mitigation techniques).
➤
TABLE 25: CREDIT RISK EXPOSURE BY ASSET CLASS AND APPROACH
Exposure
In millions of euros
31 December 2023
31 December 2022
Variation
IRB Standardised
approach approach(*)
Simple
weighting
method
IRB Standardised
Total approach approach(*)
Simple
weighting
method
Total
Total –
excluding
foreign
exchange
Total effect
Central governments
and central banks
432,341
33,179
465,520
454,775
50,222
504,997
(39,477)
(37,297)
Corporates
671,642
118,053
789,694
674,680
157,795
832,475
(42,780)
(30,298)
Institutions(**)
45,783
23,879
69,662
45,960
26,289
72,249
(2,587)
(1,384)
Retail
281,501
164,781
446,282
288,930
198,524
487,454
(41,172)
(42,025)
Equity
540
13,593
14,133
501
12,133
12,634
1,499
1,502
Units or shares in
collective investment
undertakings
5,626
5,626
5,169
5,169
457
481
Other items(***)
1,327
36,948
38,276
726
40,686
41,412
(3,136)
(3,557)
TOTAL
1,432,594
383,007
13,593
1,829,194
1,465,071
479,186
12,133
1,956,389 (127,195)
(112,577)
(*) In the following paragraphs, standardised credit risk exposures are reported according to the regulatory standardised classification.
(**) Institutions asset class comprises credit institutions and investment firms, including those recognised in other countries. It also includes some exposures
to regional and local authorities, public sector agencies and multilateral development banks that are not treated as central government authorities.
(***)O ther non credit-obligation assets include tangible assets, accrued income and residual values.
Exposure related to loan acquisitions on the secondary market in 2023 only accounts for a marginal amount.
TRENDS IN CREDIT RISK EXPOSURE
The -EUR 113 billion decrease in credit risk exposure is mostly related
to the disposal of Bank of the West in the first quarter of 2023. Currency
effects with an impact on the exposure trend of -EUR 15 billion,
particularly with the depreciation of the US dollar (-EUR 11 billion) and
Turkish lira (-EUR 5 billion), partially offset by the appreciation of Polish
Zloty (+EUR 3 billion) compared to the euro.
Excluding the currency effects, the main changes by exposure class are
the following:
■ the -EUR 42.0 billion decrease in retail exposures, following the
disposal of Bank of the West coupled with a decrease on residential
and commercial real estate loan activities at CPBS, notably in France
(-EUR 5 billion) and to a lessor extent in Italy (-EUR 1 billion).
■ the -EUR 37.3 billion decrease in central governments and central
banks arising from the sale of Bank of the West jointly with a reduction
of liquidity placed in the European Central Bank;
■ the -EUR 30.0 billion decrease in corporate mostly explained by
the sale of Bank of the West and the decrease of CPBS in France
(-EUR 4.8 billion), offset by an increase in activity driven by CIB
(+EUR 6 billion), mainly split between Americas and Europe, and by
CPBS (+EUR 4 billion), primarily in Germany (+EUR 3.4 billion), followed
by Belgium (+EUR 2.7 billion) and United Kingdom (+EUR 2.5 billion).
APPROACHES USED TO CALCULATE
CAPITAL REQUIREMENTS
BNP Paribas has opted for the most advanced approaches allowed
under Basel 3. In accordance with the European Directive and its
transposition into French law, in 2007 the supervisor authorised the
Group to use internal models to calculate capital requirements starting
on 1 January 2008.
For credit risk, the share of gross exposures under the IRBA approach is
78% at 31 December 2023, up slightly compared to 31 December 2022.
This significant scope includes in particular Corporate & Institutional
Banking (CIB), Commercial & Personal Banking in France (CPBF).
Commercial & Personal Banking in Belgium (CPBB), BNL bc, Personal
Finance and Commercial & Personal Banking in Luxembourg (CPBL).
The IRBA scope nevertheless excludes certain entities such as those
subsidiaries in the Europe-Mediterranean business lines.
Within the scope of equity exposures, the Group has mainly opted for the
simple weighting method.
➤
FIGURE 7: GROSS CREDIT RISK EXPOSURE BY APPROACH
At 31 December 2023
21%
24%
Standardised
approach
approach
1%
1%
Simple
risk-weight
method
78%
IRBA approach
Total: EUR 1,829 billion
At 31 December 2022
Standardised
Simple
risk-weight
method
75%
IRBA approach
Total: EUR 1,956 billion
The amounts and percentages below are presented net of provisions for credit risk.
➤
TABLE 26: SCOPE OF THE USE OF IRB AND SA APPROACHES (EU CR6-A)
a
b
c
d
e
In millions of euros
31 December 2023
Exposure
value for
exposures Standardised
subject approach
to IRB
approach(1)
Exposure for purposes of leverage ratio(2)
Total exposure
value for
exposures total exposure
subject to the
and to the IRB
approach
Percentage of
value subject
to the
partial use of
the SA (%)
Percentage of
total exposure
permanent value subject value subject
to a roll-out
plan (%)
Percentage of
total exposure
to IRB
Approach (%)
1
Central governments or central banks
431,674
473,358
1.35%
7.32%
91.33%
1.1
of which Regional governments or local
authorities
5,790
12.96%
87.04%
1.2
of which Public sector entities
3,194
2.50%
97.50%
2
Institutions
37,244
61,342
0.16%
25.62%
74.21%
3
Corporates
482,551
771,380
0.64%
13.14%
86.22%
3.1
of which Specialised lending, IRB approach
79,066
100.00%
4
Retail
278,276
400,428
2.80%
27.85%
69.35%
4.1
of which secured by real estate SMEs
10,675
11,014
0.00%
100.00%
4.2
of which secured by real estate non-SMEs
185,085
184,492
100.00%
4.3
of which qualifying revolving
10,051
11,533
100.00%
4.4
of which SMEs
30,819
30,745
100.00%
4.5
of which Other retail
41,644
39,918
100.00%
5
Equity
13,581
19,028
0.00%
28.57%
71.43%
6
Other non-credit obligation assets
1,327
1,327
100.00%
7
TOTAL
1,244,653
1,726,864
1.31%
15.56%
83.13%
(1) EAD value used in the risk-weighted assets calculation for the purpose of solvency ratio, pursuant to Article 166 of Regulation (EU) No. 575/2013.
(2) Exposure value used as a measure of exposure for the purpose of leverage ratio, pursuant to Article 249 of Regulation (EU) No. 2019/876.
a
b
c
d
e
In millions of euros
31 December 2022
Exposure
value for
exposures Standardised
subject approach
to IRB
approach(1)
Exposure for purposes of leverage ratio(2)
Total exposure
value for
exposures total exposure
subject to the
and to the IRB
approach
Percentage of
value subject
to the
partial use of
the SA (%)
Percentage of
total exposure
permanent value subject value subject
to a roll-out
plan (%)
Percentage of
total exposure
to IRB
Approach (%)
1
Central governments or central banks
452,804
520,777
1.14%
11.54%
87.32%
1.1
of which Regional governments or local
authorities
6,148
12.27%
87.73%
1.2
of which Public sector entities
19,169
0.39%
99.61%
2
Institutions
38,441
58,346
0.39%
21.33%
78.28%
3
Corporates
491,948
801,132
0.73%
15.91%
83.36%
3.1
of which Specialised lending, IRB approach
81,891
100.00%
4
Retail
285,075
424,581
2.94%
29.98%
67.08%
4.1
of which secured by real estate SMEs
12,044
0.00%
100.00%
4.2
of which secured by real estate non-SMEs
188,191
100.00%
4.3
of which qualifying revolving
11,657
100.00%
4.4
of which SMEs
32,960
100.00%
4.5
of which Other retail
40,105
100.00%
5
Equity
12,108
21,653
0.03%
43.94%
56.03%
6
Other non-credit obligation assets
726
726
100.00%
7
TOTAL
1,281,102
1,827,215
1.34%
18.43%
80.23%
(1) EAD value used in the risk-weighted assets calculation for the purpose of solvency ratio, pursuant to Article 166 of Regulation (EU) No. 575/2013.
(2) Exposure value used as a measure of exposure for the purpose of leverage ratio, pursuant to Article 249 of Regulation (EU) No. 2019/876.
CREDIT RISK MANAGEMENT POLICY
CREDIT POLICIES [Audited]
The Bank's lending activities are governed by the Global Credit Policy.
It applies to all Group activities that generate credit or counterparty
risk. The Global Credit Policy provides general principles (including the
risk assessment and decision-making process, adherence to the highest
standards of compliance and ethics) applicable to all credit risk, as well
as specific principles applicable to country risk, sector risks, clients
selection and the transaction structures. It is supplemented by specific
policies tailored to each type of business or counterparty.
These credit policies are regularly updated in line with developments in
the credit environment in which the Group operates.
Corporate Social and Environmental
Responsibility (CSR)
Since 2012, clauses on Corporate Social and Environmental Responsibility
(CSR) are included in specific new credit policies or when existing policies
are updated.
Furthermore, sectoral policies and financing exclusions for certain
sectors presenting significant Environmental, Social and Governance
(ESG) challenges (described in the Commitment 3, section of chapter 7,
Systematic integration and management of Environmental, social and
governance risks (ESG)) have been implemented since 2011 and steadily
strengthened since then. These risks are also analysed in the context of
sector reviews and country envelope limits.
The Group is also taking a number of steps to improve the incorporation
of ESG risks factors, especially those linked to climate change, in its credit
risk system. Within this context, the Group continues to strengthen the
ESG assessment of its clients to make it more systematic and to better
understand the ESG risk profile associated.
Expanding the ESG analysis of corporate
customers thanks to a risk assessment tool:
the ESG Assessment
BNP Paribas takes ESG criteria into account in its decision-making
processes. ESG criteria are integrated into the Know Your Client (KYC) as
well as into the Global Credit policy and, when more precise criteria are
deemed relevant, in specific credit policies.
In addition to the current ESG risk assessment framework (sectoral
policies, specific credit policies), an ESG assessment tool has been
deployed since June 2021: ESG Assessment, which progressively replaces
previous set-ups. It makes it possible to identify, assess and monitor
the ESG performance and risks of corporate customers according to the
specific characteristic of each of their sectors, with a common approach
within the Group for a given customer segment.
The assessment aims to perform an ESG analysis at business group level
as part of the credit process, a key pillar of banking financing activities,
thus integrating ESG criteria with the other analysis parameters included
in the assessment of the counterparty's credit profile
The ESG Assessment covers the environmental (climate, biodiversity),
social (health and safety at work, consumer protection and impact on
communities) and governance (business ethics) dimensions through a
set of questions, supplemented by an analysis of controversies affecting
the client. The questionnaires developed in this context are specific to
each sector in order to better integrate the challenges and issues specific
to their activities.
This tool makes it possible to assess clients' compliance with the Group's
sectoral policies, as well as the maturity of their ESG strategy and its
implementation.
The deployment of ESG Assessment, included in the credit files for all
large corporate business groups regardless of their activity, enables the
RISK Function to exercise greater control over the ESG dimensions during
credit committees on a documented basis. Currently designed for large
companies, this framework has been adapted and will be extended to
additional customer segments (corporates with a turnover of more than
EUR 50 million and financial institutions) starting from 2024.
INDIVIDUAL DECISION-M AKING
PROCEDURES [Audited]
A system of discretionary credit delegations has been established,
under which all lending decisions must be approved by managers
or representatives of the business teams, with the concurrence of a
formally designated RISK representative. Approvals are systematically
evidenced in writing, possibly electronically either by means of a signed
approval form or in the minutes of formal Credit Committee meetings.
Discretionary credit delegations correspond to aggregate commitments
by business group and vary according to internal credit ratings and the
specific nature of the business concerned. All transactions proposed
are subject to a detailed review of the borrower's current and future
position. The review, conducted when granting the transaction and
updated at least on an annual basis, is designed to ensure the Group has
a comprehensive understanding of the borrower and can monitor any
potential changes in its situation. Certain types of lending commitments,
such as loans to financial institutions, sovereign loans and loans to
customers operating in certain industries that are exposed to cyclical
risks or to a rapid pace of change, are subject to specific authorisation
procedures and require the sign-off of an industry expert or designated
specialist. In Retail Banking, simplified procedures are applied, based
on statistical decision-making aids.
Credit applications must comply with the Bank's Global Credit Policy
and any relevant specific policies. Material exceptions undergo a
special approval process. Before making any commitments, BNP Paribas
carries out an in-depth review of any known development plans of
the borrowe r, a nd ensures that it has thorough knowledge of all the
structural aspects of the borrower's operations and that adequate
monitoring will be possible.
The General Management Credit Committee (CCDG) is the highest level
Group committee for all decisions related to credit and counterparty
risk. It has in particular ultimate decision-making authority for all credit
applications notably for amounts in excess of individual discretionary
credit delegations or applications that would not comply with the Global
Credit Policy.
MONITORING AND PORTFOLIO
MANAGEMENT PROCEDURES [Audited]
Monitoring exposures
A comprehensive risk monitoring system is organised around control
units, which are responsible for ensuring that lending commitments
comply with the credit decision, that credit risk reporting data are
reliable and that risks are effectively monitored. Daily irregular exception
reports are produced and various early warning tools are used to identify
early the deterioration of credit risks. The various monitoring levels are
carried out under the supervision of RISK. Non-performing loans or those
placed under credit watch (see Exposures, provisions and cost of risk) are
overseen more closely via dedicated quarterly committee meetings (see
the Governance part of section 5.3 Risk management). To supplement
this mechanism, the Doubtful Committee meets on a monthly basis to
validate the proposed changes in individual provisions for doubtful loans
for which an adjustment is necessary based on expected financial flows.
The responsibilities of the control teams include the monitoring of
exposures against approved authorisations, covenants, and guarantees.
This allows the identification of any signs of deterioration against the
risk profile approved by the Credit Committee. Control teams flag up (to
the RISK teams and business units) any cases that fail to comply with
Credit Committee decisions and oversee their resolution. In some cases, a
specific alert is sent to the senior management of RISK and of the relevant
business unit. These are mainly where exceptions remain unresolved and/
or where there are serious indications of deterioration in the risk profile
compared with that approved by the Credit Committee.
Furthermore, since 2018 the General Credit Policy has included specific
checks to be conducted for loans granted to clients presenting high
leverage ratios, in accordance with European Central Bank guidelines.
Overall portfolio management and monitoring
The selection and careful evaluation of individual risks taken are
supported by a monitoring and risk control system based on more
aggregated portfolio levels in terms of division/business line, regions,
industry, business/product.
The overall portfolio management policy, including concentration of risk
by single name, industry and country, is based on this monitoring system
and Group Risk Committees review all reports and analyses produced:
■ risk concentration by country is managed through country risk limits
that are set at the appropriate level of delegated authority for each
country. The Group, which is naturally present in most economically
active areas endeavours to avoid excessive concentrations of risk in
countries with a high geopolitical risk or unstable political structures
or which economic position has been undermined. Country envelope
limits are reviewed at least once a yea r, a nd quarterly reports are
drawn up on their use;
■ the Group closely monitors individual concentrations, in particular
on business groups, corporates, banks or sovereign debts. These
concentrations are reported in the quarterly risk report to CCIRC.
Related policies implemented by the Group are described under Credit
risk diversification of this section;
■ regular reviews by the Group are carried out of portfolios in certain
industries, either because of the magnitude of the Group's exposure
to the sector or because of sector-specific risks, such as the cyclical
nature of the industry or rapid technological developments. In these
reviews, special focus is placed on ESG issues in potentially sensitive
sectors. The Group draws on the expertise of the relevant business
lines and independent industry specialists working in RISK (Industry
and Sector Studies). These reviews provide Executive Management,
and if appropriate the CCIRC, with an overview of the Group's exposure
to the sector under consideration, and assist it to decide on strategic
guidelines. As an illustration, in 2023, an internal portfolio review was
undertaken on Petrol & Gas, electricity generation, commercial real
estate, Metals & Mining, and automotive;
■ Stress tests assess portfolio vulnerabilities by measuring the impact
of various adverse scenarios. They are conducted on a quarterly basis
on the entire portfolio and on an ad hoc basis on sub-portfolios to
identify any concentrations. They help to ensure that the Bank's credit
risk exposure is in line with its risk appetite.
Lastly, BNP Paribas may use credit risk transfer instruments, such as
securitisation programmes, credit derivatives or credit insurance, to
mitigate individual risks, reduce portfolio concentration or cap potential
losses arising from crisis scenarios.
IMPAIRMENT V A LUATION
PROCEDURES [Audited]
The Group applies the impairment procedures described below for all
loans subject to impairment (see note 1.f.5 Impairment of financial assets
at amortised cost and of debt instruments at market value through
shareholders' equity to the consolidated financial statements):
■ impairment valuation procedure for performing loans:
A loss allowance for loans in stage 1 or stage 2 is constituted by each
operating division based on an estimation of expected credit losses.
This is validated on a quarterly basis during a committee meeting
attended by the Chief Financial Officer and Chief Risk Officer of each
operating division. Estimations of expected credit losses result from
the default risk in the coming twelve months for financial instruments
whose credit risk has not significantly increased since initial recognition
(stage 1) or upon maturity for unimpaired loans whose credit risk
has significantly increased since initial recognition (stage 2). A tool
used by most of the Group's business lines enables calculations to be
performed based on the parameters of the rating system described
below and integrating the potential impact of macroeconomic and
sectoral dynamics;
■ impairment valuation procedure for defaulted exposures:
Monthly, RISK reviews corporate, bank and sovereign loans, requiring a
review of their impairment, to determine the amount of any decrease
in value to be recognised, either by reducing the carrying amount or
by recording a provision for impairment, in accordance with applicable
accounting standards (see note 1.f.5 Impairment of financial assets
measured at amortised cost and debt instruments measured at fair
value through shareholders' equity to the consolidated financial
statements). The Group uses various methodologies (expert opinions,
statistical calculations) for defaulted exposures to retail customers.
These impairments are referred to as stage 3. The amount of this
impairment loss is based on the present value of probable recovered
net cash flows issued from several scenarios, including from
the possible realisation of the collateral held. The amount of this
impairment loss is based on the present value of probable recovered
net cash flows under various scenarios and including from the possible
realisation of the collateral held. Estimated expected cash flows also
includes a cash flow scenario from the possible sale of non-performing
loans or all loans. Proceeds from the sale is net of costs associated
to the sale.
RATING SYSTEM [Audited]
Each counterparty is rated internally by the Group using uniform
principles, regardless of the approach used to calculate regulatory capital
requirements.
The Bank has a comprehensive internal rating system compliant
with regulatory requirements regarding capital adequacy. A periodic
assessment and control process has been deployed within the Bank to
ensure that the system is appropriate and correctly implemented. The
system was formally validated by the supervisor in December 2007 and
is inspected on a regular basis.
For loans to institutions, corporates, sovereigns and specialised lendings,
the system is based on three parameters: the counterparty's probability of
default (PD) expressed via a rating, the Global Recovery Rate (GRR) or its
complement, Loss Given Default (LGD), which depends on the structure of
the transaction, and the Credit Conversion Factor (CCF) which estimates
the off-balance sheet exposure at risk.
There are twelve counterparty ratings. Ten cover performing clients with
credit assessments ranging from "excellent" to "very concerning", and
two relate to clients classified as in default, as per the definition by the
banking superviso r.
Confirmation or amendments to the probability of default parameters
and GRR applicable to each transaction are reviewed at least once a
year as part of the loan approval process or annual credit review. These
are based on the combined expertise of business line staff and, as a
second look, the RISK representatives (who have the final say in case
of disagreement). It uses appropriate tools including analysis aids and
credit scoring systems. The decision to use these tools and the choice of
technique depends on the nature of the risk.
For retail counterparties, the system is also based on three parameters:
Probability of Default (PD), the Global Recovery Rate (GRR) and the Credit
Conversion Factor (CCF). On the other hand, rating methods are applied
automatically to determine the loan parameters.
Internal estimates of risk parameters are used in the Bank's day-to-day
management in line with regulation recommendations. Thus, apart
from calculating capital requirements, they are used for example when
setting delegated limits, granting new loans or reviewing existing loans
to measure profitability, determine impairments and for book analyses.
➤
TABLE 27: INDICATIVE MAPPING OF INTERNAL
COUNTERPARTY RATING WITH AGENCY RATING
SCALE AND AVERAGE EXPECTED PD
Internal
rating
BNP Paribas
LT Issuer/
Unsecured
issuer's
S&P/Fitch
ratings Average expected
PD
Investment Grade
1+
AAA
0.01%
1
AA+
0.01%
1-
AA
0.01%
2+
AA-
0.02%
2
A+/A
0.03%
2-
A-
0.04%
3+/3/3-
BBB+
0.06% to 0.10%
4+/4/4-
BBB
0.13 to 0.21%
5+/5/5-
BBB-
0.26% to 0.48%
Non-Investment
Grade
6+
BB+
0.69%
6/6-
BB
1.00% to 1.46%
7+/7
BB-
2.11% to 3.07%
7-
B+
4.01%
8+/8/8-
B
5.23% to 8.06%
9+/9/9-
B-
9.53% to 13.32%
10+
CCC
15.75%
10
CC
18.62%
10-
C
21.81%
Default
11
D
100%
12
D
100%
The Group has developed an indicative equivalence between the
Bank's internal ratings and the long-term issuer ratings assigned by
the major rating agencies. Nevertheless, the Bank has a much broader
clientele than just those counterparties rated by an external rating agency.
An indicative equivalence is not relevant in Retail Banking. It is used when
the internal ratings are assigned or reviewed in order to identify any
differences between the Bank's assessment of a borrower's probability
of default and that of one or more of the rating agencies. Howeve r,
the internal ratings do not aim to reproduce or even approximate the
external ratings. There are significant variances in both directions within
the portfolio. Some counterparties rated 6 or 7 by BNP Paribas could be
considered Investment Grade by the rating agencies.
For further details, see the sections Internal rating system – sovereign,
financial institution, corporate and specialised financing portfolios and
Internal rating system specific to retail customers.
CREDIT RISK STRESS TESTING
Quantitative models have been developed and are used to connect
credit risk and rating migration parameters with macroeconomic
and financial variables projected in stress testing scenarios (see
section 5.3 Stress testing), for historical data as well as the relevant
forecast period.
The quality of the methods used is guaranteed by:
■ strict governance in terms of the separation of duties and
responsibilities;
■ a review of existing systems (models, methodologies, tools) by an
independent entity;
■ periodic evaluation of the effectiveness and pertinence of the system
as a whole.
This governance is based on internal policies and procedures, the
supervision of the Credit Risk Stress Testing Committees by business line
and the integration of the stress tests within the risk management system.
The central stress testing framework is consistent with the structure
defined in the EBA guidelines for European stress tests:
■ it is based on the parameters used to calculate capital requirements
(regulatory EAD, PD and LGD);
■ the expected loss conditional to the macroeconomy is used as a
measure of the cost of risk resulting from new defaults;
■ the stressed cost of risk is supplemented with impacts on stage 1 and
2 provisions and provisions on the outstanding non-performing loans;
■ the regulatory capital stress testing is performed on the basis of rating
migrations, default events, and the stressed regulatory PD used in
calculating regulatory capital requirements.
Stress testing of credit risk is used in the evaluation of the Group's risk
appetite, and more specifically during portfolio reviews. They are based
on models integrated into the risk management and financial planning
processes, shared with the provisions calculation system and the internal
economic measurement of capital requirements.
The system was strengthened and adapted to the evolution of the risk
environment:
■ it integrates consideration of the heterogeneity of sectoral trajectories
according to scenarios, in particular in high inflation and energy
transition contexts;
■ the Forward Looking Adjustment of Internal Rating (FLAIR) approach
makes it possible to include in the projections developments that are
unparalleled in the recent historical period or likely to lead to rapid
changes in the relationships observed historically between variables.
This system is used to take into account the impact of the rise in
recent interest rates and contributes to the assessment of climate
change risks.
The Bank has developed a partnership with the Centre de Mathématiques
appliquées de l'Ecole Polytechnique en France (CMAP) to ensure access to
the most advanced scientific knowledge in the measurement of climate
change risks, cyber risks, uncertainty and extreme events more generally.
CREDIT RISK DIVERSIFICATION
The Group's gross exposure to credit risk stands at EUR 1,815 billion
at 31 December 2023, a decrease compared to 31 December 2022
with EUR 1,944 billion. This decrease is mainly due to the disposal of
Bank of the West. This portfolio, which is analysed below in terms of its
diversification, comprises all exposures to credit risk shown in T a ble 25,
excluding equity exposures under the simple weighting method, shown
in the section Credit risk: equities under the simple weighting method.
These exposure amounts are based on the gross carrying value of the
financial assets. They do not include collateral taken by the Group in
its normal credit risk management operations (see section Credit risk
mitigation techniques).
No single counterparty gives rise to an excessive concentration of credit
risk, due to the size of the business and the high level of industrial and
geographical diversification of the client base. The breakdown of credit
risks by industry and by region is presented in the tables hereafte r.
This risk is mainly assessed through the monitoring of the indicators
shown below.
SINGLE NAME CONCENTRATION
The single name concentration risk of the portfolio is subject to regular
monitoring. It is assessed on the basis of the total commitments at client
or business group level and is based on two types of monitoring:
Monitoring of large exposures
Article 395 of Regulation (EU) No. 575/2013 of 26 June 2013 establishes
a limit of 25% of the Bank's capital for exposure by business group (after
exemptions and taking credit risk mitigation techniques into account).
BNP Paribas is well below the concentration thresholds set by this
regulation. The exposure (as defined above) of a client or a group of
connected clients never exceeds 10% of the Bank's eligible capital.
Monitoring through individual "single name"
concentration policies
The single name concentration risks are part of the Group's
concentration policies. They are meant to identify and closely monitor
any single business group with an excessive concentration of risk to
proactively manage individual concentrations relative to the Group's
Risk Appetite Statement.
BREAKDOWN BY REGULATORY ASSET CLASS
➤
TABLE 28: CREDIT RISK EXPOSURE BY ASSET CLASS AND APPROACH TYPE
Exposure
In millions of euros
31 December 2023
31 December 2022
Central governments or central banks
432,341
454,775
Institutions
45,783
45,960
Corporates
671,642
674,680
Corporates – Specialised financing
80,020
82,887
Corporates – SME
49,095
51,583
Other corporates
542,527
540,210
Retail
281,501
288,930
Retail – Secured by real estate property
185,070
189,024
Retail – Secured by commercial property
11,106
12,176
Retail – Revolving exposures
11,901
12,087
Retail – SME
31,932
34,210
Retail – Other
41,492
41,432
Other risk assets
1,327
726
TOTAL IRB APPROACH
1,432,594
1,465,071
Central governments or central banks
29,288
37,425
Regional governments or local authorities
5,793
6,153
Public sector entities
3,196
19,167
Multilateral development banks
1,637
221
International organisations
1,279
1,023
Institutions
15,828
12,502
Corporates
106,662
133,300
Retail
124,421
141,447
Exposures secured by mortgages on immovable property
41,726
70,079
Exposures in default
10,062
10,858
Items associated with particular high risk(*)
0
655
Exposures in the form of units or shares in collective investment undertakings
5,626
5,169
Equity
540
501
Other items
36,948
40,686
TOTAL STANDARDISED APPROACH
383,007
479,186
TOTAL
1,815,602
1,944,257
(*) Immovable property financing exposures whose risk profile may be affected by market conditions.
GEOGRAPHIC DIVERSIFICATION
Country risk is the sum of the risks on all exposures to obligors in the
country concerned. It is not the same as sovereign risk, which is the sum
of all exposures to the central government and its various branches.
Country risk reflects the Bank's exposure to a given economic and
political environment, which are taken into consideration when assessing
counterparty quality.
The geographic breakdown shown below is based on the counterparty's
country of residence.
The geographic breakdown of the portfolios is balanced. In 2023, the
Group was particularly attentive to geopolitical risks and the economic
performance of emerging countries.
➤
TABLE 29: CREDIT RISK EXPOSURE BY GEOGRAPHIC REGION
Exposure
In millions of euros
Europe(*)
Total
Europe France Belgium
Luxembourg
Italy
United
Kingdom Germany
Other
European
Netherlands countries
Central governments
or central banks
331,619
207,395
37,758
26,423
21,375
5,385
12,086
171
21,026
Institutions
26,044
7,569
8,715
424
1,968
878
1,702
1,799
2,991
Corporates
476,070
147,757
69,813
29,276
60,486
51,736
32,731
25,756
58,516
Retail
279,905
149,927
82,558
9,100
36,145
570
373
265
969
Other items
1,327
1,327
TOTAL IRB APPROACH
1,114,966
513,975
198,843
65,222
119,973
58,568
46,891
27,990
83,503
Central governments
or central banks
22,107
5,821
1,626
328
4,954
122
531
3
8,722
Regional governments
or local authorities
5,454
531
1,142
86
2,961
37
46
15
636
Public sector entities
3,085
583
77
12
1,943
41
37
6
385
Multilateral development
banks
1,637
1,603
34
International organisations
1,279
1,030
175
20
51
3
Institutions
12,460
6,825
268
216
574
780
398
94
3,306
Corporates
87,079
21,905
5,546
1,603
9,518
8,541
8,472
1,492
30,002
Retail
111,342
15,373
4,631
287
29,786
15,613
17,516
1,448
26,689
Exposures secured by
mortgages on immovable
property
39,057
7,298
7,223
85
949
1,229
2,054
5,666
14,554
Exposures in default
8,850
2,159
342
18
2,020
577
896
70
2,769
Items associated with
particular high risk(**)
-
Exposures in the form of
units or shares in collective
investment undertakings
5,482
3,167
397
1,135
458
97
35
65
128
Equity
467
210
196
1
27
2
15
16
Other items
34,866
20,369
2,365
441
4,074
2,354
3,752
166
1,344
TOTAL STANDARDISED
APPROACH
333,166
85,270
23,792
6,031
57,288
29,452
33,739
9,040
88,553
TOTAL
1,448,132
599,245
222,635
71,254
177,261
88,020
80,630
37,030
172,056
(*) Within the scope of the European Union, the European Free T r ade Association (EFTA) and United Kingdom.
(**) Immovable property financing exposures whose risk profile may be affected by market conditions.
31 December 2023
America Pacific
Asia Pacific
Rest of the World
TOTAL
North Total Asia
Japan
South-
North East Asia peninsula
Indian
Asia (ASEAN) &Pacific World
Total
Rest
of the
Türkiye
basin Africa
Gulf
Mediterranean States&
Latin
America countries
Other
46,000
47,310 25,137
6,921
9,171
6,081
7,412
404
277
2,121
2,648
1,962 432,341
5,670
7,382
1,454
4,194
705
1,029
6,687 1,059
181
3,105
1,951
390 45,783
108,216
49,882
7,721
17,085
10,813
14,264
37,474 1,200
425
8,603
14,863
12,382 671,642
560
418
20
163
191
45
619
17
72
318
78
134 281,501
-
-
1,327
160,445
104,992
34,332
28,363
20,879
21,419
52,191
2,680
955
14,147
19,540
14,868
1,432,594
366
237
53
14
1
168
6,578 4,683
1,672
133
90
29,288
196
5
5
137
137
1
5,793
1
16
16
94
94
3,196
-
-
-
1,637
-
-
-
1,279
299
1,681
12
410
221
1,038
1,388
506
83
265
332
201
15,828
1,000
6,131
51
3,011
1,534
1,535
12,453 4,825
5,136
521
638
1,333 106,662
114
2,460
4
2,107
7
342
10,505 4,864
1,367
1,103
2,475
696 124,421
20
315
1
110
155
48
2,334 1,144
1,076
62
9
44
41,726
8
4
1
1
3
1,200
138
797
200
36
29
10,062
-
-
-
-
112
26
12
7
2
5
6
4
1
5,626
58
6
6
9
8
1
540
292
972
73
815
8
76
818
390
293
24
86
25
36,948
2,467
11,852
206
6,491
1,929
3,226
35,522
16,690
10,518
2,176
3,718
2,420
383,007
162,912
116,845
34,537
34,854
22,808
24,645
87,713
19,370
11,473
16,323
23,258
17,288
1,815,601
Exposure
In millions of euros
Europe(*)
Total
Europe France Belgium
Luxembourg
Italy
United
Kingdom Germany
Other
European
Netherlands countries
Central governments
or central banks
363,169
241,404
34,353
25,225
17,668
5,544
14,996
191
23,788
Institutions
23,445
5,652
8,370
695
1,926
1,154
1,420
1,618
2,611
Corporates
475,679
149,297
67,635
29,306
63,983
53,642
34,138
24,107
53,571
Retail
288,332
156,086
84,067
9,244
37,400
345
288
226
674
Other items
726
726
TOTAL IRB APPROACH
1,151,351
553,165
194,425
64,471
120,977
60,686
50,842
26,143
80,643
Central governments
or central banks
21,889
7,159
2,580
335
3,460
23
307
3
8,022
Regional governments
or local authorities
5,073
679
1,149
102
2,420
25
12
12
674
Public sector entities
2,880
598
71
17
1,874
49
41
6
223
Multilateral development
banks
221
166
55
International organisations
1,023
772
206
3
39
2
Institutions
9,408
4,676
173
146
658
506
342
226
2,681
Corporates
81,213
23,055
5,152
1,805
9,651
7,387
5,534
1,446
27,183
Retail
111,260
17,397
4,697
299
30,876
13,541
16,942
1,399
26,110
Exposures secured by
mortgages on immovable
property
39,368
7,435
6,281
68
924
1,302
1,735
5,800
15,823
Exposures in default
8,848
2,169
281
27
2,168
585
835
42
2,740
Items associated with
particular high risk(**)
-
Exposures in the form of
units or shares in collective
investment undertakings
4,923
3,087
351
903
264
122
29
62
105
Equity
404
50
294
15
28
1
16
Other items
36,476
25,143
2,278
509
3,800
1,344
2,112
123
1,168
TOTAL STANDARDISED
APPROACH
322,986
92,220
23,219
4,673
56,149
24,967
27,890
9,120
84,747
TOTAL
1,474,337
645,385
217,644
69,145
177,126
85,654
78,732
35,262
165,390
(*) Within the scope of the European Union and the European Free T r ade Association (EFTA).
(**) Immovable property financing exposures whose risk profile may be affected by market conditions.
INDUSTRY DIVERSIFICATION
The sectoral breakdown of the exposure class of non-financial corporations by industry is available in T a ble 51 Breakdown of loans and advances and
provisions to non-financial corporations by industry (EU CQ5).
31 December 2022
America Pacific
Asia Pacific
Rest of the World
TOTAL
North Total Asia
Japan
South-
North East Asia peninsula
Indian
Asia (ASEAN) &Pacific World
Total
Rest
of the
Türkiye
basin Africa
Gulf
Mediterranean States&
Latin
America countries
Other
40,859
42,024 17,157
6,966
11,837
6,064
8,722
387
292
3,580
2,354
2,110 454,775
7,450
7,934
1,815
4,160
634
1,325
7,131 1,017
176
3,078
2,199
660 45,960
103,362
56,137
7,232
18,510
13,350
17,045
39,502 1,566
546
9,799
14,567
13,024 674,680
264
105
6
37
44
19
228
8
44
70
34
72 288,930
726
151,936
106,200
26,210
29,672
25,865
24,453
55,583
2,978
1,058
16,526
19,154
15,867
1,465,071
7,957
177
46
20
5
105
7,403 4,222
1,860
1,031
180
109
37,425
1,008
3
3
69
69
6,153
16,138
20
20
129
125
4
19,167
-
-
-
221
-
-
-
1,023
781
1,025
36
349
117
523
1,288
700
86
85
255
161
12,502
33,443
5,657
30
3,161
1,757
709
12,987 5,590
4,270
2,009
479
639 133,300
16,452
2,063
62
1,659
13
329
11,673 4,961
1,173
1,636
3,261
642 141,447
27,782
318
1
119
176
21
2,612 1,266
1,243
59
10
34
70,079
464
5
1
2
2
1,561
259
768
350
152
31
10,878
636
-
-
636
115
105
7
4
93
26
2
3
13
9
5,169
84
4
4
9
8
1
501
2,009
1,171
23
1,055
7
85
1,030
446
312
144
105
22
40,686
106,867
10,547
207
6,388
2,078
1,874
38,785
17,516
9,838
5,322
4,463
1,647
479,186
258,803
116,748
26,417
36,060
27,943
26,327
94,369
20,494
10,896
21,848
23,616
17,515
1,944,257
RIS K-WEIGHTED ASSETS
➤
TABLE 30: CREDIT RISK-WEIGHTED ASSETS
RWAs
In millions of euros
31 December 2023
31 December 2022
Variation
IRB approach
287,009
307,068
(20,059)
Central governments or central banks
4,360
4,620
(260)
Institutions
7,963
8,280
(317)
Corporates
218,425
237,260
(18,835)
Corporates – Specialised financing
22,918
24,001
(1,084)
Corporates – SME
21,967
20,979
989
Other corporates
173,540
192,280
(18,740)
Retail
55,989
56,767
(778)
Retail – Secured by real estate property
23,174
23,560
(386)
Retail – Secured by commercial property
2,880
3,146
(266)
Retail – Revolving exposures
3,366
3,304
62
Retail – SME
9,469
9,579
(110)
Retail – Other
17,100
17,178
(78)
Other risk assets
272
141
132
Standardised approach
188,191
231,375
(43,184)
Central governments or central banks
4,842
6,229
(1,386)
Regional governments or local authorities
709
774
(66)
Public sector entities
1,110
2,236
(1,126)
Multilateral development banks
International organisations
Institutions
5,562
4,411
1,150
Corporates
60,937
80,433
(19,497)
Retail
62,749
73,410
(10,661)
Exposures secured by mortgages on immovable property
16,012
26,941
(10,930)
Exposures in default
4,957
5,684
(727)
Items associated with particular high risk(*)
705
(705)
Exposures in the form of units or shares in collective investment undertakings
7,838
7,101
737
Equity
2,265
2,301
(36)
Other items
21,211
21,150
61
Equity positions under the simple weighting method
45,941
41,192
4,749
Private equity exposures in diversified portfolios
3,480
2,952
527
Listed equity exposures
3,706
2,976
730
Other equity exposures
38,755
35,263
3,492
Other risk exposures
14,000
14,000
CREDIT RISK
535,141
579,635
(44,494)
(*) Immovable property financing exposures whose risk profile may be affected by market conditions.
➤
TABLE 31: CREDIT RISK-WEIGHTED ASSETS MOVEMENTS BY KEY DRIVER (EU CR8)
➤ 4th quarter 2023
a
In millions of euros
RWAs
Capital Requirements
Total
approach
of which IRB
Total
of which IRB
approach
1
30 September 2023
532,849
306,844
42,628
24,548
2
Asset size
3,808
(3,408)
305
(273)
3
Asset quality
628
1,345
50
108
4
Model update
1,559
1,559
125
125
5
Methodology and policy
(240)
(19)
6
Acquisitions and disposals
(332)
1
(27)
7
Currency
(2,717)
(2,664)
(217)
(213)
8
Others
(414)
(16,669)
(33)
(1,334)
9
31 DECEMBER 2023
535,141
287,009
42,811
22,961
➤ Year to 31 December 2023
a
In millions of euros
RWAs
Capital Requirements
Total
approach
of which IRB
Total
of which IRB
approach
1
31 December 2022
579,635
307,068
46,371
24,565
2
Asset size
4,494
(6,203)
359
(496)
3
Asset quality
(11,150)
(7,671)
(892)
(614)
4
Model update
3,226
3,267
258
261
5
Methodology and policy
(2,588)
17
(207)
1
6
Acquisitions and disposals
(44,794)
1
(3,584)
7
Currency
(3,577)
(2,152)
(286)
(172)
8
Others
9,895
(7,318)
792
(585)
9
31 DECEMBER 2023
535,141
287,009
42,811
22,961
Credit risk-weighted assets decreased by -EUR 44 billion in 2023,
primarily as a result of the following:
■ a -EUR 45 billion decrease related to perimeter effects, linked to Bank
of the West disposal net of Stellantis acquisition;
■ a +EUR 14 billion increase in line with business activity net of the
impact of the efficient securitisation transactions initiated by the
Group;
■ a -EUR 11 billion decrease induced by improvement of risk parameters;
■ a -EUR 4 billion decrease due to currency effects, linked to the
depreciation of the US dollar and of the Turkish lira compared to
the euro.
CREDIT RISK: INTERNAL RATINGS-BASED APPROACH (IRBA)
The internal rating system developed by the Group covers the entire Bank.
The IRBA framework, validated in December 2007, covers the portfolio
described in Approaches used to calculate capital requirements in the
section entitled Exposure to credit risk.
The Group has developed specific internal models adapted for the
most common categories of exposure and clients in its loan portfolio.
BNP Paribas bases these developments on internal data gathered over
long periods. Each of these models is developed and maintained by a
specialist team, in conjunction with relevant RISK and business line
experts. Moreove r, v erification is performed to ensure compliance with
the floors set by the regulation on these models. The Bank does not use
models developed by external suppliers.
IRBA credit models are developed and used within a control system
comprising three lines of defence:
■ models producing internal estimates of the risk parameters are
developed and maintained by specialised RISK teams, which also
perform annual backtesting of each model in production;
■ another RISK team, which reports directly to the Group Chief Risk
Office r, c onducts independent reviews of the models. Three types of
review are carried out: systematic before a model is implemented,
annual when reviewing backtesting carried out by the first line,
and finally periodic, covering all the IRBA models used in the Bank
according to an auditing plan that takes into account a risk-based
approach;
■ finally, each yea r, t he General Inspectorate conducts an overall
assessment of the models and their governance, and conducts a
detailed review of an identified risk area.
In addition, the first and second line of defence RISK teams regularly
report the most important information to Bank management and senior
management, through:
■ the Capital Committee, which is the competent Executive Management
authority for issues relating to internal credit models, and which, as
such, is informed of the main decisions taken concerning these models,
annually reviews the results of backtesting and receives a summary of
the results of the independent review of the models; and
■ the Internal Control, Risk Management and Compliance Committee
(CCIRC), a body appointed by the Board of directors, which receives a
quarterly qualitative dashboard detailing the major risk-related events
over the quarter and a metric based on the recommendations of the
independent review team.
Counterparty rating (or the Probability of Default) and the Loss Given
Default are determined either using purely statistical models for portfolios
with the highest degree of granularity (loans to individuals or to very
small enterprises) or a combination of models and expert judgement
based on indicative values.
Loss Given Default is defined as the loss that the Bank would suffer in
the event of the counterparty's default in times of economic downturn,
as required by regulations. For each transaction, it is measured using
the recovery rate for a senior unsecured exposure to the counterparty,
adjusted for any risk mitigation techniques (collateral or guarantees).
Amounts recoverable against these mitigants are estimated each year
using conservative assumptions as well as haircuts calibrated to reflect
economic downturn conditions.
The Bank models its own conversion factors on financing commitments
by using internal default data. Conversion factors are used to measure
the off-balance sheet exposure at risk in the event of a default. This
parameter is assigned automatically depending on the transaction
type for all portfolios and therefore, is not determined by the Credit
Committees.
Internal estimates of risk parameters are used in the Bank's day-to-day
management in line with regulation recommendations. Thus, apart
from calculating capital requirements, they are used, for example, when
setting delegated limits, granting new loans or reviewing existing loans
to measure profitability, determining stage 1 and stage 2 impairment
and for book analyses.
➤
TABLE 32: MAIN MODELS: PD, LGD AND CCF/EAD
Modelled
parameter Portfolio
of models
Model and methodology
Number Number of years –
Default/loss data
Main asset class
PD
Sovereigns
1
Qualitative
> 10 years
Central governments
and central banks
Banks
4
opinion
Quantitative + expert
> 10 years
Institutions
Central governments
and central banks
Corporate – other
Insurance
Quantitative + expert
1
opinion
> 10 years
Corporate – other
Large corporates
3
Qualitative
Quantitative + expert
opinion
> 10 years
Corporate – other
Real Estate non-retail in France
1
Qualitative
> 10 years
Corporate – other
Project financing
3
opinion
Qualitative
Quantitative + expert
> 10 years
Corporate – specialised lending
Other Non Retail Policy
1
Qualitative
> 10 years
Corporate – other
CPBF – SME
Quantitative + expert
1
opinion
> 10 years
Corporate – SME
CPBF – Professionnals
& Entrepreneurs
1
Quantitative
> 10 years
Retail – other SME
CPBF – Personal
(Individuals & Professionnals)
1
Quantitative
> 10 years
Retail – other non-SME/qualifying
Revolving/secured by real estate
non-SME
Personal Finance
2
Quantitative
> 10 years
Retail – other non-SME
BNPP FORTIS – SME
3
opinion
Quantitative + expert
> 10 years
Retail – other/secured by real estate
SME
BNPP FORTIS – Professionnals
1
Quantitative
> 10 years
Retail – other SME/secured by real
estate SME
BNPP FORTIS – Individuals
1
Quantitative
> 10 years
Retail – Secured by real estate
non-SME
BNPP FORTIS – Public entities
1
opinion
Quantitative + expert
9 years
Institutions
BNL bc – SME
Quantitative – logistic
1
regression
> 10 years
Corporate – SME
BNL bc – Retail Individuals
Quantitative – logistic
1
regression
> 10 years
Retail – other non-SME
BNL bc – Professionnals
et Retail SME
Quantitative – logistic
1
regression
> 10 years
Retail – other SME
BCEL – Retail
1
Quantitative
> 10 years
Retail non-SME/secured by real
estate SME
Modelled
parameter Portfolio
of models
Model and methodology
Number Number of years –
Default/loss data
Main asset class
LGD
Sovereigns
1
Qualitative
> 10 years
Central governments
and central banks
Banks
4
opinion
Quantitative + expert
> 10 years
Institutions
Central governments
and central banks
Corporate – other
Insurance
1
Qualitative
> 10 years
Corporate – other
Large corporates:
Other non-retail
4
Quantitative
Quantitative – calibrated
on internal data
Quantitative + expert
opinion
> 10 years
Corporate – other
Real Estate non-retail in France
Qualitative – Asset
1
valuation haircut
> 10 years
Corporate – other
Project financing
3
Qualitative
Quantitative – calibrated
on internal data
> 10 years
Corporate – specialised lending
Other Non Retail Policy
1
Qualitative
> 10 years
Corporate – other
CPBF – SME
Quantitative – calibrated
1
on internal data
> 10 years
Corporate – SME
CPBF – Professionnals
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other SME
CPBF – Vie privée
(Individuals & Professionnals)
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other non SME/qualifying
Revolving/secured by real estate
non-SME
Personal Finance
2
on internal data
Quantitative – calibrated
> 10 years
Retail – other non-SME
BNPP FORTIS – Professionnals
& SME
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other non-SME/qualifying
Revolving/secured by real estate
non-SME
BNPP FORTIS – Individuals
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other SME/secured by real
estate non-SME
BNPP FORTIS – Public entities
Quantitative – calibrated
1
on internal data
> 10 years
Institutions
BNL bc – SME
Quantitative – calibrated
1
on internal data
> 10 years
Corporate – SME
BNL bc – Retail Individuals
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other non-SME
BNL bc – Professionnals
et Retail SME
Quantitative – calibrated
1
on internal data
> 10 years
Retail – other non-SME
BCEL – Retail
1
Quantitative
> 10 years
Retail – other non-SME
Modelled
parameter Portfolio
of models
Model and methodology
Number Number of years –
Default/loss data
Main asset class
CCF/EAD
CCF for corporates, banks
and sovereigns
Quantitative – calibrated
1
on internal data
> 10 years
Central governments
and central banks
CPBF – Retail
Quantitative – calibrated
1
on internal data
> 10 years
Retail
Personal Finance – France
2
on internal data
Quantitative – calibrated
> 10 years
Retail
BNPP FORTIS – Professionnals
& SME
Quantitative – calibrated
1
on internal data
> 10 years
Retail
BNPP FORTIS – Individuals
Quantitative – calibrated
1
on internal data
> 10 years
Retail
BNPP FORTIS – Public entities
Quantitative + expert
1
opinion
> 10 years
Institutions
BNL bc – Retail
2
Fix value
-
Retail
BNL bc – SME
1
Fix value
-
Corporates – SME
BCEL – Retail
1
Quantitative
> 10 years
Retail
BACKTESTING
Each one of the three credit risk parameters (PD, LGD, CCF/EAD) is
backtested annually in order to check the performance and conservatism
of every model and business segment of the Bank.
Backtesting of a Probability of Default's model primarily aims at
ensuring that the ratings attributed internally by the PD model are more
conservative than the default rates observed during the year for the
population under the scope of this model. When external ratings are
available, for clients covered by low default portfolio's model, they are
also used to challenge the conservatism of our internal ratings.
Backtesting of Loss Given Default's model is only based on exposures that
are on default and includes both closed and open files. The Long Run
Average LGD is compared with the corresponding LGD Estimated from the
model applied to the relevant application scope. The Time-to-Workout is
defined as the period during which the institution realises the vast majority
of the recoveries and it is used as the largest period for which recoveries
are expected. When a recovery process is operationally closed, or reaches
the Time-to-Workout (i.e. pseudo-closed), the observed LGD is calculated
using all observed cashflows (recoveries, cost of recoveries and additional
drawings) discounted back to the default date and compared with the
outstanding at default (which may include additional drawings when
relevant). When the recovery process is open or incomplete, the future
recoveries are estimated until the Time-to-Workout by extrapolating the
historical recoveries, and potentially as well the additional drawings,
observed for the underlying population.
For both PD and LGD backtesting, additional tests are performed to assess
and track over years the data representativeness, the stability, the risk
differentiation as well as the correct calibration and conservatism of
the model. In case any of these dimensions has deteriorated, or if any
major alert is threatening the model's relevancy, a recalibration can be
proposed or even, in more extreme cases, a redevelopment of the model.
All this work is reviewed annually in the Capital Committee (see
section 5.2 under Capital management). The results from the backtesting
are also certified internally by an independent team and the results sent
to the superviso r. A ny change is submitted to the supervisor for approval,
in line with the regulation.
The following tables present an overview of the performance of the
models for regulatory risk parameters PD and LGD within the context of
the Group's IRBA scope
For constructing the PD tables (see T a bles 33, 34, 35 and 36 after), each
obligor is assigned to its correspondent class of [Portfolio x PD Scale] and
then the indicators of each class are computed as follows:
■ Observed average default rate: The number of obligors falling in default
during the observed year divided by the number of performing obligors
at the end of the previous year;
■ Average PD weighted by the number of debtors: Average, of the 1-year
probability of default attributed to each performing obligor by PD
internal models;
■ Exposure weighted average PD: Average (weighted by the exposure of
each obligor) of the 1-year probability of default attributed to each
performing obligor by PD internal models;
■ Average historical annual default rates: Average (weighted by the
number of historical years observed) of the yearly observed average
default rates (defined above).
392
RISKS AND CAPITAL ADEQUACY – PILLAR 3
Credit risk
For constructing the LGD tables (see T a ble 37 after), each facility is
assigned to one of the six pre-defined types of Portfolios and then the
indicators are computed as follows:
■ Arithmetical average of the estimated LGD: Average (weighted by
the number of facilities) of the rates of loss in the event of default
attributed by internal LGD models to each performing facility;
■ Arithmetical average of the historic LGD observed: Average (weighted
by the number of facilities) of the rates of loss in the event of default
historically observed for each facility having been in default.
➤
TABLE 33: BACKTESTING OF PD ON CENTRAL GOVERNMENTS, CENTRAL BANKS AND INSTITUTIONS PORFOLIO
(EU CR9)
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average default
rate (%)
Exposures
average PD (%)
Average PD
weighted by
weighted the number of
debtors (%)
Average
historical annual
default rate (%)
of which: number
of obligors which
defaulted during
the year
Central governments
and central banks
0.00 to 0.15%
750
0.01%
0.04%
0.00 to 0.10%
664
0.01%
0.03%
0.10 to 0.15%
86
0.13%
0.12%
0.15 to 0.25%
61
0.19%
0.22%
0.37%
0.25 to 0.50%
29
0.29%
0.32%
0.50 to 0.75%
58
0.69%
0.65%
0.33%
0.75 to 2.50%
93
1.30%
1.30%
2.28%
0.75 to 1.75%
75
1.29%
1.12%
2.38%
1.75 to 2.50%
18
1.88%
2.05%
2.50 to 10.00%
19
8.33%
5.49%
0.44%
2.50 to 5.00%
10
3.07%
3.26%
0.64%
5.00 to 10.00%
9
8.36%
7.97%
0.40%
10.00 to 100.00%
38
4
10.53%
19.48%
11.92%
3.61%
10.00 to 20.00%
34
1
2.94%
14.76%
10.75%
1.99%
20.00 to 30.00%
4
3
75.00%
21.81%
21.81%
12.86%
30.00 to 100.00%
100% (Default)
14
100.00%
100.00%
Institutions
0.00 to 0.15%
710
0.04%
0.07%
0.04%
0.00 to 0.10%
491
0.04%
0.05%
0.05%
0.10 to 0.15%
219
0.12%
0.13%
0.05%
0.15 to 0.25%
202
0.18%
0.20%
0.25%
0.25 to 0.50%
185
0.32%
0.34%
0.13%
0.50 to 0.75%
85
0.64%
0.58%
0.06%
0.75 to 2.50%
259
1.42%
1.32%
0.54%
0.75 to 1.75%
219
1.06%
1.16%
0.53%
1.75 to 2.50%
40
1.87%
2.20%
0.52%
2.50 to 10.00%
123
5.29%
5.29%
0.85%
2.50 to 5.00%
66
3.34%
3.79%
0.49%
5.00 to 10.00%
57
8.71%
7.02%
0.84%
10.00 to 100.00%
33
17.74%
17.77%
2.80%
10.00 to 20.00%
18
12.44%
13.06%
2.11%
20.00 to 30.00%
15
23.83%
23.42%
4.17%
30.00 to 100.00%
51.64%
100% (Default)
18
100.00%
100.00%
393
RISKS AND CAPITAL ADEQUACY – PILLAR 3
Credit risk
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average default
rate (%)
Exposures
average PD (%)
Average PD
weighted by
weighted the number of
debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors which
defaulted during
the year
Central governments
and central banks
0.00 to 0.15%
739
0.01%
0.04%
0.00 to 0.10%
721
0.01%
0.03%
0.10 to 0.15%
18
0.13%
0.12%
0.15 to 0.25%
67
0.19%
0.17%
1.29%
0.25 to 0.50%
80
0.29%
0.33%
0.50 to 0.75%
14
0.69%
0.60%
0.75 to 2.50%
58
1.24%
1.19%
0.89%
0.75 to 1.75%
51
1.24%
1.07%
1.31%
1.75 to 2.50%
7
1.85%
2.08%
2.50 to 10.00%
43
7.07%
3.95%
0.82%
2.50 to 5.00%
36
3.10%
3.18%
0.82%
5.00 to 10.00%
7
7.13%
7.92%
0.94%
10.00 to 100.00%
16
3
18.75%
19.05%
17.85%
9.02%
10.00 to 20.00%
8
13.43%
13.29%
2.23%
20.00 to 30.00%
8
3
37.50%
21.81%
22.42%
28.31%
30.00 to 100.00%
100% (Default)
12
100.00%
100.00%
Institutions
0.00 to 0.15%
744
0.04%
0.07%
0.05%
0.00 to 0.10%
513
0.04%
0.05%
0.05%
0.10 to 0.15%
231
0.12%
0.11%
0.05%
0.15 to 0.25%
196
0.17%
0.18%
0.23%
0.25 to 0.50%
225
0.37%
0.35%
0.12%
0.50 to 0.75%
78
0.61%
0.66%
0.23%
0.75 to 2.50%
187
1.35%
1.43%
0.20%
0.75 to 1.75%
138
1.03%
1.20%
0.08%
1.75 to 2.50%
49
1.85%
2.07%
0.56%
2.50 to 10.00%
136
2
1.47%
5.08%
4.85%
0.70%
2.50 to 5.00%
82
1
1.22%
3.52%
3.48%
0.47%
5.00 to 10.00%
54
1
1.85%
7.30%
6.94%
0.98%
10.00 to 100.00%
24
21.05%
15.18%
3.54%
10.00 to 20.00%
22
14.51%
14.57%
2.56%
20.00 to 30.00%
2
23.21%
21.81%
6.26%
30.00 to 100.00%
100% (Default)
22
100.00%
100.00%
➤
TABLE 34: BACKTESTING OF PD ON CORPORATES PORTFOLIO (EU CR9)
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average default
rate (%)
Exposures
average PD (%)
Average PD
weighted by
weighted the number of
debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors which
defaulted during
the year
Corporates –
Specialised
Lending
0.00 to 0.15%
164
0.08%
0.09%
0.00 to 0.10%
65
0.05%
0.06%
0.10 to 0.15%
99
0.12%
0.12%
0.15 to 0.25%
154
0.18%
0.18%
0.02%
0.25 to 0.50%
529
1
0.19%
0.34%
0.35%
0.14%
0.50 to 0.75%
375
1
0.27%
0.69%
0.68%
0.53%
0.75 to 2.50%
954
1.35%
1.26%
0.46%
0.75 to 1.75%
780
1.18%
1.09%
0.33%
1.75 to 2.50%
174
2.09%
2.00%
1.01%
2.50 to 10.00%
423
4
0.95%
4.95%
4.20%
1.33%
2.50 to 5.00%
300
1
0.33%
3.40%
3.14%
1.13%
5.00 to 10.00%
123
3
2.44%
6.76%
6.77%
1.81%
10.00 to 100.00%
58
9
15.52%
17.17%
16.94%
13.41%
10.00 to 20.00%
40
4
10.00%
15.31%
14.75%
10.73%
20.00 to 30.00%
18
5
27.78%
22.97%
21.81%
23.78%
30.00 to 100.00%
100% (Default)
97
100.00%
100.00%
Corporates – SME
0.00 to 0.15%
1,637
4
0.24%
0.07%
0.12%
0.17%
0.00 to 0.10%
160
0.05%
0.06%
0.14%
0.10 to 0.15%
1,477
4
0.27%
0.12%
0.13%
0.20%
0.15 to 0.25%
9,418
12
0.13%
0.17%
0.23%
0.22%
0.25 to 0.50%
4,776
3
0.06%
0.31%
0.35%
0.31%
0.50 to 0.75%
3,095
12
0.39%
0.64%
0.65%
0.58%
0.75 to 2.50%
14,738
90
0.61%
1.48%
1.24%
1.28%
0.75 to 1.75%
12,940
75
0.58%
1.03%
1.12%
1.12%
1.75 to 2.50%
1,798
15
0.83%
2.04%
2.10%
2.01%
2.50 to 10.00%
9,712
193
1.99%
4.16%
4.54%
3.95%
2.50 to 5.00%
6,718
100
1.49%
3.27%
3.43%
3.08%
5.00 to 10.00%
2,994
93
3.11%
6.76%
7.03%
6.22%
10.00 to 100.00%
1,943
135
6.95%
17.50%
15.51%
13.66%
10.00 to 20.00%
1,257
71
5.65%
13.47%
11.75%
10.37%
20.00 to 30.00%
658
63
9.57%
22.59%
21.55%
17.34%
30.00 to 100.00%
28
1
3.57%
40.42%
41.82%
30.90%
100% (Default)
3,000
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average default
rate (%)
Exposures
average PD (%)
Average PD
weighted by
weighted the number of
debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors which
defaulted during
the year
Corporates – Other
0.00 to 0.15%
5,636
2
0.04%
0.08%
0.09%
0.26%
0.00 to 0.10%
2,611
1
0.04%
0.05%
0.05%
0.07%
0.10 to 0.15%
3,025
1
0.03%
0.12%
0.12%
0.19%
0.15 to 0.25%
11,588
7
0.06%
0.18%
0.22%
0.16%
0.25 to 0.50%
6,331
4
0.06%
0.34%
0.35%
0.20%
0.50 to 0.75%
3,738
10
0.27%
0.67%
0.65%
0.55%
0.75 to 2.50%
16,433
56
0.34%
1.39%
1.28%
0.71%
0.75 to 1.75%
14,071
44
0.31%
1.15%
1.14%
0.60%
1.75 to 2.50%
2,362
12
0.51%
2.02%
2.07%
1.28%
2.50 to 10.00%
9,363
113
1.21%
4.68%
4.58%
2.54%
2.50 to 5.00%
6,349
64
1.01%
3.48%
3.47%
1.91%
5.00 to 10.00%
3,014
49
1.63%
6.80%
6.93%
3.96%
10.00 to 100.00%
1,708
103
6.03%
16.94%
16.18%
9.80%
10.00 to 20.00%
1,178
61
5.18%
14.68%
13.05%
7.70%
20.00 to 30.00%
500
33
6.60%
22.71%
22.21%
13.47%
30.00 to 100.00%
30
9
30.00%
34.27%
38.95%
21.74%
100% (Default)
2,867
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Corporates –
Specialised
Lending
0.00 to 0.15%
138
0.08%
0.09%
0.00 to 0.10%
65
0.06%
0.06%
0.10 to 0.15%
73
0.12%
0.12%
0.15 to 0.25%
114
0.18%
0.18%
0.25 to 0.50%
522
0.36%
0.34%
0.12%
0.50 to 0.75%
278
0.69%
0.68%
0.66%
0.75 to 2.50%
945
1.39%
1.24%
0.48%
0.75 to 1.75%
786
1.20%
1.08%
0.36%
1.75 to 2.50%
159
2.09%
1.98%
1.01%
2.50 to 10.00%
339
3
0.88%
4.68%
3.99%
1.44%
2.50 to 5.00%
261
3.36%
3.18%
1.31%
5.00 to 10.00%
78
3
3.85%
6.96%
6.69%
1.91%
10.00 to 100.00%
53
10
18.87%
16.69%
17.17%
13.17%
10.00 to 20.00%
35
5
14.29%
15.70%
14.51%
10.63%
20.00 to 30.00%
18
5
27.78%
22.22%
22.35%
23.89%
30.00 to 100.00%
100% (Default)
68
100.00%
100.00%
Corporates – SME
0.00 to 0.15%
1,251
1
0.08%
0.07%
0.11%
0.16%
0.00 to 0.10%
317
1
0.32%
0.05%
0.06%
0.15%
0.10 to 0.15%
934
0.11%
0.13%
0.18%
0.15 to 0.25%
595
1
0.17%
0.18%
0.19%
0.24%
0.25 to 0.50%
8,997
17
0.19%
0.31%
0.36%
0.42%
0.50 to 0.75%
1,845
6
0.33%
0.66%
0.66%
0.72%
0.75 to 2.50%
8,955
54
0.60%
1.33%
1.26%
1.37%
0.75 to 1.75%
8,120
44
0.54%
1.02%
1.18%
1.19%
1.75 to 2.50%
835
10
1.20%
1.99%
2.08%
2.08%
2.50 to 10.00%
10,746
206
1.92%
4.40%
4.32%
3.56%
2.50 to 5.00%
8,049
107
1.33%
3.29%
3.35%
2.83%
5.00 to 10.00%
2,697
99
3.67%
7.01%
7.24%
5.72%
10.00 to 100.00%
1,312
174
13.26%
16.81%
17.36%
17.23%
10.00 to 20.00%
766
72
9.40%
12.70%
13.52%
14.36%
20.00 to 30.00%
515
101
19.61%
22.96%
21.93%
20.51%
30.00 to 100.00%
31
1
3.23%
43.14%
36.41%
30.65%
100% (Default)
3,379
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Corporates – Other
0.00 to 0.15%
5,983
2
0.03%
0.08%
0.08%
0.21%
0.00 to 0.10%
3,581
1
0.03%
0.05%
0.05%
0.08%
0.10 to 0.15%
2,402
1
0.04%
0.12%
0.12%
0.10%
0.15 to 0.25%
3,844
3
0.08%
0.18%
0.18%
0.08%
0.25 to 0.50%
8,133
7
0.09%
0.34%
0.36%
0.19%
0.50 to 0.75%
3,066
3
0.10%
0.67%
0.65%
0.51%
0.75 to 2.50%
11,639
44
0.38%
1.41%
1.37%
0.61%
0.75 to 1.75%
9,321
34
0.36%
1.12%
1.19%
0.49%
1.75 to 2.50%
2,318
10
0.43%
2.04%
2.07%
1.09%
2.50 to 10.00%
10,130
100
0.99%
4.83%
4.58%
2.30%
2.50 to 5.00%
6,680
42
0.63%
3.43%
3.41%
1.68%
5.00 to 10.00%
3,450
58
1.68%
6.87%
6.85%
3.61%
10.00 to 100.00%
1,242
93
7.49%
15.68%
17.59%
12.30%
10.00 to 20.00%
911
54
5.93%
13.96%
14.56%
10.43%
20.00 to 30.00%
257
24
9.34%
22.46%
22.58%
17.05%
30.00 to 100.00%
74
15
20.27%
42.45%
37.54%
18.73%
100% (Default)
3,535
100.00%
100.00%
➤
TABLE 35: BACKTESTING OF PD ON RETAIL SECURED BY PROPERTY PORTFOLIO (EU CR9)
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Retail – Secured by
immovable property
non-SME
0.00 to 0.15%
503,520
430
0.09%
0.10%
0.08%
0.06%
0.00 to 0.10%
218,757
60
0.03%
0.06%
0.05%
0.06%
0.10 to 0.15%
284,763
370
0.13%
0.11%
0.11%
0.11%
0.15 to 0.25%
83,030
106
0.13%
0.18%
0.19%
0.13%
0.25 to 0.50%
295,890
686
0.23%
0.37%
0.36%
0.30%
0.50 to 0.75%
195,767
889
0.45%
0.59%
0.59%
0.33%
0.75 to 2.50%
110,626
837
0.76%
1.48%
1.46%
0.96%
0.75 to 1.75%
81,291
475
0.58%
1.28%
1.27%
0.84%
1.75 to 2.50%
29,335
362
1.23%
2.00%
1.96%
1.44%
2.50 to 10.00%
48,747
977
2.00%
4.20%
4.50%
3.60%
2.50 to 5.00%
33,125
710
2.14%
3.46%
3.46%
2.44%
5.00 to 10.00%
15,622
267
1.71%
6.52%
6.72%
6.16%
10.00 to 100.00%
20,529
2,275
11.08%
21.94%
19.99%
20.88%
10.00 to 20.00%
14,993
1,064
7.10%
13.13%
13.84%
13.41%
20.00 to 30.00%
2,976
410
13.78%
26.01%
24.18%
25.73%
30.00 to 100.00%
2,560
801
31.29%
44.99%
51.15%
40.97%
100% (Default)
30,727
100.00%
100.00%
Retail – Secured by
immovable property SME
0.00 to 0.15%
2,670
1
0.04%
0.09%
0.08%
0.13%
0.00 to 0.10%
1,834
0.07%
0.06%
0.09%
0.10 to 0.15%
836
1
0.12%
0.12%
0.13%
0.20%
0.15 to 0.25%
5,642
13
0.23%
0.18%
0.22%
0.23%
0.25 to 0.50%
8,226
20
0.24%
0.36%
0.36%
0.39%
0.50 to 0.75%
11,657
76
0.65%
0.59%
0.57%
0.45%
0.75 to 2.50%
11,400
70
0.61%
1.41%
1.43%
0.77%
0.75 to 1.75%
8,763
44
0.50%
1.21%
1.22%
0.68%
1.75 to 2.50%
2,637
26
0.99%
2.05%
2.11%
1.02%
2.50 to 10.00%
9,642
142
1.47%
4.61%
4.66%
2.04%
2.50 to 5.00%
6,279
73
1.16%
3.47%
3.75%
1.46%
5.00 to 10.00%
3,363
69
2.05%
6.33%
6.36%
3.00%
10.00 to 100.00%
2,141
189
8.83%
18.21%
18.24%
14.49%
10.00 to 20.00%
1,378
77
5.59%
13.35%
13.18%
9.17%
20.00 to 30.00%
577
65
11.27%
23.99%
23.18%
18.73%
30.00 to 100.00%
186
47
25.27%
38.88%
40.44%
31.76%
100% (Default)
3,050
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
which
defaulted
during the
year
Retail – Secured by
immovable property
non-SME
0.00 to 0.15%
493,375
371
0.08%
0.10%
0.08%
0.05%
0.00 to 0.10%
207,309
51
0.02%
0.06%
0.05%
0.07%
0.10 to 0.15%
286,066
320
0.11%
0.11%
0.11%
0.10%
0.15 to 0.25%
81,767
87
0.11%
0.18%
0.19%
0.13%
0.25 to 0.50%
302,721
993
0.33%
0.37%
0.37%
0.31%
0.50 to 0.75%
164,121
685
0.42%
0.59%
0.60%
0.32%
0.75 to 2.50%
98,023
815
0.83%
1.47%
1.45%
0.99%
0.75 to 1.75%
71,575
557
0.78%
1.26%
1.27%
0.86%
1.75 to 2.50%
26,448
258
0.98%
1.99%
1.95%
1.49%
2.50 to 10.00%
41,490
939
2.26%
4.28%
4.45%
3.80%
2.50 to 5.00%
29,867
616
2.06%
3.41%
3.43%
2.51%
5.00 to 10.00%
11,623
323
2.78%
6.77%
7.08%
6.79%
10.00 to 100.00%
18,460
2,124
11.51%
22.41%
20.37%
22.28%
10.00 to 20.00%
12,825
939
7.32%
13.28%
14.12%
14.07%
20.00 to 30.00%
3,432
548
15.97%
25.76%
24.24%
27.71%
30.00 to 100.00%
2,203
637
28.92%
45.43%
50.71%
41.59%
100% (Default)
35,325
100.00%
100.00%
Retail – Secured by
immovable property SME
0.00 to 0.15%
2,409
1
0.04%
0.09%
0.08%
0.12%
0.00 to 0.10%
1,693
1
0.06%
0.06%
0.06%
0.10%
0.10 to 0.15%
716
0.00%
0.12%
0.13%
0.16%
0.15 to 0.25%
2,042
4
0.20%
0.18%
0.19%
0.22%
0.25 to 0.50%
16,064
65
0.40%
0.39%
0.40%
0.41%
0.50 to 0.75%
4,815
13
0.27%
0.66%
0.59%
0.32%
0.75 to 2.50%
11,907
90
0.76%
1.41%
1.48%
0.72%
0.75 to 1.75%
8,732
67
0.77%
1.20%
1.26%
0.68%
1.75 to 2.50%
3,175
23
0.72%
2.03%
2.07%
0.85%
2.50 to 10.00%
14,130
206
1.46%
4.73%
4.93%
2.02%
2.50 to 5.00%
7,554
83
1.10%
3.48%
3.67%
1.50%
5.00 to 10.00%
6,576
123
1.87%
6.69%
6.38%
2.82%
10.00 to 100.00%
2,371
235
9.91%
19.06%
19.25%
14.09%
10.00 to 20.00%
1,486
94
6.33%
13.63%
13.97%
8.93%
20.00 to 30.00%
591
87
14.72%
23.64%
23.59%
19.88%
30.00 to 100.00%
294
54
18.37%
41.69%
37.24%
26.15%
100% (Default)
3,813
100.00%
100.00%
➤
TABLE 36: BACKTESTING OF PD ON OTHER RETAIL PORTFOLIO (EU CR9)
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Retail – Qualifying
revolving
0.00 to 0.15%
1,787,470
3,292
0.18%
0.09%
0.08%
0.09%
0.00 to 0.10%
849,072
515
0.06%
0.03%
0.03%
0.06%
0.10 to 0.15%
938,398
2,777
0.30%
0.12%
0.13%
0.17%
0.15 to 0.25%
57,094
142
0.25%
0.17%
0.18%
0.25%
0.25 to 0.50%
296,988
1,926
0.65%
0.38%
0.34%
0.47%
0.50 to 0.75%
295,878
2,285
0.77%
0.61%
0.60%
0.63%
0.75 to 2.50%
316,764
7,285
2.30%
1.35%
1.24%
1.51%
0.75 to 1.75%
301,731
6,888
2.28%
1.29%
1.20%
1.46%
1.75 to 2.50%
15,033
397
2.64%
1.94%
2.05%
2.08%
2.50 to 10.00%
195,573
16,194
8.28%
4.97%
5.01%
5.23%
2.50 to 5.00%
106,856
5,664
5.30%
3.47%
3.36%
3.45%
5.00 to 10.00%
88,717
10,530
11.87%
7.20%
7.01%
7.01%
10.00 to 100.00%
56,430
10,144
17.98%
22.05%
18.93%
22.03%
10.00 to 20.00%
39,979
3,869
9.68%
12.92%
12.34%
12.29%
20.00 to 30.00%
8,016
2,298
28.67%
24.12%
28.33%
25.72%
30.00 to 100.00%
8,435
3,977
47.15%
48.44%
41.22%
40.48%
100% (Default)
162,034
100.00%
100.00%
Retail – Other SME
0.00 to 0.15%
110,444
421
0.38%
0.09%
0.10%
0.15%
0.00 to 0.10%
45,341
72
0.16%
0.07%
0.07%
0.08%
0.10 to 0.15%
65,103
349
0.54%
0.12%
0.12%
0.18%
0.15 to 0.25%
92,257
404
0.44%
0.18%
0.21%
0.25%
0.25 to 0.50%
74,393
489
0.66%
0.33%
0.35%
0.43%
0.50 to 0.75%
122,861
1,550
1.26%
0.60%
0.60%
0.69%
0.75 to 2.50%
208,002
5,354
2.57%
1.50%
1.57%
2.29%
0.75 to 1.75%
150,885
3,305
2.19%
1.14%
1.36%
1.32%
1.75 to 2.50%
57,117
2,049
3.59%
2.07%
2.11%
5.08%
2.50 to 10.00%
124,230
7,117
5.73%
4.92%
4.97%
5.49%
2.50 to 5.00%
74,171
3,985
5.37%
3.68%
3.86%
4.58%
5.00 to 10.00%
50,059
3,132
6.26%
5.83%
6.61%
6.86%
10.00 to 100.00%
45,251
7,851
17.35%
17.44%
14.23%
16.82%
10.00 to 20.00%
38,262
5,846
15.28%
12.60%
11.47%
12.06%
20.00 to 30.00%
4,423
885
20.01%
24.24%
23.68%
25.83%
30.00 to 100.00%
2,566
1,120
43.65%
41.73%
39.14%
41.33%
100% (Default)
102,019
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2022
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Retail – Other non-SME
0.00 to 0.15%
572,651
357
0.06%
0.10%
0.06%
0.06%
0.00 to 0.10%
433,424
133
0.03%
0.05%
0.04%
0.05%
0.10 to 0.15%
139,227
224
0.16%
0.12%
0.12%
0.16%
0.15 to 0.25%
144,330
393
0.27%
0.19%
0.20%
0.33%
0.25 to 0.50%
365,100
1,653
0.45%
0.38%
0.37%
0.50%
0.50 to 0.75%
136,848
764
0.56%
0.61%
0.64%
0.54%
0.75 to 2.50%
443,439
4,418
1.00%
1.39%
1.30%
1.35%
0.75 to 1.75%
398,325
3,328
0.84%
1.20%
1.23%
1.25%
1.75 to 2.50%
45,114
1,090
2.42%
2.00%
1.89%
3.28%
2.50 to 10.00%
115,346
5,805
5.03%
4.49%
4.97%
6.01%
2.50 to 5.00%
63,102
2,263
3.59%
3.52%
3.67%
3.88%
5.00 to 10.00%
52,244
3,542
6.78%
7.34%
6.55%
9.00%
10.00 to 100.00%
36,149
5,563
15.39%
23.12%
18.94%
20.40%
10.00 to 20.00%
25,797
2,923
11.33%
13.71%
13.54%
15.21%
20.00 to 30.00%
6,573
1,013
15.41%
24.37%
25.01%
22.09%
30.00 to 100.00%
3,779
1,627
43.05%
45.64%
45.24%
39.93%
100% (Default)
188,753
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Retail – Qualifying
revolving
0.00 to 0.15%
1,790,722
2,891
0.16%
0.09%
0.08%
0.08%
0.00 to 0.10%
840,717
426
0.05%
0.03%
0.03%
0.06%
0.10 to 0.15%
950,005
2,465
0.26%
0.12%
0.13%
0.16%
0.15 to 0.25%
67,866
159
0.23%
0.17%
0.18%
0.25%
0.25 to 0.50%
305,277
1,920
0.63%
0.39%
0.34%
0.45%
0.50 to 0.75%
253,240
2,063
0.81%
0.62%
0.59%
0.62%
0.75 to 2.50%
314,801
6,692
2.13%
1.35%
1.24%
1.43%
0.75 to 1.75%
300,721
6,318
2.10%
1.29%
1.20%
1.37%
1.75 to 2.50%
14,080
374
2.66%
1.94%
1.96%
2.02%
2.50 to 10.00%
190,523
14,151
7.43%
4.95%
4.89%
4.92%
2.50 to 5.00%
110,190
5,117
4.64%
3.48%
3.34%
3.26%
5.00 to 10.00%
80,333
9,034
11.25%
7.21%
7.02%
6.53%
10.00 to 100.00%
63,196
9,266
14.66%
21.45%
17.48%
22.53%
10.00 to 20.00%
48,239
4,001
8.29%
12.92%
12.16%
12.64%
20.00 to 30.00%
7,616
1,992
26.16%
24.27%
28.33%
25.42%
30.00 to 100.00%
7,341
3,273
44.59%
47.77%
41.21%
39.82%
100% (Default)
166,145
100.00%
100.00%
Retail – Other SME
0.00 to 0.15%
63,471
77
0.12%
0.09%
0.08%
0.09%
0.00 to 0.10%
47,114
54
0.11%
0.06%
0.07%
0.07%
0.10 to 0.15%
16,357
23
0.14%
0.12%
0.13%
0.12%
0.15 to 0.25%
115,421
502
0.43%
0.18%
0.19%
0.18%
0.25 to 0.50%
106,183
589
0.55%
0.37%
0.38%
0.39%
0.50 to 0.75%
70,553
538
0.76%
0.63%
0.58%
0.59%
0.75 to 2.50%
162,966
3,770
2.31%
1.54%
1.46%
2.43%
0.75 to 1.75%
120,061
1,829
1.52%
1.15%
1.25%
1.22%
1.75 to 2.50%
42,905
1,941
4.52%
2.08%
2.06%
5.30%
2.50 to 10.00%
180,087
7,845
4.36%
5.07%
4.86%
5.33%
2.50 to 5.00%
115,977
3,935
3.39%
3.60%
3.55%
4.34%
5.00 to 10.00%
64,110
3,910
6.10%
6.55%
7.24%
6.91%
10.00 to 100.00%
22,305
3,976
17.83%
18.73%
20.50%
22.00%
10.00 to 20.00%
13,922
1,955
14.04%
12.87%
14.92%
15.09%
20.00 to 30.00%
4,967
863
17.37%
24.22%
24.26%
27.07%
30.00 to 100.00%
3,416
1,158
33.90%
43.02%
37.77%
42.27%
100% (Default)
121,222
100.00%
100.00%
a
b
c
d
e
f
g
h
Portfolio
PD scale
2021
Number of obligors
at the end of the year
Observed
average
default rate
(%)
average PD
Exposures Average PD
weighted weighted by
the number of
(%) debtors (%)
Average
historical
annual default
rate (%)
of which:
number of
obligors
which
defaulted
during the
year
Retail – Other non-SME
0.00 to 0.15%
672,077
775
0.12%
0.10%
0.06%
0.10%
0.00 to 0.10%
508,777
395
0.08%
0.05%
0.04%
0.07%
0.10 to 0.15%
163,300
380
0.23%
0.12%
0.12%
0.27%
0.15 to 0.25%
188,902
973
0.52%
0.19%
0.20%
0.39%
0.25 to 0.50%
437,832
2,667
0.61%
0.38%
0.37%
0.54%
0.50 to 0.75%
150,840
969
0.64%
0.60%
0.64%
0.63%
0.75 to 2.50%
461,013
5,901
1.28%
1.37%
1.30%
1.46%
0.75 to 1.75%
410,554
4,546
1.11%
1.20%
1.23%
1.32%
1.75 to 2.50%
50,459
1,355
2.69%
2.00%
1.90%
3.40%
2.50 to 10.00%
121,986
6,866
5.63%
4.60%
5.16%
6.33%
2.50 to 5.00%
63,458
2,518
3.97%
3.54%
3.64%
4.00%
5.00 to 10.00%
58,528
4,348
7.43%
7.39%
6.81%
9.52%
10.00 to 100.00%
44,003
6,718
15.27%
22.41%
19.62%
21.57%
10.00 to 20.00%
31,628
3,719
11.76%
13.45%
13.90%
15.59%
20.00 to 30.00%
7,361
1,141
15.50%
24.38%
24.52%
23.41%
30.00 to 100.00%
5,014
1,858
37.06%
46.30%
48.51%
39.76%
100% (Default)
231,030
100.00%
100.00%
➤
TABLE 37: BACKTESTING OF LGD
Portfolio
2022
average of the
estimated LGD
Arithmetical Historic arithmetic
average of the
observed LGD
Sovereigns and public sector entities
31%
18%
Institutions(*)
32%
31%
Large corporates(**)
39%
22%
Individuals
58%
37%
Professionals and SME retail
48%
34%
SME corporate
51%
42%
(*) Including the Banks, Insurance and Regulated funds & Agency arrangements portfolios.
(**) Including the Large corporates, Project financing and Energy and commodity financing portfolios.
Portfolio
2021
average of the
estimated LGD
Arithmetical Historic arithmetic
average of the
observed LGD
Sovereigns and public sector entities
33%
6%
Institutions(*)
33%
32%
Large corporates(**)
40%
27%
Individuals
60%
36%
Professionals and SME retail
46%
35%
SME corporate
36%
30%
(*) Including the Banks, Insurance and Regulated funds & Agency arrangements portfolios.
(**) Including the Large corporates, Project financing and Energy and commodity financing portfolios.
INTERNAL RATING SYSTEM – SOVEREIGN,
FINANCIAL INSTITUTION, CORPORATE
AND SPECIALISED FINANCING PORTFOLIOS
The IRBA for sovereigns, financial institutions, corporates and specialised
financing portfolios is based on a consistent rating procedure in which
RISK has the final say regarding the rating assigned to the counterparty
and the Global Recovery Rate (GRR) assigned to transactions. Credit
Conversion Factors (CCF) of off-balance sheet transactions are
automatically assigned according to counterparty and transaction type.
The generic process for assigning a rating to each segment is as follows:
■ for large corporates and specialised financing, an analysis is carried out
by the unit proposing a rating and a Global Recovery Rate to the Credit
Committee, using the rating models and tools developed by RISK. The
rating and Global Recovery Rate are validated or revised by the RISK
representative during the Credit Committee meeting. The committee
decides whether or not to grant or renew a loan and, if applicable,
reviews the counterparty rating at least once a year;
■ for financial institutions, the analysis is carried out by analysts in the
RISK Function. Counterparty ratings and Global Recovery Rates are
determined during review committees by geographical area to ensure
comparability between similar banks;
■ for sovereigns, the ratings are proposed by the Economic Research
Department and approved at Country ratings Committee meetings
which take place generally three times per yea r. T he committee
comprises members of Executive Management, representatives of
Economic Studies and the RISK function;
■ for small and medium-sized companies (other than retail customers),
a score is assigned by the RISK analysts.
For each of these sub-portfolios, the risk parameters are measured using
a model certified and validated by the RISK teams, based mainly on an
analysis of the Bank's historical data. The model is supported as far
as possible by tools shared Group-wide to ensure consistent use. The
method is supplemented by expert judgement provided it can be justified.
Howeve r, t he expert judgement remains irreplaceable, with each of the
scores and each of the GTRs relying on the judgement, which may deviate,
subject to justification, from the strict application of the models.
The method for assessing risk parameters is based on a set of common
principles, and particularly the "two pairs of eyes" principle which
requires at least two people, at least one of whom has no commercial
involvement, to give their opinion on each counterparty rating and each
transaction Global Recovery Rate.
The same definition of default is used consistently throughout the Group
for each asset class, in accordance with regulations.
The chart hereafter presents a breakdown by PD range of non-defaulted
loans and commitments for the asset classes: central governments
and central institutions, corporates for all the Group's business lines,
measured using the internal ratings-based approach (see T a ble 27:
Indicative mapping of internal counterparty rating with agency rating
scale and average expected PD).
This exposure represented EUR 1,139 billion at 31 December 2023
compared with EUR 1,165 billion at 31 December 2022.
The majority of commitments are towards borrowers rated as good or
excellent quality, reflecting the heavy weighting of large multinational
groups and financial institutions in the Bank's client base. A significant
proportion of commitments to non-Investment Grade borrowers are
highly structured or secured by high quality guarantees implying a
high recovery rate in the event of default. They include export financing
covered by export credit insurance written by international agencies,
project finance, structured finance and transaction financing.
➤
FIGURE 8: IRBA EXPOSURE BY PD RANGE – SOVEREIGN, FINANCIAL INSTITUTION, CORPORATE AND SPECIALISED
FINANCING PORTFOLIOS
% of exposure
PD range
(%)
0.00 to < 0.15
0.15 to < 0.25
0.25 to < 0.50
0.5 to < 0.75
0.75 to < 2.50
2.5 to < 10
10 to < 100
31 December 2023
31 December 2022
0%
10%
20%
30%
40%
50%
60%
70%
SOVEREIGN, FINANCIAL INSTITUTION,
CORPORATE AND SPECIALISED FINANCING
PORTFOLIOS
The following table presents the breakdown by PD range of loans and
commitments for the asset classes: Central governments and central
banks, Institutions and Corporates for all the Group's business lines using
the advanced IRB Approach. This exposure represented EUR 1,150 billion
at 31 December 2023, including EUR 1,139 billion of non-defaulted loans
and EUR 11 billion of defaulted loans, compared with EUR 1,175 billion
at 31 December 2022, including EUR 1,165 billion of non-defaulted loans
and EUR 10 billion of defaulted loans.
The table also gives the average rates of the main risk parameters in
the Basel framework:
■ average probability of default weighted by exposure at default:
average PD(1);
■ weighted average of Credit Conversion Factor (CCF) for off-balance
sheet items: average CCF(2);
■ average Loss Given Default weighted by exposure at default: average
LGD(3);
■ average of residual maturities (in years) weighted by the exposure at
default: average maturity.
The average risk weight (average RW) is defined as the ratio between
risk-weighted assets and the exposure at default (EAD), resulting from
the parameters defined above.
The column "Estimated loss amount" presents the expected loss at a
one-year horizon.
(1) Average PD: "Probability of Default" – average probability of default weighted by exposure at default.
(2) Average CCF: "Credit Conversion Factor" – ratio of exposure at default to off-balance sheet exposure.
(3) Average LGD: "Loss Given Default" – average Loss Given Default weighted by exposure at default.
➤
TABLE 38: IRBA EXPOSURE BY PD SCALE AND ASSET CLASS – CENTRAL BANK, CENTRAL GOVERNMENT
AND INSTITUTIONS PORTFOLIO (EU CR6)
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance balance
sheet sheet
expo- exposure
Off-
sure before CCF CCF
Weighted
average
EAD
Weighted
average Number of average
PD obligors
Weighted Weighted
LGD maturity assets(*) weight losses(**)
average weighted
Risk-
Average expected
Amount
Value
adjust-
of ments and
provi-
sions(**)
Central
governments
and central
banks
0.00 to < 0.15%
422,378
875
36%
423,540
0.01%
100 to 1 000
2%
2
1,774
0%
2
0.00 to < 0.10%
418,230
875
36%
419,392
0.01%
100 to 1 000
1%
2
850
0%
1
0.10 to < 0.15%
4,148
0
0%
4,148
0.13%
0 to 100
19%
3
924
22%
1
0.15 to < 0.25%
1,304
0
3%
1,304
0.19%
0 to 100
11%
2
177
14%
0
0.25 to < 0.50%
2,921
614
55%
3,259
0.29%
0 to 100
21%
2
913
28%
2
0.50 to < 0.75%
1,127
757
55%
1,544
0.69%
0 to 100
17%
2
579
38%
2
0.75 to < 2.50%
512
361
55%
710
1.30%
0 to 100
11%
3
200
28%
1
0.75 to < 1.75%
501
361
55%
699
1.29%
0 to 100
11%
3
191
27%
1
1.75 to < 2.5%
11
0
23%
11
1.88%
0 to 100
33%
1
9
79%
0
2.50 to < 10%
456
263
55%
601
8.33%
0 to 100
7%
4
252
42%
4
2.5 to < 5%
3
2
55%
4
3.07%
0 to 100
2%
2
0
8%
0
5 to < 10%
453
261
55%
597
8.36%
0 to 100
7%
4
252
42%
4
10 to < 100%
556
83
55%
604
19.48%
0 to 100
12%
2
433
72%
15
10 to < 20%
152
83
55%
199
14.76%
0 to 100
3%
5
31
16%
1
20 to < 30%
405
0
57%
405
21.81%
0 to 100
16%
1
402
99%
14
30 to < 100%
100% (Default)
86
47
55%
113
100.00%
0 to 100
14%
5
32
28%
15
SUB-TOTAL
429,341
3,001
50%
431,674
0.09%
2%
2
4,360
1%
40
(29)
Institutions
0.00 to < 0.15%
23,355
12,145
44%
28,926
0.04% 1,000 to 10,000
25%
3
4,589
16%
3
0.00 to < 0.10%
22,421
11,021
44%
27,453
0.04% 1,000 to 10,000
25%
3
4,197
15%
3
0.10 to < 0.15%
934
1,124
46%
1,472
0.12%
100 to 1,000
32%
2
392
27%
1
0.15 to < 0.25%
1,430
1,171
45%
1,961
0.18%
100 to 1,000
39%
2
647
33%
1
0.25 to < 0.50%
1,803
1,747
68%
2,989
0.32%
100 to 1,000
18%
2
639
21%
2
0.50 to < 0.75%
361
184
36%
432
0.64%
100 to 1,000
19%
3
148
34%
1
0.75 to < 2.50%
1,789
578
34%
1,993
1.42%
100 to 1,000
28%
2
1,165
58%
8
0.75 to < 1.75%
989
240
42%
1,090
1.06%
100 to 1,000
27%
2
502
46%
3
1.75 to < 2.5%
800
338
29%
904
1.87%
100 to 1,000
29%
2
663
73%
5
2.50 to < 10%
489
363
43%
644
5.29%
100 to 1,000
36%
2
460
71%
9
2.5 to < 5%
318
239
38%
409
3.34%
100 to 1,000
44%
2
377
92%
6
5 to < 10%
171
124
53%
235
8.71%
100 to 1,000
22%
4
83
35%
4
10 to < 100%
44
144
51%
117
17.74%
100 to 1,000
47%
2
313
267%
10
10 to < 20%
14
93
53%
63
12.44%
100 to 1,000
40%
3
133
212%
3
20 to < 30%
30
51
48%
55
23.83%
100 to 1,000
54%
1
180
331%
7
30 to < 100%
100% (Default)
181
0
20%
181
100.00%
0 to 100
97%
3
2
1%
168
SUB-TOTAL
29,452
16,331
47%
37,244
0.79%
25%
3
7,963
21%
203
(258)
TOTAL
458,792
19,332
468,918
12,323
3%
243
(287)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of financial assets measured at amortised
cost and debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance balance
sheet sheet
expo- exposure
Off-
sure before CCF CCF
Weighted
average
EAD
Weighted
average Number of average
PD obligors
Weighted Weighted
LGD maturity assets(*) weight losses(**)
average weighted
Risk-
Average
Amount Value
of adjust-
ted
expec- ments and
provi-
sions(**)
Central
governments
and central
banks
0.00 to < 0.15%
442,627
2,846
49%
444,432
0.01%
100 to 1,000
2%
2
1,836
0%
2
0.00 to < 0.10%
438,412
2,846
49%
440,218
0.01%
100 to 1,000
1%
2
871
0%
1
0.10 to < 0.15%
4,214
0
0%
4,214
0.13%
0 to 100
19%
4
965
23%
1
0.15 to < 0.25%
1,140
0
22%
1,140
0.19%
0 to 100
13%
3
188
17%
0
0.25 to < 0.50%
3,103
414
55%
3,330
0.29%
0 to 100
26%
2
1,025
31%
2
0.50 to < 0.75%
961
751
55%
1,374
0.69%
0 to 100
16%
2
482
35%
2
0.75 to < 2.50%
596
480
55%
982
1.24%
0 to 100
13%
3
278
28%
1
0.75 to < 1.75%
592
480
55%
978
1.24%
0 to 100
13%
3
275
28%
1
1.75 to < 2.5%
4
0
0%
4
1.85%
0 to 100
30%
1
3
67%
0
2.50 to < 10%
441
593
55%
767
7.07%
0 to 100
6%
4
237
31%
3
2.5 to < 5%
13
0
27%
13
3.10%
0 to 100
6%
1
2
17%
0
5 to < 10%
428
593
55%
754
7.13%
0 to 100
6%
4
234
31%
3
10 to < 100%
674
84
55%
720
19.05%
0 to 100
13%
2
537
75%
20
10 to < 20%
192
84
55%
237
13.43%
0 to 100
3%
4
47
20%
1
20 to < 30%
482
0
55%
482
21.81%
0 to 100
18%
1
490
102%
19
30 to < 100%
100% (Default)
52
13
55%
59
100.00%
0 to 100
12%
3
38
64%
5
SUB-TOTAL
449,594
5,181
52%
452,804
0.08%
2%
2
4,620
1%
36
(22)
Institutions
0.00 to < 0.15%
24,436
11,627
47%
30,181
0.04%
1,000 to
10,000
28%
2
4,946
16%
4
0.00 to < 0.10%
23,189
10,741
47%
28,515
0.04%
1,000 to
10,000
27%
2
4,547
16%
3
0.10 to < 0.15%
1,247
886
43%
1,666
0.12%
100 to 1,000
32%
2
399
24%
1
0.15 to < 0.25%
2,146
813
41%
2,482
0.17%
100 to 1,000
46%
2
771
31%
2
0.25 to < 0.50%
1,896
812
46%
2,268
0.37%
100 to 1,000
23%
1
682
30%
2
0.50 to < 0.75%
381
254
43%
497
0.61%
100 to 1,000
18%
3
163
33%
1
0.75 to < 2.50%
2,044
566
38%
2,266
1.35%
100 to 1,000
26%
2
1,179
52%
8
0.75 to < 1.75%
1,256
267
42%
1,369
1.03%
100 to 1,000
28%
1
672
49%
4
1.75 to < 2.5%
787
300
35%
896
1.85% 100 to 1,000
23%
3
506
56%
4
2.50 to < 10%
320
327
39%
452
5.08%
100 to 1,000
25%
3
281
62%
5
2.5 to < 5%
208
156
35%
265
3.52%
100 to 1,000
34%
2
190
72%
3
5 to < 10%
112
171
43%
187
7.30%
100 to 1,000
13%
4
92
49%
2
10 to < 100%
85
65
37%
109
21.05%
100 to 1,000
48%
1
255
233%
11
10 to < 20%
18
27
32%
27
14.51%
100 to 1,000
43%
2
63
233%
2
20 to < 30%
67
38
40%
82
23.21%
100 to 1,000
50%
1
192
233%
10
30 to < 100%
100% (Default)
187
0
26%
186
100.00%
0 to 100
94%
3
3
1%
177
SUB-TOTAL
31,495
14,465
46%
38,441
0.76%
28%
2
8,280
22%
209
(286)
TOTAL
481,089
19,646
491,246
12,900
3%
245
(308)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of financial assets measured at amortised
cost and debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
➤
TABLE 39: IRBA EXPOSURE BY PD SCALE AND ASSET CLASS CORPORATE PORTOFOLIOS (EU CR6)
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance
sheet
sheet
expo-
Off-
balance
exposure
sure before CCF
Weighted
average
CCF
EAD
Weighted
average
PD
Number of
obligors
Weighted Weighted
average average
LGD maturity assets(*) weight losses(**)
Risk-
weighted Average
Amount
of anti-
cipated
Value
adjust-
ments and
provi-
sions(**)
Corporates –
Specialised
financing
0.00 to < 0.15%
5,732
3,944
50%
7,777
0.08%
100 to 1,000
12%
4
814
10%
1
0.00 to < 0.10%
3,276
2,534
49%
4,606
0.05%
100 to 1,000
13%
4
516
11%
0
0.10 to < 0.15%
2,456
1,411
51%
3,171
0.12%
100 to 1,000
9%
4
299
9%
0
0.15 to < 0.25%
6,366
1,535
52%
7,163
0.18%
100 to 1,000
12%
4
1,230
17%
2
0.25 to < 0.50%
14,129
5,235
53%
16,941
0.34%
1,000 to 10,000
15%
4
4,330
26%
9
0.50 to < 0.75%
5,950
2,453
63%
7,508
0.69%
100 to 1,000
17%
3
3,217
43%
9
0.75 to < 2.50%
13,006
6,035
57%
16,438
1.35%
1,000 to 10,000
14%
3
7,234
44%
30
0.75 to < 1.75%
10,365
5,241
57%
13,339
1.18%
1,000 to 10,000
14%
3
5,880
44%
21
1.75 to < 2.5%
2,642
793
57%
3,100
2.09%
100 to 1,000
13%
3
1,354
44%
9
2.50 to < 10%
5,874
2,818
54%
7,405
4.95%
1,000 to 10,000
12%
3
3,404
46%
40
2.5 to < 5%
3,219
1,432
52%
3,971
3.40%
100 to 1,000
13%
3
1,834
46%
17
5 to < 10%
2,655
1,386
56%
3,434
6.76%
100 to 1,000
10%
4
1,571
46%
22
10 to < 100%
2,740
2,399
54%
4,036
17.17%
100 to 1,000
8%
4
1,537
38%
60
10 to < 20%
1,843
2,234
54%
3,052
15.31%
100 to 1,000
5%
4
949
31%
25
20 to < 30%
896
165
53%
984
22.97%
0 to 100
15%
2
588
60%
35
30 to < 100%
100% (Default)
1,622
182
67%
1,769
100.00%
100 to 1,000
46%
3
1,151
65%
823
SUB-TOTAL
55,418
24,601
55%
69,038
4.61%
13%
3
22,918
33%
972
(954)
SME
corporates
0.00 to < 0.15%
1,608
2,276
48%
2,703
0.07%
1,000 to 10,000
37%
3
867
32%
1
0.00 to < 0.10%
915
1,863
48%
1,818
0.05%
100 to 1,000
38%
3
515
28%
0
0.10 to < 0.15%
693
413
46%
885
0.12%
100 to 1,000
35%
3
352
40%
0
0.15 to < 0.25%
1,515
786
35%
1,807
0.17%
1,000 to 10,000
25%
2
445
25%
1
0.25 to < 0.50%
6,616
1,879
38%
7,362
0.31%
20,000 to 30,000
26%
3
2,444
33%
6
0.50 to < 0.75%
2,020
477
43%
2,233
0.64%
1,000 to 10,000
22%
4
964
43%
3
0.75 to < 2.50%
13,157
2,333
45%
14,236
1.48%
30,000 to 40,000
27%
3
9,463
66%
55
0.75 to < 1.75%
7,069
1,757
44%
7,864
1.03%
10,000 to 20,000
29%
3
4,307
55%
23
1.75 to < 2.5%
6,088
575
48%
6,371
2.04%
10,000 to 20,000
25%
2
5,156
81%
32
2.50 to < 10%
4,538
8,283
37%
7,607
4.16%
10,000 to 20,000
32%
3
5,106
67%
101
2.5 to < 5%
2,885
7,726
36%
5,671
3.27%
1,000 to 10,000
34%
3
3,360
59%
64
5 to < 10%
1,654
557
48%
1,936
6.76%
1,000 to 10,000
27%
3
1,745
90%
37
10 to < 100%
1,375
131
45%
1,445
17.50%
1,000 to 10,000
27%
3
1,685
117%
66
10 to < 20%
861
66
45%
894
13.47%
1,000 to 10,000
28%
3
1,056
118%
32
20 to < 30%
470
63
45%
505
22.59%
1,000 to 10,000
25%
2
569
113%
29
30 to < 100%
44
1
82%
45
40.42%
100 to 1,000
26%
4
60
132%
5
100% (Default)
1,986
117
38%
2,033
100.00%
1,000 to 10,000
50%
2
995
49%
977
SUB-TOTAL
32,815
16,280
40%
39,427
7.24%
28%
3
21,967
56%
1,209
(1,176)
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance
sheet
sheet
expo-
Off-
balance
exposure
sure before CCF
Weighted
average
CCF
EAD
Weighted
average
PD
Number of
obligors
Weighted Weighted
average average
LGD maturity assets(*) weight losses(**)
Risk-
weighted Average
Amount
of anti-
cipated
Value
adjust-
ments and
provi-
sions(**)
Other
corporates
0.00 to < 0.15%
92,209
188,099
47%
181,047
0.08%
10,000 to 20,000
33%
2
41,916
23%
46
0.00 to < 0.10%
45,780
149,087
48%
117,093
0.05%
1,000 to 10,000
32%
2
23,109
20%
20
0.10 to < 0.15%
46,429
39,012
45%
63,954
0.12%
1,000 to 10,000
34%
2
18,807
29%
25
0.15 to < 0.25%
26,881
33,494
43%
41,366
0.18%
10,000 to
20,000
35%
2
16,388
40%
27
0.25 to < 0.50%
38,033
36,937
41%
53,582
0.34%
30,000 to
40,000
34%
2
27,272
51%
61
0.50 to < 0.75%
10,323
9,030
40%
14,099
0.67%
1,000 to 10,000
28%
3
8,423
60%
26
0.75 to < 2.50%
32,864
23,352
42%
43,235
1.39%
30,000 to
40,000
27%
2
29,105
67%
160
0.75 to < 1.75%
23,249
17,809
43%
31,306
1.15%
20,000 to
30,000
27%
2
19,410
62%
97
1.75 to < 2.5%
9,615
5,543
39%
11,929
2.02%
1,000 to 10,000
26%
2
9,695
81%
64
2.50 to < 10%
20,748
14,362
45%
27,024
4.68%
20,000 to
30,000
30%
3
36,320
134%
213
2.5 to < 5%
13,623
8,943
42%
17,248
3.48%
10,000 to
20,000
30%
2
25,124
146%
185
5 to < 10%
7,125
5,419
48%
9,777
6.80%
1,000 to 10,000
30%
3
11,196
115%
28
10 to < 100%
5,194
3,761
49%
7,055
16.94%
1,000 to 10,000
27%
3
9,946
141%
322
10 to < 20%
3,758
2,889
48%
5,172
14.68%
1,000 to 10,000
25%
3
6,788
131%
189
20 to < 30%
1,373
866
51%
1,815
22.71%
1,000 to 10,000
31%
3
3,060
169%
128
30 to < 100%
63
5
59%
68
34.27%
0 to 100
22%
3
98
144%
5
100% (Default)
6,272
966
40%
6,677
100.00%
1,000 to 10,000
45%
2
4,170
62%
3391
SUB-TOTAL
232,524
310,003
45%
374,086
2.73%
32%
2
173,540
46%
4,246
(4,449)
TOTAL
320,758
350,884
482,551
218,425
45%
6,428
(6,579)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of financial assets measured at amortised
cost and debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance
sheet
sheet
expo-
Off-
balance
exposure
sure before CCF
Weighted
average
CCF
EAD
Weighted
average
PD
Number of
obligors
Weighted Weighted
average average
LGD maturity assets(*) weight losses(**)
Risk-
weighted Average
Amount
of anti-
cipated
Value
adjust-
ments and
provi-
sions(**)
Corporates –
Specialised
financing
0.00 to < 0.15%
6,664
3,043
51%
8,238
0.08%
100 to 1,000
13%
4
1,257
15%
1
0.00 to < 0.10%
3,814
2,274
50%
4,960
0.06%
100 to 1,000
15%
4
966
19%
0
0.10 to < 0.15%
2,850
769
51%
3,278
0.12%
100 to 1,000
10%
4
291
9%
0
0.15 to < 0.25%
5,770
1,890
41%
6,542
0.18%
100 to 1,000
17%
3
1,479
23%
2
0.25 to < 0.50%
14,048
5,920
51%
17,113
0.36%
1,000 to 10,000
15%
4
4,785
28%
9
0.50 to < 0.75%
7,712
3,677
56%
9,811
0.69%
100 to 1,000
16%
3
4,180
43%
11
0.75 to < 2.50%
13,217
5,172
54%
15,998
1.39%
1,000 to 10,000
14%
3
7,040
44%
29
0.75 to < 1.75%
10,439
4,038
53%
12,580
1.20%
1,000 to 10,000
14%
3
5,390
43%
19
1.75 to < 2.5%
2,778
1,133
56%
3,418
2.09%
100 to 1,000
13%
3
1,650
48%
10
2.50 to < 10%
5,639
3,294
53%
7,401
4.68%
1,000 to 10,000
12%
3
3,149
43%
39
2.5 to < 5%
3,655
2,040
50%
4,682
3.36%
100 to 1,000
13%
3
1,991
43%
20
5 to < 10%
1,984
1,255
59%
2,719
6.96%
100 to 1,000
11%
3
1,158
43%
19
10 to < 100%
2,949
2,046
74%
4,475
16.69%
100 to 1,000
7%
4
1,729
39%
56
10 to < 20%
2,382
1,848
76%
3,795
15.70%
100 to 1,000
7%
4
1,334
35%
41
20 to < 30%
567
198
57%
681
22.22%
0 to 100
9%
4
394
58%
15
30 to < 100%
100% (default)
1,761
85
71%
1,822
100.00%
100 to 1,000
46%
3
383
21%
828
SUB-TOTAL
57,760
25,128
54%
71,400
4.60%
14%
4
24,001
34%
975
(996)
SME
corporates
0.00 to < 0.15%
1,460
3,276
51%
3,156
0.07%
1,000 to 10,000
38%
3
860
27%
1
0.00 to < 0.10%
834
2,925
52%
2,366
0.05%
100 to 1,000
39%
3
575
24%
1
0.10 to < 0.15%
625
351
47%
791
0.11%
100 to 1,000
35%
3
285
36%
0
0.15 to < 0.25%
1,978
933
41%
2,371
0.18%
1,000 to 10,000
21%
2
499
21%
1
0.25 to < 0.50%
8,645
2,081
45%
9,600
0.31%
20,000 to 30,000
27%
3
3,253
34%
8
0.50 to < 0.75%
2,090
418
45%
2,301
0.66%
1,000 to 10,000
18%
3
747
32%
3
0.75 to < 2.50%
12,008
2,660
49%
13,328
1.33%
20,000 to 30,000
28%
3
7,694
58%
50
0.75 to < 1.75%
8,154
1,938
48%
9,099
1.02%
10,000 to 20,000
26%
3
4,542
50%
24
1.75 to < 2.5%
3,853
722
51%
4,229
1.99%
1,000 to 10,000
31%
3
3,152
75%
26
2.50 to < 10%
4,870
7,627
36%
7,622
4.40%
10,000 to 20,000
31%
3
4,924
65%
100
2.5 to < 5%
2,703
7,362
36%
5,337
3.29%
1000 to 10,000
32%
3
2,930
55%
56
5 to < 10%
2,166
265
43%
2,284
7.01%
1,000 to 10,000
27%
3
1,994
87%
43
10 to < 100%
1,545
189
49%
1,642
16.81%
1,000 to 10,000
29%
3
1,950
119%
75
10 to < 20%
1,036
99
50%
1,087
12.70%
1,000 to 10,000
31%
3
1,372
126%
42
20 to < 30%
460
86
48%
502
22.96%
1,000 to 10,000
25%
3
528
105%
29
30 to < 100%
50
4
67%
52
43.14%
100 to 1,000
20%
3
50
96%
4
100% (Default)
1,664
139
39%
1,734
100.00%
1,000 to 10,000
58%
3
1,051
61%
1085
SUB-TOTAL
34,259
17,324
42%
41,754
6.16%
28%
3
20,979
50%
1,323
(1,326)
a
b
c
d
e
f
g
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance
sheet
sheet
expo-
Off-
balance
exposure
sure before CCF
Weighted
average
CCF
EAD
Weighted
average
PD
Number of
obligors
Weighted Weighted
average average
LGD maturity assets(*) weight losses(**)
Risk-
weighted Average
Amount
of anti-
cipated
Value
adjust-
ments and
provi-
sions(**)
Other
corporates
0.00 to < 0.15%
93,168
169,770
47%
173,373
0.08%
10,000 to 20,000
34%
2
41,435
24%
46
0.00 to < 0.10%
44,554
132,678
48%
108,009
0.05%
1,000 to 10,000
33%
2
21,076
20%
19
0.10 to < 0.15%
48,614
37,092
45%
65,364
0.12%
1,000 to 10,000
35%
2
20,360
31%
27
0.15 to < 0.25%
27,318
35,829
44%
43,323
0.18%
10,000 to 20,000
36%
2
16,918
39%
28
0.25 to < 0.50%
39,251
40,293
42%
56,599
0.34%
20,000 to 30,000
35%
3
30,365
54%
67
0.50 to < 0.75%
10,834
8,251
41%
14,406
0.67%
1000 to 10,000
28%
2
8,605
60%
28
0.75 to < 2.50%
36,816
21,224
45%
46,772
1.41%
30,000 to 40,000
28%
2
33,720
72%
188
0.75 to < 1.75%
23,906
16,885
46%
31,961
1.12%
20,000 to 30,000
30%
2
21,329
67%
113
1.75 to < 2.5%
12,910
4,339
40%
14,811
2.04%
10,000 to 20,000
25%
2
12,391
84%
75
2.50 to < 10%
21,789
18,654
45%
30,468
4.83%
10,000 to 20,000
30%
3
46,675
153%
310
2.5 to < 5%
12,959
10,736
46%
18,073
3.43%
10,000 to 20,000
30%
3
32,157
178%
187
5 to < 10%
8,830
7,918
45%
12,395
6.87%
1,000 to 10,000
30%
3
14,518
117%
124
10 to < 100%
6,400
4,453
41%
8,248
15.68%
1,000 to 10,000
29%
2
11,466
139%
369
10 to < 20%
5,169
3,883
40%
6,738
13.96%
1,000 to 10,000
29%
3
9,236
137%
263
20 to < 30%
1,169
561
49%
1,445
22.46%
1,000 to 10,000
31%
2
2,150
149%
100
30 to < 100%
62
9
32%
66
42.45%
0 to 100
20%
3
80
121%
6
100% (Default)
5,099
1,061
46%
5,606
100.00%
1,000 to 10,000
45%
2
3,097
55%
3173
SUB-TOTAL
240,676
299,534
46%
378,795
2.52%
33%
2
192,280
51%
4,209
(4,518)
TOTAL
332,695
341,985
491,948
237,260
48%
6,506
(6,841)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of financial assets measured at amortised
cost and debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
Most of the Group's central government and central bank counterparties
are of very high credit quality and based in developed countries, meaning
that they have very good internal ratings and very low average Loss
Given Default.
The majority of the Group's corporate commitments concerns
counterparties of excellent or good quality, reflecting the large part of
multinationals in BNP Paribas' customer base. Other commitments are
mainly structured transactions or transactions secured by high-quality
assets, reflected in their average LGD levels.
On average, the probability of default excluding counterparty default
stands at 0.65%. It is 1.23% for Corporates.
➤
TABLE 40: AVERAGE PD AND LGD OF THE CORPORATE ASSET CLASS BY GEOGRAPHIC REGION
In millions of euros
31 December 2023
Non-defaulted
exposure
Average PD
Average LGD
Europe(*)
460,921
1.28%
28%
of which France
144,717
1.21%
30%
of which Belgium
69,107
1.89%
20%
of which Luxembourg
24,002
1.07%
29%
of which Italy
56,657
0.99%
34%
North America
114,632
1.16%
29%
Asia Pacific
52,751
0.98%
34%
Rest of the World
32,192
1.05%
30%
TOTAL
660,497
1.23%
29%
(*) Within the European Union and the European Free T r ade Association (EFTA).
In millions of euros
31 December 2022
Non-defaulted
exposure
Average PD
Average LGD
Europe(*)
463,470
1.31%
29%
of which France
148,753
1.32%
31%
of which Belgium
66,782
1.76%
20%
of which Luxembourg
23,845
1.07%
30%
of which Italy
60,301
1.06%
34%
North America
109,298
1.31%
30%
Asia Pacific
57,924
1.24%
35%
Rest of the World
34,178
1.14%
29%
TOTAL
664,871
1.29%
30%
(*) Within the European Union and the European Free T r ade Association (EFTA).
INTERNAL RATING SYSTEM SPECIFIC
TO RETAIL CUSTOMERS
Retail customers are characterised by a high degree of granularity, small
unit volumes and a standard risk profile.
The majority of retail borrowers are assigned a behavioural score which
serves as a basis to determine the probability of default and, for each
transaction, the Global Recovery Rate (GRR) and exposure at default
(EAD). These parameters are calculated every month on the basis of the
most up-to-date information. They are supplemented by different scores
that are made available to the commercial function. The latter has no
involvement in determining risk parameters. These methods are used
consistently for all retail customers. The general principles of the rating
system are set out in the Rating System paragraph in the section Credit
Risk Management Policy.
Scoring techniques are used to assign retail customers to risk groups
presenting the same default risk characteristics. This also applies to the
other credit risk parameters: EAD and LGD.
The chart below shows a breakdown by PD range of non-defaulted loans
and commitments in the retail book for all the Group's business lines,
measured using the internal ratings-based approach (see T a ble 27:
Indicative mapping of internal counterparty rating with agency rating
scale and average PD).
These exposures represented EUR 275 billion at 31 December 2023,
stable compared with 31 December 2022.
➤
FIGURE 9: IRBA EXPOSURE BY PD RANGE – RETAIL PORTFOLIO
% of exposure
PD range
(%)
0.00 to < 0.15
0.15 to < 0.25
0.25 to < 0.50
0.5 to < 0.75
0.75 to < 2.50
2.5 to < 10
10 to < 100
31 December 2023
31 December 2022
0%
5%
10%
15%
20%
25%
30%
35%
RETAIL PORTFOLIO
The following table gives the breakdown by PD range of the retail loans and commitments for all of the Group's business lines using the advanced IRB
Approach. Total exposure represented EUR 282 billion as at 31 December 2023 compared with EUR 289 billion as at 31 December 2022.
➤
TABLE 41: IRBA EXPOSURE BY PD SCALE AND ASSET CLASS – RETAIL GUARANTEED BY REAL PROPERTY PORTFOLIO
(EU CR6)
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight
Risk-
weighted Average
Amount of
anticipated
losses provisions(**)
(**)
Value
adjustments
and
Retail –
Secured by
residential
property
0.00 to < 0.15%
67,217
1.488
100%
68,707
0.10%
10%
5
2,107
3%
7
0.00 to < 0.10%
15,183
292
100%
15,475
0.06%
13%
5
392
3%
1
0.10 to < 0.15%
52,034
1.197
100%
53,232
0.11%
9%
5
1,715
3%
5
0.15 to < 0.25%
16,986
427
102%
17,420
0.18%
16%
5
1,156
7%
5
0.25 to < 0.50%
43,548
672
100%
44,220
0.37%
13%
5
4,478
10%
22
0.50 to < 0.75%
24,280
433
101%
24,715
0.59%
13%
5
3,389
14%
19
0.75 to < 2.50%
17,269
243
100%
17,511
1.48%
14%
5
4,765
27%
36
0.75 to < 1.75%
12,406
139
99%
12,544
1.28%
14%
5
3,230
26%
23
1.75 to < 2.5%
4,863
103
100%
4,967
2.00%
13%
5
1,535
31%
13
2.50 to < 10%
7,747
232
101%
7,980
4.20%
14%
5
3,930
49%
48
2.5 to < 5%
5,842
212
101%
6,056
3.46%
13%
5
2,747
45%
28
5 to < 10%
1,905
19
100%
1,924
6.52%
16%
5
1,183
61%
19
10 to < 100%
2,877
35
100%
2,913
21.94%
14%
5
2,486
85%
89
10 to < 20%
1,839
22
100%
1,862
13.13%
14%
5
1,535
82%
33
20 to < 30%
409
4
100%
413
26.01%
13%
5
401
97%
14
30 to < 100%
628
10
100%
638
44.99%
15%
5
550
86%
42
100% (default)
1,610
7
95%
1,617
100.00%
24%
4
862
53%
457
SUB-TOTAL
181,533
3,537
100%
185,085
1.76%
12%
5
23,174
13%
682
(578)
Retail –
Secured by
commercial
property
0.00 to < 0.15%
186
22
35%
198
0.09%
22%
4
8
4%
0
0.00 to < 0.10%
96
10
32%
102
0.07%
25%
4
4
4%
0
0.10 to < 0.15%
90
11
39%
97
0.12%
18%
4
4
4%
0
0.15 to < 0.25%
366
75
32%
403
0.18%
18%
4
26
6%
0
0.25 to < 0.50%
2,586
248
35%
2,708
0.36%
21%
4
308
11%
2
0.50 to < 0.75%
2,329
106
48%
2,390
0.59%
25%
5
465
19%
3
0.75 to < 2.50%
2,442
242
37%
2,552
1.41%
17%
4
606
24%
6
0.75 to < 1.75%
1,850
192
36%
1,935
1.21%
16%
4
386
20%
4
1.75 to < 2.5%
592
50
42%
617
2.05%
21%
4
220
36%
3
2.50 to < 10%
1,624
135
33%
1,681
4.61%
17%
4
801
48%
14
2.5 to < 5%
977
89
33%
1,012
3.47%
18%
4
438
43%
6
5 to < 10%
647
46
34%
669
6.33%
17%
4
363
54%
7
10 to < 100%
468
18
59%
480
18.21%
24%
4
526
110%
21
10 to < 20%
337
14
60%
347
13.35%
25%
4
378
109%
11
20 to < 30%
70
4
48%
72
23.99%
17%
4
62
87%
3
30 to < 100%
61
0
91%
62
38.88%
28%
5
86
139%
7
100% (default)
252
6
42%
263
100.00%
36%
3
140
53%
92
SUB-TOTAL
10,254
853
37%
10,675
4.58%
21%
4
2,880
27%
138
(93)
TOTAL
191,787
4,390
195,760
26,054
13%
820
(671)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of financial assets measured at amortised
cost and debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight
Risk-
weighted Average
Amount of
losses provisions(**)
(**)
Value adjust-
anticipated ments and
Retail –
Secured by
residential
property
0.00 to < 0.15%
65,449
2,210
100%
67,660
0.10%
9%
5
1,995
3%
6
0.00 to < 0.10%
14,153
443
100%
14,596
0.06%
11%
5
294
2%
1
0.10 to < 0.15%
51,296
1,767
100%
53,063
0.11%
9%
5
1,701
3%
5
0.15 to < 0.25%
16,199
684
103%
16,905
0.18%
16%
5
1,158
7%
5
0.25 to < 0.50%
44,554
1,060
100%
45,614
0.37%
13%
5
4,643
10%
23
0.50 to < 0.75%
26,389
758
101%
27,153
0.59%
11%
5
3,548
13%
18
0.75 to < 2.50%
17,759
423
100%
18,181
1.47%
14%
5
4,812
26%
36
0.75 to < 1.75%
12,753
239
100%
12,992
1.26%
14%
5
3,259
25%
23
1.75 to < 2.5%
5,006
184
100%
5,190
1.99%
13%
5
1,553
30%
13
2.50 to < 10%
8,608
352
101%
8,963
4.28%
14%
5
4,356
49%
54
2.5 to < 5%
6,308
323
101%
6,634
3.41%
13%
5
2,969
45%
31
5 to < 10%
2,300
29
100%
2,329
6.77%
15%
5
1,387
60%
23
10 to < 100%
2,376
35
100%
2,412
22.41%
13%
5
1,987
82%
70
10 to < 20%
1,475
23
100%
1,499
13.28%
13%
5
1,192
80%
25
20 to < 30%
366
6
100%
373
25.76%
13%
5
356
96%
12
30 to < 100%
535
6
101%
541
45.43%
13%
5
439
81%
33
100% (default)
2,163
3
98%
2,169
100.00%
33%
3
1,061
49%
703
SUB-TOTAL
183,497
5,527
101%
189,058
2.00%
12%
5
23,560
12%
917
(834)
Retail –
Secured by
commercial
property
0.00 to < 0.15%
182
33
46%
201
0.09%
23%
4
9
4%
0.00 to < 0.10%
96
15
49%
106
0.06%
26%
4
4
4%
0.10 to < 0.15%
85
18
44%
95
0.12%
19%
4
4
5%
0.15 to < 0.25%
371
87
34%
414
0.18%
20%
4
29
7%
0.25 to < 0.50%
4,074
314
44%
4,249
0.39%
24%
5
628
15%
4
0.50 to < 0.75%
1,133
109
44%
1,192
0.66%
19%
4
187
16%
2
0.75 to < 2.50%
2,784
302
41%
2,930
1.41%
17%
4
698
24%
7
0.75 to < 1.75%
2,092
249
41%
2,211
1.20%
16%
4
436
20%
4
1.75 to < 2.5%
692
53
42%
720
2.03%
22%
4
262
36%
3
2.50 to < 10%
1,858
167
40%
1,937
4.73%
18%
4
978
51%
17
2.5 to < 5%
1,126
104
45%
1,180
3.48%
18%
4
517
44%
7
5 to < 10%
732
62
33%
757
6.69%
18%
4
461
61%
9
10 to < 100%
424
24
57%
439
19.06%
22%
4
451
103%
19
10 to < 20%
285
19
62%
298
13.63%
23%
4
307
103%
9
20 to < 30%
85
4
33%
87
23.64%
17%
4
74
85%
3
30 to < 100%
54
1
63%
54
41.69%
26%
4
70
130%
6
100% (default)
310
6
46%
320
100.00%
43%
3
166
52%
133
SUB-TOTAL
11,136
1,041
42%
11,681
4.81%
20%
4
3,146
27%
182
(132)
TOTAL
194,633
6,568
200,739
26,706
13%
1,098
(966)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC) whilst
the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1f.5 Impairment of financial assets measured at amortised cost and
debt instruments measured at fair value through shareholders' equity to the consolidated financial statements as at 31 December 2023).
➤
TABLE 42: IRBA EXPOSURE BY PD SCALE AND ASSET CLASS – OTHER RETAIL PORTFOLIOS (EU CR6)
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight losses(**) provisions(**)
Risk-
weighted Average
Amount of
anticipated
Value
adjustments
and
Retail –
Revolving
exposures
0.00 to < 0.15%
60
1,773
76%
1,914
0.09%
81%
1
115
6%
1
0.00 to < 0.10%
9
673
76%
699
0.03%
80%
1
17
2%
0.10 to < 0.15%
51
1,100
77%
1,215
0.12%
82%
1
98
8%
1
0.15 to < 0.25%
59
3,383
74%
2,584
0.17%
29%
1
82
3%
1
0.25 to < 0.50%
262
1,513
49%
1,088
0.38%
49%
1
121
11%
2
0.50 to < 0.75%
48
590
71%
548
0.61%
57%
1
108
20%
2
0.75 to < 2.50%
380
644
52%
763
1.35%
56%
1
267
35%
6
0.75 to < 1.75%
358
597
50%
694
1.29%
54%
1
219
32%
5
1.75 to < 2.5%
23
47
78%
68
1.94%
80%
1
48
70%
1
2.50 to < 10%
1,474
475
70%
1,840
4.97%
49%
1
1,292
70%
46
2.5 to < 5%
841
400
59%
1,098
3.47%
47%
1
587
53%
18
5 to < 10%
633
76
128%
741
7.20%
52%
1
705
95%
28
10 to < 100%
658
63
124%
760
22.05%
52%
1
1,126
148%
87
10 to < 20%
428
44
133%
498
12.92%
53%
1
663
133%
34
20 to < 30%
83
13
76%
98
24.12%
52%
1
176
179%
13
30 to < 100%
147
7
157%
164
48.44%
50%
1
287
175%
40
100% (default)
492
26
65%
555
100.00%
61%
1
255
46%
311
SUB-TOTAL
3,433
8,468
68%
10,051
8.33%
52%
1
3,366
33%
456
(368)
Retail – SME
0.00 to < 0.15%
1,022
362
65%
1,304
0.09%
33%
2
92
7%
0.00 to < 0.10%
565
211
62%
720
0.07%
32%
2
39
5%
0.10 to < 0.15%
457
150
69%
583
0.12%
34%
3
53
9%
0.15 to < 0.25%
782
941
55%
1,352
0.18%
31%
2
138
10%
1
0.25 to < 0.50%
5,118
1,688
69%
6,425
0.33%
32%
3
1,004
16%
7
0.50 to < 0.75%
4,103
571
73%
4,567
0.60%
31%
4
1,014
22%
8
0.75 to < 2.50%
6,805
1,848
79%
8,384
1.50%
34%
2
2,933
35%
44
0.75 to < 1.75%
3,952
1,339
79%
5,084
1.14%
32%
2
1,536
30%
18
1.75 to < 2.5%
2,853
509
80%
3,300
2.07%
38%
3
1,397
42%
25
2.50 to < 10%
3,905
587
70%
4,407
4.92%
30%
2
1,890
43%
66
2.5 to < 5%
1,564
353
74%
1,863
3.68%
32%
2
768
41%
22
5 to < 10%
2,342
235
64%
2,544
5.83%
29%
2
1,122
44%
44
10 to < 100%
1,784
196
92%
2,035
17.44%
38%
3
1,307
64%
128
10 to < 20%
1,345
153
92%
1,524
12.60%
39%
3
944
62%
73
20 to < 30%
242
33
84%
288
24.24%
32%
2
185
64%
22
30 to < 100%
197
9
122%
223
41.73%
35%
3
178
80%
33
100% (default)
2,143
74
98%
2,346
100.00%
46%
1
1,090
46%
981
SUB-TOTAL
25,664
6,268
71%
30,819
10.04%
33%
3
9,469
31%
1,235
(1,187)
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2023
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight losses(**) provisions(**)
Risk-
weighted Average
Amount of
anticipated
Value
adjustments
and
Retail – Other
0.00 to < 0.15%
7,769
1,832
88%
9,463
0.10%
43%
3
1,274
13%
4
0.00 to < 0.10%
2,334
1,016
73%
3,095
0.05%
41%
3
204
7%
1
0.10 to < 0.15%
5,435
816
107%
6,368
0.12%
44%
3
1,071
17%
3
0.15 to < 0.25%
1,637
541
88%
2,141
0.19%
36%
3
359
17%
1
0.25 to < 0.50%
7,171
1,712
94%
8,854
0.38%
38%
3
2,590
29%
13
0.50 to < 0.75%
3,395
365
98%
3,972
0.61%
41%
3
1,665
42%
10
0.75 to < 2.50%
7,511
1,059
98%
8,650
1.39%
40%
2
4,864
56%
47
0.75 to < 1.75%
5,587
977
99%
6,637
1.20%
39%
2
3,555
54%
31
1.75 to < 2.5%
1,924
81
93%
2,012
2.00%
41%
2
1,308
65%
16
2.50 to < 10%
4,884
249
111%
5,175
4.49%
42%
2
3,882
75%
100
2.5 to < 5%
3,666
154
120%
3,860
3.52%
41%
2
2,722
71%
56
5 to < 10%
1,218
95
96%
1,315
7.34%
46%
2
1,160
88%
44
10 to < 100%
1,254
77
97%
1,347
23.12%
43%
2
1,502
112%
130
10 to < 20%
715
55
99%
785
13.71%
44%
2
806
103%
47
20 to < 30%
242
5
89%
247
24.37%
42%
2
303
123%
25
30 to < 100%
297
16
90%
314
45.64%
40%
2
392
125%
58
100% (default)
2,020
18
85%
2,043
100.00%
63%
2
964
47%
1,410
SUB-TOTAL
35,641
5,851
93%
41,644
6.67%
40%
2
17,100
41%
1,715
(1,574)
TOTAL
64,738
20,587
82,515
29,935
36%
3,406
(3,129)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of assets at amortised cost and debt
instruments at fair value through equity to the consolidated financial statements at 31 December 2023).
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight losses(**) provisions(**)
Risk-
weighted Average
Amount of
Value adjust-
anticipated ments and
Retail –
Revolving
exposures
0.00 to < 0.15%
54
1,798
76%
1,902
0.09%
81%
1
115
6%
1
0.00 to < 0.10%
7
661
76%
676
0.03%
80%
1
17
2%
0.10 to < 0.15%
48
1,137
76%
1,226
0.12%
82%
1
99
8%
1
0.15 to < 0.25%
62
3,476
74%
2,659
0.17%
29%
1
85
3%
1
0.25 to < 0.50%
267
1,551
49%
1,125
0.39%
51%
1
132
12%
2
0.50 to < 0.75%
46
615
71%
553
0.62%
54%
1
104
19%
2
0.75 to < 2.50%
362
689
53%
775
1.35%
56%
1
269
35%
6
0.75 to < 1.75%
339
638
51%
704
1.29%
54%
1
220
31%
5
1.75 to < 2.5%
24
51
77%
71
1.94%
78%
1
49
69%
1
2.50 to < 10%
1,361
502
67%
1,729
4.95%
49%
1
1,203
70%
42
2.5 to < 5%
782
423
58%
1,049
3.48%
47%
1
561
53%
17
5 to < 10%
580
79
115%
681
7.21%
52%
1
642
94%
25
10 to < 100%
623
67
111%
722
21.45%
52%
1
1,060
147%
80
10 to < 20%
417
47
120%
482
12.92%
53%
1
637
132%
33
20 to < 30%
78
13
71%
93
24.27%
52%
1
167
179%
12
30 to < 100%
127
7
128%
146
47.77%
50%
1
256
175%
35
100% (Default)
582
30
70%
630
100.00%
63%
1
335
53%
383
SUB-TOTAL
3,359
8,728
68%
10,095
8.86%
51%
1
3,304
33%
517
(430)
Retail – SME
0.00 to < 0.15%
1,342
637
65%
1,806
0.09%
30%
3
113
6%
0.00 to < 0.10%
844
308
70%
1,086
0.06%
29%
3
53
5%
0.10 to < 0.15%
498
329
61%
721
0.12%
32%
3
60
8%
0.15 to < 0.25%
1,342
1,060
56%
1,990
0.18%
30%
2
204
10%
1
0.25 to < 0.50%
7,280
1,803
73%
8,717
0.37%
30%
3
1,454
17%
10
0.50 to < 0.75%
2,247
471
67%
2,601
0.63%
31%
3
602
23%
5
0.75 to < 2.50%
7,576
1,787
78%
9,072
1.54%
32%
3
3,086
34%
45
0.75 to < 1.75%
4,191
1,280
78%
5,257
1.15%
30%
2
1,530
29%
18
1.75 to < 2.5%
3,385
507
78%
3,815
2.08%
34%
3
1,556
41%
27
2.50 to < 10%
4,022
685
74%
4,595
5.07%
27%
2
1,925
42%
63
2.5 to < 5%
1,924
449
77%
2,305
3.60%
29%
3
906
39%
24
5 to < 10%
2,098
236
68%
2,291
6.55%
25%
2
1,019
45%
39
10 to < 100%
1,695
176
85%
1,882
18.73%
36%
3
1,159
62%
113
10 to < 20%
1,241
139
85%
1,380
12.87%
39%
3
851
62%
67
20 to < 30%
193
25
78%
219
24.22%
28%
2
124
57%
15
30 to < 100%
261
12
103%
284
43.02%
26%
3
184
65%
31
100% (Default)
1,989
99
90%
2,199
100.00%
53%
1
1,035
47%
1099
SUB-TOTAL
27,492
6,718
71%
32,861
9.06%
31%
3
9,579
29%
1,335
(1,250)
a
b
c
d
e
f
h
i
j
k
l
m
In millions
of euros
PD range
31 December 2022
Balance balance
sheet sheet
exposure exposure
Off-
Weighted
average
CCF
EAD
Weighted Weighted Weighted
average average average
PD
LGD maturity assets(*) weight losses(**) provisions(**)
Risk-
weighted Average
Amount of
Value adjust-
anticipated ments and
Retail – Other
0.00 to < 0.15%
7,299
1,699
83%
8,771
0.10%
41%
3
1,188
14%
4
0.00 to < 0.10%
1,850
986
72%
2,574
0.05%
37%
3
165
6%
-
0.10 to < 0.15%
5,449
713
98%
6,197
0.12%
43%
3
1,023
17%
3
0.15 to < 0.25%
1,802
779
97%
2,572
0.19%
37%
2
450
17%
2
0.25 to < 0.50%
7,405
1,667
95%
9,044
0.38%
39%
3
2,727
30%
13
0.50 to < 0.75%
3,574
436
103%
4,136
0.60%
39%
3
1,653
40%
10
0.75 to < 2.50%
7,361
1,097
97%
8,481
1.37%
40%
2
4,827
57%
47
0.75 to < 1.75%
5,608
1,017
97%
6,643
1.20%
40%
2
3,651
55%
32
1.75 to < 2.5%
1,753
80
92%
1,838
2.00%
40%
2
1,176
64%
15
2.50 to < 10%
4,857
239
115%
5,149
4.60%
42%
2
3,804
74%
101
2.5 to < 5%
3,527
154
126%
3,731
3.54%
40%
2
2,561
69%
53
5 to < 10%
1,330
85
97%
1,418
7.39%
46%
2
1,244
88%
48
10 to < 100%
1,253
49
97%
1,308
22.41%
44%
2
1,475
113%
127
10 to < 20%
742
39
96%
785
13.45%
45%
2
802
102%
47
20 to < 30%
244
4
101%
249
24.38%
44%
2
320
128%
27
30 to < 100%
266
6
101%
274
46.30%
42%
2
354
129%
53
100% (Default)
1,896
19
92%
1,919
100.00%
64%
2
1,053
55%
1242
SUB-TOTAL
35,447
5,985
94%
41,380
6.38%
40%
2
17,178
42%
1,545
(1,466)
TOTAL
66,298
21,432
84,336
30,061
36%
3,398
(3,145)
(*) Add-on included.
(**) The expected losses and provisions are not directly comparable data: the expected one-year losses are statistical estimates through the cycle (TTC)
whilst the provisions for credit risk are calculated according to the IFRS 9 standard (see note 1.f.5 Impairment of assets at amortised cost and debt
instruments at fair value through equity to the consolidated financial statements at 31 December 2023).
Most of the mortgage exposures concern Commercial & Personal Banking
in France, Commercial & Personal Banking in Belgium and Commercial
& Personal Banking in Luxembourg. Mortgages are issued according to
strict and well-defined procedures. Average probability of default on retail
clients' non-defaulted loans is 1.34%. The low average Loss Given Default
level reflects the guarantees put in place when the mortgages were
granted. Most of the Revolving exposures and Other exposures relate
to consumer loans subsidiaries that have a wider range of customers in
terms of credit quality and a lower level of guarantees.
➤
TABLE 43: AVERAGE PD AND LGD OF THE RETAIL PORTFOLIO BY GEOGRAPHIC REGION
In millions of euros
31 December 2023
Non-defaulted
exposure
Average PD
Average LGD
Europe(*)
273,289
1.34%
20%
of which France
145,826
1.48%
21%
of which Belgium
81,663
1.15%
18%
of which Luxembourg
8,983
0.91%
21%
of which Italy
34,683
1.27%
21%
North America
548
n.s.
n.s.
Asia Pacific
414
n.s.
n.s.
Rest of the World
603
n.s.
n.s.
TOTAL
274,854
1.34%
20%
(*) Within the European Union and the European Free T r ade Association (EFTA).
In millions of euros
31 December 2022
Non-defaulted
exposure
Average PD
Average LGD
Europe(*)
281,267
1.30%
20%
of which France
152,218
1.42%
20%
of which Belgium
83,212
1.14%
17%
of which Luxembourg
9,148
0.73%
23%
of which Italy
35,197
1.30%
21%
North America
251
n.s.
n.s.
Asia Pacific
102
n.s.
n.s.
Rest of the World
213
n.s.
n.s.
TOTAL
281,833
1.30%
20%
(*) Within the European Union and the European Free T r ade Association (EFTA).
CREDIT RISK: STANDARDISED APPROACH
For exposures under the standardised approach, BNP Paribas uses the
external ratings from External Credit Assessment Institutions (ECAIs)
Standard & Poor's, Moody's, Fitch Ratings, Cerved and Banque de France
recognised by the superviso r.
The Group uses the correspondence tables published by the EBA and
the ACPR to compare the external ratings and weighting rates used to
calculate risk-weighted assets specific to each exposure class:
The ratings supplied by Standard & Poor's, Moody's and Fitch Ratings are
mainly used for exposures to Central governments and central banks,
Regional and local authorities, Public sector entities and Multilateral
development banks, Institutions and Corporates. The ratings supplied
by the Banque de France are mainly used for corporate exposures and
exposures secured by a mortgage on a real estate asset.
The ratings supplied by Cerved are mainly used for Corporate exposures.
When there is no directly applicable external rating, the issuer's senior
unsecured rating may, if available, be obtained from external databases
and used for risk-weighting purposes in some cases.
As at 31 December 2023, standardised approach exposure represented
21% of the BNP Paribas Group's total gross exposures to credit risk of
the Group. This breakdown is down compared to 31 December 2022.
The following table shows a summary of standardised risk-weighted
exposures broken down by regulatory asset class. The equity exposures
weighted using the standardised approach consist primarily of asset
value guarantees given to fund unit holders.
➤
TABLE 44: STANDARDISED CREDIT RISK EXPOSURE BY STANDARD EXPOSURE CLASS (EU CR4)
a
b
c
d
e
f
In millions of euros
31 December 2023
Gross exposure
of provisions
Exposure net
EAD
RWAs
RWA
density
Balance balance Balance balance Balance balance
sheet
Off-
sheet
sheet
Off-
sheet
sheet
Off-
sheet
1
Central governments or central
banks
29,003
285
28,972
285
33,629
134
4,842
14%
2
Regional government or local
authorities
3,668
2,125
3,666
2,124
3,290
442
709
19%
3
Public sector entities
1,779
1,417
1,778
1,417
1,737
351
1,110
53%
4
Multilateral development banks
1,635
2
1,635
2
1,796
1
0%
5
International organisations
1,278
1
1,278
1
1,278
0%
6
Institutions
12,999
2,829
12,996
2,821
13,597
1,281
5,562
37%
7
Corporates
77,899
28,763
77,615
28,703
71,297
9,259
60,937
76%
8
Retail
94,497
29,923
92,854
29,872
89,681
2,081
62,749
68%
9
Exposures secured by mortgages
on immovable property
39,750
1,976
39,422
1,966
35,040
867
16,012
45%
10
Exposures in default
9,777
285
4,661
251
4,469
66
4,957
109%
11
Exposures associated with
particularly high risk(*)
12
Covered bonds
13
Institutions and corporates with
a short-term credit assessment
14
Collective investment
undertakings
3,470
2,156
3,459
2,156
3,459
846
7,838
182%
15
Equity
96
444
96
444
96
222
2,265
712%
16
Other items
35,286
1,662
35,286
1,662
35,286
1,556
21,211
58%
17
TOTAL
311,139
71,868
303,718
71,704
294,657
17,107
188,191
60%
(*) Exposures in the property development sector for which risk profile may be influenced by market conditions.
a
b
c
d
e
f
In millions of euros
31 December 2022
Gross exposure
provisions
Exposure net of
EAD
RWAs
RWA
density
Balance balance Balance balance Balance balance
sheet
Off-
sheet
sheet
Off-
sheet
sheet
Off-
sheet
1
Central governments or central
banks
36,898
527
36,856
527
41,819
183
6,229
15%
2
Regional government or local
authorities
4,121
2,032
4,117
2,032
3,778
551
774
18%
3
Public sector entities
17,669
1,498
17,666
1,498
18,376
392
2,236
12%
4
Multilateral development banks
221
221
221
5
International organisations
989
34
989
34
989
33
6
Institutions
10,673
1,829
10,668
1,827
11,760
967
4,411
35%
7
Corporates
91,999
41,300
91,538
41,184
84,950
15,325
80,433
80%
8
Retail
107,851
33,597
106,236
33,526
102,256
3,945
73,410
69%
9
Exposures secured by mortgages
on immovable property
62,509
7,570
62,006
7,535
57,196
1,538
26,941
46%
10
Exposures in default
10,494
364
5,111
302
4,974
105
5,684
112%
11
Exposures associated with
particularly high risk(*)
288
367
287
367
287
183
705
150%
12
Covered bonds
-50%
13
Institutions and corporates with
a short-term credit assessment
14
Collective investment
undertakings
2,976
2,193
2,969
2,193
2,969
849
7,101
212%
15
Equity
99
402
99
402
99
201
2,301
767%
16
Other items
39,334
1,352
39,334
1,352
39,334
1,203
21,150
52%
17
TOTAL
386,121
93,066
378,097
92,778
369,008
25,475
231,375
59%
(*) Exposures in the property development sector for which risk profile may be influenced by market conditions.
Excluding the foreign exchange effect, loan outstandings processed
according to the standardised method recorded a sharp decrease in
2023, mainly due to the disposal of Bank of the West (-EUR 99.9 billion),
partially offset by an increase in CPBS, in particular on Corporate Clients
(+EUR 7.7 billion) with the acquisition of Stellantis and on Institutions
(+EUR 2.7 billion) mainly in Europe.
The following table gives the breakdown by standard asset class, the
distribution by risk weight of the loans and commitments in the book
for all the Group's business lines using the standardised approach.
Exposure at default was EUR 312 billion at 31 December 2023 compared
to EUR 394 billion at 31 December 2022.
➤
TABLE 45: STANDARDISED CREDIT EXPOSURE AT DEFAULT (EU CR5)
a
e
f
g
i
j
k
m
n
o
p
q
Risk weight
In millions of euros
31 December 2023
EAD (on-balance and off-balance)
0% 20% 35% 50% 75%100% 150%370% 1,250%Other Total unrated(*)
of which
1
Central governments or
central banks
28,305
630
225
4,602
1
33,764
8,934
2
Regional government or local
authorities
682
2,922
4
124
3,732
1,650
3
Public sector entities
633
251
287
916
2,088
583
4
Multilateral development
banks
1,797
1,797
161
5
International organisations
1,278
1,278
82
6
Institutions
10,229
2,232
2,356
62
14,878
520
7
Corporates
621
15,334
632
9,093
54,240
636
80,556
48,834
8
Retail
4,030
87,733
91,762
91,762
9
Exposures secured by
mortgages on immovable
property
24,637
5,221
2,293
3,560
197
35,907
28,231
10
Exposures in default
3,694
842
4,536
4,438
11
Exposures associated with
particularly high risk(**)
-
12
Covered bonds
-
13
Institutions and corporates
with a short-term credit
assessment
-
14
Unit or shares in collective
investment undertakings
7
101
109
809
7
3,272
4,305
4,034
15
Equity
194
124
318
318
16
Other items
7,805
566
139
14,280
14,052
36,843
28,466
17
TOTAL
41,129
30,032
29,298
17,311
90,025
84,581
1,745
194
124
17,324 311,764
218,013
(*) Exposures to counterparties without a credit rating from external rating agencies.
(**) Exposures in the property development sector for which risk profile may be influenced by market conditions.
a
e
f
g
i
j
k
m
n
o
p
q
Risk weight
In millions of euros
31 December 2022
EAD (on-balance and off-balance)
0% 20% 35% 50% 75%100% 150%370% 1,250%Other Total unrated(*)
of which
1
Central governments or central
banks
35,509
211
192
6,096
1
42,002
10,814
2
Regional government or local
authorities
706
3,556
66
4,328
1,728
3
Public sector entities
11,016
6,717
267
768
18,768
11,122
4
Multilateral development banks
221
221
5
International organisations
1,023
1,022
132
6
Institutions
9,156
1,992
1,471
107
12,727
355
7
Corporates
617
13,392
3,732
8,990
72,261
1,283
100,275
67,137
8
Retail
4,193
102,007
106,201 106,201
9
Exposures secured by mortgages
on immovable property
34,186
16,586
2,815
4,339
808
58,734
40,307
10
Exposures in default
3,870
1,209
5,079
5,033
11
Exposures associated with
particularly high risk(**)
470
470
19
12
Covered bonds
13
Institutions and corporates with
a short-term credit assessment
14
Unit or shares in collective
investment undertakings
13
84
124
541
8
3,047
3,818
3,526
15
Equity
165
135
300
300
16
Other items
13,777
190
141
16,064
10,366 40,538
27,705
17
TOTAL
62,881
33,306
42,111
28,293
104,822
105,468
3,888
165
135
13,414
394,482
274,379
(*) Exposures to counterparties without a credit rating from external rating agencies.
(**) Exposures in the property development sector for which risk profile may be influenced by market conditions.
The following chart shows the breakdown by risk weight of EAD outstandings relating to credit risk for all the Group's business lines, measured using
the standardised approach.
➤
FIGURE 10: STANDARDISED EXPOSURE AT DEFAULT BY RISK WEIGHT
% of exposure
0%
20%
35%
50%
75%
100%
150%
1,250%
Other
0%
5%
10%
15%
20%
25%
30%
35%
40%
31 December 2023
31 December 2022
Weighting
(%)
CREDIT RISK: EQUITIES UNDER THE SIMPLE WEIGHTING METHOD
Exposure
Exposures under the simple weighting method at 31 December
2023 amounted to EUR 13.6 billion, versus EUR 12.1 billion at
31 December 2022.
Scope
The equities held by the Group outside trading portfolios are securities
2022);
"conferring residual and subordinated rights on issuer's assets or income,
or securities representing a similar economic nature". They encompass:
■ listed and unlisted equities, including shares in investment funds;
■ embedded options of convertible bonds, redeemable or exchangeable
for equities;
■ equity options;
■ super subordinated notes;
■ private funds on given commitments;
■ equity holdings hedge;
■ shares of consolidated entities using the equity method.
The scope of exposures processed according to the simple weighting
method does not include the following items:
■ stakes higher than 10% in credit or financial institutions, mainly
consolidated by the equity method or held as financial assets at
fair value through equity, are exempt from the equity deduction,
being weighted at a flat rate of 250% (exposure of EUR 4.9 billion at
31 December 2023 compared with EUR 4.6 billion at 31 December
■ exposures in the form of units or shares of undertakings for collective
investment (UCI) treated according to the transparency approach in
accordance with the provisions of Articles 132 to 132c of Regulation
(EU) No. 2019/876 (exposure of EUR 5.6 billion at 31 December 2023
compared with EUR 5.2 billion at 31 December 2022).
Accounting principles and valuation methods
Accounting principles and valuation methods are set out in note 1.f to
the consolidated financial statements – Financial assets and liabilities.
Total gains and losses
Total unrealised gains and losses recorded in shareholders' equity are
set out in note 5.c to the consolidated financial statements – Financial
assets at fair value through equity.
Risk-weighted assets
The simple weighting method gives the following risk weights for the
calculation of risk-weighted assets:
■ 190% for investments held for medium/long-term valuation purposes
within the activity of the Principal Investments business, as well as
private equity exposures in diversified portfolios in line with the Bank's
business line activities;
■ 290% for exposures in the form of listed securities, including primarily
investments related to the Bank's business line activities. In addition,
some exposures relating to Principal Investments are also included
in this category;
■ 370% for all other exposures in the form of equities, primarily including
entities consolidated using the equity method (including the Group's
insurance entities in the prudential scope that are included in T a ble 47:
Insurance undertakings (EU INS1)). Furthermore, this risk weight is
also applied to unlisted investments in non-diversified portfolios.
➤
TABLE 46: EQUITY POSITIONS UNDER THE SIMPLE WEIGHTING METHOD (EU CR10)
a
b
c
d
e
f
In millions of euros
31 December 2023
On-balance Off-balance
sheet gross
exposure
sheet gross
exposure Risk weight
Exposure
value
Risk weighted
exposure
Expected
amount loss amount
Private equity exposures
1,820
23
190%
1,831
3,480
15
Exchange-traded equity exposures
1,278
290%
1,278
3,706
10
Other equity exposures
10,474
370%
10,474
38,755
251
TOTAL
13,572
23
13,584
45,941
276
a
b
c
d
e
f
In millions of euros
31 December 2022
On-balance Off-balance
sheet gross
exposure
sheet gross
exposure Risk weight
Exposure
value
Risk weighted
exposure Expected
amount loss amount
Private equity exposures
1,529
50
190%
1,554
2,952
12
Exchange-traded equity exposures
1,026
290%
1,026
2,976
8
Other equity exposures
9,531
370%
9,531
35,263
229
TOTAL
12,086
50
12,111
41,192
249
The increase of +EUR 5 billion in risk-weighted assets in 2023 is mainly linked market effects for the entire portfolio.
The Group does not use the simple weighting method for specialised lending portfolios.
➤
TABLE 47: INSURANCE UNDERTAKINGS (EU INS1)
a
b
In millions of euros
31 December 2023
31 December 2022
1
Holdings in insurance companies(*)
(before 370% risk weight)
4,824
4,561
TOTAL RISK-WEIGHTED ASSETS
17,847
16,876
(*) Significant financial holdings in insurance companies consolidated by the equity method within the prudential scope, benefiting from the provisions
of Article 49 of Regulation (EU) No. 575/2013 on exemptions from deduction from regulatory capital of holdings in an insurance company. Under the
provisions of Article 48 of Regulation (EU) No. 575/2013, a potential deduction from regulatory capital would have a limited impact with a decrease of
less than 10 basis points in the CET1 ratio.
EXPOSURES, PROVISIONS AND COST OF RISK [Audited]
Impaired exposures (stage 3) related to assets at amortised cost and
financing and guarantee commitments given, as well as the guarantees
received as collateral are presented in note 5.f Impaired exposures. The
definition of impaired loans (stage 3) is presented in note 1.f.5 Impairment
of financial assets measured at amortised cost and debt instruments
measured at fair value through shareholders' equity, Definition of default
paragraph.
The following table shows the carrying amount of performing and
non-performing(1) financial assets included in the prudential consolidation
scope.
An exposure is deemed to be non-performing when it falls into one of
the following categories:
■ exposures in default;
■ 90 days past-due exposures which are not in default;
■ restructured loans (see the Restructured loans section) during the one-
year minimal period required before returning to performing status.
In this part, in accordance with the Implementing Regulation (EU)
No. 2021/637, the scope of the tables in this section includes the
following items:
■ current accounts with central banks (cash accounts are not
considered);
■ loans and receivables and debt securities at amortised cost;
■ loans and receivables and debt securities at fair value through equity;
■ loans and receivables and debt securities at fair value through profit
or loss excluding the trading portfolio;
■ financing and guarantee commitments outside the trading portfolio.
Exposures in default include impaired loans and receivables (stage 3) and
doubtful loans and receivables and debt securities at fair value through
profit or loss outside the trading book.
The classifications used for exposures shown are taken from financial
reports intended for the supervisory authority(2) and so differ from
the exposure classes usually used within the context of Pillar 3. The
classification includes:
■ central banks;
■ public administrations including mainly central governments, regional
or local authorities and international organisations;
■ credit institutions including credit institutions and multilateral
development banks;
■ other financial corporations including institutions (notably supervised
investment companies and clearing houses) and corporations (mainly
investment funds, pension funds and insurance companies);
■ non-financial corporations including mainly corporations and small
and medium enterprises (SME);
■ households: mainly non-SME retail portfolio.
In addition, in accordance with Appendix III and V of Implementing
Regulation (EU) No. 2021/451 regarding supervisory reporting of financial
institutions, the assets of activities held for sale(3) for the items listed
above, are presented on a separate line in the tables.
(1) At 31 December 2023, the Group's non-performing loans ratio was 2.2%, compared with 2.1% at 31 December 2022. This ratio is used by the European Banking Authority to monitor
non-performing outstandings in Europe. It is calculated on the basis of gross outstanding of loans, receivables and deposits with central banks, not netted of guarantees received.
(2) Appendices III and V of Implementing Regulation (EU) No. 2021/451 on supervisory reporting.
(3) See note 9.e Discontinued activities to the consolidated financial statements.
➤
TABLE 48: PERFORMING AND NON-PERFORMING EXPOSURES AND RELATED PROVISIONS (EU CR1) [Audited]
a
b
c
d
e
f
g
h
i
j
k
l
n
o
In millions of euros
31 December 2023
Gross carrying amount
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
Collateral and financial
guarantees received
Performing exposures
Non-performing
exposures
Performing
exposures
Non-performing
exposures
On performing
exposures
On non-
performing
exposures
of which
stage 1
of which
stage 2
of which
stage 1 & 2
of which
defaulted
of which
stage 1
of which
stage 2
of which
stage 1 & 2
of which
defaulted
Current accounts
at central banks
and other
005 demand deposits
292,738
292,359
379
2
-
2
(26)
(21)
(5)
-
-
-
973
-
010 advances
902,012
828,757
Loans and
73,255
26,775
465
26,310
(4,338)
(1,960)
(2,378)
(13,261)
(13)
(13,248)
538,230
8,551
020 Central banks
9,731
9,731
3,313
030 governments
33,971
General
31,954
2,017
256
93
163
(16)
(6)
(10)
(39)
(1)
(38)
8,826
167
040 Credit institutions
7,457
6,839
618
80
80
(27)
(18)
(9)
(67)
(67)
3,580
Other financial
050 corporations
90,811
87,537
3,274
1,412
1,412
(153)
(70)
(83)
(856)
(856)
21,110
502
060 corporations
430,758
380,019
Non-financial
50,739
14,155
344
13,811
(1,807)
(726)
(1,081)
(6,978)
(3)
(6,975)
272,354
5,011
070 of which SMEs
127,144
108,650
18,494
5,597
90
5,507
(770)
(319)
(451)
(2,363)
(2)
(2,361)
92,600
2,532
080 Households
329,284
312,677
16,607
10,872
28
10,844
(2,335)
(1,140)
(1,195)
(5,321)
(9)
(5,312)
229,047
2,871
090 Debt Securities
175,677
175,342
335
349
-
349
(36)
(19)
(17)
(226)
-
(226)
4,017
-
100 Central banks
4,705
4,705
110 governments
118,856
118,785
General
71
(17)
(14)
(3)
450
120 Credit institutions
18,004
18,004
101
101
(101)
(101)
3,262
130 corporations
27,747
Other financial
27,552
195
152
152
(13)
(1)
(12)
(56)
(56)
305
140 corporations
6,365
Non-financial
6,296
69
96
96
(6)
(4)
(2)
(69)
(69)
150 exposures
560,116
533,559
Off-balance sheet
26,557
1,661
3
1,658
(570)
(269)
(301)
(313)
-
(313)
142,400
398
160 Central banks
51,627
51,627
49,622
170 governments
11,292
General
9,915
1,377
48
48
(5)
(2)
(3)
742
42
180 Credit institutions
15,155
13,611
1,544
(27)
(7)
(20)
654
190 corporations
77,005
Other financial
76,019
986
87
87
(32)
(24)
(8)
(11)
(11)
17,614
12
200 corporations
357,031
335,568
Non-financial
21,463
1,390
4
1,386
(421)
(182)
(239)
(298)
(298)
69,078
331
210 Households
48,006
46,819
1,187
136
(1)
137
(85)
(54)
(31)
(4)
(4)
4,690
13
220 TOTAL
1,930,543 1,830,017 100,526 28,787
468
28,319
(4,970)
(2,269)
(2,701)
(13,800)
(13)
(13,787)
685,620
8,949
a
b
c
d
e
f
g
h
i
j
k
l
n
o
In millions of euros
31 December 2022
Gross carrying amount
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
Collateral and financial
guarantees received
Performing exposures
Non-performing
exposures
Performing
exposures
Non-performing
exposures
On performing
exposures
On non-
performing
exposures
of which
stage 1
of which
stage 2
of which
stage 1 & 2
of which
defaulted
of which
stage 1
of which
stage 2
of which
stage 1 & 2
of which
defaulted
Cash balances
at central banks
and other
005 demand deposits 326,410 325,762
648
4
1
3
(29)
(20)
(9)
(1)
-
(1)
829
-
010 advances
905,208
818,136
Loans and
87,072
26,337
447
25,890
(4,862)
(2,045)
(2,817)
(13,513)
(10)
(13,503)
540,589
8,359
020 Central banks
13,619
13,612
7
4,807
030 governments
31,523
General
30,155
1,368
199
99
100
(15)
(6)
(9)
(26)
(2)
(24)
8,138
151
040 institutions
8,044
Credit
7,912
132
84
1
83
(13)
(6)
(7)
(79)
(79)
3,817
1
050 corporations
84,667
Other financial
79,895
4,772
1,106
1,106
(169)
(70)
(99)
(778)
(778)
25,770
284
060 corporations
437,918
374,954
Non-financial
62,964
13,196
329
12,867
(2,267)
(803)
(1,464)
(6,920)
(7)
(6,913)
267,929
4,711
070 of which SMEs
125,350
110,545
14,805
4,984
89
4,895
(804)
(327)
(477)
(2,277)
(4)
(2,273)
87,527
2,154
080 Households
329,437
311,608
17,829
11,752
18
11,734
(2,398)
(1,160)
(1,238)
(5,710)
(1)
(5,709)
230,128
3,212
090 Debt Securities
154,741
154,209
532
348
-
348
(68)
(42)
(26)
(231)
-
(231)
3,182
20
100 Central banks
6,012
6,012
110 governments
105,318
104,965
General
353
(32)
(23)
(9)
476
120 institutions
13,320
Credit
13,320
103
103
(5)
(5)
(103)
(103)
2,390
130 corporations
24,801
Other financial
24,635
166
111
111
(24)
(7)
(17)
(44)
(44)
316
140 corporations
5,290
Non-financial
5,277
13
134
134
(7)
(7)
(84)
(84)
20
Assets held for
sale
79,542
76,392
3,150
553
-
553
(267)
(141)
(126)
(62)
-
(62)
46,754
283
Off-balance
150 sheet exposures
565,733
533,619
32,114
1,730
-
1,730
(664)
(325)
(339)
(316)
-
(316)
127,110
386
160 Central banks
50,759
50,742
17
1
1
48,718
170 governments
12,256
General
11,128
1,128
10
10
(6)
(2)
(4)
947
180 institutions
13,832
Credit
13,033
799
1
1
(12)
(5)
(7)
652
190 corporations
68,425
Other financial
66,541
1,884
24
24
(50)
(36)
(14)
(9)
(9)
15,334
5
200 corporations
363,252
336,133
Non-financial
27,119
1,489
1,489
(500)
(221)
(279)
(299)
(299)
57,571
377
210 Households
57,209
56,042
1,167
205
205
(96)
(61)
(35)
(8)
(8)
3,888
4
220 TOTAL
2,031,634 1,908,118 123,516
28,972
448
28,524
(5,890)
(2,573)
(3,317)
(14,123)
(10)
(14,113)
718,464
9,048
Changes in the stock of non-performing loans and advances (EU CR2) are presented in note 5.f Impaired financial assets (stage 3) to the consolidated
financial statements as at 31 December 2023.
➤
TABLE 49: PERFORMING AND NON-PERFORMING EXPOSURES BY PAST DUE DAYS (EU CQ3) [Audited]
a
b
c
d
e
f
g
h
i
j
k
l
In millions of euros
31 December 2023
Performing exposures
Non-performing exposures
Not past
due or
≤ 30 days
> 30 days
≤ 90 days
Unlikely
to pay that
are not past
due or are
past due
≤ 90 days
> 90 days
≤ 180 days
> 180 days
≤ 1 year
> 1 year
≤ 2 years
> 2 years
≤ 5 years
> 5 years
≤ 7 years
> 7 years
of which
defaulted
005 deposits
Cash balances at central
banks and other demand
292,738
292,738
-
2
-
-
-
-
-
-
2
2
010 Loans and advances
902,012
897,206
4,806
26,775
9,475
2,051
2,110
2,728
4,780
1,374
4,257
26,310
020 Central banks
9,731
9,731
030 General governments
33,971
33,935
36
256
36
12
6
69
99
28
6
163
040 Credit institutions
7,457
7,454
3
80
3
2
75
79
050 Other financial corporations
90,811
90,687
124
1,412
638
30
5
309
230
8
192
1,412
060 Non-financial corporations
430,758
427,102
3,656
14,155
5,847
995
848
1,049
1,767
869
2,780
13,812
070 of which SMEs
127,144
126,363
781
5,597
2,082
378
544
707
838
314
734
5,506
080 Households
329,284
328,297
987
10,872
2,951
1,014
1,251
1,299
2,684
469
1,204
10,844
090 Debt securities
175,677
175,677
-
349
236
-
-
-
5
101
7
349
100 Central banks
4,705
4,705
110 General governments
118,856
118,856
120 Credit institutions
18,004
18,004
101
2
99
101
130 Other financial corporations
27,747
27,747
152
144
2
6
152
140 Non-financial corporations
6,365
6,365
96
90
5
1
96
150 Off-balance sheet exposures
560,116
1,661
1,658
160 Central banks
51,627
170 General governments
11,292
48
48
180 Credit institutions
15,155
190 Other financial corporations
77,005
87
87
200 Non-financial corporations
357,031
1,390
1,386
210 Households
48,006
136
137
220 TOTAL
1,930,543
1,365,621
4,806
28,787
9,711
2,051
2,110
2,728
4,785
1,475
4,266
28,319
a
b
c
d
e
f
g
h
i
j
k
l
In millions of euros
31 December 2022
Performing exposures
Non-performing exposures
Not past
due or
≤ 30 days
> 30 days
≤ 90 days
Unlikely
to pay that
are not past
due or are
past due
≤ 90 days
> 90 days
≤ 180 days
> 180 days
≤ 1 year
> 1 year
≤ 2 years
> 2 years
≤ 5 years
≤ 2 years
> 1 year
> 5 years
of which
defaulted
005 deposits
Cash balances at central
banks and other demand
326,410
326,410
-
4
1
-
-
-
-
-
3
3
010 Loans and advances
905,208
900,706
4,502
26,337
7,736
1,773
2,163
2,246
5,434
1,662
5,323
25,890
020 Central banks
13,619
13,619
030 General governments
31,523
31,462
61
199
35
6
7
40
68
35
8
100
040 Credit institutions
8,044
8,028
16
84
3
81
83
050 Other financial corporations
84,667
84,598
69
1,106
572
1
10
64
251
5
203
1,106
060 Non-financial corporations
437,918
434,683
3,235
13,196
4,314
687
970
903
2,286
968
3,068
12,867
070 of which SMEs
125,350
124,698
652
4,984
1,422
365
472
508
914
401
902
4,895
080 Households
329,437
328,316
1,121
11,752
2,815
1,079
1,176
1,236
2,829
654
1,963
11,734
090 Debt securities
154,741
154,741
-
348
232
-
-
-
4
101
11
348
100 Central banks
6,012
6,012
110 General governments
105,318
105,318
120 Credit institutions
13,320
13,320
103
4
99
103
130 Other financial corporations
24,801
24,801
111
100
2
9
111
140 Non-financial corporations
5,290
5,290
134
128
4
2
134
Assets held for sale
79,542
79,130
412
553
372
67
91
15
8
-
-
553
150 Off-balance sheet exposures
565,733
1,730
1,730
160 Central banks
50,759
1
1
170 General governments
12,256
10
10
180 Credit institutions
13,832
1
1
190 Other financial corporations
68,425
24
24
200 Non-financial corporations
363,252
1,489
1,489
210 Households
57,209
205
205
220 TOTAL
2,031,634
1,460,987
4,914
28,972
8,341
1,840
2,254
2,261
5,446
1,763
5,337
28,524
T a ble 50 (EU CQ4) below shows the on- and off-balance sheet exposures. These exposures contribute to all Group risks, mainly credit risk.
➤
TABLE 50: EXPOSURES AND PROVISIONS BY GEOGRAPHIC BREAKDOWN (EU CQ4) [Audited]
a
b
c
d
e
f
g
In millions of euros
31 December 2023
Gross carrying amount/Nominal amount
Accumulated impairment
Provisions on
commitments non-performing
and financial
given
Accumulated
off-balance negative due to
sheet credit risk on
exposures
guarantees changes in fair
value
Of which
Instruments
with
significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage 2)
Of which non-performing
Of which loans
and advances
subject to
impairment
Of which
Instruments
with
significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage 2)
Of which
defaulted
Of which
defaulted
010 exposures
1,397,553
On balance sheet
74,371
27,126
26,661
1,393,402
(17,817)
(2,404)
(13,404)
(70)
Europe(*)
1,100,051
62,345
22,566
22,352
1,097,563
(14,349)
(2,050)
(10,559)
(43)
France
490,339
21,068
9,042
8,897
488,938
(5,286)
(759)
(3,949)
(8)
Belgium
174,544
9,073
2,531
2,521
174,517
(1,423)
(190)
(1,087)
Luxembourg
51,238
2,419
362
357
51,042
(189)
(46)
(113)
(3)
Italy
133,525
8,179
4,631
4,629
133,453
(3,657)
(487)
(2,784)
(23)
United Kingdom
57,788
4,811
977
966
57,545
(743)
(99)
(533)
(7)
Germany
52,738
5,913
1,330
1,308
52,529
(987)
(151)
(689)
Netherlands
21,181
2,190
160
157
21,165
(92)
(20)
(52)
Other European
countries
118,699
8,693
3,532
3,517
118,374
(1,972)
(298)
(1,353)
(3)
North America
111,548
4,431
767
614
110,240
(225)
(87)
(113)
(27)
Asia Pacific
95,147
2,294
323
320
94,981
(290)
(48)
(160)
Japan
31,455
276
12
12
31,424
(2)
(1)
North Asia
26,472
855
149
148
26,466
(103)
(11)
(31)
South-East Asia
(ASEAN)
18,706
488
131
130
18,697
(165)
(32)
(121)
Indian peninsula
& Pacific
18,514
675
31
30
18,394
(20)
(4)
(8)
070 Rest of the World
90,807
5,301
3,471
3,375
90,617
(2,954)
(218)
(2,571)
Türkiye
14,086
1,201
140
140
14,066
(213)
(83)
(81)
Mediterranean
9,387
1,450
798
791
9,387
(723)
(54)
(630)
Gulf States & Africa
10,606
267
1,726
1,726
10,606
(1,509)
(43)
(1,439)
Latin America
17,683
592
318
316
17,513
(264)
(16)
(214)
Other countries
39,045
1,791
489
402
39,045
(245)
(22)
(207)
a
b
c
d
e
f
g
In millions of euros
31 December 2023
Gross carrying amount/Nominal amount
Accumulated impairment
Provisions on
commitments non-performing
and financial
given
Accumulated
off-balance negative due to
sheet credit risk on
exposures
guarantees changes in fair
value
Of which
Instruments
with
significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage 2)
Of which non-performing
Of which loans
and advances
subject to
impairment
Of which
Instruments
with
significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage 2)
Of which
defaulted
Of which
defaulted
080 exposures
561,777
Off-balance sheet
26,559
1,661
1,658
561,777
(883)
(301)
(313)
(883)
Europe(*)
350,726
14,572
1,230
1,228
350,726
(560)
(172)
(178)
(560)
France
102,178
3,597
286
286
102,178
(159)
(52)
(37)
(159)
Belgium
41,563
2,157
190
190
41,563
(106)
(16)
(64)
(106)
Luxembourg
16,864
492
51
51
16,864
(19)
(7)
(3)
(19)
Italy
40,105
1,604
367
367
40,105
(90)
(25)
(40)
(90)
United Kingdom
39,555
2,538
114
114
39,555
(55)
(32)
(2)
(55)
Germany
32,110
1,726
57
57
32,110
(52)
(14)
(21)
(52)
Netherlands
17,431
406
47
47
17,431
(12)
(2)
(3)
(12)
Other European
countries
60,920
2,052
119
116
60,920
(66)
(24)
(8)
(66)
North America
111,492
7,479
177
177
111,492
(135)
(74)
(38)
(135)
Asia Pacific
33,458
863
30
30
33,458
(14)
(3)
-
(14)
Japan
2,669
2,669
(1)
(1)
North Asia
18,854
151
27
27
18,854
(7)
(1)
(7)
South-East Asia
(ASEAN)
4,896
429
3
3
4,896
(3)
(1)
(3)
Indian peninsula
& Pacific
7,038
283
7,038
(4)
(1)
(4)
140 Rest of the World
66,101
3,645
223
223
66,101
(174)
(53)
(97)
(174)
Türkiye
4,633
388
8
8
4,633
(31)
(21)
(4)
(31)
Mediterranean
2,240
521
86
86
2,240
(58)
(14)
(39)
(58)
Gulf States & Africa
44,285
316
49
49
44,285
(65)
(5)
(54)
(65)
Latin America
5,910
812
33
33
5,910
(11)
(9)
(11)
Other countries
9,033
1,608
48
48
9,033
(9)
(4)
(9)
150 TOTAL
1,959,330
100,930
28,787
28,319
1,955,179
(18,700)
(2,705)
(13,717)
(883)
(70)
(*) Within the European Union, the European Free T r ade Association (EFTA) and the United Kingdom.
a
b
c
d
e
f
g
In millions of euros
31 December 2022
Gross carrying amount/Nominal amount
Accumulated impairment
Provisions on
commitments
and financial
given
Accumulated
negative
off-balance due to credit
sheet risk on non-
performing
exposures
guarantees changes in fair
value
Of which
Instruments
with significant
increase in credit
risk since initial
recognition but
recognition
not credit-
impaired
impaired
(Stage 2)
Of which non-performing
Of which loans
and advances
subject to
Of which
Instruments
with
significant
increase in
credit risk
since initial
but not credit-
(Stage 2)
Of which
defaulted
Of which
defaulted impairment
010 exposures
1,493,143
On balance sheet
91,775
27,242
26,794
1,486,697
(18,972)
(2,978)
(13,736)
-
(61)
of which balance
sheet exposures
of continuing
activities
1,413,048
88,625
26,689
26,241
1,406,602
(18,643)
(2,852)
(13,674)
(61)
Europe(*)
1,122,545
67,479
22,341
22,137
1,118,922
(14,740)
(2,322)
(10,662)
(61)
France
518,296
25,082
7,657
7,518
516,899
(4,949)
(855)
(3,518)
(17)
Belgium
172,415
9,047
2,361
2,353
172,402
(1,368)
(180)
(1,035)
Luxembourg
52,880
2,334
300
298
52,674
(176)
(34)
(113)
(22)
Italy
135,910
8,587
5,823
5,818
135,218
(4,068)
(543)
(3,132)
(16)
United Kingdom
54,639
6,040
1,149
1,145
54,172
(799)
(119)
(585)
(3)
Germany
47,965
5,405
1,224
1,207
47,620
(976)
(178)
(673)
Netherlands
21,341
1,803
118
114
21,321
(135)
(63)
(52)
Other European
countries
119,099
9,181
3,709
3,684
118,616
(2,269)
(350)
(1,554)
(3)
North America
103,128
7,354
330
200
101,157
(238)
(112)
(94)
Asia Pacific
96,915
5,109
379
375
96,707
(356)
(78)
(174)
Japan
23,942
1,225
70
70
23,942
(9)
(5)
(3)
North Asia
29,143
2,162
63
61
29,129
(132)
(24)
(41)
South-East Asia
(ASEAN)
23,895
665
166
165
23,825
(168)
(38)
(108)
Indian peninsula
& Pacific
19,935
1,057
80
79
19,811
(47)
(11)
(22)
070 Rest of the World
90,460
8,683
3,639
3,529
89,816
(3,309)
(340)
(2,744)
Türkiye
14,962
911
233
233
14,962
(338)
(115)
(151)
Mediterranean
8,886
1,485
818
809
8,886
(722)
(75)
(608)
Gulf States & Africa
14,696
1,099
2,005
2,003
14,696
(1,734)
(71)
(1,613)
Latin America
17,922
1,999
295
294
17,922
(313)
(37)
(226)
Other countries
33,994
3,189
288
190
33,350
(202)
(42)
(146)
of which balance
sheet exposures of
assets held for sale
80,095
3,150
553
553
80,095
(329)
(126)
(62)
a
b
c
d
e
f
g
In millions of euros
31 December 2022
Gross carrying amount/Nominal amount
Accumulated impairment
Provisions on
commitments
and financial
given
Accumulated
negative
off-balance due to credit
sheet risk on non-
performing
exposures
guarantees changes in fair
value
Of which
Instruments
with significant
increase in credit
risk since initial
recognition but
recognition
not credit-
impaired
impaired
(Stage 2)
Of which non-performing
Of which loans
and advances
subject to
Of which
Instruments
with
significant
increase in
credit risk
since initial
but not credit-
(Stage 2)
Of which
defaulted
Of which
defaulted impairment
080 exposures
567,463
Off-balance sheet
32,114
1,729
1,730
567,463
(980)
(338)
(316)
(980)
-
Europe(*)
345,858
18,237
1,286
1,286
345,858
(633)
(204)
(196)
(633)
France
101,899
4,072
179
179
101,899
(158)
(49)
(41)
(158)
Belgium
40,336
3,115
252
252
40,336
(125)
(22)
(70)
(125)
Luxembourg
16,102
614
20
20
16,102
(20)
(7)
(1)
(20)
Italy
36,399
1,519
340
340
36,399
(104)
(30)
(44)
(104)
United Kingdom
42,349
3,014
326
326
42,349
(60)
(33)
(1)
(60)
Germany
31,969
1,545
50
50
31,969
(64)
(25)
(18)
(64)
Netherlands
15,774
946
20
20
15,774
(24)
(11)
(5)
(24)
Other European
countries
61,030
3,412
99
99
61,030
(78)
(27)
(16)
(78)
North America
125,435
8,554
115
115
125,435
(133)
(67)
(19)
(133)
Asia Pacific
34,728
1,655
3
3
34,728
(20)
(8)
(20)
Japan
2,764
158
2,764
(1)
(1)
North Asia
18,354
588
18,354
(10)
(4)
(10)
South-East Asia
(ASEAN)
5,841
263
3
3
5,841
(4)
(1)
(5)
Indian peninsula
& Pacific
7,769
646
7,769
(5)
(3)
(4)
140 Rest of the World
61,442
3,668
325
325
61,442
(194)
(60)
(101)
(194)
Türkiye
4,891
338
13
13
4,891
(35)
(19)
(7)
(35)
Mediterranean
2,492
287
92
92
2,492
(54)
(11)
(37)
(54)
Gulf States & Africa
40,860
578
73
73
40,860
(79)
(14)
(56)
(79)
Latin America
5,316
1,026
141
141
5,316
(16)
(10)
(1)
(16)
Other countries
7,883
1,439
6
6
7,883
(10)
(6)
(10)
150 TOTAL
2,060,606
123,889
28,971
28,524
2,054,160
(19,952)
(3,316)
(14,052)
(980)
(61)
(*) Within the European Union, the European Free T r ade Association (EFTA) and the United Kingdom.
In accordance with Implementing Regulation (EU) No. 2021/637, the table below (EU CQ5) shows the breakdown of loans and receivables with the
scope of non-financial corporations. It does not take into account all exposures to central governments and central banks, credit institutions, financial
companies and households. These on-balance sheet and off-balance sheet exposures contribute to all Group risks, mainly credit risk. The breakdown
by sector – as defined by European Regulation No. 1893/2006 establishing the statistical classification of economic activities NACE rev. 2 – is based on
the borrower's declaration.
These same balance sheet exposures of continuing activities, broken down by secto r, a re included in T a ble 108: Credit quality of exposures by sector and
residual maturities of section 5.11 Environmental, social and governance risks of this chapte r. I n the latte r, e xposures include, howeve r, d ebt securities
and equity instruments not held for trading.
➤
TABLE 51: BREAKDOWN OF LOANS AND ADVANCES AND PROVISIONS TO NON-FINANCIAL CORPORATIONS
BY INDUSTRY (EU CQ5) [Audited]
a
b
c
d
e
f
In millions of euros
31 December 2023
Gross carrying amount/Nominal amount
Accumulated impairment
Accumulated
negative changes
in fair value due
to credit risk on
non-performing
exposures
Of which
Instruments
with significant
increase in credit
risk since initial
recognition but
not credit-
impaired
(Stage2)
Of which non-
performing
Of which
Instruments
with significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage2)
Of which
defaulted
Of which
defaulted impairment
Of which
loans and
advances
subject to
On balance sheet
exposures
444,913
51,031
14,155
13,810
443,073
(8,753)
(1,084)
(6,942)
(33)
010
Agriculture, forestry
and fishing
12,989
969
460
457
12,841
(341)
(40)
(261)
020
Mining and quarrying
7,622
544
192
192
7,622
(124)
(5)
(108)
030
Manufacturing
91,434
9,444
2,603
2,439
90,492
(2,035)
(235)
(1,663)
040
Electricity, gas, steam
and air conditioning
supply
18,367
1,537
312
310
18,366
(138)
(17)
(102)
050
Water supply
2,507
276
108
106
2,507
(72)
(4)
(62)
060
Construction
25,544
2,919
2,110
2,099
25,523
(1,494)
(49)
(1,389)
(6)
070
Wholesale and retail
trade
69,557
10,492
2,120
2,084
69,546
(1,323)
(172)
(1,033)
080
Transport and
storage
28,600
3,837
593
591
28,529
(423)
(51)
(335)
090
Accommodation and
food service activities
7,545
1,761
653
652
7,517
(347)
(69)
(262)
100
Information and
communication
16,133
2,147
620
606
15,758
(178)
(46)
(111)
(27)
110
Financial and
insurance activities
21,192
1,650
788
711
20,964
(502)
(58)
(408)
120
Real estate activities
61,270
7,111
1,494
1,494
61,256
(730)
(181)
(438)
130
Professional,
scientific and
technical activities
19,413
2,087
604
592
19,413
(333)
(41)
(257)
140
Administrative and
support service
activities
45,092
2,462
624
618
45,091
(334)
(49)
(252)
a
b
c
d
e
f
In millions of euros
31 December 2023
Gross carrying amount/Nominal amount
Accumulated impairment
Accumulated
negative changes
in fair value due
to credit risk on
non-performing
exposures
Of which
Instruments
with significant
increase in credit
risk since initial
recognition but
not credit-
impaired
(Stage2)
Of which non-
performing
Of which
Instruments
with significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage2)
Of which
defaulted
Of which
defaulted impairment
Of which
loans and
advances
subject to
150
Public administration
and defence,
compulsory social
security
724
55
59
59
724
(41)
(4)
(35)
160
Education
1,072
165
34
34
1,072
(29)
(5)
(16)
170
Human health
services and social
work activities
6,348
965
485
480
6,348
(139)
(27)
(96)
180
Arts, entertainment
and recreation
1,974
511
141
141
1,974
(83)
(19)
(51)
190
Other services
7,531
2,098
155
146
7,530
(86)
(12)
(63)
200 exposures
358,419
Off-balance sheet
21,465
1,389
1,386
358,419
(717)
(239)
(296)
-
Agriculture, forestry
and fishing
1,511
91
3
3
1,511
(3)
(2)
0
Mining and quarrying
8,305
292
35
35
8,305
(6)
(1)
0
Manufacturing
112,756
4,542
352
352
112,756
(190)
(63)
(69)
Electricity, gas, steam
and air conditioning
supply
31,873
750
60
60
31,873
(26)
(6)
(10)
Water supply
3,317
90
19
19
3,317
(3)
0
(2)
Construction
32,639
2,205
356
356
32,639
(113)
(29)
(64)
Wholesale and retail
trade
37,411
2,657
170
170
37,411
(91)
(24)
(45)
Transport and
storage
20,851
3,981
33
33
20,851
(40)
(31)
(3)
Accommodation and
food service activities
2,595
247
30
30
2,595
(10)
(6)
(2)
Information and
communication
23,863
3,981
76
76
23,863
(50)
(21)
(21)
Financial and
insurance activities
20,121
904
37
37
20,121
(69)
(13)
(48)
Real estate activities
15,335
732
55
55
15,335
(26)
(9)
(7)
Professional,
scientific and
technical activities
22,323
877
29
26
22,323
(19)
(7)
(2)
a
b
c
d
e
f
In millions of euros
31 December 2023
Gross carrying amount/Nominal amount
Accumulated impairment
Accumulated
negative changes
in fair value due
to credit risk on
non-performing
exposures
Of which
Instruments
with significant
increase in credit
risk since initial
recognition but
not credit-
impaired
(Stage2)
Of which non-
performing
Of which
Instruments
with significant
increase in
credit risk
since initial
recognition
but not credit-
impaired
(Stage2)
Of which
defaulted
Of which
defaulted impairment
Of which
loans and
advances
subject to
Administrative and
support service
activities
19,863
911
91
91
19,863
(27)
(12)
(5)
Public administration
and defense,
compulsory social
security
364
110
364
Education
279
30
1
1
279
(1)
Human health
services and social
work activities
1,393
82
32
32
1,393
(3)
(1)
Arts, entertainment
and recreation
1,030
259
5
5
1,030
(10)
(6)
Other services
2,589
452
5
5
2,589
(29)
(7)
(18)
TOTAL
803,332
72,496
15,544
15,196
801,492
(9,470)
(1,323)
(7,238)
(33)
a
b
c
d
e
f
In millions of euros
31 December 2022
Gross carrying amount\Nominal amount
Accumulated impairment
Accumulated
negative changes
in fair value due
to credit risk on
non-performing
exposures
Of which
increase in credit
risk since initial
recognition but
recognition
not credit-
impaired
impaired
(Stage2)
Of which non-
performing
Of which
Instruments
Instruments
with significant
with significant
increase in
credit risk
since initial
but not credit-
(Stage2) Defaulted
Of which
Of which
Defaulted impairment
Of which
loans and
advances
subject to
On balance sheet
exposures
482,673
64,359
13,622
13,242
479,359
(9,306)
(1,492)
(6,929)
(22)
of which balance sheet
exposures of continuing
activities
451,114
63,221
13,196
12,816
447,800
(9,165)
(1,470)
(6,892)
(22)
010
Agriculture, forestry
and fishing
13,302
1,409
526
510
13,102
(325)
(69)
(211)
020
Mining and quarrying
9,452
909
156
155
9,452
(123)
(15)
(93)
030
Manufacturing
90,538
11,715
2,723
2,687
88,733
(2,238)
(323)
(1,742)
040
Electricity, gas, steam
and air conditioning
supply
20,640
1,874
137
136
20,477
(135)
(43)
(68)
050
Water supply
2,934
195
148
148
2,935
(134)
(4)
(124)
060
Construction
24,991
3,288
2,262
2,226
24,970
(1,593)
(83)
(1,449)
(3)
070
Wholesale and retail
trade
62,880
11,433
1,919
1,818
62,857
(1,287)
(195)
(964)
080
Transport and
storage
30,129
6,804
781
777
30,100
(551)
(121)
(386)
090
Accommodation and
food service activities
7,567
2,299
528
527
7,540
(365)
(113)
(232)
100
Information and
communication
15,925
1,824
204
201
15,435
(177)
(27)
(126)
110
Financial and
insurance activities
24,136
3,361
664
616
24,038
(346)
(101)
(195)
120
Real estate activities
65,402
6,708
1,199
1,188
65,209
(649)
(146)
(415)
130
Professional,
scientific and
technical activities
20,782
2,592
478
472
20,782
(333)
(55)
(228)
140
Administrative and
support service
activities
45,608
4,130
855
852
45,342
(588)
(103)
(444)
150
Public administration
and defence,
compulsory social
security
288
35
6
5
288
(5)
(4)
160
Education
817
91
43
43
817
(18)
(2)
(14)
170
Human health
services and social
work activities
5,606
882
190
187
5,606
(134)
(29)
(94)
180
Arts, entertainment
and recreation
2,207
433
153
153
2,207
(74)
(17)
(54)
190
Other services
7,911
3,239
224
115
7,910
(91)
(24)
(49)
(19)
a
b
c
d
e
f
In millions of euros
31 December 2022
Gross carrying amount\Nominal amount
Accumulated impairment
Accumulated
negative changes
in fair value due
to credit risk on
non-performing
exposures
Of which
increase in credit
risk since initial
recognition but
recognition
not credit-
impaired
impaired
(Stage2)
Of which non-
performing
Of which
Instruments
Instruments
with significant
with significant
increase in
credit risk
since initial
but not credit-
(Stage2) Defaulted
Of which
Of which
Defaulted impairment
Of which
loans and
advances
subject to
of which balance sheet
exposures of assets
held for sale
31,559
1,138
426
426
31,559
(141)
(22)
(37)
0
200 exposures
364,740
Off-balance sheet
27,119
1,489
1,489
364,740
(795)
(280)
(295)
-
Agriculture, forestry
and fishing
2,164
132
10
10
2,164
(8)
(2)
Mining and quarrying
9,136
758
88
88
9,136
(9)
(4)
Manufacturing
118,678
7,287
326
326
118,678
(219)
(89)
(50)
Electricity, gas, steam
and air conditioning
supply
26,268
1,300
49
49
26,268
(29)
(9)
(7)
Water supply
3,535
170
4
4
3,535
(2)
(1)
Construction
34,086
3,754
431
431
34,086
(126)
(30)
(78)
Wholesale and retail
trade
42,621
2,591
178
178
42,621
(126)
(29)
(70)
Transport and
storage
21,354
4,634
267
267
21,354
(64)
(49)
(7)
Accommodation and
food service activities
2,334
167
23
23
2,334
(6)
(2)
(2)
Information and
communication
21,653
694
18
18
21,653
(16)
(3)
(2)
Financial and
insurance activities
21,368
1,091
14
14
21,368
(68)
(14)
(43)
Real estate activities
19,422
1,228
29
29
19,422
(22)
(5)
(8)
Professional,
scientific and
technical activities
17,887
1,097
49
49
17,887
(20)
(8)
(2)
Administrative and
support service
activities
14,374
1,152
130
130
14,374
(38)
(19)
(9)
Public administration
and defence,
compulsory social
security
748
28
748
Education
366
21
1
1
366
Human health
services and social
work activities
1,777
147
2
2
1,777
(16)
(2)
(12)
Arts, entertainment
and recreation
1,333
284
7
7
1,333
(6)
(4)
Other services
5,636
584
39
39
5,636
(20)
(11)
(4)
TOTAL
847,413
91,478
15,111
14,731
844,099
(10,101)
(1,772)
(7,224)
(22)
Industry risks are monitored in terms of gross exposure(1) and
risk-weighted assets. Certain sectors, defined in line with the principles of
the Group's Risk Appetite Statement, are subject to enhanced monitoring
and specific reviews. Their monitoring is carried out on a wider scope,
taking into account all the exposures of the Business Groups and entities
relating to these sectors as defined by the monitoring and the internal
risk management nomenclature.
■ the leveraged finance sector:
As at 31 December 2023, the Group's exposure to Leverage
Buy-Out transactions with financial sponsors ("LBO") amounted to
EUR 12.7 billion, or 0.7% of the Group's gross on-balance sheet and
off-balance sheet commitments, compared with EUR 18.4 billion, or
0.9% as at 31 December 2022. This reduction is partly due to lower new
production in the context of higher interest rates and to slowdown in
the M&A market. These exposures are very granular with an average
amount of EUR 12 million per loan (EUR 24 million taking into account
all exposures related to the business groups). This portfolio has proven
resilient in the current economic environment, despite an increase at
the end of the year in defaulted assets (EUR 762 million compared
to EUR 361 million in 2022) and stage 3 provisions amounting to
EUR 156 million (compared to EUR 125 million at end 2022).
■ the shipping sector:
2022;
the shipping sector covers a set of segments with very different
dynamics: bulk, oil and gas tankers, container carriers, oil services
and cruises. In 2023, these different segments were affected in
very heterogeneous ways by the evolution of the macro-economic
environment. The cruise segment benefitted from a progressive
recovery of demand but remains with the burden of banking debt and
export finance repayments that were delayed during the pandemic.
Some signs of slowdown of the maritime container transport are visible
since the second half of 2022, however this segment is still doing very
well. Lastly, the dry bulk and tanker segments remain subject to high
market volatility and have suffered both positive and negative impacts
from the consequences of the invasion of Ukraine and the Middle East
conflict. LNG and Floating Storage and Regasification Units (FRSUs)
benefited from the collapse of Russian natural gas exports to Europe
via pipeline and the lasting change in the geopolitical context.
The shipping industry has to face new environmental constraints
(International Maritime Organisation (IMO) standards) involving
investment efforts. A growing number of new orders concern hybrid
LNG (Liquefied Natural Gas) propulsion or other technologies with a
reduced impact on the environment.
At 31 December 2023 gross exposure of the shipping finance sector
was EUR 19.6 billion, i.e. 1.1% of the Group's gross on-balance sheet
and off-balance sheet credit exposures, compared to EUR 21.5 billion
or 1.1% at 31 December 2022. Most of this exposure is borne by
Corporate and Institutional Banking (more than 90%, like last year),
with good geographical diversification of the client base. Doubtful
loans account for 2.4% of the Group's exposure to the shipping finance
segment (compared to 3.2% of doubtful loans at 31 December 2022) and
stage 3 provisions were EUR 175 million (compared to EUR 230 million
in provisions at 31 December 2022);
■ the aviation sector:
business activity in this sector is evenly split between airlines and
aircraft leasing companies. The gross exposure is EUR 14.5 billion at
31 December 2023, i.e. 0.8% of the Group's total gross on- and off-
balance sheet commitments, versus EUR 14.4 billion, i.e. 0.7% of the
Group's total gross commitments at 31 December 2022. Origination
continues to be concentrated on leading airlines and the latest
technology aircrafts with lower environmental impact. The direct
and indirect consequences of the invasion of Ukraine have not had
a significant impact on the cost of risk of this portfolio yet. Thus,
the amount of doubtful loans remains low and strongly decreased
at 31 December 2023 representing 2% of the sector's outstandings
(versus 5.2% in 2022). As aircraft financing is a highly collateralised
business, stage 3 provisions are limited and represent EUR 58 million
at 31 December 2023, compared to EUR 111 million at 31 December
■ the commercial real estate sector:
The commercial real estate sector covers a set of segments with very
different dynamics: logistics, office real estate, residential, hotels,
shopping centers, but all segments are affected by rising rates which
are driving down valuations. The Group expects values to stabilise in
2024, but they will not return to their 2022 level until 2027, except
for the best assets. More specifically, the office sector is undergoing a
change in use following the widespread adoption of work-from-home
and some assets may experience a high vacancy rate. Overall, the
portfolio is predominantly investment grade.
At 31 December 2023, the gross exposure to the commercial real estate
sector is EUR 71.7 billion, (EUR 82.6 billion at 31 December 2022 o/w
EUR 11.2 billion in Bank of the West), i.e. 3.9% of the Group's total gross
on- and off-balance sheet commitments (4.2% of total commitments in
2022). This exposure is mainly in Europe and highly diversified between
the various market segments, countries and entities of the Group.
Defaulted assets represent 2.4% of the sector's total gross exposure
(compared to 1.5% in 2022). On commercial real estate, stage 3
provisions amounted to EUR 583 million as at 31 December 2023
(EUR 411 million as at 31 December 2022). The provisions for stages 1
and 2 amount to EUR 298 million at 31 December 2023, i.e. an exposure
coverage rate of 0.4%.
(1) Gross credit risk exposures across all regulatory exposure classes. They amounted to EUR 1,829 billion at 31 December 2023.
■ the Power sector:
The activity of this sector includes the generation, transportation, and
distribution of electricity.
A strong demand for electricity is expected in the coming years due
to the need for electrification of many economic sectors, particularly
as part of the decarbonisation of the economy.
The strong geopolitical tensions and the consequences of the Russia-
Ukraine conflict caused a sharp rise in electricity market prices in 2022,
mainly in Europe. In 2023, the decrease in prices has reduced clients'
need for liquidity, even though market volatility remains high due to
new geopolitical tensions.
To meet the future demand for electricity and the gradual phase-out
of fossil fuels, the "Renewables" segment will continue to expand,
but certain adjustments have been made necessary regarding the
economic parameters of new investments, in a context of inflation and
increased costs related to the development of these assets.
As at 31 December 2023, gross exposure to the electricity sector
amounted to EUR 55.2 billion (or 3.0% of the Group's total on- and
off-balance sheet gross exposure), compared with EUR 55.3 billion
as at 31 December 2022 (2.8% of gross exposure in 2022). 81% of
counterparties have good credit quality (investment grade rating), and
the amount of outstanding on doubtful customers is low, representing
0.7% of the sector as at 31 December 2023 (compared to 0.4% in 2022).
Stage 3 provisions amounted to EUR 87 million as at 31 December
2023 (compared to EUR 74 million last year).
The Group remains diversified, with no sector accounting for more than
10% of corporate lending exposure and more than 4.0% of total credit
exposure as at 31 December 2023.
At 31 December 2023, non-performing loans were stable compared to
31 December 2022, following the sale of Bank of the West and the sale
of doubtful portfolios in Italy and Personal Finance, offset by an increase
at CPBS in France and Global Banking Americas.
The main effects explaining changes in the amount of doubtful
outstandings in 2023 (EU CR2-B) are presented in note 5.f Impaired
financial assets (stage 3).
The cost of risk and the change in impairment in respect of credit risk
are presented in note 1.f.6 Cost of risk to the consolidated financial
statements.
The following table shows the carrying amounts of the financial assets
and commitments at amortised cost and fair value through equity subject
to impairment provisions for credit risk (i.e. excluding instruments at
fair value through profit and loss) broken down by stage of impairment
and by BNP Paribas internal rating in the prudential scope. Financial
assets subject to impairment are recognised in the following accounting
categories:
■ amounts due from central banks (excluding cash);
■ debt securities at fair value through equity or at amortised cost;
■ loans and advances at amortised cost;
■ financing and guarantee commitments given (off-balance sheet).
➤
TABLE 52: BREAKDOWN OF FINANCIAL ASSETS SUBJECT TO IMPAIRMENT BY STAGE AND INTERNAL RATING [Audited]
In millions of euros
31 December 2023
Gross carrying value
Net
carrying
value
BNP Paribas rating or equivalent
1 to 3
4 to 5
6 to 8
9 to 10
Defaulted
TOTAL Impairments
Central Banks
280,710
1,085
3,489
312
-
285,596
(20)
285,576
Stage 1
280,710
1,085
3,484
285,279
(20)
285,259
Stage 2
5
312
317
317
Stage 3
-
-
-
Debt securities at fair value
through equity
49,857
1,996
1,126
-
109
53,088
(121)
52,967
Stage 1
49,857
1,833
1,048
52,738
(7)
52,731
Stage 2
163
78
241
(12)
229
Stage 3
109
109
(102)
7
Loans and advances at amortised
cost
222,805
283,937
380,766
20,237
25,887
933,632
(17,572)
916,060
Stage 1
220,797
276,147
331,317
5,766
834,027
(1,970)
832,057
Stage 2
2,008
7,790
49,449
14,471
73,718
(2,387)
71,331
Stage 3
25,887
25,887
(13,215)
12,672
Debt securities at amortised cost
105,170
12,653
3,016
67
180
121,086
(104)
120,982
Stage 1
105,170
12,632
2,960
50
120,812
(12)
120,800
Stage 2
21
56
17
94
(5)
89
Stage 3
180
180
(87)
93
Financing and guarantee
commitments
274,772
159,280
118,897
7,169
1,658
561,776
(883)
560,893
Stage 1
272,732
155,360
104,403
1,064
533,559
(269)
533,290
Stage 2
2,040
3,920
14,494
6,105
26,559
(301)
26,258
Stage 3
1,658
1,658
(313)
1,345
TOTAL
933,314
458,951
507,294
27,785
27,834
1,955,178
(18,700)
1,936,478
Financial assets subject to impairments were down by EUR 99 billion, a
decrease of 5% compared to 31 December 2022. This change is mainly due
to the disposal of the activities of Bank of the West in the first quarter of
2023, for which outstandings amounted to EUR 80 billion on the balance
sheet (presented in "A ssets held for sale") and EUR 22 billion in financing
and guarantee commitments (including EUR 6 billion rated 4 to 5 and
EUR 14 billion rated 6 to 8) at 31 December 2022.
Excluding the disposal of the Bank of the West activities, financial
assets subject to impairments were up by EUR 4 billion compared to
31 December 2022. This change mainly relates to financial assets and
commitments rated 6 to 8 (+EUR 6 billion), while financial assets and
commitments rated 9 to 10 decreased by EUR 2 billion.
Loans and receivables at amortised cost classified in stage 1 increased
by EUR 9 billion, while outstandings classified in stage 2 decreased by
EUR 14 billion, notably as a result of a less pronounced deterioration in
activity than initially anticipated during the first half of 2023 (see note
3.g Cost of risk in the notes to the consolidated financial statements).
Outstandings transferred from stage 2 to stage 1 mainly concern the
least risky outstandings among those previously classified in stage 2
(outstandings rated 4 to 5 and 6 to 8 notably).
In millions of euros
31 December 2022
Gross carrying value
Net
carrying
value
BNP Paribas rating or equivalent
1 to 3
4 to 5
6 to 8
9 to 10
Defaulted
TOTAL Impairments
Central Banks
310,779
2,185
2,368
226
315,558
(21)
315,537
Stage 1
310,779
2,126
2,070
314,975
(15)
314,960
Stage 2
59
298
226
583
(6)
577
Stage 3
Debt securities at fair value through
equity
35,431
1,856
1,291
14
108
38,700
(130)
38,570
Stage 1
35 431
1,794
1,208
14
38,447
(15)
38,432
Stage 2
62
83
145
(15)
130
Stage 3
108
108
(100)
8
Loans and advances at amortised
cost
224,883
287,238
378,444
22,095
25,842
938,502
(18,361)
920,141
Stage 1
221,538
274,000
321,860
7,752
825,150
(2,050)
823,100
Stage 2
3,345
13,238
56,584
14,343
87,510
(2,829)
84,681
Stage 3
25,842
25,842
(13,482)
12,360
Debt securities at amortised cost
95,454
13,614
4,521
97
155
113,841
(130)
113,711
Stage 1
95,454
13,593
4,199
53
113,299
(27)
113,272
Stage 2
21
322
44
387
(10)
377
Stage 3
155
155
(93)
62
Assets held for sale
24,979
7,923
46,036
605
553
80,096
(329)
79,767
Stage 1
24,979
7,795
43,251
368
76,393
(141)
76,252
Stage 2
128
2,785
237
3,150
(126)
3,024
Stage 3
553
553
(62)
491
Financing and guarantee
commitments
268,021
161,600
128,697
7,415
1,730
567,463
(980)
566,483
Stage 1
265,880
154,481
111,371
1,887
533,619
(326)
533,293
Stage 2
2,141
7,119
17,326
5,528
32,114
(338)
31,776
Stage 3
1,730
1,730
(316)
1,414
TOTAL
959,547
474,416
561,357
30,452
28,388
2,054,160
(19,951)
2,034,209
RESTRUCTURED LOANS [AUDITED]
When a borrower is bordering on or is in financial difficulties, he may
receive a concession from the bank that would otherwise not have been
granted if the borrower had not met with financial difficulties. The
concession may be:
■ a change to the contract terms and conditions;
■ partial or total refinancing of the debt.
The loan is then said to be "restructured". It must retain the status
of "restructured" during a period of observation, known as a probation
period, for at least two years. The concept of restructuring is described
in the accounting principles (note 1.f.5 Impairment of financial assets
measured at amortised cost and debt instruments measured at fair value
through shareholders' equity to the consolidated financial statements
as at 31 December 2023) and is aligned with by Article 47 of Regulation
575/2013.
According to the principles for identifying the restructured exposure
amounts for the Group as a whole, for the non-retail business, exposures
are identified individually during the loan process, notably during
committees. As for restructured exposures for retail customers, they are
usually identified via a systematic process requiring the use of algorithms
whose parameters are validated by the RISK and Finance & Strategy
Functions.
Information on restructured loans is reported to the supervisory authority
on a quarterly basis.
The following table shows the gross value and impairment amounts
of performing and non-performing loans that have been restructured.
➤
TABLE 53: CREDIT QUALITY OF RESTRUCTURED LOANS (EU CQ1) [Audited]
a
b
c
e
f
g
h
In millions of euros
31 December 2023
Gross carrying amount
Accumulated impairment,
accumulated negative
changes in fair value due to
credit risk and provisions
Collaterals received and financial
guarantees received
Performing
exposures
Non-performing
exposures
On performing
exposures
On non-
performing
exposures
Of which Collateral and
financial guarantees
received on non-
performing exposures
Of which
defaulted
010
Loans and advances
6,713
7,738
7,714
(312)
(3,179)
6,977
2,695
030
General governments
15
5
5
(4)
040
Credit institutions
5
5
(5)
050
Other financial
corporations
377
421
421
(11)
(244)
252
169
060
Non-financial
corporations
4,547
3,915
3,898
(140)
(1,639)
4,981
1,660
070
Households
1,775
3,392
3,385
(162)
(1,287)
1,744
866
080
Debt Securities
-
25
25
-
(13)
-
-
090
Loan commitments given
2,290
309
307
(18)
(40)
1,465
64
100
TOTAL
9,002
8,073
8,046
(331)
(3,232)
8,442
2,758
a
b
c
e
f
g
h
In millions of euros
31 December 2022
Gross carrying amount
Accumulated impairment,
accumulated negative
changes in fair value due to
credit risk and provisions
Collaterals received and financial
guarantees received
Performing
exposures
Non-performing
exposures
On performing
exposures
On non-
performing
exposures
Of which Collateral and
financial guarantees
received on non-
performing exposures
Of which
defaulted
010
Loans and advances
9,461
7,889
7,866
(491)
(3,154)
8,749
2,662
030
General governments
7
7
7
(1)
(4)
4
040
Credit institutions
-
5
5
(5)
050
Other financial
corporations
313
427
427
(18)
(194)
315
206
060
Non-financial
corporations
6,870
3,720
3,701
(319)
(1,533)
6,278
1,604
070
Households
2,271
3,731
3,727
(154)
(1,417)
2,151
852
080
Debt Securities
-
102
102
-
(53)
20
20
Assets held for sale
123
134
134
(5)
(6)
239
127
090
Loan commitments given
2,209
150
150
(34)
(14)
1,401
29
100
TOTAL
11,793
8,275
8,252
(530)
(3,227)
10,409
2,838
CREDIT RISK MITIGATION TECHNIQUES
Credit risk mitigation techniques are divided into two main categories:
■ funded credit protection (collateral) pledged to the Bank is used to
secure timely performance of a borrower's financial obligations;
■ unfunded credit protection (personal guarantee) is the commitment
by a third party to replace the primary obligor in the event of default.
Thus, public guarantee mechanisms are considered as personal
guarantees. By extension, credit insurance and credit derivatives
(purchased protection) fall into this category.
The amount of personal guarantees and collateral recognised on loans
and receivables and debt securities in the prudential reporting scope
amounted to EUR 552 billion at 31 December 2023.
➤
TABLE 54: CREDIT RISK MITIGATION TECHNIQUES (EU CR3) [Audited]
a
b
c
d
e
In millions of euros
31 December 2023
Gross
amount
Unsecured
carrying net carrying
amount
Secured net carrying amount
Secured by
physical
collateral
Secured by personal
guarantees
Secured
by credit
derivatives
1
Loans and advances
1,221,527
656,149
547,754
315,544
232,210
2
Debt securities
176,026
171,747
4,017
1,795
2,222
3
TOTAL
1,397,553
827,895
551,771
317,339
234,432
-
4
of which non-performing exposures
27,126
5,089
8,551
5,847
2,704
EU-5
of which defaulted
26,661
4,981
8,343
5,826
2,517
a
b
c
d
e
In millions of euros
31 December 2022
Gross
amount
Unsecured
carrying net carrying
amount
Secured net carrying amount
Secured by
physical
collateral
Secured by personal
guarantees
Secured
by credit
derivatives
1
Loans and advances
1,257,959
689,778
549,777
298,331
251,446
2
Debt securities
155,088
151,587
3,202
1,122
2,080
Assets held for sale
80,095
32,729
47,037
38,998
8,039
3
TOTAL
1,493,143
874,094
600,016
338,451
261,565
-
4
of which non-performing exposures
26,689
4,565
8,378
5,616
2,762
EU-5
of which defaulted
26,240
4,378
8,217
5,590
2,626
Credit Risk Mitigants (CRM) are taken into account in accordance with
the regulation. In particula r, t heir effect is assessed under conditions
characteristic of an economic downturn.
For the scope under the IRB approach, personal guarantees and collaterals
are taken into account, provided they are eligible, by decreasing the Loss
Given Default (LGD) parameter corresponding to an increase in the Global
Recovery Rate (GRR) that applies to the transactions of the banking book.
The value taken into consideration takes account, where relevant, of
currency and maturity mismatches and, for funded credit protection, of
a haircut applied to the market value of the pledged asset based on a
default scenario during an economic downturn. The amount of unfunded
credit protection to which a haircut is applied depends on the enforceable
nature of the commitment and the risk of simultaneous default by the
borrower and guaranto r.
For the scope under the standardised approach, unfunded credit
protection is taken into account provided it is eligible, by applying the
more favourable risk weight of the guarantor to a portion of the secured
exposure adjusted for currency and maturity mismatches. Funded credit
protection is taken into account as a decrease in the exposure, after
adjustment for any currency and maturity mismatches and a discount to
take account of volatility in market value for financial security collaterals.
The assessment of the credit risk mitigating effect follows a methodology
that is approved for each activity and is used throughout the Group. These
techniques are monitored in accordance with the monitoring and portfolio
management procedures described in the Credit risk management policy
section.
➤
TABLE 55: CREDIT RISK MITIGATION IN IRBA AND STANDARD APPROACH
In millions of euros
31 December 2023
31 December 2022
Gross
exposure
Risk mitigation amount
Gross
exposure
Risk mitigation amount
Collateral derivatives
Guarantees
and credit
Total risk
mitigation
Guarantees
and credit
Collateral derivatives
Total risk
mitigation
IRB approach
1,431,267
233,297
197,157
430,454
1,464,345
234,920
197,444
432,365
Standardised
approach
340,936
42,736
25,381
68,117
433,607
68,758
23,479
92,237
TOTAL
1,772,203
276,033
222,538
498,570
1,897,952
303,679
220,923
524,602
➤
TABLE 56: SECURED EXPOSURES IN IRB APPROACH (EU CR7-A)
a
b
c
d
In millions of euros
Total gross
Total of the risk-
exposures(*) exposed value
Part covered
by Financial
Collateral
Part covered by other eligible
physical collaterals (%)
of which
immovable
property
Collaterals
1
Central governments and central banks
432,341
431,674
0.00%
0.01%
0.01%
2
Institutions
45,783
37,244
2.14%
1.19%
1.14%
3
Corporates
671,642
482,551
2.29%
18.95%
9.28%
3.1
of which SMEs
49,095
39,427
1.61%
33.66%
26.45%
3.2
of which specialised lending
80,020
69,038
0.14%
54.34%
18.30%
3.3
of which other
542,527
374,086
2.76%
10.87%
5.81%
4
Retail
281,501
278,276
0.41%
44.47%
44.29%
4.1
of which immovable property SMEs
11,106
10,675
0.09%
91.32%
91.30%
4.2
of which immovable property non-SMEs
185,070
185,085
0.02%
57.65%
57.64%
4.3
of which qualifying revolving
11,901
10,051
0.00%
0.00%
0.00%
4.4
of which other SMEs
31,932
30,819
1.38%
18.36%
16.74%
4.5
of which other non-SMEs
41,492
41,644
1.58%
3.95%
3.95%
5
TOTAL
1,431,267
1,229,744
1.06%
17.54%
13.70%
(*) Excluding derivatives and securities financing transactions subject to counterparty risk exposures.
(**) In accordance with the Group's IRBA methodology, the impact of risk mitigation techniques is treated only by reducing LGD (no substitution approach).
a
b
c
d
In millions of euros
Total gross
Total of the risk-
exposures(*) exposed value
Part covered
by Financial
Collateral
Part covered by other eligible
physical collaterals (%)
of which
immovable
property
Collaterals
1
Central governments and central banks
454,775
452,804
0.00%
0.01%
0.01%
2
Institutions
45,960
38,441
0.72%
1.05%
1.01%
3
Corporates
674,680
491,948
2.65%
17.78%
8.91%
3.1
of which SMEs
51,583
41,754
1.63%
35.65%
27.20%
3.2
of which specialised lending
82,887
71,400
1.04%
50.88%
17.79%
3.3
of which other
540,210
378,795
3.07%
9.57%
5.22%
4
Retail
288,930
285,075
0.42%
44.20%
44.02%
4.1
of which immovable property SMEs
12,176
11,681
0.11%
90.50%
90.46%
4.2
of which immovable property non-SMEs
189,024
189,058
0.02%
57.05%
57.04%
4.3
of which qualifying revolving
12,087
10,095
0.00%
0.00%
0.00%
4.4
of which other SMEs
34,210
32,861
1.53%
17.76%
16.22%
4.5
of which other non-SMEs
41,432
41,380
1.51%
4.20%
4.20%
5
TOTAL
1,464,345
1,268,269
1.14%
16.87%
13.38%
(*) Excluding derivatives and securities financing transactions subject to counterparty risk exposures.
(**) In accordance with the Group's IRBA methodology, the impact of risk mitigation techniques is treated only by reducing LGD (no substitution approach).
e
f
g
h
i
j
k
l
m
31 December 2023
Credit Risk Mitigation techniques
Total RWA
(reduction
Funded credit Protection (physical collateral)
Unfunded credit protection
Part covered by other physical funded credit protection (%)
Part covered by
guarantees
Part covered
by credit
derivatives effects only)(**)
of which
receivables collateral
of which
other
physical
of which cash
on deposit
of which life
policies
of which
Instruments
insurance held by a third
party
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.83%
0.00%
4,360
0.03%
0.02%
0.03%
0.03%
0.00%
0.00%
15.49%
0.00%
7,963
1.66%
8.01%
0.53%
0.46%
0.07%
0.00%
20.67%
0.01%
218,425
6.42%
0.80%
1.03%
0.78%
0.24%
0.00%
17.03%
0.00%
21,967
1.95%
34.09%
0.60%
0.60%
0.00%
0.00%
18.37%
0.00%
22,918
1.10%
3.96%
0.46%
0.40%
0.06%
0.00%
21.47%
0.01%
173,540
0.15%
0.04%
0.75%
0.05%
0.69%
0.00%
31.64%
0.00%
55,989
0.02%
0.01%
0.06%
0.02%
0.04%
0.00%
2.10%
0.00%
2,880
0.00%
0.00%
0.05%
0.00%
0.04%
0.00%
41.28%
0.00%
23,174
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
3,366
1.31%
0.31%
1.93%
0.31%
1.62%
0.00%
29.77%
0.00%
9,469
0.00%
0.00%
3.32%
0.11%
3.21%
0.00%
5.39%
0.00%
17,100
0.69%
3.15%
0.38%
0.19%
0.18%
0.00%
16.03%
0.00%
286,737
e
f
g
h
i
j
k
l
m
31 December 2022
Credit Risk Mitigation techniques
Total RWA
(reduction
Funded credit Protection (physical collateral)
Unfunded credit protection
Part covered by other physical funded credit protection (%)
Part covered by
guarantees
Part covered
by credit
derivatives effects only)(**)
of which
receivables collateral
of which
other
physical
of which cash
on deposit
of which life
policies
of which
Instruments
insurance held by a third
party
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.75%
0.00%
4,620
0.02%
0.02%
0.36%
0.35%
0.00%
0.00%
15.03%
0.00%
8,280
1.75%
7.12%
0.85%
0.71%
0.13%
0.00%
19.61%
0.01%
237,260
7.62%
0.83%
0.73%
0.41%
0.32%
0.00%
17.57%
0.00%
20,979
1.97%
31.12%
2.78%
2.78%
0.00%
0.00%
16.69%
0.00%
24,001
1.06%
3.29%
0.50%
0.36%
0.14%
0.00%
20.39%
0.02%
192,280
0.14%
0.04%
0.78%
0.05%
0.73%
0.00%
32.19%
0.00%
56,766
0.03%
0.01%
0.08%
0.02%
0.06%
0.00%
2.24%
0.00%
3,146
0.00%
0.00%
0.05%
0.01%
0.05%
0.00%
41.60%
0.00%
23,559
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
3,304
1.23%
0.31%
1.81%
0.25%
1.56%
0.00%
31.96%
0.00%
9,579
0.00%
0.00%
3.65%
0.11%
3.54%
0.00%
5.67%
0.00%
17,178
0.71%
2.77%
0.51%
0.30%
0.22%
0.00%
15.56%
0.00%
306,927
The main providers of unfunded credit protection (personal guarantees)
are the guarantee institutions in the Commercial & Personal Banking of
CPBS mortgage business (mainly housing loans in France) and, since
2020, States or public organisms that have set up public guarantee
mechanisms to counter the public health crisis.
As at 31 December 2023, 78% of exposure to property loans is concentrated
in the Group's two main Domestic Markets (France, Belgium). In view of
the specific features of these markets (amortising long-term financing,
primarily at fixed rates), the LTV (Loan-to-value) ratio is not a main
monitoring indicator at Group level.
FUNDED CREDIT PROTECTION
Funded credit protection is divided into two categories:
■ financial collateral:
this consists of cash amounts (including gold), shares in collective
investment funds, equities (listed or unlisted) and bonds;
■ other diverse forms of collateral:
these include real estate mortgages or ship mortgages, pledge of
equipment or inventories, transfer of commercial receivables or any
other rights to an asset of the counterparty.
To be considered as eligible, funded credit protection must fulfil the
following conditions:
■ the value of the collateral must not be highly correlated with the risk
on the obligor (in particula r, s hares of the obligor are not eligible);
■ the pledge must be documented;
■ the pledged asset must be traded on a liquid secondary market to
enable rapid resale;
■ the Bank must have a regularly updated value of the pledged asset;
■ the Bank must have a reasonable level of comfort in the potential
appropriation and realisation of the asset concerned.
In the Retail Banking business, the presence or absence of a particular
type of collateral may, depending on the coverage ratio, lead to assigning
the exposure to particular LGD class on a statistical basis.
UNFUNDED CREDIT PROTECTION
Guarantors are subject to the same rigorous credit risk assessment
process as primary obligors and are assigned risk parameters according
to similar methods and procedures.
Guarantees are granted by the obligor's parent company or by other
entities such as financial institutions. Other examples of guarantees are
credit derivatives, guarantees from public insurers for export financing
or private insurers.
Consideration of a guarantee consists of determining the average
amount the Bank can expect to recover if the borrower defaults and the
guarantee is called in. It depends on the amount of the guarantee, the risk
of simultaneous default by the borrower and the guarantor (which is a
function of the probability of default of the borrowe r, o f the guaranto r, a nd
the degree of correlation between borrower and guarantor default, which
is high if they belong to the same business group or the same sector and
low if not) and the enforceable nature of the guarantee.
OPTIMISING CREDIT RISK MANAGEMENT
THROUGH CDS (EU CR7)
As part of its role of optimising credit risk management for CIB,
Portfolio Management (PM) sets up hedges using credit derivatives,
and mainly credit default swaps (CDS). These CDS are used as part of
an active management policy, the main aim being to hedge migration
and concentration risks and manage major exposures. The underlying
assets are loans made to large corporates by CIB Global Banking, and
occasionally those made by the Commercial & Personal Banking activity.
These hedges are put on by CIB to hedge exposures mainly treated under
the IRB approach. Provided they are eligible, they have the effect of
decreasing the estimated Loss Given Default for the underlying asset,
and, therefore, reducing its consumption in terms of risk-weighted assets.
The reduction in risk-weighted assets resulting from hedging operations
via CDS concerns only the corporate asset class, and represents
EUR 165 million as at 31 December 2023 compared to EUR 238 million
as at 31 December 2022 (EU CR7).
COLLATERAL SEIZED
➤
TABLE 57: COLLATERAL OBTAINED BY TAKING POSSESSION AND EXECUTION PROCESSES (EU CQ7) [Audited]
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
Collateral obtained by taking possession
accumulated(*)
Collateral obtained by taking possession
accumulated(*)
Value at initial
Accumulated
recognition negative changes
Value at initial
Accumulated
recognition negative changes
010 Property Plant and Equipment (PP&E)
020 Other than Property Plant and Equipment
227
(29)
270
(35)
030 Residential immovable property
199
(29)
224
(35)
040 Commercial Immovable property
8
8
050 Movable property (auto, shipping, etc.)
060 Equity and debt instruments
20
22
070 Other collateral
16
080 TOTAL
227
(29)
270
(35)
(*) The amount of assets held for sale are included in the amounts of collateral presented in the table above.
Collateral obtained by taking possession includes assets obtained in exchange for cancellation of the receivable, whether on a voluntary basis or on
foot of legal proceedings.
5.5 Securitisation in the banking book
The securitisation transactions discussed below concern:
■ the programmes originated by the Group for its own account,
securitising its credit exposures ("originator" role) which are recognised
as efficient under Basel 3 regulatory framework;
■ the programmes that the Group has structured on behalf of its clients
("sponsor" role where clients' assets are securitised), in which it has
retained positions;
■ the programmes to which the Group has subscribed without having a
role in structuring the operation ("investor" role).
Securitisation positions deducted from own funds, amounting to at
-EUR 270 million at 31 December 2023, are now included in this whole
section 5.5.
BNP PARIBAS SECURITISATION ACTIVITIES
The Group's activities in each of its roles as originato r, s ponsor and investo r, a re described below:
➤
TABLE 58: SECURITISED EXPOSURES AND SECURITISATION POSITIONS (HELD OR ACQUIRED) BY ROLE
BNP Paribas role
In millions of euros
31 December 2023
31 December 2022
Securitised exposures originated
by BNP Paribas(*)
securitisation positions held or
(SRT)(**) acquired (EAD)(***)
Securitised exposures originated
by BNP Paribas(*)
securitisation positions held or
(SRT)(**) acquired (EAD)(***)
Efficient Securitised
Efficient Securitised
Originator
136,720
62,097
42,798
119,716
50,072
39,893
Sponsor
35,470
31,353
Investor
23,003
21,005
TOTAL
136,720
62,097
101,271
119,716
50,072
92,252
(*) Securitised exposures originated by the Group correspond to the underlying exposures recognised on the Group's balance sheet and off-balance sheet
which have been securitised.
(**) Securitisation programmes meeting the Significant Risk T r ansfer (SRT) criteria, see next paragraph.
(***)S ecuritisation positions correspond to tranches retained and off-balance sheet commitments granted by the Group in securitisation transactions
originated or arranged by the Group, as well as tranches acquired by the Group in securitisation transactions arranged by other parties.
Securitisation means a transaction or scheme, whereby the credit
risk associated with an exposure or pool of exposures is tranched,
having the following characteristics:
■
payments made in the transaction or scheme are dependent
upon the performance of the exposure or pool of exposures;
■
the subordination of tranches determines the distribution of
losses during the life of the risk transfe r.
Any commitment (including derivatives and liquidity lines)
granted to a securitisation operation must be treated as a
securitisation position. Most of these commitments are held in
the prudential banking book (section 5.5). Commitments held in
the trading book are set out in section 5.7 Market risk.
PROPRIETARY SECURITISATION
(ORIGINATOR)
The Group acts as an originator by securitising its own credit exposures
in order to obtain new sources of financing and improve the liquidity of
its balance sheet, and to reduce its risk and capital requirements.
Where the purpose of the transaction is solely to reduce risk, the Group
will favour so-called "synthetic" securitisation transactions, ensuring
the risk transfer of exposures (mortgages, consumer loans, corporate
loans, etc.) through credit derivatives or guarantees. These transactions
are initiated mainly by Corporate & Institutional Banking in collaboration
with the Commercial, Personal Banking & Services business lines.
In the context of securitisation transactions carried out for financing
purposes, the Group will favour so-called "cash" or "traditional"
securitisations, characterised by the sale of securitised exposures to a
specially created entity. These operations are initiated by ALM Treasury
in collaboration with the businesses whose exposures are securitised in
exchange for liquid assets eligible for central bank financing or included
in the global liquidity reserve (see paragraph Wholesale funding and
liquidity reserve monitoring indicators in section 5.8 Liquidity risk).
Risk transfer of own account securitisation
transactions
The capital requirement of securitised credit exposures and securitisation
positions depends on the risk transfer level of the transaction.
When the exposures securitised by the Group in the context of
own-account securitisation transactions meet the Basel eligibility criteria,
in particular that of significant risk transfer as defined in Regulation
(EU) No. 2017/2401, they are excluded from the calculation of credit
risk-weighted assets and the securitisation transaction is said to be
efficient. In this case, only the positions retained by the institution and
any commitments granted to the structure after securitisation are subject
to risk-weighted assets calculation.
Exposures securitised through proprietary securitisation transactions that
do not meet Basel eligibility criteria (inefficient securitisations) remain in
their original prudential portfolio. Their capital requirement is calculated
as if they were not securitised and is included in section 5.4 Credit risk.
Efficient securitisations
Exposures retained in securitisation positions originated by BNP Paribas
amounted to EUR 42.8 billion at 31 December 2023, corresponding to
positions in thirty efficient securitisation programmes under Basel rules.
At 31 December 2023, the main securitisation transactions recognised
as efficient are the following:
■ a synthetic transaction initiated in 2023 by Commercial & Institutional
Banking concerning an EUR 3.2 billion portfolio of large corporate
loans in France;
■ a synthetic transaction initiated in 2023 by Commercial & Personal
Banking in France concerning an EUR 1.8 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2023 by Commercial & Personal
Banking in France concerning an EUR 1.5 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2023 by Commercial & Personal
Banking in Belgium concerning an EUR 2.1 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2023 by Commercial & Institutional
Banking concerning an EUR 9.5 billion portfolio of large corporate
loans;
■ a synthetic transaction initiated in 2023 by Commercial & Personal
Banking in France concerning an EUR 1.3 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2022 by Commercial & Institutional
Banking concerning an EUR 0.9 billion portfolio of large corporate
loans in France;
■ a synthetic transaction initiated in 2022 by BNL bc concerning an
EUR 1.3 billion portfolio of corporate loans;
■ a synthetic transaction initiated in 2022 by Commercial & Institutional
Banking concerning an EUR 5.7 billion portfolio of large corporate
loans;
■ a synthetic transaction initiated in 2022 by Commercial & Institutional
Banking concerning an EUR 3.0 billion portfolio of large corporate
loans;
■ a synthetic transaction initiated in 2021 by Corporate & Institutional
Banking concerning an EUR 1.1 billion portfolio of large corporate
loans;
■ a synthetic transaction initiated in 2021 by Commercial & Institutional
Banking concerning an EUR 2.2 billion portfolio of large corporate
loans;
■ a synthetic transaction initiated in 2021 by BNL bc concerning an
EUR 1.3 billion portfolio of large corporate loans;
■ a synthetic transaction initiated in 2020 by Commercial & Personal
Banking in France concerning an EUR 0.9 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2019 by Commercial & Personal
Banking in Belgium concerning an EUR 1.2 billion portfolio of large
corporate loans;
■ a synthetic transaction initiated in 2019 by Commercial & Institutional
Banking concerning an EUR 2.3 billion portfolio of large corporate
loans in France.
The Group has not set up own account securitisations of revolving
exposures with an anticipated repayment clause.
At 31 December 2023, there were no assets awaiting securitisation.
➤
TABLE 59: SECURITISED EXPOSURES ORIGINATED BY BNP PARIBAS
In millions of euros
Securitised exposures originated
by BNP Paribas
31 December 2023
31 December 2022
Traditional
6,767
8,884
of which IRB approach
2,739
3,532
of which standardised approach(*)
4,027
5,351
Synthetic
55,330
41,188
of which IRB approach
55,330
41,188
TOTAL
62,097
50,072
(*) Securitisation programmes processed under SE C-ERBA approach.
➤
TABLE 60: SECURITISED EXPOSURES BY BNP PARIBAS AS AN ORIGINATOR BY UNDERLYING ASSET CATEGORY(*)
In millions of euros
31 December 2023
31 December 2022
Originated securitised exposures
Originated securitised exposures
Traditional
Synthetic
Total Traditional
Synthetic
Total
Consumer loans
4,629
4,629
6,764
6,764
Loans to corporates
1,572
55,330
56,903
1,620
41,188
42,808
Finance leases
565
565
500
500
TOTAL
6,767
55,330
62,097
8,884
41,188
50,072
(*) This breakdown is based on the predominant underlying asset of the securitisations.
Inefficient securitisations
Inefficient securitisation transactions are mainly carried out for
refinancing purposes. These operations, which do not result in any risk
transfer within the meaning of Regulation (EU) No. 2017/2401, do not
have a diminishing effect on the calculation of risk-weighted assets.
Securitised exposures are included in customer loans and subject to
credit risk-weighted assets calculation.
As at 31 December 2023, BNP Paribas originated 31 securitisation
transactions, for a total amount of EUR 70.5 billion of securitised
exposures. The main transactions concern: Commercial & Personal
Banking in Belgium (EUR 31.4 billion), BNP Paribas Personal
Finance (EUR 7.3 billion), Commercial & Personal Banking in France
(EUR 27.8 billion) and BNL bc (EUR 0.1 billion). In 2023, two transactions
without a significant risk transfer were completed by Commercial &
Personal Banking in France, for a total amount of EUR 13 billion. The
relevant exposures are therefore included in the section on credit risk
(see section 5.4 Credit risk).
Credit quality of securitised exposures
The table below presents all exposures securitised by BNP Paribas as part of efficient and ineffective securitisation transactions carried out as originator:
➤
TABLE 61: EXPOSURES SECURITISED BY THE INSTITUTION – EXPOSURES IN DEFAULT (EU SEC5)
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
Exposures securitised by the institution
as originator
Exposures securitised by the institution
as originator
Total gross exposure amount(*)
Total gross exposure amount(*)
of which in default
of which in default
2
Retail
66,052
1,204
64,029
946
3
Residential real estate
49,650
1,025
45,977
740
4
Credit card and consumer loans
16,402
178
18,052
206
7
Corporate
70,667
144
55,687
148
8
Loans to corporates
70,102
142
55,187
145
9
Commercial real estate
10 Finance lease and commercial receivables
565
2
500
3
1
TOTAL
136,720
1,348
119,716
1,094
(*) Underlying exposures of effective and ineffective securitisation transactions.
SECURITISATION ON BEHALF OF CLIENTS (SPONSOR)
As part of their third-party securitisation activity, Corporate & Institutional Banking enables its large corporate and institutional clients to obtain attractive
financing conditions directly from the financing markets, through multiple-seller conduits (short-term refinancing markets) or specific structured
operations (medium and long-term refinancing).
➤
TABLE 62: SECURITISED EXPOSURES BY BNP PARIBAS AS A SPONSOR(*) BY UNDERLYING ASSET CATEGORY(*)
Securitised exposures
In millions of euros
31 December 2023
31 December 2022
Traditional
Synthetic Total
Traditional
Synthetic
Total
Residential mortgages
550
550
Consumer loans
16,700
16,700
14,839
14,839
Loans to corporates
1,145
1,145
1,084
1,084
Trade receivables
17,622
17,622
14,858
14,858
Finance leases
18
18
Other assets
3
3
5
5
TOTAL
35,470
35,470
31,353
31,353
(*) This breakdown is based on the predominant underlying asset of the securitisation.
The financing structures thus put in place are accompanied by liquidity
lines and, where appropriate, by the granting of guarantees by the Group,
which are subject to a capital requirement. Commitments and positions
retained or acquired by BNP Paribas on securitisation programmes as
sponso r, a mounted to EUR 35.5 billion at 31 December 2023.
Short-term refinancing
At 31 December 2023, two consolidated multi-seller conduits (Starbird
and Matchpoint) were sponsored by the Group. These conduits, by
seeking refinancing on the local short-term commercial paper market,
are able to provide CIB clients, large corporates and institutions with an
attractive financing solution in exchange for some of their assets (trade
receivables, finance leases for automobiles or various equipment, credit
card receivables, etc.).
BNP Paribas provides each of these conduits with a liquidity line which
amounted to EUR 33.7 billion at 31 December 2023, compared with
EUR 28.9 billion at 31 December 2022.
Medium/long-term refinancing
In Europe and North America, the Group's structuring platform provides
financing solutions to its clients, based on products adapted to current
conditions in terms of risk and liquidity. Altogethe r, t he facilities granted
by the Group through these transactions amounted to EUR 1.8 billion at
31 December 2023, compared with EUR 2.0 billion at 31 December 2022.
SECURITISATION AS INVESTOR
The securitisation positions of BNP Paribas as an investor amounted to
EUR 23.0 billion at 31 December 2023, with an increase of EUR 2.0 billion
compared to 31 December 2022 (EUR 21.0 billion).
Investments made by the Group in third-party securitisation transactions
are mainly concentrated in Capital markets, a joint-venture between
Global Banking and Global Markets with an exposure of EUR 23.7 billion
at 31 December 2023 compared to EUR 20.6 billion at 31 December 2022.
Capital Markets is involved in setting up, then financing and hedging
(as a "swap" supplier) structured asset financing operations initiated
by its clients, including mainly institutions, large companies or private
equity platforms.
Investor securitisation exposures also include historical positions within
the BNP Paribas Fortis entity managed in run-off. This portfolio, housed in
the Corporate Cente r, a mounted to EUR 0.3 billion at 31 December 2023
compared with EUR 0.4 billion at 31 December 2022.
The table below shows the securitisation vehicles set up on behalf of the
Group or its customers.
➤
TABLE 63: LIST OF SECURITISATION VEHICLES INITIATED BY THE GROUP (SEC-A)
Business line which initiated the vehicle
Underlying asset category(*)
VEHICULES SPONSORED BY THE GROUP
ACCESS HARMONY IRELAND FINCO LIMITED
Corporate & Institutional Banking
Consumer Loans
APIDOS CLO XLVII LTD
Corporate & Institutional Banking
SME loans
ARES CLO WAREHOUSE 2023-4 LTD.
Corporate & Institutional Banking
SME loans
BANCA IFIS SPA
Corporate & Institutional Banking
Receivables
BELMONT PARK VIEW, LTD.
Corporate & Institutional Banking
SME loans
BNPP AM EURO CLO 2017 DESIGNATED ACTIVITY
COMPANY
Asset Management
SME loans
BNPP AM EURO CLO 2018 DAC
Asset Management
SME loans
BNPP AM EURO CLO 2019 DAC
Asset Management
SME loans
BNPP AM EURO CLO 2021 DAC
Asset Management
SME loans
BNPP IP EURO CLO 2015-1 DAC
Asset Management
SME loans
CREDIARC SPV S.R.L.
BNL bc
Other assets
DRYDEN 100 CLO, LTD.
Corporate & Institutional Banking
SME loans
EXETER FUNDING II LLC
Corporate & Institutional Banking
Consumer Loans
FORTRESS CREDIT BSL XXI LIMITED
Corporate & Institutional Banking
SME loans
KIMM FUNDING I LLC
Corporate & Institutional Banking
SME loans
MADISON PARK FUNDING LXI LTD
Corporate & Institutional Banking
SME loans
MADISON PARK FUNDING LXIV, LTD.
Corporate & Institutional Banking
SME loans
MATCHPOINT FINANCE PUBLIC LIMITED COMPANY
Corporate & Institutional Banking
Receivables
OHA CREDIT FUNDING 17, LTD.
Corporate & Institutional Banking
SME loans
PEEBLES PARK CLO, LTD.
Corporate & Institutional Banking
SME loans
STARBIRD FUNDING CORPORATION
Corporate & Institutional Banking
Consumer Loans
STEAMBOAT HARBOR LTD.
Corporate & Institutional Banking
SME loans
VEHICULES WHICH ACQUIRE EXPOSURES ORIGINATED BY THE GROUP (ORIGINATOR)(**)
AUTOFLORENCE 1 SRL
Personal Finance
Consumer Loans
AUTOFLORENCE 2 SRL
Personal Finance
Consumer Loans
AUTOFLORENCE 3 SRL
Personal Finance
Consumer Loans
AUTONORIA 2019
Personal Finance
Consumer Loans
AUTONORIA DE 2023
Personal Finance
Consumer Loans
AUTONORIA SPAIN 2019
Personal Finance
Consumer Loans
AUTONORIA SPAIN 2021, FT
Personal Finance
Consumer Loans
AUTONORIA SPAIN 2022, FT
Personal Finance
Consumer Loans
AUTONORIA SPAIN 2023, FT
Personal Finance
Consumer Loans
AXA INVESTMENT MANAGERS
Corporate & Institutional Banking
SME loans
BLACKSTONE COF IV SCA SICAV-RAIF
Corporate & Institutional Banking
SME loans
BNL MINERVA 3
BNL bc
SME loans
BNP PARIBAS ARBITRAGE ISSUANCE B.V. – RESONANCE 3
Commercial & Personal Banking in France
SME loans
CHORUS CAPITAL CREDIT FUND V EUR SCSP-RAIF
Commercial & Personal Banking in Belgium
SME loans
CHORUS CAPITAL MANAGEMENT LIMITED
Commercial & Personal Banking in France
SME loans
EUROPEAN INVESTMENT FUND
Corporate & Institutional Banking
SME loans
EUROPEAN INVESTMENT FUND MINERVA
BNL bc
SME loans
Business line which initiated the vehicle
Underlying asset category(*)
EUROPEAN INVESTMENT FUND MINERVA 2
BNL bc
SME loans
EUROPEAN INVESTMENT FUND PROXIMA2
Commercial & Personal Banking in France
SME loans
EUROPEAN INVESTMENT FUND PROXIMA3
Commercial & Personal Banking in France
SME loans
EUROPEAN INVESTMENT FUND PROXIMA 4
Commercial & Personal Banking in France
SME loans
FCT MONTE CRISTO 2 COMPARTMENT HAREWOOD
Corporate & Institutional Banking
SME loans
FCT MONTE CRISTO 2 – COMPARTMENT RESONANCE 11
Corporate & Institutional Banking
SME loans
FCT MONTE CRISTO 2 COMPARTMENT RESONANCE 6B
Corporate & Institutional Banking
SME loans
FCT MONTE CRISTO 2 COMPARTMENT WAGNER
Corporate & Institutional Banking
SME loans
FCT MONTE CRISTO COMPARTMENT RESONANCE 7
Corporate & Institutional Banking
SME loans
FCT MONTE CRISTO COMPARTMENT RESONANCE 9
Corporate & Institutional Banking
SME loans
FONDS COMMUN DE TITRISATION- RESONANCE 4
Corporate & Institutional Banking
SME loans
INTERNATIONAL FINANCE CORPORATION
Corporate & Institutional Banking
SME loans
JUNO_1
BNL bc
SME loans
JUNO_2
BNL bc
SME loans
LIBERTY MUTUAL INSURANCE EUROPE SE
Corporate & Institutional Banking
SME loans
NORIA 2021
Personal Finance
Consumer Loans
NORIA 2023
Personal Finance
Consumer Loans
PARK MOUNTAIN SECURITISATION 2019
Commercial & Personal Banking in Belgium
SME loans
PBD GERMANY AUTO LEASE MASTER S.A.
Personal Finance
Finance lease
PIXEL 2021
Leasing Solutions
Finance lease
VEHICULES INCLUDED IN THE PRUDENTIAL
CONSOLIDATION SCOPE
See note 9.k Scope of consolidation (reference t) to the consolidated financial
statements.
(*) The category is based on the predominant underlying asset of the securitisation.
(**) Efficient securitisation.
ACCOUNTING METHODS [Audited]
(See note 1 to the consolidated financial statements – Summary of
significant accounting policies applied by the Group.)
The accounting classification of securitisation positions in the banking
book is shown in T a ble 9:Prudential balance sheet by risk type (EU LI1-B).
Securitisation positions classified as "Financial assets at amortised cost"
are measured using the method described in note 1.f.1 Financial assets
at amortised cost to the consolidated financial statements: the effective
interest rate used to recognise interest income is measured on the basis
of an expected cash flow model. From the outset, these positions are
subject to an impairment calculation for expected credit risk losses (see
note 1.f.5 Impairment of financial assets measured at amortised cost and
debt instruments measured at fair value through shareholders' equity
to the consolidated financial statements).
Securitisation positions classified on an accounting basis as "Financial
assets at fair value through equity" are measured using the method
described in note 1.f.2 Financial assets at fair value through shareholders'
equity to the consolidated financial statements. Changes in fair value
determined according to the principles listed in note 1.f.10 Determination
of fair value to the consolidated financial statements (excluding revenue
recognised using the effective interest method) are presented in a specific
subsection of shareholders' equity along with expected credit risk
losses calculated using the methods described in note 1.f.5 Impairment
of financial assets measured at amortised cost and debt instruments
measured at fair value through shareholders' equity to the consolidated
financial statements. Upon disposal, amounts previously recognised in
recyclable equity are transferred to the profit and loss account.
Securitisation positions classified on an accounting basis as "Financial
instruments at fair value through profit or loss" are measured using the
method described in note 1.f.7 Financial instruments at fair value through
profit or loss to the consolidated financial statements.
Proceeds from the sale of securitisation positions are recognised in
accordance with rules for the category of origin of positions sold.
Synthetic securitisations in the form of credit derivatives (credit default
swaps) or guarantees received follow accounting rules appertaining
respectively:
■ to trading portfolio derivatives. These are measured at fair value
through profit or loss (see note 1.f.7 Financial instruments at fair
value through profit or loss to the consolidated financial statements);
■ to financial guarantees received, which cannot be considered as
forming an integral part of secured assets. If it is virtually certain
that a loss caused by a defaulting debtor will be offset by the guaranto r,
the guarantee is then recognised as a reimbursement asset (right
to reimbursement for expected credit losses) and expected credit
losses on the asset are, at the same time, recognised in profit or
loss. The overall impact in terms of profit or loss is the same as if
the guarantee had been recognised in the measurement of expected
credit losses, with the difference that the guarantee received is shown
as a reimbursement asset rather than as a reduction in the expected
credit losses on the asset.
Assets awaiting securitisation are classified as:
■ financial instruments at amortised cost or at fair value through equity
and in the prudential banking book in the case of exposures resulting
from the Bank's balance sheet, for which the Bank will be originator
in the future securitisation within the meaning of Basel 3;
■ financial instruments at fair value through profit or loss and in the
prudential banking book in the case of exposures purchased and put
into warehousing, for which the Bank will be sponsor in the future
securitisation within the regulatory meaning.
SECURITISATION RISK MANAGEMENT
The risk management framework for securitisation is part of the risk
management described in section 5.3 Risk management.
The business lines represents the first line of defence with responsibility
for understanding all the risks incurred in order to ensure correct
evaluation. The RISK Function acts independently, as a second line of
defence.
Positions taken are monitored to measure changes in individual and
portfolio risks.
The monitoring of securitised assets covers credit, counterparty, market
and liquidity risks on the underlying assets.
CREDIT RISK ON SECURITISED ASSETS
Securitisation assets outside the trading book are subject to specific
approval by the Credit Committees. For new transactions, a credit
proposal is prepared by the business, and a comprehensive risk analysis
is carried out by the RISK analysts before presentation to the Credit
Committee. All approvals are subject to an annual review. Exposures
are monitored to ensure that they do not exceed the limits set by the
Credit Committees.
The risk exposure of securitisation tranches is intrinsically linked to that
of the underlying assets, whether for securitisation or re-securitisation.
Through the customary governance of Credit Committees, the Group
monitors changes in the quality of underlying assets for the entire
duration of the programme concerned.
COUNTERPARTY RISK ON SECURITISATION
RELATED TO INTEREST RATES
OR FX DERI V A T IVES
Securitisation-related derivative instruments are also subject to the
approval of the Credit Committees. BNP Paribas integrates counterparty
risk into the securitisation structure. The principles are the same as those
described above in respect of credit risk.
MARKET RISK WITHIN THE BANKING BOOK
On fixed rate ABS positions, a macro hedge consisting of fixed/variable
rate swaps is put in place to cover interest rate risk. The hedge is recorded
in accordance with the rules of hedge accounting.
LIQUIDIT Y/FUNDING RISK
Securitisation positions are financed internally by the ALM – Treasury or
via conduits sponsored by BNP Paribas.
SECURITISATION POSITIONS
➤
TABLE 64: SECURITISATION EXPOSURES IN THE NON-T RADING BOOK(1) (EU SEC1)
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
In millions of euros
31 December 2023
originator
sponsor
investor
Total
Traditional
Synthetic
Traditional
Total
Traditional
STS(2) Non-STS Synthetic Total
STS(2)
Non-STS
of
which
SRT(3)
Total STS(2) Non-STS Synthetic
of which
SRT(3)
of which
SRT(3)
2
Retail
7,637
867
50,908
-
-
-
58,546
300
16,400
-
16,700
1,085
3,902
-
4,987
80,232
3
of which residential
mortgages
374
45,942
46,316
-
103
2,647
2,750
49,066
4
of which credit card
receivables
-
-
4
4
4
5
of which other retail
7,263
867
4,967
12,230
300
16,400
16,700
982
1,250
2,233
31,162
6
of which re-securitisation
-
-
-
-
7
Corporate
76
76
12,867
7
41,849
41,849
54,792
294
18,476
-
18,770
350
17,666
- 18,016
91,579
8
of which loans
to corporates
12,867
7
41,849
41,849
54,716
98
1,048
1,145
17,045
17,045
72,907
9
of which commercial
mortgages
-
-
15
15
15
10
of which finance leases
76
76
76
-
350
398
748
824
11
of which other assets
-
196
17,429
17,625
208
208
17,833
12 of which re-securitisation
-
-
-
-
1
TOTAL
7,713
943
63,776
7
41,849 41,849 113,338
594
34,876
-
35,470
1,434
21,569
- 23,003 171,811
(1) Based on the predominant asset class in the asset pool of the securitisation in which the position is held.
(2) Simple,T r ansparent and Standards securitisation programmes (see next section).
(3) Effective securitisation programmes, for which the criteria for significant risk transfer are met (see paragraph Risk transfer of own account securitisation
transactions, in the section on BNP Paribas securitisation activities).
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
In millions of euros
31 December 2022
originator
sponsor
investor
Total
Traditional
Synthetic
Traditional
Total
Traditional
STS(2) Non-STS Synthetic Total
STS(2)
Non-STS
of
which
SRT(3)
Total STS(2) Non-STS Synthetic
of which
SRT(3)
of which
SRT(3)
2
Retail
7,628
917
48,398
185
-
-
56,026
-
15,388
-
15,388
834
3,456
-
4,290
75,704
3
of which residential
mortgages
388
43,247
43,636
549
549
137
3,072
3,209
47,394
4
of which credit card
receivables
-
-
2
2
2
5
of which other retail
7,240
917
5,150
185
12,390
14,839
14,839
697
382
1,079
28,308
6
of which re-securitisation
-
-
-
7
Corporate
121
121
12,012
9
38,662
38,662
50,794
305
15,660
-
15,965
310
16,405
-
16,715
83,474
8
of which loans
to corporates
12,012
9
38,662
38,662
50,674
100
984
1,084
16,110
16,110
67,867
9
of which commercial
mortgages
-
-
16
16
16
10
of which finance leases
121
121
121
18
18
310
236
546
685
11
of which other assets
-
187
14,676
14,863
43
43
14,906
12
of which re-securitisation
-
-
-
-
1
TOTAL
7,749
1,037
60,409
194
38,662 38,662 106,820
305
31,048
-
31,353
1,144
19,861
- 21,005 159,178
(1) Based on the predominant asset class in the asset pool of the securitisation in which the position is held.
(2) Simple,T r ansparent and Standards securitisation programmes (see next section).
(3) Effective securitisation programmes, for which the criteria for significant risk transfer are met (see paragraph Risk transfer of own account securitisation
transactions, in the section on BNP Paribas securitisation activities).
➤
TABLE 65: BANKING BOOK SECURITISATION POSITION QUALITY
In millions of euros
Securitisation positions held
or acquired (EAD)
Tranche quality
31 December 2023
31 December 2022
Senior tranche
99,482
90,899
Mezzanine tranche
1,548
1,150
First-loss tranche
241
203
TOTAL
101,271
92,252
At 31 December 2023, 98.2% of the securitisation positions held or acquired by the Group were senior tranches, compared with 98.5% at 31 December
2022, reflecting the high quality of the Group's portfolio.
RIS K-WEIGHTED ASSETS
The revised securitisation framework came into force on 1 January 2019
with the application of Regulation (EU) No. 2017/2401 and Regulation
(EU) No. 2017/2402. It provides for:
■ the creation of a specific status for programmes known as Simple,
Transparent and Standardised, which comply with certain conditions:
■
the portfolio of underlying assets, which must be uniform in terms
of asset type, may not include a re-securitisation position nor
defaulting asset at origination,
■
the programme must be traditional and the payment of the
interest for the securitisation positions must be based on standard
benchmark interest rates,
■
investors must have sufficient information on the portfolio of
underlying assets, specifically, information on the histories of
defaults and losses.
Subject to eligibility in terms of applicable risk-weight and
concentration of the underlying asset portfolio, these programmes
may benefit from preferential weightings;
■ new approaches for the calculation of risk-weighted assets related to
applicable securitisation positions according to the specificities of the
underlying portfolio:
■
internal ratings-based approach (SEC-IRBA): the risk-weight
applicable to the securitisation position depends on the one hand
on the characteristics of the securitisation programme and on
the other hand on the capital charge of the underlying portfolio
calculated as credit risk,
■
standardised approach (SEC-SA): the risk-weight applicable to
the securitisation position depends on the characteristics of the
securitisation programme, the capital charge of the underlying
portfolio calculated as credit risk and the proportion of assets in
default in this portfolio,
■
external ratings-based approach (SEC-ERBA): the risk-weight
applicable to the securitisation position is given directly by a
correspondence table defined in Regulation (EU) No. 2017/2401,
based on the external rating of the tranche, its subordination rank
and its maturity. BNP Paribas uses the external ratings of the
Standard & Poor's, Moody's, Fitch and DBRS rating agencies,
■
in other cases, Regulation (EU) No. 2017/2401 provides for the
deduction of CET1 own funds.
Risk-weighted assets corresponding to securitisation positions held or
acquired by the Group amounted to EUR 16.6 billion at 31 December 2023,
or 2.4% of Group total risk-weighted assets, compared with EUR 15.8 billion
at 31 December 2022 (2.1% of Group total risk-weighted assets).
➤
TABLE 66: SECURITISATION RISK-WEIGHTED ASSETS MOVEMENTS BY KEY DRIVER
In millions of euros
31 December
Key driver
Other variation
Total 31 December
2022 Asset size Asset quality updates
2023
Model Methodology
and policy
Acquisitions
and
disposals Currency
RWAs -
Securitisation
15,794
917
79
(172)
(29)
795
16,589
➤
TABLE 67: SECURITISATION EXPOSURES AND RISK-WEIGHTED ASSETS – INSTITUTION ACTING AS ORIGINATOR OR AS
SPONSOR (EU SEC3)
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
EU-p EU-q
In millions of euros
31 December 2023
Exposure values (EAD)
by RW bands/deductions
Exposure values (EAD)
by regulatory approach
Risk-weighted assets
by regulatory approach
Capital charge after cap(**)
≤ 20%≤ 50%≤ 100%< 1,250%tions(*)
> 20%
> 50%
> 100%
deduc-
SEC-
SEC-
IRBA ERBA SEC-SA tions(*)
deduc-
SEC-
SEC-
IRBA ERBA SEC-SA tions(*)
deduc-
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
2
Traditional
transactions
33,162
2,955
175
79
49
1,232
3,790 31,348
49
327
986
5,363
26
78
422
3
Securitisation
33,162
2,955
175
79
49
1,232
3,790 31,348
49
327
986
5,363
26
78
422
4
Retail
14,715
2,771
53
27
179
2,666 14,694
27
49
678
2,803
4
54
220
5
of which STS
321
766
53
27
179
661
300
27
49
188
30
4
15
2
6
Wholesale
18,446
184
122
79
22
1,053
1,124 16,653
22
278
308
2,560
22
24
202
7
of which STS
196
68
16
69
21
153
196
21
125
20
9
2
8
Re-securitisation
9
Synthetic
transactions
39,556
1,667
405
221 41,628
221
6,090
487
10 Securitisation
39,556
1,667
405
221 41,628
221
6,090
487
11
Retail
12
Wholesale
39,556
1,667
405
221 41,628
221
6,090
487
13 Re-securitisation
1
TOTAL
72,718
4,622
580
79
270 42,860
3,790 31,348
270
6,417
986
5,363
513
78
422
(*) The Group opted for the deduction of CET1 capital rather than the 1,250% weighting.
(**) After application of the regulatory ceiling. Capital requirements correspond to 8% of risk-weighted assets.
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
EU-p EU-q
In millions of euros
31 December 2022
Exposure values (EAD)
by RW bands/deductions
Exposure values (EAD)
by regulatory approach
Risk weighted assets
by regulatory approach
Capital charge after cap(**)
≤ 20%≤ 50%≤ 100%< 1,250%tions(*)
> 20%
> 50%
> 100%
deduc-
SEC-
SEC-
IRBA ERBA SEC-SA tions(*)
deduc-
SEC-
SEC-
IRBA ERBA SEC-SA tions(*)
deduc-
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
2
Traditional
transactions
29,720
2,528
238
84
15
1,387
3,456 27,727
15
408
851
6,613
32
67
398
3
Securitisation
29,720
2,528
238
84
15
1,387
3,456 27,727
15
408
851
6,613
32
67
398
4
Retail
14,299
1,970
222
395
1,797 14,298
162
443
4,408
12
35
223
5
of which STS
864
53
226
691
61
196
4
15
6
Wholesale
15,421
559
16
84
15
992
1,659 13,428
15
246
409
2,205
20
32
175
7
of which STS
205
121
16
70
15
206
205
15
138
20
11
2
8
Re-securitisation
Synthetic
9
transactions
35,092
3,370
199 38,463
199
5,896
472
10 Securitisation
35,092
3,370
199 38,463
199
5,896
472
11
Retail
12
Wholesale
35,092
3,370
199 38,463
199
5,896
472
13 Re-securitisation
1
TOTAL
64,812
5,899
238
84
214 39,850
3,456 27,727
214
6,304
851
6,613
504
67
398
(*) The Group opted for the deduction of CET1 capital rather than the 1,250% weighting.
(**) After application of the regulatory ceiling. Capital requirements correspond to 8% of risk-weighted assets.
➤
TABLE 68: SECURITISATION POSITIONS AND RISK-WEIGHTED ASSETS – BNP PARIBAS ACTING AS INVESTOR
(EU SEC4)
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
EU-p EU-q
In millions of euros
31 December 2023
Exposure values (EAD)
by RW bands/deductions
by regulatory approach
Exposure values (EAD)
Risk-weighted assets
Capital charge after cap(**)
≤ 20%≤ 50%≤ 100%< 1,250%tions(*)
> 20%
> 50%
> 100%
deduc-
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
Traditional
2
transactions
19,593
3,045
291
74
15,744
355
6,904
2,678
384
1,260
193
23
98
3
Securitisation
19,593
3,045
291
74
15,744
355
6,904
2,678
384
1,260
193
23
98
4
Retail
4,604
79
242
63
908
304
3,775
136
373
588
22
45
5
of which STS
1,085
1,085
110
9
6
Wholesale
14,989
2,966
50
11
14,837
51
3,129
2,542
10
672
193
1
54
7
of which STS
350
350
35
3
8
Re-securitisation
Synthetic
9
transactions
10 Securitisation
11
Retail
underlying
12
Wholesale
13 Re-securitisation
1
TOTAL
19,593
3,045
291
74
- 15,744
355
6,904
2,678
384
1,260
193
23
98
(*) The Group opted for the deduction of CET1 capital instead of the 1,250% weighting.
(**) After application of the regulatory ceiling. Capital requirements correspond to 8% of risk-weighted assets.
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
EU-p EU-q
In millions of euros
31 December 2022
Exposure values (EAD)
by RW bands/deductions
by regulatory approach
Exposure values (EAD)
Risk weighted assets
Capital charge after cap(**)
≤ 20%≤ 50%≤ 100%< 1,250%tions(*)
> 20%
> 50%
> 100%
deduc-
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
SEC-
SEC- deduc-
IRBA ERBA SEC-SA tions(*)
2
Traditional
transactions
18,438
2,405
77
86
15,086
449
5,471
2,496
415
912
198
24
73
3
Securitisation
18,438
2,405
77
86
15,086
449
5,471
2,496
415
912
198
24
73
4
Retail
3,886
258
76
70
362
3,928
398
567
23
45
5
of which STS
834
834
84
7
6
Wholesale
14,552
2,147
1
15
15,086
87
1,542
2,496
17
345
198
1
28
7
of which STS
310
310
31
2
8
Re-securitisation
Synthetic
9
transactions
10 Securitisation
11
Retail
underlying
12
Wholesale
13 Re-securitisation
1
TOTAL
18,438
2,405
77
86
- 15,086
449
5,471
-
2,496
415
912
198
24
73
(*) The Group opted for the deduction of CET1 capital instead of the 1,250% weighting.
(**) After application of the regulatory ceiling. Capital requirements correspond to 8% of risk-weighted assets.
Guarantees on securitisation positions amounted to EUR 142 million as at 31 December 2023, compared with EUR 188 million at 31 December 2022.
5.6 Counterparty credit risk
In respect of counterparty risk, the RISK function is structured according
to five main priorities:
■ measuring exposure to counterparty credit risk;
■ checking and analysing these exposures and the limits that apply
to them;
■ implementing mechanisms to reduce risk;
■ calculating and managing credit valuation adjustments (CVA);
■ defining and implementing stress tests.
COUNTERPARTY CREDIT RISK V A LUATION
COUNTERPARTY EXPOSURE CALCULATION
Exposure to counterparty risk is measured using two approaches:
Modelled exposure – Internal model method
With regard to modelling counterparty risk exposure, the exposure
at default (EAD) for counterparty risk is calculated based on the
Effective Expected Positive Exposure (EEPE) indicator multiplied by
the alpha regulatory factor as defined in article 284-4 of Regulation
(EU) No. 575/2013. The Effective Expected Positive Exposure (EEPE) is
measured using an internal exposure valuation model to determine
exposure profiles. The model was developed by the Group and approved
by the superviso r.
The principle of the model is to simulate the main risk factors, such
as commodity and equity prices, interest rates and foreign exchange
rates, affecting the counterparty risk exposure, based on their initial
respective values. The Bank uses Monte-Carlo simulations to generate
thousands of time trajectories (corresponding to thousands of potential
market scenarios) to define potential changes in risk factors. The diffusion
processes used by the model are calibrated on the most recent historic
data set over a four-year period.
Based on all the risk factor simulations, the model assesses the value of
the positions from the simulation date to the transaction maturity date
(from one day to more than thirty years for the longest-term transactions)
to generate an initial set of exposure profiles.
Exposure may be reduced by a Master Agreement, and may also be
covered by a Credit Support Annex (CSA). For each counterparty, the
model aggregates the exposures taking into consideration any netting
agreements and credit support annexes, as well as the potentially risky
nature of the collateral exchanged.
Based on the breakdown of exposure to the counterparty, the model
determines the following in particular:
■ The average risk profile, the Expected Positive Exposure (EPE), from
which the EEPE (Effective Expected Positive Exposure) is calculated:
the Expected Positive Exposure (EPE) profile is calculated as the
average of the breakdown of counterparty exposures at each point
in the simulation, with the negative portions of the trajectories set to
zero (the negative portions correspond to situations where BNP Paribas
Group is a risk for the counterparty). The EEPE is calculated as the
first-year average of the non-decreasing EPE profile: at each simulation
date, the value taken is the maximum of the EPE value and the value
on the previous simulation date.
■ The Potential Future Exposure (PFE) profile:
the Potential Future Exposure (PFE) profile is calculated as a 90%
percentile of the breakdown of exposure to the counterparty at each
point in the simulation. This percentile is raised to 99% for hedge fund
counterparties. The highest Potential Future Exposure value (Max PFE)
is used to monitor maximum limits.
Counterparty credit risk is the translation of the credit
risk embedded in financial transactions, investments and/
or settlement transactions between counterparties. Those
transactions include bilateral contracts such as over-the-counter
(OTC) derivative contracts as well as contracts settled through
clearing houses. The amount of this risk may vary over time in
line with changing market parameters which then impacts the
replacement value of the relevant transactions.
Counterparty risk lies in the event that a counterparty defaults
on its obligations to pay the Bank the full present value of the
flows relating to a transaction or a portfolio for which the Bank
is a net receive r. C ounterparty credit risk is also linked to the
replacement cost of a derivative or portfolio in the event of
counterparty default. Hence, it can be seen as a market risk in
case of default or a contingent risk.
Since 1 January 2014, date of entry into force of Regulation (EU)
No. 575/2013, the system for measuring exposures to counterparty risk
takes into account:
■ extension of the margin periods of risk in accordance with article 285
of the CRR;
■ inclusion of the specific correlation risk;
■ determination of a stressed EEPE calculated based on a calibration
reflecting a particular period of stress.
Non-modelled exposure – Method SA-CCR
For non-modelled counterparty credit risk exposures, the derivative
exposure at default is calculated using the standardised approach
for counterparty credit risk (Standardised Approach for Counterparty
Credit Risk – SA-CCR) in accordance with Article 274 of Regulation (EU)
No. 2019/876.
The exposure at default of a netting set using the standardised approach
to counterparty risk is based on:
■ the replacement cost (RC), calculated in accordance with Article 275;
■ potential future exposure (PFE), calculated in accordance with
Article 278;
■ the regulatory factor alpha, set in accordance with Article 274.
The exposure at default on securities financing transactions (SF T s) is
calculated using the Financial Collateral Comprehensive Method in
accordance with Article 223 of Regulation (EU) No. 575/2013.
LIMIT/MONITORING FRAMEWORK
Limits reflecting the principles of the Group's Risk Appetite Statement are
defined for the counterparty credit risk. These limits are set in accordance
with the type of counterparty (banks, institutional investors, asset
managers, corporates, clearing houses, etc.) and the type of exposure
used to measure and manage counterparty risk:
■ the highest value of potential future exposures (Max PFE) for modelled
exposures;
■ the exposure value calculated using the standardised approach for
non-modelled exposures.
The exposure of each counterparty is calculated to verify compliance
with credit decisions.
These limits are defined and calibrated as part of the risk approval
process. They are approved in the following committees (listed in
ascending order of discretionary authority): Local Credit Committee,
Regional Credit Committee, Global Credit Committee, General
Management Credit Committee.
These measures are complemented by sets of directives (covering
contingent market risk sensitivities per counterparty which are
extracted from the market risk system) which provide further tools in
the monitoring of counterparty credit risk and the prevention of systemic
risk concentrations.
MITIGATION OF COUNTERPARTY
CREDIT RISK
As part of its risk management, the BNP Paribas Group implemented
three counterparty risk mitigation mechanisms:
■ the signature of netting agreements for OTC transactions;
■ clearing through central counterparties, in the case of OTC or listed
derivative transactions;
■ Bilateral initial margin exchange.
Netting agreements
Netting is used by the Bank in order to mitigate counterparty credit
risk associated with derivative trading. The main instance where netting
occurs is in case of trade termination: if the counterparty defaults, all the
trades are terminated at their current market value, and all the positive
and negative market values are summed to obtain a single amount (net)
to be paid to or received from the counterparty. The balance ("close-out
netting") may be collateralised with cash, securities or deposits.
The Bank also applies settlement netting in order to mitigate counterparty
credit risk in cases of currency settlement. This corresponds to the netting
of all payments and receipts between the Bank and one counterparty
in the same currency to be settled in the same day. The netting results
in a single amount (for each currency) to be paid either by the Bank or
by the counterparty.
Transactions affected by this are processed in accordance with bilateral
or multilateral agreements respecting the general principles of the
national or international framework. The main forms of bilateral
agreements are those issued by Fédération bancaire française (FBF) and
on an international basis by the International Swaps and Derivatives
Association (ISDA).
Trade clearing through central counterparties
Trade clearing through central counterparties (CCPs) is part of
BNP Paribas usual capital market activities. As a global clearing membe r,
BNP Paribas contributes to the risk management framework of the CCPs
through payment to a default fund as well as daily margin calls. The
rules which define the relationships between BNP Paribas and the CCPs
of which it is a member are described in each CCP's rulebook.
For Europe, the United Kingdom and the United States in particula r, t his
scheme enables the reduction of notional amounts through the netting
of the portfolio, on one hand, and, on the othe r, a t ransfer of the risk from
several counterparties to a single central counterparty with a robust risk
management framework.
In its clearing for third parties activity, BNP Paribas requests as well, and
on a daily basis, the payment of margin calls from its clients.
Since default by one or more clearing houses would affect BNP Paribas,
it has introduced dedicated monitoring of these central counterparties
and closely tracks concentrations with them.
Bilateral initial margin exchange
Regulation (EU) No. 648/2012 (EMIR) stipulates the establishment of
additional constraints for players in the derivatives markets, including
the obligation to exchange collateral for contracts that are not centrally
cleared. An initial guarantee deposit must be made by the Bank's most
significant financial and non-financial counterparties. The purpose of this
exchange is to mitigate the counterparty credit risk associated with over-
the-counter derivative trading that is not centrally cleared. The Bank's
transactions with sovereign borrowers, central banks, and supranational
entities are excluded from this system.
If the counterparty defaults, all the trades are terminated at their
current market value by the Bank. The initial guarantee deposit hedges
the variation in the value of transactions during this liquidation period.
The initial deposit reflects an extreme but plausible estimate of potential
losses corresponding to a unilateral interval of confidence of 99% over a
ten-day period, based on historic data including an episode of significant
financial tensions.
The initial deposit must be bilaterally traded on a gross basis between the
Bank and the counterparty. It is kept by a third party so as to guarantee
that the Bank immediately has access to the counterparty's deposit and
that the Bank's deposit be protected in case the counterparty defaults.
CREDIT V A LUATION ADJUSTMENTS (C V A)
The valuation of financial OTC trades carried out by BNP Paribas as part
of its trading activities (mainly Global Markets) includes Credit Valuation
Adjustments (CVA). CVA is an adjustment of the trading portfolio valuation
to take into account each counterparty's credit risk. It is the fair value
on any expected loss arising from counterparty exposure based on
the potential positive value of the contract, the counterparty default
probability and the estimated recovery rate in case of default.
The majority of counterparty credit risk exposures on derivatives are
related to the Group's interest rate, credit and foreign exchange activities,
all underlying assets, and all business lines combined.
The credit valuation adjustment is not only a function of the expected
exposure but also the credit risk level of the counterparty, which is linked
to the level of the Credit Default Swaps (CDS) spreads used in the default
probability calculation.
In order to reduce the risk associated with the credit quality deterioration
embedded in a financial operations portfolio, BNP Paribas uses a dynamic
hedging strategy, involving the purchase of market instruments such
as credit derivative instruments. (See CVA risk management in the
section Counterparty risk management).
Risk related to the volatility of CVAS (CVA risk)
To protect banks against the risk of losses due to CVA variations,
Regulation (EU) No. 575/2013 introduced a dedicated capital charge, the
CVA charge. This charge aims at capitalising the risk of loss caused by
changes in the credit spread of a counterparty to which the BNP Paribas
Group is exposed. The CVA charge is computed by the Group using mainly
the advanced method and relies on the Bank's model on market risk (see
section CVA Risk hereafter).
STRESS TESTS AND WRONG W A Y R ISK
The BNP Paribas counterparty risk stress testing framework is consistent
with the market risk framework (see section 5.7 Market risk related to
trading activities). As such, the counterparty stress testing framework
is implemented in conjunction with the market risk stress testing and
employs consistent market shifts where scenarios are shared. Testing
also comprises factors specific to counterparty risk such as deteriorations
in counterparty credit quality.
Such risk analysis is present within the Executive Management reporting
framework which shares some common forums with the market risk
reporting set up such as the Financial Markets Risk Committee (FMRC),
core risk committee for market and counterparty credit risk. Both
counterparty and market risk stress testing frameworks are governed
by the Stress Testing Steering Committee.
Wrong Way Risk (or unfavourable correlation risk) is the case of exposure
to a counterparty being inversely correlated with the counterparty's
credit quality.
Such risk can be split in two parts:
■ General Wrong Way Risk (GWWR), which corresponds to the risk that
the probability of default by counterparty is positively correlated with
general market risk factors;
■ Specific Wrong Way Risk (SWWR), which corresponds to the risk arising
when future exposure to a specific counterparty is positively correlated
with the counterpart's probability of default due to the nature of the
transactions with the counterparty or of the collateral received.
BNP Paribas' monitoring and analysis of General Wrong Way Risk is
performed through stress tests that highlight the risk factors negatively
correlated with the counterparty's credit quality. It combines a top-down
approach and a bottom-up approach:
■ for the top-down approach, the GWWR policy defines the generic rules
and criteria to be used to detect GWWR. These criteria are based on the
countries of incorporation of the counterparties, the region of which
they are part and the industries in which they are involved. Derivative
positions, structured financing, and collateral that counterparties may
have with BNP Paribas have been defined as the situations where
GWWR should be analysed and reported;
■ the GWWR framework relies upon a robust bottom-up approach with
the expertise of the counterparty credit analysts specifically needed
to define the most impacting scenarios at portfolio level (the approach
consists of the use of stressed market parameters reflecting extreme
but realistic conditions).
When a legal link between the exposure underlyings and the counterparty
is established, the SWWR is subject to prescribed regulatory capital
treatment.
EXPOSURE TO COUNTERPARTY CREDIT RISK
The table below shows exposure to counterparty credit risk (measured as
the exposure at default) by Basel asset class on derivative contracts and
securities lending/borrowing transactions, after the impact of any netting
agreement. Bilateral transactions between the Bank and customers
(bilateral counterparty risk) are distinguished from transactions related
to the clearing activities of the Bank, including essentially exposures to
central counterparties (CCP).
➤
TABLE 69: COUNTERPARTY CREDIT RISK EXPOSURE AT DEFAULT BY ASSET CLASS (EXCL. CVA RISK CHARGE)
In millions of euros
31 December 2023
31 December 2022
EAD
EAD Variation
IRBA
approach
Standardised
Total
IRBA
approach
Standardised
Total
Total
Bilateral counterparty credit risk
140,157
2,760
142,916
147,061
1,975
149,036
(6,119)
Central governments and central banks
23,023
38
23,061
26,737
49
26,786
(3,725)
Corporates(*)
72,727
1,798
74,525
93,069
1,103
94,172
(19,647)
Institutions(**)
44,406
922
45,328
27,255
795
28,050
17,278
Retail
2
2
27
27
(25)
Exposure to CCP related to clearing activities
4,489
51,884
56,373
1,778
71,056
72,834
(16,461)
TOTAL
144,646
54,644
199,289
148,839
73,031
221,870
(22,580)
(*) Corporates asset class includes other risky assets (EUR 3 million at 31 December 2022).
(**) Institutions asset class comprises credit institutions and investment firms, including those recognised in other countries, it also includes some
exposures to regional and local authorities, public sector agencies and multilateral development banks that are not treated as central government
authorities.
For bilateral counterparty credit risk, the share of exposures under the IRB approach represented 98% at 31 December 2023 (stable compared with
31 December 2022).
The following table summarises the exposures to counterparty credit risk with a breakdown by product. An indication of the Group's business volume
on derivative financial instruments booked in the trading portfolio is presented in note 5.a Financial instruments at fair value through profit or loss to
the consolidated financial statements.
➤
TABLE 70: COUNTERPARTY CREDIT RISK EXPOSURE AT DEFAULT BY PRODUCT (EXCL. CVA RISK CHARGE)
In millions of euros
31 December 2023
31 December 2022
EAD
EAD
Bilateral
counterparty credit
risk
Exposure to CCP
related to clearing
activities
Total
Bilateral
counterparty credit
risk
Exposure to CCP
related to clearing
activities
Total
OTC derivatives
78,438
96.19%
3,108
3.81%
81,546
89,517
85.88%
14,715
14.12%
104,233
Securities Financing
Transactions
64,478
81.74%
14,406
18.26%
78,885
59,514
93.82%
3,919
6.18%
63,434
Listed derivatives
18,399
100.00%
18,399
38,315
100.00%
38,315
Default fund
contribution
20,459
100.00%
20,459
15,885
100.00%
15,885
TOTAL
142,916
71.71%
56,373
28.29%
199,289
149,036
67.17%
72,834
32.83%
221,870
BILATERAL COUNTERPARTY CREDIT RISK
The bilateral counterparty risk corresponds to the contracts treated
bilaterally (or over-the-counter) by BNP Paribas with its clients.
The exposure at default (EAD) is primarily measured with the aid of
internal models (see paragraph Counterparty exposure calculation).
For the perimeter not covered by internal models (limited mainly to
subsidiaries BNL and TEB), EAD is calculated using the standardised
approach to counterparty credit risk. Risk-weighted assets linked
to counterparty credit risk are computed by multiplying EAD by an
appropriate weighting according to the approach used (standardised or
IRBA).
The following table shows a summary, by approach, of the regulatory
exposures of counterparty credit risk and associated risk-weighted assets
for the entire scope of the BNP Paribas Group's bilateral activities, which
represents the bulk of counterparty credit risk exposures.
Since 30 June 2021, exposures not modelled are calculated according
to the provisions of Article 274 of Regulation (EU) No. 2019/876 (SA-CCR
method) and no longer using the "Mark-to-market" valuation method.
➤
TABLE 71: BILATERAL COUTERPARTY CREDIT RISK EXPOSURES AT DEFAULT BY APPROACH (EU CCR1)
a
b
c
d
e
f
g
h
In millions of euros
31 December 2023
Replacement exposure
cost (RC)
Potential
future
(PFE)
EEPE(**)
Alpha
used for
computing
regulatory Exposure
exposure value
value pre-CRM
Exposure
value Exposure
post-CRM value
RWA
Of which
standard IRB
approach approach
Of which
EU – Original Exposure Method
EU1 (for derivatives)
EU – Simplified SA-CCR
EU2 (for derivatives)
1
SA-CCR (for derivatives)
906
3,159
1.40
5,692
5,692
5,692
3,287
1,596
1,691
2
IMM (for derivatives and SF T s)(*)
86,754
1.55
134,468
134,468
134,282
28,904
231
28,674
2a
of which securities financing
transactions
39,703
61,540
61,540
61,535
7,821
53
7,768
2b
of which derivatives and long
settlement transactions
47,050
72,928
72,928
72,747
21,083
177
20,906
2c
of which from contractual
cross-product netting sets
3
Financial collateral simple
method (for SF T s)
4
Financial collateral
comprehensive method (for SF T s)
2,943
2,943
2,943
452
168
284
5
VaR for SF T s
6
TOTAL
143,103
143,103
142,916
32,643
1,995
30,648
(*) Securities Financing T r ansactions.
(**) Effective Expected Positive Exposure.
(***)C redit risk mitigation.
a
b
c
d
e
f
g
h
In millions of euros
31 December 2022
Replacement exposure
cost (RC)
Potential
future
Alpha used
for computing
regulatory value
(PFE) EEPE(**) exposure value pre-CRM post-CRM
Exposure Exposure
value Exposure
value
RWA
Of which
standard IRB
approach approach
Of which
EU – Original Exposure Method
EU1 (for derivatives)
EU2 derivatives)
EU – Simplified SA-CCR (for
1
SA-CCR (for derivatives)
363
655
1.40
1,425
1,425
1,425
1,208
1,184
24
2
IMM (for derivatives and SF T s)(*)
91,812
1.60
146,900
146,900
146,873
31,072
203
30,869
2a
of which securities financing
transactions
36,738
58,781
58,781
58,781
6,618
100
6,518
2b
of which derivatives and long
settlement transactions
55,074
88,119
88,119
88,092
24,454
103
24,351
2c
of which from contractual
cross-product netting sets
3
Financial collateral simple
method (for SF T s)
4
Financial collateral
comprehensive method (for SF T s)
734
734
734
1,031
1,031
5
VaR for SF T s
6
TOTAL
149,059
149,059
149,032
33,311
1,386
31,925
(*) Securities Financing T r ansactions.
(**) Effective Expected Positive Exposure.
(***)C redit risk mitigation.
➤
TABLE 72: IRBA BILATERAL COUNTERPARTY CREDIT RISK EXPOSURE AT DEFAULT (EU CCR4)
a
b
c
d
e
f
g
In millions of euros
PD scale
31 December 2023
EAD
Average
PD
Number of
obligors
Average
LGD marturity
Average
RWAs
Average
RW
1
Central
governments or
central banks
0.00 to < 0.15%
22,702
0.02%
100 to 1,000
2%
2
97
0%
2
2
0.15 to < 0.25%
126
0.18%
0 to 100
20%
27
22%
3
0.25 to < 0.50%
131
0.30%
0 to 100
50%
0
61
46%
4
0.50 to < 0.75%
1
0.69%
0 to 100
50%
1
1
81%
5
0.75 to < 2.50%
48
1.45%
0 to 100
11%
5
19
40%
6
2.50 to < 10.0%
7
10 to < 100%
14
21.81%
0 to 100
40%
247%
8
100% (Default)
SUB-TOTAL
23,023
0.04%
2%
2
240
1%
1
Institutions
0.00 to < 0.15%
39,668
0.05%
1,000 to 10,000
36%
1
4,960
13%
2
0.15 to < 0.25%
2,534
0.17%
100 to 1,000
40%
1
940
37%
3
0.25 to < 0.50%
1,360
0.35%
100 to 1,000
50%
1
710
52%
4
0.50 to < 0.75%
147
0.59%
100 to 1,000
42%
1
93
63%
5
0.75 to < 2.50%
364
1.15%
100 to 1,000
60%
1
438
120%
6
2.50 to < 10.0%
317
3.07%
100 to 1,000
50%
1
414
131%
7
10 to < 100%
16
23.14%
0 to 100
63%
0
58
361%
8
100% (Default)
SUB-TOTAL
44,406
0.10%
37%
1
7,612
17%
1
Corporates
0.00 to < 0.15%
56,435
0.06%
1,000 to 10,000
31%
1
10,992
19%
2
0.15 to < 0.25%
5,292
0.18%
1,000 to 10,000
39%
2
2,008
38%
3
0.25 to < 0.50%
4,515
0.32%
1,000 to 10,000
37%
2
2,471
55%
4
0.50 to < 0.75%
631
0.69%
100 to 1,000
35%
2
419
66%
5
0.75 to < 2.50%
3,575
1.36%
1,000 to 10,000
46%
1
3,493
98%
6
2.50 to < 10.0%
1,873
4.44%
1,000 to 10,000
47%
2
2,794
149%
7
10 to < 100%
301
17.15%
100 to 1,000
42%
2
619
206%
8
100% (defaults)
106
100.00%
0 to 100
43%
2
1
1%
SUB-TOTAL
72,727
0.48%
33%
1
22,796
31%
Retail
n.s.
n.s.
n.s.
n.s.
n.s.
n.s.
TOTAL
140,157
0.29%
29%
1
30,648
22%
a
b
c
d
e
f
g
In millions of euros
PD scale
31 December 2022
EAD
Average
PD
Number of
obligors
Average
LGD marturity
Average
RWAs
Average
RW
1
Central
governments or
central banks
0.00 to < 0.15%
26,356
0.01%
100 to 1,000
1%
1
53
0%
2
0.15 to < 0.25%
147
0.17%
0 to 100
20%
2
26
18%
3
0.25 to < 0.50%
170
0.31%
0 to 100
47%
0
66
39%
4
0.50 to < 0.75%
5
0.75 to < 2.50%
3
1.07%
0 to 100
50%
1
3
101%
6
2.50 to < 10.0%
7
10 to < 100%
61
21.79%
0 to 100
n/a
n/a
n/a
8
100% (Default)
SUB-TOTAL
26,737
0.07%
2%
1
436
2%
1
Institutions
0.00 to < 0.15%
23,963
0.05%
10,000 to 20,000
41%
1
3,903
16%
2
0.15 to < 0.25%
1,293
0.18%
100 to 1,000
45%
1
527
41%
3
0.25 to < 0.50%
1,188
0.34%
100 to 1,000
52%
1
764
64%
4
0.50 to < 0.75%
201
0.61%
0 to 100
55%
1
185
92%
5
0.75 to < 2.50%
449
1.26%
100 to 1,000
56%
1
476
106%
6
2.50 to < 10.0%
117
3.70%
0 to 100
58%
1
181
154%
7
10 to < 100%
44
14.33%
0 to 100
49%
1
104
238%
8
100% (Default)
0 to 100
SUB-TOTAL
27,255
0.13%
42%
1
6,140
23%
1
Corporates
0.00 to < 0.15%
74,593
0.05%
20,000 to 30,000
32%
1
12,501
17%
2
0.15 to < 0.25%
6,124
0.17%
1,000 to 10,000
37%
1
2,065
34%
3
0.25 to < 0.50%
6,459
0.31%
1,000 to 10,000
34%
1
3,062
47%
4
0.50 to < 0.75%
776
0.68%
100 to 1,000
36%
2
519
67%
5
0.75 to < 2.50%
3,339
1.31%
1,000 to 10,000
58%
2
4,308
129%
6
2.50 to < 10.0%
1,329
4.32%
1,000 to 10,000
59%
2
2,115
159%
7
10 to < 100%
356
15.85%
100 to 1,000
43%
2
778
218%
8
100% (Default)
93
100.00%
100 to 1,000
0
0%
SUB-TOTAL
93,069
0.35%
34%
1
25,349
27%
Retail
n.s.
n.s.
n.s.
n.s.
n.s.
n.s.
TOTAL
147,061
0.26%
30%
1
31,925
22%
➤
TABLE 73: STANDARDISED BILATERAL COUNTERPARTY CREDIT RISK EXPOSURE AT DEFAULT (EU CCR3)
a
e
f
h
i
j
l
In millions of euros
0%
31 December 2023
EAD
RWAs
Risk weight
20%
50%
75%
100%
150%
Total
1
Central governments
or central banks
23
15
38
26
2; 3; 4; 5; 6 Institutions
648
226
49
922
291
7; 9; 10
Corporates
23
203
1,524
48
1,798
1,676
8
Retail
2
2
2
TOTAL
-
671
451
2
1,587
48
2,760
1,995
a
e
f
h
i
j
l
In millions of euros
0%
31 December 2022
EAD
RWAs
Risk weight
20%
50%
75%
100%
150%
Total
1
Central governments
or central banks
41
8
49
28
2; 3; 4; 5; 6 Institutions(*)
574
140
81
795
266
7; 9; 10
Corporates
8
78
972
46
1,103
1,076
8
Retail
27
27
20
TOTAL
-
582
259
27
1,061
46
1,975
1,390
(*) Asset class "Corporate" included Other risk assets with an amount of EUR 3 million at 31 December 2022.
COUNTERPARTY CREDIT RISK FOR EXPOSURES TO CENTRAL
COUNTERPARTIES ASSOCIATED WITH CLEARING ACTIVITIES
The capital requirements related to central counterparties (CCP)
exposures correspond to an extension of the bilateral counterparty credit
risk perimeter to clearing activities; it covers the cleared part of the
OTC derivatives, repo portfolio as well as the listed derivatives portfolio.
It is equal to the sum of the following three elements:
■ a charge resulting from exposures generated by clearing activities
(proprietary and client clearing);
■ a requirement resulting from the non-segregated initial margins
posted to the CCP;
■ a requirement resulting from the default fund contribution of the
central counterparties.
For central counterparties (CCP), Regulation (EU) No.575/2013
distinguishes qualifying central counterparties (QCCP) from non-qualifying
central counterparties. Qualifying central counterparties correspond to
central counterparties authorised or recognised in accordance with
Regulation (EU) No. 648/2012.
The table below presents the breakdown of the risk-weighted assets by method and category of exposure to central counterparties.
➤
TABLE 74: EXPOSURES TO CCPS (EU CCR8)
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
EAD
RWAs
EAD
RWAs
1
Exposures to QCCPs (total)
3,917
2,349
2
Exposures for trades at QCCPs (excluding initial margin
and default fund contributions);
33,385
1,720
44,669
1,140
3
of which OTC derivatives
2,669
126
4,208
93
4
of which exchange-traded derivatives
17,463
1,321
37,723
992
5
of which SF T s(*)
13,252
274
2,738
55
6
of which Netting sets where cross-product netting
has been approved
7
Segregated initial margin
8
Non-segregated initial margin
1,968
41
12,212
252
9
Prefunded default fund contributions
6,127
2,155
5,320
957
10
Unfunded default fund contributions
14,115
10,555
11
Exposures to non-eligible CCPs
3,276
192
12
Exposures for trades at non-QCCPs (excluding initial
margin and default fund contributions);
479
479
1
1
13
of which OTC derivatives
118
118
14
of which exchange-traded derivatives
320
320
15
of which SF T s(*)
41
41
1
1
16
of which netting sets where cross-product netting
has been approved
17
Segregated initial margin
18
Non-segregated initial margin
82
82
67
67
19
Prefunded default fund contributions
41
514
4
47
20
Unfunded default fund contributions
176
2,202
6
77
(*) Securities Financing T r ansactions.
C V A R ISK
The CVA risk measures the risk of losses caused by changes in the credit
valuation adjustments resulting from credit spread changes associated
with the counterparties to whom the Group is exposed (see paragraph
Credit Valuation Adjustments (CVA)).
Using the standardised approach, the capital requirement for credit
valuation adjustment risk (CVA) is calculated according to the supervisory
formula.
Using the IRB approach, the CVA risk capital charge is the sum of two
elements:
■ CVA VaR charge, which represents the own funds requirement
measured from a VaR computation on CVA sensitivities to credit
spreads;
■ CVA SVaR charge, which represents the own funds requirement
measured from a stressed VaR computation on CVA sensitivities to
credit spreads.
➤
TABLE 75: CVA RISK CAPITAL CHARGE (EU CCR2)
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
EAD
RWAs
EAD
RWAs
1
Advanced approach(*)
51,629
4,988
45,446
6,137
2
CVA VaR charge
924
1,295
3
CVA SVaR charge
4,064
4,842
4
Standardised approach
370
200
530
327
5
TOTAL
52,000
5,189
45,976
6,464
(*) The EAD in advanced approach has been adjusted on the previous closing date on a specific counterparty. This change has no impact on the associated RWA.
C V A R ISK MANAGEMENT
CVA sensitivities to credit spreads are partially offset by the recognition of
hedges. These hedges correspond to credit derivatives on certain identified
counterparties or indices composed of identifiable counterparties.
Instruments authorised as hedges in the calculation of the capital
requirements for credit valuation adjustment risk form a sub-set of the
credit derivatives used as hedges by the Global Markets business in the
management of its CVA.
COUNTERPARTY CREDIT RISK MANAGEMENT
CREDIT RISK MITIGATION TECHNIQUES
In the context of liquidity management and counterparty credit risk
management, the BNP Paribas Group systematically monitors the
collateral guarantees received and given, for both the portion hedging
the contracts' market value (variation margin) and the risk of an adverse
change in these market values in the event of a counterparty default
(initial margin). The collateral given and received used in derivative
contracts is mainly comprised of cash, and to a lesser extent, debt
securities. The impact of the collateral received in clearing contracts is
shown in the consolidated financial statements in note 5.o Offsetting of
financial assets and liabilities.
As a general rule, when EAD is modelled in EEPE and weighted according
to the IRB approach, the LGD (Loss Given Default) is not adjusted according
to the collateral received since it is already taken into account in the
"Effective Expected Positive Exposure" computation (see section Bilateral
counterparty risk).
Collateral guarantees used in the standardised approach to reduce the
EAD totalled EUR 690 million at 31 December 2023, compared with
EUR 490 million at 31 December 2022.
The table below shows the breakdown of the collateral posted and received in respect of initial margins, margin calls as well as amounts in cash and
in securities of repurchase agreements and securities lending and borrowing.
➤
TABLE 76: COMPOSITION OF COLLATERAL GIVEN AND RECEIVED (EU CCR5)
a
b
c
d
e
f
g
h
In millions of euros
31 December 2023
Collateral used in derivative transactions
Collateral used in SFTs(*)
Fair value of collateral
received collateral
Fair value of posted
Fair value of collateral
received
Fair value of posted
collateral
Segregated Unsegregated
Segregated Unsegregated
Segregated Unsegregated
Segregated Unsegregated
1
Cash – domestic currency
39,307
3,300
49,002
203,858
1,110
173,855
2
Cash – other currencies
38,320
1,337
33,703
287,443
15
262,674
3
Domestic sovereign debt-euro
216
14,346
15,984
12,851
206,202
4,108
189,108
4
Other sovereign debt
6,707
6,735
2,317
6,109
6
370,802
147
306,124
5
Government agency debt
112
410
317
3,160
3,045
6
Corporate bonds
26,027
4,847
23,365
2,128
2
94,165
125,513
7
Equity securities
125
13
94,989
51,914
8
Other collateral
14
6,261
16,332
9
TOTAL
33,186
103,992
46,303
104,110
7
1,266,880
5,379
1,128,565
(*) Securities Financing T r ansactions.
a
b
c
d
e
f
g
h
In millions of euros
31 December 2022
Collateral used in derivative transactions
Collateral used in SFTs(*)
Fair value of collateral
received collateral
Fair value of posted
Fair value of collateral
received
Fair value of posted
collateral
Segregated Unsegregated
Segregated Unsegregated
Segregated Unsegregated
Segregated Unsegregated
1
Cash – domestic currency
47,462
2,552
86,212
156,026
2,821
154,694
2
Cash – other currencies
58,613
848
30,652
97,635
146,290
3
Domestic sovereign debt-euro
402
17,485
12,779
5,742
202,959
1,382
187,290
4
Other sovereign debt
6,094
6,128
1,174
3,776
2
229,008
294
167,096
5
Government agency debt
619
3,807
2,421
6
Corporate bonds
17,735
5,482
15,409
125
216
70,744
46,772
7
Equity securities
642
25
96,322
66,879
8
Other collateral
14
3,231
110
9
TOTAL
24,874
135,827
32,762
126,507
218
859,732
4,497
771,552
(*) Securities Financing T r ansactions.
The amount of additional collateral to be provided by the Group in the event of a credit rating downgrade is not significant.
CREDIT DERI V A T IVE EXPOSURES
The following table summarises all the notional amounts and market values of the trading portfolio credit derivatives.
➤
TABLE 77: CREDIT DERIVATIVES EXPOSURES (EU CCR6)
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
Protection bought
Protection sold
Protection bought
Protection sold
6
Notionals
455,307
369,046
548,220
441,858
1
Single-name credit default swaps
186,611
154,081
211,302
168,367
2
Index credit default swaps
223,602
177,977
291,586
238,239
3
Total return swaps
10,647
5,426
10,919
3,654
4
Credit options
31,396
31,562
33,749
31,598
5
Other credit derivatives
3,051
665
Fair values
(8,348)
6,455
(2,730)
2,292
7
Positive fair value (asset)
953
7,536
2,593
4,774
8
Negative fair value (liability)
(9,301)
(1,081)
(5,324)
(2,482)
CAPITAL REQUIREMENT AND RIS K-WEIGHTED ASSETS
➤
TABLE 78: COUNTERPARTY CREDIT RISK CAPITAL REQUIREMENT AND RISK-WEIGHTED ASSETS
In millions of euros
2023
RWAs
Capital requirements
31 December
31 December
2022
Variation
31 December
2023
31 December
2022
Variation
Bilateral counterparty credit
risk
32,191
32,280
(89)
2,575
2,582
(7)
Exposure to CCP related
to clearing activities(*)
7,193
2,541
4,652
575
203
372
CVA risk
5,189
6,464
(1,276)
415
517
(102)
Others (general method based
on financial collateral)
452
1,035
(583)
36
83
(47)
TOTAL
45,025
42,320
2,705
3,602
3,386
216
(*) Counterparty credit risk related to clearing activities.
➤
TABLE 79: COUNTERPARTY CREDIT RWA MOVEMENTS BY KEY DRIVER (EU CCR7)
➤ 4th quarter 2023
a
In millions of euros
RWAs – Counterparty credit risk
Capital Requirements – Counterparty credit risk
Total
method (IMM)
of which internal model
Total
of which internal model
method (IMM)
1
30 September 2023
46,888
29,871
3,751
2,390
2
Asset size
(1,661)
(2,072)
(133)
(166)
3
Asset quality
2
112
9
4
Model update
39
312
3
25
5
Methodology and policy
6
Acquisitions and disposals
7
Currency
(2)
(5)
8
Other
(241)
687
(19)
55
9
31 DECEMBER 2023
45,025
28,904
3,602
2,312
(*) Internal model method related to bilateral counterparty model (excluded CCP clearing).
➤ Year to 31 December 2023
a
In millions of euros
RWAs – Counterparty credit risk
Capital Requirements – Counterparty credit risk
Total
method (IMM)
of which internal model
Total
of which internal model
method (IMM)
1
31 December 2022
42,320
31,072
3,386
2,486
2
Asset size
1,625
(294)
130
(24)
3
Asset quality
(741)
(1,091)
(59)
(87)
4
Model update
701
(188)
56
(15)
5
Methodology and policy
3,111
249
6
Acquisitions and disposals
(159)
(13)
7
Currency
(87)
(5)
(7)
8
Other
(1,745)
(590)
(140)
(47)
9
31 DECEMBER 2023
45,025
28,904
3,602
2,312
(*) Internal model method related to bilateral counterparty model (excluded CCP clearing).
The change in counterparty risk-weighted assets in 2023 is explained by a EUR 3.1 billion increase caused by the de qualification of Indian clearing
houses, an increase of EUR 1.6 billion due to the activity, offset by a -EUR 1.7 billion reduction in CVA.
478
RISKS AND CAPITAL ADEQUACY – PILLAR 3
Market risk
5.7 Market risk
Market risk is the risk of incurring a loss of value due to adverse
trends in market prices or parameters, whether directly observable
or not.
Observable market parameters include, but are not limited to,
exchange rates, prices of securities and commodities (whether listed
or obtained by reference to a similar asset), prices of derivatives,
and other parameters that can be directly inferred from them, such
as interest rates, credit spreads, volatilities and implied correlations
or other similar parameters.
Non-observable factors are those based on working assumptions
such as parameters contained in models or based on statistical or
economic analyses, non-ascertainable in the market.
In fixed-income trading books, credit instruments are valued on the
basis of bond yields and credit spreads, which represent market
parameters in the same way as interest rates or foreign exchange
rates. The credit risk arising on the issuer of the debt instrument is
therefore a component of market risk known as issuer risk.
Liquidity is an important component of market risk. In times of
limited or no liquidity, instruments or goods may not be tradable
or may not be tradable at their estimated value. This may arise,
for example, due to low transaction volumes, legal restrictions or
a strong imbalance between demand and supply for certain assets.
The market risk related to banking activities encompasses the
interest rate and foreign exchange risks stemming from banking
intermediation activities.
Market risk is presented in this section in two parts:
■ market risk linked to trading activities and corresponding to trading instruments and derivative contracts;
■ market risk linked to banking activities encompassing the interest rate and foreign exchange risks stemming from banking intermediation activities.
CAPITAL REQUIREMENTS AND RIS K-WEIGHTED ASSETS
➤
TABLE 80: MARKET RISK CAPITAL REQUIREMENT AND RISK-WEIGHTED ASSETS
In millions of euros
2023
RWAs
Capital requirements
31 December
31 December
2022
Variation
31 December
2023
31 December
2022
Variation
Internal model approach
19,015
18,921
95
1,521
1,514
8
Standardised approach
8,979
5,851
3,128
718
468
250
Trading book securitisation
positions
789
771
17
63
62
1
TOTAL
28,783
25,543
3,241
2,303
2,043
259
Within the BNP Paribas Group, market risk is primarily handled using the internal model approach.
At 31 December 2023, the increase in market risk-weighted assets is mainly related to the update by EBA of the list of closely correlated currencies.
Thus, since 1 October 2023, the correlation of the euro with the US dollar and the yuan renminbi, among others, is no longer applied in the context of
the calculation of foreign exchange risk under the standardised method.
➤
TABLE 81: MARKET RISK UNDER THE INTERNAL MODEL APPROACH (EU MR2-A)
a
b
a
b
In millions of euros
31 December 2023
31 December 2022
RWAs
requirements
Capital
RWAs
Capital
requirements
1
VaR(*) (higher of values 1.a and 1.b)
4,134
331
5,635
451
1.a Previous day's VaR (VaRt-1)
116
119
Average of the daily VaR on each of the preceding 60 business days
1.b x multiplication factor
331
451
2
SVaR(*) (higher of values 2.a and 2.b)
9,050
724
9,936
795
2.a Latest SVaR
229
256
Average of the daily SVaR during the preceding 60 business days
2.b x multiplication factor
724
795
3
IRC(*)(**) (higher of values 3.a and 3.b)
5,170
414
2,731
219
3.a Last measure
346
203
3.b Average of the IRC number over the preceding 12 weeks
414
219
4
CRM(***) (higher of values 4.a, 4.b and 4.c)
661
53
618
49
4.a Last measure
15
19
4.b Average of the CRM over the preceding 12 weeks
33
42
8% of the capital requirement in the standardised approach
4.c on the most recent CRM for the correlation trading portfolio
53
49
6
TOTAL
19,015
1,521
18,921
1,514
(*) VaR,SVaR and IRC include all the components taken into account in the calculation of RWA.
(**) Incremental Risk Charge.
(***)C omprehensive Risk Measure.
The market risk calculated using the standardised approach covers the
market risk of some entities of the Group that are not covered by internal
models. The standardised approach is used to calculate foreign exchange
risk and raw materials risk for the banking book (see section 5.7 Market
risk related to banking activities).
➤
TABLE 82: MARKET RISK UNDER THE STANDARDISED APPROACH (EU MR1)
a
a
In millions of euros
31 December 2023
31 December 2022
RWAs
requirements
Capital
RWAs
Capital
requirements
Outright products
1
Interest rate risk (general and specific)
405
32
344
28
2
Equity risk (general and specific)
1
0
59
5
3
Foreign exchange risk
8,568
685
5,434
435
4
Commodity risk
0
0
0
0
Options
5
Simplified approach
6
Delta-plus approach
7
Scenario approach
5
0
13
1
8
Securitisation (specific risk)
789
63
771
62
9
TOTAL
9,768
781
6,622
530
➤
TABLE 83: MARKET RISK-WEIGHTED ASSETS MOVEMENTS BY KEY DRIVER (EU MR2-B)
➤ 4th quarter 2023
a
b
c
d
e
f
g
In millions of euros
VaR
SVaR
IRC(*)
CRM(**)
Standardised
approach Total RWAs
Total capital
requirements
1
30 September 2023
5,072
10,031
4,659
723
6,655
27,439
2,195
2
Asset size and quality
(937)
(1,266)
511
(62)
1344
(410)
(33)
3
Model update
4
Methodology and policy
5
Acquisitions and
disposals
6
Currency
7
Other
(1)
285
1,769
1,754
140
8
31 DECEMBER 2023
4,134
9,050
5,170
661
9,768
28,783
2,303
(*) Incremental Risk Charge.
(**) Comprehensive Risk Measure.
➤ Year to 31 December 2023
a
b
c
d
e
f
g
In millions of euros
VaR
SVaR
IRC(*)
CRM(**)
Standardised
approach Total RWAs
Total capital
requirements
1
31 December 2022
5,635
9,936
2,731
618
6,622
25,543
2,043
2.
Asset size and quality
(886)
212
2,436
43
(764)
2,569
206
3
Model update
(607)
(1,075)
(1,682)
(135)
4
Methodology and policy
5
Acquisitions and
disposals
87
186
(10)
264
21
6
Currency
7
Other
(94)
(210)
3
2,391
2,089
167
8
31 DECEMBER 2023
4,134
9,050
5,170
661
9,768
28,783
2,303
(*) Incremental Risk Charge.
(**) Comprehensive Risk Measure.
The change in market risk-weighted assets in 2023 is explained mainly by an increase of EUR 3.1 billion in line with activity business and a EUR 1.7 billion
increase linked to the EBA update of correlated currencies for the currency risk computation partially offset by a -EUR 1.7 billion decrease following
the decrease in the VaR and sVaR multiplie r.
MARKET RISK RELATED TO TRADING ACTIVITIES
INTRODUCTION
Market risk arises mainly from trading activities carried out within
Corporate & Institutional Banking (CIB), mainly within Global Markets
and encompasses different risk factors defined as follows:
■ interest rate risk is the risk that the value of a financial instrument
will fluctuate due to changes in market interest rates;
■ foreign exchange risk is the risk that the value of an instrument will
fluctuate due to changes in foreign exchange rates;
■ equity risk arises from changes in the market prices and volatilities of
equity shares and/or equity indices;
■ commodities risk arises from changes in the market prices and
volatilities of commodities and/or commodity indices;
■ credit spread risk arises from the change in the credit quality of an
issuer and is reflected in changes in the cost of purchasing protection
on that issuer;
■ option products carry by nature volatility and correlation risks, for
which risk parameters can be derived from option market prices
observed in an active market.
Trading activities at BNP Paribas are directly related to economic
relations with business line customers, or indirectly as part of market-
making activities.
MARKET RISK MANAGEMENT
ORGANISATION
The market risk management system aims to track and control market
risks as well as control financial instrument valuation whilst ensuring
that the control functions remain totally independent from the business
lines.
Within RISK, three departments are responsible for monitoring market
risk:
■ RISK Markets and Financial Institutions (RISK MFI) covers Global
Markets and Securities Services activities;
■ RISK ALM-T c overs ALM-T r easury activities;
■ RISK Commercial, Personal Banking and Services (RISK CPBS) covers
Domestic Markets and Europe-Mediterranean activities.
This mission consists of defining, measuring and analysing risk factors
and sensitivities, as well as measuring and controlling Value at Risk (VaR),
the global indicator of potential losses. RISK ensures that all business
activity complies with the limits approved by the various committees and
approves new activities and major transactions, reviews and approves
position valuation models and conducts a monthly review of market
parameters (MAP review) in association with the Valuation and Risk
Control Department (V&RC).
Market Risk and financial instrument valuation monitoring is structured
around several formal committees:
■ the Financial Market Risk Committee (FMRC) is the main committee
governing the risks related to Capital Market activities. It is
responsible for addressing, in a coherent manne r, t he issues related
to market and counterparty risk. The FMRC follows the evolution of
the main exposures and stress risk and sets the high level trading
limits. The committee meets approximately monthly. It is chaired by
either the Group Chief Executive Officer or by a Bank's Deputy Chief
Operating Officer;
■ the Product and Financial Control Committee (PFC) is the arbitration
and pricing decision-making committee regarding financial instrument
valuation matters. The committee meets quarterly and discusses the
conclusions of the CIB Financial Control teams and their work to
enhance control effectiveness and the reliability of the measurement
and recognition of the results of market transactions. It is chaired by
the Group Chief Financial Officer and brings together the Directors of
Finance & Strategy – Accounting, Corporate & Institutional Banking
and RISK;
■ at business line level, the Valuation Review Committee (VRC) meets
monthly to examine and approve the results of Market parameters
review (MAP review) and any changes in reserves. The Valuation
Review Committee also acts as the referee in any disagreements
between trading and control functions. The committee is chaired by
the Senior Trader and other members include representatives from
trading, RISK, the CIB Valuation and Risk Control Group (V&RC) team,
and Finance & Strategy. Any disagreement is escalated to the PFC;
■ the Valuation Methodology Committee (VMC) meets quarterly
per business line to monitor model approvals and reviews, follow
up relevant recommendations and present model governance
improvements. This committee is chaired by RISK MFI and includes
representatives from trading, research, and the valuation and risk
control (V&RC) team of CIB and Finance & Strategy. Any disagreement
can be escalated to the PFC, which can make an arbitrage decision.
As part of BCBS 239 Principles for effective risk data aggregation and
risk reporting by the Basel Committee, a quarterly reconciliation process
ensures that the entire trading portfolio of Front Office systems is
correctly represented in the Group's RISK and Finance & Strategy systems,
and in particular:
■ that the dividing line between trading activities and banking activities
is observed;
■ that the internal market risk model is exhaustive: each portfolio and
entity generating market risk relating to trading activities corresponds
to a capital requirement.
This quarterly process is structured around the Effective Coverage of
Portfolios Committee (EC) which validates the reconciliation results and
any corrective and prevention actions undertaken subsequent to any
discrepancies observed.
V A LUATION CONTROL
Financial instruments in the prudential trading book are valued and
reported at market or model value through P&L, in compliance with
applicable accounting standards. Such can also be the case of financial
instruments classified in the banking book.
Portfolio valuation control is described in the Charter of Responsibility for
Valuation, which sets out the division of responsibilities. These governance
policies and practices also apply to all ALM Treasury activities.
In addition to the charte r, t he relevant valuation controls are detailed
in specific policies. The main processes that together form the valuation
control governance mechanism are set out below.
Transaction accounting control
This control is under the responsibility of middle-office teams. Howeve r,
the most complex transactions are controlled by RISK.
Market Parameter (MAP) review –
Independent Price Verification
Price verification is managed jointly by Valuation and Risk Control (V&RC)
and RISK. Daily controls are performed on the most liquid parameters
and a comprehensive and formal review of all the market parameters is
performed at month end. The types of parameters controlled by V&RC
are listed precisely; these are essentially the parameters for which an
automatic control against external sources can be implemented (security
prices, vanilla parameters); this may include the use of consensus price
services. RISK is in charge of controlling valuation methodologies as
well as the most complex parameters that are very dependent on the
choice of models.
The general principles of the Market Parameter review are described in
the Charter of Responsibility for Valuation as well as specialised global
policies such as the Global Marking and Independent Price Verification
Policy and MAP Review Principles. The specific methodologies are
described in documents known as the MAP Books organised by product
lines and regularly updated. The responsibilities of RISK and V&RC
are defined for each point in time and the conclusions of the Market
Parameter reviews are documented in the MAP review finding documents.
The outcome of the Market parameter review is the estimation of
valuation adjustments communicated to the middle-office, which enters
it in the accounting records. The results are communicated to the Trading
management during the Valuation Review Committees. The opinion
of the control functions prevails, howeve r, s ignificant and persistent
disagreement can be escalated to the PFC.
Model Approval and Reviews
The governance of model controls is described in the Valuation
Methodology Control Policy (VMCP).
Front office quantitative analysts design and propose the methodologies
used to value the product and measure the risks that are used to take
trading decisions. The research team and IT are responsible for the
implementation of these models in the systems.
The independent control of the valuation models falls under the
responsibility of RISK and includes:
■ model validation, by which a formal decision to approve or reject a
model is taken, including following any modification of the valuation
methodology called a "Valuation Model Event". In all cases, the
approval decisions are taken by a senior RISK analyst during a
specific VMC. The review required by the validation process can be fast
track or comprehensive; in the latter case, the reasons and conditions
for approval are detailed in a model approval document;
■ the review of models can be conducted at inception (linked to
approval) or during the life of a model (re-calibration); it consists of
an examination of the suitability of the model used to value certain
products in the context of a given market environment;
■ the control of the use and implementation of models, consists of
continuous control of the correct parameterisation and configuration
of the models as well as their suitability for the relevant products.
Reserve and other valuation adjustments
RISK defines and calculates "reserves". These are adjustments to the
market or model value affecting both the accounting valuation and
regulatory capital. They can be considered either as the exit cost of a
position or as a premium for risks that cannot be diversified or hedged,
as appropriate.
The reserves primarily cover:
■ the bid-offer spreads and liquidity risk;
■ the model or market parameters uncertainties;
■ the reduction of non-hedgeable risks (smoothing digital or barrier
pay-offs).
A general valuation adjustment policy exists. Reserve methodologies are
documented by RISK for each product line and these documentations
are updated regularly. The analysis of reserve variations is reported at
the monthly VRC.
Reserve methodologies are improved regularly and any change is a
Valuation Model Event. Reserve improvements are generally motivated
by the conclusion of a model review or by the calibration to market
information during the Market parameter review process.
Additional Valuation Adjustments (AVA) are calculated in accordance with
the Commission delegated Regulation (EU) No. 2016/101.
This delegated regulation supplements the requirements of article 105
of the CRR with regard to regulatory technical standards for prudent
valuation of financial instruments in the trading portfolio. It specifies that
the scope of application of these requirements covers all instruments
measured according to article 34 of the CRR, based on the proportion of
the accounting valuation change that impacts Tier 1 capital.
The regulatory technical standards set out the definitions and a framework
for measurement and control for the elements of valuation uncertainty
that must be considered when determining a prudent valuation under
article 105. The standard also sets a target level of valuation certainty:
the Bank must be 90% confident that it could liquidate the instrument
at a better price than the prudent valuation.
To apply these requirements, the first step is to define Prudent Valuation
Adjustments (PVA). These adjustments correspond to the different types
of risks and costs that could lead to exit costs, relative to the mid-
market value (or the expected value). The main categories are the
liquidation cost, the risk related to uncertainties regarding market prices,
concentration risk and valuation model risk. PVAs are calculated for each
exposure on a granular level.
Based on these PVAs and for each exposure and risk type, BNP Paribas
calculates the AVA (Additional Valuation Adjustments) that may be
necessary, in addition to the reserves already taken into account in the
valuation for the same exposure and risk type, to achieve the target
valuation certainty level.
For some types of risk, the calculation of AVAs includes a diversification
effect. This reflects the fact that the amount of the additional adjustments
that are necessary with respect to all positions are less than the sum
of the additional adjustments that may be required for the positions or
risks taken individually.
The AVA amounts are deducted from Common Equity Tier 1 capital.
Day One profit or loss
Some transactions are valued with non-observable parameters.
Accounting norms require the recognition of any Day One P&L where these
parameters are used. The deferred net margin on reserves is recognised
through profit or loss in proportion to the anticipated duration of the
transaction or the period for which the inputs will be non-observable.
RISK works with Finance, middle-offices, and business lines on the
process of identifying and handling these profit and loss items, in order
to determine whether a type of parameter or transaction is observable
or not in accordance with the observability rules, which are moreover
duly documented and approved in the Valuation Methodology Committee.
The P&L impact of the P&L deferral is calculated by the middle-office or
the Finance teams, according to the scope.
The accounting treatment of the deferred margin is explained in
note 1.f.10 Determination of fair value to consolidated the financial
statements.
MARKET RISK EXPOSURE
Market risk is first analysed by systematically measuring portfolio
sensitivity to various market parameters. The results of these sensitivity
analyses are compiled at various aggregate position levels and compared
with market limits.
Risk monitoring set up and limit setting
The Group uses an integrated system to follow the trading positions on a
daily basis and manage VaR calculations. This system not only tracks the
VaR, but also detailed positions and sensitivities to market parameters
based on various criteria (such as by currency, product, counterparty).
This system is also configured to include trading limits, reserves and
stress tests.
Responsibility for limit setting and monitoring is delegated at three levels,
which are, in order of decreasing importance: FMRC, followed by the
Head of the business line and finally the manager of a trading portfolio.
Limits may be changed either temporarily or permanently, in accordance
with the level of delegation and the prevailing procedures. Appropriate
escalation mechanisms are in place to ensure that the independent view
from the RISK Function on the level of limits is heard.
Core risk analysis and reporting to Executive
Management
RISK reports, through various risk analyses and dashboards, to Executive
Management and business lines' Senior Management on its risk analysis
work (limit, VaR monitoring, core risk analysis, etc.). The reporting and
diffusion of the main summary reports on risk are carried out by the
MFI MI (Markets and Financial Institutions - Management Information)
team within RISK.
The following reports are generated on a regular basis:
■ weekly "Main Position" reports for each business line (equity
derivatives, commodities, credit G10 rates and FX & Local Markets),
summarising all positions and highlighting items needing particular
attention; these reports are mainly intended for business line
managers;
■ monthly local "bottom-up" stress testing reports for Executive
Management identifying key risk concentrations around the globe;
■ supporting documentation for the FMRC comprising markets and
risk event summaries, global counterparty exposure summary, VaR/
Stressed VaR evolution, market and counterparty risk stress testing
and capital evolution summaries, market and counterparty risk
backtesting;
■ geographical and global risk dashboards;
■ reports on valuation adjustments in the trading book, in particular
regarding market and CVA sensitivities.
VaR (Value at Risk)
The VaR is a statistical measure indicating the worst loss expected for a
given portfolio over a given time horizon and within a given confidence
interval under normal market movements. It is not a maximum loss and
it can potentially be exceeded in some cases, for example in the event
of abnormal market conditions.
The BNP Paribas VaR calculation uses an internal model which has
been approved by the banking superviso r. T he BNP Paribas VaR
methodology aims to accurately compute a one-day Value at Risk at
the 99% confidence level.
The VaR calculation is based on a Monte-Carlo approach, which not only
performs normal or log-normal simulations but also accounts for the
non-normality often observed in financial markets as well as correlation
between risk factors. An equally weighted one-year rolling window of
historical market data (updated fortnightly) is used to calibrate the
Monte-Carlo simulation.
The principal groups of simulated factors include: interest rates,
credit spreads, exchange rates, equity prices, commodities prices, and
associated volatilities. Changes in risk factors are proportional (share
prices, volatility, CDS spreads) or absolute (rates excluding OIS, spreads,
repo rates, correlations).
The valuation method used varies depending not upon the product but
upon the type of risk we are capturing. To generalise, the methods used
are either sensitivity based or full revaluation based on grid interpolation
to incorporate both linear and, especially for derivatives, non-linear
effects. In both cases, BNP Paribas calculates the general and specific
risk as a whole, taking into account the diversification effect by correlating
market parameters.
The algorithms, methodologies and sets of indicators are reviewed and
improved regularly to take into account the capital market evolution.
The scope of the BNP Paribas internal model covers the majority of
capital market activities (Global Markets, ALM Treasury). As an indication,
market risk based on the standardised approach (excluding securitisation
positions in the trading book) represented less than 5% of the total market
risk capital requirement at 31 December 2022, including foreign exchange
risk.
VaR is a statistical measure that does not take into account losses
outside a given confidence interval and does not apply to losses related
to intraday market movements. Other risk measures, such as Stressed
VaR (SVaR), IRC and CRM, complement the BNP Paribas Group's market
risk monitoring and management system.
Evolution of the VaR (1-day, 99%)
The VaR set out below are calculated from an internal model, which uses
parameters that comply with regulations in place. They correspond to
measurements taken into account within the framework of monitoring
market limits. They are based on a one-day time horizon and a 99%
confidence interval.
In 2023, total average VaR for BNP Paribas was EUR 31 million (with a minimum of EUR 23 million and a maximum of EUR 44 million), after taking into
account the -EUR 39 million netting effect between the different types of risks. These amounts break down as follows:
➤
TABLE 84: VALUE AT RISK (1-DAY, 99%) [Audited]
In millions of euros
Year to 2023
Year to 2022
Minimum(**)
Average Maximum(**)
Last
measure
Average
Last
measure
Interest rate risk
19
28
44
31
24
27
Credit risk
8
11
33
9
11
10
Foreign exchange risk
5
10
21
7
7
9
Equity price risk
9
14
28
11
15
12
Commodity price risk
3
7
13
5
17
7
Netting effect(*)
(39)
(30)
(40)
(36)
TOTAL VALUE AT RISK
23
31
44
33
34
30
(*) Note that the minimum and maximum figures shown above for the various risk types are computed on a standalone basis (i.e. independently from
each other as well as the total VaR). While the minimum or maximum for each risk type may not necessarily be observed on the same date, minimum/
maximum netting effects are not considered relevant.
(**) For minima and maxima, total VaR cannot be read as the sum of VaR by risk type.
The VaR (1 day, 99%) stood at a low level throughout 2023 thanks to
prudent management.
Backtesting the VaR
RISK continuously tests the accuracy of its internal model through a
variety of techniques, including in particular a regular comparison over
a long-term horizon between actual daily losses on capital market
transactions and one-day VaR.
This backtesting consists of making a comparison between the daily global
trading book VaR and the actual result except fees and commissions. In
accordance with the regulation, BNP Paribas supplements this "actual
backtesting" method with a comparison between the daily VaR and
the hypothetical result generated by the trading book, which is also
known as "hypothetical backtesting". The hypothetical result includes
all components of the actual result, calculated on the previous day's
positions, only incorporating changes in market parameters. A backtesting
event is declared when a real or hypothetical loss exceeds the daily VaR
amount. The confidence interval selected for calculating daily VaR is 99%,
which in theory means the observation of two to three events per yea r.
The number of events is calculated at least quarterly and is equal to
the highest of the number of excesses for the hypothetical and actual
variations in the portfolio value.
➤
FIGURE 11: COMPARISON BETWEEN VAR (1-DA Y, 9 9%) AND DAILY TRADING REVENUE (EU MR4)
In millions of euros
VaR (1-day, 99%)
Daily hypothetical trading revenues
Daily actual trading revenues
-90
-60
-30
0
30
60
90
120
150
January
2023
2023
March
2023
April
2023
June
2023
February
May
2023
July
2023
August
2023
September October
2023
2023
November December
2023
2023
In 2023, only one backtesting event at Group level was noted:
■ 15 March 2023: this hypothetical loss was due to a market rally on
16 March, in an unfavourable context for Silicon Valley Bank and Credit
Suisse, which resulted in cumulative losses within different business
lines of the Bank.
Quarterly change in VaR
➤
FIGURE 12: QUARTERLY CHANGE IN VAR (1-DA Y, 99%)
-50
-50
-51
-51
-40
-40
-40
-40
-39
-39
-39
-47
-45
-44
-44
-42
-42
-42
-35
-30
-30
-30
-32
-26
-23
-28
-28
-29
-28
-30
-59
-58
-52
-53
-33
-33
-36
-38
-41
-41
-43
-37
-35
13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20 20 21 21 21 21 22 22 22 22 23 23 23 23
19
16
19
19
14
17
17
17
15
16
18
21
17
14
14
11
13
13
14
11
12
10
10
12
9
9
13
12
12
14
33
24
20
23
9
8
11
11
11
13
11
13
11
42
43
35
33
36
4
29
28
31
43 43
34
28 31
5
31
9
31
4
22
22
25
5
25
24
23
4
27
27
7
23
4
20
26
4
3
35
54
55
33
33
32
34
34
33
33
33
31
7
28
3
37
4
9
8
6
6
6
6
7
3
4
4
4
3
8
2
4
4
5
4
5
10
5
9
8
9
9
18
19
17
11
19
11
7
7
14
35
15
15
13
14
18
14
14
10
14
20
24
15
16
17
7
15
7
8
8
6
6
8
8
15
46 45
13
13
12
7
8
5
9
12
9
10
9
9
24
21
22
17
12
11
17
21
17
20
13
12
12
16
14
11
12
16
14
13
17
11
9
10
7
19
24
4
24
26
33
17
6
8
18
18
16
14
14
15
15
15
18
14
12
11
31
20
21
26
22
19
18
23
30
32
30
25
27
23
23
23
18
16
15
16
16
19
19
19
19
17
16
20
23
24
24
36
32
35
26
21
23
24
26
27
31
32
24
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Commodities
Currencies
Equities
Interest rates
Credit
Netting
Distribution of daily revenue
The following histogram presents the distribution of the actual daily trading revenue of BNP Paribas, including intra-day revenues, fees and commissions.
It indicates the numbers of trading days during which the revenue reached each of the levels marked on the x axis, in millions of euros.
➤
FIGURE 13: DISTRIBUTION OF ACTUAL DAILY TRADING REVENUE
In trading days
Actual
income
in millions
of euros
0
10
20
30
40
50
60
70
80
Less than -30
-30 to -2 0 -20 to -10
-10 to 0
0 to 10
10 to 20
20 to 30
30 to 40
40 to 50
50 to 60
60 to 70
70 to 80
80 to 9 0 More than 90
Frequency
Trading activities generated an actual positive result for 99% of the trading days in 2023 (versus 95% in 2022).
Evolution of the VaR (10-day, 99%)
The VaR set out below are calculated from an internal model, which uses
parameters that comply with the method recommended by the Basel
Committee for determining estimated Value at Risk. They correspond to
measurements taken into account within the framework of monitoring
market limits. These are based on a ten-day time horizon and a 99%
confidence interval, extrapolated from 1-day VaR amounts with the same
confidence interval, by multiplying by a factor equal to the square root
of ten.
In 2023, total average VaR (10-day, 99%) for BNP Paribas is EUR 99 million
(with a minimum of EUR 71 million and a maximum of EUR 141 million),
after taking into account the -EUR 123 million netting effect between the
different types of risks. These amounts break down as follows:
➤
TABLE 85: VALUE AT RISK (10-DAY, 99%) [Audited]
In millions of euros
Year to 2023
Year to 2022
Minimum(**)
Average
Maximum(**)
Last measure
Average
Last measure
Interest rate risk
59
90
139
98
76
86
Credit risk
27
36
106
29
34
32
Foreign exchange risk
17
31
68
22
22
28
Equity price risk
27
43
89
35
48
39
Commodity price risk
10
22
40
16
53
22
Netting effect(*)
(123)
(95)
(125)
(113)
TOTAL VALUE AT RISK
71
99
141
105
106
95
(*) Note that the minimum and maximum figures shown above for the various risk types are computed on a standalone basis (i.e. independently from
each other as well as the total VaR). While the minimum or maximum for each risk type may not necessarily be observed on the same date, minimum/
maximum netting effects are not considered relevant.
(**) For minima and maxima, total VaR cannot be read as the sum of VaR by risk type.
Stressed VaR
Stressed VaR is calibrated over a specified full twelve-month period,
including a crisis period. This period applies across the Group, which must
have comprehensive market data to calculate the risk measurements
and remain relevant when applied to the current trading book. An expert
committee reviews the period on a quarterly basis in accordance with
a quantitatively informed approach among the three scenarios that
generate the maximum stressed risk measures.
The current reference period for calibrating stressed VaR is from 3 January
2008 to 31 December 2008.
BNP Paribas uses the same calculation method as for calculating VaR,
with market parameters determined based on this reference period.
The SVaRs presented below are based on a one-day time horizon and
a 99% confidence interval and correspond to measurements taken into
account within the framework of monitoring market limits.
The SVaR (1-day, 99%) experienced a downward trend in the second half
of 2023 due to the activity in domestic and emerging markets.
➤
TABLE 86: STRESSED VALUE AT RISK (1-DA Y, 99%)
In millions of euros
Year to 2023
Year to 2022
Minimum
Average
Maximum
Last measure
Average
Last measure
Stressed Value at Risk
60
75
113
70
75
70
Incremental Risk Charge (IRC)
The IRC approach measures losses due to default and ratings migration
at the 99.9% confidence interval (i.e. the maximum loss incurred after
eliminating the 0.1% worst events) over a capital of one yea r, a ssuming
a constant level of risk. The scope to which IRC applies mainly includes
plain vanilla credit products (bonds and CDS, excluding securitised
products) from the trading book.
The calculation of IRC is based on the assumption of a constant level of
risk over the one-year capital horizon, implying that the trading positions
or sets of positions must be rebalanced during the one-year horizon in a
manner that maintains the initial risk level. Positions that have reached
maturity or are in default are thus rolled over at the beginning of the
liquidity horizon.
The model, developed internally, is built around a rating-based simulation
for each obligo r, w hich captures both the risk of the default as well as the
risk of rating migration. The dependency between debtors is integrated
into a multi-factor asset return model, resulting in the rating migration,
potential default and changes in credit spreads.
The performance of each debtor depends on four factors:
■ a specific factor;
■ three systemic factors including one global facto r, o ne geographical
factor among three regions and one sector factor among twelve, one
of which is dedicated to sovereign entities.
The model is calibrated quarterly over the period from 1 February 2010
to the end of the quarter preceding the calculation date based on the CDS
spread data series, and the price of corporate and institutional shares.
The simulated returns are used to calculate the probability of change in
rating – which is assigned to a credit rating scenario, then a credit spread
– and to define a price variation grid associated with each debtor within
a credit rating scenario. Positions that can be broken down by debtor
are thus valued in the various simulated scenarios. Non-linear products
such as credit index options are revalued directly.
IRC was up, with an average of EUR 288 million in 2023. This increase is
linked to the increase in the risk of positions in European and US credit
index options.
Comprehensive Risk Measure (CRM)
for credit correlation portfolio
CRM is an additional capital charge to the IRC which applies to the credit
correlation portfolio (excluding securitisation products) from the trading
book. It measures potential losses from a variety of specific price change
risks (spread, correlation, recovery, credit migration, etc.) at the 99.9%
confidence interval (i.e. the maximum loss incurred after eliminating the
0.1% worst events) over a capital and liquidity horizon or rebalancing
frequency of one yea r, a ssuming a constant level of risk over this horizon.
The corporate correlation activity is an activity that consists of trading
and risk managing mainly bespoke corporate CDOs and their hedges using
single name CDS, CDS indices and index tranches. This activity falls under
the structured credit activity trading within the Global Credit business
line of Global Markets.
The valuation framework uses both market observable prices (particularly
used for CDS, index and index tranches) and data established based on
models for the implicit correlations and recovery rates, the same model
of returns and dependency between debtors, similar to that used for the
IRC. The calibration is carried out on an annual basis. The correlation
portfolio comprises of complex non-linear products. Each product is
revalued directly in the various simulated scenarios.
Summary of measures taken into account within the framework of monitoring market limits
➤
TABLE 87: IMA VALUES FOR TRADING PORTFOLIOS (EU MR3)
a
In millions of euros
31 December 2023
31 December 2022
VaR (10 days, 99%)
1
Maximum value
141
164
2
Average value
99
106
3
Minimum value
71
77
4
Period end
105
95
SVaR (10 days, 99%)
5
Maximum value
358
359
6
Average value
239
238
7
Minimum value
190
162
8
Period end
221
220
IRC(*) (99.9%)
9
Maximum value
594
439
10
Average value
288
256
11
Minimum value
154
136
12
Period end
324
184
CRM(**) (99.9%)
13
Maximum value
82
140
14
Average value
42
79
15
Minimum value
0
9
16
Period end
15
19
(*) Incremental Risk Charge.
(**) Comprehensive Risk Measure.
Securitisation positions in trading book
outside correlation portfolio
For securitisation positions treated as financial assets at fair value for
accounting purposes, changes in market value, except accrued interest
on fixed-income securities, are recognised in the profit and loss account
under "Net gain/loss on financial instruments at fair value through profit
or loss".
For ABS positions outside the correlation book, the standardised capital
charge applies (as per the standard method for banking books). The
capital requirements are determined on the basis of the asset's external
rating. The capital calculation is based on the second-worst rating of
the three rating agencies.
➤
TABLE 88: BREAKDOWN OF TRADING BOOK SECURITISATION POSITIONS OUTSIDE CORRELATION BOOK BY ASSET
TYPE (EU SEC2)
i
j
k
In millions of euros
31 December 2023
Investor
EAD
RWA
Traditional
Synthetic
Traditional
STS
Non-STS
STS
Non-STS
Synthetic
2
Retail
45
347
-
64
231
-
3
Residential mortgages
24
124
3
25
4
Credit card receivables
12
59
57
17
5
Other retail exposures
9
165
5
189
6
Re-securitisation
7
Corporates
3
477
-
2
298
-
8
Loans to corporates
418
260
9
Commercial mortgage
9
8
10
Finance lease and trade receivables
3
27
2
14
11
Other assets
22
16
12
Re-securitisation
1
TOTAL
48
824
-
66
530
-
i
j
k
In millions of euros
31 December 2022
Investor
EAD
RWA
Traditional
Synthetic
Traditional
STS
Non-STS
STS
Non-STS
Synthetic
2
Retail
42
174
-
68
179
-
3
Residential mortgages
1
47
49
4
Credit card receivables
16
16
2
5
5
Other retail exposures
24
111
66
126
6
Re-securitisation
7
Corporates
-
470
-
524
-
8
Loans to corporates
387
507
9
Commercial mortgage
10
2
10
Finance lease and trade receivables
71
14
11
Other assets
1
1
12
Re-securitisation
1
TOTAL
42
644
-
68
703
-
➤
TABLE 89: BREAKDOWN OF TRADING BOOK SECURITISATION POSITIONS AND CAPITAL REQUIREMENTS OUTSIDE THE
CORRELATION BOOK BY RISK WEIGHT
In millions of euros
31 December 2023
Risk weight
Securitisation positions
Capital requirements
Short positions
Long positions
Short
positions
positions
Long
Total
Re-
Securitisation securitisation Total Securitisation
Re-
securitisation
Total
7% – 10%
-
68
68
1
1
12% – 18%
-
467
467
7
7
20% – 35%
-
292
292
8
8
40% – 75%
100%
-
163
163
18
18
250%
61
61
17
17
425%
-
4
4
2
2
650%
-
17
17
11
11
Deduction(*)
-
13
13
TOTAL
-
-
-
1,084
-
1,084
-
63
63
(*) The Group opted for the deduction of CET1 capital instead of the 1.250% weighting.
In millions of euros
31 December 2022
Risk weight
Securitisation positions
Capital requirements
Short positions
Long positions
Short
positions
positions
Long
Total
Re-
Securitisation securitisation Total Securitisation
Re-
securitisation
Total
7% – 10%
11
11
12% – 18%
167
167
2
2
20% – 35%
301
301
8
8
40% – 75%
100%
135
135
17
17
250%
19
19
5
5
425%
7
7
3
3
650%
36
36
26
26
Deduction(*)
9
9
TOTAL
-
-
-
686
-
686
-
62
62
(*) The Group opted for the deduction of CET1 capital instead of the 1.250% weighting.
MARKET RISK STRESS TESTING
FRAMEWORK
A range of stress tests are performed to simulate the impact of extreme
market moves on the value on the global trading books. Stress tests
cover all market activities applying a range of stressed market conditions.
Scenarios
The fundamental approach of the current trading book stress testing
framework combines "bottom-up" and "top-down" stress testing:
■ Macro Level Scenarios (top-down) comprise the evaluation of a set of
global level stress test. These scenarios assess the impact of severe
market moves on BNP Paribas trading positions related to large
regional or market shock events. They can be based on historical
events or forward-looking hypothetical scenarios. Scenarios include
events such as an emerging markets crisis, credit crunch and a stock
market crash, and some are based on past crises.
The official macro stress tests scenarios currently comprise a range of
eight different stress tests. The results of these scenarios are reviewed
at each Financial Markets Risk Committee (FMRC). The scenarios are:
■
scenario 1: Unexpected Rate Hike, driving short-term rates higher
with a flattening of the interest rate curve,
■
scenario 2: Stock Market Crash, with a flight to quality assets leading
to a drop and a steepening of the interest rate curve,
■
scenario 3: Emerging Market Crisis, generic and not one specific
region,
■
scenario 4: Credit Crunch, leading to general risk aversion,
■
scenario 5: Euro Crisis, low GDP expectations, potential threat of a
country leaving the euro and a significant weakening of the currency,
■
scenario 6: Energy Shock driven by geopolitical turmoil with serious
consequences on energy markets,
■
scenario 7: Crisis in the United States, linked to an event such as a
US debt ceiling deadlock,
■
scenario 8: Risk-On scenario: rally in equity and emerging markets,
low implied volatility and drop in implied volatility in all markets
(effectively a return to risky assets);
■ Micro Level Scenarios (bottom-up): instead of looking at the effect
on the global portfolio, these types of scenarios aim to highlight risk
exposures on specific trading desks, regions, or risk concentrations.
This bottom-up approach enables the use of more bespoke stress
scenarios (such as complex product dislocations or idiosyncratic risk)
and hence allows the detection of areas of potential losses which may
not be easily achieved under the global macroeconomic scenario. This
bottom-up process also facilitates the classification of risk areas into
those where there may be less liquidity or where the risk may be more
structural in nature.
Process
It is the combination of such top-down and bottom-up scenarios that
leads to the construction of the FMRC Adverse scenario for the trading
books. The official top-down stress scenarios are presented at each FMRC
meeting along with the FMRC Adverse global stress scenarios and any
bottom-up stress tests on complex products yielding significant results.
The results of all stress tests are reviewed regularly by Executive
Management and sent to the Board of directors.
The scenarios take market liquidity into account by simulating the drying
up of certain assets or product liquidity as the stress event unfolds.
To understand this process, it can be simplified by considering an
approach where the time horizon for the stress shock can vary between
different instruments/assets (hence more advanced scenarios can take
certain idiosyncratic factors into account). Moreove r, i t may sometimes
be required to quantify the impact of a stress event occurring with re-
hedging assumptions factored into part of the exposure under stress.
Stress testing is governed by the Stress Testing Steering Committee
(STSC). The committee meets approximately monthly and sets the
direction of all internal risk departmental stress scenario developments,
infrastructure, analysis and reporting. The STSC governs all internal
stress testing matters relating to both market and counterparty risk
and decides upon the detailed definition of the FMRC Stress Tests.
Stress testing is the core element of the tail risk analysis, which is also
captured through the stressed Value at Risk, the Incremental Risk Charge
and the Comprehensive Risk Measure. Furthermore, the risk of a rare
event used in the form of the "average loss in addition to VaR" (Expected
Shortfall) in allocating capital in respect of market risk between business
lines is an additional element allowing tail risk in the management and
monitoring of market risk to be taken into account.
MARKET RISK RELATED TO BANKING ACTIVITIES
Interest rate and foreign exchange risks related to banking intermediation
activities and investments are managed by the cross-functional ALM
Treasury Department. At Group level, the ALM-T r easury Department is
directly overseen by the Group Senior Executive Adviso r. B NP Paribas SA's
ALM Treasury Department exercises functional authority over the ALM
Treasury teams of each entity or group of entities covering the entire
Group perimete r. S trategic decisions are made by the Asset and Liability
Committee (ALCo), which oversees ALM Treasury's activities. These
committees have been set up at Group, entity or group of entities level.
The foreign exchange risk gives rise to a weighted assets calculation
under Pillar 1. The interest rate risk falls under Pillar 2.
FOREIGN EXCHANGE RISK
Calculation of risk-weighted assets
Foreign exchange risk relates to all transactions part of the banking book.
Group entities calculate their net position in each currency, including
the euro. The net position is equal to the sum of all asset items less all
liability items plus off-balance sheet items (including the net forward
currency position and the net delta-based equivalent of the currency
option book), less structural, non-current assets (long-term equity
interests, property, plant and equipment, and intangible assets) subject
to exemption. These positions are converted into euros at the exchange
rate prevailing on the reporting date and aggregated to give the Group's
overall net open position in each currency. The net position in a given
currency is long when assets exceed liabilities and short when liabilities
exceed assets. For each Group entity, the net currency position is balanced
in the relevant currency (i.e. its reporting currency) such that the sum of
long positions equals the sum of short positions.
The rules for calculating the capital requirement for foreign exchange
risk are as follows:
■ matched positions in currencies of Member States participating in
the European Monetary System are subject to a capital requirement
of 1.6% of the value of the matched positions;
■ CFA and CFP francs are matched with the euro, and are not subject to
a capital requirement;
■ positions in closely correlated currencies are subject to a capital
requirement of 4% of the matched amount;
■ other positions, including the balance of unmatched positions in the
currencies mentioned above, are subject to a capital requirement of
8% of their amount.
The amounts involved are set out in T a ble 85: Market risk under the
standardised approach (EU MR1).
Foreign exchange risk and hedging of net income
generated in foreign currencies [Audited]
So-called "operating" foreign exchange risk exposure relates to net
earnings generated by activities conducted in currencies other than the
functional currency of the entity concerned. The Group's policy is to hedge
the variability of its net income due to currency movements. To this end,
earnings generated in a currency other than the functional currency of
a given entity of the Group are hedged locally.
Foreign exchange risk and hedging of net
investments in foreign operations [Audited]
The so-called "structural" foreign exchange position of an entity relates
to investments in currencies other than the functional currency. This
position mainly results from the capital endowment of the branches
and equity investments in foreign currencies financed by buying the
investment currency. This structural foreign exchange position, adjusted
for any intangibles, constitutes patrimonial exposure.
The Group's policy is to hedge portfolio exposure to liquid currencies,
while at the same time maintaining the solvency ratio's limited sensitivity
to exchange rate fluctuations. For this, borrowings in the same currency
as the investment are used as an alternative to financing by purchasing
the currency in question. Borrowings are recognised as hedges of
investments.
INTEREST RATE RISK [Audited]
Interest rate risk in the banking book, or global interest rate risk, is
the risk of variability in results as a result of mismatches in interest
rates, maturities and nature between assets and liabilities in the
banking book. This risk arises in non-trading portfolios.
Organisation of the Group interest risk
management
The Board of directors assigns responsibility to the Chief Executive Officer
for management of interest rate risk in the banking book. The Board
of directors is informed quarterly on the principles governing interest
rate policy and the Group's position through the Internal Control, Risk
Management and Compliance Committee (CCIRC).
The Chief Executive Officer delegates management responsibility to
the Group ALM Treasury Committee (Asset and Liability Management
Committee). The permanent members of the Group ALM Treasury
Committee are the Group Senior Executive Advisor (Chairman), the Delegate
Deputy Chief Operating Officers, the Group Chief Risk Office r, t he Group
Chief Financial Office r, t he Group ALM Treasury Head. The Head of General
Inspection and the Head of Compliance are also invited. This committee is
responsible for tracking interest rate risk monitoring indicators, proposing
the Group's interest rate risk profile and assigning limits.
ALM Treasury is responsible for the analysis of the management proposals
and operational implementation of decisions related to managing the
interest rate risk of the banking book as part of its delegated management.
The RISK Function participates in the Group ALM Treasury Committee and
the local ALM Treasury Committees (ALCo) and oversees implementation
by ALM Treasury of the relevant decisions made by these committees.
It also provides second-line control by reviewing the models and risk
indicators, monitoring the level of risk indicators and ensuring compliance
with the limits assigned.
The banking book consists of the Group's total bank balance sheet,
excluding trading book transactions. This includes intermediation
transactions (deposits, loans, etc.), non-commercial balance sheet items
(equity, fixed assets,etc.) and banking book risk management activities,
including derivatives used for the management of interest rate risk on
the banking book (notably when they are ineligible for hedge accounting
under IFRS).
Banking book interest rate risk in each BNP Paribas entity is systematically
transferred to ALM Treasury, through internal analytic contracts or
lending/borrowing transactions. For the Group as a whole, ALM Treasury
is responsible for managing the interest rate risk transferred in this way.
Decisions concerning the management of interest rate risk are made and
monitored during monthly or quarterly committee meetings by entity
or group of entities, attended by representatives of local ALM Treasury,
Group ALM Treasury, FINANCE & STRATEGY and RISK Functions and senior
management of the entities and/or businesses.
Measurement of interest rate risk
Rate positions are measured taking into account the specific features of
the risks managed. Hence, the Group has defined the concepts of standard
rate risks and structural rate risks. The standard rate risk corresponds
to the general case, namely when it is possible to define uniquely the
most appropriate hedging strategy for a given transaction. The structural
rate risk is the interest rate risk for equity and non-interest-bearing
current accounts: the investment of these balance sheet items generates
regular revenues but are sensitive to interest rate levels. Howeve r, i t is
not possible to define a single hedging strategy to fully neutralise this
sensitivity. In this case, the Group included all the possible so-called
"neutral" management strategies in terms of interest rate risk.
Interest rate risks are analysed in terms of interest rate gaps that measure
for each future period the potential rate characteristic mismatches
between assets and liabilities (fixed rate and indexation type). In the
interest rate gaps, the optional effects, in particular linked to behavioural
options, are embedded and translated into their delta equivalent. Value
indicators are also used.
The maturity split is determined on the basis of the contractual terms
of the transactions and observations of customer behaviou r. For Retail
Banking products, behavioural models are based on historical or forward
data and econometric studies. These possible management strategies
notably relate to early redemption and savings accounts. Moreove r, t he
maturities of non-interest-bearing current accounts and of equity are
calculated according to a more conventional approach defining a range
of investments taking into account the objective of stabilising results and
stability of deposits. For current accounts, average maturities are less
than five years and the proportion invested beyond 10 years is negligible.
Incorporating dynamic changes in balance sheet items, the interest
rate risk is measured through indicators of the sensitivity of revenues
to interest rate changes on a going concern basis. This enables the
partial or zero correlation between customer interest rates and market
interest rates to be taken into account on the one hand, and the volume
sensitivities to interest rates on the other hand, which create a risk to
future revenues.
The choice of indicators and risk modelling are reviewed by RISK. The
results and the adjustments following these reviews are presented and
monitored to the committees on a regular basis.
The interest rate risk measurement indicators are consistently presented
to the ALCos and serve as the basis for operating risk management
decisions.
Risk limits
Interest rate risk indicators span the entire banking book as at
31 December 2022.
The interest rate gaps are subject to interest rate risk limits across all
time horizons. These limits are calibrated based on the nature of the risks
(standard or structural) at Group and entity level. They are reviewed
annually.
The Group's revenue sensitivity indicator is subject to limits and a
warning threshold relative to the overall sensitivity level, also broken
down by division and the main entities. Moreove r, t he Group regularly
monitors the impact of stress scenarios on its revenues.
Economic hedges transactions that do not qualify for hedge accounting
under IFRS are subject to specific limits.
Sensitivity of revenues to global interest rate risk
Net interest income sensitivities are calculated on the total banking
book, over one-, two- and three-year rolling timeframes notabl y, f or a
parallel, instantaneous and definitive increase and decrease in market
rates on all currencies over all the terms of
50 basis points ( 0.5%).
These sensitivities are measured as deviations from the NII projection for
the central rate scenario corresponding to future interest rates expected
by the markets at estimation date (e.g. forward rates seen at the end of
December 2023 for sensitivities at the end -2023). Other scenarios are
also used to measure NII sensitivities, including instantaneous, parallel
and definitive shocks of
200 basis points.
The sensitivities include the direct impacts of market rates and business
trends. Indirect effects on commercial activity linked to changes in
outstandings and customer rates, are also taken into account. Thus, for
the sake of prudence, increases in sight non-interest-bearing current
account balances, observed during the period of low or negative interest
rates, are considered as situational to the low interest rates environment,
and are assumed to decrease gradually when short-term rates return to
sufficiently positive levels. Having maintained interest rates at significant
positive levels, has gradually led to sensitivities levels that existed before
the low interest rate environment, as illustrated below by end -2023
sensitivities (end -December interest rates being punctually at lower
levels compared to previous and subsequent weeks).
➤
TABLE 90: SENSITIVITY OF REVENUES TO GLOBAL INTEREST RATE RISK BASED ON A 50 BASIS POINTS INCREASE OR
DECREASE IN THE INTEREST RATES (EU IRRBB1A) [Audited]
In millions of euros
31 December 2023
For +50bps shock
For -50bps shock
Year 1
336
(363)
Year 2
401
(378)
Year 3
603
(555)
Sensitivity of the value of the net assets of the
banking intermediation activity
As the assets and liabilities of the Group's banking intermediation
business are not intended to be sold, they are not recognised or managed
on the basis of their theoretical economic value measured by discounting
future cash flows. Similarly, the theoretical economic value of the net
assets does not affect the Group's capital.
Howeve r, p ursuant to the regulatory requirements and calculation
methods laid down by the European Banking Authority (EBA), the ratios
of sensitivity of the theoretical economic value of the net assets of
the intermediation business in relation to Tier 1 capital are regularly
calculated through 6 interest rate scenarios defined by the EBA (i.e.
parallel up/down, steepening/flattening, short rates up/down). Moreove r,
the EBA defines thresholds for risk-free rates by maturity (interpolated
yield curve between -1.5% for the overnight rate and 0% for the 50-year
yields) These ratios are compared to the -15% threshold used by the
supervisor to identify situations where the interest rate risk in the banking
book could be material.
The ratios at end-December 2023 are presented in the table below and
are significantly below the materiality threshold of -15%. In the event
of parallel down interest rate scenario, the ratio decreases compared to
end-December 2022 and stands at -5.4%.
In millions of euros
31 December 2022
For +50bps shock
For -50bps shock
Year 1
(22)
20
Year 2
(20)
(92)
Year 3
125
(264)
➤
TABLE 91: SENSITIVITY OF TIER 1 CAPITAL ECONOMIC VALUE TO THE 6 REGULATORY STRESS TEST SCENARIOS
(EU IRRBB1B)
In millions of euros
31 December 2023
Interest rates shock(*)
Change in
the economic value
as a percentage
Overnight rate
10-year rate
of equity (Tier 1)
1
Parallel up
2.00%
2.00%
0.3%
2
Parallel down
-2.00%
-2.00%
-5.4%
3
Steepener (decrease in short term rates, increase in long term rates)
-1.70%
0.80%
1.3%
4
Flattener (increase in short term rates, decrease in long term rates)
2.10%
-0.40%
-3.1%
5
Short rates up
2.60%
0.20%
-2.0%
6
Short rates down
-2.60%
-0.20%
0.8%
(*) Change in interest rate level (OIS swaps) applied for each scenario and application of floor rates (for the euro).
In millions of euros
31 December 2022
Interest rates shock(*)
Change in the economic
Overnight rate
10-year rate
value of equity (Tier 1)
1
Parallel up
2.00%
2.00%
-6.8%
2
Parallel down
-2.00%
-2.00%
1.2%
3
Steepener (decrease in short term rates, increase in long term rates)
-1.60%
0.70%
0.9%
4
Flattener (increase in short term rates, decrease in long term rates)
2.00%
-0.40%
-2.6%
5
Short rates up
2.50%
0.20%
-4.6%
6
Short rates down
-2.50%
-0.20%
2.4%
(*) Change in interest rate level (OIS swaps) applied for each scenario and application of floor rates (for the euro).
HEDGING OF INTEREST RATE
AND FOREIGN EXCHANGE RISKS
Hedges initiated by the Group consist mainly of interest rate or currency
hedges using derivative financial instruments (swaps, options and
forwards).
Depending on the hedging objective, derivative financial instruments
used for hedging purposes are qualified either as fair value hedges,
cash flow hedges, or hedges of net investments in foreign operations.
Each hedging relationship is formally documented at inception. The
documentation describes the hedging strategy, identifies the hedged
item and the hedging instrument, and the nature of the hedged risk;
and describes the methodology used to test the expected (prospective)
and actual (retrospective) effectiveness of the hedge.
Global interest rate risk
The Bank's strategy for managing global interest rate risk is mainly based
on closely monitoring the sensitivity of the Bank's net income to changes
in interest rates, factoring in all interest rate risks. The aim is to ensure
the stability and regularity of the interest margin. This monitoring is
based on an extremely accurate assessment of the risks incurred so that
the Bank can determine the hedging strategy, after taking into account
the effects of netting the different types of risk. These hedging strategies
are defined and implemented by entity and by currency.
The hedges can comprise swaps and options and are typically accounted
for as fair value hedges or cash flow hedges. They may also take the
form of government securities and are classified on an accounting basis
as "Financial assets at amortised cost" or "Financial assets at fair value
through equity".
2023 was characterised by a marked slowdown in the rise of price indices
due to less difficult logistics and more restrictive policies of main central
banks. The latter ones continued to reduce their balance sheets and to
increase their key rates during the first three quarters of the year (+2.00%
in Europe, +1.75% in the United Kingdom, +1.00% in the United States of
America). To the extent that the outlook related to price increase returns
to commonly accepted levels of 2.00% and that the outlook related to
economic activity displays a relative slowdown, financial markets began
to anticipate declines in key interest rates in 2024 from the last quarter
of 2023, particularly in Europe and the United States.
Bonds' interest rates rose from January to October (10-year Bund from
2.00% to 3.00%, US 10-year debt from 3.30% to 5.00%) before a contraction
until the end of the year (the 10-year Bund interest rate having ended
below 2.00% and the US 10-year debt at 3.80%).
Structural foreign exchange risk [Audited]
Currency hedges are contracted by the ALM Treasury in relation to the
Group's investments in foreign currencies and its future foreign currency
revenues. Each hedging relationship is formally documented at inception.
The documentation describes the hedging strategy, identifies the hedged
item and the hedging instrument, and the nature of the hedged risk and
describes the methodology used to test the expected (prospective) and
actual (retrospective) effectiveness of the hedge.
A hedging relationship is applied and documented for investments in
subsidiaries and branches financed by foreign currency loans so as to
record movements in exchange rates symmetrically and avoid impacts
on the profit and loss account. In this context, these instruments are
designated as net investment hedges. The amount of these loans stood
at EUR 16 billion at 31 December 2023, compared with EUR 23 billion at
31 December 2022. The changes in value related to exchange differences
recognised directly in equity with respect to these hedges amounted
to +EUR 339 million in 2023, compared with -EUR 303 million at
31 December 2022.
During the 2023 financial yea r, n o net investment hedging relationships
were disqualified.
The amount recorded in the profit and loss account for 2023 with respect
to the ineffective portion of hedges of net investments is immaterial.
Hedging of financial instruments recognised
in the balance sheet (Fair Value Hedge)
Fair value hedges of interest rate risks relate either to identified fixed-
rate assets or liabilities, or to portfolios of fixed-rate assets or liabilities.
Derivatives are contracted to reduce the exposure of the fair value of
these instruments to changes in interest rates.
Individual assets hedging consists mainly of securities classified as
"Financial assets at amortised cost" or "Financial assets at fair value
through equity"; individual liabilities hedging consists mainly of fixed-
income securities issued by the Group.
Hedges of portfolios of financial assets and liabilities, constructed by
currency, relate to:
■ fixed-rate loans (property loans, equipment loans, consumer credit
and export loans);
■ fixed-rate deposits (mainly demand deposits and funds deposited
under home savings contracts).
To identify the hedged amount, the residual balance of the hedged item is
split into maturity bands, and a separate amount is designated for each
band. The maturity split is determined on the basis of the contractual
terms of the transactions and historical observations of customer
behaviour (early redemption assumptions and estimated default rates).
Demand deposits, which do not bear interest at contractual rates, are
qualified as fixed-rate medium-term financial liabilities. Consequently, the
value of these liabilities is sensitive to changes in interest rates. Estimates
of future cash outflows are based on historical analyses.
For each hedging relationship, expected hedge effectiveness is measured
by ensuring that for each maturity band, the fair value of the hedged
items is greater than the fair value of the designated hedging instruments.
Actual effectiveness is assessed on an ex-post basis by ensuring that the
monthly change in the fair value of hedged items since the start of the
month does not indicate any over-hedging.
Cash flow hedge
In terms of interest rate risk, the Group uses derivative instruments
to hedge fluctuations in income and expenses arising on floating-rate
assets and liabilities. Highly probable forecast transactions are also
hedged. Hedged items are split into maturity bands by currency and
benchmark interest rate. After factoring in early redemption assumptions
and estimated default rates, the Group uses derivatives to hedge some
or all of the risk exposure generated by these floating-rate instruments.
In terms of foreign exchange risk, the Group hedges against variability
in components of consolidated net income. In particula r, t he Group may
hedge future revenue flows (especially interest income and fees) derived
from operations carried out by its main subsidiaries and/or branches
in a currency other than their functional currencies. As in the case of
interest rate hedges, the effectiveness of these hedging relationships
is documented and assessed on the basis of forecast maturity bands.
The table below concerns the scope of BNP Paribas SA's medium- and
long-term transactions and shows the amount of hedged future cash
flows (split by forecast date of realisation), which constitute the majority
of the Group's hedging transactions.
➤
TABLE 92: HEDGED CASH FLOWS [Audited]
Period to realisation
In millions of euros
31 December 2023
31 December 2022
Less than
1 year
1 to 5 years
More than
5 years
Total
Less than
1 year
1 to 5 years
More than
5 years
Total
Hedged cash flows
2,993
6,716
887
10,596
1,769
4,090
739
6,598
In 2023, no cash flow hedges were declassified on the grounds that achieving these future earnings would no longer be highly probable.
5.8 Liquidity risk
Liquidity risk is the risk that the Bank will not be able to honour
its commitments or unwind or settle a position due to the market
environment or idiosyncratic factors (i.e. specific to BNP Paribas),
within a given timeframe and at a reasonable cost.
Liquidity risk reflects the risk of the Group being unable to fulfil current
or future foreseen or unforeseen cash or collateral requirements,
across all time horizons, from the short to the long term.
This risk may stem from the reduction in funding sources,
drawdown of funding commitments, a reduction in the liquidity of
certain assets, or an increase in cash or collateral margin calls. It
may be related to the bank itself (reputation risk) or to external
factors (risks in some markets).
The Group's liquidity risk is managed under a global liquidity policy
approved by the Group's ALM Treasury Committee. This policy is
based on management principles designed to apply both in normal
conditions and in a liquidity crisis. The Group's liquidity position is
assessed on the basis of internal indicators and regulatory ratios.
LIQUIDITY RISK MANAGEMENT POLICY [Audited]
OBJECTIVES
The objectives of the Group's liquidity management policy are to secure
a balanced financing structure for the development of BNP Paribas
business activities, and to ensure it is sufficiently robust to cope with
crisis situations.
The liquidity risk management framework relies on:
■ management indicators:
■
by volume, to ensure that businesses or activities comply with their
liquidity targets set in line with the Group's funding capacity,
■
by price, via internal liquidity pricing;
■ the definition of monitoring indicators which enable assessment of
the Group's liquidity position under normal conditions and in crisis
situations, the efficiency of actions undertaken and compliance with
regulatory ratios;
■ the implementation of liquidity risk management strategies based on
diversification of funding sources with maturities in line with needs,
and the constitution of liquidity reserves.
The Group's liquidity policy defines the management principles that apply
across all Group entities and businesses and across all time horizons.
GOVERNANCE
As for all risks, the Group Chief Executive Officer is granted authority by
the Board of directors to manage the Group's liquidity risk. The Chief
Executive Officer delegates this responsibility to the Group ALM Treasury
Committee.
The Internal Control, Risk Management and Compliance Committee
(CCIRC) reports quarterly to the Board of directors on liquidity policy
principles and the Group's liquidity position.
The Group ALM Treasury Committee is responsible for:
■ proposing the Group's liquidity risk profile at the CCIRC and the Board
of directors, for review and decision;
■ monitoring compliance with regulatory liquidity ratios;
■ defining and monitoring management indicators and calibrating the
quantitative thresholds set for the Bank's businesses;
■ defining and monitoring liquidity risk indicators and associating
quantitative thresholds to them if necessary;
■ defining and overseeing implementation of liquidity risk management
strategies, including monitoring of business lines, under normal and
stressed conditions.
In particula r, t he Group ALM Treasury Committee is informed about
funding programmes and programmes to build up liquidity reserves,
simulations in crisis conditions (stress tests), and about all events that
may arise in crisis situations.
The Group ALM Treasury Committee is tasked with defining the
management approach in periods of crisis (emergency plan). This
framework is based on:
■ supervision of the emergence of a crisis by monitoring the market
position and complying with thresholds set for a series of indicators;
■ governance of the activation of crisis management mode and the
associated responsibilities;
■ identification of possible actions for managing a crisis.
The Group ALM Treasury Committee meets every month under normal
conditions and more often in stressed conditions or to deal with specific
issues.
The permanent members of the Group ALM Treasury Committee are the
Group Senior Executive Advisor (Chairman), the Delegate Deputy Chief
Operating Officers, the Chief Risk Office r, t he Group Chief Financial Officer
and the Group ALM Treasury Head. Other members represent the RISK
Function, Finance & Strategy Function and ALM Treasury. The Head of
General Inspection and the Head of Compliance are also invited.
Across the Group, ALM Treasury is responsible for the operational
implementation of the Group ALM Treasury Committee's liquidity
management decisions. The ALM Treasury Committees in entities or
groups of entities are responsible for local implementation of the strategy
decided by the Group ALM Treasury Committee to manage the Bank's
liquidity risk.
ALM Treasury is responsible for managing liquidity for the entire Group
across all maturities. In particula r, i t is responsible for funding and
short-term issuance (certificates of deposit, commercial pape r, etc.),
for senior and subordinated debt issuance (MTNs, bonds, medium/
long-term deposits, covered bonds, etc.), preferred share issuance, and
loan securitisation programmes for the Group. ALM Treasury is tasked
with providing internal funding to the Group's divisions, operating entities
and business lines, and investing their surplus cash. It is also responsible
for building up and managing liquidity reserves, which comprise assets
that can be easily sold in the event of a liquidity squeeze.
RISK participates in the Group and local ALM Treasury Committees and
oversees implementation by ALM Treasury of the relevant decisions made
by these committees. It provides second-line control by reviewing the
models and risk indicators (including liquidity stress tests), monitoring
risk indicators and ensuring compliance with the limits assigned.
Finance is responsible for producing the regulatory liquidity indicators,
as well as the internal monitoring indicators. Finance oversees the
consistency of the internal monitoring indicators with the objectives
defined by the Group ALM Treasury Committee. Finance takes also part
in the Group and local ALM Committees.
LIQUIDITY RISK MANAGEMENT AND SUPERVISION
Internal liquidity risk management and internal monitoring are based
on a large range of indicators at various maturities. These indicators are
measured on a regular basis by currency and maturity, both at Group
level and entity level.
BUSINESS LINES' INTERNAL MONITORING
INDICATORS [Audited]
The management indicators relate to funding needs of Group's Business
Lines under normal and stressed conditions. These indicators are part
of the Group's budget management framework, with targets and regular
(monthly) monitoring of the deviations from the objectives set.
Funding needs of the Group's businesses
The funding needs associated with the activity of the Group's businesses
are managed in particular by measuring the difference between
commercial funding needs (customer loans and overdrafts, trading
assets, etc.) and commercial funding resources (customer deposits,
sale of the Group's debt securities to customers, trading liabilities, etc.).
This indicator makes it possible to measure the business lines' liquidity
consumption under a normal business scenario.
It is supplemented by indicators to measure the funding needs of the
business lines in one month and one year depending on the assumptions
defined by European regulations in force (Liquidity Coverage Ratio) and
(Net Stable Funding Ratio).
In addition to this commercial funding need indicators, the Group closely
monitors the liquidity reserves and the refinancing provided by ALM
Treasury, as well as the Group's structural resources (i.e. net own funds).
The overall management of the business funding needs, the Group's
structural resources, funding and liquidity reserves made by the ALM
Treasury allows the Group to achieve a structurally robust liquidity
situation able to resist severe liquidity stresses.
Business lines' consumption of liquidity is thus integrated in the Group's
budget process, wherein each business line estimates its future liquidity
needs, in keeping with its profitability targets and capital consumption
objectives. During the iterative budget process, liquidity consumption
objectives are allotted to the business lines, taking into account the
funding provided by ALM Treasury and structural resources, in line with
the Group's overall target. This process is regularly renewed, monitored
and adjusted as appropriate throughout the year by the Group ALM
Treasury Committee.
Internal liquidity pricing
All of the Group's assets and liabilities are subject to internal liquidity
pricing, the principles of which are decided by the Group ALM Treasury
Committee and aim to take account of trends in the cost of market
liquidity and the balance between assets and liabilities within the Group's
development strategy.
Change in the liquidity position
At end -2023, the businesses had a net liquidity surplus, as in 2022
(deposits higher than loans). Group's net equity is added to this surplus
leading to an overall liquidity surplus.
In this context, the funding provided by ALM Treasury is used to finance
the liquidity reserve, while also correcting the structural differences
between assets and liabilities (by maturity term) and covering TLAC
(Total Loss-Absorbing Capacity) requirements, as well as future Minimum
Requirement for own funds and Eligible Liabilities (MREL).
The Group maintains a large surplus in liquidity.
WHOLESALE FUNDING AND LIQUIDITY
RESERVE MONITORING INDICATORS [Audited]
Sources of wholesale funding
The Group adopted a broad definition of wholesale funding, covering all
funds excluding those provided by:
■ retail customers, professionals and corporates;
■ institutional clients for their operating needs (e.g. portion needed for
custody management);
■ monetary policy and funding secured by market assets.
This definition is broader than market funding. For example, it includes
medium- to long-term debt placed in funds for individuals and, in the
short-term portion, non-operating deposits in the Securities Services
business.
The Group has a conservative policy for the management of its wholesale
funding by ensuring that it does not depend on very short-term funding
and diversifying these funding sources.
Thus, wholesale funding with an original maturity of less than one month,
so-called very short-term wholesale funding, is systematically "sterilised"
by being placed in immediately-available deposits in central banks so
that it is not used to fund the Group's business.
The Group ensures that short-term wholesale funding (with original
maturity of between one month and one year) is diversified in terms
of counterparty, industry and residual maturity. Any excess concentration
on one of these criteria is systematically "sterilised" and placed in central
bank deposits.
Medium- to long-term wholesale market funding (with original maturity
over one year) is diversified in terms of investor type, distribution network,
funding programme (secured or unsecured), and by geographical area to
ensure diversification. Furthermore, the Group aims to optimise the term
structure of its funding operations.
At end of 2023, sterilised very short-term wholesale funding totalled
EUR 70.9 billion (leading to the sterilisation of an equivalent amount in
the Group's liquidity reserve), diversified short-term wholesale funding
totalled EUR 137.4 billion and diversified medium-to long-term wholesale
funding totalled EUR 217.7 billion.
➤
TABLE 93: BREAKDOWN OF THE WHOLESALE FUNDING BY CURRENCY [Audited]
The breakdown of funding by currency corresponds to the Group's needs and to a diversification objective.
In millions of euros
31 December 2023
EUR
USD
Other
Total
Sterilised very short-term wholesale funding
38,358
20,243
12,328
70,930
Short-term wholesale funding
56,676
46,920
33,805
137,400
Medium- to long-term wholesale funding
105,461
85,776
26,485
217,722
TOTAL WHOLESALE
200,495
152,939
72,618
426,052
In millions of euros
31 December 2022
EUR
USD
Other
Total
Sterilised very short-term wholesale funding
49,067
23,948
15,893
88,908
Short-term wholesale funding
48,376
53,690
32,567
134,632
Medium- to long-term wholesale funding
88,954
64,591
26,976
180,521
TOTAL WHOLESALE
186,397
142,228
75,436
404,062
➤
TABLE 94: BREAKDOWN OF THE GROUP'S MEDIUM LONG TERM (MLT) WHOLESALE FUNDING
The instruments are shown at their net carrying amount (including in particular accrued unpaid interest and the revaluation of the hedged portion).
In millions of euros
31 December 2023
Tier 1
hybrid subordinated
debt
Tier 2
debt
Subordinated
debt not
eligible to
own funds
preferred
Unsecured senior debt
Secured Monetary
MLT
funding
policy
funding
TOTAL
Non-
Preferred
Total MLT funding
14,901
20,748
1,600
73,499
109,123
15,524
18,162
253,556
MLT debt placed with clients
(17,673)
(17,673)
Monetary policy
(18,162)
(18,162)
WHOLESALE MLT FUNDING
14,901
20,748
1,600
73,499
91,450
15,524
-
217,722
In millions of euros
31 December 2022
Tier 1
hybrid subordinated
debt
Tier 2
debt
Subordinated
debt not
eligible to
own funds
preferred
Unsecured senior debt
Secured Monetary
MLT
funding
policy
funding
TOTAL
Non-
Preferred
Total MLT funding
11,801
22,270
793
72,227
73,608
12,993
67,087
260,779
MLT debt placed with clients
(12,904)
(268)
(13,172)
Monetary policy
(67,087)
(67,087)
WHOLESALE MLT FUNDING
11,801
22,270
793
72,227
60,704
12,726
-
180,521
➤
TABLE 95: TRENDS IN GROUP MLT WHOLESALE FUNDING [Audited]
In millions of euros
Outstanding
31 December
New
2022 origination Redemptions
Buy-backs
of calls
Perimeter Outstanding
Exercise effect and 31 December
other
2023
Total MLT funding
260,779
74,732
(77,635)
(2,008)
(11,370)
9,058
253,556
MLT debt placed with clients
(13,172)
(3,028)
749
458
(2,680)
(17,673)
Monetary policy
(67,087)
48,925
(18,162)
WHOLESALE MLT FUNDING
180,521
71,704
(27,961)
(1,550)
(11,370)
6,378
217,722
Total medium- to long-term wholesale funding outstandings stood at
EUR 217.7 billion at 31 December 2023 against EUR 180.5 billion at
31 December 2022.
Wholesale funding raised by the Group in the markets with an initial
maturity of over 1 year reached EUR 71.7 billion in 2023, compared to
EUR 51.9 billion in 2022.
Wholesale funding trends based
on regulatory changes
In addition to the Group's liquidity management targets, use of wholesale
funding also satisfies regulatory requirements relating to Recovery and
Resolution, with the application of the Total Loss Absorbing Capacity
(TLAC) and Minimum Requirement on own funds and Eligible Liabilities
(MREL) requirements (see paragraph Recovery and resolution in Capital
adequacy and capital planning in section 5.2).
At 31 December 2023, BNP Paribas issued a total of EUR 80.3 billion
(outstanding principal) of non-preferred senior debt (of which
EUR 71.9 billion in debt is eligible for TLAC and MREL). This debt is
composed of: public issues and private placements in various currencies
with different maturities.
The main characteristics of these debt instruments are:
■ issues under EMTN and US MTN programmes, non-preferred senior
bonds (see article L.613-30-3-I-4 of the French Monetary and Financial
Code) or unstructured debt;
■ initial maturities of more than one year;
■ subject to conversion or impairment before senior preferred debt but
after subordinated debt;
■ documentation mandatorily stating that this debt belongs to the new
statutory category.
In addition, as at 31 December 2023, BNP Paribas issued a total of
EUR 19.5 billion in senior preferred vanilla debt, eligible for the MREL
requirement.
To meet the TLAC and MREL ratio requirements, the Group plans to issue
EUR 18.5 billion of senior debt (senior preferred and senior non-preferred)
in 2024, subject to market conditions. The Group had completed 19.7%
of its issue programme for this category of debt as at 29 January 2024.
MLT secured wholesale funding
MLT secured wholesale funding is measured by separating out assets
representing securities and loans. Funding obtained from central banks
is not included in the table below.
➤
TABLE 96: MLT SECURED WHOLESALE FUNDING
In millions of euros
31 December 2023
31 December 2022
Collateral used(*) Funding raised(**)
Collateral used(*) Funding raised(**)
Loans and receivables
17,671
15,524
14,662
12,685
Securities
43
40
TOTAL
17,671
15,524
14,706
12,726
(*) Amounts gross of haircuts.
(**) Amounts net of haircuts.
MLT secured wholesale funding (outside of monetary policy) represents
7.1% of total MLT wholesale funding in 2023 (7.0% in 2022). The Bank
carefully manages its proportion of secured funding and the associated
overcollateralisation in order to protect creditors holding unsecured debt.
Covered bonds and securitisation programmes are the main sources of the
Group's secured financing. On average, covered bonds are collateralised
by 114% and securitisation programmes by 115%.
Medium- to long-term liquidity position
The medium-to long-term liquidity positions are measured regularly
at Group level by entity and by currency to evaluate the medium-
to long-term resources and uses. To this end, each balance sheet
item is given a maturity in an economic approach using models and
conventions offered by ALM Treasury and reviewed by the RISK Function,
or a regulatory approach by applying standardised weightings of the
Net Stable Funding Ratio (NSFR). For example, despite their immediate
availability, the current accounts of retail customers and those linked
with corporates' cash management activities always remain highly
stable, even through the most severe financial crises, thus constituting
stable medium- to long-term funding sources in both an economic and
a regulatory approach.
Stress tests and liquidity reserve
Liquidity stress tests are performed regularly on various maturities (one
day to twelve months) based on market factors and/or factors specific
to the Group and using different scenarios: idiosyncratic (i.e. specific
to BNP Paribas), systemic crisis (affecting financial institutions), and
combined crisis scenarios.
For each crisis scenario considered, borrowings and liabilities are
expected to only partially renew, while loan amortisations are expected
to be replaced by new loans to protect the commercial franchise, off-
balance sheet financing commitments are expected to be used, and
market assets are expected to lose their market liquidity. Commitment
renewal and utilisation are differentiated in intensity and in time, based
on client type (individuals, small and medium enterprises, corporates,
financial institutions, etc.) and/or the type of underlying for secured
borrowings and loans (repos/reverse repos). Stress scenarios also
cover calls for additional collateral (e.g. increased margin calls for
collateralised derivatives, impact of "rating trigger" clauses).
The liquidity reserve consists of Group assets held by ALM Treasury and
the capital market businesses. The liquidity reserve comprises:
■ deposits with central banks;
■ available assets that can be immediately sold on the market or through
repurchase agreements (bonds or shares);
■ available securities and receivables that can be refinanced with central
banks (e.g. through securitisation, transforming less liquid assets into
liquid or available assets) (see section 5.5 Proprietary Securitisation
(originator)).
The global liquidity reserve (counterbalancing capacity) is calculated
net of the payment systems' intraday needs and in keeping with
prudential rules, in particular US rules, under which certain liquid
assets are only recognised as available after a certain time period.
Transferability restrictions are also taken into consideration in the
calculation of the Group's liquidity reserve. These restrictions may stem
from local regulations which limit transfers between entities of a group,
non-convertible currencies or jurisdictions with foreign exchange control.
The table below shows its trends.
➤
TABLE 97: BREAKDOWN OF GLOBAL LIQUIDITY RESERVE (COUNTERBALANCING CAPACITY)
In millions of euros
Average 2023
31 December 2023
31 December 2022
Total eligible assets
614,152
618,359
591,242
Utilisations
(146,390)
(138,791)
(124,649)
Transferability
(5,078)
(5,700)
(5,943)
GLOBAL LIQUIDITY RESERVE
462,683
473,867
460,651
of which liquid assets meeting prudential regulation requirements (HQLA)
408,476
402,700
418,900
of which other liquid assets
54,207
71,167
41,751
The Group's liquidity reserve stood at EUR 473.9 billion at end-2023,
of which EUR 70.9 billion sterilising very short-term wholesale funding.
The Group's liquidity reserve at 31 December 2023 increased by
EUR 13.2 billion compared to end-2022.
REGULATORY LIQUIDITY RATIOS
Scope of application
The prudential liquidity scope defined by the BNP Paribas Group for
monitoring and overseeing liquidity ratios on a consolidated basis is the
one defined for its capital ratio adequacy, with the exception of jointly
controlled entities which are consolidated under the equity method in the
prudential liquidity scope (see Scope of application in section 5.2 Capital
management and capital adequacy).
Liquidity Coverage Ratio – LCR
The 30-day Liquidity Coverage Ratio (LCR) came into force on
1 October 2015 setting the minimum coverage ratio for net cash
outflows over a one-month time horizon, in a crisis situation, at 100%
from 1 January 2018. The Group measures its liquidity requirements in
accordance with the requirements of the Delegated Act adopted by the
European Commission in January 2015, and has adapted its management
process in keeping with this regulation. The management indicators for
the businesses' funding needs and the internal pricing terms therefore
reflect the standardised assumptions set by the LCR and allow the Group
to monitor compliance with this requirement.
The Group's LCR for the period ending 31 December 2023 stood at 148%,
versus 129% at 31 December 2022.
➤
TABLE 98: SHORT-T ERM LIQUIDITY RATIO (LCR)(*) – ITEMISED (EU LIQ1)
a
b
c
d
e
f
g
h
In millions of euros
2023
Unweighted value
Weighted value
31 December
30 September
2023
30 June
2023
31 March
2023
31 December
2023
30 September
2023
30 June
2023
31 March
2023
Number of data points used in the calculation
of averages
12
12
12
12
12
12
12
12
HIGH QUALITY LIQUID ASSETS (HQLA)
1
TOTAL HIGH QUALITY LIQUID ASSETS (HQLA)
408,476
420,636
436,951
446,763
CASH OUTFLOWS
2
Retail deposits (including small businesses)
423,972
432,121
440,215
446,460
31,077
32,046
32,893
33,553
3
of which stable deposits
249,034
254,490
260,292
264,816
12,452
12,725
13,015
13,241
4
of which less stable deposits
159,938
165,121
168,507
171,086
18,545
19,203
19,697
20,056
5
Unsecured non-retail funding
490,373
510,230
537,281
563,639
222,958
234,633
248,694
264,473
6
of which operational deposits
163,363
166,440
172,777
179,881
40,256
40,978
42,502
44,218
7
of which non-operational deposits
313,896
330,609
351,386
368,820
169,588
180,475
193,074
205,317
8
of which unsecured debt
13,115
13,180
13,119
14,938
13,115
13,180
13,119
14,938
9
Secured non-retail funding (of which repos)
93,645
91,116
88,304
90,243
10
Additional requirements
385,746
390,921
392,540
391,373
103,752
104,403
102,242
98,688
11
of which outflows related to derivative exposures
and other collateral requirements
48,604
48,334
44,761
42,661
47,463
47,611
44,321
42,370
12
of which outflows on secured debt
7,430
7,498
8,020
6,351
7,430
7,498
8,020
6,351
13
of which credit and liquidity facilities
329,712
335,089
339,759
342,361
48,859
49,294
49,901
49,967
14
Other contractual funding obligations
61,133
63,615
65,514
62,495
61,133
63,615
65,514
62,495
15
Other contingent funding obligations
139,214
137,295
138,667
139,806
6,746
6,711
6,720
7,686
16
TOTAL CASH OUTFLOWS
519,311
532,522
544,367
557,137
CASH INFLOWS
17
Secured lending (of which reverse repos)
453,725
441,809
445,077
453,494
93,698
92,466
93,950
96,941
18
Inflows from fully performing exposures
87,373
90,998
93,786
97,236
68,319
71,490
73,167
75,733
19
Other cash inflows
67,430
65,025
59,732
57,623
57,436
55,566
49,900
47,395
20
TOTAL CASH INFLOWS
608,529
597,832
598,595
608,354
219,452
219,522
217,017
220,069
EU-20c Inflows subject to 75% cap
436,026
427,000
424,511
432,262
219,452
219,522
217,017
220,069
21
LIQUIDITY BUFFER
408,476
420,636
436,951
446,763
22
TOTAL NET CASH OUTFLOWS
299,859
313,001
327,349
337,068
23
LIQUIDITY COVERAGE RATIO (%)
136.47%
134.61%
133.74%
132.63%
(*) The data presented in this table are calculated as the rolling average over the twelve latest month-end values.
Qualitative information on LCR (EU LIQ-B)
The Group's rolling month-end average LCR over the last 12 months
stands at 136%, which corresponds to a liquidity surplus of EUR 109 billion
compared with the regulatory requirement. The Group ratio averaged
between 133% and 136%.
After application of the regulatory haircuts (weighted values), the Group's
rolling month-end average liquid assets over the last 12 months amount
to EUR 408 billion, and mainly consist of central bank deposits (68% at
the end of December) and government and sovereign bonds (32%).
Rolling month-end average cash outflows over the last 12 months under
the thirty-day liquidity stress scenario amount to EUR 300 billion, a large
part of which corresponds to thirty-day deposit outflow assumptions of
EUR 254 billion. Reciprocally, cash inflows on loans under the thirty-day
liquidity regulatory stress scenario amount to EUR 68 billion.
Cash flows on financing transactions and collateralised loans,
representing repurchase agreements and securities exchanges, were
balanced between inflows and outflows, given the regulatory haircuts
applied to collaterals. Flows linked to derivative instruments and
regulatory stress tests record net outflows of EUR 18 billion after netting
of cash outflows (EUR 47 billion) and inflows (EUR 29 billion).
Lastly, the rolling month-end average drawdown assumptions on
financing commitments over the last 12 months amount to EUR 49 billion.
There is no excessive imbalance on any significant currency.
Net Stable Funding Ratio – NSFR
Regulation (EU) No. 2019/876 has introduced a one-year structural
liquidity ratio (Net Stable Funding Ratio – NSFR), subject to a 100%
minimum requirement since 28 June 2021. This standardised ratio aims
to ensure that assets and financing commitments considered over one
year are financed by resources over one yea r.
At 31 December 2023, the Group complies with the minimum NSFR
requirement with a level of 115.92%.
➤
TABLE 99: NET STABLE FUNDING RATIO (EU LIQ2)
a
b
c
d
e
In millions of euros
31 December 2023
Unweighted value by residual maturity
Weighted
No maturity
< 6 months to < 1 year
value
6 months
≥ 1 year
Available stable funding (ASF) Items
1
Capital items and instruments
119,821
143
19,041
138,862
2
Own funds
119,821
143
17,332
137,153
3
Other capital instruments
1,708
1,708
4
Retail deposits
394,964
3,744
5,476
375,800
5
Stable deposits
228,935
777
977
219,203
6
Less stable deposits
166,030
2,967
4,500
156,597
7
Wholesale funding
998,486
52,212
162,771
440,539
8
Operational deposits
165,695
12
804
83,658
9
Other wholesale funding
832,791
52,200
161,967
356,881
10
Interdependent liabilities
17,926
25,778
11
Other liabilities
61,763
168,967
1,095
28,373
28,920
12
NSFR derivative liabilities
61,763
13
All other liabilities and capital instruments not included in the above categories
168,967
1,095
28,373
28,920
14
TOTAL AVAILABLE STABLE FUNDING (ASF)
984,120
Required stable funding (RSF) Items
15
Total high-quality liquid assets (HQLA)
29,226
15a
Assets encumbered for a residual maturity of one year or more in a cover pool
254
250
10,413
9,279
16
Deposits held at other financial institutions for operational purposes
6
1
1
5
17
Performing loans and securities:
433,499
93,040
642,326
650,883
18
Performing securities financing transactions with financial customers collateralised
by Level 1 HQLA subject to 0% haircut
113,944
4,910
5,396
13,040
19
Performing securities financing transactions with financial customer collateralised by other
assets and loans and advances to financial institutions
132,919
12,305
9,982
27,290
20
Performing loans to non-financial corporate clients, loans to retail and small business
customers, and loans to sovereigns, and PSEs, of which
120,158
59,023
372,265
406,659
21
With a risk weight of less than or equal to 35% under the Basel Standardised Approach
for credit risk
22
Performing residential mortgages, of which
5,078
5,143
172,478
117,581
23
With a risk weight of less than or equal to 35% under the Basel Standardised Approach
for credit risk
5,078
5,143
172,478
117,581
24
Other loans and securities that are not in default and do not qualify as HQLA, including
exchange-traded equities and trade finance on-balance sheet products
61,400
11,659
82,205
86,313
25
Interdependent assets
17,926
25,778
26
Other assets
27
Physical traded commodities
10,110
8,594
28
Assets posted as initial margin for derivative contracts and contributions to default funds
of CCPs
30,767
26,152
29
NSFR derivative assets
30
NSFR derivative liabilities before deduction of variation margin posted
103,619
5,181
31
All other assets not included in the above categories
47,661
2,996
79,755
95,927
32
Off-balance sheet items
431,582
18,425
38,209
23,731
33
TOTAL REQUIRED STABLE FUNDING (RSF)
848,977
34
NET STABLE FUNDING RATIO (%)
115.92%
a
b
c
d
e
In millions of euros
31 December 2022
Unweighted value by residual maturity
Weighted
No maturity
< 6 months to < 1 year
value
6 months
≥ 1 year
Available stable funding (ASF) Items
1
Capital items and instruments
117,703
20,692
138,395
2
Own funds
117,703
20,692
138,395
3
Other capital instruments
4
Retail deposits
442,881
2,548
4,284
418,566
5
Stable deposits
266,922
983
1,318
255,828
6
Less stable deposits
175,959
1,565
2,966
162,738
7
Wholesale funding
1,061,592
48,662
154,116
454,843
8
Operational deposits
177,614
26
672
89,492
9
Other wholesale funding
883,978
48,636
153,444
365,351
10
Interdependent liabilities
15,157
-
50,663
-
11
Other liabilities
68,599
173,335
1,273
30,845
31,481
12
NSFR derivative liabilities
68,599
13
All other liabilities and capital instruments not included in the above categories
173,335
1,273
30,845
31,481
14
TOTAL AVAILABLE STABLE FUNDING (ASF)
1,043,285
Required stable funding (RSF) Items
15
Total high-quality liquid assets (HQLA)
24,749
15a
Assets encumbered for a residual maturity of one year or more in a cover pool
165
163
6,564
5,859
16
Deposits held at other financial institutions for operational purposes
1
1
1
2
17
Performing loans and securities:
458,227
90,795
701,469
715,424
18
Performing securities financing transactions with financial customers collateralised
by Level 1 HQLA subject to 0% haircut
96,139
4,787
4,125
10,157
19
Performing securities financing transactions with financial customer collateralised by other
assets and loans and advances to financial institutions
156,806
14,320
6,329
25,403
20
Performing loans to non-financial corporate clients, loans to retail and small business
customers, and loans to sovereigns, and PSEs, of which
141,518
57,200
433,552
472,528
21
With a risk weight of less than or equal to 35% under the Basel Standardised Approach
for credit risk
22
Performing residential mortgages, of which
5,728
5,560
177,717
123,034
23
With a risk weight of less than or equal to 35% under the Basel Standardised Approach
for credit risk
5,728
5,560
177,717
123,034
24
Other loans and securities that are not in default and do not qualify as HQLA, including
exchange-traded equities and trade finance on-balance sheet products
58,035
8,928
79,746
84,301
25
Interdependent assets
15,157
50,663
26
Other assets
27
Physical traded commodities
11,755
9,992
28
Assets posted as initial margin for derivative contracts and contributions to default funds
of CCPs
27,440
23,324
29
NSFR derivative assets
30
NSFR derivative liabilities before deduction of variation margin posted
113,092
5,655
31
All other assets not included in the above categories
37,017
4,756
87,667
97,867
32
Off-balance sheet items
397,340
12,542
28,511
23,951
33
TOTAL REQUIRED STABLE FUNDING (RSF)
906,821
34
NET STABLE FUNDING RATIO (%)
115.05%
SCHEDULE OF THE BANK'S PRUDENTIAL
BALANCE SHEET
This schedule presents cash flows according to contractual payment
dates within the prudential scope (see Scope of application in section 5.2
Capital management and capital adequacy) in line with the rules defined
for the liquidity ratio.
The securities in the trading book listed at fair value through profit or
loss are presented with "not determined" maturities, as the securities'
contractual maturity is not representative of the Group's planned
holding period. Likewise, derivative financial instruments listed at fair
value through profit or loss, derivatives used for hedging purposes and
remeasurement adjustments on interest-rate risk hedged portfolios are
presented with "not determined" maturities.
In the following table and in the event of an early repayment option, the
rules applied are the most conservative:
■ if the option is at the hands of both parties, the repayment date is the
next contractual date for the exercise of the option;
■ if the option is at the hands of the counterparty, the date for the
repayment of assets is the date of final maturity while that used for
liabilities is the next contractual date for the exercise of the option;
■ if the option is at the hands of the Group, the repayment date is the
next contractual date for the exercise of the option, for both assets
and liabilities;
■ in the case of subordinated debt, the redemption date used is the
final maturity date.
➤
TABLE 100: CONTRACTUAL MATURITIES OF THE PRUDENTIAL BALANCE SHEET (EU CR1-A) [Audited]
In millions of euros
31 December 2023
Not Overnight
determined or demand Overnight) 3 months
Up to
1 month
(excl.
1 to
3 months to
1 year
1 to
5 years
5 years
More
than
TOTAL
ASSETS
Cash and amounts due from central banks
288,270
288,270
Financial instruments at fair value through
profit and loss
Securities
212,127
212,127
Loans and repurchase agreements
65,049
86,442
30,200
24,195
16,466
4,686
227,038
Derivative financial instruments
292,754
292,754
Derivatives used for hedging purposes
21,814
21,814
Financial assets at fair value through equity
Debt securities
26
81
1,571
1,418
3,440
16,706
29,725
52,967
Equity securities
2,275
2,275
Financial assets at amortised cost
Loans and advances to credit institutions
7,058
8,971
4,672
2,496
496
560
24,255
Loans and advances to customers
1,143
59,590
81,324
147,170
349,672
252,907
891,806
Debt securities
150
553
2,092
4,511
20,584
48,071
45,021
120,982
Remeasurement adjustment on interest rate
risk hedged portfolios
(2,661)
(2,661)
Financial assets
526,485
362,155
158,665
122,125
197,887
431,410
332,900
2,131,627
Other assets
174,813
9,772
8,581
1,568
1,521
766
5,575
202,596
TOTAL ASSETS
701,298
371,927
167,247
123,693
199,408
432,176
338,475
2,334,224
of which Loans and advances
-
66,111
155,003
116,196
173,862
366,634
258,154
1,135,960
of which Debt securities
133,195
635
3,662
5,929
24,024
64,777
74,746
306,968
LIABILITIES
Deposit from central banks
3,374
3,374
Financial instruments at fair value through
profit and loss
Securities
104,910
104,910
Deposits and repurchase agreements
35,451
157,221
47,554
20,074
11,907
1,667
273,873
Issued debt securities
218
4,190
5,131
16,140
37,549
20,116
83,343
Derivative financial instruments
279,446
279,446
Derivatives used for hedging purposes
37,911
37,911
Financial liabilities at amortised cost
Deposits from credit institutions
14,293
4,219
53,913
10,944
2,154
67
85,590
Deposits from customers
724,599
142,697
79,720
35,283
7,978
3,598
993,875
Debt securities
107
11,647
32,852
46,140
57,453
36,473
184,672
Subordinated debt
48
1,127
8,076
13,715
22,965
Remeasurement adjustment on interest rate
risk hedged portfolios
(14,175)
(14,175)
Financial liabilities
408,093
778,042
320,021
219,170
129,707
125,116
75,635
2,055,785
Other liabilities
229,199
3,965
22,483
2,466
1,903
585
17,838
278,439
TOTAL LIABILITIES AND EQUITY
637,292
782,007
342,503
221,636
131,610
125,701
93,473
2,334,224
In millions of euros
31 December 2022
Not Overnight
determined or demand Overnight) 3 months
Up to
1 month
(excl.
1 to
3 months to
1 year
1 to
5 years
5 years
More
than
TOTAL
ASSETS
Cash and amounts due from central banks
318,569
318,569
Financial instruments at fair value through
profit and loss
Securities
166,946
166,946
Loans and repurchase agreements
64,994
57,714
29,441
24,085
9,961
5,828
192,024
Derivative financial instruments
328,358
328,358
Derivatives used for hedging purposes
25,681
25,682
Financial assets at fair value through equity
Debt securities
59
3,890
797
3,787
12,120
17,916
38,570
Equity securities
2,188
2,188
Financial assets at amortised cost
Loans and advances to credit institutions
9,987
13,023
5,055
2,463
649
1,297
32,474
Loans and advances to customers
13,851
56,802
78,893
134,620
345,125
258,376
887,667
Debt securities
154
92
3,503
4,100
14,908
47,213
43,741
113,711
Remeasurement adjustment on interest rate
risk hedged portfolios
(7,477)
(7,477)
Financial assets
515,910
407,494
134,931
118,287
179,864
415,067
327,158
2,098,711
Other assets
187,930
21,181
6,832
9,241
1,835
1,977
8,727
237,722
Assets held for sale
86,839
86,839
TOTAL ASSETS
703,839
428,674
141,764
214,366
181,699
417,045
335,885
2,423,272
of which Loans and advances
-
77,985
127,538
113,389
161,168
355,735
265,501
1,101,317
of which Debt securities
104,526
92
7,393
4,898
18,696
59,333
61,656
256,593
LIABILITIES
Deposit from central banks
3,054
3,054
Financial instruments at fair value through
profit and loss
Securities
99,155
99,155
Deposits and repurchase agreements
48,048
125,131
39,086
14,922
5,923
965
234,076
Issued debt securities
7
3,672
4,662
12,442
27,376
17,250
65,409
Derivative financial instruments
300,936
300,936
Derivatives used for hedging purposes
40,002
40,002
Financial liabilities at amortised cost
Deposits from credit institutions
14,768
5,518
25,331
49,365
20,950
780
116,714
Deposits from customers
780,457
124,371
63,839
37,088
5,924
2,888
1,014,567
Debt securities
5
9,731
31,847
34,884
42,770
32,952
152,191
Subordinated debt
8
270
8,599
13,511
22,388
Remeasurement adjustment on interest rate
risk hedged portfolios
(20,201)
(20,201)
Financial liabilities
419,893
846,339
268,431
164,765
148,972
111,543
68,347
2,028,290
Other non-financial liabilities
257,789
13,059
14,228
10,092
2,318
1,818
18,675
317,980
Liabilities associated with assets held for
sale
-
-
-
77,002
-
-
-
77,002
TOTAL LIABILITIES AND EQUITY
677,682
859,398
282,659
251,860
151,290
113,361
87,022
2,423,272
For liquidity risk management, the above contractual schedule is
supplemented by economic analyses taking into account customer
behaviour or market liquidity of certain assets (e.g. securities), under
normal conditions and stress situations.
To this end, the Group uses a set of tools to anticipate and manage its
economic liquidity, in particular as previously stated:
■ medium and long-term liquidity situations;
■ stress tests and the liquidity reserve;
■ monitoring regulatory liquidity ratios.
The following table presents the details of T a ble 100: Contractual
maturities of the prudential balance sheet for equity instruments and
debt securities issued by the Group in the medium and long term,
excluding early redemption options.
➤
TABLE 101: CONTRACTUAL MATURITIES OF CAPITAL INSTRUMENTS AND MEDIUM LONG TERM DEBT SECURITIES IN
THE PRUDENTIAL SCOPE
In millions of euros
2023
TOTAL
31 December
2024
2025
2026
2027
2028
2029- Beyond
2033
2033 Perpetual
Amount(*) of liabilities eligible to Additional
Tier 1
14,901
-
-
-
-
-
-
-
14,901
Subordinated debt
1,352
-
-
-
-
-
-
-
1,352
Preferred shares and Undated super
subordinated notes
13,549
-
-
-
-
-
-
-
13,549
Amount(*) of debt eligible to Tier 2
20,748
1,165
2,635
2,574
2,598
253
8,785
2,739
-
Subordinated debt
20,748
1,165
2,635
2,574
2,598
253
8,785
2,739
-
of which subordinated debt at
amortised cost
20,728
1,163
2,635
2,574
2,598
253
8,785
2,721
of which subordinated debt at fair value
through profit and loss
20
2
18
Amount(*) of debt not eligible to prudential
own funds
1,600
-
40
-
-
2
46
2
1,510
Unsecured Senior debt
158,320
17,796
25,315
19,119
17,886
23,628
43,259
11,315
-
Non-preferred senior debt
73,499
6,198
9,668
6,420
10,902
11,321
23,726
5,264
-
of which non preferred senior debt
at amortised cost
69,018
6,198
9,668
6,420
10,902
11,321
23,451
1,059
of which non preferred senior debt at fair
value through profit and loss
4,481
276
4,205
Preferred senior debt
84,821
11,598
15,648
12,700
6,984
12,307
19,533
6,051
-
of which preferred senior debt at
amortised cost
27,464
7,091
2,088
2,697
803
4,531
7,957
2,297
of which preferred senior debt at fair
value through profit and loss
57,357
4,507
13,559
10,004
6,181
7,776
11,576
3,754
Secured Senior debt
15,114
3,738
3,705
903
872
3,864
1,581
451
-
(*) Accounting value before any prudential adjustments.
T a bles providing details of instruments recognised as capital (CET1, AT1
and Tier 2), as well as debt instruments eligible for TLAC ratio (senior
non-preferred debt), as required (EU CCA) by implementing Regulation
(EU) No. 2021/637, are available in the BNP Paribas Debt section of the
Investor Relations website: https://invest.bnpparibas/recherche/dette/
documents/informations-sur-les programmes-et-les-emissions.
Some debt instruments shown above have an early redemption ("call")
option exercisable by the Group (Issuer). The following table shows
the maturity schedule for debt and other subordinated liabilities by
considering, where appropriate, the next date on which the option may
be exercised ("call date"). Calls may only be exercised after authorisation
from the regulato r. T he maturity dates shown hereafter are purely
contractual and do not foresee the Group's call policy.
➤
TABLE 102: ECONOMIC(*) MATURITIES OF SUBORDINATED DEBT (PRUDENTIAL PERIMETER)
In millions of euros
2023
TOTAL
31 December
2024
2025
2026
2027
2029- Beyond
2028
2033
2033
Perpetual
Amount(**) of liabilities eligible to Additional
Tier 1
14,901
1,325
1,534
-
2,691
2,508
6,843
-
-
Subordinated debt
1,352
1,352
Preferred shares and undated super
subordinated notes
13,549
1,325
1,534
2,691
1,156
6,843
Amount(**) of debt eligible to Tier 2
20,748
1,494
3,283
4,314
5,425
2,315
2,420
1,497
-
Subordinated debt
20,748
1,494
3,283
4,314
5,425
2,315
2,420
1,497
of which subordinated debt at amortised cost
20,728
1,492
3,283
4,314
5,425
2,315
2,420
1,479
of which subordinated debt at fair value
through profit and loss
20
2
18
Amount(**) of debt not eligible to prudential
own funds
1,600
248
40
-
-
70
46
2
1,194
(*) The economic maturity is defined as either the contractual maturity or the next call date when the instrument has an early redemption option.
(**) Accounting value before any prudential adjustments.
ENCUMBRANCE OF GROUP ASSETS AND ASSETS RECEIVED BY THE GROUP
Assets on the balance sheet and financial instruments received in
guarantee used as pledges, guarantees or enhancement of a Group
transaction and which cannot be freely withdrawn are considered to
be encumbered.
The encumbrance of assets is central to the Group's businesses and
has two aims:
■ to trade in derivatives or repurchase agreements, including the
payment of margin calls to secure transactions (see paragraphs
on Bilateral initial margin exchange and Counterparty credit risk
management in section 5.6 Counterparty credit risk);
■ to obtain funding, by issuing secured debt, in particular asset-backed
securities (see Proprietary securitisation (originator) in section 5.5
Securitisation in the banking book), covered bonds (see paragraph
on M L T s ecured wholesale funding in this section) or by participating in
monetary policy, thus diversifying and optimising its funding structure.
Thus, the encumbrance of assets can be distinguished from the
transfer of assets shown in note 5.p T r ansfers of financial assets to
the consolidated financial statements insofar as it only comprises the
following transactions:
■ securities recognised in the Bank's balance sheet, which have been
sold or loaned, on a temporary basis, by the Bank under repurchase
agreements (repos and securities lending) but which are not
derecognised in the Bank's balance sheet once the transaction is
complete;
■ assets securitised by the Bank (within efficient and inefficient
programmes), which continue to be recognised in the Bank's balance
sheet under the applicable consolidation rules contained in the
accounting standard, to hedge the issue of asset-backed securities.
Based on the definitions above, guarantees given to clearing houses
or central banks in the context of monetary policy, along with asset
portfolios hedging the issue of secured bonds, fall within the scope of
the encumbrance of assets but do not fall within the scope of asset
transfers. The same applies to repurchase agreements (repos) and loans
in the case of securities that are not recognised in the Bank's balance
sheet (because they were previously received under reverse repos
and securities borrowing) and to securities received under repurchase
agreements (reverse repos) and securities borrowings.
ENCUMBRANCE OF ASSETS
AND COLLATERAL RECEIVED
The monitoring of encumbered assets and assets received is carried out
within the prudential scope defined in the section Scope of application
in section 5.2 Capital management and capital adequacy.
The amounts of encumbered and unencumbered assets and collateral
received are shown in the following table according to the provisions
of Execution Regulation (EU) 2021/637. Thus, all data presented in
the table are calculated as the median of the four quarter ends of the
corresponding yea r. E ach total line is thus calculated as the median of
the four values of the total at each end of quarte r, n ot as the sum of the
median values for the yea r.
The median ratio of encumbered assets relative to Group balance sheet
assets was 14.6% in 2023, compared to 19.5% in 2022.
➤
TABLE 103: ENCUMBRED AND UNENCUMBERED ASSETS
➤ Encumbered and unencumbered assets
010
030
040
050
060
080
090
100
In millions of euros
Four end of quarter median values in 2023
Carrying amount of
encumbered assets
Fair value of
encumbered assets
Carrying amount of
unencumbered assets
Fair value of
unencumbered assets
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
010 ASSETS
354,106
135,540
2,067,026
464,382
030 Equity instruments
24,694
16,253
61,759
22,956
040 Debt securities
148,995
119,481
148,995
119,481
175,765
154,098
175,765
154,098
050
of which covered bonds
3,458
2,839
3,458
2,839
2,975
2,723
2,975
2,723
060
of which asset-backed securities
867
558
867
558
7,615
3
7,615
3
070
of which issued by general governments
112,222
110,833
112,222
110,833
137,469
135,332
137,469
135,332
080
of which issued by financial corporations
27,861
4,093
27,861
4,093
24,982
6,177
24,982
6,177
090
of which issued by non-financial corporations
8,999
1,779
8,999
1,779
8,973
1,119
8,973
1,119
120 Other assets
178,102
1,838,784
283,351
121
of which: Loans on demand
301,377
283,351
122
of which: Loans and advances other than loans
on demand
85,622
1,079,703
123
of which: Other assets
91,909
434,107
(*) Assets of extremely high liquidity and credit quality.
010
030
040
050
060
080
090
100
In millions of euros
Four end of quarter median values in 2022
Carrying amount of
encumbered assets
Fair value of
encumbered assets
Carrying amount of
unencumbered assets
Fair value of
unencumbered assets
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
Total EHQLA(*)
of which
HQLA and
010 ASSETS
508,631
146,763
2,096,309
496,901
030 Equity instruments
37,218
22,377
29,941
7,471
040 Debt securities
155,037
123,822
155,037
123,822
146,761
135,134
146,761
135,134
050
of which covered bonds
3,230
2,564
3,230
2,564
1,933
1,393
1,933
1,393
060
of which asset-backed securities
1,209
673
1,209
673
5,847
5,847
070
of which issued by general governments
114,059
113,724
114,059
113,724
110,250
106,340
110,250
106,340
080
of which issued by financial corporations
28,133
4,624
28,133
4,624
22,091
4,767
22,091
4,767
090
of which issued by non-financial corporations
13,070
1,718
13,070
1,718
4,498
531
4,498
531
120 Other assets
286,731
2,887
1,942,768
358,506
121
of wich: Loans on demand
360,595
351,181
122
of which: Loans and advances other than
loans on demand
163,784
1,029,183
123
of which: Other assets(**)
135,134
2,887
552,117
8,326
(*) Assets of extremely high liquidity and credit quality.
(**) The encumbered assets of Bank of the West are presented under "Other assets" following the application of IFRS 5 relating to groups of assets and
liabilities held for sale, in accordance with prudential balance sheet presentation conventions. At 31 December 2022, EUR 15 billion in loans and
advances were encumbered out of a total of EUR 56 billion, and EUR 6 billion of fixed-income securities were encumbered out of a total of EUR 21
billion.
The other encumbered assets mainly comprised loans and advances
(often used when issuing asset-backed securities issues or guaranteed
bonds) and amount to EUR 86 billion. The balance, grouped under line
123 "of which other assets", comprises guarantee deposits and bank
guarantees paid in respect of derivatives (recognised in the Accrued
income and other assets category) amounting to EUR 92 billion.
The other unencumbered assets amount to EUR 434 billion. They mainly
include intangible assets, goodwill, current and deferred tax assets,
and assets ineligible for financing programmes under normal business
conditions.
➤ Encumbered and unencumbered collateral received
010
030
040
060
010
030
040
060
In millions of euros
Four end of quarter median values in 2023
Four end of quarter median values in 2022
Fair value of encumbered
collateral received or
issued
Fair value of collateral
received or own(*) debt
own(*) debt securities securities issued available own(*) debt securities securities issued available
for encumbrance
Fair value of encumbered
collateral received or
issued
Fair value of collateral
received or own(*) debt
for encumbrance
Total
of which
HQLA and
EHQLA(**)
Total
of which
HQLA and
EHQLA(**)
Total
of which
HQLA and
EHQLA(**)
Total
of which
HQLA and
EHQLA(**)
130 COLLATERAL RECEIVED
548,698
450,565
72,634
40,558
530,400
440,989
108,852
59,441
140 Loans on demand
150 Equity instruments
139,591
97,423
12,123
4,620
112,102
75,298
26,494
17,675
160 Debt securities
412,865
356,143
61,156
37,553
421,322
365,691
79,236
38,767
170
of which covered bonds
7,548
5,293
1,875
1,354
2,764
2,456
403
180
of which asset-backed securities
5,871
218
6,846
513
4,343
3,807
523
190
of which issued by general
governments
346,412
345,059
24,316
23,798
360,183
357,787
37,060
37,060
200
of which issued by financial
corporations
30,969
7,257
13,383
2,277
28,661
3,226
35,169
210
of which issued by non-financial
corporations
36,760
5,440
15,899
6,039
28,903
4,403
5,571
1,958
Loans and advances other than loans
220 on demand
230 Other collateral received
OWN(*) DEBT SECURITIES ISSUED
OTHER THAN OWN COVERED BONDS
240 OR ASSE T-BACKED SECURITIES
-
-
-
-
-
-
-
OWN(*) COVERED BONDS AND
ASSE T-BACKED SECURITIES AND
241 NOT YET PLEDGED
68,876
-
10,456
-
TOTAL ASSETS, COLLATERAL
PLEDGED AND OWN(**) DEBT
250 SECURITIES ISSUED
915,448
586,106
1,055,791
592,502
(*) Financial assets issued by a Group entity and underwritten by the Group.
(**) Assets of extremely high liquidity and credit quality.
The amount of own collateralised bonds and asset-backed securities (ABS and collateralised bonds) without collateral amounted to EUR 76 billion
(EUR 69 billion available and EUR 6 billion not available) for an outstanding amount of underlying assets of EUR 87 billion.
➤ Encumbered assets/collateral received and associated liabilities
010
030
010
030
In millions of euros
Four end of quarter median values in 2023
Four end of quarter median values in 2022
Matching liabilities,
contingent liabilities or
securities lent
Assets, collateral
received and own debt
securities issued(*)
Matching liabilities,
contingent liabilities or
securities lent
Assets, collateral
received and own debt
securities issued(*)
010 LIABILITIES
766,746
CARRYING AMOUNT OF SELECTED FINANCIAL
915,448
852,991
1,055,791
011
of which: Repurchase agreements
346,474
361,885
332,012
342,546
012
of which: Collateralised deposits other than
repurchase agreements
101,560
110,923
194,063
227,587
013
of which: Debt securities issued
36,371
37,903
30,443
32,159
014
of which: Other sources of encumbrance
276,463
393,876
296,113
439,003
(*) Other than encumbered secured bonds and securities backed by encumbered assets.
Encumbered assets, collateral received and own fixed-income securities
are mainly issued by general government entities, raising EUR 460 billion
and make it possible to obtain EUR 411 billion of financing.
In median data as at 31 December 2023, Fixed-Income Credit and
Commodities and Prime Solutions & Financing businesses as well as
Securities Services represent 68% of the Group's encumbered assets
(EUR 238 billion) and 100% of the collateral received (EUR 548 billion),
i.e. 88% of the encumbrance (EUR 784 billion). These are mainly repos
and derivatives activities. The other encumbered assets are mainly held
through financing activities of ALM Treasury.
Encumbered assets and received and encumbered collateral are
denominated mainly in euros or dollars (for a median amount of 38%
and 43%, respectively, over the year).
5.9 Operational risk
Operational risk is the risk of incurring a loss due to inadequate
or failed internal processes, or due to external events, whether
deliberate, accidental or natural occurrences. Management of
operational risk is based on an analysis of the "cause – event –
consequences" chain.
Internal processes giving rise to operational risk may involve
employees and/or IT systems. External events include, but are not
limited to floods, fire, earthquakes and terrorist attacks. Credit or
market events such as default or fluctuations in value do not fall
within the scope of operational risk.
Operational risk encompasses fraud, Human Resources risks,
legal risks, non-compliance risks, tax risks, information system
risks, conduct risks (risks related to the provision of inappropriate
financial services), risk related to failures in operating processes,
including loan procedures or model risks, as well as any
potential financial implications resulting from the management
of reputation risk.
REGULATORY FRAMEWORK
Operational and non-compliance risks come under a specific regulatory
framework:
■ Directive 36/2013/UE (CRD 4) and Regulation (EU) No. 575/2013 (CRR)
governing prudential supervision and the methods for calculating the
amount of capital requirements to cover the operational risk;
■ French Ministry of Finance Decree of 3 November 2014, which defines
the roles and responsibilities of the RISK Function (covering all types
of risks) and an internal control system which ensures the efficiency
and quality of the Bank's internal operations, the reliability of internal
and external information, the security of transactions, as well as
compliance with applicable laws, regulations and internal policies.
Banking regulation divides operational loss events into seven categories:
(i) internal fraud, (ii) external fraud, (iii) employment practices and
safety (such as an anomaly arising from recruitment management),
(iv) clients, products and business practices (such as product defects,
mis-selling, professional misconduct, etc.), (v) damage to physical assets,
(vi) business disruption and system failures, (vii) execution, delivery and
process management (data entry erro r, e rror in documentation, etc.).
Effective management of non-compliance risk aims to ensure compliance
with applicable laws, regulations, rules of ethics and instructions, protect
the Group's reputation, that of its investors and that of its customers,
ensure ethical professional behaviou r, p revent conflicts of interest,
protect customers' interests and market integrity, fight against money
laundering, corruption and the financing of terrorist activities, as well as
ensure compliance with financial embargoes.
ORGANISATION AND OVERSIGHT MECHANISM
KEY PL A Y ERS AND GOVERNANCE
The general internal control system at BNP Paribas underpins
management of operational, non-compliance and reputation risks as
part of its dual-level system to ensure periodic and permanent control.
Within BNP Paribas, the control functions providing the second line of
defence are Compliance, RISK and LEGAL. General Inspection provides a
third line of defence responsible for periodic controls. These four Group
oversight and control functions are organised according to a hierarchical
reporting principle by all their teams worldwide, guaranteeing their
independence and resource autonomy.
The governance of the Group's internal control system is described in the
section Internal control in chapter 2 Corporate governance and internal
control.
Within the RISK Function, the second line of defence in terms of operational,
technological and information protection risks (cybersecurity) is provided
by Operational Risk Officers in the operating entities in accordance with
the operational risk management system defined and supervised by RISK
Operational Risk Management (RISK ORM).
The operational risk management and control system for the Group as
a whole is structured around a dual-level system with the following
participants:
■ on the first level of defence: operational staff, notably the Heads
of operating entities, business lines and functions, who are on the
front-line of risk management and implementation of systems to
manage these risks;
■ on the second line of defence: the functions exercising second-
level control that are responsible for the organisation and proper
functioning of the risk management system and its compliance with
laws and regulations for their domain of expertise as defined in their
Responsibility Charte r. T hese teams are, in particula r, r esponsible for:
■
coordinating, throughout the scope of responsabilities, the definition
and implementation of the permanent control and operational
risk identification and management system, its standards and
methodologies, reporting and related tools;
■
acting as a second pair of eyes, independently of the Heads of
operating entities, to scrutinise operational risk factors and the
functioning of the operational risk and permanent control system,
and issuing warnings, where appropriate.
Issues relating to operational risk, permanent control and the emergency
plan to ensure business continuity in those situations specified in the
regulatory standards are regularly submitted to the Group's Executive
Committee. The Group operating entities and subsidiaries implement this
governance structure within their organisations, with the participation
of Executive Management.
For its part, Compliance is in charge of supervising the non-compliance
and reputation risk control system (see section 5.3).
OBJECTIVES AND PRINCIPLES
To meet this dual requirement of the management and control of
operational risk, BNP Paribas has developed a permanent iterative risk
management process based on the following elements:
■ identifying and assessing operational risks;
■ formalisation, implementing and monitoring of the risk mitigation
system (procedures, checks and all organisational elements designed
to help to control risk, such as segregation of tasks, management of
access rights, etc.);
■ producing measurements of known and potential risks and calculating
the capital requirement for operational risk;
■ reporting and analysing oversight information relating to operational
risk and the permanent control system;
■ managing the system through a governance framework that involves
members of management, preparing and monitoring action plans.
This system encompasses two major pillars:
■ the identification and assessment of risk and of the control system
based on the libraries of risks and controls defined by the Group's
business lines and functions. Each entity must take into consideration
those risks and, if necessary, enhance them when assessing the
intrinsic and residual risks in accordance with the standard Group
scoring grid;
■ the risk management system is underpinned by procedures, standards
and generic control plans consistent with the above-mentioned risk
libraries, and which each entity must apply, unless an exception is
authorised, and enhance according to their own characteristics.
SCOPE AND NATURE OF RISK
REPORTING AND MEASUREMENT
Group Executive Committees, and those of operating entities (business
lines, functions and subsidiaries), are tasked with monitoring the
management of operational and non-compliance risk and permanent
control in the areas falling within their remit, in accordance with the
Group's operational risk framework. The committees validate the quality
and consistency of reporting data, examine their risk profile in light of the
tolerance levels they have set in keeping with the Group Risk Appetite
Statement, and assess the quality of risk control procedures according to
their objectives and the risks they incu r. T hey monitor the implementation
of risk mitigation techniques.
Operational risk management has developed a system of data collection
of actual or potential incidents using an approach structured by
organisational process and business unit (activities in a country and a
single legal entity) focusing on the cause-and-effect chain behind events.
This information is used as the basis for risk mitigation and prevention
measures.
The most significant information is brought to the attention of staff at
various levels of the organisation, up to and including executive managers
and supervisory bodies, in line with a predefined information reporting
process.
SPECIFIC COMPONENTS LINKED TO OPERATIONAL RISK
By its nature, operational risk covers numerous areas related with the
Group's usual business activity and is linked to specific risks such as
non-compliance, reputation, legal, fiscal and cybersecurity risks which
are monitored in specific ways.
NON-COMPLIANCE AND REPUTATION RISK
Definitions
Non-compliance risk is defined in French regulations as the risk of legal,
administrative or disciplinary sanctions, of significant financial loss or
reputational damage that a bank may suffer as a result of failure to
comply with national or European laws and regulations, codes of conduct
and standards of good practice applicable to banking and financial
activities, or instructions given by leaders, particularly in application of
guidelines issued by a supervisory body.
The non-compliance risk is a sub-category of operational risk. Moreove r,
certain of its implications can involve more than a purely financial loss
and may actually damage the institution's reputation.
Reputation risk is the risk of damaging the Group's image, the trust placed
in a corporation by customers, counterparties, suppliers, employees,
shareholders, supervisors and any other stakeholder whose trust is
an essential condition for the corporation to carry out its day-to-day
operations.
Reputation risk is primarily contingent on all the other risks borne by the
Group, specifically the effective or potential materialisation of a credit,
market risk, an operational, non-compliance, environmental, social or
legal risk, as well as any violation of a law, a regulation of the Group's
Code of conduct or procedure.
Group organisation
Responsibility for controlling the risk of non-compliance lies primarily
with the activities and business lines. In this context, and in accordance
with international standards and French regulations, Compliance
manages the system for monitoring non-compliance risks for the scope
of all of the Group's businesses in France and abroad.
The system for managing non-compliance risks is based on a permanent
control system, structured around the following axes:
■ general and specific procedures;
■ processes for identifying and assessing risks, monitoring, reporting
information and alerts, coordinated to ensure overall consistency and
effectiveness;
■ the deployment of risk prevention and detection tools (systems
for combating money laundering, the financing of terrorism and
corruption, detection of market abuse, etc.);
■ training and awareness-raising initiatives for all Group employees.
Reputation risk management is based on the following elements:
■ individual responsibility of employees: the Group's employees
have an essential role in managing reputation risk. Any employee
confronted with the actual or potential occurrence of a credit, market
or operational risk (including in the area of IT and cybersecurity, a
non-compliance, legal or social risk, and/or the violation of a law
or regulation, or of the Group's Code of conduct or procedures), that
could lead to a reputation risk for the Group or one of its entities, must
communicate, immediately and without delay, his or her concern to
his or her line manager or to a more senior manage r. T his individual
responsibility is one of the key elements of the Group's Code of conduct,
which is at the heart of every action and guides all employees in their
decisions, at all levels of the organisation. The employee awareness
programme also reiterates the responsibility of each individual
and guides them, in particular through information on identifying,
controlling and managing reputation risk, the Group's values and its
ethics standards;
■ permanent control: identifying and managing reputation risk are part of
the objectives of the permanent control system. Implementation of the
procedures and recommendations of the periodic control, the results
of the controls and reports from the whistleblowing system are closely
monitored. Reputation risk is also taken into account in the process for
validating exceptional transactions, new businesses, and new products.
The Group has procedures for conflicts of interest, market integrity,
adequacy and appropriateness of offers to clients, best execution of
their orders, anti-money laundering, terrorist financing and corruption,
compliance with international sanctions and embargoes, and social
and environmental responsibility that, along with the Code of conduct,
are conducive to effective management of reputation risk;
■ corporate engagement: the Corporate Engagement Department is
made up of the Corporate Social and Environmental Responsibility
and Group Communication functions. It defines and implements the
Group's strategy of engagement in the main sectors related to the
future of the society, such as economic development, the environment
and energy transition; social integration and regional development;
diversity and respect for human rights. These areas are particularly
relevant to the protection against risk to the Group's reputation.
Furthermore, one of the major missions of Corporate Communication
is to protect the reputation of the Group and its entities, as well as
being a source of information for employees and the public, whose
trust is essential for the Group.
Compliance Function is centrally responsible for coordinating initiatives
related to reputation risk management.
The Group's reputation risk management framework, like the entire
internal control system, is under the responsibility of the Group
Supervisory and Control Committee (GSCC), which is chaired by the
Chief Executive Officer (see chapter 2 Corporate governance and internal
control, section Internal control).
LEGAL RISK
The LEGAL Function is an independent function of the BNP Paribas Group
and is hierarchically integrated with all the Group's legal teams. LEGAL
is responsible for managing legal risks and is responsible for interpreting
the laws and regulations applicable to the Group's activities and providing
legal advice and guidance to the Group in a manner that meets the
highest standards of excellence and integrity. The LEGAL Function
provides Executive Officers and the Board of directors with reasonable
assurance that legal risks are monitored, controlled and mitigated at the
Group level. It is responsible for the prevention and management of legal
risks within the Group through its advisory and control roles.
Legal risk refers to the potential loss to the BNP Paribas Group, whether
financial or reputational, which impacts or could impact one or more
entities of the BNP Paribas Group and/or its employees, business lines,
operations, products and/or its services, and results from:
■ non-compliance with a law or regulation or a change in law(s) or
regulation(s) (including a change in the interpretation or application
of a law or regulation by a court or competent authority and any
requirement of any regulatory or supervisory authority);
■ a dispute (including all forms of alternative/extrajudicial dispute
resolution and court orders) or an investigation or inquiry by a
regulatory or supervisory authority (with implications for LEGAL);
■ a contractual deficiency;
■ a non-contractual matte r.
The LEGAL Function is responsible for:
■ every failure or deficiency in a legal process that may involve the risk
of a penalty, reputational risk or financial loss, in all areas;
■ management of risk relating to a conflict with a counterparty, a
custome r, a t hird party or a regulatory body, resulting from a deficiency
or default that could be attributable to the Group in the course of its
operations.
Strategic and preventive missions
In its strategic missions, LEGAL is responsible for:
■ defining the Group's legal policy and overseeing its consistency;
■ providing legal advice to the Executive Management, business lines
and functions;
■ contributing to the Bank's influence on regulatory, legislative or market
initiatives.
In its prevention missions, LEGAL is responsible for ensuring:
■ the Group's legal security in connection with its commercial activities
or proprietary businesses;
■ the protection of the Group's legal interests, including through the
management of the Group's disputes and conflicts;
■ the legal protection of the Group's managers or employees in the
ordinary course of their business.
TAX RISK
BNP Paribas ensures compliance with the tax regulations in force in
the various countries where the Group operates and which apply to the
sectors of activity covered by the several Group entities, such as banking,
insurance and other financial services.
The tax mission is carried out by TAX, which has global powers in order to
ensure, in particula r, c ontrol of tax risk at the Group level. RISK, FINANCE
& STRATEGY and Compliance are involved as the second line of defence in
monitoring the tax risk according to the domain concerned (transactions
carried out by the Group, obligations related to the tax situation of clients,
tax returns made by the Group).
TAX is composed of the Group T a x Department (GTD) and the tax
departments on which the GTD is based in certain businesses and
in the main geographical areas where the Group operates (there are
tax correspondents in the other geographical areas where the Group
operates).
In ensuring the coherence of the Group's tax practices and the global tax
risk monitoring, the Group T a x Department:
■ has drawn up principles and guidelines that business lines must follow
to limit tax risks;
■ has implemented a process of feedback aimed at contributing to the
master of local and global tax risk;
■ oversees tax-related operational risks by defining an adequate system
for managing these risks, in particular by drawing up and validating
control plans;
■ oversees the internal audit recommendations falling within tax
mission's scope of responsibility.
CYBERSECURITY AND TECHNOLOGY
The use and protection of data and technologies are determining factors
for the Bank's activity and its transformation process.
While the Bank continues the roll-out of Digital Banking (for the Group's
customers and partners) and Digital Working (for the Group's employees),
it must incorporate new technology and innovative risk management
practices, and establish new working practices. This introduces new
technology risks in the cybersecurity area. In that context, the Group
deploys significant resources to identify, measure and control these risks.
Technology management and information systems security is part
of the Group's cybersecurity strategy. This strategy is focused on the
preservation of the most sensitive data, regularly adapting both its
internal processes and procedures, and its employee training and
awareness to contend with increasingly sophisticated and varied threats.
To reinforce its technology and the protection of data, the Group has
adopted a comprehensive approach in cybersecurity management
through its three lines of defence:
■ operating entities are the first line of defence. Since 2015, the Group
has introduced across all of the entities a transformation programme
based on the international standard NIST (National Institute of
Standards and Technology). This programme is regularly updated
taking into account new threats and recent incidents identified around
the world;
■ as a second line of defence, the team dedicated to managing
cybersecurity and technological risk within RISK ORM and under the
responsibility of the Group Chief Operational Risk Office r, i s tasked with
the following in relation to Operational Risk Officers:
■
presenting the Group's cybersecurity and technology risk position
to the Group Executive Committee, the Board of directors, and the
supervisory authorities,
■
monitoring the transformation programme across the entire Group,
■
integrating the cybersecurity and technology risk aspects into all
major projects within the Group,
■
ensuring that policies, principles and major projects take aspects of
cybersecurity and technology risk into consideration,
■
monitoring existing risks and identifying new threats likely to have
a negative impact on the Group's business,
■
overseeing third-party information systems risks within a
strengthened framework,
■
conducting independent assessment campaigns on priority
objectives,
■
taking measures to assess and improve the Group's ability to
respond to failings and incidents;
■ as the third line of defence, the role of General Inspection is to:
■
assess the processes put in place to manage ICT risks (related to
information and communication technologies), as well as associated
controls and governance,
■
check for compliance with laws and regulations,
■
propose areas of improvement to support the mechanisms put in
place.
The Group is responding to new technological and cybersecurity risks
as follows:
■ ITC risks linked to availability and continuity:
BNP Paribas relies heavily on communication and information systems
across all its business activities. Any breach in the security of these
systems could lead to failures or interruptions in the systems used
to manage customer relations or to record transactions (deposits,
services and loans) and could incur major costs to recover and verify
compromised data. The Group regularly manages, and revises its crisis
management and recovery plans by testing its data recovery services
and the robustness of its information systems, using various scheduled
stress scenarios;
■ security risks:
the Bank is vulnerable to cybersecurity risk, or risk caused by malicious
and/or fraudulent acts, committed with the intention of manipulating
information (confidential, bank/insurance, technical or strategic data),
processes and users, which may result in material losses for the
Group's subsidiaries, employees, partners and customers. The Group
continually reassesses the threats as they evolve and mitigates risks
detected in a good time by means of taking effective counter measures;
■ IT change-related risks:
the Group's information systems are changing rapidly in the light
of digital transformation. These risks, identified during the systems'
design or modification phases, are regularly assessed to ensure that
the proposed solutions are consistent with the needs of the Group's
business lines;
■ data integrity risks:
confidentiality of customer data and transaction integrity are areas
covered by the same systems set up in response to Regulation (EU)
No. 2016/679 of 27 April 2016 (General Data Protection Regulation –
GDPR) intended to provide the Group's customers with a service that
meets their expectations;
■ third-party information systems risks:
the Bank is exposed to risks of financial default, breaches or operational
capacity constraints when it interacts with third parties, including
customers, financial intermediaries and other market operators.
The Group's three lines of defence constitute the management
framework of these risks at every step of integration until the end of
the relationship with such third parties.
OPERATIONAL RISK EXPOSURE
The chart below shows the losses linked to operational risk, according to
the event classification defined in the current regulation.
➤
FIGURE 14: OPERATIONAL LOSSES – BREAKDOWN
BY EVENT TYPE (AVERAGE 2015-2023)(*)
Clients, products
and business
practices
3%
Employment practices
and workplace safety
22%
4%
Business disruption
and system failures
1%
Damage to
physical assets
External fraud
31%
38%
Execution,
delivery and
process
management
1%
Internal fraud
(*) Percentages correspond to average loss by type of event for the
2015-2023 period.
The breakdown of losses by type of operational risk for the period
2015-2023 is rebalanced following the exit from the reference period of
the comprehensive settlement with the US authorities in 2014.
The main type of operational risk incidents remains the "Clients, products
and business practices" category, followed by process failures, including
errors in executing or processing transactions, and then external fraud.
BNP Paribas Group pays the utmost attention to analyse its operational
risk incidents to continuously improve its control system.
CAPITAL REQUIREMENT CALCULATION
Operational risk-weighted assets are calculated by multiplying the capital
requirement by 12.5.
APPROACH ADOPTED
BNP Paribas uses a hybrid approach combining the advanced
measurement approach (AMA), standardised approach, and basic
indicator approach.
In terms of net banking income, most legal entities within the Group's
prudential scope of consolidation use the advanced measurement
approach. This includes most retail banking activities in the domestic
networks and private banking, as well as Corporate & Institutional
Banking.
Advanced Measurement Approach (AMA)
Under the AMA for calculating capital requirements, the Bank uses an
operational risk internal model based on the four components required
by regulations, namely:
■ internal historical loss data from operational risk;
■ external loss data from operational risk;
■ environmental and internal control factors;
■ analysis of forward-looking scenarios, known as potential incidents
in the BNP Paribas Group.
BNP Paribas' internal model in place since 2008 includes the following
features:
■ an aggregated annual loss distribution, meaning that the frequency
and severity of losses from operational risks are modelled using an
actuarial approach and according to distributions calibrated with
available risk data;
■ it uses historical data as well as prospective scenarios to calculate
capital requirements, with a predominance for scenarios because they
can be shaped to reflect severe and less frequent operational risks;
■ the model is faithful to its operational risk input data, so that its results
can be used easily by each of the Group's business lines. Most of the
assumptions are therefore included in the data themselves;
■ it is prudent in its capital requirement calculations: the input data
are thoroughly reviewed, and any supplemental risk data are added
if needed to cover all relevant operational risks within the Group.
Regulatory AMA capital requirements are calculated as VaR (Value at
Risk), or the maximum potential loss over one yea r, a t a 99.9% confidence
level to calculate regulatory capital requirements. Capital requirements
are calculated at an aggregated level using risk data from all Group
entities in the AMA perimete r, t hen allocated to business lines and
individual legal entities.
Fixed-parameter approaches
BNP Paribas uses fixed-parameter approaches (basic or standard) to
calculate the capital requirements for entities in the Group's prudential
consolidation scope that are not covered by the internal model:
■ basic approach: the capital requirement is calculated as the average
over the past three years of a financial aggregate based on net
banking income (the exposure indicator) multiplied by a unique alpha
parameter set by the regulator (15% weighting);
■ standardised approach: the capital requirement is calculated as the
average over the past three years of a financial aggregate based on
net banking income multiplied by factors set by the regulator and
corresponding to each business category. For the purposes of this
calculation, all the Group's business lines are broken down into eight
regulatory business categories.
RIS K-WEIGHTED ASSETS AND CAPITAL REQUIREMENT
➤
TABLE 104: OPERATIONAL RISK CAPITAL REQUIREMENT AND RISK-WEIGHTED ASSETS (EU OR1)
a
b
c
d
e
In millions of euros
31 December 2023
2022
31 December
Relevant Indicators
Capital
Year-3
Year-2
Last year
RWAs requirements
RWAs
1
Basic indicator approach
1,654
2,002
2,602
3,911
313
4,280
2
Standardised approach
4,937
5,921
6,135
10,215
817
12,073
3
of which subject to TSA
4,937
5,921
6,135
10,215
817
12,073
4
of which subject to ASA
5
Advanced measurement
approach (AMA)
32,613
34,475
32,171
44,771
3,582
45,302
TOTAL OPERATIONAL RISK
39,205
42,397
40,908
58,897
4,712
61,656
The -EUR 2.8 billion decrease in risk-weighted assets due to operational
risk in 2023 is driven by the decrease in risk-weighted assets according
to the standardised approach, notably due to the sale of Bank of the
West during the first quarter of 2023. A decrease is also observed on the
risk-weighted assets calculated according to the AMA method induced
by the update of risk scenarios.
RISK MITIGATION TECHNIQUES
AND INSURANCE POLICIES
BNP Paribas Group deals with its insurable risks with the triple aim of
protecting its balance sheet, its profit and loss account and its staff.
Its insurance set-up is based on risk identification and assessment,
underpinned by risk mapping and by analysis of operational loss profile,
both historical and forward-looking.
The Group purchases insurance from leaders in the insurance market,
covering computer crime, fraud, theft, business disruption, liability and
other risks for which it may be held responsible. In order to optimise
costs whilst effectively managing its exposure, the Group retains some
well-identified risks whose impact in terms of frequency and cost is
known or can be adequately estimated.
In selecting insurers, the Group pays close attention to the credit
rating and claims paying ability of the companies concerned. Detailed
information on risks incurred by BNP Paribas as well as risk assessment
visits, enable insurers to assess the quality risk prevention within the
Group, as well as the safeguard measures put in place and upgraded on
a regular basis in light of new standards and regulations.
5.10 Insurance risks [Audited]
BNP PARIBAS CARDIF GROUP RISK MANAGEMENT SYSTEM
Risk management is a process that allows identification, measurement,
monitoring, management and reporting of both the risks arising from
the external environment as well as intrinsic risks inherent to the
BNP Paribas Cardif group. The objective is to guarantee the solvency,
business continuity, and development of the BNP Paribas Cardif group,
under satisfactory conditions of risk and profitability.
Within the framework of the provisions of article L.354-2 of the French
Insurance Code, the BNP Paribas Cardif group conducts a forward-looking
assessment of its solvency and risks every year under the Solvency II
framework, in particular:
■ the definition and evaluation of a capital requirement specific to the
risk profile;
■ the level of capital that the BNP Paribas Cardif group wishes to hold
to cover this specific requirement; the forward-looking solvency ratios
under the medium-term plan;
■ the resilience of these ratios in stress test cases.
Depending on the observed solvency ratio levels and the forecasts made
under ORSA (Own Risk and Solvency Assessment), remedial actions may
be undertaken to adjust own capital.
The risk typology adopted by the BNP Paribas Cardif group is changing
in pace with methodological work and regulatory requirements. It is
presented according to the main categories as follows:
■ underwriting risk: underwriting risk is the risk of a financial loss caused
by a sudden, unexpected increase in insurance claims that may result
from inadequate pricing and provisioning assumptions due to internal
or external factors, including sustainability risks. Depending on the
type of insurance business (life, non-life), this risk may be statistical,
macroeconomic or behavioural, or may be related to public health
issues or disasters;
■ market risk: market risk is the risk of a financial loss arising from
adverse movements of financial markets. These adverse movements
are notably reflected in price fluctuations (foreign exchange rates,
bonds, equities and commodities, derivatives, real estate, etc.) and
derived from fluctuations in interest rates, credit spreads, volatilities
and correlations;
■ liquidity risk: liquidity risk is the risk of being unable to fulfil current
or future foreseen or unforeseen cash requirements coming from
insurance commitments to policyholders, because of an inability to
sell assets in a timely manner and at an acceptable cost without
having a significant impact on market prices; and/or get access to
alternative financing instruments in a timely manner;
■ credit risk: credit risk is the risk of loss or adverse change in the
financial situation resulting from fluctuations in the credit standing
of issuers of securities, counterparties, and any debtors to which the
BNP Paribas Cardif group is exposed, in the form of counterparty risk.
Among the debtors, risks related to financial instruments (including
the banks in which the BNP Paribas Cardif group holds deposits) and
risks related to receivables generated by the underwriting activities
(premium collection, reinsurance recovering, etc.) are divided into two
categories: assets credit risk and liabilities credit risk;
■ operational risk: operational risk is the risk of loss resulting from
inadequate or failed internal processes, IT failures or from external
events, whether accidental or natural. It includes legal, tax and
non-compliance risks, but excludes risks arising from strategic
decisions and reputational risks.
The BNP Paribas Cardif group is exposed mainly to credit, underwriting,
and market risks. The BNP Paribas Cardif group closely monitors its
exposures, taking into account these various risks and the adequacy of
its capital with regard to regulatory solvency requirements. It endeavours
to contain potential losses in adverse scenarios at acceptable levels.
The risk strategy is implemented and monitored through an organisation
tailored to the broad risk classes and supported by ad hoc governance
structures. The governance and risk management systems are presented
in sections B. System of Governance and C. Risk profile of the BNP Paribas
Cardif group's Solvency and Financial Condition Report (SFCR), available
on the institutional website at https://www.bnpparibascardif.com/en.
The solvency requirements for the BNP Paribas Cardif group under
Solvency II are shown in section 5.2 Capital management and capital
adequacy.
MARKET RISK
Market risk arises mainly in the Savings business, where technical
reserves represent most of the BNP Paribas Cardif group insurance
subsidiaries liabilities.
Interest rate risk management for the general insurance funds and the
asset diversification policy have driven investment in real estate assets,
equities and fixed- or floating-income securities, including government
bonds particularly in the Eurozone countries.
Market risk falls into four categories:
■ interest rate risk:
Euro funds in underwritten life insurance policies are measured based
on either a contractual fixed rate or a variable rate, with or without
a minimum guaranteed return. All of these policies give rise to an
interest rate and asset value risk, corresponding to the risk that
the return on admissible assets is less than the contractual return
payable to policyholders or return payable defined in consideration
of the market expectations and the positioning of the market players.
In France, the average rate guaranteed by Cardif Assurance Vie in
2023 is below 0.1%;
■ liquidity risk:
liquidity risk with a 24-month horizon is managed by the Asset
Management Department. Asset-liability matching analyses over the
medium to long term are also carried out regularly by Asset-Liability
Management in order to supplement the measurement of the financial
risks incurred. They are based on medium- and/or long-term profit and
loss account and balance sheet projections prepared using a range of
economic scenarios. The results of these reviews are analysed in order
to determine any adjustments to required assets (through strategic
allocation, diversification, use of derivatives, etc.);
■ spread risk:
limits by issuer and rating type (Investment Grade, non-Investment
Grade) are monitored regularly. Issuer credit quality is also reviewed
frequently;
■ change in the value of assets:
The exposure to the risk of a decline in the value of assets (interest
rate, spread, equities, real estate) for contracts with a profit-sharing
clause is mitigated by the variable fees model (VFA), with changes in
the value of financial assets adjusting the cash flows from execution
for the share accruing to policyholders and the margin on contractual
services for the share accruing to the insure r.
GROUP BNP PARIBAS CARDIF
INVESTMENTS
The BNP Paribas Cardif group manages EUR 158.3 billion at net book
value and at market value, through its subsidiaries in France, mainly
Cardif Assurance Vie, representing EUR 127.7 billion, its subsidiaries in
Italy, mainly Cardif Vita, representing EUR 18.5 billion and its subsidiary
in Luxembourg, Cardif Lux Vie (EUR 7.9 billion). BNP Paribas Cardif group
investments break down as follows:
➤
TABLE 105: BREAKDOWN OF BNP PARIBAS CARDIF GROUP INVESTMENTS
(EXCLUDING INVESTMENTS IN UNIT-LINKED CONTRACTS)
In millions of euros
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Net book value
Market value
Net book value
Market value
Equities and variable-income securities (including UCI)
44,866
44,866
39,580
39,580
Real eastate
7,266
7,266
8,044
8,044
of which buildings
4,136
4,136
4,453
4,453
of which shares in real estate companies
3,130
3,130
3,591
3,591
Government bonds and similar
45,544
45,544
47,324
47,324
Other bonds
57,051
57,051
55,676
55,676
Derivative instruments and other
3,540
3,539
3,493
3,492
TOTAL
158,267
158,266
154,117
154,116
➤
TABLE N° 106: BOND EXPOSURE BY ISSUER AND RATING (EXCLUDING INVESTMENTS IN UNIT-LINKED CONTRACTS
AND EUROCROISSANCE CONTRACTS)
Exposure by rating
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Govies
Corporate
Total
Govies
Corporate
Total
AAA
7.9%
4.1%
12.0%
6.6%
3.7%
10.3%
AA
21.0%
13.6%
34.6%
22.3%
6.1%
28.3%
A
2.9%
23.7%
26.6%
5.5%
21.1%
26.6%
BBB
10.1%
13.7%
23.8%
9.7%
16.2%
26.0%
< BBB(*)
0.4%
2.6%
3.0%
0.2%
8.6%
8.8%
TOTAL
42.2%
57.8%
100%
44.3%
55.7%
100%
(*) Including unrated bonds.
➤
TABLE 107: EXPOSURE TO GOVERNMENT BOND AND SIMILAR BY ISSUING COUNTRY
(EXCLUDING INVESTMENTS IN UNIT-LINKED CONTRACTS AND EUROCROISSANCE CONTRACTS)
Exposure by country
In millions of euros
Rating
Net book value
31 December 2023
31 December 2022
restated according to IFRS 17 and 9
Net book value
France
AA
15,523
17,383
Italy
BBB
10,253
10,487
Spain
A-
1,904
3,656
Belgium
AA-
7,494
4,352
Germany
AAA
1,922
1,717
Austria
AA+
313
785
Netherlands
AAA
674
1,024
Ireland
A+
96
252
Portugal
BBB-
57
454
Others
7,308
7,521
TOTAL
45,544
47,632
INSURANCE UNDERWRITING RISK
Underwriting risk arises mainly from the surrende r, t he longevity and
the mortality risk in the savings business line, and in creditor insurance
contracts for the protection business.
There are three types of underwriting risk:
SAVINGS – SURRENDER RISK
Savings contracts include a surrender clause allowing policyholders to
request reimbursement of all or part of their accumulated savings. The
insurer is thus exposed to the risk of surrender volumes being higher than
the forecasts used for ALM purposes, leading to potential capital losses
on asset disposals needed to finance excess surrenders.
BNP Paribas Cardif adopted a monitoring framework and tools to reduce
the surrender risk:
■ expected short-, medium- and long-term liability flows are regularly
estimated and any liquidity gaps with expected asset flows are
identified and controlled in order to reduce the risk of large-
scale instant asset disposals. Changes in assets and liabilities are
projected over periods of up to forty years, in order to identify treasury
mismatches and over or under covered maturities giving rise to a
liquidity risk. These analyses are then used to determine the choice of
maturities for new investments and the assets to be sold;
■ the guaranteed revaluation of policies is completed by a participating
benefit feature, partly discretionary, that raises the total return to
a level in line with market benchmarks and reduces the risk of an
increase in surrenders. The policyholders' surplus reserve is the
mechanism in France that enables the surplus actually paid out to
be pooled and spread between generations of policyholders and
to manage the performance of contracts over time;
■ the return on financial assets may be protected through the use of
hedging instruments.
Average redemption rates for BNP Paribas Cardif group general funds
stood in France(1) at 7.9% (compared to 6.7% in 2022), in Italy at 21.1%
(compared 9.4% in 2022) and in Luxembourg at 23.8% (compared to
22.5% in 2022).
SAVINGS – UNIT-LINKED CONTRACTS WITH
A MINIMUM COVERAGE
The insurer's liabilities are covered by the assets held, which are used
as a valuation reference. The consistency of this coverage is controlled
at monthly intervals.
Certain unit-linked commitments provide for the payment of a death
benefit at least equal to the cumulative premiums invested in the
contract, whatever the conditions on the financial markets at the time
of the insured's death. The risk on these contracts is both statistical
(probability of a claim) and financial (market value of the units).
The capital guarantee is generally subject to certain limits. In France,
for example, most contracts limit the guarantee to one year (renewable
annually), an age limit of eighty to benefit from the guarantee and a
maximum of EUR 1 million per person insured.
The minimum coverage reserve, included in liabilities for the remaining
coverage, is (re)assessed every quarter and takes into account the
probability of death, based on a deterministic scenario, and stochastic
analyses of changing financial market prices. The reserve amounted
to EUR 4.9 million at 31 December 2023 (versus EUR 18.9 million at
31 December 2022).
PROTECTION
These risks result mainly from the sale of creditor insurance, as well as
activities as individual death and disability, extended warranty, theft,
accidental damage, third party liability, annuity policies in France, and
health, with geographic coverage in many countries.
Creditor insurance mainly covers death, disability, critical illness, work
disability, loss of employment and financial loss risks for revolving credit,
personal loans and mortgage loans. The insurance book comprises a
very large number of policies representing low risks and low premiums.
Margins depend on the size of the insurance book, effective pooling of
risks and tight control of administrative costs. The term of these contracts
is usually equal to the term of the underlying loan and the premium is
either deducted once upon issuance of the policy (single premium) or
deducted regularly throughout the term of the policy (regular or periodic
premiums).
Other contracts (individual death and disability, extended warranty, theft,
accidental damage, and annuity policies in France, civil liability, health)
are either for personal risk (death, accidental death, hospitalisation,
critical illness, healthcare expenses) or property & casualty risk and/
or responsibilities (accidental damage, breakdown or theft of consumer
goods or vehicles, civil liability, etc.). The individual sums insured under
these contracts are generally low, whether they are indemnities or lump-
sum payments.
Lastly, principally through its expanding entity, Cardif IARD in France,
motor contracts (material damage, civil liability, car assistance) and
comprehensive household coverage are also underwritten. This type of
insurance coverage is also developing in the international market, namely
in Latin America.
The governance set up to prevent and control actuarial risks in France
and internationally is based on guidelines and tools that describe the
principles, rules, methods and best practices to be followed by each
actuary throughout the policies' life cycle, the tasks to be performed by
the actuaries and their reporting obligations. It also sets out the practices
that are excluded or that are allowed only if certain conditions are met.
Risks underwritten must comply with delegation limits set at various
local and central levels depending on the estimated maximum acceptable
(1) On the main general fund.
losses, the estimated Solvency II capital requirements and the estimated
margins on the policies concerned. The experience acquired in managing
geographically diversified portfolios is used to regularly update risk
pricing databases comprising a wide range of criteria such as loan type
for creditor insurance, the type of guarantee and the insured population,
etc. Each contract is priced by reference to the profitability and return-
on-equity targets set by the Executive Management of the BNP Paribas
Cardif group.
Reinsurance is a complementary element of the underwriting risk
management system. Its objective is to protect the BNP Paribas Cardif
group against three main risks:
■ the so-called "peak" risk from exposure to an individual risk exceeding
a certain threshold, called "retention". The peak risk can be managed
by reinsurance which may take the form of surplus or excess of loss
treaties;
■ the so-called "claim accumulation" risk, which corresponds mainly to
the disaster risk associated with exposure to a single low occurrence
event, but very strong financial impact (concentration risk). This risk
can be reinsured in the form of a catastrophe excess of loss treaty;
■ risk on new products, linked to insufficient mutualisation, wrong
definition of the technical databases or uncertainty over the insured
portfolio data. This risk can be reinsured in the form of quota share, stop
loss or excess of loss treaties, depending on the level of risk identified.
Risk exposures are monitored periodically by the Executive Committee
of the BNP Paribas Cardif group through the Commitment Monitoring
Committees that are based on a two-pronged approach:
■ quarterly monitoring of loss ratios at each accounting quarter end;
■ supplemented by monitoring of the portfolio characteristics according
to a schedule based on the type of product (monthly, quarterly or
annually).
Contract pricing for annuity contracts are based on mortality tables
applicable under insurance regulations, adjusted in some cases by
portfolio-specific data which is certified by independent actuaries. The
result is a low annuity risk.
Underwriting risks are covered by various reserves in accordance with
IFRS 17:
■ a reserve for the cash flows related to the future coverage period,
including an adjustment for non-financial risks;
■ a reserve for the contractual service margin yet to be recognised;
■ a reserve for all incurred claims whether reported or not, including
an adjustment for non-financial risks.
The level of confidence used to determinate the non-financial risk
adjustment corresponds to the 70% quantile for the main countries.
5.11 Environmental, social and governance risk
The publications under this section cover the environmental, social and
governance (ESG) risk factors that may directly affect credit institutions
through their impacts on the business activity of the customers.
From a general perspective, the Group is integrating the ESG-related
risk factors into the Group's risk management framework, as potential
driver of existing financial risks. Given the evolving nature of these
methodologies, data and regulations related to ESG, the Group's set-up
may also be gradually adapted, as relevant.
The tools rolled out and continuously improved within the Group
cover the risk factors regarding the three pillars "E", "S", and "G". The
environmental and climate-related ones are the most developed. The
Supervisors and other external stakeholders pay particular attention to
identifying and managing these types of risks, considering their potential
impacts on the banking secto r.
BUSINESS STRATEGY AND PROCESSES
IMPACT OF ESG RISK FACTORS ON
BUSINESS STRATEGY AND PROCESSES
In its ambition to be a leader in sustainable finance and in the wake of its
2022-2025 Strategic Plan, built around the pillars Growth, Technology &
Sustainability (GTS), BNP Paribas has set itself the objective of directing
financial flows towards a more sustainable economy. The Group
consequently supports all its customers (corporates and individuals)
in their transition.
Three strategic pillars have been identified to accelerate the
implementation of the Group's sustainable development commitments:
firstly, the alignment of lending portfolios with the commitment to
carbon neutrality through sector-specific objectives, integrating customer
transition. Secondly, supporting clients towards a sustainable, low-
carbon economy, thanks to the mobilisation of the Group's networks of
internal experts on ESG issues through the Low-Carbon Transition Group.
Thirdly, strengthening the internal expertise, the management tools, the
processes and mechanisms enabling to support the evolving needs of
stakeholders and the training of employees, including the Sustainability
Academy.
In this context, the Group continuously strengthens its ESG risk
management framework. The Group monitors the potential impact
of ESG risk factors on the conduct of its business, counterparties and
investments on its own behalf or on behalf of third parties. Initially
focused on the sectors most sensitive from an ESG perspective, the
assessment of these ESG risks is gradually strengthened following the
development of the methods for measuring and analysing these factors
and their impact on financial risks, in particular those relating to credit
risk. Thus, the Group relies in particular on:
■ financing and investing policies which set ESG criteria governing the
Group's decisions to allocate financial services in some ESG sensitive
areas, in particular those related to sensitive industrial areas (see
section Commitment 3 Systematic integration and management of
Environmental, social and governance risks (ESG) in chapter 7);
■ the Global Credit Policy, supplemented by specific credit policies. The
policy requires that client engagement be grounded on solid ESG
assessment. The latter must be performed in accordance with the
defined ESG framework, notably integrating the questions from the
ESG Assessment (see appendix 5: ESG Assessment (ESG-A)) for large
corporates. It takes into consideration clients' reports and performance
indicators, that could be their transition plans or external data
assessing the transition, as relevant. The Group works directly with
its clients to identify, assess, and manage the ESG risks.
Finally, the Group has considerably expanded its training offer towards
employees to further support the consideration of ESG issues in its global
risk management. It now covers a broad spectrum ranging from general
awareness-raising on the ESG issues related to the energy transition, the
protection of biodiversity and respect for human rights, training on ESG
risk management setups and the offer of sustainable finance products.
The creation of the Sustainability Academy in 2022 enabled to accelerate
this process (see section Commitment 6 A learning company supporting
dynamic career path management in chapter 7).
OBJECTIVES, TARGETS AND LIMITS
RELATED TO ESG RISKS AND
OPPORTUNITIES
BNP Paribas has implemented a comprehensive ESG risk management
approach developed in compliance with the United Nations Sustainable
Development Goals (SDGs). It reflects a commitment at the highest
level of the Group to combine performance, responsibility, ethics, and
transparency. BNP Paribas' approach to corporate social responsibility
(CSR) embeds environmental and social risks on a short, medium, and
long-term scale as displayed in its CSR policy management dashboard
in line with the Growth-T e chnology-Sustainability (GTS) 2025 Strategic
Plan (see section 7.1 Strategy in chapter 7).
The Group strategy aims to contribute to directing capital flows towards
the transition to a more sustainable economy through banking and
financial services. In that regard, the Group also pays specific attention to
actions and practices that facilitate the alignment of its loan portfolio with
the Net-Zero in 2050 objective. By joining the Net-Zero Banking Alliance
(NZBA) in 2021, the Group has committed to extending the alignment
scope to a greater number of sectors and to a higher ambition: to finance
a carbon-neutral world by 2050, which corresponds to a limited increase
in temperature of 1.5°C compared to the pre-industrial era.
In May 2023, the Group has published its Climate report(1). It illustrates its
progress in supporting the transition of clients in developing renewable
and low-carbon energies, supporting the energy transition of individuals
and improving energy efficiency within its operating scope. The Climate
report presents the transition in the financing of low-carbon energy, now
the majority in its energy financing portfolio, and the intermediate targets
for reducing greenhouse gas emissions intensity of its credit portfolios
in the oil and gas sectors (matched by reductions in its financing for
this sector), electricity generation, automotive, steel, aluminium and
cement sectors. In 2024, the Group will extend the scope to new sectors
by defining new targets for reducing greenhouse gas emissions (see
section Commitment 3 Systematic integration and management of
Environmental, social and governance risks (ESG) in chapter 7).
In addition , the objectives, targets and limits to assess and address social
risks are developed in the strategy and in the Group's vigilance plan.
The Group's vigilance plan is implemented to identify and prevent the
risk of serious violations of human rights and fundamental freedoms, of
harm to human health and safety, and to the environment throughout its
business operations. The actions related to the Group's vigilance Plan are
defined by the CSR Department, prepared jointly with the stakeholders
in the main business lines and functions. These actions aim to cover all
the Group's business lines, functions and countries of operation. For more
information, refer to section 7.7 Vigilance plan in chapter 7.
Furthermore, the Group is committed to respecting and promoting
internationally recognised human rights standards as defined in
the International Charter of Human Rights, the OECD Guidelines for
(1) https://invest.bnpparibas/document/rapport-climat-2022.
Multinational Enterprises, and the United Nations Guidelines on
Business and Human Rights. The Group also recognises the fundamental
conventions established by the International Labour Organisation (ILO),
integral parts of the ILO Declaration on Fundamental Principles and
Rights at Work, as well as the principles of international humanitarian
law applicable in situations of armed conflict.
The Group has been an active member of the United Nations Global
Compact since 2003. The principles of the Global Compact, the Sustainable
Development Goals (SDGs) and the OECD Guidelines for Multinational
Enterprises serve as a framework for BNP Paribas to effectively guide
its corporate responsibility approach, particularly in terms of human
rights protection. As a founding member of the Principles for Responsible
Banking (2019), the Group committed itself to aligning its business model
and practices to help achieve the SDGs.
BNP Paribas complies with international covenants and local regulations
of the countries in which the Group operates.
Finally, the Group also monitors social issues related to health, safety
at work and impact on communities as part of its assessment process
using the ESG Assessment tool. (see section Commitment 3 integration
and management of environmental, social and governance risks (ESG)
in chapter 7).
GOVERNANCE
MANAGEMENT BODY SETTING ESG RISKS
AND OPPORTUNITIES FRAMEWORK
The Board of directors validates the Group's strategy on energy and
climate-related matters, with the support of two specialised Committees
(as described in the Governance section at 5.3 Risk Management):
■ the Corporate Governance, Ethics, Nominations and CSR Committee
(CGEN);
■ the Internal Control, Risk management and Compliance Committee
(CCIRC).
For environmental-related risks and opportunities in all fields, the
Chief Executive Officer and the Chief Operating Officer submit a strategy
proposal to the Board of directors, then subsequently oversee the
management of the Group and its performance.
The Chief Executive Officer is responsible for the climate strategy,
for which the definition and implementation through the Group's
commitments is managed by the Head of Company Engagement, a
member of the Group Executive Committee, in its role as CSR superviso r.
The Company Engagement Department, the CSR Department (which is
part of the Company Engagement Department), the operating entities
and functions are responsible for the implementation of the Group's
climate strategy.
Since 2021, the Group's ESG governance system has been extended to
cover all aspects of the Company and restructured to better incorporate
environmental and climate-related issues in the definition of the
strategy, its oversight and management of the associated risks. This
framework is based on well-defined governance, with responsibilities
shared between the Group and operating entities in order to facilitate
operational integration of the ESG policies, targets and risk framework.
This governance is led by:
■ the sustainable finance strategic Committee, which aims to validate
the Group's climate strategy and the implementation of the policy
of aligning the loan portfolio with the Paris Agreement. The main
associated indicators are discussed at regular meetings chaired by
the Chief Executive Officer within the framework of this Strategic
Committee. The topics related to sustainable financing discussed by
the members of the Committee are then transmitted to the business
lines and functions through their representatives;
■ the sustainable finance infrastructure Committee aims at industrialising
ESG processes, data and reporting. Its mission is to meet the growing
needs of customers, regulators and investors. Around the Deputy Chief
Executive Office r, i t brings together key contributors from different
business lines and functions;
■ the ESG Regulatory Committee at Executive Management level was set
up to assess the operational consequences of the main new regulations.
ESG RISK CONTROLLING AND REPORTING
FRAMEWORK
The Group General Management has settled an internal control
framework which main objective is to ensure the global risk management
and to give a reasonable assurance that related objectives are achieved
(see section 2.4 Internal Control in chapter 2). The BNP Paribas Group's
internal control monitors all types of risks to which the Group may be
exposed, including those resulting from ESG factors. It is applied at the
Group level and at the level of directly or indirectly controlled entities.
Environmental and social risk factors are progressively being integrated
into the usual reporting processes, considering progress on internal
analyses related to ESG issues as well as regulatory developments. At the
Board of directors' level, the CCIRC reviews the Risk Appetite Statement
(RAS), which contains metrics resulting from targets set within the NZBA
commitments.
Finally, environmental and social risk-related objectives are considered
in the remuneration policy (see section 1. Corporate governance in
chapter 2).
ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISK MANAGEMENT FRAMEWORK
DEFINITIONS AND FRAMEWORK
The ESG risk management framework of the Group has been built on
the ground of voluntary actions and commitments as well as regulatory
requirements and supervisory expectations.
The long-standing voluntary actions with respect to international
and European policy framework encompass good practices on both
environmental and social fields and include the following principles:
■ application of internationally recognised human rights standards as
defined in the Bill of Human Rights: the United Nations Declaration
of Human Rights, the International Covenant on Economic, Social and
Cultural Rights and the International Covenant on Civil and Political
Rights. This commitment is expressed at the highest level in the
BNP Paribas Declaration on Human Rights, signed by the Group's Chief
Executive Officer and promoting the respect of these rights within
BNP Paribas' sphere of influence;
■ adoption of social and environmental goals aligned with global
standards such as the United Nations Sustainable Development
Goals and those of the financial community such as the Principles
for Responsible Banking (PRB) and the Principles for Responsible
Investment (PRI);
■ actions following the framework of the United Nations Global Compact
(Advanced level) and the United Nations Women's Empowerment
Principles. The Group also complies with ILO Conventions concerning
social and labour aspects and the internationally accepted OECD
Guidelines for multinational enterprises;
■ commitment to align greenhouse gas (GHG) emissions arising from its
credit activities with the path required to achieve carbon neutrality in
2050. By joining the Net-Zero Banking Alliance (NZBA) and engaged
to align thanks to the methodology guidance developed by the NZBA,
the Group has been able to assess the trajectory of its portfolio on
the following sectors: power generation, oil and gas (upstream and
refining), automotive, cement, aluminium and steel;
■ application of the 4th version of the Equator Principles (EP4) related
to project finance activities. The Group works with its customers to
identify, assess, and manage the environmental and social risks and
impacts linked with major industrial and infrastructure projects.
Any potential negative impact of these projects on communities,
ecosystems or climate must be avoided, mitigated and/or offset.
With respect to legislative and regulatory requirements, the Group
abides by those in relation to the French Duty of Care law requiring,
in particula r, a v igilance plan to be established and implemented to
identify and prevent the risk of serious violations of human rights and
fundamental freedoms, and of harm to human health and safety and to
the environment.
Specific actions aiming at further embedding the ESG into the risk
management framework are handled within the ESG Methodologies,
Analyses and Risk Management program.
IDENTIFICATION OF ESG RISK,
ASSESSMENT AND LIMITS
The Group does not consider the ESG risks as risk types per se but rather
as risk factors which may potentially favou r, t rigger or worsen any types
of risk, and notably credit, market or operational risks.
Accordingly, ESG risk factors are incorporated in the Group's existing risk
management framework and processes.
Given the still evolving feature of the ESG topics, projects are ongoing to
further identify and integrate these risk factors into the risk management
framework, for instance in the Risk Appetite framework, and in the risk
identification process:
■ the Group Risk Appetite Statement (RAS), which is defined consistently
with the strategy of BNP Paribas, includes principles dedicated to
ESG risk factors. These principles, coupled with dedicated metrics,
define the risk tolerance of the Group on these dimensions. The Group
Risk Appetite Statement ESG section has been further reinforced in
2023 and now integrates 5 metrics with limits to control the Group
achievements with respect to its commitments on Thermal Coal and
Oil & Gas financing for 2025 and 2030. In addition, complementary
indicators, resulting from the definition of the Net-Zero targets setting
regarding the Oil & Gas, the Powe r, t he Low-Carbon Financing and
the Automotive sectors are part of the Risk Appetite Statement for
monitoring purposes;
■ the Group Risk Identification process (Risk ID) (see Appendix 5 Risk
identification & assessment process ("Risk ID")) has been adapted
and enriched to capture ESG dimensions and to inform the capital
adequacy assessment and the resilience tests.
The importance devoted by the Group to better taking into account ESG
aspects in its risk management framework is attested by the fact that,
in BNP Paribas 2023 Financial Institutions Global Risks Landscape(1), 13
among the 32 global risks retained and detailed in this work have an ESG
dimension (see the table below). This document is meant to be used by
Risk ID contributors who have to appreciate the extent to which these
global risks could have direct or indirect negative impacts for the Group.
(1) BNP Paribas Financial Institution Global Risks Landscape is a document, produced annually and presented to the Group RISK Anticipation Committee, that proposes a panorama of
the global risks (uncertainties, vulnerabilities, trends and threats) of all natures (economic, technological, business, geopolitical socio-political & environmental, etc) that should
be taken into account when trying to anticipate scenarios that could lead to direct or indirect damages for financial institutions, in the short, medium and longer term.
Time
horizons(1)
Severity
Trend
Type
Systemic Emerging
Technology and digital
Data protection, governance and strategy
Short term
High
Medium Term
Extremely high
Structural
Long term
Extremely high
Risks related to artificial intelligence
Short term
High
Structural

Medium Term
Extremely high
Long term
High
Changes in the business environment
Regulatory pressure and supervision
Short term
High
➞
Structural

Medium Term
High
Long term
High
Possible change in insurance and reinsurance
markets
Short term
High
Structural


Medium Term
Extremely high
Long term
Extremely high
Customer expectations and impact of
consumerism
Short term
High
➞
Medium Term
High
Structural
Long term
High
Financial expectations of investors
Short term
High
➞
Medium Term
High
Structural
Long term
Extremely high
Environment & Society
Economic impact of climate change & energy
transition
Short term
High
Structural


Medium Term
Very high
Long term
Extremely high
Imbalance in the supply and demand for natural
resources
Short term
High
Structural


Medium Term
Very high
Long term
Extremely high
Environmental and climatic risks due to the
collapse of ecosystems
Short term
High
Structural


Medium Term
Very high
Long term
Extremely high
Threats for health and resistance to pathogenic
agents
Short term
Medium
Structural


Medium Term
High
Long term
Extremely high
Bank and ESG concerns
Short term
High
Medium Term
Very high
Structural
Long term
Very high
Aggravation of inequalities, societal
fragmentation and civil unrest
Short term
High
Structural

Medium Term
Extremely high
Long term
Extremely high
Employee expectations and commitment,
recruitment & retention
Short term
High
Medium Term
High
Structural
Long term
High
(1) Time horizons are defined as follows: Short term from 0 to 3 years; Medium term from 3 to 10 years, Long term from 10 to 30 years.
Risk ID process has been designed to favour anticipation and to promote a
forward-looking approach when updating the Risk inventory of the Group,
which is the final outcome of the process. The risk inventory is made of
a set of "severe but plausible" elementary scenarios (the "risk events")
that reflect the ways the risk types faced by the Group could materialise.
For each risk event, Risk ID methodology requires to identify the risk
factors that underpin its materialisation, those that favou r, t rigger or
worsen the event. ESG-related are among the risk factors that shall be
considered by contributors to the Risk ID process.
Because in Risk ID, ESG risks are considered as risk factors, BNP Paribas
risk driver taxonomy that is used as a reference in Risk ID approach
encompasses a comprehensive set of risk factors covering environmental,
social and governance risk topics.
With regard to the way horizons are considered, if Risk ID contributors
are asked to identify and assess scenarios that represent concerns in
the coming 3 to 4 years (short to medium term), they are also invited to
anticipate scenarios that could materialise in the longer term.
To do so, four features in the Risk ID methodology enable to qualify the
probability and the time horizon of each risk event, notably those that
are favoured, triggered or worsened by ESG risk factors:
■ the intrinsic frequency, i.e., recurrence time, of the risk event (this
corresponds to the number of years between two risk events of the
same magnitude);
■ the imminence of the risk event that qualifies the probability that the
risk event occurs in the coming three years;
■ the probable evolution of the materiality of the risk event in the coming
year;
■ the relative materiality of the risk event on a 30-year horizon.
This approach enables the Group to consider in its risk inventory both
frequent, probable risk events and unusual, long-term, less probable but
more severe risk events. In addition, there are several other components of
ESG assessment that provide information to the risk identification process:
■ the country and sovereign risks assessment: BNP Paribas takes into
consideration the countries' Environmental, Social, and Governance
performances when gauging the overall "country risks" and is assessing
the sovereign counterparties' exposure to ESG risks and to more specific
transition and physical climate & environment risks. Country risk is an
essential component in the assessment of the creditworthiness of the
Group's counterparties; sovereign risks are central to the analysis of
the risks associated with the Group's exposures to public and banking
counterparties. More precisely, the assessment of sovereign ESG risks
is based on an internal methodology and on data from recognised
external sources (international organisations such as UN agencies,
NGFS - Network for Greening the Financial System, World Bank),
updated annually;
■ sectoral analysis: sectoral analyses and heatmaps on climate-related
risks are being developed by the Group. Climate transition risk heatmap
and climate physical risk heatmap stand as a key tools to appreciate
the materiality of the ESG risks, as it enables to map the Group's
exposures to sectors considered as vulnerable to climate transition
and/or physical risk factors, and to assess potential concentrations
thereof;
■ in the credit risk framework with the ESG Assessment deployment
(see Appendix 5 ESG Assessment (ESG-A)), aiming at strengthening
and further documenting monitoring process on ESG aspects both at
counterparty and transaction levels.
With respect to social risk factors and similarly to climate and
environmental-related risks, they are incorporated as risk factors in the
Group's process for identifying and assessing risks incurred by the Group,
thus enabling the identification and assessment of elementary severe
but plausible scenarios that are triggered, favoured or aggravated by
social risk factors. (See section Commitment 3 Systematic integration
and management of Environmental, social and governance risks (ESG)
in chapter 7 and Appendix 5 ESG Assessment (ESG-A)).
MEASUREMEN T, M ONITORING
& MITIGATION
In order to support the Group's Sustainable Finance ambitions, actions
related to ESG data and information systems are subject to a specific
"Data & Systems" stream, under the Group Sustainable Finance
Infrastructure Committee's umbrella.
In this context, the following framework has been set up to collect ESG
needs within the Group:
■ identification and prioritisation of the various ESG use-cases conducted
by the Group Data Office and ITG Architecture for the Group Entities
and Functions. At the end of 2023, 48 use cases have been identified,
of which 38 are under analysis;
■ identification of data needs for each use-case: definition of the sourcing
strategy either via the purchase from external ESG data providers or
internal sourcing relying on the Group's existing processes;
■ in case of external sourcing, integration, storage and distribution of the
data by the impACT platform, the Group ESG data platform;
■ deployment of the ESG Data Management system: classification of data
into data families, update of the ESG data catalogue and the ESG data
dictionary into We Data (Group data management tool), implementation
of data quality indicators to measure data completeness, data validity.
Feedback loops are organised with data providers to address data
quality issues and remediation;
■ implementation of a governance to define the data collection
instructions, the data management and estimation rules, in order to
optimise the quality, the exhaustivity and the freshness of ESG data.
As highlighted in the section related to business strategy and processes,
since 2011, BNP Paribas has gradually been incorporating ESG issues
in its risk management framework, notably drawing on the following:
■ financing and investment policies, named "sector policies", have been
established in particular for sectors extensively associated to ESG
issues;
■ provisions relating to social and environmental responsibility
(including climate) have been added in the General Credit Policy and
specific policies, and are progressively reinforced;
■ adherence to the Equator Principles on project financing;
■ integration of ESG criteria in collateral valuation policies;
■ integration of ESG criteria into supply chain management;
■ integration of ESG criteria into asset management activities;
■ offering of enhanced ESG training programs for all staff of the
Group (see section Commitment 2 Ethic of the highest standards in
chapter 7);
■ dedicated programmes to reinforce the integration of ESG into the risk
management framework;
■ active participation in open-source initiatives for methodology
development regarding climate risk analyses, for instance, BNP Paribas
is one of the founding members of the Open-Source Climate Risk (OS-
Climate) initiative.
Besides, tools to enhance forward-looking assessment capabilities are
being developed. In particula r, c limate scenarios analyses are being
expanded, covering climate-related risk factors, in that respect:
■ use of traditional regulatory and internal stress tests to measure
the consequences of a crisis scenario on an institution's solvency
and liquidity situation. Gradually, this scenario analysis framework
has been enriched for use in analysing the consequences of global
warming and the energy transition on asset portfolios. Progress has
been made in the integration of longer horizons (e.g. 50 years), to
project the evolution in the breakdown of sectors in the institution's
balance sheet, differentiated scenarios according to a detailed sectoral
segmentation and to take into account specific factors such as the
cost of carbon emissions, technological innovation and physical risks.
Improvements to the climate scenario analyses framework initiated in
2022, which include the development of a long-term strategy for the
dynamic balance sheet projection in line with the different transition
risk scenarios;
■ climate scenarios addressing transition risk and physical risk have
been included in the ICAA P, r eflecting the increasing importance of
climate in the Bank's strategy, climate being one of the pillars of the
new 2022-2025 strategic plan. Consistent with this pivotal role of
climate change and energy transition, these scenarios are part of a
more general treatment of climate-related risks and opportunities
in the ICAA P, w hich are documented in a dedicated section of the
ICAA P. T his section includes a description of how climate change and
energy transition are embedded in Group processes, of how the ICAAP
infrastructure increasingly addresses climate-related risks and of the
outcome of climate scenarios;
■ climate scenario analyses in the ICAAP are not limited to credit risk
and also include:
■
an assessment in an adverse scenario of losses calculated from
operational risk events for which climate risk has been identified
as a risk facto r,
■
a reputation risk scenario, in which the impacts of climate-related
controversies on the revenues of various business lines are assessed.
Those different scenarios enable the Group to determine the
materiality and sensitivity of climate risk factors to risks it is
exposed to and for which climate risk can be a relevant risk factor
and to assess the impact of climate scenarios on its business model.
This concerns in particular business risk, credit risk and operational
risk. Climate risk scenarios remain exploratory in nature and cover
time horizons that far exceed horizons used for capital planning.
As a result, although integrated in the ICAAP for risk management
purposes, climate scenarios are not used to calculate an impact on
the Group' capital position,
■
for further information on the Group's developing climate stress
testing infrastructure, please also refer to section 5.3 Risk
Management which provides information on the Group's stress
testing infrastructure, including relating to climate.
The Group does not calculate a capital charge linked to climate-related
risk, which is considered a risk factor of risks such as business, credit or
operational risk. The Group is, howeve r, a ble to assess the contribution
of events that can be triggered or worsened by climate risk to its
internal capital requirement. The assessment relies on the Group's risk
identification process.
The Group's resilience to environmental and social risk is underpinned
by its diversified, integrated business model. The diversity of the
business lines, the business sectors in which the Group operates and
the geographic areas in which it is established is a key asset to mitigate
risks of all kinds, whether they are climate, related to biodiversity or
other environmental risks.
In parallel with internal climate scenario analyses, the Group continues
to participate in supervisory climate stress test exercises. Notably, the
Group participates in the "One-off Fit-for-55 climate scenario analysis"
for which EBA launched in July a public consultation on draft templates
for collecting data to carry out its climate scenario by the end of 2023.
A cross-fertilisation occurs between internal climate scenario analyses
and climate-related exercises mandated by supervisors.
Several other elements can be highlighted as contributing significantly
to the Group's resilience to environmental risks:
■ the integration of the transition to carbon neutrality at the core of the
2025 strategic plan and the commitment to align its activities with
a carbon neutrality trajectory by 2050. Formalised by the Group's
membership in the Net-Zero Banking Alliance, BNP Paribas Cardif's
membership in the Net-Zero Asset Owner Alliance and BNP Paribas
Asset Management's membership in the Net-Zero Asset Manager
Initiative, those commitments contribute to supporting the reduction
in the Group's exposure to economic players responsible for generating
the highest GHG emissions, and thus its exposure to transition risks,
particularly those related to changes in public policies aimed at
reducing emissions;
■ expansion of teams dedicated to supporting customers in their
transition (e.g. Low-Carbon Transition Group);
■ enhancement of the Group's capabilities to assess and manage
environmental risks and incorporate them in its decision-making
processes as described in other chapters.
Regarding social risks, activities of the corporate clients may introduce
social risks related to the respect of human rights particularly in the area
of workers' rights, and may have a negative impact on local communities.
Hence, the Group encourages clients to manage their own activities with
respect to human rights. It also endeavors to identify, assess, monitor
and encourage the improvement of the current and future performance
of clients operating in sensitive sectors through the application of
its investment and financing policies. This set-up has been further
strengthened with the deployment of the ESG assessment of the Group's
customers on five dimensions, including social (health, safety and impact
on communities). In case of suspicion or identification of serious human
rights abuses by a BNP Paribas customer or a company in its portfolio,
the Group conducts in-depth due diligences with the company concerned.
In addition, the adherence to international and European policy
framework, which incorporates principles on the social field, can also
contribute to reduce potential social risks. For example, as a signatory
member of the Equator Principles, the Group ensures that any negative
impacts of a project finance on communities, ecosystems or the climate
are avoided and, if necessary, remedied; and encourages clients to obtain
the Free, Prior and Informed Consent (FPIC) of the local communities
impacted by their projects.
Further information is displayed in the Commitment 3 Systematic
integration and management of Environmental, social and governance
risks (ESG) and Commitment 8 Combat Social Exclusion and Support
HR in chapter 7.
MEASURING THE POTENTIAL RISK
OF CLIMATE CHANGE
Despite the developments in recent years in terms of standardising
methodologies for the quantitative analysis of ESG factors and their
impact on traditional financial risks, they must be interpreted with
caution, taking into account their limitations. In the response to the
public consultation of its Report on prudential disclosures for ESG(1)
of January 2022, the EBA underlines the difficulties relating to these
methodologies, namely the low historical depth, the unavailability of
standardised and comparable data on the various geographies and
sectors of activity, the multiplicity of methods and scenarios used to
estimate missing data, among others.
The tables presented in this section should be read in conjunction with
the methods and definitions used and described in the accompanying
narrative. In the absence of a reference proposed by the supervisory
authorities, the Group has chosen to refe r, w henever possible, to European
definitions or regulatory exercises. When this was not possible, the
information was produced on the basis of forward-looking plans and
projections, prepared in good faith by the Group based on internal
definitions and estimates. The Group constantly adapts its methodologies
taking into account the development of knowledge, the availability of data,
the establishment or updating of recognised guidelines and standards.
Certain factors, which are external to the Group, may cause variations in
the forecasts taken into account to prepare forward-looking plans and
projections, such as changes in climate scenarios, changes in economic
conditions or geopolitical risks. The information contained in this section
may, therefore, be significantly revised in future publications.
As a result, the tables presented in this section can only be assessed on
the date of publication of this document and must be interpreted taking
into account the uncertainties related to the methodologies, projections
and data used.
(1) EBA draft ITS on Pillar 3 disclosures on ESG risks.pdf (europa.eu).
BANKING BOOK - INDICATORS OF POTENTIAL CLIMATE CHANGE TRANSITION RISK
➤
TABLE N° 108: CREDIT QUALITY OF EXPOSURES BY SECTOR, EMISSIONS AND RESIDUAL MATURITY
a
b
c
d
e
In millions of euros
Gross carrying amount
of which exposures
towards companies
excluded from
EU Paris-Aligned
of which
environmentally
Benchmarks sustainable(CCM)
of which
Stage 2
of which
non-performing
exposures
1
Exposures towards sectors that highly contribute
to climate change(*)
327,955
22,630
4,117
38,902
10,646
2
A – Agriculture, forestry and fishing
12,989
39
0
969
460
3
B – Mining and quarrying
7,623
5,389
22
544
193
4
B.05 – Mining of coal and lignite
124
124
0
58
3
5
B.06 – Extraction of crude petroleum
and natural gas
3,755
3,755
11
140
101
6
B.07 – Mining of metal ores
1,656
101
1
260
63
7
B.08 – Other mining and quarrying
690
11
3
52
20
8
B.09 – Mining support service activities
1,398
1,398
7
35
6
9
C – Manufacturing
92,356
4,889
1,115
9,444
2,603
10
C.10 – Manufacture of food products
12,857
276
1
1,081
339
11
C.11 – Manufacture of beverages
3,279
145
46
12
C.12 – Manufacture of tobacco products
6
1
13
C.13 – Manufacture of textiles
961
297
87
14
C.14 – Manufacture of wearing apparel
1,156
113
70
15
C.15 – Manufacture of leather and related products
406
105
32
16
C.16 – Manufacture of wood and of products
of wood and cork
1,149
8
5
96
48
17
C.17 – Manufacture of paper and paper products
1,741
336
38
18
C.18 – Printing and reproduction of recorded media
791
0
109
58
19
C.19 – Manufacture of coke and refined
petroleum products
2,987
2,987
17
506
10
20
C.20 – Manufacture of chemicals and chemical
products
7,878
541
25
771
124
21
C.21 – Manufacture of basic pharmaceutical
products and pharmaceutical preparations
4,939
1
525
11
22
C.22 – Manufacture of rubber products
4,919
168
1
320
199
23
C.23 – Manufacture of other non-metallic
mineral products
3,103
0
29
291
160
24
C.24 – Manufacture of basic metals
5,393
100
164
441
72
25
C.25 – Manufacture of fabricated metal
products, except machinery and equipment
4,749
8
17
458
237
26
C.26 – Manufacture of compute r, e lectronic and
optical products
6,686
207
15
574
67
27
C.27 – Manufacture of electrical equipment
4,635
219
245
578
45
28
C.28 – Manufacture of machinery and
equipment n.e.c.
8,236
30
67
448
459
29
C.29 – Manufacture of motor vehicles, trailers
and semi-trailers
7,038
23
60
1,015
264
f
g
h
l
m
n
o
p
31 December 2023
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
non-performing ≤5 years
> 5 year
≤ 10 years
≤ 20 years
> 10 year
> 20 years
Average
weighted
maturity
(in years)
of which Stage 2
of which
(7,032)
(821)
(5,659)
269,597
29,396
27,266
1,723
4
(341)
(40)
(261)
10,945
1,124
841
78
4
(124)
(5)
(108)
6,678
840
103
1
3
(4)
()
(3)
124
3
(63)
(1)
(58)
3,336
392
27
0
4
(31)
(2)
(26)
1,268
388
4
(17)
(2)
(14)
628
59
2
0
3
(9)
()
(6)
1,322
1
75
3
(2,035)
(235)
(1,663)
87,074
3,822
1,172
289
3
(243)
(37)
(183)
12,140
545
143
29
3
(30)
(2)
(22)
3,161
80
37
1
3
()
6
4
(67)
(3)
(62)
929
10
10
12
3
(71)
(9)
(49)
1,143
8
4
1
2
(24)
(2)
(22)
400
4
0
2
2
(35)
(3)
(27)
965
175
8
1
4
(38)
(4)
(30)
1,640
92
3
6
2
(37)
(5)
(29)
744
36
7
3
3
(30)
(16)
(10)
2,097
445
445
5
(85)
(15)
(52)
7,056
720
76
26
3
(23)
(7)
(8)
4,698
219
8
14
4
(138)
(8)
(125)
4,762
100
28
29
3
3
(120)
(5)
(110)
2,922
144
24
13
(64)
(6)
(55)
5,071
262
44
16
3
(193)
(16)
(170)
4,311
273
128
38
3
(91)
(23)
(58)
6,443
210
8
26
3
(72)
(24)
(40)
4,530
59
28
18
2
(297)
(5)
(287)
8,053
135
21
27
3
2
(223)
(9)
(214)
6,991
38
5
3
a
b
c
d
e
In millions of euros
Gross carrying amount
of which exposures
towards companies
excluded from
EU Paris-Aligned
of which
environmentally
Benchmarks sustainable(CCM)
of which
Stage 2
of which
non-performing
exposures
30
C.30 – Manufacture of other transport
equipment
4,331
213
372
584
47
31
C.31 – Manufacture of furniture
1,013
0
108
35
32
C.32 – Other manufacturing
1,614
0
3
238
98
33
C.33 – Repair and installation of machinery
and equipment
2,490
106
94
305
57
34 supply
19,080
D – Electricity, gas, steam and air conditioning
4,760
1,339
1,546
312
35
D35.1 – Electric power generation,
transmission and distribution
15,711
1,943
1,323
1,164
281
36
D35.11 – Production of electricity
11,946
1,528
824
1,100
276
37
D35.2 – Manufacture of gas; distribution
of gaseous fuels through mains
2,797
2,797
13
192
29
38
D35.3 – Steam and air conditioning supply
571
20
3
190
2
E – Water supply; sewerage, waste management
39 and remediation activities
2,528
102
89
276
108
40 F– Construction
25,615
332
374
2,923
2,112
41
F.41 – Construction of buildings
15,728
87
134
1,585
1,473
42
F.42 – Civil engineering
3,713
236
70
626
200
43
F.43 – Specialised construction activities
6,173
9
171
711
439
G – Wholesale and retail trade; repair of motor
44 vehicles and motorcycles
69,868
4,165
654
10,492
2,120
45 H– Transportation and storage
29,001
2,892
311
3,836
591
46
H.49 – Land transport and transport
via pipelines
8,600
1,754
93
912
335
47
H.50 – Water transport
11,170
934
6
1,875
170
48
H.51 – Air transport
3,162
563
21
49
H.52 – Warehousing and support activities
for transportation
5,888
205
212
473
60
50
H.53 – Postal and courier activities
181
0
12
5
51 I– Accommodation and food service activities
7,587
20
1
1,761
653
52 L– Real estate activities
61,308
41
212
7,111
1,494
Exposures towards sectors other than those
53 that highly contribute to climate change(*)
125,900
2,823
4,473
12,197
3,606
54 K– Financial and insurance activities
23,702
619
454
1,695
793
55 Exposures to other sectors (NACE codes J, M – U)
102,198
2,204
4,019
10,502
2,813
56 TOTAL
453,855
25,453
8,590
51,100
14,252
(*) In accordance with Commission Delegated Regulation (EU) 2020/1818 supplementing Regulation (EU) 2016/1011 as regards minimum standards for EU
Climate T r ansition Benchmarks and EU Paris-aligned Benchmarks – regulation on climate benchmarks: the sectors listed in Annex I, sections A to H and
section L, of Regulation (EC) No. 1893/2006
f
g
h
l
m
n
o
p
31 December 2023
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
non-performing ≤5 years
> 5 year
≤ 10 years
≤ 20 years
> 10 year
> 20 years
Average
weighted
maturity
(in years)
of which Stage 2
of which
(26)
(7)
(18)
4,150
100
78
3
2
(32)
(4)
(25)
929
56
27
1
2
(53)
(15)
(34)
1,540
47
11
16
3
3
(41)
(7)
(32)
2,394
63
28
5
(138)
(17)
(102)
13,677
2,323
2,876
204
5
(118)
(12)
(91)
10,650
2,194
2,680
188
7
(110)
(12)
(85)
7,305
1,864
2,626
150
6
(19)
(4)
(11)
2,572
106
119
1
(2)
()
()
455
22
77
16
1
(72)
(4)
(62)
1,949
476
83
21
3
(1,499)
(49)
(1,395)
23,246
1,126
1,140
102
3
(936)
(22)
(886)
14,263
681
706
79
3
(153)
(11)
(131)
3,603
53
52
5
4
(410)
(16)
(378)
5,381
393
381
18
4
(1,323)
(172)
(1,033)
64,766
3,564
1,267
271
3
(423)
(51)
(335)
23,390
3,803
1,660
148
4
4
(231)
(16)
(200)
7,577
653
359
11
(113)
(10)
(100)
8,352
2,250
568
0
5
(19)
(6)
(11)
2,625
359
171
6
5
4
(55)
(18)
(21)
4,661
538
559
130
(4)
0
(3)
176
2
3
0
2
(347)
(69)
(262)
5,774
1,117
642
54
4
(730)
(181)
(438)
32,097
11,174
17,480
557
7
(1,828)
(265)
(1,385)
108,287
10,580
5,048
1,985
2
(502)
(58)
(408)
18,745
3,142
1,139
676
2
(1,326)
(206)
(977)
89,542
7,438
3,910
1,309
3
(8,860)
(1,086)
(7,044)
377,884
39,949
32,314
3,708
4
a
b
d
e
In millions of euros
Gross carrying amount
of which exposures
towards companies
excluded from
EU Paris-Aligned
Benchmarks(**)
of which
Stage 2
of which
non-performing
exposures
1
Exposures towards sectors that highly contribute to climate change
330,046
24,319
46,639
10,472
2
A – Agriculture, forestry and fishing
13,302
38
1,409
526
3
B – Mining and quarrying
9,501
6,892
909
194
4
B.05 – Mining of coal and lignite
183
183
14
40
5
B.06 – Extraction of crude petroleum and natural gas
5,221
5,221
571
123
6
B.07 – Mining of metal ores
2,114
176
203
4
7
B.08 – Other mining and quarrying
691
19
40
23
8
B.09 – Mining support service activities
1,293
1,293
81
4
9
C – Manufacturing
91,160
5,218
11,715
2,723
10
C.10 – Manufacture of food products
13,250
309
1,743
432
11
C.11 – Manufacture of beverages
4,116
600
53
12
C.12 – Manufacture of tobacco products
14
13
C.13 – Manufacture of textiles
1,241
199
83
14
C.14 – Manufacture of wearing apparel
1,715
105
92
15
C.15 – Manufacture of leather and related products
522
193
30
16
C.16 – Manufacture of wood and of products of wood and cork,
1,125
103
48
17
C.17 – Manufacture of paper and paper products
1,979
32
385
66
18
C.18 – Printing and reproduction of recorded media
709
122
67
19
C.19 – Manufacture of coke and refined petroleum products
3,565
3,565
172
12
20
C.20 – Manufacture of chemicals and chemical products
6,402
535
1,190
132
21
C.21 – Manufacture of basic pharmaceutical products and
pharmaceutical preparations
5,416
518
6
22
C.22 – Manufacture of rubber products
4,877
207
528
127
23
C.23 – Manufacture of other non-metallic mineral products
3,065
318
157
24
C.24 – Manufacture of basic metals
5,326
108
644
85
25
C.25 – Manufacture of fabricated metal products, except
machinery and equipment
5,015
8
674
255
26
C.26 – Manufacture of compute r, e lectronic and optical products
4,304
35
197
65
27
C.27 – Manufacture of electrical equipment
4,665
238
461
52
28
C.28 – Manufacture of machinery and equipment n.e.c.
9,376
1
1,072
431
29
C.29 – Manufacture of motor vehicles, trailers and semi-trailers
6,879
1
998
289
30
C.30 – Manufacture of other transport equipment
3,274
173
624
88
31
C.31 – Manufacture of furniture
743
150
44
32
C.32 – Other manufacturing
1,619
242
42
33
C.33 – Repair and installation of machinery and equipment
1,961
6
479
68
f
g
h
l
m
n
o
p
31 December 2022
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
exposures ≤5 years
> 5 year
≤ 10 years
≤ 20 years
> 10 year
> 20 years
Average
weighted
maturity
(in years)
of which Stage 2
of which non-
performing
(7,475)
(1,112)
(5,754)
270,655
29,967
28,006
1,418
4
(325)
(69)
(211)
11,255
1,160
800
88
4
(141)
(15)
(111)
8,562
707
224
7
3
(22)
(22)
183
3
(69)
(1)
(63)
4,832
159
224
6
3
(19)
(9)
(5)
1,739
376
4
(21)
(2)
(18)
648
41
1
3
(10)
(3)
(4)
1,160
132
3
(2,239)
(323)
(1,742)
85,109
4,743
1,063
245
3
(310)
(60)
(220)
12,432
674
122
23
3
(38)
(7)
(23)
3,978
107
30
3
14
4
(69)
(5)
(61)
1,212
14
9
7
3
(72)
(12)
(57)
1,669
34
8
5
2
(28)
(7)
(21)
516
4
2
2
(41)
(5)
(33)
980
126
18
1
3
(68)
(7)
(55)
1,926
46
2
6
2
(39)
(7)
(29)
671
27
8
3
3
(16)
(2)
(10)
2,656
429
479
5
(89)
(20)
(55)
5,568
770
44
21
3
2
(12)
(3)
(3)
5,355
43
5
13
(124)
(23)
(89)
4,587
232
32
25
3
(125)
(16)
(102)
2,852
163
37
14
3
(142)
(27)
(107)
5,030
219
52
25
3
(198)
(23)
(161)
4,518
388
83
26
3
(67)
(5)
(53)
3,638
633
8
25
3
(58)
(6)
(43)
4,119
501
39
7
2
(298)
(24)
(260)
9,221
114
22
19
3
(243)
(26)
(204)
6,832
42
3
2
2
(73)
(17)
(56)
3,258
15
1
1
(36)
(4)
(30)
677
45
20
1
3
(42)
(12)
(27)
1,559
31
13
15
3
(50)
(5)
(42)
1,841
88
27
5
3
a
b
d
e
In millions of euros
Gross carrying amount
of which exposures
towards companies
excluded from
EU Paris-Aligned
Benchmarks(**)
of which
Stage 2
of which
non-performing
exposures
34
D – Electricity, gas, steam and air conditioning supply
21,213
5,200
1,874
137
35
D35.1 – Electric power generation, transmission and distribution
16,965
1,549
1,250
129
36
D35.11 – Production of electricity
13,014
1,165
1,098
121
37
D35.2 – Manufacture of gas; distribution of gaseous fuels
through mains
3,914
3,650
610
8
38
D35.3 – Steam and air conditioning supply
334
15
39
E – Water supply; sewerage, waste management and remediation
activities
2,935
3
195
148
40
F – Construction
25,096
315
3,292
2,272
41
F.41 – Construction of buildings
15,665
89
1,768
1,591
42
F.42 – Civil engineering
3,175
180
533
181
43
F.43 – Specialised construction activities
6,256
46
992
499
44
G – Wholesale and retail trade; repair of motor vehicles and
motorcycles
63,307
3,380
11,433
1,939
45
H – Transportation and storage
30,514
3,267
6,806
806
46
H.49 – Land transport and transport via pipelines
8,356
1,863
889
286
47
H.50 – Water transport
12,297
1,231
3,260
230
48
H.51 – Air transport
3,519
2
2,102
102
49
H.52 – Warehousing and support activities for transportation
6,197
171
547
185
50
H.53 – Postal and courier activities
145
8
3
51
I – Accommodation and food service activities
7,576
2,299
528
52
L – Real estate activities
65,442
6
6,708
1,199
53
Exposures towards sectors other than those that highly contribute
to climate change(*)
128,619
3,015
16,595
2,858
54
K – Financial and insurance activities
26,945
1,302
3,369
669
55
Exposures to other sectors (NACE codes J, M – U)
101,673
1,713
13,226
2,189
56
TOTAL
458,665
27,334
63,234
13,330
(*) In accordance with Commission Delegated Regulation (EU) 2020/1818 supplementing Regulation (EU) 2016/1011 as regards minimum standards for EU
Climate T r ansition Benchmarks and EU Paris-aligned Benchmarks – regulation on climate benchmarks: the sectors listed in Annex I, sections A to H and
section L, of Regulation (EC) No. 1893/2006.
(**) Amounts supplemented by additional data.
The Group's total exposure to non-financial corporates stands at
EUR 454 billion at 31 December 2023 including loans and advances, debt
securities and equity instruments not held for trading. The table shows
a mapping of exposures by sector with the detail of those considered
to significantly contribute to climate change and may not, under any
circumstances, be interpreted as an exposure to transition risk as such.
The exposure towards companies excluded from Paris-aligned
benchmarks(1) stands at EUR 25 billion and is mainly composed of
exposure towards companies active in fossil fuel. These companies have
been identified through a double screening based on:
1. the identification of counterparts belonging to oil, gas and coal sectors
as identified in the Group's internal activity referential or according to
the NACE code declared by the counterpart;
2. the identification of counterparts deriving their revenue from the fossil
fuel value chain as per defined in the Climate Benchmark Standard
Regulation(2) obtained from an external data provide r.
(1) In accordance with article 12 (1) (d) to (g) and article 12 (2) of Regulation (EU) 2020/1818.
(2) As per Regulation (EU) 2020/1818, companies active in fossil fuel are those that derive revenues from exploration, mining, extraction, production, processing, storage, refining or
distribution, including transportation, storage and trade, of fossil fuels with the following thresholds 1% for coal, 10% for oil, 50% for gas.
f
g
h
l
m
n
o
p
31 December 2022
Accumulated impairment, accumulated negative changes in fair
value due to credit risk and provisions
exposures ≤5 years
> 5 year
≤ 10 years
≤ 20 years
> 10 year
> 20 years
Average
weighted
maturity
(in years)
of which Stage 2
of which non-
performing
(135)
(43)
(68)
14,868
2,924
3,286
135
5
(106)
(28)
(60)
11,043
2,641
3,146
135
5
(91)
(28)
(50)
7,582
2,219
3,101
112
5
(28)
(14)
(9)
3,533
282
100
1
(1)
292
2
41
1
3
(134)
(4)
(124)
2,504
346
84
(1,600)
(83)
(1,456)
22,386
1,316
1,342
53
3
(983)
(46)
(911)
13,896
849
884
35
3
(130)
(10)
(108)
3,036
80
52
7
3
(488)
(27)
(437)
5,453
387
406
10
3
(1,308)
(195)
(984)
58,452
3,416
1,248
190
3
(578)
(121)
(411)
25,132
3,268
1,982
133
4
(192)
(32)
(134)
7,211
647
488
10
4
(177)
(27)
(140)
9,724
1,655
918
5
(54)
(38)
(20)
3,004
417
90
7
4
(153)
(23)
(114)
5,053
547
483
115
4
(3)
(2)
140
2
2
2
(365)
(113)
(232)
5,868
1,081
596
31
4
(649)
(146)
(415)
36,520
11,005
17,381
536
7
(1,803)
(358)
(1,244)
112,001
10,569
4,172
1,877
1
(349)
(101)
(195)
22,115
2,854
1,295
682
1
(1,455)
(257)
(1,049)
89,886
7,715
2,877
1,195
2
(9,278)
(1,470)
(6,998)
382,655
40,536
32,178
3,295
3
The environmentally-sustainable outstandings relate to the exposures
identified as aligned to the climate change mitigation objective in relation
with the Regulation EU 2020/852. They only cover financial instruments
with general purpose, granted to European corporates subject to the
Non-Financial Reporting Directive. The alignment share is calculated
on the basis of the ratio of EU T a xonomy aligned turnover disclosed by
these counterparts. The methodology is detailed in section 7.9 Activities
aligned within the meaning of the European T a xonomy in chapter 7.
Financed GHG emissions of our non-financial counterparts are not
disclosed, as authorised by the regulations during the phasing-in period
to June 2024, as the quality of the underlying data coming from our
clients is still not available with a sufficient quality as not required by
regulation yet. Hence, more than two-thirds of the portfolio would rely on
low quality estimated data, based on geographical and sectorial average,
not taking into consideration the specific situation of our clients even in
the most emitting sectors.
Internally within the risk identification process (Risk ID), the bank
identifies the climate change risk drivers, including three drivers related
to the transition, and how they materialise into the traditional financial
(e.g. credit risk) and non-financial risks (e.g. legal risk, operational risk).
In particula r, i t highlights how credit exposure to sector highly sensitive
to the transition (e.g. Power generation secto r, f ossil fuel extraction)
could materialise through transmission channel (e.g. new climate-related
regulations, shifts in prices and asset values) into credit risk, which is
the most salient risk for the banking book.
The Group has adapted its Credit risk management by taking into account
ESG risks and transition risk in particular into the Global Credit policy
and into the specific credit policies when it is relevant.
➤
TABLE 109: EXPOSURES TO TOP 20 CARBON-INTENSIVE FIRMS
a
b
c
d
e
31 December 2023
Gross carrying amount
(in millions of euros)carrying amount (aggregate)(*)
Gross carrying amount
towards the counterparties
compared to total gross
of which
environmentally
sustainable (CCM)
(in millions of euros)
Weighted
average
maturity
(in years)
Number of top 20
polluting firms included
1
TOTAL
6,407
0.58%
14.7
4
11
(*) For counterparties among the top 20 carbon emitting companies in the world.
The information above does not include the counterparties for which the commercial relationship has ended and for which the residual outstanding
is not significant.
a
b
c
d
e
31 December 2022
Gross carrying amount
(in millions of euros)carrying amount (aggregate)(*)
Gross carrying amount
towards the counterparties
compared to total gross
of which
environmentally
sustainable (CCM)
(in millions of euros)
Weighted
average
maturity
(in years)
Number of top 20
polluting firms included
1
TOTAL
7,885
0.72%
-
4
16
(*) For counterparties among the top 20 carbon emitting companies in the world
The identification of the counterparties making up the list of the 20 most
carbon-intensive firms worldwide is based on the public list provided
by the Climate Accountability Institute as for 2018(1). This list shows
limits as notably it only contains companies active in fossil fuel activities
compared to the others proposed in the EBA instructions, nevertheless it
is also the most recent and the one for which the Group has computed
the highest exposure.
The assets included in the table are composed of loans and advances,
debt securities and equity instruments not held for trading granted to
these business groups. They are compared to the gross carrying amount
of the assets included in the banking book, excluding financial assets
held for trading and held for sale.
After matching on a name-by-name basis the Climate Accountability
Institute list with the internal third parties referential at business group
level, the related carrying amount, corresponding to the financing
of 11 of them, has been aggregated and stands at EUR 6 billion at
end-December 2023.
The environmentally-sustainable gross carrying amount relates to the
exposures identified as aligned to the climate change mitigation objective
in relation with the Regulation EU 2020/852. They only cover financial
instruments with general purpose, granted to European corporates
subject to the Non-Financial Reporting Directive. The alignment share
is calculated on the basis of the ratio of EU T a xonomy aligned turnover
disclosed by these counterparts. The methodology is detailed in section
7.9 Activities aligned within the meaning of the European T a xonomy in
chapter 7.
(1) https://climateaccountability.org/wp-content/uploads/2020/12/T o pTwenty-CO2CH4-1751-2018-T a ble.png – T o p Twenty CO2e 2018 table.
ENERGY EFFICIENCY OF THE COLLATERAL
➤
TABLE 110: LOANS COLLATERALISED BY IMMOVABLE PROPERTY – ENERGY EFFICIENCY OF THE COLLATERAL
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
In millions of euros
0; ≤ 100
31 December 2023
Total gross carrying amount
Level of energy efficiency
(EP score in kWh/m2 of collateral)
Level of energy efficiency
(EPC label of collateral)
Without EPC label of collateral
> 100;
> 200;
≤ 200
≤ 300
> 300;
≤ 400
> 400;
≤ 500
> 500
A
B
C
D
E
F
G
Of which level
of energy
efficiency (EP
score in kWh/m2 of
collateral) estimated
1
TOTAL EU AREA
200,874
21,533
52,250
43,576
25,784
18,787
11,918
1,854 3,072
3,940
4,472
4,123
4,290
3,363
175,759
85%
2
of which Loans collateralised by
commercial immovable property
67,486
8,054
20,142
15,074
6,525
4,499
4,866
152
633
636
1,126
657
158
364
63,760
87%
3
of which Loans collateralised by
residential immovable property
133,182
13,480
32,106
28,495
19,237
14,112
7,052
1,702 2,439
3,304
3,346
3,466
4,132
2,999
111,792
83%
4
of which Collateral obtained by
taking possession: residential and
commercial immovable properties
207
2
7
22
176
207
100%
5
of which Level of energy
efficiency (EP score in kWh/m2
of collateral) estimated
145,656
18,328
44,436
37,196
22,215
15,658
7,823
6
TOTAL NON-EU AREA
5,577
18
183
298
53
26
29
2
128
229
14
10
9
8
5,178
4%
7
of which Loans collateralised by
commercial immovable property
1,855
0
118
218
0
118
218
0
1,519
0%
8
of which Loans collateralised by
residential immovable property
3,722
18
65
80
53
25
29
2
10
11
14
10
9
8
3,658
6%
9
of which Collateral obtained by
taking possession: residential and
commercial immovable properties
10
of which Level of energy
efficiency (EP score in kWh/m2
of collateral) estimated
145
7
36
54
30
13
5
A
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
In millions of euros
31 December 2022
Total gross carrying amount
Level of energy efficiency
(EP score in kWh/m2 of collateral)
Level of energy efficiency
(EPC label of collateral)
Without EPC label of collateral
0; <=
> 100;
> 200;
> 300;
> 400;
100 <= 200 <= 300 <= 400 <= 500 > 500
A
B
C
D
E
F
G
Of which level
of energy
efficiency (EP
score in kWh/m2 of
collateral) estimated
1
TOTAL EU AREA
200,012 18,030 47,092 41,226 26,390 22,524 16,947
1,206
992 1,572 2,008 1,859 2,033 2,604
187,738
2
of which Loans collateralised by
commercial immovable property
65,399
8,007 19,704 13,766
6,293
4,874
5,126
66
62
135
162
128
75
40
64,732
87%
3
of which Loans collateralised by
residential immovable property
134,381 10,023 27,386 27,452 20,072 17,453 11,822
1,139
930 1,438 1,846 1,731 1,957 2,564
122,775
76%
4
of which Collateral obtained by
taking possession: residential and
commercial immovable properties
232
2
7
25
197
232
100%
5
of which Level of energy
efficiency (EP score in kWh/m2
of collateral) estimated
159,705 16,294 44,637 38,923 24,514 20,813 14,524
6
TOTAL NON-EU AREA
7,519
11
63
70
22
6
2
2
9
11
8
2
1
7,486
7
of which Loans collateralised by
commercial immovable property
3,321
1
3
3
1
1
1
3,318
8
of which Loans collateralised by
residential immovable property
4,198
10
60
67
22
6
2
1
9
11
7
1
1
4,168
3%
9
of which Collateral obtained by
taking possession: residential and
commercial immovable properties
10
of which Level of energy
efficiency (EP score in kWh/m2
of collateral) estimated
142
9
47
61
18
5
2
The Group's total portfolio of loans collateralised by immovable
properties stands at EUR 206 billion at 31 December 2023 including loans
collateralised by both commercial and residential immovable properties
and collateral obtained by taking possession. Its repartition by energy
efficiency is displayed in two forms: its value in kWh/m2 and in label (A
to G) of the collateral as defined in the Energy Performance of Buildings
Directive(1) and the Energy Efficiency Directive(2). The Energy Performance
Certificates (EPCs) provides information on the energy efficiency of the
collateral, which enables to:
■ support/advice clients on their home purchase and during their home
sustainable transition,
■ integrate EPC-related information into the credit decision process and
credit risk management framework,
■ improve the accuracy of financial risk measures performed in climate
scenario analyses.
The availability of Energy Performance Certificates across Europe is
nevertheless not homogeneous, as it strongly relies on geographical
specificities, such as national data protection laws in Belgium, or real
estate local market practices for instance. Moreove r, o pen-source data
bases are sometimes available, barely covering a whole country and
often showing with poor data quality, as only updated at the last sale of
the assets, often more than two years ago.
As Energy Performance Certificates are based on EU regulations, data for
real estate collaterals located outside of the European Union cannot be
obtained except in a case where a mapping with the EU EPC label exists.
As in most cases no mapping exists, the columns corresponding to the
EPC label of real estate collaterals located outside of the EU have been
left blank and only the energy efficiency in kWh/m2 has been filled in
with estimates, when relevant.
(1) Directive 2010/31/EU.
(2) Directive 2012/27/EU.
As a result, Energy Performance Certificates (EPCs) are either:
■ collected by entities, during the loan origination process. In this case
they are considered as reported data.
■ obtained from central national databases. When a 1-to-1 matching
with the financed counterpart is possible, EPC data is considered as
reported. When the matching is deduced (based on the address for
example), EPC data is considered as estimated.
■ estimated on the basis of proxies or rules (based on the mean energy
efficiency for a region or a country for example).
Loans guaranteed by a mutual guarantee fund, especially the "Crédit
Logement" framework in France, do not fall under the definition of loans
collateralised by immovable property and are not reported in this table.
Should these loans have been reported, the total gross carrying amount
of real estate loans at 31 December 2023 would have increased
by EUR 78 billion, of which EUR 7 billion in the "0; < 100" bucket,
EUR 26 billion in the "> 100; <= 200" bucket, EUR 27 billion in the
"> 200; <= 300" tranche, EUR 13 billion in the "> 300; <= 400" bucket,
EUR 3 billion in the "> 400; <= 500" bucket, and EUR 2 billion in the
"> 500" bucket.
ALIGNMENT METRICS BY SECTOR
To achieve the banking's sector ambition to align its climate commitments
with the objectives of the Paris Agreement and to pursue a warming target
limited to 1.5°C, BNP Paribas signed the Net Zero Alliances in 2021.
As part of its 2025 strategic Plan, the Group has published a Climate
Report in May 2023 which illustrates notably its progress in supporting
the alignment of its portfolio with its Net-Zero commitment for different
sectors: oil and gas, electricity generation, automotive, steel, aluminium
and cement.
At 31 December 2023, the Group's commitments and progress update
for these six sectors, which meet the requirement to disclose alignment
metrics, are reported in the Commitment 3 Systematic integration and
management of Environmental, social and governance risks (ESG)
of chapter 7. These metrics though they met most of the disclosure
requirements do not exactly respect all definitions and criteria defined
by EBA as they are measured according to NZBA framework.
In the first semester 2024, for the first ESG Pillar 3 disclosure requirement,
the Group has noted some adjustments which are in the process of
being assessed and prioritised and is working towards alignment with
the reporting requirements:
■ in terms of sector: the inclusion of the coal sector in the perimeter of
the "Upstream oil & gas" sector;
■ in terms of portfolio amounts disclosed: the disclosure of the gross
carrying amount of the portfolios instead of the total exposure
including drawn and committed undrawn amounts;
■ in terms of precise scope of counterparts: the use of NACE codes to map
the counterparts included in each sector instead of internal sectorial
approach;
■ in terms of target date: the use of a rolling target (3 years after the
year of reference) instead of fixed targets.
BANKING BOOK – INDICATORS OF POTENTIAL CLIMATE CHANGE PHYSICAL RISK
➤
TABLE 111: EXPOSURES SUBJECT TO POTENTIAL PHYSICAL RISK
a
b
c
d
e
f
g
h
i
j
In millions of euros
31 December 2023
Gross carrying amount
of which exposures sensitive to impact from climate change physical events
Breakdown by maturity bucket
of which
exposures
sensitive to
impact from
maturity chronic climate acute climate climate change
change events
of which
exposures
sensitive to
impact from
change events
of which
exposures
sensitive to
impact both
from chronic
and acute
events
> 5 years> 10 years
≤ 5 years≤ 10 years≤ 20 years> 20 years
Average
weighted
(in years)
1
A – Agriculture, forestry
and fishing
12,989
51
5
4
4
60
2
B – Mining
and quarrying
7,623
3
C – Manufacturing
92,356
1
3
1
4
D – Electricity, gas, steam
and air conditioning supply
19,080
5
E – Water supply;
sewerage, waste
management and
remediation activities
2,528
6
F – Construction
25,615
164
8
8
1
3
181
7
G – Wholesale and
retail trade; repair of
motor vehicles and
motorcycles
69,868
73
4
1
3
79
8
H – Transportation
and storage
29,001
1
4
2
9
L – Real estate activities
61,308
594
207
323
10
7
1,135
10 property
13,749
Loans collateralised by
residential immovable
208
45
62
3
4
319
11 property
55,591
Loans collateralised by
commercial immovable
874
189
262
13
4
1,337
12 Repossessed collaterals
227
Exposures to other sectors
13 (NACE codes I, J, M - U)
133,488
287
29
14
5
3
336
14 TOTAL
453,855
1,172
254
351
17
1,794
A
b
c
d
e
f
g
h
i
j
In millions of euros
31 December 2022
Gross carrying amount
of which exposures sensitive to impact from climate change physical events
Breakdown by maturity bucket
of which
exposures
sensitive to
impact from
maturity chronic climate acute climate climate change
change events
of which
exposures
sensitive to
impact from
change events
of which
exposures
sensitive to
impact both
from chronic
and acute
events
> 5 years> 10 years
≤ 5 years≤ 10 years≤ 20 years> 20 years
Average
weighted
(in years)
1
A – Agriculture, forestry
and fishing
13,302
89
9
6
1
4
106
2
B – Mining
and quarrying
9,501
3
C – Manufacturing
91,160
40
2
1
3
43
4
D – Electricity, gas, steam
and air conditioning
supply
21,213
25
4
5
5
35
5
E – Water supply;
sewerage, waste
management and
remediation activities
2,935
1
3
1
6
F – Construction
25,096
585
35
36
1
3
657
7
G – Wholesale and
retail trade; repair of
motor vehicles and
motorcycles
63,307
14
1
3
15
8
H – Transportation
and storage
30,514
15
2
1
4
18
9
L – Real estate activities
65,442
371
110
174
5
7
661
Loans collateralised by
residential immovable
10 property
13,064
150
74
101
2
3
327
11 property
55,657
Loans collateralised by
commercial immovable
489
241
331
6
3
1,068
12 Repossessed collaterals
232
Exposures to other sectors
13 (NACE codes I – K & M – U)
136,194
256
25
10
4
4
295
14 TOTAL
458,665
1,395
189
233
12
1,828
The table before shows the potential exposures sensitives to physical
risks.
Disclaimer: Given the current lack of stability of the models, the data gaps
and the guidelines uncertainty, the Bank has opted for the disclosure of
impacts using the physical risk scenarios of the 2022 European Central
Bank Climate stress test. The results of the flood, heat wave and drought
scenarios of the ECB's 2022 climate stress test have been adjusted to
reflect the materiality of chronic physical risk factors over the horizon of
the estimated duration of the credit portfolios, by only retaining exposures
to non-financial companies to match the model expected by EBA. These
figures are not comparable with other banks publications having taken
other disclosure options and are published for information only. Those
figures are an attempt to flag exposures potentially sensitive to physical
risk events and should not be understood as direct or integrated risks.
The Group expects that the instructions and working assumptions will
be clarified with a common methodology to be applied for future years.
It should also be noted that these analyses are based on an adjusted
version of the ECB scenarios initially presenting a time horizon of 2050, to
reflect the materiality of the chronic physical risk factors to the expected
duration of the credit portfolios, all other things being equal.
Physical risks are defined as the risks of any negative financial impact
on the institution stemming from the current or prospective impacts of
physical effects of environmental factors on its counterparties or invested
assets.
The presentation of assets subject to climate change physical risks in
the Group's balance sheet requires the definition of methodologies and
hypotheses to identify the corresponding counterparties.
Two physical risk scenarios were retained by the European Central Bank
for its 2022 climate stress test exercise. They are based on anticipating
today the levels of expected chronic heat levels and an acute river
flooding event forecast for 2050. The acute extreme climate events are
managed through this thirty-year anticipation of severe events that are
plausible in 2050. No chronic physical risk events have been specifically
covered in the 2022 ECB climate stress test.
In the ECB drought and heat risk scenario, the economic effects of a
severe drought and heatwave in Europe were modelled. Extended
periods of hot weather can lead to sizeable output losses across
several economic sectors, for example through the decrease in labour
productivity for outdoor professional activities. Through their exposure to
these vulnerable industries, banks could sustain losses. To limit the scope
of the exercise, the scenario only models the shocks to sectoral gross
value-added growth. The scenario calibration is based on NGFS (Network
for Greening the Financial System) estimates for labour productivity
shocks due to heat stress across relevant countries in 2050. Thus, the
key transmission channel of heatwave risk to the economy is through
labour productivity. For example, a severe heatwave can weaken the
productivity of construction workers or that of farmers who face harsher
working conditions.
For this drought risk scenario, BNP Paribas provided its corporate
exposures not secured by real estate with headquarters in France,
Belgium, Italy, Germany and Luxembourg.
River flooding has historically been a major source of physical risk
in Europe and, with a rise in extreme levels of precipitation being
associated with climate change, this risk is expected to increase. The
floods during the summer of 2021 show the consequences of heavy
rainfall on both human lives lost and physical capital being destroyed
or severely impaired. Under the river flooding scenario used by the ECB
in its 2022 climate stress test, it is assumed that severe floods sweep
across Europe on the first day of projection. While the probability of
such an event is very low, it allows relevant flood risk scenarios to be
created across the European Union. Flood risk is different across Europe
and can vary significantly even within a few kilometers. Therefore,
the flood risk scenario accounts for within-country variation in risks.
As such, shocks to residential and commercial real estate exposures
are estimated at NUTS3 regional level ("Nomenclature des Unités
T e rritoriales Statistiques" – the level 3 being departments for France),
according to a specific flood risk level.
The flood risk scenario was developed based on insights from the work
carried out by the European Commission's Joint Research Centre on flood
risk, as well as from granular geospatial flood risk data collected for the
purposes of the ECB economy-wide climate stress test based on the Four
Twenty-Seven dataset.
For this flood risk scenario, BNP Paribas provided its commercial real
estate exposures located in France, Belgium and Italy.
BANKING BOOK – MITIGATION ACTIONS
In accordance with EBA instructions, publications relating to the GAR
(Green Asset Ratio) presented below in tables 112 to 114 are based on
the alignment with the taxonomy of the counterparty's turnover for the
financing component without determined allocation.
The methodology for identifying eligible and aligned assets is described in
section 7.9 Aligned activities within the meaning of European taxonomy
of chapter 7. The Group has chosen to publish the GAR according to the
interpretation of the European Commission published on 21 December
2023. As a result, no financial instrument whose use of funds is allocated
has been reported in the numerator of the GAR, either with respect to
companies, local governments or households.
Due to its methodological imbalance and operational complexity, the
GAR cannot reflect all the financing of the transition to a low-carbon
economy for the Group. As a result, an additional ratio of the share of
aligned assets eligible assets is presented in the section 7.9 Activities
aligned within the meaning of European taxonomy.
➤
TABLE 112: SUMMARY OF KEY PERFORMANCE INDICATORS (KPIS) ALIGNED WITH THE TAXONOMY
a
b
c
d
e
f
31 December 2023
Key performance indicators
Proportion of eligible
assets in relation to
total assets
Proportion of assets
covered by the European
Taxonomy compared to
total assets
Climate change
mitigation
Climate change
adaptation
Total (climate change
mitigation +climate change
adaptation)
GAR stock
0.77%
0.01%
0.78%
11.78%
28.10%
GAR flow
-
-
-
-
➤
TABLE 113: ASSETS FOR THE GAR CALCULATION
a
b
c
d
e
f
In millions of euros
Climate Change Mitigation (CCM)
Gross
carrying
amount
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending transitional
of which
of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and equity
instruments not held for trading eligible for the
GAR calculation
659,823
276,571
9,137
5,808
2,631
2
Financial corporations
82,051
6,803
546
495
403
3
Credit institutions
12,674
978
4
Loans and advances
1,356
253
5
Debt securities
6,137
725
6
Equity instruments
5,181
7
Other financial corporations
69,377
5,825
546
495
403
8
of which investment firms
47,567
3,108
323
323
231
9
Loans and advances
31,470
1,799
221
221
130
10
Debt securities
11,305
1,309
102
102
102
11
Equity instruments
4,792
12
of which management companies
8,039
2,231
172
172
171
13
Loans and advances
6,424
2,219
172
172
171
14
Debt securities
752
12
15
Equity instruments
863
16
of which insurance undertakings
13,771
487
51
0
0
17
Loans and advances
5,727
48
0
0
0
18
Debt securities
3,445
8
19
Equity instruments
4,599
431
51
20
Non-financial corporations
(subject to NFRD disclosure obligations)
258,850
42,107
8,590
5,313
2,228
21
Loans and advances
250,750
37,862
7,585
4,769
1,935
22
Debt securities
2,045
1,137
534
534
290
23
Equity instruments
6,055
3,108
471
9
3
24
Households
307,637
227,656
25
of which loans collateralised by residential
immovable property
208,499
208,499
26
of which building renovation loans
4,617
4,617
27
of which loans for motor vehicles
14,540
14,540
g
h
i
j
k
l
m
n
o
p
31 December 2023
Climate Change Adaptation (CCA)
TOTAL (CCM +CCA)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending
of which
adaptation
of which
enabling
of which
specialised transitional/
lending
of which
adaptation
of which
enabling
598
117
277,169
9,254
5,808
2,631
34
4
6,837
550
495
403
978
253
725
495
403
34
4
5,859
550
21
3
3,128
326
323
231
21
3
1,820
224
221
130
1,309
102
102
102
172
171
13
1
2,244
173
13
1
2,233
173
172
171
12
0
0
487
51
48
0
0
0
8
431
51
564
113
42,672
8,704
5,313
2,228
564
113
38,427
7,699
4,769
1,935
1,137
534
534
290
3,108
471
9
3
227,656
208,499
4,617
14,540
a
b
c
d
e
f
In millions of euros
Climate Change Mitigation (CCM)
Gross
carrying
amount
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending transitional
of which
of which
enabling
28
Local governments financing
11,286
4
29
Housing financing
30
Other local government financing
11,286
4
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
227
32
TOTAL GAR ASSETS
660,050
276,571
9,137
5,808
2,631
Assets excluded from the numerator for GAR
calculation (covered in the denominator)
33
EU non-financial corporations
(not subject to NFRD disclosure obligations)
60,919
34
Loans and advances
59,684
35
Debt securities
177
36
Equity instruments
1,058
37
Non-EU non-financial corporations
(not subject to NFRD disclosure obligations)
129,776
38
Loans and advances
125,265
39
Debt securities
4,207
40
Equity instruments
305
41
Derivatives
21,814
42
On demand interbank loans
7,139
43
Cash and cash-related assets
2,694
44
Other assets (goodwill, commodities, etc.)
308,610
45
TOTAL ASSETS IN THE DENOMINATOR (GAR)
1,191,002
Other assets excluded from both the numerator
and the denominator for the GAR calculation
46
Sovereigns
141,256
47
Central bank exposures
300,225
48
Trading book
719,602
49
TOTAL ASSETS EXCLUDED FROM THE
NUMERATOR AND THE DENOMINATOR
1,161,082
50
TOTAL ASSETS
2,352,085
g
h
i
j
k
l
m
n
o
p
31 December 2023
Climate Change Adaptation (CCA)
TOTAL (CCM +CCA)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending
of which
adaptation
of which
enabling
of which
specialised transitional/
lending
of which
adaptation
of which
enabling
4
4
5,808
2,631
598
117
277,169
9,254
➤
TABLE 114: GAR (%)
a
b
c
d
e
f
% (of total assets included in the denominator)
Climate Change Mitigation (CCM)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending transitional
of which
of which
enabling
1
GAR
23.22%
0.77%
0.49%
0.22%
0.05%
2
Loans and advances, debt securities and
equity instruments not held for trading and
eligible for the GAR calculation
23.22%
0.77%
0.49%
0.22%
0.05%
3
Financial corporations
0.57%
0.05%
0.04%
0.03%
4
Credit institutions
0.08%
5
Other financial corporations
0.49%
0.05%
0.04%
0.03%
6
of which investment firms
0.26%
0.03%
0.03%
0.02%
7
of which management companies
0.19%
0.01%
0.01%
0.01%
8
of which insurance undertakings
0.04%
9
Non-financial corporations
(subject to NFRD disclosure obligations)
3.54%
0.72%
0.45%
0.19%
0.05%
10
Households
19.11%
11
of which loans collateralised by residential
immovable property
17.51%
12
of which building renovation loans
0.39%
13
of which motor vehicles loans
1.22%
14
Local governments financing
15
Housing financing
16
Other local government financing
17
Collateral obtained by taking possession:
residential and commercial immovable properties
For consistency purpose, the figures presented in the tables of this
section correspond to the alignment information presented in the
section 7.9 Aligned activities within the meaning of European taxonomy
of chapter 7, in application of the Commission Delegated Regulation
(EU) 2021/2178 of 6 July 2021 and of the Draft Commission Notice of
21 December 2023. Therefore, the Group did not apply in this section the
simplified approach recommended by EBA. As such, only gross carrying
amounts of general purpose financing instruments towards European
non-financial companies subject to NFRD (Non-Financial Reporting
Directive 2014/95/EU of 22 October 2014), and identified as aligned,
have been included in the ratio's numerato r.
The detail of covered assets and the methodology as well as the
limitations of the Green Asset Ratio are presented in the section
7.9 Aligned activities within the meaning of European taxonomy of
chapter 7, as well as an internal complementary ratio. The table with
the gross carrying amounts in absolute values is accessible in the ESG
regulatory indicators dedicated document, on the Group Investors
Relationships website.
It should be noted that the Green Asset Ratio, due to its unbalanced
methodology and its operating complexity, cannot reflect for the Group the
entirety of the instruments financing transition to a low-carbon economy.
Firstly, the EU T a xonomy alignment covers only companies subject to
the NFRD, European households and specialised financings granted to
European local administrations. The regulation excludes from the analysis
financings granted to SMEs and non-EU companies. Neither does not
allow either to include in the analysis of project financings set up in
dedicated vehicles, not subject to NFRD, even if they relate to financing of
g
h
i
j
k
l
m
n
o
p
31 December 2023: Stock indicators
Climate Change Adaptation (CCA)
TOTAL (CCM +CCA)
Proportion of
eligible assets
in relation to
enabling total assets
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which towards taxonomy relevant sectors
(Taxonomy-eligible)
of which environmentally sustainable
(Taxonomy-aligned)
of which environmentally sustainable
(Taxonomy-aligned)
of which
specialised
lending
of which
adaptation
of which
enabling
of which
specialised transitional/
lending
of which
adaptation
of which
0.01%
23.27%
0.78%
0.49%
0.22%
11.78%
0.01%
23.27%
0.78%
0.49%
0.22%
11.78%
0.57%
0.05%
0.04%
0.03%
0,29%
0.08%
0.04%
0.49%
0.05%
0.04%
0.03%
0.25%
0.26%
0.03%
0.03%
0.02%
0.13%
0.19%
0.01%
0.01%
0.01%
0.10%
0.04%
0.02%
0.01%
3.58%
0.73%
0.45%
0.19%
1.81%
19.11%
9.68%
17.51%
8.86%
0.39%
0.20%
1.22%
0.62%
European low-carbon infrastructures. Moreove r, t he ratio's scope limited
to large corporations subject to NFRD regulation, appears too restrictive
as regards to the Group's diversified business model.
As such, the unbalance between the assets subject to alignment analysis
for the numerator and all covered assets in the denominator sets a
structural cap to the GAR at 55% for 2023. This cap is as much lower
as the business model is diversified in terms of clients, products and
geographies.
The taxonomy's alignment criteria are by definition ambitious, since
they correspond to science-based thresholds compatible with the EU
carbon neutrality goal by 2050. Howeve r, b y proposing only an aligned or
non-aligned outcome, the transition pathway is not taken into account,
although it is part of long-term effort already engaged by the Group
and its clients.
Lastly, climate performance criteria are completed by multiple
supplementary conditions, aiming at ensuring that no significant
harm is caused towards one of the other environmental objectives of
the T a xonomy. The assessment of these latter conditions is complex,
including issues both of normative interpretation and of information
access. Most of the information to be collected by banks from their clients
are not standardised yet, which slows down the activities alignment
assessment by companies, and the bank's data collection for each criteria
is not operant as of today.
➤
TABLE 115: OTHER CLIMATE CHANGE MITIGATION ACTIONS NOT COVERED BY THE TAXONOMY
a
b
c
d
e
Type of financial instrument
In millions of euros
31 December 2023
Type of counterparty
Gross
carrying
Type of risk
mitigated
(Climate
change
amount transition risk) physical risk)
Type of risk
Qualitative
mitigated information on
(Climate the nature of
change the mitigating
actions
1
Bonds (e.g. green,
sustainable, sustainability-
linked under standards other
than the EU standards)
Financial corporations
43
Yes
Refer to
comments
2
Non-financial corporations
93
Yes
7
Other counterparties
3,797
Yes
8
Loans (e.g. green,
sustainable, sustainability-
linked under standards
other than the EU
standards)
Financial corporations
2,335
Yes
Refer to
comments
9
Non-financial corporations
18,907
Yes
10
of which Loans collateralised by
commercial immovable property
1,882
Yes
11
Households
22,919
Yes
12
of which Loans collateralised by
residential immovable property
14,569
Yes
13
of which building renovation loans
4,619
Yes
14
Other counterparties
116
Yes
a
b
c
d
e
Type of financial instrument
In millions of euros
31 December 2022
Type of counterparty
Gross
carrying
amount
Type of risk
mitigated
(Climate
change
transition
risk)
Type of risk
mitigated
risk)
Qualitative
(Climate information on
change the nature of
physical the mitigating
actions
1
Bonds (e.g. green,
sustainable, sustainability-
linked under standards other
than the EU standards)
Financial corporations
360
Yes
Refer to
comments
2
Non-financial corporations
29
Yes
7
Other counterparties
2,297
Yes
8
Loans (e.g. green,
sustainable, sustainability-
linked under standards
other than the EU
standards)
Financial corporations
1,560
Yes
Refer to
comments
9
Non-financial corporations
11,554
Yes
10
of which Loans collateralised by
commercial immovable property
1,851
Yes
11
Households
12,713
Yes
12
of which Loans collateralised by
residential immovable property
6,259
Yes
13
of which building renovation loans
1,329
Yes
14
Other counterparties
3
Yes
The table shows the loans and bonds, held in the banking book, measured
on a gross carrying amount basis, and that contribute to mitigating
climate change risks according to the ESG internal classification
principles of the Bank.
Bonds outstanding stood at EUR 3.9 billion at 31 December 2023 (versus
EUR 2.7 billion at 31 December 2022) and are identified by a third part
as aligned with key green bond principles defined by the International
Capital Market Association. Each bond in the banking book portfolio
is analysed according to the different criteria collected by external
information in order to select only the bonds which finance low-carbon
and/or climate resilient projects or climate transition projects.
Reported obligations are only those recorded in assets for which the
business model is to collect the contractual cash flows and hold the
asset until maturity.
Loans outstanding stood at EUR 44 billion at 31 December 2023
(versus EUR 26 billion at 31 December 2022) measured on the basis
of the gross carrying amount. They have been identified by the Group
as corresponding to loans with a specified climate mitigation purpose
based on the transactions tagging process deployed by the Group in
the credit process. The internal principles on which the tagging is done
are based on the Loan Market Association principles. The outstanding
also includes Sustainability-Linked Loans granted to financial and non-
financial corporations, whose loan agreement contains at least one
performance indicator related to climate change mitigation.
Appendix 1: Sovereign exposures
The BNP Paribas Group is exposed to sovereign risk, which is the risk of
a State defaulting on its debt, i.e. a temporary or prolonged interruption
of debt servicing (interest and/or principal). The Group is thus exposed to
credit, counterparty or market risk according to the accounting category
of the financial asset issued by the sovereign State.
Exposure to sovereign debt mainly consists of securities. The Group holds
sovereign bonds as part of its liquidity management process. Liquidity
management is based in particular on holding securities eligible as
collateral for refinancing by central banks and includes a substantial
share of highly rated debt securities issued by governments, representing
a low level of risk. Moreove r, a s part of its assets and liability management
and structural interest rate risk management policy, the Group also holds
a portfolio of assets including sovereign debt instruments, with interest-
rate characteristics that contribute to its hedging strategies. In addition,
the Group is a primary dealer in sovereign debt securities in a number
of countries, which leads it to take temporary long and short trading
positions, some of which are hedged by derivatives.
Sovereign exposures held by the Group are presented in the table
hereafter in accordance with the method defined by the EBA for the
2014 stress tests covering a scope which includes sovereigns as well as
local and regional authorities.
➤
BANKING AND TRADING BOOKS SOVEREIGN EXPOSURES BY GEOGRAPHICAL BREAKDOWN
Exposures
In millions of euros
31 December 2023
Banking book(1)
Trading book
Total
of which
financial
assets at
amortised
of which
at fair value
cost through equity
financial of which financial
fair value through
profit or loss
Financial instruments at
instruments instruments at fair value through profit
or loss held for trading
(excl. derivatives)exposures(3) exposures(4)
Derivatives(2)
Direct
Indirect
Eurozone
Belgium
11,073
8,206
2,867
(50)
2
(21)
France
12,776
11,105
1,622
49
(1,713)
9
(79)
Germany
5,067
3,592
1,475
8,754
(174)
(8)
Ireland
1,061
1,061
182
1
Italy
12,353
9,608
2,745
(347)
2,482
(35)
Portugal
3,153
3,153
(347)
5
(1)
Spain
9,194
8,919
275
(93)
4
Other Eurozone countries
1,842
1,088
754
209
513
10
TOTAL EUROZONE
56,519
46,732
9,738
49
6,595
2,838
(130)
Other European Economic Area
countries
Poland
6,229
4,640
1,589
(105)
(431)
Other EEA countries
698
650
47
1
(612)
(57)
TOTAL OTHER EEA COUNTRIES
6,927
5,290
1,636
1
(717)
(488)
-
TOTAL EEA
63,446
52,022
11,374
50
5,878
2,350
(130)
United States
18,446
10,737
7,709
20,858
233
(64)
Canada
4,189
2,387
1,802
1,860
1,755
United Kingdom
3,609
1,722
1,887
(879)
70
Japan
107
38
69
Türkiye
2,050
1,806
244
444
(46)
Other
13,244
8,074
5,171
29,652
4,208
(731)
TOTAL
105,091
76,786
28,255
50
57,813
8,546
(901)
(1) Book value after revaluation and before any impairment provision.
(2) Market value.
(3) Sovereign counterparty risk: direct exposure to a sovereign counterparty. This excludes exposure to a non-sovereign counterparty fully or partly
covered by a sovereign counterparty.
(4) Positions held with a non-sovereign counterparty, exposing BNP Paribas to a credit risk on a sovereign third party. For example, sale of a CDS to a
non-sovereign third party as a hedge against a sovereign's default. This excludes exposures to non-sovereign counterparties fully or partly covered by
a sovereign government.
Exposures
In millions of euros
31 December 2022
Banking book(1)
Trading book
Total
of which
assets at
cost
financial of which financial
instruments at
amortised fair value through
equity
of which
at fair value
through profit
or loss
financial Financial instruments
instruments at fair value through
profit or loss held
for trading (excl.
derivatives) exposures(3) exposures(4)
Derivatives(2)
Direct
Indirect
Eurozone
Belgium
9,914
8,961
953
(676)
(57)
106
France
12,709
11,135
1,528
46
(3,669)
(12)
83
Germany
5,006
4,205
801
3,264
(174)
(2)
Ireland
994
994
(97)
4
Italy
11,556
9,793
1,763
(211)
1,915
(58)
Portugal
3,101
3,101
(449)
(6)
Spain
9,835
8,547
1,288
(132)
40
Other Eurozone countries
1,395
1,173
222
(663)
701
TOTAL EUROZONE
54,510
47,909
6,555
46
(2,633)
2,371
169
Other European Economic Area
countries
Poland
4,837
3,906
931
8
(2)
Other EEA countries
749
698
50
1
(24)
(79)
TOTAL OTHER EEA COUNTRIES
5,586
4,604
981
1
(16)
(81)
-
TOTAL EEA
60,096
52,513
7,536
47
(2,649)
2,290
169
United States
23,448
14,415
9,033
14,650
(24)
617
Canada
3,531
2,179
1,352
(19)
2,600
Japan
83
38
45
9,380
575
(151)
United Kingdom
1,950
1,667
283
565
257
Türkiye
2,725
2,299
426
82
(12)
Other
13,349
9,032
4,317
12,503
1,619
(90)
TOTAL
105,182
82,143
22,992
47
34,512
7,060
790
(1) Book value after revaluation and before any impairment provision.
(2) Market value.
(3) Sovereign counterparty risk: direct exposure to a sovereign counterparty. This excludes exposure to a non-sovereign counterparty fully or partly
covered by a sovereign counterparty.
(4) Positions held with a non-sovereign counterparty, exposing BNP Paribas to a credit risk on a sovereign third party. For example, sale of a CDS to a
non-sovereign third party as a hedge against a sovereign's default. This excludes exposures to non-sovereign counterparties fully or partly covered by
a sovereign government.
Appendix 2: Regulatory capital – Detail
➤
REGULATORY CAPITAL – DETAIL (EU CC1)
a
a
b
In millions of euros
2023
31 December
31 December
2022
Reference to
table 8
Notes
Common Equity Tier 1 (CET1) capital: instruments and reserves
1
Capital instruments and the related share premium accounts
21,253
26,236
6
of which: Instrument type 1
21,253
26,236
2
Retained earnings
82,257
77,751
6
3
Accumulated other comprehensive income (and other reserves)
(2,809)
(3,319)
3a
Funds for general banking risk
4
Amount of qualifying items referred to in Article 484 (3) and the related share
premium accounts subject to phase out from CET1
5
Minority interests (amount allowed in consolidated CET1)
2,048
1,736
8
(1)
5a
Independently reviewed interim profits net of any foreseeable charge
or dividend(*)
3,970
4,933
7
(2)
6
Common Equity Tier 1 (CET1) capital before regulatory adjustments
106,719
107,337
Common Equity Tier 1 (CET1) capital: regulatory adjustments
7
Additional value adjustments (negative amount)
(1,817)
(1,514)
8
Intangible assets (net of related tax liability) (negative amount)
(8,055)
(10,559)
3
(3)
10
Deferred tax assets that rely on future profitability excluding those arising
from temporary differences (net of related tax liability where the conditions in
Article 38 (3) are met) (negative amount)
(311)
(160)
11
Fair value reserves related to gains or losses on cash flow hedges of financial
instruments that are not valued at fair value
(293)
(12)
12
Negative amounts resulting from the calculation of expected loss amounts
(599)
(298)
13
Any increase in equity that results from securitised assets (negative amount)
14
Gains or losses on liabilities valued at fair value resulting from changes
in own credit standing
(146)
(118)
15
Defined-benefit pension fund assets (negative amount)
(397)
(457)
(3)
16
Direct and indirect holdings by an institution of own CET1 instruments
(negative amount)
(128)
(137)
17
Direct, indirect and synthetic holdings of the CET 1 instruments of financial
sector entities where those entities have reciprocal cross holdings with the
institution designed to inflate artificially the own funds of the institution
(negative amount)
18
Direct, indirect and synthetic holdings by the institution of the CET1
instruments of financial sector entities where the institution does not have
a significant investment in those entities (amount above 10% threshold and
net of eligible short positions) (negative amount)
a
a
b
In millions of euros
2023
31 December
31 December
2022
Reference to
table 8
Notes
19
Direct, indirect and synthetic holdings by the institution of the CET1
instruments of financial sector entities where the institution has a significant
investment in those entities (amount above 10% threshold and net of eligible
short positions) (negative amount)
Exposure amount of the following items which qualify for a RW of 1,250%,
20a where the institution opts for the deduction alternative
(284)
(223)
20b
of which: qualifying holdings outside the financial sector (negative amount)
20c
of which: securitisation positions (negative amount)
(284)
(223)
20d
of which: free deliveries (negative amount)
21
Deferred tax assets arising from temporary differences (amount above 10%
threshold, net of related tax liability where the conditions in Article 38 (3)
are met) (negative amount)
22
Amount exceeding the 17.65% threshold (negative amount)
23
of which: direct, indirect and synthetic holdings by the institution of the
CET1 instruments of financial sector entities where the institution has a
significant investment in those entities
25
of which: deferred tax assets arising from temporary differences
25a Losses for the current financial year (negative amount)
Foreseeable tax charges relating to CET1 items except where the institution
suitably adjusts the amount of CET1 items insofar as such tax charges reduce
the amount up to which those items may be used to cover risks or losses
25b (negative amount)
26
Empty set in the EU
27
Qualifying AT1 deductions that exceed the AT1 items of the institution
(negative amount)
27a Other regulatory adjusments(**)
(1,832)
(2,031)
28
Total regulatory adjustments to Common Equity Tier 1 (CET1)
(13,862)
(15,509)
29
Common Equity Tier 1 (CET1) capital
92,857
91,828
Additional Tier 1 (AT1) capital: instruments(***)
30
Capital instruments and the related share premium accounts
14,901
11,800
31
of which: classified as equity under applicable accounting standards
13,549
11,800
4
32
of which: classified as liabilities under applicable accounting standards
1,352
4
33
Amount of qualifying items referred to in Article 484 (4) and the related share
premium accounts subject to phase out from AT1 as described in Article 486(3)
of CRR
4
(4)
Amount of qualifying items referred to in Article 494a(1) subject to phase out
33a from AT1
33b from AT1(****)
Amount of qualifying items referred to in Article 494b(1) subject to phase out
34
Qualifying Tier 1 capital included in consolidated AT1 capital (including
minority interests not included in row 5) issued by subsidiaries and held
by third parties
249
303
35
of which: instruments issued by subsidiaries subject to phase out
a
a
b
In millions of euros
2023
31 December
31 December
2022
Reference to
table 8
Notes
36
Additional Tier 1 (AT1) capital before regulatory adjustments
15,150
12,103
Additional Tier 1 (AT1) capital: regulatory adjustments
37
Direct and indirect holdings by an institution of own AT1 instruments
(negative amount)
(56)
(37)
38
Direct, indirect and synthetic holdings of the AT1 instruments of financial
sector entities where those entities have reciprocal cross holdings with the
institution designed to inflate artificially the own funds of the institution
(negative amount)
39
Direct, indirect and synthetic holdings of the AT1 instruments of financial
sector entities where the institution does not have a significant investment in
those entities (amount above 10% threshold and net of eligible short positions)
(negative amount)
40
Direct, indirect and synthetic holdings by the institution of the AT1
instruments of financial sector entities where the institution has a significant
investment in those entities (net of eligible short positions) (negative amount)
(450)
(450)
42
Qualifying T2 deductions that exceed the T2 items of the institution (negative
amount)
42a Other regulatory adjustments to AT1 capital
43
Total regulatory adjustments to Additional Tier 1 (AT1) capital
(506)
(487)
44
Additional Tier 1 (AT1) capital
14,644
11,616
45
Tier 1 capital (T1 = CET1 + AT1)
107,501
103,445
Tier 2 (T2) capital: instruments and provisions(***)
46
Capital instruments and the related share premium accounts(**)
15,002
16,883
5
(5)
47
Amount of qualifying items referred to in Article 484 (5) and the related share
premium accounts subject to phase out from T2 as described in Article 486 (4) CRR
Amount of qualifying items referred to in Article 494a (2) subject to phase out
47a from T2
5
(5)
47b from T2(****)
2,284
Amount of qualifying items referred to in Article 494b (2) subject to phase out
3,588
5
(5)
48
Qualifying own funds instruments included in consolidated T2 capital
(including minority interests and AT1 instruments not included in rows 5
or 34) issued by subsidiaries and held by third parties
190
222
49
of which: instruments issued by subsidiaries subject to phase out
50
Credit risk adjustments
51
Tier 2 (T2) capital before regulatory adjustments
17,476
20,692
Tier 2 (T2) capital: regulatory adjustments
52
Direct and indirect holdings by an institution of own T2 instruments
and subordinated loans (negative amount)
(101)
(137)
53
Direct, indirect and synthetic holdings of the T2 instruments and subordinated
loans of financial sector entities where those entities have reciprocal cross
holdings with the institution designed to inflate artificially the own funds
of the institution (negative amount)
a
a
b
In millions of euros
2023
31 December
31 December
2022
Reference to
table 8
Notes
54
Direct and indirect holdings of the T2 instruments and subordinated loans
of financial sector entities where the institution does not have a significant
investment in those entities (amount above 10% threshold and net of eligible
short positions) (negative amount)
55
Direct and indirect holdings by the institution of the T2 instruments and
subordinated loans of financial sector entities where the institution has
a significant investment in those entities (net of eligible short positions)
(negative amount)
(3,132)
(3,132)
1
(6)
Qualifying eligible liabilities deductions that exceed the eligible liabilities
56a items of the institution (negative amount)
56b Other regulatory adjustments to T2 capital
(307)
57
Total regulatory adjustments to Tier 2 (T2) capital
(3,233)
(3,575)
58
Tier 2 (T2) capital
14,243
17,117
59
Total capital (TC = T1 + T2)
121,744
120,562
60
Total risk-weighted assets
703,694
744,851
Capital ratios and buffers
61
Common Equity Tier 1 (as a percentage of total risk exposure amount)
13.20%
12.33%
62
Tier 1 (as a percentage of total risk exposure amount)
15.28%
13.89%
63
Total capital (as a percentage of total risk exposure amount)
17.30%
16.19%
64
Institution CET1 overall capital requirement (CET1 requirement in accordance
with Article 92 (1) CRR, plus additional CET1 requirement which the institution
is required to hold in accordance with point (a) of Article 104(1) CRD,
plus combined buffer requirement in accordance with Article 128(6) CRD)
expressed as a percentage of risk exposure amount
9.79%
9.45%
65
of which: capital conservation buffer requirement
2.50%
2.50%
66
of which: countercyclical buffer requirement
0.40%
0.09%
67
of which: systemic risk buffer requirement(*****)
0.00%
0.08%
67a
of which: Global Systemically Important Institution (G-SII) or Other
Systemically Important Institution (O-SII) buffer
1.50%
1.50%
67b
of which: Pillar 2 Requirements – additional CET1 SREP requirements
0.88%
0.78%
68
Common Equity Tier 1 available to meet buffer (as a percentage of risk
exposure amount)
7.73%
6.80%
Amounts below the thresholds for deduction (before risk weighting)
72
Direct and indirect holdings of own funds and eligible liabilities of financial
sector entities where the institution does not have a significant investment
in those entities (amount below 10% threshold and net of eligible short
positions)
4,835
4,259
2
(6)
73
Direct and indirect holdings by the institution of the CET1 instruments of
financial sector entities where the institution has a significant investment
in those entities (amount below 17.65% thresholds and net of eligible short
positions)
4,910
4,635
1
(6)
75
Deferred tax assets arising from temporary differences (amount below
17.65% threshold, net of related tax liability where the conditions
in Article 38 (3) are met)
2,805
3,308
a
a
b
In millions of euros
2023
31 December
31 December
2022
Reference to
table 8
Notes
Applicable caps on the inclusion of provisions in Tier
76
Credit risk adjustments included in T2 in respect of exposures subject
to standardised approach (prior to the application of the cap)
77
Cap on inclusion of credit risk adjustments in T2 under standardised approach
2,633
3,173
78
Credit risk adjustments included in T2 in respect of exposures subject to
internal ratings-based approach (prior to the application of the cap)
79
Cap for inclusion of credit risk adjustments in T2 under internal ratings-based
approach
1,995
2,035
Capital instruments subject to phase out arrangements (only applicable between
1 Jan 2013 and 1 Jan 2022)
80
Current cap on CET1 instruments subject to phase out arrangements
81
Amount excluded from CET1 due to cap (excess over cap after redemptions
and maturities)
82
Current cap on AT1 instruments subject to phase out arrangements
83
Amount excluded from AT1 due to cap (excess over cap after redemptions
and maturities)
84
Current cap on T2 instruments subject to phase out arrangements
85
Amount excluded from T2 due to cap (excess over cap after redemptions
and maturities)
(*) At 31 December 2023, eligible income was reduced by the proposed dividend distribution, including in the form of share buyback for -EUR 1,055 million.
(**) At 31 December 2022, other regulatory adjustments include adjustments related to IFRS 9 transitional arrangements and -EUR 962 million included in the
share buyback programme under the ordinary dividend policy.
(***) In accordance with the eligibility rules for grandfathered debt in additional Tier 1 and Tier 2 capital applicable.
(****) This amount includes grandfathered debts issued under the law of third countries to the European Union without a bail-in clause under Regulation (EU)
No. 2019/876.
(*****) Since 30 June 2023, the sector systemic risk buffer (SyRB) in Belgium on mortgage portfolios does not apply at BNP Group level.
(1) Minority interests are adjusted for their capitalisation surplus for regulated entities. For the other entities, minority interests are not recognised in full
Basel 3.
(2) Profit eligible of the period is mainly reduced by related project of result distribution.
(3) The deduction of intangible assets and pension plans is calculated net of related deferred tax liabilities.
(4) Own funds instruments that will be progressively be excluded (Grandfathered instruments), included instruments issued by subsidiaries.
(5) A prudential discount is applied to Tier 2 capital instruments with less than five years of residual maturity.
(6) Holdings of equity instruments in financial institutions are recorded in the banking book, as detailed in the consolidated accounting balance sheet to the
prudential balance sheet reconciliation, as well as in the trading book.
Appendix 3: Countercyclical capital buffer
and G-SIB buffer
COUNTERCYCLICAL CAPITAL BUFFER
The calculation and the amount of the BNP Paribas countercyclical capital buffer are given in the tables below in accordance with the instructions of
Commission Delegated Regulation (EU) No. 2015/1555 of 28 May 2015.
➤
INSTITUTION-SPECIFIC COUNTERCYCLICAL CAPITAL BUFFER (EU CCYB2)
a
In millions of euros
31 December 2023
31 December 2022
010 Total risk-weighted assets
703,694
744,851
020 BNP Paribas countercyclical capital buffer rate
0.40%
0.09%
030 Countercyclical capital buffer requirement
2,813
682
At 31 December 2023, the BNP Paribas countercyclical capital buffer rate
is 0.40% against 0.09% at 31 December 2022.
The countercyclical capital buffer is calculated as the weighted average
of the countercyclical buffer rates that apply in the countries where the
relevant credit exposures of the Group are located. The weight applied to
the countercyclical buffer rate in each country is the share of own funds
requirements in total own funds requirements relating to relevant credit
exposures in the territory in question.
In the context of the public health crisis, many countries have reduced the
countercyclical buffer rate applicable to relevant credit exposures located
in their territory. At 31 December 2023, BNP Paribas' countercyclical
capital buffer rate of 0.40% is mainly due to the rates applicable in
France (0.5%) and United Kingdom (2.0%). This rate is expected to be
around 0.69% at 31 December 2024 due to the activation or increase in
requirements announced by certain European countries (see table below).
➤
GEOGRAPHICAL DISTRIBUTION OF CREDIT EXPOSURES RELEVANT FOR THE CALCULATION OF THE COUNTERCYCLICAL
CAPITAL BUFFER (CCYB1)
a
b
c
d
e
g
h
i
j
k
l
m
In millions of euros
31 December 2023
2024
31 December
General credit exposures
Relevant credit exposures
– Market risk
Securi-
tisation
exposures
value for
Own fund requirements
Risk-weighted rements
exposure weights
amounts
Own fund
requi- cyclical
(%)
Counter-
(%) annonced(**)
Countercy-
buffer clical buffer
rate rate (%)
Exposure
value Exposure
under the
standardised
approach approach approach approach
value under
the IRB
Exposure
under the
standardised
value Exposure Exposure
value under
the IRB
Of which
non-trading credit risk market risk
book exposure exposure
Of which
Of which
securi-
tisation
positions
Total
Breakdown
010 by country
Europe(*)
229,769
681,303
68,621
35,607
1,517
842
37,967
474,581
81%
of which
Germany
26,043
24,654
3,548
2,076
46
2,121
26,518
5%
0.75%
0.75%
of which Belgium
25,256
133,421
3,855
3,901
51
3,951
49,389
8%
0.00%
1.00%
of which Bulgaria
26
133,421
3,855
7
7
91
0%
2.00%
2.00%
of which Cyprus
28
74
5
5
66
0%
0.50%
1.00%
of which Croatia
3
83
3
3
39
0%
1.00%
1.50%
of which
Denmark
1,959
3,169
201
201
2,511
0%
2.50%
2.50%
of which Estonia
2
62
4
4
46
0%
1.50%
1.50%
of which France
57,190
281,814
39,060
14,800
1, 490
468
16,757
209,465
36%
0.50%
1.00%
of which Hungary
235
1,341
52
52
653
0%
0.00%
0.50%
of which Ireland
803
8,774
378
265
5
270
3,380
1%
1.00%
1.50%
of which Iceland
18
1
1
9
0%
2.00%
2.50%
of which Latvia
2
3
3
0%
0.00%
0.50%
of which
Lithuania
14
6
1
1
17
0%
1.00%
1.00%
of which
Luxembourg
3,287
39,436
40
1,878
0
0
1,879
23,486
4%
0.50%
0.50%
of which Norway
454
2,851
89
89
1,108
0%
2.50%
2.50%
of which
Netherland
5,077
20,254
1,305
876
15
891
11,132
2%
1.00%
2.00%
of which Czech
Republic
369
465
39
39
491
0%
2.00%
2.00%
of which Romania
774
94
49
49
607
0%
1.00%
1.00%
of which United
Kingdom
16,619
45,429
12,559
2,235
170
2,404
30,051
5%
2.00%
2.00%
of which Slovakia
95
178
11
11
138
0%
1.50%
1.50%
of which Slovenia
8
22
2
2
22
0%
0.50%
0.50%
of which Sweden
2,541
4,552
597
247
252
3,154
1%
2.00%
2.00%
North America
1,107
93,448
30,974
2,856
42
462
3,360
41,995
7%
Asia Pacific
10,099
45,135
1,652
2,905
20
2,925
36,559
6%
of which
Australia
196
7,303
192
2,401
0%
1.00%
1.00%
of which Hong
Kong
1,586
6,976
318
2
320
3,995
1%
1.00%
1.00%
Rest of the World
20,668
34,440
49
2,759
5
3
2,768
34,594
6%
020 TOTAL
261,643
854,325
101,296
44,127
1,564
1,327
47,018
587,730
100%
0.40%
0.69%
(*) Within the European Union, the European Free T r ade Association (EFTA) and the United Kingdom.
(**) According to the rates published on the ESRB website as at 6 July 2023.
G-SIB BUFFER
The measurement approach of the global systemic importance is
indicator-based. The selected indicators reflect the size of banks, their
interconnectedness, the use of banking information systems for the
services they provide, their global cross-jurisdictional activity and their
complexity. The methodology is described in a document published in
July 2013 by the Basel Committee, entitled Global systemically important
banks: updated assessment methodology and the higher loss absorbency
requirement (BCBS 255).
The Group received notification from the Autorité de contrôle prudentiel
et de résolution (ACPR), dated 27 November 2023, that it was on the 2023
list of global systemically important financial institutions in sub-category
3, corresponding to its score in the database at end 2022.
As a result, the G-SIB buffer requirement for the Group, applicable from
1 January 2024 remains unchanged at 1.5% of the total exposure amount.
The Group's G-SIB indicators at 31 December 2023 will be published in
April 2024 and included in the first update to the Universal registration
document.
➤
SYSTEMIC RISK BUFFER (G-SIB)
In millions of euros
31 December 2022
Cross-jurisdictional activity
1
Cross-jurisdictional claims
1,359,358
2
Cross-jurisdictional liabilities
1,255,194
Size
3
Total exposures
2,629,311
Interconnectedness
4
Intra-financial system assets
336,835
5
Intra-financial system liabilities
298,893
6
Securities outstanding
317,231
Substitutability
7
Assets under custody
5,854,163
Trading volume fixed income
1,681,052
Trading volume equities and other securities
2,629,393
Financial institution infrastructure
8
Payment activity
58,091,405
Underwritten transactions in debt and equity markets
9
Underwritten transactions in a debt and equity markets
178,373
Complexity
10
Notional amount of over-the-counter (OTC) derivatives
26,324,698
11
Level 3 assets
29,469
12
Trading and available for sale (AFS) securities
73,926
Appendix 4: Capital requirements of significant
subsidiaries
BNP PARIBAS FORTIS GROUP
In millions of euros
RWAs
Capital
requirements
31 December 2023
31 December 2022
31 December 2023
1
Credit risk
137,700
133,033
11,016
2
of which standardised approach
62,680
59,185
5,014
EU 4a
of which equities under the simple weighting approach
15,664
14,192
1,253
5
of which advanced IRB (A-IRB) approach
59,356
59,657
4,749
6
Counterparty credit risk
1,296
1,402
104
7
of which SACCR (derivatives)
634
604
51
8
of which internal model method (IMM)
330
580
27
EU 8a
of which exposures to CCP related to clearing activities
297
152
24
EU 8b
of which CVA
33
67
3
9
of which other
2
1
-
16
Securitisation exposures in the banking book
1,026
724
82
17
of which internal ratings based approach (SEC-IRBA)
621
295
50
18
of which external ratings based approach (SEC-ERBA)
394
416
31
19
of which standardised approach (SEC-SA)
11
13
1
20
Market risk
1,061
788
85
21
of which standardised approach
1,061
788
85
23
Operational risk
11,971
10,806
958
EU 23a
of which basic indicator approach
2,212
1,912
177
EU 23b
of which standardised approach
3,108
2,449
249
EU 23c
of which advanced measurement approach (AMA)
6,651
6,444
532
24
Amounts below the thresholds for deduction
(subject to 250% risk weight)
3,616
4,088
289
29
TOTAL
156,669
150,840
12,534
BNL GROUP
In millions of euros
RWAs
Capital
requirements
31 December 2023
31 December 2022
31 December 2023
1
Credit risk
36,081
38,097
2,886
2
of which standardised approach
7,288
7,320
583
EU 4a
of which equities under the simple weighting approach
1,128
1,139
90
5
of which advanced IRB (A-IRB) approach
27,664
29,638
2,213
6
Counterparty credit risk
471
205
38
7
of which SACCR (Derivatives)
440
184
35
8
of which internal model method (IMM)
EU 8a
of which exposures to CCP related to clearing activities
EU 8b
of which CVA
32
20
3
9
of which other
16
Securitisation exposures in the banking book
396
507
32
17
of which internal ratings based approach (SEC-IRBA)
322
393
26
18
of which external ratings based approach (SEC-ERBA)
19
of which standardised approach (SEC-SA)
75
113
6
20
Market risk
7
2
1
21
of which standardised approach
7
2
1
23
Operational risk
3,366
3,393
269
EU 23a
of which basic indicator approach
61
54
5
EU 23b
of which standardised approach
95
112
8
EU 23c
of which advanced measurement approach (AMA)
3,209
3,227
257
24
Amounts below the thresholds for deduction
(subject to 250% risk weight)
80
19
6
29
TOTAL
40,402
42,223
3,232
BNP PARIBAS PERSONAL FINANCE GROUP
In millions of euros
RWAs
Capital
requirements
31 December 2023
31 December 2022
31 December 2023
1
Credit risk
59,136
57,112
4,731
2
of which standardised approach
52,140
49,970
4,171
EU 4a
of which equities positions under the simple weighting approach
33
46
3
5
of which advanced IRB (A-IRB) approach
6,963
7,096
557
6
Counterparty credit risk
174
37
14
7
of which SACCR (Derivatives)
96
8
8
8
of which internal model method (IMM)
EU 8a
of which exposures to CCP related to clearing activities
EU 8b
of which CVA
77
28
6
9
of which other
16
Securitisation exposures in the banking book
216
341
17
17
of which internal ratings based approach (SEC-IRBA)
45
154
4
18
of which external ratings based approach (SEC-ERBA)
171
186
14
19
of which standardised approach (SEC-SA)
20
Market risk
78
216
6
21
of which standardised approach
78
216
6
23
Operational risk
5,963
6,829
477
EU 23a
of which basic indicator approach
390
188
31
EU 23b
of which standardised approach
1,496
1,913
120
EU 23c
of which advanced measurement approach (AMA)
4,077
4,727
326
24
Amounts below the thresholds for deduction
(subject to 250% risk weight)
2,032
1,557
163
29
TOTAL
67,598
66,091
5,408
BGL BNP PARIBAS GROUP
In millions of euros
RWAs
Capital
requirements
31 December 2023
31 December 2022
31 December 2023
1
Credit risk
24,625
24,683
1,970
2
of which standardised approach
17,744
17,374
1,420
EU 4a
of which equities under the simple weighing approach
618
535
49
5
of which advanced IRB approach
6,263
6,774
501
6
Counterparty credit risk
21
28
2
7
of which SACCR (Derivatives)
15
24
1
8
of which internal model method (IMM)
EU 8a
of which exposures to CCP related to clearing activities
EU 8b
of which CVA
3
3
0
9
of which other
2
1
0
16
Securitisation exposures in the banking book
15
26
1
17
of which internal rating based approach (SEC-IRBA)
18
of which external ratings based approach (SEC-ERBA)
15
26
1
19
of which standardised approach
20
Market risk
30
13
2
21
of which standardised approach
30
13
2
23
Operational risk
1,564
1,495
125
EU 23a
of which basic indicator approach
273
281
22
EU 23b
of which standardised approach
227
228
18
EU 23c
of which advanced measurement approach (AMA)
1,064
986
85
24
Amounts below the thresholds for deduction
(subject to 250% risk weight)
205
192
16
29
TOTAL
26,459
26,438
2,117
Appendix 5: Environmental, social
and governance risk
ESG ASSESSMENT (ESG-A)
The ESG analysis of large corporate clients has been expanded to all
sectors, thanks to a new risk assessment tool: the ESG Assessment
(ESG-A). This assessment aims to perform a systematic ESG analysis
as part of the credit process by integrating ESG criteria within the other
criteria included in the assessment of the clients' credit profile.
The ESG-A covers the environmental (climate, biodiversity), social
(health and safety at work and impact on communities) and governance
(business ethics) dimensions through a set of questions, supplemented by
an analysis of the controversies affecting the client. The questionnaires
developed in this context are specific to each sector in order to better
integrate the challenges and issues specific to related activities.
Overall, ESG Assessment enables to:
■ assess clients' compliance with sectoral policies;
■ assess the maturity of the clients' ESG strategy and its implementation
as well as their capability to monitor their ESG key material issues and
publish performance indicators;
■ determine whether actions plans have been undertaken;
■ identify if some commitments have been taken by the clients on
specific topics;
■ get a sense of forward-looking ESG path of the clients.
The deployment of ESG-A, included in the credit files of all large
corporates business groups whatever the business sectors, enables
the RISK Function to exercise greater control over the ESG dimensions
during credit committees, on a documented basis. Currently designed for
large companies, this framework has been adapted and will be extended
to additional customer segments (corporates with a turnover above
EUR 50 million and financial institutions) starting from 2024.
This ESG-A which is being rolled-out for corporate clients covers the
performance assessment of the counterparty and includes questions on
the way ESG-related issues are tackled by the Bank's clients. This set of
questions cove r, f or example, the following aspects:
■ Environment:
■
existence of GHG emission reduction targets set with a clear
deadline,
■
use of sectorial standard metric to measure GHG intensity,
■
existence of a Net-Zero emission target or carbon neutrality target,
■
extent of physical risk exposure and actions to mitigate it,
■
the way biodiversity matters are addressed by the company;
■ Social:
■
existence of a health & safety management system,
■
ability to disclose/provide performance indicators with regards to
health & safety aspects to workers relying on frequency and/or
severity rates,
■
commitment to disclose or provide health & safety indicators for
workers and subcontractors;
■ Governance:
■
existence of a Code of conduct in place to address ethical
considerations, deployment of a whistleblowing system,
■
relevant employees' compensation (such as top management
variable compensation) linked to ESG performance,
■
transparency: check if company's extra-financial information (i.e.
indicators or policies) are audited by an external third party.
As previously mentioned, the questionnaire aims at guiding the
assessment and dialogue with the client, and, among other things,
it enables evaluation of a counterparty's governance capability to
identity and monitor ESG key material issues as well as to publish ESG
performance indicators.
RISK IDENTIFICATION & ASSESSMENT PROCESS ("RISK ID")
BNP Paribas' risk identification & assessment process (Risk ID) is part
of the Group risk management framework. Risk ID is a fully integrated
process, involving business lines, the RISK Function and the other control
functions throughout the Group. It serves to maintain up-to-date the Risk
Inventories, both at local and Group levels. The Risk ID process aims to
identify and assess all risks to which the Group is or could be exposed
in a forward-looking way.
The Risk ID process covers:
■ all sets of activities and exposures, on and off-balance sheet, as well
as new products and activities;
■ all risk types and all geographies;
■ all business lines and legal entities.
As part of the Group's Risk ID process, all business lines are requested
to keep up to date their Risk Inventory (that is ultimately contribution to
the Group Risk Inventory). This inventory consists in identifying a set of
elementary severe but plausible scenarios ("risk events") corresponding
to the way the risk types the Group is or might be exposed to could
materialise. Each scenario is briefly described and attached to one
of the 101 risk types of the Group reference risk type taxonomy, and
is associated with a selection of risk factors (identified from the 115
proposed in the Group reference risk driver taxonomy) that are liable to
trigge r, f avor or worsen the scenario. There can be up to five risk factors
for a given scenario. A scenario can be linked to individual counterparties,
to one (or several) specific sector(s), and all activities are covered
ESG dimensions are captured via risk factors. To this end, among the
115 risk factors proposed in the risk factor taxonomy, 13 pertain to ESG
categories, of which:
■ 9 are totally or partially related environmental concerns (columns
"Climate" & "Nature" in the table below);
■ 5 are totally or partially related to social concerns (column "Social");
■ 3 are totally or partially related to governance concerns (column
"Governance").
These ESG-related risk factors have been designed in line with EBA and
ECB recommendations. They are used in the Risk ID process to assess, in
a forward-looking way, how they could give rise to elementary scenarios,
corresponding to the virtual materialisation of any kind of financial or
non-financial risks.
BNP Paribas taxonomy of ESG risk factors are presented in the following table.
Level 1 risk factor
Level 2 risk factor
Level 3 risk factor
Climate Nature
Social Governance
Environmental, social and
governance risk factors
Physical climate change
risk factors
1
Acute physical impact of climate change

2
Chronic physical impact of climate change

Transition due to climate
change risk factors
3
Transition to a low-carbon eco. - Policy
changes

4
Transition to a low-carbon eco. -
Technological changes

5
Transition to a low-carbon eco. -
Behavioural changes

Nature-related risk
factors
6
Biodiversity loss, land degradation & other
nature-related risk factors

7
Pollution and natural resources concerns

Social risk factors
8
Human rights (local communities and
consumers)

9
Human rights (workforce)

10
Social sentiments and expectations

Governance risk factors
11
Inadequate governance regarding
management of E & S risks




12
Non-compliance with corporate gov.
frameworks or codes

Liability consequences
13
ESG related liability consequences




Besides, a better understanding of the transmission channels that explain how ESG risk drivers could lead to direct or indirect damage to the Group
enhances the ability to seize and model the possible impacts of ESG risk drivers. Consequently, in Risk ID approach, whenever an ESG risk driver is
considered as favouring, triggering and or worsening a risk event. Associated transmissions channels must be identified. They have to be selected from
the first version of the BNP Paribas reference taxonomy of ESG transmission channels.
The following graph illustrates the manner BNP Paribas accounts for the fact that ESG risk drivers are likely to contribute, via pre-identified transmission
channels, to the materialisation of, potentially, any type of risk.
ESG-related risk factors
Physical climate change
risk factors
ESG transmission channels
Materialization of risk types
Acute physical impact of climate change
Chronic physical impact of climate change
Transition due to climate change
risk factors
Transition to a low-carbon economy
– Policy changes
Transition to a low-carbon economy
– Technological Changes
Transition to a low-carbon economy
– Behavioural changes
Biodiversity loss, land degradation
and other nature-related risk drivers
Pollution and natural resources concerns
Human rights (local communities
and consumers)
Human rights (workforce)
Social sentiments and expectations
Governance risk factors linked to
inadequate management of E & S risks
Inadequate governance regarding
management of E & S risks
ESG related liability consequences
Nature-related risk factors
Social risk factors
Governance risk factors
Liability consequences
Regulation, norms & politics
Carbon price or carbon tax
Energy performance / EPCs
New ESG-related regulations
Sanctions & ꢀnes
Political decisions
Social, health & legal
Changes in expectations, habits
or behaviours
Damage to the reputation
Dispute, claims, legal proceeds
Morbidity (disease, pandemics...)
& mortality
Social unrest
Migration of populations
Physical & nancial assets
Physical asset damage / destruction
Increased volatility or shift in prices
or values
Lower ꢀnancial asset performance
Stranded assets or workers
Model error risks
Compliance risks
Information Communication
& Technology risks
Execution risks
Other operational risks
(frauds, HR, legal, third-party, etc)
Microeconomics
Losses of business opportunity
New capital expenditures / Increased costs
Operational disruption (excluding supply
chain)
Supply chain disruption
Lower production
Lower productivity
Impact on wealth and / or solvency
Others
ESG-related technological change
Availability & costs of risk transfer to
insurance & re-insurance
Business & strategic risks
Credit, counterparty & settlement risks
Market risks
ALM Treasury risks
Model uncertainty risk
Operational risks
Corporate structure risks
Regulatory risks
Insurance underwriting risks
Not all transmission channels are relevant to for all ESG risk factors. For each of the ESG risk factors, only a sub-set of the transmission channel
ensemble is applicable and could play a role in the causal chain leading to the materialization of a financial or non-financial risk, ultimately leading to
a direct or indirect damage to the Group. The following compatibility matrix illustrates this state of affairs.
➤
ESG RISK FACTORS
ESG transmission channels
Physical
Transition
Acute physical
impact of
climate change
Chronic
physical impact
of climate
change
Transition -
Policy changes
Transition -
Technological
changes
Transition -
Behavioural
changes
Regulation,
norms
& policies
1
Carbon price or carbon tax

2
Energy performance / EPCs

3
New regulations ESG




4
Sanctions & fines


5
Political decisions





Social, health
& legal
6
Changes in expectations, habits or behaviours




7
Damage to the reputation





8
Dispute, claims, legal proceeds




9
Morbidity (disease, pandemics, etc) & mortality


10 Social unrest




11 Migration of populations



Physical &
financial assets
12 Physical asset damage / destruction


13 Increased volatility or shift in prices or values





14 Lower financial asset performance





15 Stranded assets or workers





Microeconomics
16 Losses of business opportunity





17 New capital expenditures / Increased costs





Operational disruption
18 (excluding supply chain)


19 Supply chain disruption




20 Lower production




21 Lower productivity




22 Impact on wealth and / or solvency





Others
23 ESG-related technological change





Availability & costs of risk transfer to insurance
24 &re-insurance



Nature
Social
Governance
Liability
Biodiversity loss
& other nature risk
drivers
Pollution &
natural resources
concerns
Human rights
(local comm. &
consumers)
Human rights
(workforce)
Social sentiments
and expectations
Gov. risk drivers
linked to
inadequate mgmt
of E & S risks
Non-compl. with
corp. gov. Fwks /
codes
ESG related
liability
consequences



















































































































Appendix 6: List of tables and figures
Pages
5.1 ANNUAL RISK SURVEY
307
T a ble 1
Key indicators (EU KM1)
308
T a ble 2
TLAC ratio (EU KM2)
309
Figure 1
Risk-weighted assets by risk type
309
Figure 2
Risk-weighted assets by business line
310
Figure 3
Credit risk exposure breakdown by geographic region
310
Figure 4
Credit risk exposure breakdown by asset class
310
T a ble 3
Doubtful loans on gross outstandings ratio
311
T a ble 4
Stage 3 coverage ratio
311
T a ble 5
Cost of risk on outstandings
311
T a ble 6
Immediately available liquidity reserve
311
5.2 CAPITAL MANAGEMENT AND CAPITAL ADEQUACY
329
T a ble 7
Differences between the accounting and prudential scopes (EU LI3)
330
T a ble 8
Consolidated balance sheet to prudential balance sheet reconciliation (EU LI1/EU CC2)
331
T a ble 9
Prudential balance sheet by risk type (EU LI1-B)
335
T a ble 10
Reconciliation between net carrying values under the prudential scope and the exposure amounts considered
for regulatory purposes (EU LI2)
339
T a ble 11
Transition from consolidated equity to Common Equity Tier 1 (CET1) capital
341
T a ble 12
Value adjustments related to prudent valuation (PVA) (EU PV1)
342
T a ble 13
Regulatory capital
343
T a ble 14
Change in regulatory capital
344
T a ble 15
Change in eligible debt for the constitution of equity
344
T a ble 16
Effect of the application of transitional arrangements for IFRS 9 accounting standard (EU IFRS9-FL)
345
T a ble 17
Overview of risk-weighted exposure amounts (EU OV1)
346
T a ble 18
Risk-weighted assets movements by key driver
347
T a ble 19
Risk-weighted assets by risk type and business
348
T a ble 20
Overall capital requirements
351
Figure 5
MDA restriction thresholds
352
T a ble 21
Financial conglomerates – own funds and capital adequacy ratio (EU INS2)
353
T a ble 22
Composition of TLAC ratio (EU TLAC1)
355
T a ble 23
Creditor ranking of the resolution entity – BNP Paribas SA (EU TLAC3)
356
T a ble 24
Leverage ratio – Itemised
358
5.3 RISK MANAGEMENT
363
Figure 6
Overview of Group level governing bodies covering risk-related topics
363
5.4 CREDIT RISK
372
T a ble 25
Credit risk exposure by asset class and approach
372
Figure 7
Gross credit risk exposure by approach
373
T a ble 26
Scope of the use of IRB and SA approaches (EU CR6-A)
374
T a ble 27
Indicative mapping of internal counterparty rating with agency rating scale and average expected PD
378
T a ble 28
Credit risk exposure by regulatory asset class and approach type (EU CRB-B)
381
T a ble 29
Credit risk exposure by geographic region
382
T a ble 30
Credit risk-weighted assets
386
T a ble 31
Credit risk-weighted assets movements by key driver (EU CR8)
387
T a ble 32
Main models: PD, LGD and CCF/EAD
389
T a ble 33
Backtesting of PD on central governments, central banks and institutions portfolio (EU CR9)
392
T a ble 34
Backtesting of PD on corporates portfolio (EU CR9)
394
T a ble 35
Backtesting of PD on retail secured by property portfolio (EU CR9)
398
Pages
T a ble 36
Backtesting of PD on other retail portfolio (EU CR9)
400
T a ble 37
Backtesting of LGD
403
Figure 8
IRBA exposure by PD range – Sovereign, financial institution, corporate and specialised financing portfolios
405
T a ble 38
IRBA exposure by PD scale and asset class – central bank, central government and institutions portfolio (EU CR6)
406
T a ble 39
IRBA exposure by PD scale and asset class corporate portfolio (EU CR6)
408
T a ble 40
Average PD and LGD of the corporate asset class by geographic region
412
Figure 9
IRBA exposure by PD range – Retail portfolio
413
T a ble 41
IRBA exposure by PD scale and asset class – retail guaranteed by real property portfolio (EU CR6)
414
T a ble 42
IRBA exposure by PD scale and asset class – other retail portfolios (EU CR6)
416
T a ble 43
Average PD and LGD of the retail portfolio by geographic region
420
T a ble 44
Standardised credit risk exposure by standard exposure class (EU CR4)
421
T a ble 45
Standardised credit exposure at default (EU CR5)
423
Figure 10
Standardised credit exposure at default by risk weight
425
T a ble 46
Equity positions under the simple weighting method (EU CR10)
426
T a ble 47
Insurance undertakings (EU INS1)
426
T a ble 48
Performing and non-performing exposures and related provisions (EU CR1)
428
T a ble 49
Performing and non-performing exposures by past due days (EU CQ3)
430
T a ble 50
Exposures and provisions by geographic breakdown (EU CQ4)
432
T a ble 51
Breakdown of loans and advances and provisions to non-financial corporations by industry (EU CQ5)
436
T a ble 52
Breakdown of financial assets subject to impairment by stage and internal rating
443
T a ble 53
Credit quality of restructured loans (EU CQ1)
445
T a ble 54
Credit risk mitigation techniques (EU CR3)
446
T a ble 55
Credit risk mitigation in IRBA and standard approach
447
T a ble 56
Secured exposures in IRB approach (EU CR7-A)
448
T a ble 57
Collateral obtained by taking possession and execution processes (EU CQ7)
451
5.5
SECURITISATION IN THE BANKING BOOK
452
T a ble 58
Securitised exposures and securitisation positions (held or acquired) by role
452
T a ble 59
Securitised exposures originated by BNP Paribas
453
T a ble 60
Securitised exposures by BNP Paribas as an originator by underlying asset category
454
T a ble 61
Exposures securitised by the institution – exposures in default (EU SEC5)
454
T a ble 62
Securitised exposures by BNP Paribas as sponsor by underlying asset category
455
T a ble 63
List of securitisation vehicles Initiated by the Group (SEC-A)
456
T a ble 64
Securitisation exposures in the non-trading book (EU SEC1)
459
T a ble 65
Banking book securitisation position quality
460
T a ble 66
Securitisation positions and risk-weighted assets movements by key driver
460
T a ble 67
Securitisation exposures and risk-weighted assets – institution acting as originator or as sponsor (EU SEC3)
461
T a ble 68
Securitisation positions and risk-weighted assets – BNP Paribas acting as investor (EU SEC4)
463
5.6
COUNTERPARTY CREDIT RISK
465
T a ble 69
Counterparty credit risk exposure at default by asset class (excl. CVA risk charge)
468
T a ble 70
Counterparty credit risk exposure at default by product (excl. CVA risk charge)
468
T a ble 71
Bilateral counterparty credit risk exposure at default by approach (EU CCR1)
469
T a ble 72
IRBA bilateral counterparty credit risk exposure at default (EU CCR4)
471
T a ble 73
Standardised bilateral counterparty credit risk exposure at default (EU CCR3)
473
T a ble 74
Exposure to central CCPs (EU CCR8)
474
T a ble 75
CVA risk capital charge (EU CCR2)
475
T a ble 76
Composition of collateral for CCR exposures given and received (EU CCR5)
475
T a ble 77
Credit derivative exposures (EU CCR6)
476
T a ble 78
Counterparty credit risk capital requirement and risk-weighted assets
477
T a ble 79
Counterparty credit RWA movements by key driver (EU CCR7)
477
Pages
5.7
MARKET RISK
478
T a ble 80
Market risk capital requirement and risk-weighted assets
478
T a ble 81
Market risk under the internal model approach (EU MR2-A)
479
T a ble 82
Market risk under the standardised approach (EU MR1)
479
T a ble 83
Market risk-weighted assets movements by key driver (EU MR2-B)
480
T a ble 84
Value at Risk (1-day, 99%)
484
Figure 11
Comparison between VaR (1-day, 99%) and daily trading revenue (EU MR4)
485
Figure 12
Quarterly change in VaR (1-day, 99%)
486
Figure 13
Distribution of daily trading revenue
486
T a ble 85
Value at Risk (10-day, 99%)
487
T a ble 86
Stressed Value at Risk (1-day, 99%)
487
T a ble 87
IMA values for trading portfolios (EU MR3)
488
T a ble 88
Breakdown of trading book securitisation positions outside correlation book by asset type (EU SEC2)
489
T a ble 89
Breakdown of trading book securitisation positions and capital requirements outside correlation book by risk
weight
490
T a ble 90
Sensitivity of revenues to global interest rate risk based on a 50 basis point increase or decrease in the
interest rates (EU IRRBB1A)
494
T a ble 91
Sensitivity of Tier 1 capital economic value to the 6 regulatory stress test scenarios (EU IRRBB1B)
495
T a ble 92
Hedged cash flows
496
5.8 LIQUIDITY RISK
497
T a ble 93
Breakdown of the wholesale funding by currency
499
T a ble 94
Breakdown of the Group's medium long term (MLT) wholesale funding
500
T a ble 95
Trends in Group MLT wholesale funding
500
T a ble 96
MLT secured wholesale funding
501
T a ble 97
Breakdown of global liquidity reserve (counterbalancing capacity)
502
T a ble 98
Short-term liquidity ratio (LCR) – Itemised (EU LIQ1)
503
T a ble 99
Net stable funding ratio (EU LIQ2)
505
T a ble 100
Contractual maturities of the prudential balance sheet (EU CR1-A)
508
T a ble 101
Contractual maturities of capital instruments and medium -and long-term debt securities
in the prudential scope
510
T a ble 102
Economic maturities of subordinated debt (prudential perimeter)
511
T a ble 103
Encumbred and unencumbered assets
512
5.9 OPERATIONAL RISK
515
Figure 14
Operational losses – Breakdown by event type (average 2015-2023)
520
T a ble 104
Operational risk capital requirement and risk-weighted assets (EU OR1)
521
5.10 INSURANCE RISKS
522
T a ble 105
Breakdown of BNP Paribas Cardif Group investments (excluding investments in unit-linked contracts)
523
T a ble 106
Bond exposure by issuer and rating (excluding investments in unit-linked contracts
and Eurocroissance contracts)
524
T a ble 107
Exposure to government bond and similar by issuing country (excluding investments in unit-linked
contracts and Eurocroissance contracts)
524
5.11 ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISK
526
T a ble 108
Credit quality of exposures by secto r, e missions and residual maturity
534
T a ble 109
Exposures to top 20 carbon-intensive firms
542
T a ble 110
Loans collateralised by immovable property – energy efficiency of the collateral
543
T a ble 111
Exposures subject to potential physical risk
546
T a ble 112
Summary of key performance indicators (KPIs) aligned with the taxonomy
549
T a ble 113
Assets for the GAR calculation
550
T a ble 114
GAR (%)
554
T a ble 115
Other climate change mitigation actions not covered by the taxonomy
556
Appendix 7: Acronyms
Acronyms
ABCP
Asset-Backed Commercial Paper
ABS
Asset-Backed Securities
ACPR
Autorité de contrôle prudentiel et de résolution
ALCo
Asset and Liability Committee
EFTA
European Free Trade Association
AFG
Affaires Fiscales Groupe (Group T a x Department)
A-IRB
Advanced internal ratings-based approach
ALM
Asset and Liability Management
AMA
Advanced measurement approach
AMF
Autorité des Marchés Financiers (French Financial
Markets Authority)
ASA
Alternative Standardised Approach
AVA
Additional Valuation Adjustments
BCBS
Basel Committee on Banking Supervision
ECB
European Central Bank
CPBF
Commercial & Personal Banking in France
CPBB
Commercial & Personal Banking in Belgium
BNB
Banque Nationale de Belgique
BNL
Banca Nazionale del Lavoro
BRRD
Bank Recovery and Resolution Directive
CCA
Climate Change Adaptation
CCDG
Executive Management Credit Committee
CDDG
Executive Management Receivables Committee
CCF
Credit Conversion Factor
CCIRC
Internal Control, Risk Management and Compliance
Committee
CCM
Climate Change Mitigation
CC
Central Counterparty
CDO
Collaterised Debt Obligations
CDS
Credit Default Swap
CEBS
Committee of European Banking Supervisors
CFA
French African Community
CFP
Change Franc Pacifique
CGEN
Corporate Governance, Ethics, Nominations and
CSR Committee
CIB
Corporate & Institutional Banking
HRC
Homogeneous Risk Category
CLO
Collaterised Loan Obligations
CMAP
Centre for Applied Mathematics
CMBS
Commercial Mortgage Backed Securities
CMG
Crisis Management Group
CPBS
Commercial, Personal Banking & Services
CRD
Capital Requirement Directive (European directive)
CRM
Comprehensive Risk Measure
CRR
Capital Requirement Regulation (EU regulation
amended by CRR2)
SRB
Single Resolution Board
CSA
Credit Support Annex
CVA
Credit Valuation Adjustment
DPE
Energy Performance Diagnosis
D-SIBS
Domestic Systemically Important Banks
Acronyms
EAD
Exposure at Default
EBA
European Banking Authority
ECAIs
External Credit Assessment Institutions
EDTF
Enhanced Disclosure T a sk Force
EEA
European Economic Area
EEPE
Effective Expected Positive Exposure
EHQLA
Assets of extremely high liquidity and credit quality
EPE
Expected Positive Exposure
EIOPA
European Insurance and Occupational Pensions
Authority
EIS
Systemically important institution
G-SII
Global systemically important institution
EL
Expected Loss
EMIR
European Market Infrastructure Regulation
(European regulation)
EMTN
Euro Medium-T e rm Note
EP4
4th version of the Equator Principles
EPC
Energy Performance Contract
ESG
Environmental Social and Governance
ESG-A
ESG Assessment
ESMA
European Securities and Markets Authority
ESRB
European Systemic Risk Board
FBF
Fédération Bancaire Française(French Banking
Federation)
Fed
Federal Reserve System of the United States
FICC
Fixed Income Credit and Commodities
FLAIR
Forward Looking Adjustment of Internal Rating
IMF
International Monetary Fund
FMRC
Financial Markets Risk Committee
FRTB
Fundamental review of trading book
FSB
Financial Stability Board
FSRU
Floating Storage and Regasification Unit
GAFAM
Google, Apple, Facebook, Amazon, Microsoft
GCM
Global Clearing Member
GHG
Greenhouse gas emissions
GHOS
Central Bank Governers and BankSupervisors
Group
GITRC
Group IT Risk Committee
GSCC
Group Supervisory and Control Committee
G-SIBs
Global systemically important banks
GTS
Growth Technology Sustainability
GWWR
General Wrong Way Risk
HQLA
High Quality Liquid Assets
ICAAP
Internal Capital Adequacy Assessment Process
(under Pillar 2)
ICT
Information, communication and technology
IFRS
International Financial Reporting Standards
IMM
Internal Model Method
IPS
Investment & Protection Services
IRB
International Retail Banking
IRBA
Internal Ratings-Based Approach (internal models)
IRC
Incremental Risk Charge
Acronyms
ISDA
International Swaps and Derivatives Association
STIs
Implementing Technical Standards
JJ
Overnight Rate
LBO
Leveraged Buy-Out
LCR
Liquidity Coverage Ratio
LGD
Loss Given Default
KYC
Know Your Client
LTV
Loan-to-Value
MAP
Market Parameter
MFI MI
Markets and Financial Institutions - Management
Information
MLT
Medium and long term
NIM
Net interest margin
MDA
Maximum Distributable Amount
MREL
Minimum Requirement for own funds and Eligible
Liabilities
SSM
Single Supervisory Mechanism
MTN
Medium-T e rm Note
NACE
Statistical classification of economic activities
in the European Community
NIST
National Institute of Standards and Technology
NFRD
Non-Financial Reporting Directive
NGFS
Network for Greening the Financial System
NPV
Net Present Value
NSFR
Net Stable Funding Ratio
NUTS3
Classification of territorial units for statistics,
level 3 corresponding to the departments
NZBA
Net-Zero Banking Alliance
OAT
Obligations Assimilables du T r ésor (10-year French
government bonds)
OECD
Organisation for Economic Cooperation
and Development
SDG
Sustainable Development Goals
OIS
Overnight Indexed Swap
ILO
International Labour Organization
IMO
International Maritime Organisation
OPC
Collective investment undertakings
ORM
Operational Risk Management
ORSA
Own Risk and Solvency Assessment
OS
Open Source (source designed to be accessible
to the public)
OTC
Over-the-counter
P2G
Pillar 2 Guidance
P2R
Pillar 2 Requirement (prudential requirement)
bp
Basis points
PCAF
Partnership for Carbon Accounting Financials
PD
Probability of Default
PFC
Product and Financial Control Committee
PFE
Potential Future Exposure
GDP
Gross Domestic Product
PM
Portfolio Management
SME
Small and Medium-sized Enterprise
SR
Policyholders' Surplus Reserve
PRB
Principles for Responsible Banking
PRI
Principles for Responsible Investment
PVA
Prudent Valuation Adjustment
Acronyms
RAS
Risk Appetite Statement
RC
Replacement cost
RDPC
Risk and Development Policy Committees
GDPR
General Data Protection Regulation
RMBS
Residential Mortgage-Backed Securities
CSR
Corporate Social Responsibility
RW
Risk weight
SA-CCR
Standardised Approach for Counterparty Credit Risk
SEC-ERBA
External ratings-based approach
SEC-IRBA
Internal ratings-based approach
SEC-SA
Standardised approach
SFCR
Solvency and Financial Condition Report
SFSC
Sustainable Finance Strategic Committee
SFT
Securities Financing Transaction
SREP
Supervisory Review and Evaluation Process
STFS
Stress Testing and Financial Simulations
STS
Simple, transparent et standard
STSC
Stress Testing Steering Committee
SWWR
Specific Wrong Way Risk
SyRB
Systemic risk buffer
TCP
Thematic Credit Policy
TLAC
Total Loss Absorbing Capacity
TLTRO
T a rgeted Long-T e rm Refinancing Operation
MGR
Minimum guaranteed rate
EIR
Effective Interest Rate
GRR
Global Recovery Rate
SRT
Significant Risk Transfer
TSA
Standardised approach
TTC
Through The Cycle
US MTN
United States Medium-T e rm Note
V&RC
Risk valuation and control team
VaR
Value at Risk
SVaR
Stressed VaR
VFA
Variable Fee Approach
VMC
Valuation Methodology Committee
VMCP
Valuation Methodology Control Policy
VRC
Valuation Review Committee
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6
INFORMATION ON THE PARENT
COMPANY FINANCIAL STATEMENTS
31 DECEMBER 2023
6.1
BNP Paribas SA financial statements
584
Profit and loss account for the year ended 31 December 2023
584
Balance sheet at 31 December 2023
585
Notes to the parent company financial statements
586
Note 1
Summary of significant accounting principles applied by BNP Paribas SA
586
Note 2
Notes to the 2023 profit and loss account
593
Note 3
Notes to the balance sheet at 31 December 2023
596
Note 4
Financing, guarantee and securities commitments
606
Note 5
Salaries and employee benefits
607
Note 6
Additional information
609
6.2
Appropriation of income for the year ended 31 December 2023
and dividend distribution
612
6.3
BNP Paribas SA five-year financial summary
613
6.4
Main subsidiaries and associates of BNP Paribas SA
614
6.5
Disclosures of investments of BNP Paribas SA in 2023 affecting
at least 5% of share capital of french companies
624
6.6
Statutory Auditors' report on the financial statements
625
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
BNP Paribas SA financial statements
6.1 BNP Paribas SA financial statements
On 1st November 2023, the retroactive merger from 1st January of Exane SA into BNP Paribas SA was completed by absorption. On that date, Exane SA
was dissolved by operation of law without liquidation.
The legal disappearance of Exane led to the closure of six branches following the transfer of their assets and liabilities to BNP Paribas SA branches in
each country in Europe. Thus, the 2023 financial statements are prepared taking this legal transaction into account.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2023
In millions of euros
Year to
Notes 31 December 2023
Year to
31 December 2022
Interest income
2.a
67,392
29,450
Interest expense
2.a
(64,304)
(22,333)
Income on equities and other variable instruments
2.b
8,211
6,312
Commission income
2.c
8,545
8,711
Commission expense
2.c
(2,042)
(2,052)
Net gains on trading account securities
2.d
9,552
6,889
Net losses on securities available for sale
2.e
(228)
(1,244)
Other banking income
557
327
Other banking expenses
(490)
(351)
NET BANKING INCOME
27,193
25,709
Salaries and employee benefit expense
5.a
(8,765)
(8,116)
Other administrative expenses
(6,132)
(6,417)
Depreciation, amortisation and impairment on tangible and intangible assets
(741)
(763)
GROSS OPERATING INCOME
11,555
10,413
Cost of risk
2.f
(748)
(321)
OPERATING INCOME
10,807
10,092
Net losses on disposals of long-term investments
2.g
(538)
(1,115)
Net additions to or reversals of regulated provisions
34
(1)
INCOME BEFORE TAX
10,303
8,976
Income taxes
2.h
(683)
(943)
NET INCOME
9,620
8,033
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
BNP Paribas SA financial statements
BALANCE SHEET AT 31 DECEMBER 2023
In millions of euros, at
Notes 31 December 2023
31 December 2022
ASSETS
Cash and amounts due from central banks
234,997
274,886
Treasury bills and money-market instruments
3.c
159,168
141,968
Due from credit institutions
3.a
216,239
201,981
Customer items
3.b
586,322
552,162
Bonds and other fixed-income securities
3.c
140,476
122,130
Equities and other variable-income securities
3.c
2,356
2,140
Investments in subsidiaries and equity securities held for long-term investment
3.c
4,006
3,825
Investments in affiliates
3.c
48,654
61,725
Intangible assets
3.j
2,635
2,994
T a ngible assets
3.j
2,093
2,122
Treasury shares
3.d
38
38
Other assets
3.h
189,177
223,274
Accrued income
3.i
126,335
141,062
TOTAL ASSETS
1,712,496
1,730,307
LIABILITIES
Due to central banks
1,330
681
Due to credit institutions
3.a
227,418
233,747
Customer items
3.b
839,734
832,154
Debt securities
3.f
180,433
160,373
Other liabilities
3.h
230,846
263,810
Accrued expenses
3.i
115,121
123,744
Provisions
3.k
1,990
2,013
Subordinated debt
3.l
31,882
29,919
TOTAL LIABILITIES
1,628,754
1,646,441
SHAREHOLDERS' EQUITY
6.b
Share capital
2,295
2,469
Additional paid-in capital
17,565
22,374
Reserves and Retained earnings
54,262
50,990
Net income for the period
9,620
8,033
TOTAL SHAREHOLDERS' EQUITY
83,742
83,866
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
1,712,496
1,730,307
OFF-BALANCE SHEET
Notes 31 December 2023
31 December 2022
COMMITMENTS GIVEN
Financing commitments
4.a
447,356
369,872
Guarantee commitments
4.b
211,773
231,899
Commitments given on securities
4.b
51,108
38,219
COMMITMENTS RECEIVED
Financing commitments
4.a
178,847
126,204
Guarantee commitments
4.b
323,022
333,633
Commitments given on securities
4.b
54,234
42,281
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
Notes to the parent company financial statements
Note 1
SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES APPLIED
BY BNP PARIBAS SA
BNP Paribas SA's financial statements have been prepared in accordance with generally accepted accounting principles applied to credit institutions in
France, set out in ANC (French Accounting Standards Authority) Regulation No. 2014-07 of 26 November 2014 and its amending regulations since that date.
AMOUNTS DUE FROM CREDIT
INSTITUTIONS AND CUSTOMERS
Amounts due from credit institutions include all subordinated and
unsubordinated loans made in connection with banking transactions
with credit institutions, with the exception of debt securities. They also
include assets purchased under resale agreements, whatever the type of
assets concerned, and receivables corresponding to securities sold under
collateralised repurchase agreements. They are broken down between
demand loans and deposits, and term loans and time deposits.
Amounts due from customers include loans to customers other than credit
institutions, with the exception of loans represented by debt securities
issued by customers, assets purchased under resale agreements,
whatever the type of assets concerned, and receivables corresponding
to securities sold under collateralised repurchase agreements. They are
broken down between commercial loans, customer debit accounts, and
other loans.
Amounts due from credit institutions and customers are recorded in the
balance sheet at nominal value plus accrued interest not yet due.
Outstanding loans and confirmed credit facilities are broken down into
sound loans, including sound restructured loans, and doubtful loans. The
same analysis is performed for credit risks attached to forward financial
instruments whose present value represents an asset for the Group.
Credit risks are monitored using BNP Paribas SA's internal credit
risk rating system. This system is based on two key parameters: the
probability of default by the counterparty, expressed as a rating, and the
overall recovery rate determined by reference to the type of transaction.
There are 12 counterparty ratings: 10 covering sound loans and two
covering doubtful loans and loans classified as irrecoverable.
Doubtful loans are defined as loans where the Bank considers that there
is a risk that the borrowers will be unable to honour all or part of their
commitments. The definition of default is consistent with the Basel
definition, which takes into account the EBA guidelines of 28 September
2016, in particular the applicable thresholds for overdue amounts and
probationary periods.
Loans overdue for more than 90 days, as well as loans subject to litigation
are considered as doubtful. When a loan is classified as doubtful, all
other loans and commitments to the debtor are automatically assigned
the same classification.
The Bank recognises an impairment for doubtful accounts on these
loans, in an amount corresponding to the difference between the gross
loan value and present value of the future cash flows (from principal,
interest, and any realised guarantees) that are deemed recoverable, using
a discount rate equal to the original effective interest rate (for fixed-
rate loans), or the most recent contractual interest rate (for floating-
rate loans). The guarantees considered here include mortgages and
pledges on assets, as well as credit derivatives acquired by the Bank as
a protection against credit losses in the loan book.
These impairments are determined on an individual or collective basis
based on statistical models for loan portfolios with similar risks and not
impaired individually.
If a loan is restructured because the borrower is facing financial
difficulties, the Bank calculates a discount equal to the difference in
present value between the old and new repayment terms. These
discounts are recognised as a deduction to assets and reversed through
income on an actuarial basis over the remaining term of the loan. If any
instalments on a restructured loan are not paid, the loan is reclassified
as doubtful or irrecoverable.
In the case of doubtful loans where the borrower has resumed making
regular payments in accordance with the original repayment schedule,
the loan is reclassified as sound. Similarly, doubtful loans that have been
restructured, where the restructuring terms are satisfied and for which
the credit risk is no longer proven, are also reclassified as sound.
Irrecoverable loans include loans to borrowers whose credit standing
is such that after a reasonable time classified as doubtful loans, no
reclassification as a sound loan is foreseeable, loans where an event of
default has occurred, almost all restructured loans where the borrower
has once again defaulted, and loans classified as doubtful for more than
one year that are in default and are not secured by guarantees covering
a substantial portion of the amount due.
Impairments for credit risk on doubtful loans are deducted from
the carrying amount of the assets on the balance sheet. Provisions
recorded under liabilities include provisions related to off-balance
sheet commitments, loss provisions relating to interests in real-estate
development programmes, provisions for claims and litigation, and
provisions for unforeseeable industry risks.
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6
Notes to the parent company financial statements
Additions to and recoveries of provisions and impairment, losses on
irrecoverable loans, recoveries on loans covered by provisions and
discounts calculated on restructured loans are recorded in the profit
and loss account under "Cost of risk".
The interest received from the repayment of the carrying amount of loans
that have been written-down, as well as the reversals of discounting
effects and the discount on restructured loans, are recognised under
"Interest income".
REGULATED SAVINGS AND LOAN
CONTRACTS
Home savings accounts (Comptes Épargne Logement – "CEL") and home
savings plans (Plans d'Épargne Logement – "PEL") are government-
regulated retail products for individuals sold in France. They combine
a savings phase and a loan phase which are inseparable, with the loan
phase contingent upon the savings phase.
These products contain two types of obligations for BNP Paribas SA: an
obligation to pay interest on the savings for an indefinite period at a rate
set by the government on inception of the contract (in the case of PEL
products) or at a rate reset every half-year using an indexation formula
set by law (in the case of CEL products); and an obligation to lend to the
customer (at the customer's option) an amount contingent upon the
rights acquired during the savings phase at a rate set on inception of
the contract (in the case of PEL products) or at a rate contingent upon
the savings phase (in the case of CEL products).
BNP Paribas SA's future obligations with respect to each generation (in
the case of PEL products, a generation comprises all products with the
same interest rate at inception; in the case of CEL products, all such
products constitute a single generation) are measured by discounting
potential future earnings from at-risk outstandings for that generation.
At-risk outstandings are estimated on the basis of a historical analysis
of customer behaviou r, a nd equate to statistically probable outstanding
loans and the difference between statistically probable outstandings and
minimum expected outstandings, with minimum expected outstandings
being deemed equivalent to unconditional term deposits.
Earnings for future periods from the savings phase are estimated as the
difference between the reinvestment rate and the fixed savings interest
rate on at-risk savings outstanding for the period in question. Earnings
for future periods from the loan phase are estimated as the difference
between the refinancing rate and the fixed loan interest rate on at-risk
outstanding loans for the period in question.
The reinvestment rate for savings and the refinancing rate for loans
are derived from the swap yield curve and from the spreads expected
on financial instruments of similar type and maturity. Spreads are
determined on the basis of actual spreads on fixed-rate home loans in
the case of the loan phase and on products offered to retail clients in the
case of the savings phase.
In order to reflect the uncertainty of future interest-rate trends, and
the impact of such trends on customer behaviour models and on at
risk outstandings, the obligations are estimated using the Monte-Carlo
method.
When the sum of BNP Paribas SA's estimated future obligations with
respect to the savings and loan phases of any generation of contracts
indicates a potentially unfavourable situation for BNP Paribas SA,
a provision is recognised, with no offset between generations, in the
balance sheet under "Provisions". Movements in this provision are
recognised as interest income and expense in the profit and loss account.
SECURITIES
The term "Securities" covers interbank market securities, treasury bills
and negotiable certificates of deposit, bonds and other "fixed-income"
securities (whether fixed- or floating-rate), equities and other variable-
income securities.
Securities are classified as: "Trading securities", "Securities available
for sale", "Equity securities available for sale in the medium term",
"Debt securities held to maturity", "Equity securities held for long-term
investment", or "Investments in subsidiaries and affiliates".
From 1st January 2018, trading securities acquired or disposed of under
agreements whose terms require delivery of the securities within a period
defined by regulation or by an agreement on the relevant market are
recorded in the balance sheet on the settlement date. This change has
no impact on the opening income statement or equity. Other categories of
securities acquired or disposed of under the same conditions are recorded
on the transaction date.
When a credit risk has occurred, fixed-income securities held in the
"A vailable for sale" or "Held to maturity" portfolio are classified as
doubtful, based on the same criteria as those applied to doubtful loans
and commitments.
When securities exposed to counterparty risk are classified as doubtful
and the related provision can be separately identified, the corresponding
charge is included in "Cost of risk".
Trading account securities
"Trading account securities" are securities bought or sold with the
intention of selling them or repurchasing them in the near future, as
well as those held as a result of market-making activities. These securities
are valued individually at market value if they meet the following criteria:
■ they can be traded on an active market (i.e. a market where third
parties have continuous access to market prices through a securities
exchange, brokers, traders, or market-makers);
■ the market prices reflect actual, regularly-occurring transactions
taking place under normal competition conditions.
"Trading account securities" also include securities bought or sold for
specific asset-management objectives (especially in terms of sensitivity)
for trading books comprised of forward financial instruments, securities,
or other financial instruments taken globally, as well as borrowed
securities. When the latter are not backed by cash, they are presented in
the balance sheet as a deduction from the debt representing the value of
the borrowed securities. In the same way, financial instruments received
as fully-owned collateral under financial guarantee contracts with the
right of re-use, recorded in the balance sheet and revalued according to
the rules applicable to trading securities, are presented with a deduction
from the liability representing the restitution commitment.
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Changes in the market value of these securities are recognised in income.
"Trading account securities" cannot be reclassified into another category
and must follow the valuation rules for this category until they are sold,
fully redeemed, or recognised as a loss and consequently removed from
the balance sheet.
In the case of exceptional market circumstances necessitating a change in
investment strategy, "Trading securities" can be reclassified as "Securities
available for sale" or "Debt securities held to maturity" depending on the
new strategy adopted.
If fixed-income securities classified as "Trading securities" can no
longer be traded on an active market, and if the Bank has the intention
and ability to hold these securities for the foreseeable future or until
maturity, they can be reclassified as "Securities available for sale" or
"Debt securities held to maturity".
The accounting rules for the new category would apply to reclassified
securities as of the reclassification date.
If the market in which securities classified as "Trading account securities"
were purchased can no longer be considered active, the securities will be
valued using methods that take into account the new market conditions.
Securities available for sale
The "Securities available for sale" category includes securities not
classified into one of the other categories.
Bonds and other fixed-income securities are valued at the lower of cost
(excluding accrued interest) or probable market prices. This is generally
determined on the basis of stock market prices. Accrued interest is posted
to the profit and loss account under "Interest income on bonds and other
fixed-income securities".
For fixed-income securities available for sale that have been purchased on
the secondary market, any difference between cost and redemption price
is recognised in income using the actuarial method over the remaining life
of the securities. On the balance sheet, their carrying amount is amortised
to their redemption value over their remaining life.
Equities are valued at the lower of cost or probable market prices. This
is generally determined on the basis of stock market prices for listed
equities, or BNP Paribas SA's share in net equity, calculated on the basis
of the most recent financial statements available, for unlisted equities.
Dividends received are recognised in the profit and loss account under
"Income on variable-income securities" on a cash basis.
The cost of securities available for sale that have been sold is determined
on a first in, first out (FIFO) basis. Disposal gains or losses, and additions
to and reversals of lower of cost and market provisions are reflected in
the profit and loss account under "Gains (losses) on securities available
for sale".
In the case of exceptional circumstances necessitating a change in
investment strategy, or if the securities can no longer be traded on an
active market, securities classified as "Securities available for sale" may
be reclassified as "Debt securities held to maturity" and must be identified
within this portfolio. These securities would then be recognised according
to the method used for "Debt securities held to maturity".
Equity securities available for sale
in the medium term
Equity securities available for sale in the medium term comprise
investments made for portfolio management purposes, with the aim of
realising a profit in the medium term without investing on a long-term
basis in the development of the issuer's business. This category includes
venture capital investments.
Equity securities available for sale in the medium term are recorded
individually at the lower of historic cost and fair value. Fair value takes
into account the issuer's general business outlook and the planned
holding period. The fair value of listed shares is determined by reference
to the average stock market price determined over a one-month period.
Debt securities held to maturity
Fixed-income securities with a specified maturity (mainly bonds,
interbank market securities, treasury bills, and other negotiable debt
securities) are recorded under "Debt securities held to maturity" to reflect
BNP Paribas SA's intention of holding them to maturity.
Bonds classified under this heading are financed by matching funds or
hedged against interest-rate exposure for their remaining lives.
The difference between cost and the redemption price of these securities
is recognised in income using the actuarial method over the remaining life
of the securities. On the balance sheet, their carrying amount is amortised
to their redemption value over their remaining life.
Interest on debt securities held to maturity is recorded in the profit and
loss account under "Interest income on bonds and other fixed-income
securities".
An impairment is recognised when a decline in the credit standing of an
issuer jeopardises redemption at maturity.
If a significant portion of the "Debt securities held to maturity" is sold or
reclassified into a different category, the sold or reclassified securities
cannot be returned to the "Debt securities held to maturity" category
at any time during the current financial period or the following two
financial years. All the securities classified as "Debt securities held to
maturity" would then be reclassified as "Securities available for sale in
the medium term".
If exceptional market circumstances necessitate a change in investment
strategy, and "Trading account securities" and "Securities available for
sale" are reclassified as "Debt securities held to maturity", the sale of
any "Debt securities held to maturity" prior to the maturity date would
not invoke the reclassification clauses in the above paragraph if the sale
occurred because the securities had once again become tradable on an
active market.
Equity securities held for long-term
investment, investments in subsidiaries and
affiliates
Equity interests include investments in subsidiaries and affiliates in
which BNP Paribas SA exercises significant influence over management
and investments considered strategic to BNP Paribas SA's business
development. This influence is deemed to exist when BNP Paribas SA
holds an ownership interest of at least 10%.
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"Equity securities held for long-term investment" are shares and related
instruments that BNP Paribas SA intends to hold on a long-term basis
in order to earn a satisfactory long-term rate of return without taking
an active part in the management of the issuing company, but with the
intention of promoting the development of lasting business relationships
by creating special ties with the issue r.
Other investments in affiliates consist of shares and other variable-
income securities in companies over which BNP Paribas SA has exclusive
control (i.e. companies likely to be fully consolidated into the Group).
These types of securities are recorded individually at the lower of cost
and fair value.
Fair value for each security is determined on the basis of available
information, including discounted future cash flows, net revalued assets
and/or multiples commonly used to assess future yields. For securities
listed on an active market, the fair value is considered to be the average
market price over the previous one-month period.
For simplicity, listed securities acquired for less than EUR 10 million may
be valued on the basis of the average closing stock market price in the
month prior to closing.
Disposals, gains or losses and provision movements are recorded in the
profit and loss account under "Net gains or losses on disposals of long-
term investments".
Dividends are recognised as soon as payment has been approved by the
Annual General Meeting or when they are received if the shareholders'
decision is unknown. They are recorded under "Income on equities and
variable-income securities".
Treasury shares
Treasury shares held by BNP Paribas SA are classified and valued as
follows:
■ treasury shares held, purchased under a market-making agreement or
acquired in connection with index arbitrage transactions are recorded
under "Trading securities" at market price;
■ shares held for allocation to employees are recorded in the
securities available for sale category. Shares granted to employees of
BNP Paribas SA subsidiaries and branches are re-invoiced to them, in
accordance with the applicable local provisions;
■ treasury shares held to be granted to employees are not impaired,
but a provision is recognised for these shares based on the services
provided by the employees who will receive the shares;
■ treasury shares that are intended to be cancelled or that are not
being held for either of the above reasons are included in long term
investments. Treasury shares intended to be cancelled are stated at
cost. All others are stated at the lower of cost and fair value.
FIXED ASSETS
Buildings and equipment are stated at acquisition cost or at the adjusted
value determined in accordance with France's finance laws of 1977 and
1978. Revaluation differences on non-depreciable assets, recorded at
the time of these statutory revaluations, are included in share capital.
Fixed assets are initially recognised at purchase price plus directly
attributable costs, together with borrowing costs where a long period of
construction or adaptation is required before the asset can be brought
into service.
Software developed by BNP Paribas SA, that fulfils the criteria for
capitalisation, is capitalised at direct development cost, which includes
external costs and staff costs directly attributable to the project.
Subsequent to initial recognition, fixed assets are measured at cost less
accumulated depreciation or amortisation and any impairment losses.
Fixed assets are depreciated or amortised using the straight-line method
over the useful life of the asset. Depreciation and amortisation expenses
are recognised in the profit and loss account under "Depreciation,
amortisation, and provisions on property, plant and equipment and
intangible assets".
The portion of recognised depreciation or amortisation that exceeds the
economic amount, mainly calculated on a straight-line basis, is recorded in
the balance sheet as a liability under "Regulatory provisions: accelerated
depreciation and amortisation". BNP Paribas SA does not calculate the
deferred tax effects of accelerated depreciation and amortisation.
Where an asset consists of a number of components which may
require replacement at regular intervals, or which have different uses
or generate economic benefits at different rates, each component is
recognised separately and depreciated using a method appropriate to that
component. BNP Paribas SA has adopted the component-based approach
for property used in operations.
The depreciation periods used for office property are as follows: 80 years
or 60 years for the shell (for prime and other property respectively);
30 years for facades; 20 years for general and technical installations;
and 10 years for fixtures and fittings.
Depending on its type, software is amortised over a period of no more
than eight years for infrastructure developments and three years or five
years in the case of software developed primarily for the purpose of
providing services to customers.
Depreciable fixed assets are tested for impairment if there is an indication
of potential impairment at the balance sheet date. Non-depreciable
assets are tested for impairment annually.
If there is an indication of impairment, the new recoverable amount of
the asset is compared with the carrying amount. If the asset is found to
be materially impaired, an impairment loss is recognised in the profit
and loss account. This loss is reversed in the event of a change in the
estimated recoverable amount or if there is no longer an indication of
impairment, with the exception of goodwill and residual merger premium
(see below) allocated to goodwill. Impairment losses are taken into
account in the profit and loss account under "Depreciation, amortisation,
and provisions on property, plant and equipment and intangible assets".
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■ Goodwill in the business is now presumed to have an unlimited
period of use. It is therefore non-amortisable, without any required
justification. Howeve r, t his is a refutable presumption, meaning that
if there is a limited period for use, the goodwill must be amortised
over its actual or fixed period of use (10 years) if it is not possible to
reliably assess this period. In addition, if goodwill is not amortised, it
must now be tested for impairment annually regardless of whether
there is any indication of impairment.
■ The merger premium is allocated to the various assets contributed
as a result of mergers and similar transactions up to the limit of
identified unrealised gains. The amount is allocated in the dedicated
sub-accounts of the assets concerned, according to the amortisation,
depreciation and provisioning rules for these assets.
■ After allocation to the different underlying assets (see above), the net
balance of the residual merger premium is carried to goodwill.
Gains and losses on disposals of property, plant and equipment, and
intangible assets used in operations are recognised in the profit and loss
account under "Net gains or losses on disposals of long-term investments".
AMOUNTS DUE TO CREDIT INSTITUTIONS
AND CUSTOMERS
Amounts due to credit institutions and customers are presented according
to their initial term or type: demand accounts and time deposits for credit
institutions; regulated savings accounts and other deposits for customers.
These sections include securities and other assets sold under repurchase
agreements depending on the type of counterparty. Accrued interest is
recorded on a separate line. Savings accounts with special arrangements
are presented as the centralised share with the Caisse des Dépôts et
Consignations, less the savings deposits collected.
DEBT SECURITIES
Debt securities are presented according to the nature of their support:
savings certificates, interbank market securities, negotiable debt
securities, bonds and similar securities, excluding subordinated notes
classified as subordinated debt.
Accrued interest on debt securities is recorded on a separate line of the
balance sheet and is debited to the profit and loss account.
Bond issue and redemption premiums are amortised using the yield-
to-maturity method over the life of the bonds. Bond issuance costs are
amortised using the straight-line method over the life of the bonds.
PROVISIONS FOR INTERNATIONAL
COMMITMENTS
Provisions for international commitments are based on the evaluation of
non-transfer risk related to the future solvency of each of the countries
at risk and on the systemic credit risk incurred by debtors in the event
of a constant and durable deterioration in the overall situation and
economies of these countries. Additions and reversals of these provisions
are reflected in the profit and loss account under "Cost of risk".
PROVISIONS FOR NON-BANKING
TRANSACTIONS
BNP Paribas SA records provisions for clearly identified contingencies
and charges whose timing or amount is uncertain. In accordance with
current regulations, these provisions for non-banking transactions may
be recorded only if the Bank has an obligation to a third party at year-
end, there is a high probability of an outflow of resources to the third
party, and no equivalent economic benefits are expected in return from
the third party.
COST OF RISK
The "Cost of risk" line item includes expenses arising from the identification
of counterparty and credit risks, litigation, and fraud inherent to banking
transactions conducted with third parties. Net movements in provisions
that do not fall under the category of such risks are classified in the profit
and loss account according to their type.
FORWARD FINANCIAL INSTRUMENTS
Forward financial instruments are purchased on various markets for use
as specific or general hedges of assets and liabilities, or for transaction
purposes.
The Bank's commitments related to these instruments are recognised
off-balance sheet at nominal value. The accounting treatment of these
instruments depends on the corresponding investment strategy.
Derivative financial instruments held
for hedging purposes
Income and expenses related to forward derivative financial instruments
held for hedging purposes and designated to one instrument or a group
of homogeneous instruments are recognised in income symmetrically
with the income and expenses on the underlying instrument, and under
the same accounting heading.
Income and expenses related to forward financial instruments used to
hedge overall interest rate risk are recognised in income on a pro rata
basis.
Derivative financial instruments held
for trading purposes
Derivatives held for trading purposes can be traded on organised markets
or over-the-counte r.
Derivatives held within a trading book are valued at market value on
the balance sheet date. The corresponding gains or losses (realised and
unrealised) are recognised in income. They are recognised in the profit
and loss account under "Gains (losses) on trading account securities".
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The market value is determined from either:
■ the listed price, if one is available;
■ a valuation method using recognised financial models and theories,
with parameters calculated from transaction prices observed on active
markets, or from statistical or other quantitative methods.
In both cases, BNP Paribas SA makes conservative value adjustments to
account for modelling, counterparty, and liquidity risks.
Some complex derivatives, which are typically custom-made from
combined instruments and highly illiquid, are valued using models where
certain parameters are not observable on an active market.
The margin generated during the trading of these complex financial
instruments is deferred and reversed in profit or loss over the period
during which the valuation parameters are expected to be unobservable.
When parameters that were originally unobservable become observable,
or when the valuation can be substantiated in comparison with recent
similar transactions in an active market, the unrecognised portion of the
day one profit is released to the profit and loss account.
Derivative financial instruments held within an
isolated open position
Depending on the nature of the instruments, gains and losses on
contracts representing isolated open positions are recognised in income
when the contracts are settled or on a pro rata basis. Derivatives are
measured at market value on the balance sheet date and a provision for
unrealised losses is recognised for each group of homogeneous contracts.
CORPORATE INCOME TAX
A charge for corporate income tax is taken in the period in which the
related taxable income and expenses are booked, regardless of the period
in which the tax is actually paid. When the period in which the income
and expenses are booked differs from that in which the income is taxed
and expenses deducted, BNP Paribas SA recognises a deferred tax, whose
amount is calculated according to the liability method, with the basis
taken to be all temporary differences between the book value and tax
basis of balance sheet items, and applying applicable future tax rates
once these have been approved. Deferred tax assets are recognised in
accordance with the likelihood of their being recovered.
Following the recommendations of Pillar 2 of the Organisation for
Economic Cooperation and Development (OECD) on the reform of
international taxation, on 14 December 2022, the European Union
adopted Directive 2022/2523 establishing a minimum taxation of
international groups with respect to corporate income tax, applicable
from 1 January 2024. Following the example provided for the consolidated
financial statements prepared under French rules in application of ANC
Regulation 2020-01 amended by ANC Regulation 2023-02, BNP Paribas
SA does not recognise deferred taxes related to the Pillar II/GloBE rules.
Given the information available, the impact of the Pillar II reform would
be negligible for BNP Paribas SA when it is adopted.
EMPLOYEE PROFIT-SHARING
As required by French law, BNP Paribas SA recognises employee profit-
sharing in the income statement in the year in which the employee
entitlement arises. The amount is reported under "Salaries and employee
benefit expenses" in the profit and loss account.
EMPLOYEE BENEFITS
BNP Paribas SA employees receive each of the following four types of
benefits:
■ termination benefits, payable primarily in the case of early termination
of an employment contract;
■ short-term benefits, such as salary, annual leave, incentive plans,
profit-sharing and additional payments;
■ long-term benefits, including compensated leaves of absence, long-
service awards, and other types of cash-based deferred compensation;
■ post-employment benefits, consisting mainly in France of
supplementary pension benefits paid by the BNP Paribas SA pension
funds and end-of-career bonuses, and in other countries by pension
plans, some of which are funded by pension funds.
Termination benefits
Termination benefits are employee benefits payable as a result of a
decision by BNP Paribas SA to terminate a contract of employment
before the legal retirement age or by an employee to accept voluntary
redundancy in exchange for a benefit. Termination benefits due more than
12 months after the balance sheet date are discounted.
Short-term benefits
The Group recognises an expense when it has used services rendered by
employees in exchange for employee benefits.
Long-term benefits
Long-term benefits are benefits (other than post-employment benefits
and termination benefits) which do not fall wholly due within 12 months
after the end of the period in which the employee renders the associated
services. The actuarial techniques used are similar to those used for
defined-benefit post-employment benefits, except that actuarial gains
and losses are recognised immediately, as are the effects of any plan
amendments.
This category relates to compensation paid in cash and deferred for
more than twelve months, which is accrued in the financial statements
for the financial years during which the employee rendered the
corresponding services. If this deferred variable compensation is subject
to the employee's continued presence at the vesting date, the services
are presumed to been rendered during the vesting period and the
corresponding compensation expense is recognised on a pro rata basis
over that period. The expense is recognised under salary and employee
benefits expenses with a corresponding liability in the balance sheet. It is
revised to take account of any non-fulfilment of the continued presence
or performance conditions, and changes in the BNP Paribas share price,
for deferred compensation indexed to the share.
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If there is no continued presence condition, the deferred variable
compensation is immediately provisioned in the financial statements of
the year to which it refers; the liability is then revised on each reporting
date until settlement, to account for any performance conditions, and
for deferred compensation indexed to the BNP Paribas share price, to
changes in the share price.
In France, the changes brought about by the pension reform enacted
on 14 April 2023 constitute an amendment to the plan for retirement
benefits for which the impact recognised in the income statement is
not material.
Post-employment benefits
The post-employment benefits provided to BNP Paribas SA employees in
France include both defined-contribution plans and defined-benefit plans.
Defined-contribution plans, such as Caisse Nationale d'A ssurance
Vieillesse and supplemental national and trade union plans that pay
pensions to former BNP Paribas SA employees in France, do not give rise
to an obligation for BNP Paribas SA and consequently do not require a
provision. The amount of the employer's contributions payable during
the period is recognised as an expense.
Only defined-benefit plans, such as the retirement packages paid for
by BNP Paribas SA's retirement fund, give rise to an obligation for
BNP Paribas SA. This obligation must be measured and recognised as a
liability by means of a provision.
The classification of plans into these two categories is based on the
economic substance of the plan, which is reviewed to determine whether
BNP Paribas SA has a legal or constructive obligation to pay the agreed
benefits to employees.
Post-employment benefit obligations under defined-benefit plans are
measured using actuarial techniques that take demographic and financial
assumptions into account. The amount of the obligation recognised as a
liability is measured on the basis of the actuarial assumptions applied
by the Group, using the projected unit credit method. This method takes
into account various parameters, tailored to the country in question, such
as demographic assumptions, the probability that employees will leave
before retirement age, salary inflation, a discount rate, and the general
inflation rate. The value of any plan assets is deducted from the amount
of the obligation. When the value of the plan assets exceeds the amount
of the obligation, an asset is only recognised if it represents a future
economic benefit in the form of a reduction in future contributions or a
future partial refund of amounts paid into the plan.
The amount of the obligation under a plan, and the value of the plan
assets, may show significant fluctuations from one period to the next
due to changes in actuarial assumptions, thereby giving rise to actuarial
gains and losses. Actuarial gains and losses and the effect of limits on
assets are recognised in full in profit or loss; the expected gains from
investments are calculated at the discount rate of the corresponding
commitments.
RECOGNITION OF INCOME AND EXPENSES
Interest and fees and commissions qualified as interest are recognised
on an accrual basis on a pro rata basis. These include the commissions
charged by the Bank as part of an overall loan package (i.e. application
fees, commitment fees, participation fees, etc.). The marginal transaction
costs that the Bank must pay when granting or acquiring loans are also
spread out over the effective life of the corresponding loan.
Fees and commissions not qualified as interest that relate to the provision
of services are recognised when the services are performed o r, f or ongoing
services, on a pro rata basis over the length of the service agreement.
FOREIGN CURRENCY TRANSACTIONS
Foreign exchange positions are generally valued at the official year-end
exchange rate. Exchange gains and losses on transactions in foreign
currency carried out in the normal course of business are recognised in
the profit and loss account.
Exchange differences arising from the conversion of assets held on a long-
term basis, including equity securities held for long-term investment, the
capital made available to branches, and other foreign equity investments
denominated in foreign currencies and financed in euros, are recognised
as translation adjustments for the balance sheet line items recording
the assets.
Exchange differences arising from the conversion of assets held on a long-
term basis, including equity securities held for long-term investment, the
capital made available to branches, and other foreign equity investments,
denominated and financed in foreign currencies, are recognised
symmetrically as translation differences for the corresponding financing.
TRANSLATION OF ACCOUNTS EXPRESSED
IN FOREIGN CURRENCIES
Monetary and non-monetary foreign currency-denominated assets and
liabilities of foreign branches are translated into euros at the year-end
exchange rate. Translation adjustments regarding the capital made
available to branches outside of France are included in "A ccrued income"
and "A ccrued expenses".
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Note 2
NOTES TO THE 2023 PROFIT AND LOSS ACCOUNT
2.a NET INTEREST INCOME
BNP Paribas SA includes in "Interest income" and "Interest expense" all
income and expenses from financial instruments measured at amortised
cost according to the effective interest rate method (interest, commission
and expenses) and from financial instruments measured at fair value
that do not meet the definition of a derivative instrument. The change
in fair value on financial instruments at fair value through profit or loss
(excluding accrued interest) is recognised under "Gains (losses) on
trading account securities".
Interest income and expense on derivatives accounted for as fair value
hedges are included with the revenues generated by the hedged item.
In millions of euros
Year to 31 December 2023
Year to 31 December 2022
Income
Expenses
Income
Expenses
Credit institutions
33,003
(20,543)
10,442
(6,240)
Demand accounts, loans and borrowings
26,096
(14,253)
8,501
(4,736)
Securities given/received under repurchase agreements
6,500
(6,290)
1,672
(1,504)
Subordinated loans
407
269
Customers
27,708
(32,942)
13,102
(10,156)
Demand accounts, loans, and term accounts
16,187
(18,295)
9,442
(5,987)
Securities given/received under repurchase agreements
11,516
(14,647)
3,659
(4,169)
Subordinated loans
5
-
1
-
Finance lease
3
-
1
-
Debt securities
217
(9,258)
206
(5,937)
Bonds and other fixed-income securities
6,461
-
5,565
-
Trading account securities
1,014
-
223
-
Securities available for sale
5,243
-
5,291
-
Debt securities held to maturity
204
-
51
-
Macro-hedging instruments
-
(1,561)
134
-
INTEREST INCOME AND EXPENSE
67,392
(64,304)
29,450
(22,333)
2.b INCOME ON EQUITIES AND OTHER VARIABLE INSTRUMENTS
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Securities available for sale
40
42
Investments in subsidiaries and equity securities held for long-term investment
355
452
Investments in affiliates
7,816
5,818
INCOME ON EQUITIES AND OTHER VARIABLE INSTRUMENTS
8,211
6,312
2.c COMMISSIONS
In millions of euros
Year to 31 December 2023
Year to 31 December 2022
Income
Expenses
Income
Expenses
Commissions on banking and financing transactions
3,086
(1,081)
3,425
(1,072)
Customer items
1,675
(65)
1,820
(35)
Others
1,411
(1,016)
1,605
(1,037)
Commissions on financial services
5,459
(961)
5,286
(980)
COMMISSION INCOME/EXPENSE
8,545
(2,042)
8,711
(2,052)
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6
Notes to the parent company financial statements
2.d GAINS OR LOSSES ON TRADING ACCOUNT TRANSACTIONS
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Fixed-income instruments and transactions in trading account securities
2,992
(4,427)
Currency instruments
6,031
7,416
Credit instruments
(1,271)
2,315
Other variable income financial instruments and transactions in trading account securities
1,800
1,585
NET GAINS ON TRADING ACCOUNT SECURITIES
9,552
6,889
2.e GAINS OR LOSSES ON SECURITIES AVAILABLE FOR SALE
In millions of euros
Year to 31 December 2023
Year to 31 December 2022
Income
Expenses
Income
Expenses
Divestments
256
(1,033)
369
(620)
Provisions
700
(151)
159
(1,152)
TOTAL
956
(1,184)
528
(1,772)
NET LOSSES ON SECURITIES AVAILABLE FOR SALE
(228)
(1,244)
2.f COST OF RISK AND PROVISIONS FOR CREDIT RISKS
Cost of risk represents the net amount of impairment losses recognised with respect to credit risks inherent to BNP Paribas SA's banking intermediation
activities, plus any impairment losses in the case of known counterparty risk on over-the-counter derivative financial instruments.
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Additions to or write-backs from provisions during the period
(421)
(139)
Customer items and credit institutions
(279)
(103)
Off-balance sheet commitment
(55)
11
Securities
(92)
(45)
Doubtful loans
2
(5)
Financial instruments for market activities
3
3
Irrecoverable loans not covered by provisions
(376)
(259)
Recoveries of loans written-off
49
77
COST OF RISK
(748)
(321)
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Balance at 1st January
6,332
7,173
Additions to or write-backs from provisions during the period
421
139
Write-offs during the period covered by provisions
(497)
(915)
Effect of movements in exchange rates and other
115
(65)
PROVISIONS FOR CREDIT RISKS
6,371
6,332
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6
Notes to the parent company financial statements
The provisions break down as follows:
In millions of euros
31 December 2023
31 December 2022
Provisions deducted from assets
6,068
6,086
For amounts due from credit institutions (note 3.a)
162
151
For amounts due from customers (note 3.b)
5,371
5,507
For securities
482
382
For financial instruments for market activities
53
46
Provisions recognised as liabilities (note 3.k)
303
246
For off-balance sheet commitments
264
204
For doubtful loans
39
42
PROVISIONS FOR CREDIT RISKS
6,371
6,332
2.g GAINS OR LOSSES ON DISPOSALS OF LONG-T ERM INVESTMENTS
In millions of euros
Year to 31 December 2023
Year to 31 December 2022
Income
Expenses
Income
Expenses
Investments in subsidiaries and equity securities held
for long-term investment
153
(96)
165
(71)
Divestments
41
(9)
150
(22)
Provisions
112
(87)
15
(49)
Investments in affiliates
544
(1,192)
93
(1,238)
Divestments
358
(462)
6
(284)
Provisions
186
(730)
87
(954)
Operating assets
88
(35)
55
(119)
TOTAL
785
(1,323)
313
(1,428)
NET LOSSES ON NON-CURRENT ASSETS
(538)
(1,115)
2.h INCOME TAX
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Current tax expense
(1,077)
(674)
Deferred tax
394
(269)
INCOME TAXES
(683)
(943)
The basic tax consolidation agreements between BNP Paribas SA and the subsidiaries belonging to its tax group are designed to be tax neutral for
every party. Each Group subsidiary recognises in its own books, over the full term of its consolidation, corporate income tax income or expense,
additional contributions and all current or future taxes covered by the scope of tax consolidation just as they would if they were not part of a tax group.
BNP Paribas SA, as the parent company, records the impact of Group tax savings from tax consolidation in France in current tax expense.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
Note 3
NOTES TO THE BALANCE SHEET AT 31 DECEMBER 2023
3.a AMOUNTS DUE TO AND FROM CREDIT INSTITUTIONS
In millions of euros, at
31 December 2023
31 December 2022
Loans and receivables
152,665
126,977
Demand accounts
6,178
7,089
Term accounts and loans(*)
140,790
112,327
Subordinated loans
5,697
7,561
Securities received under repurchase agreements
63,736
75,155
LOANS AND ADVANCES TO CREDIT INSTITUTIONS BEFORE IMPAIRMENT
216,401
202,132
of which accrued interest
2,361
1,270
of which irrecoverable loans
-
-
of which potentially recoverable doubtful loans
11
13
Impairments on receivables due from credit institutions (note 2.f)
(162)
(151)
LOANS AND RECEIVABLES TO CREDIT INSTITUTIONS NET OF IMPAIRMENT
216,239
201,981
(*) At 31 December 2023, interbank loans include loans with BNP Paribas Financial Markets for EUR 6.9 billion after the entity was approved as a credit and
investment institution on 6 December 2023.
In millions of euros, at
31 December 2023
31 December 2022
Deposits and borrowings
147,278
164,786
Demand deposits
20,380
20,594
Term deposits and borrowings(*)
126,898
144,192
Securities given under repurchase agreements
80,140
68,961
DUE TO CREDIT INSTITUTIONS
227,418
233,747
of which accrued interest
1,203
292
(*) Interbank borrowings include term borrowings from central banks, of which EUR 14 billion of T L T RO III at 31 December 2023, compared to EUR 33 billion
at 31 December 2022.
3.b CUSTOMER TRANSACTIONS
In millions of euros, at
31 December 2023
31 December 2022
Loans and receivables
403,526
440,872
Commercial and industrial loans
10,198
9,232
Demand accounts
16,643
17,167
Short-term loans
133,813
132,990
Mortgages
86,213
90,981
Equipment loans
53,187
58,651
Export loans
6,110
6,560
Other customer loans(*)
96,524
124,893
Subordinated loans
838
398
Securities received under repurchase agreements
188,167
116,797
CUSTOMER ITEMS BEFORE IMPAIRMENT – ASSETS
591,693
557,669
of which accrued interest
3,893
2,584
of which loans eligible for refinancing by the Banque de France
13
119
of which potentially recoverable doubtful loans and receivables
5,680
4,448
of which irrecoverable loans and receivables
3,757
3,769
Impairments on receivables due from customers (note 2.f)
(5,371)
(5,507)
CUSTOMER ITEMS NET OF IMPAIRMENT – ASSETS
586,322
552,162
(*) At 31 December 2022, other customer loans included loans with BNP Paribas Financial Markets for EUR 19.5 billion before its change of status in 2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Notes to the parent company financial statements
The following table gives the loans and receivables net of impairment due from customers by counterparty:
In millions of euros, at
31 December 2023
31 December 2022
Sound Potentially
Doubtful loans
Total
Sound Potentially
loans recoverable
Doubtful loans
Total
loans recoverable Irrecoverable
Irrecoverable
Financial institutions
73,264
388
11
73,663
104,776
92
109
104,977
Corporate exposures
237,769
2,571
1,109
241,449
236,430
1,838
1,067
239,335
Entrepreneurs
3,724
2
6
3,732
9,274
93
90
9,457
Individuals
70,910
390
409
71,709
71,856
323
346
72,525
Other non-financial customers
7,493
19
90
7,602
9,003
38
30
9,071
TOTAL LOANS AND RECEIVABLES NET
OF IMPAIRMENT
393,160
3,370
1,625
398,155
431,339
2,384
1,642
435,365
In millions of euros, at
31 December 2023
31 December 2022
Deposits
638,697
676,015
Demand deposits
340,879
383,412
Term deposits
229,016
229,405
Special savings accounts
68,802
63,198
of which demand special savings accounts
54,556
46,749
of which share centralised with Caisse des Dépôts et Consignations(1)
(17,874)
(15,157)
Securities given under repurchase agreements
201,037
156,139
CUSTOMER ITEMS – LIABILITIES
839,734
832,154
of which accrued interest
4,201
1,815
(1) Regulation No. 2020-10 of 22 December 2020, which amends ANC Regulation No. 2014-07 allows the presentation of the centralised share with
the Caisse des Dépôts et Consignations to be presented less the savings deposits collected.
6
As of 31 December 2023, the amount of regulated savings centralised with the Caisse des Dépôts et Consignations amounted to EUR 17,874 million,
compared to EUR 15,157 million at 31 December 2022.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
3.c SECURITIES HELD
In millions of euros, at
31 December 2023
31 December 2022
Net carrying
amount
Market value
Net carrying
amount
Market value
Transaction
82,762
82,762
65,855
65,855
Securities available for sale
71,643
72,416
72,178
72,239
of which provisions
(370)
(756)
Investments
4,763
4,763
3,935
3,935
TREASURY BILLS AND MONEY-MARKET INSTRUMENTS
159,168
159,941
141,968
142,029
of which receivables corresponding to loaned securities
28,641
44,968
of which goodwill
4,105
5,145
Transaction
32,853
32,853
28,751
28,751
Securities available for sale
107,601
108,279
93,363
94,468
of which provisions
(655)
(681)
Investments
22
22
16
16
BONDS AND OTHER FIXED-INCOME SECURITIES
140,476
141,154
122,130
123,235
of which unlisted securities
41,140
41,869
27,979
28,558
of which accrued interest
1,809
427
of which receivables corresponding to loaned securities
12,581
14,395
of which goodwill
(405)
46
Transaction
279
279
368
368
Securities available for sale and equity securities available
for sale in the medium term
2,077
2,677
1,772
2,433
of which provisions
(409)
(446)
EQUITIES AND OTHER VARIABLE-INCOME SECURITIES
2,356
2,956
2,140
2,801
of which unlisted securities
1,821
2,396
1,486
1,925
of which receivables corresponding to loaned securities
6
10
Associated companies
3,595
5,729
3,462
6,631
of which provisions
(262)
(171)
Equity securities held for long-term investment
411
695
363
455
of which provisions
(45)
(51)
INVESTMENTS IN SUBSIDIARIES AND EQUITY SECURITIES
HELD FOR LONG-T ERM INVESTMENT
4,006
6,424
3,825
7,086
of which unlisted securities
1,918
3,300
1,841
3,440
Investments in affiliates
48,654
78,220
61,725
97,493
of which provisions
(9,410)
(8,696)
INVESTMENTS IN AFFILIATES
48,654
78,220
61,725
97,493
Equity investments in credit institutions and investments in affiliates held by BNP Paribas SA totalled EUR 1,495 million and EUR 30,614 million
respectively as at 31 December 2023, compared with EUR 1,530 million and EUR 30,576 million respectively as at 31 December 2022.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
Borrowed securities held by BNP Paribas SA break down as follows:
In millions of euros, at
31 December 2023
31 December 2022
Treasury bills and money-market instruments
107,951
106,000
Bonds and other fixed-income securities
27,318
24,214
Equities and other variable-income securities
11,265
14,573
EQUITIES AND OTHER VARIABLE-INCOME SECURITIES
146,534
144,787
Following Regulation No. 2020-10 of 22 December 2020, which amended Regulation ANC No. 2014-07, borrowed securities are presented as a deduction
from the liabilities representing these same securities. The amount of securities borrowed represented EUR 146,534 million as at 31 December 2023,
compared with EUR 144,787 million as at 31 December 2022.
3.d TREASURY SHARES
In millions of euros, at
31 December 2023
31 December 2022
Gross book value
Net carrying
amount
Net carrying
amount
Transaction
-
-
-
Securities available for sale
6
6
6
Investment in subsidiaries
32
32
32
TREASURY SHARES
38
38
38
The fifth resolution of the Shareholders' Combined General Meeting of
16 May 2023, which replaced the fifth resolution of the Shareholders'
Combined General Meeting of 17 May 2022, authorised BNP Paribas SA to
buy back shares representing up to 10% of BNP Paribas SA's issued capital
at a maximum purchase price of EUR 89 per share (previously EUR 88).
The shares could be acquired for the following purposes: for subsequent
cancellation in accordance with conditions set by the Shareholders'
Combined General Meeting of 16 May 2023, to fulfil the Bank's obligations
relative to the issue of shares or share equivalents, for stock option plans,
for bonus share awards, or for granting or selling shares to employees
under an employee profit-sharing plan, employee share ownership plan
or Corporate Savings Plan and to cover any type of share award to the
employees of BNP Paribas SA and companies controlled exclusively by
BNP Paribas SA within the meaning of article L.233-16 of the French
Commercial Code; to be held in treasury for subsequent remittance in
exchange or in payment for acquisitions, mergers, spin-offs or asset
transfers; within the scope of a market-making agreement compliant
with the Code of Ethics recognised by the Autorité des Marchés Financiers
(French Financial Markets Authority – AMF); or for asset and financial
management purposes.
This authorisation was granted for a period of 18 months.
At 31 December 2023, BNP Paribas SA held 603,827 treasury shares
classified as "Equity securities held for long-term investment".
BNP Paribas SA also held 118,144 treasury shares classified as "Securities
available for sale" and intended to be used for free share awards to Group
employees, granted or sold as part of an employee profit-sharing plan,
employee share ownership plan, or Company Savings Plan.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
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Notes to the parent company financial statements
3.e LONG-T ERM INVESTMENTS
In millions of euros
Gross values
Provisions
Carrying amount
1 Jan. 2023
Acquisitions
and changes
in share
capital redemptions
movements 31 Dec. 2023
Disposals Transfers
and and other
1 Jan. 2023
Additions Write-backs
Other
variations 31 Dec. 2023
31 Dec. 2023
31 Dec. 2022
Debt securities held
to maturity (note 3.c)
3,951
1,268
(390)
(44)
4,785
-
-
-
-
-
4,785
3,951
Investments in
subsidiaries and
equity securities
held for long-term
investment (note 3.c)
4,046
215
(48)
100
4,313
222
94
(7)
(2)
307
4,006
3,825
Investments in affiliates
(note 3.c)(*)
70,420
(8,879)
(524)
(2,953)
58,064
8,695
760
(16)
(29)
9,410
48,654
61,725
of which merger
premium on investments
in affiliates
4,575
-
-
(317)
4,258
2,868
544
-
(28)
3,384
874
1,707
Treasury shares
(note 3.d)
32
-
-
-
32
-
-
-
-
-
32
32
LONG-T ERM
INVESTMENTS
78,449
(7,396)
(962)
(2,897)
67,194
8,917
854
(23)
(31)
9,717
57,477
69,533
(*) In April 2023, following the validation by the Board of directors of BNPP USA INC of the level of sufficient reserves, a capital decrease of USD 11.4 billion
was carried out.
3.f DEBT SECURITIES
In millions of euros, at
31 December 2023
31 December 2022
Negotiable debt securities
157,120
145,532
Bond issues (note 3.g)
2,312
2,212
Other debt securities
21,001
12,629
DEBT SECURITIES
180,433
160,373
of which unamortised issuance premiums
780
619
Maturities of bonds issued by BNP Paribas SA, according to contractual maturity:
In millions of euros
31/12/2023
Outstanding at
2024
2025
2026
2027
2028
2029 to 2033
After 2033
Bond issues
2,312
215
222
174
156
454
720
371
In millions of euros
31/12/2022
Outstanding at
2023
2024
2025
2026
2027
2028 to 2032
After 2032
Bond issues
2,212
212
124
289
123
159
917
388
3.g BOND ISSUES
At 31 December 2022, an allocation correction was made for EUR 79.9 billion between "Other debt securities" and "Negotiable debt securities" following
a configuration error identified and corrected in 2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Notes to the parent company financial statements
3.h OTHER ASSETS AND LIABILITIES
In millions of euros, at
31 December 2023
31 December 2022
Options purchased
46,038
47,960
Settlement accounts related to securities transactions
2,323
3,301
Deferred taxes – assets
1,150
797
Miscellaneous assets
139,666
171,216
OTHER ASSETS
189,177
223,274
Options sold
55,487
51,064
Settlement accounts related to securities transactions
1,897
3,379
Liabilities related to securities transactions(*)
64,731
66,562
Deferred taxes – liabilities
277
293
Miscellaneous liabilities
108,454
142,512
OTHER LIABILITIES
230,846
263,810
(*) Further to Regulation No. 2020-10 of 22 December 2020, the borrowed securities are presented as a deduction from the liabilities representing these
same securities (see note 3.c).
Under "Miscellaneous liabilities", BNP Paribas SA's trade payables amount to EUR 433.1 million at 31 December 2023 and break down as follows,
pursuant to article D.441-6 of the French Commercial Code.
Invoices received, due and outstanding at the year-end
0 days
(indicative)
1 to 30 days
31 to 60 days
61 to 90 days
91 days and
over
Total (1 day
and more)
Total invoices concerned, including taxes
(in millions of euros)
152.3
255.7
16.5
2.4
6.2
280.8
Percentage of total purchases
for the yea r, i ncluding taxes
2.64%
4.43%
0.29%
0.04%
0.11%
4.87%
6
Number of invoices concerned
716
11,183
Information related to invoices received and presented in the table above does not include banking and related transactions. The payment terms used
are the statutory terms. Customer advances outside the scope of banking and related transactions are mainly loans to BNP Paribas Group entities. For
amounts due to and from customers of BNP Paribas SA for banking and related transactions which are not shown in the table above, the remaining
term of the sources and uses of funds is presented in note 6.e.
3.i ACCRUED INCOME AND EXPENSES
In millions of euros, at
31 December 2023
31 December 2022
Remeasurement of currency instruments and derivatives
104,130
119,167
Accrued income
5,767
4,849
Collection accounts
99
305
Other accrued income
16,339
16,741
ACCRUED INCOME – ASSETS
126,335
141,062
Remeasurement of currency instruments and derivatives
95,676
103,869
Accrued expenses
6,293
6,749
Collection accounts
2,403
2,476
Other accrued expenses
10,749
10,650
ACCRUED EXPENSES – LIABILITIES
115,121
123,744
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
3.j OPERATING ASSETS
In millions of euros, at
31 December 2023
31 December 2022
Gross value
Depreciation,
amortisation and
impairment
Net amount
Net amount
Software
4,436
(3,614)
822
810
Other intangible assets
3,431
(1,618)
1,813
2,184
INTANGIBLE ASSETS
7,867
(5,232)
2,635
2,994
Land and buildings
2,440
(977)
1,463
1,376
Equipment, furniture and fixtures
2,600
(2,113)
487
500
Other fixed assets
102
(11)
91
192
T a ngible assets – Merger premium
84
(32)
52
54
TANGIBLE ASSETS
5,226
(3,133)
2,093
2,122
3.k PROVISIONS
In millions of euros, at
31 December 2022
Additions
Write-
backs
Other
variations 31 December 2023
Provisions for employee benefit obligations
445
71
(57)
(26)
433
Provisions for credit risks (note 2.f)
42
8
(9)
(2)
39
Provisions for commitments given (note 2.f)
204
115
(62)
7
264
Other provisions
■ for banking transactions
662
192
(469)
99
484
■ for non-banking transactions
660
373
(261)
(2)
770
PROVISIONS
2,013
759
(858)
76
1,990
➤
PROVISIONS FOR RISKS ON REGULATED SAVINGS PRODUCTS
In millions of euros, at
31 December 2023
31 December 2022
Deposits collected under home savings accounts and plans
14,477
16,410
of which for home savings plans
12,334
14,310
■ aged more than 10 years
6,645
6,287
■ aged between 4 and 10 years
4,886
6,967
■ aged less than 4 years
803
1,056
Outstanding loans granted under home savings accounts and plans
7
9
of which for home savings plans
2
2
Provisions for home savings accounts and plans
48
47
of which discount on home savings accounts and plans
-
-
of which provisions recognised for home savings plans
33
42
■ of which provisions for plans aged more than 10 years
14
26
■ of which provisions for plans aged between 4 and 10 years
16
12
■ of which provisions for plans aged less than 4 years
3
4
of which provisions for home savings accounts
15
5
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Notes to the parent company financial statements
➤
CHANGE IN PROVISIONS FOR REGULATED SAVINGS PRODUCTS
In millions of euros
Year to 31 December 2023
Year to 31 December 2022
Provisions for home
savings plans
Provisions for home
savings accounts
Provisions for home
savings plans
Provisions for home
savings accounts
Provisions at start of period
42
5
92
-
Additions to provisions
during the period
-
10
-
5
Provisions write-backs
during the period
(9)
-
(50)
-
Provisions at end of period
33
15
42
5
3.l SUBORDINATED DEBT
In millions of euros, at
31 December 2023
31 December 2022
Redeemable subordinated debt
15,801
16,475
Undated subordinated debt
15,575
12,907
Undated super subordinated notes
13,490
12,173
Undated floating-rate subordinated notes
1,860
509
Undated participating subordinated notes
225
225
Related debt
506
537
SUBORDINATED DEBT
31,882
29,919
Redeemable subordinated debt
The redeemable subordinated debt issued by BNP Paribas SA is in the
form of medium and long-term debt securities equivalent to ordinary
subordinated debt; these issues are redeemable prior to the contractual
maturity date in the event of liquidation of the issue r, a nd rank after the
other creditors but before holders of participating loans and participating
subordinated notes.
These debt issues may contain a call provision authorising the Group to
redeem the securities prior to maturity by repurchasing them in the stock
market, via a public tender or exchange offers, or (in the case of private
placements) over the counte r, s ubject to regulatory approval.
Debt issued by BNP Paribas SA via placements in the international
markets may be subject to early redemption of the capital and early
payment of interest due at maturity at the issuer's discretion on or
after a date stipulated in the issue particulars (call option), or in the
event that changes in the applicable tax rules oblige the BNP Paribas
Group issuer to compensate debt-holders for the consequences of such
changes. Redemption may be subject to a notice period of between 15 and
60 days, and is in all cases subject to approval by the banking supervisory
authorities.
In 2022, three subordinated debt issued were repaid at or before maturity.
These transactions resulted in a EUR 1,107 million reduction in the amount
of redeemable subordinated debt. In addition, two new subordinated debt
were issued for an amount of EUR 1,583 million in 2022.
In 2023, five subordinated debt issued were repaid at or before maturity.
These transactions resulted in a EUR 411 million reduction in the amount
of redeemable subordinated debt.
The following table gives the maturity schedule for redeemable subordinated debt at 31 December 2023:
In millions of euros
31/12/2023
Outstanding at
2024
2025
2026
2027
2028
2029 to 2033
After 2033
Redeemable subordinated debt
15,801
906
2,706
2,709
2,674
181
5,893
732
The following table gives the maturity schedule for redeemable subordinated debt at 31 December 2022:
In millions of euros
31/12/2022
Outstanding at
2023
2024
2025
2026
2027
2028 to 2032
After 2032
Redeemable subordinated debt
16,475
-
935
2,750
2,748
2,729
5,206
2,107
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Undated subordinated debt
Undated super subordinated notes
BNP Paribas SA has issued Undated super subordinated notes which pay
a fixed, fixed adjustable or floating-rate coupon and are redeemable at
the end of a fixed period and thereafter at each coupon date or every
five years.
On 3 January 2022, BNP Paribas SA redeemed the July 2006 issue for an
amount of EUR 150 million. These notes paid a 5.45% fixed-rate coupon.
On 12 January 2022, BNP Paribas SA issued Undated super subordinated
notes in the amount of USD 1,250 million. This issue pays a fixed-rate
coupon of 4.625%. These notes could be redeemed at the end of a period
of five years. If not redeemed in 2027, a coupon will be paid semi-annually
On 19 February 2022, BNP Paribas SA redeemed the June 2007 issue for
an amount of USD 1,100 million. These notes paid a 7.195% fixed-rate
coupon.
On 14 March 2022, BNP Paribas SA redeemed the December 2016 issue,
for an amount of USD 750 million. These notes paid a 6.75% fixed-rate
coupon.
On 17 June 2022, BNP Paribas SA redeemed the June 2015 issue for an
amount of EUR 750 million, at its first call date. These notes paid a 6.125%
fixed-rate coupon.
On 16 August 2022, BNP Paribas SA issued Undated super subordinated
notes in the amount of EUR 2,000 million. This issue pays a fixed-rate
coupon of 7.75%. These notes could be redeemed at the end of a period
of seven years. If not redeemed in 2029, a coupon will be paid semi-
annually indexed to the rate of the US Treasury bill with a constant
five-year maturity (CMT rate).
On 6 September 2022, BNP Paribas SA issued Undated super subordinated
notes in the amount of USD 1,000 million. This issue pays a fixed-rate
coupon of 6.875%. These notes could be redeemed at the end of a period of
7.25 years. If not redeemed in 2029, a coupon will be paid semi-annually
indexed to the five-year European mid-swap rate.
On 17 November 2022, BNP Paribas SA issued Undated super
subordinated notes in the amount of USD 1,000 million. This issue pays
a fixed-rate coupon of 9.25%. These notes could be redeemed at the end
of a period of five years. If not redeemed in 2027, a coupon will be paid
indexed to the rate of the US Treasury bill with a constant five-year
semi-annually indexed to the rate of the US Treasury bill with a constant
maturity (CMT rate).
five-year maturity (CMT rate).
On 11 January 2023, BNP Paribas SA issued Undated super subordinated
notes in the amount of EUR 1,250 million. This issue pays a fixed-rate
coupon of 7.375%. These notes could be redeemed at the end of a period
of seven years. If the notes are not redeemed in 2030, a mid-swap rate
EUR five-year coupon will be paid half-yearly.
On 28 February 2023, BNP Paribas SA issued Undated super subordinated
notes in the amount of SGD 600 million. This issue pays a fixed-rate
coupon of 5.9%. These notes could be redeemed at the end of a period of
five years. If not redeemed in 2028, a coupon will be paid semi-annually
indexed to the rate of the Singapore Treasury bill with a constant five-
year maturity (SORA rate).
The following table summarises the characteristics of these various issues:
Issue date
Amount
in original
currency Coupon
Currency (in millions)
frequency
beforeꢀfirstꢀcallꢀdate
Rate and term
Rateꢀafterꢀfirstꢀcallꢀdate
31 December
2023
31 December
2022
August 2015
USD
1,500 semi-annual
7.375%
10 years
USD 5-year swap +5.150%
1,360
1,402
November 2017
USD
750 semi-annual
5.125%
10 years
USD 5-year swap +2.838%
679
701
August 2018
USD
750 semi-annual
7.000%
10 years
USD 5-year swap +3.980%
679
701
March 2019
USD
1,500 semi-annual
6.625%
5 years
USD 5-year swap +4.149%
1,359
1,402
July 2019
AUD
300 semi-annual
4.500%
5.5 years
AUD 5-year swap +3.372%
185
191
February 2020
USD
1,750 semi-annual
4.500%
10 years
US CMT 5 years +2.944%
1,585
1,636
February 2021
USD
1,250 semi-annual
4.625%
10 years
US CMT 5 years +3.340%
1,132
1,168
January 2022
USD
1,250 semi-annual
4.625%
5 years
US CMT 5 years +3.196%
1,132
1,168
August 2022
USD
2,000 semi-annual
7.750%
7 years
US CMT 5 years +4.899%
1,811
1,869
September 2022
EUR
1,000 semi-annual
6.875%
7.25 years EUR 5-year mid-swap +4.645%
1,000
1,000
November 2022
USD
1,000 semi-annual
9.250%
5 years
US CMT 5 years +4.969%
906
935
January 2023
EUR
1,250 semi-annual
7.375%
7 years
EUR 5-year mid-swap +4.631%
1,250
-
February 2023
SGD
600 semi-annual
5.900%
5 years
SGD SORA 5 years +2.674%
412
-
UNDATED SUPER SUBORDINATED NOTES
13,490
12,173
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Notes to the parent company financial statements
BNP Paribas has the option of not paying interest due on these Undated
super subordinated notes. Unpaid interest is not carried forward.
For the notes issued before 2015, this non-payment is subject to the
absence of any payment on BNP Paribas SA ordinary shares or on
Undated super subordinated note equivalents in the previous yea r. T his
interest must be paid when dividends are paid on BNP Paribas SA's
ordinary shares.
The contracts relating to these Undated super subordinated notes contain
a loss absorption clause. Under the terms of this clause, in the event of
insufficient regulatory capital, the nominal value of the notes may be
reduced in order to serve as a new basis for the calculation of the related
coupons until the capital deficiency is made up and the nominal value of
the notes is increased to its original amount.
Undated floating-rate subordinated notes
The Undated floating-rate subordinated notes (TSDIs) and other
Undated subordinated notes issued by BNP Paribas SA are redeemable
on liquidation of the Bank after repayment of all other debts but ahead
of Undated participating subordinated notes. They confer no rights over
residual assets.
Characteristics of Undated floating-rate subordinated notes:
Issue date
Currency
Amount
in original
currency
(in millions)
Date of call or
Rate interest step-up
Interest rate
reset 31 December 2023
31 December 2022
October 1985
EUR
305
TMO – 0.25%
-
-
254
254
September 1986
USD
500 6-month Libor +0.075%
-
-
248
255
August 2023
USD
1,500
8.500%
August 2028
CMT 4.354%
1,358
-
UNDATED FLOATING-RATE SUBORDINATED NOTES
1,860
509
Payment of interest is obligatory on the TSDIs issued in October 1985
(representing a nominal amount of EUR 305 million), but the Board
of directors may postpone interest payments if the Ordinary General
Meeting of the Shareholders notes that there is no income available for
distribution in the twelve months preceding the interest payment date.
Interest payments are cumulative and are payable in full once dividend
payments resume.
Payment of interest is obligatory on the TSDIs issued in September 1986
(representing a nominal amount of USD 500 million), but the Board
of directors may postpone interest payments if the Ordinary General
Meeting of shareholders approves a decision not to pay a dividend in
the 12 months preceding the interest payment date. Interest payments
are cumulative and are payable in full once dividend payments resume.
The bank has the option of resuming payment of interest arrears, even
where no dividend is paid out.
The instruments issued by BNP Paribas SA in August 2023 in the amount
of USD 1,500 million are contingent convertible securities recorded
for accounting purposes as TSDIs. Payment of the interest is made
on a discretionary basis and may be cancelled in full or in part upon
notification by the regulator based on its assessment of the issuer's
financial and solvency situation. The amounts of interest on the bonds
will not be cumulative once coupon payments resume.
Undated participating subordinated notes
Undated participating subordinated notes issued by BNP Paribas SA in
July 1984 in a total amount of EUR 337 million are redeemable only in
the event of the liquidation of BNP Paribas SA, but may be bought back
on the terms specified in the French act of 3 January 1983. The number
of notes in circulation was 1,434,092 at 31 December 2023.
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Note 4
FINANCING, GUARANTEE AND SECURITIES COMMITMENTS
In millions of euros, at
31 December 2023
31 December 2022
Credit institutions
82,330
64,314
Customers
365,026
305,558
Confirmed letters of credit
87,886
106,579
Other commitments given to customers
277,140
198,979
FINANCING COMMITMENTS GIVEN
447,356
369,872
Credit institutions
124,938
86,091
Customers
53,909
40,113
FINANCING COMMITMENTS RECEIVED
178,847
126,204
4.b GUARANTEE AND SECURITIES COMMITMENTS
BNP Paribas SA's annual contribution to the European Union's Single
Resolution Fund may be made, in part, in the form of an irrevocable
payment commitment (IPC) guaranteed by a cash deposit of the same
amount. When the an institution's resolution involves the fund, the latter
may call on all or part of the IPC received.
The irrevocable payment commitment is qualified as a contingent
liability. It gives rise to provisioning if the probability of a call by the fund
becomes greater than 50%. As it is estimated to be below this threshold,
no provision was recorded by BNP Paribas SA at 31 December 2023.
These commitments amounted to EUR 946 million at 31 December 2023
(versus EUR 724 million at 31 December 2022).
The cash paid as collateral is subject to a remuneration and is recognised
as an asset at amortised cost.
In millions of euros, at
31 December 2023
31 December 2022
COMMITMENTS GIVEN ON SECURITIES
51,108
38,219
COMMITMENTS RECEIVED ON SECURITIES
54,234
42,281
4.a FINANCING COMMITMENTS
In millions of euros, at
31 December 2023
31 December 2022
Credit institutions
85,324
107,858
Customers
126,449
124,041
GUARANTEE COMMITMENTS GIVEN
211,773
231,899
Credit institutions
92,230
93,377
Customers
230,792
240,256
GUARANTEE COMMITMENTS RECEIVED
323,022
333,633
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4.c FINANCIAL INSTRUMENTS GIVEN OR RECEIVED AS COLLATERAL
➤
FINANCIAL INSTRUMENTS GIVEN AS COLLATERAL
In millions of euros, at
31 December 2023
31 December 2022
Financial instruments (negotiable securities and private receivables) lodged with central banks
and eligible for use at any time as collateral for refinancing transactions after haircut
66,096
80,379
■ Used as collateral with central banks
14,832
34,368
■ Available for refinancing transactions
51,264
46,011
Other financial assets pledged as collateral for transactions with credit institutions,
financial customers or subscribers of covered bonds issued by the Group
271,709
173,847
As at 31 December 2023, the Bank had EUR 66,096 million of financial
instruments (negotiable securities and private receivables) deposited
or pledged with central banks for use at any time as collateral for
refinancing transactions (vs. EUR 80,379 million as at 31 December
2022). This amount includes EUR 57,106 million deposited with the
Banque de France (vs. EUR 70,683 million at 31 December 2022) under
the Banque de France's Comprehensive Collateral Management system
to cover Eurosystem monetary policy transactions and intraday loans.
As at 31 December 2023, the Bank had EUR 14,832 million of collateral
deposited with central banks (EUR 34,368 million as at 31 December
2022).
The other assets that the Bank has pledged as collateral with credit
institutions and financial customers totalled EUR 41,715 million at
31 December 2023 (vs. EUR 40,500 million at 31 December 2022),
included in particular financing for BNP Paribas Home Loan SFH.
➤
FINANCIAL INSTRUMENTS RECEIVED AS COLLATERAL
In millions of euros, at
31 December 2023
31 December 2022
Financial instruments received as collateral (excluding repurchase agreements)
205,568
185,576
Note 5
SALARIES AND EMPLOYEE BENEFITS
5.a SALARIES AND EMPLOYEE BENEFIT EXPENSE
In millions of euros
Year to
31 December 2023
Year to
31 December 2022
Salaries
(6,190)
(5,830)
T a x and social security charges(1)
(2,283)
(1,984)
Employee profit-sharing and incentive plans
(292)
(302)
TOTAL SALARIES AND EMPLOYEE BENEFIT EXPENSES
(8,765)
(8,116)
(1) Including the remeasurement of actuarial effects on post-employment benefits.
BNP Paribas SA's headcount breaks down as follows:
Headcount at
31 December 2023
31 December 2022
BNP Paribas Metropolitan France
36,833
36,673
of which managers
30,094
27,928
Employees outside Metropolitan France
28,014
26,411
TOTAL BNP PARIBAS SA
64,847
63,084
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5.b SOCIAL COMMITMENTS
Defined-contribution plans
In France, BNP Paribas SA pays contributions to various nationwide basic
and top-up pension plans. BNP Paribas SA has set up a funded pension
plan under a company-wide agreement. Under this plan, employees
will receive an annuity on retirement in addition to the pension paid by
nationwide schemes.
Since defined-benefit plans have been closed to new employees in
most countries outside France, they are offered the benefit of defined-
contribution pension plans. Under these plans, the Group's obligation
is essentially limited to paying a percentage of the employee's annual
salary into the plan.
The amount paid into defined-contribution post-employment plans
in France and other countries for the year 2023 was EUR 407 million,
compared with EUR 376 million for the year 2022.
Defined-benefit plans
Existing legacy defined-benefit plans within BNP Paribas SA are valued
independently using actuarial techniques by applying the projected
unit cost method in order to determine the expense arising from rights
vested in employees and benefits payable to retired employees. The
demographic and financial assumptions used to estimate the present
value of these obligations and of plan assets take into account economic
conditions specific to each country.
Provisions set up to cover obligations under defined-benefit post-
employment plans totalled EUR 106 million at 31 December 2023 (against
EUR 120 million at 31 December 2022), comprised of EUR 52 million for
French plans and EUR 54 million for other plans.
BNP Paribas recognised EUR 508 million of retirement plan assets
(recognised surplus and reimbursement rights) at 31 December 2023
as compared to EUR 561 million at 31 December 2022.
Pension plans and other retirement benefits
Pension plans
In France, BNP Paribas pays a top-up banking industry pension arising
from rights acquired to 31 December 1993 by retired employees and
active employees in service at that date. At The Group's residual
obligations for these employees were recognised on the balance sheet
in full.
The defined-benefit plans previously granted to some Group senior
managers have all been closed to new employees and converted into
top-up type schemes. The amounts allocated to residual beneficiaries,
subject to their presence within the Group at retirement, were fixed when
these schemes were closed. These pension plans have been outsourced
to insurance companies. The market value of the related plan assets in
these companies' balance sheets breaks down as 77% bonds, 8% equities,
13% property assets and 2% other financial instruments.
In BNP Paribas SA's foreign branches, pension plans are based either
on pensions linked to the employee's final salary and length of service
(United Kingdom), or on annual vesting of rights to a capital sum
expressed as a percentage of annual salary and remunerated at a
predefined rate (United States).
Some plans are managed by independent fund managers. At 31 December
2023, 86% of the gross obligations under these plans related to plans in
the United Kingdom, the United States and the Netherlands. The market
value of the related plan assets was split as follows: 74% bonds, 12%
equities, and 14% other financial instruments.
Other post-employment benefits
BNP Paribas SA employees also receive various other contractual
post-employment benefits, such as indemnities payable on retirement.
In France, the obligations for these benefits are funded through a contract
held with an insurer that is independent from BNP Paribas SA.
The law of 14 April 2023 modified the age criteria and number of quarters
required to liquidate pension rights. The provisions of this law were taken
into account, with the impact of a decrease in the value of commitments
of EUR 19 million.
Post-employment healthcare benefits
In France, BNP Paribas SA no longer has any obligation in relation to
healthcare benefits for its retired employees.
Among BNP Paribas SA's foreign branches, there are several healthcare
benefit plans for retired employees, mainly in the United States.
Provisions for obligations under these plans amounted to EUR 15 million
at 31 December 2023, compared to EUR 13 million at 31 December 2022.
Obligations under post-employment healthcare benefit plans are
measured using the mortality tables applicable in each country and
assumptions about trends in healthcare costs. They also build in
assumptions about healthcare benefit costs, including forecast trends
in the cost of healthcare services and in inflation, which are derived
from historical data.
Provision for voluntary departure,
early retirement plans, and
headcount adaptation plans
The Bank has implemented a number of voluntary redundancy plans and
a headcount adaptation plan for employees who meet certain eligibility
criteria. The obligations to eligible active employees under such plans are
provided for when the plan is the subject of an agreement or a bilateral
draft agreement.
Provisions for these plans totalled EUR 41 million at 31 December 2023
(EUR 66 million at 31 December 2022).
In millions of euros, at
31 December 2023
31 December 2022
Provision for voluntary departure, early retirement plans, and headcount adaptation plans
41
66
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Note 6
ADDITIONAL INFORMATION
6.a TRANSACTIONS IN SHARE CAPITAL
Resolutions of Shareholders' Annual General Meetings that can be used during the year are presented in chapter 2 Corporate governance report of the
Universal registration document.
Operations affecting share capital
Number of
Par value
shares (in euros)
In euros
Date of
by the Annual
General Meeting
authorisation Date of decision
by Board of
Date from which
shares carry
directors dividend rights
NUMBER OF SHARES ISSUED
AT 31 DECEMBER 2021
1,234,331,646
2
2,468,663,292
NUMBER OF SHARES ISSUED
AT 31 DECEMBER 2022
1,234,331,646
2
2,468,663,292
Capital reduction by cancellation of shares
(60,914,757)
(121,829,514)
(1)
(1)
2
27 Sept. 23
Capital reduction by cancellation of shares
(6,238,000)
(12,476,000)
(1)
(1)
2
11 Oct. 23
Capital reduction by cancellation of shares
(2,491,000)
(4,982,000)
(1)
(1)
2
23 Oct. 23
Capital reduction by cancellation of shares
(3,744,000)
(7,488,000)
(1)
(1)
2
27 Oct. 23
Capital reduction by cancellation of shares
(4,333,000)
(8,666,000)
(1)
(1)
2
06 Nov. 23
Capital reduction by cancellation of shares
(4,449,000)
(8,898,000)
(1)
(1)
2
13 Nov. 23
Capital reduction by cancellation of shares
(4,684,480)
(9,368,960)
(1)
(1)
2
17 Nov. 23
NUMBER OF SHARES ISSUED
AT 31 DECEMBER 2023
1,147,477,409
2
2,294,954,818
(1) Various resolutions passed by the Shareholders' Annual General Meeting and decisions of the Board of directors authorising the allocation of stock
options exercised during the period.
6.b STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY BETWEEN 31 DECEMBER 2021 AND
31 DECEMBER 2023
In millions of euros
Share capital
Additional paid-in
capital and other
premiums
Net income
andꢀreservesꢀ
for the period
Total
shareholders'
equity
SHAREHOLDERS' EQUITY AT 31 DECEMBER 2021
2,469
22,374
55,516
80,359
Dividend payout for 2021
(4,527)
(4,527)
Other variations
(1)
(1)
Accelerated depreciation
2
2
Net income for 2022
8,033
8,033
SHAREHOLDERS' EQUITY AT 31 DECEMBER 2022
2,469
22,374
59,023
83,866
Dividend payout for 2022
(4,744)
(4,744)
Capital decrease (by cancellation of shares)
(174)
(4,809)
(17)
(5,000)
Other variations
1
1
Accelerated depreciation
(1)
(1)
Net income for 2023
9,620
9,620
SHAREHOLDERS' EQUITY AT 31 DECEMBER 2023
2,295
17,565
63,882
83,742
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6.c NOTIONAL AMOUNTS OF FINANCIAL INSTRUMENTS
The notional amounts of derivative financial instruments are merely an indication of the volume of BNP Paribas SA's activities in financial instrument
markets, and do not reflect the market risks associated with such instruments.
Trading portfolio
in millions of euros, at
31 December 2023
31 December 2022
Currency derivatives
9,387,120
7,898,318
Interest rate derivatives
22,922,988
19,339,847
Equity derivatives
1,396,282
1,167,841
Credit derivatives
864,441
1,020,840
Other derivatives
205,969
239,812
FORWARD FINANCIAL INSTRUMENTS IN THE TRADING PORTFOLIO
34,776,800
29,666,658
Financial instruments traded on organised markets or admitted to clearing houses accounted for 43% of the Bank's derivatives transactions at 31 December
2023 (compared with 47% at 31 December 2022).
Hedging strategy
The total notional amount of derivative financial instruments used for
hedging purposes stood at EUR 1,057,833 million at 31 December 2023,
compared with EUR 969,351 million at 31 December 2022.
Derivatives used for hedging purposes are primarily contracted on over-
the-counter markets.
Market value
The market value of the Bank's positive net position on outright
transactions was EUR 263 million at 31 December 2023, compared with
a positive net position of EUR 17,182 million at 31 December 2022. The
market value of the Bank's net short position on conditional transactions
was valued at EUR 8,301 million at 31 December 2023, compared with a
net long position of EUR 9,250 million at 31 December 2022.
6.d SEGMENT INFORMATION
The following table gives a regional breakdown of BNP Paribas SA's interbank transactions and customer transactions recognised on the balance sheet:
In millions of euros, at
2023
Interbank transactions
Customer items
Total by region
31 December
31 December
2022
31 December
2023
31 December
2022
31 December
2023
31 December
2022
France
421,028
445,515
342,023
332,190
763,051
777,705
Other countries in the European
Economic Area
78,537
78,841
92,219
92,882
170,756
171,723
Countries in the Americas and Asia
109,234
92,852
149,537
123,222
258,771
216,074
Other countries
1,606
1,627
2,543
3,868
4,149
5,495
TOTAL USES OF FUNDS
610,405
618,835
586,322
552,162
1,196,727
1,170,997
France
156,173
148,586
378,100
391,492
534,273
540,078
Other countries in the European
Economic Area
48,425
51,853
208,750
221,912
257,175
273,765
Countries in the Americas and Asia
23,540
32,400
244,788
207,063
268,328
239,463
Other countries
610
1,589
8,096
11,687
8,706
13,276
TOTAL SOURCES OF FUNDS
228,748
234,428
839,734
832,154
1,068,482
1,066,582
82% of BNP Paribas SA's revenues in 2023 came from counterparties in the European Economic Area (82% in 2022).
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6.e SCHEDULE OF USES AND SOURCES OF FUNDS
In millions of euros
Demand and
overnight
Term remaining
Up to
transactions 3 months
3 months
to 1 year
1 to 5 years
More than
5 years
provisions
Of which
Total
Uses of funds
Cash and amounts due from central banks
and CCP
234,277
720
-
-
-
-
234,997
Treasury bills and money-market
instruments
200
16,271
13,032
49,480
80,185
(370)
159,168
Due from credit institutions
15,959
86,703
47,518
52,060
13,999
(162)
216,239
Customer and leasing transactions
44,292
213,466
59,601
138,460
130,503
(5,371)
586,322
Bonds and other fixed-income securities
2,148
6,773
5,661
49,677
76,217
(655)
140,476
Sources of funds
Amounts due to credit institutions
and central banks and CCP
53,697
100,459
9,750
39,541
25,301
-
228,748
Customer items
433,846
305,221
67,838
26,393
6,436
-
839,734
Debt securities
1,162
28,218
29,735
56,854
64,464
-
180,433
6.f NON-COOPERATIVE STATES AND TERRITORIES
Authorisation from the Group's Compliance Department must be
obtained through a special procedure before BNP Paribas SA or Group
subsidiaries that report to BNP Paribas SA can open a location in a State
considered "uncooperative" as defined by article 238-O A of the French
General T a x Code and the Order issued on 3 February 2023 amending
the list of non-cooperative States. In accordance with BNP Paribas'
"best interests" ethics principle, and to ensure that the Group's internal
control mechanisms are applied consistently, these locations are subject
to the Group's regulations on Risk Management, anti-money laundering,
corruption, financial embargoes, and terrorism financing.
Company name
Ownership
interest
(%)
Legal form
Type of licence
Business activity
British Virgin Islands
Twenty-T hree Investments Ltd – in liquidation
100
Investments Limited
In liquidation
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6
Appropriation of income for the year ended 31 December 2023 and dividend distribution
6.2 Appropriation of income for the year ended
31 December 2023 and dividend distribution
At the Annual General Meeting of 14 May 2024, the Board of directors will propose an appropriation of net income for the year ended 31 December
2023 and dividend distribution under the following terms:
In millions of euros
Net income
9,620
Unappropriated retained earnings
37,655
TOTAL TO BE APPROPRIATED
47,275
Dividend
5,278
Retained earnings
41,997
TOTAL APPROPRIATED INCOME
47,275
The total proposed dividend to be paid to BNP Paribas SA shareholders is EUR 5,278 million, which corresponds to EUR 4.60 per share (with a par value
of EUR 2.00) based on the number of existing shares at 31 December 2023.
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6
BNP Paribas SA five-year financial summary
6.3 BNP Paribas SA five-year financial summary
2019
2020
2021
2022
2023
Financial position at year-end
a) Share capital (in euros)
2,499,597,122
2,499,597,122
2,468,663,292
2,468,663,292
2,294,954,818
b) Number of shares issued
1,249,798,561
1,249,798,561
1,234,331,646
1,234,331,646
1,147,477,409
c) Number of convertible bonds in issue
None
None
None
None
None
Results of operations for the year (in millions of euros)
a) Total revenues excluding VAT
40,100
32,108
31,884
50,446
94,079
b) Earnings before tax, amortisation and impairment
7,611
7,159
7,769
11,129
11,207
c) Income tax expense
(325)
(653)
(716)
(943)
(683)
d) Profit after tax, amortisation and impairment
7,490
4,404
7,307
8,033
9,620
e) Total dividend payout(1)
-
3,324
4,527
4,744
5,278
Earnings per share (in euros)
a) Profit after tax, but before amortisation and provisions
5.83
5.21
5.71
8.25
9.17
b) Profit after tax, amortisation and provisions
5.99
3.52
5.92
6.51
8.38
c) Dividend per share(1)
-
2.66
3.67
3.90
4.60
Employee data
a) Number of employees at year-end
53,880
52,590
52,444
63,084
64,847
b) Total payroll expense (in millions of euros)
4,797
4,721
4,792
5,899
6,123
c) Amount paid in respect of social benefits
(Social security, Social works, etc.) (in millions of euros)
1,535
1,485
1,543
1,738
1,929
(1) For 2023, subject to approval by the Annual General Meeting of 14 May 2024.
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6
Main subsidiaries and associates of BNP Paribas SA
6.4 Main subsidiaries and associates
of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
BNP PARIBAS SA (SIREN 662 042 449) is the parent company of all subsidiaries and associated companies
I – Detailed information about subsidiaries and associated companies whose book value exceeds 1% of BNP PARIBAS SA's share capital
1. Subsidiaries (more than 50% owned)
Banca Nazionale
Del Lavoro SPA
Viale Altiero
Spinelli 30
00157 Rome
Italy
EUR
2,077
3,646
163
2,316
2,077
3,646
163
2,316
100%
(1)
Banco BNPP
Brasil SA
510 Av. Presidente
Juscelino Kubitschek,
10° to 13° Andares,
Itaim Bibi
04543-906 Sao Paulo
Brazil
BRL
2,756
1,246
(114)
992
514
233
(21)
185
76%
(2)
BNP Paribas Bank
Polska SA
10/16 ul. Kasprzaka
01-211 Warsaw
Poland
PLN
148
11,282
957
6,544
34
2,598
220
1,507
63%
(2)
Bank BNPP
Indonesia PT
35th Floor Menara
BCA
Grand Indonesia
Jl M H Thamrin No. 1
10310 Jakarta
Indonesia
IDR 3,852,573
1,597,421
228,574
744,957
227
94
13
44
99%
(2)
BNP PUK
Holding Ltd
10 Harewood
Avenue
NW1 6AA London
UK
GBP
40
18
3
3
46
21
4
4
100%
(2)
BNPP Asset
Management
Holding
1 boulevard
Haussmann
75009 Paris
France
682 001 904
EUR
23
1,440
33
148
23
1,440
33
148
67%
(1)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
BNPP Bank JSC
5 Lesnaya Street,
Bld. B
Business Center
White Square
125047 Moscow
Russian Federation
RUB
5,798
9,547
1,670
2,467
59
97
17
25
100%
(2)
BNPP Canada Corp
1981 avenue McGill
College
H3A 2W8 Montreal
Canada
CAD
159
212
12
9
109
145
8
6
100%
(2)
BNPP Cardif
1 boulevard
Haussmann
75009 Paris
France
382 983 922
EUR
150
2,108
416
611
150
2,108
416
611
100%
(1)
BNPP China Ltd
25/F Shanghai
World Financial
Center
100 Century Avenue
Shanghai 200120, P.R.C
China
CNY
8,711
2,441
354
1,215
1,116
313
45
156
100%
(2)
BNPP Colombia
Corporacion
Carrera 8A No. 99-51
6
Edificio World Trade
Cente r, T o rre A,
Piso 9
Bogotá DC
Colombia
COP 133,721
15,109
27,705
130,159
31
4
6
30
94%
(2)
BNPP
Développement
20 rue Chauchat
75009 Paris
France
348 540 592
EUR
136
1,505
116
41
136
1,505
116
41
100%
(1)
BNPP El Djazair
8 rue de Cirta
Hydra
16035 Algiers
Algeria
DZD
20,000
11,978
2,721
12,521
135
81
18
84
84%
(2)
BNPP Factor
46/52 rue Arago
92823 Puteaux
France
775 675 069
EUR
6
118
53
151
6
118
53
151
100%
(2)
BNPP Fortis
3 rue Montagne du
Parc/Warandeberg 3
1000 Brussels
Belgium
EUR
10,965
8,882
2,573
5,279
10,965
8,882
2,573
5,279
100%
(1)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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6
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
BNPP Home Loan
SFH
1 boulevard
Haussmann
75009 Paris
France
454 084 211
EUR
285
287
8
6
285
287
8
6
100%
(1)
BNPP India Holding
Private Ltd
1 North Avenue –
BNP Paribas House
Maker Maxity,
Bandra – Kurla
Complex
Bandra (East)
400 051 Mumbai
India
INR
2,608
607
459
570
28
7
5
6
100%
(2)
BNPP IRB
Participations
1 boulevard
Haussmann
75009 Paris
France
433 891 983
EUR
46
107
152
18
46
107
152
18
100%
(1)
BNPP Ireland
Unlimited Co
5 George's Dock
IFSC
Dublin 1
Ireland
EUR
402
35
35
36
402
35
35
36
100%
(2)
BNPP Lease
Group Leasing
Solutions SPA
3 Piazza Lina Bo
Bardi
20124 Milan
Italy
EUR
65
(6)
(17)
4
65
(6)
(17)
4
74%
(2)
BNPP Malaysia
Berhad
Level 48, Vista Tower
The Intermark
182 Jalan Tun Razak
50400 Kuala
Lumpur
Malaysia
MYR
650
239
66
172
128
47
13
34
100%
(2)
BNPP Mexico
Avenida Paseo de
las Palmas 11000
Ciudad de Mexico
Mexico
MXN
4,500
-
-
-
240
-
-
-
100%
(2)
BNPP Personal
Finance
1 boulevard
Haussmann
75009 Paris
France
542 097 902
EUR
584
6,327
(452)
1,467
584
6,327
(452)
1,467
100%
(1)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
BNPP Prime
Brokerage
International Ltd
c/o Marsh
Management
Services Limited
25/28 Adelaide
Road Dublin 2
Ireland
USD
-
619
104
437
-
561
94
396
100%
(2)
BNPP Real Estate
50 cours de l'île
Seguin
92650 Boulogne-
Billancourt Cedex
France
692 012 180
EUR
450
603
(64)
575
450
603
(64)
575
100%
(2)
BNPP Real Estate
Investment
Management
Italy SPA
Via Carlo Bo 11
20143 Milan
Italy
EUR
10
11
(11)
1
10
11
(11)
1
100%
(2)
BNPP Réunion
1 boulevard
Haussmann
75009 Paris
France
428 633 408
EUR
25
12
13
47
25
12
13
47
100%
6
(2)
BNPP SB Re
16 rue Edward
Steichen
L – 2540
Luxembourg
Luxembourg
EUR
250
117
49
68
250
117
49
68
100%
(2)
BNPP Securities
Asia Ltd
59-63/F II
International
Finance Centre
8 Finance Street
Central
Hong Kong
HKD
3,879
(2,275)
(189)
291
450
(264)
(22)
34
100%
(2)
BNPP Securities
Japan Ltd
GranTokyo North
Tower
1-9-1 Marunouchi,
Chiyoda-ku
100-6740 Tokyo
Japan
JPY 156,050
51,547
30,065
65,488
1,002
331
193
421
100%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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6
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
BNPP Securities
Korea Co Ltd
24, 25FL, State
Tower Namsan, 100,
Toegye-ro, Jung-gu
Seoul 100-052
Rep. of Korea
KRW 250,000
(1,795)
(6,229)
17,975
176
(1)
(4)
13
100%
(2)
BNPP Suisse SA
2 place de
Hollande
1211 Geneva 11
Switzerland
CHF
320
962
(12)
299
345
1,036
(13)
322
100%
(2)
BNPP USA Inc
787 Seventh
Avenue
NY 10019 New York
United States
of America
USD
3,674
2,694
(381)
371
3,328
2,440
(345)
336
100%
(2)
BNPP Wealth
Management
Monaco
5/17 Avenue
d'Ostende
98000 Monaco
Monaco
EUR
13
20
13
49
13
20
13
49
100%
(2)
BNPP Yatirimlar
Holding AS
Ankara caddesi,
Büyük Kelkit Han
n° 243, Kat 5
Sirkeci, Eminönü/
Fatih
Istanbul
Türkiye
TRY
1,032
(129)
388
428
32
(4)
12
13
100%
(2)
Cetelem
América Ltda.
na Alameda Rio
Negro, n° 161,
18° andar
Alphaville
Industrial
Barueri
Sao Paulo
Brazil
BRL
1,540
(186)
(580)
-
287
(35)
(108)
-
100%
(3)
Compagnie
Financière
Ottomane SA
44 avenue JF
Kennedy
L-1855
Luxembourg
Luxembourg
EUR
9
461
-
-
9
461
-
-
97%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
Expo Atlantico
EAII Investimentos
Imobiliarios SA
Torre Ocidente, Rua
Galileu Galilei, n°2
1500-392 Lisbon
Portugal
EUR
1
36
-
-
1
36
-
-
74%
(2)
Expo Indico
EIII Investimentos
Imobiliarios SA
Torre Ocidente,
Rua Galileu Galilei,
n°2 1500-392
Lisbon
Portugal
EUR
1
36
-
-
1
36
-
-
74%
(2)
Financière des
Paiements
Électroniques
18 avenue Winston
Churchill 94220
Charenton-le-Pont
France
753 886 092
EUR
1
75
20
163
1
75
20
163
95%
(2)
Financière
du Marché
Saint-Honoré
37 place
du Marché
6
Saint-Honoré
75001 Paris
France
662 047 513
EUR
297
224
(18)
1
297
224
(18)
1
100%
(1)
Floa
Immeuble G7 – 71
rue Lucien Faure
33300 Bordeaux
France
434 130 423
EUR
72
197
(88)
299
72
197
(88)
299
100%
(2)
Harewood Helena
1 Ltd
10 Harewood
Avenue
London NW1 6AA
UK
USD
39
10
2
4
35
9
1
3
100%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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6
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6
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
Human Value
Developers
Private Ltd
Lodha iThink
Techno Campus,
10th Flr
Beta Bldg Off. JVLR,
Opp. Kanjurmarg
Rly Stn,
Kanjurmarg East
Maharashtra
400042 Mumbai
India
INR
2,346
1
(7)
-
26
-
-
-
100%
(2)
International
Factors Italia SPA
15 Via Vittor Pisani
20124 Milan
Italy
EUR
56
800
58
153
56
800
58
153
100%
(2)
Kantox
8 Devonshire
Square
5th Floor
London EC2M 4PL
United Kingdom
GBP
-
58
(2)
22
-
67
(3)
25
100%
(2)
Natiocredibail
12 rue du Port
92000 Nanterre
France
998 630 206
EUR
32
76
10
22
32
76
10
22
100%
(2)
Parilease
41 avenue
de l'Opéra
75002 Paris
France
339 320 392
EUR
129
247
12
12
129
247
12
12
100%
(2)
Portzamparc
1 boulevard
Haussmann
75009 Paris
France
399 223 437
EUR
5
14
(1)
36
5
14
(1)
36
100%
(1)
Sagip
3 rue Montagne
du Parc
1000 Brussels
Belgium
EUR
657
2,502
88
118
657
2,502
88
118
100%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
Sharekhan Ltd
Lodha iThink
Techno Campus,
10th Fl r, B eta Bldg
Off. JVLR, Opp.
Kanjurmarg Rly
Stn, Kanjurmarg
East Maharashtra
400042 Mumbai
India
INR
587
15,364
1,792
7,853
6
167
20
85
73%
(2)
SNC T a itbout
Participation 3
1 boulevard
Haussmann
75009 Paris
France
433 912 250
EUR
552
553
313
-
552
553
313
-
100%
(1)
Société
Orbaisienne de
Participations
1 boulevard
Haussmann
75009 Paris
France
428 753 479
EUR
311
209
2
-
311
209
2
-
100%
(1)
UkrSibbank
Public JSC
7 Andreevskaya
Street
6
04070 Kiev
Ukraine
UAH
5,069
7,747
4,385
-
120
184
104
-
60%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
2023 Universal registration document and annual financial report - BNP PARIBAS
622
6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Main subsidiaries and associates of BNP Paribas SA
Name
Siren Currency
In millions of foreign currency
Share
capital
Reserves and
retained earnings
before income
Last
published Revenue
appropriation net income excl.Tax(**) capital appropriation net income
NBI or
Reserves
and retained
earnings
Share before income published
Last Revenue
NBI or
excl.
Tax (**)
Percent
of share
capital
held
In millions of euros(*)
in %
Ref.
2. Associated companies (10% to 50%-owned)
Bank of Nanjing
50 Huaihai Road
210005 Nanjing
China
CNY 10,344
115,170
18,408
44,606
1,325
14,751
2,358
5,713
16%
(3)
BGL BNPP
50 avenue J.F.
Kennedy
2951 Luxembourg
Luxembourg
EUR
713
6,946
499
954
713
6,946
499
954
16%
(2)
BNPP Leasing
Solutions
16 rue Edward
Steichen
2540 Luxembourg
Luxembourg
EUR
1,815
329
147
166
1,815
329
147
166
50%
(2)
BON BNPP
Consumer Finance
Co Ltd (Formerly
Sunning)
588 Changbai Street,
Qinhuai District,
Nanjing City,
Jiangsu Province,
China
CNY
5,000
87
111
2,633
640
11
14
337
33%
(1)
Crédit Logement
50 boulevard de
Sébastopol
75003 Paris
France
302 493 275
EUR
1,260
165
120
216
1,260
165
120
216
17%
(3)
Euro Protection
Surveillance
30 rue du Doubs
67100 Strasbourg
France
338 780 513
EUR
1
94
31
252
1
94
31
252
12%
(3)
Geojit BNP Paribas
Financial
Services Ltd (Group)
34/659-P Civil
Line Road
Padivattom
Kochi
682024 Kerala
India
INR
239
4,672
896
4,278
3
51
10
47
25%
(5)
Sicovam
18 rue Lafayette
75009 Paris
France
EUR
10
916
101
102
10
916
101
102
15%
(4)
Union de Creditos
Inmobiliarios
Calle Retama 3
28045 Madrid
Spain
EUR
182
365
(53)
125
182
365
(53)
125
10%
(2)
(*) Converted at the price on 31/12/2023.
(**) Pre-tax revenue for commercial entities and NBI for banking entities.
(1) Non-audited social contribution data at 31/12/2023.
(2) Data used in Group consolidated financial statements at 31/12/2023.
(3) Social data at 31/12/2022.
(4) Social data at 31/07/2023.
(5) Social data at 31/03/2023.
2023 Universal registration document and annual financial report - BNP PARIBAS
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Main subsidiaries and associates of BNP Paribas SA
In millions of euros
Subsidiaries
Associated companies
French
Foreign
French
Foreign
II – General information about all subsidiaries and associated companies
Carrying amount of shares held
Gross value
16,845
41,220
533
3,325
Carrying amount
15,267
33,388
526
3,070
Loans and advances given by BNP Paribas SA
38,468
23,950
323
286
Guarantees and endorsements given by BNP Paribas SA
48,581
29,905
-
86
Dividends received
771
7,046
56
287
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Disclosures of investments of BNP Paribas SA in 2023 affecting at least 5% of share capital of french companies
6.5 Disclosures of investments of BNP Paribas SA
in 2023 affecting at least 5% of share capital
of french companies
Crossing threshold of more than 5% of the capital
Unlisted
1001PACT
SAS
Unlisted
ECOV SAS
SAS
Crossing threshold of more than 10% of the capital
Unlisted
EACH ONE
SA
Crossing threshold of more than 20% of the capital
None
Crossing threshold of more than 33.33% of the capital
Unlisted
EXANE ASSET MANAGEMENT
SAS
Crossing threshold of more than 50% of the capital
Unlisted
UPTEVIA
SA
Crossing threshold of more than 66.66% of the capital
Unlisted
SAS HANOVRE BAIL
SAS
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Statutory Auditors' report on the financial statements
6.6 Statutory Auditors' report on the financial
statements
For the year ended 31 December 2023
This is a free translation into English of the Statutory Auditors' report issued in French and is provided solely for the convenience of English speaking
readers. This report includes information specifically required by European regulations or French law, such as information about the appointment of
Statutory Auditors. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards
applicable in France.
To the Shareholders,
Opinion
In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying financial statements of
BNP Paribas SA for the year ended 31 December 2023.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company at 31 December
2023 and of the results of its operations for the year then ended in accordance with French accounting principles.
The audit opinion expressed above is consistent with our report to the Financial Statements Committee.
Basis for opinion
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
6
Our responsibilities under these standards are further described in the "Responsibilities of the Statutory Auditors relating to the audit of the financial
statements" section of our report.
Independence
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code (Code de commerce) and
the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from 1 January 2023 to the date of our report, and, in particula r,
we did not provide any non-audit services prohibited by article 5(1) of Regulation (EU) No. 537/2014.
Justification of assessments – Key audit matters
In accordance with the requirements of articles L.821-53 and R.821-180 of the French Commercial Code relating to the justification of our assessments,
we inform you of the key audit matters relating to the risks of material misstatement that, in our professional judgement, were the most significant in
our audit of the financial statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the financial statements as a whole, and therefore contributed to the opinion we formed as
expressed above. We do not provide a separate opinion on specific items of the financial statements.
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Statutory Auditors' report on the financial statements
Identificationꢀandꢀassessmentꢀofꢀcreditꢀriskꢀonꢀcustomerꢀloanꢀportfolios
(See Notes 1, 2.f, 3.b and 3.k to the financial statements)
Description of risk
How our audit addressed this risk
As part of its banking intermediation activities, BNP Paribas is exposed
to credit risk.
It recognises impairment losses to cover known credit risks which are
inherent to its operations.
Impairment losses either take the form of individual impairment losses
recognised against the related on- and off-balance sheet commitments
or of collective impairment losses recognised against loan portfolios
presenting similar risks which are not individually impaired. Collective
provisions are determined using statistical models which require
judgement at each stage of the calculation, particularly with respect to
building similar portfolios and determining the inputs for the applicable
risks and the obligating event of the provisions.
Under certain circumstances, additional collective provisions for
international commitments are recognised in order to take into account
any risks identified by BNP Paribas which are not covered by the
individual or collective provisions described above.
At 31 December 2023, total balance sheet outstandings due from
customers exposed to credit risk amounted to EUR 404 billion while
total impairment losses stood at EUR 5 billion.
In an environment still marked by considerable uncertainty relating to the
macro-economic climate, we deemed the assessment of credit risk and
the measurement of impairment losses to be a key audit matter insofar
as management is required to exercise judgement and make estimates
as regards credit granted to companies.
We assessed the relevance of BNP Paribas' control system and tested
the manual and computerised controls for identifying and measuring
impairment.
We also examined the most significant outstandings and/or portfolios
at the reporting date as well as on the credit granted to companies
operating in more sensitive economic sectors or geographic regions.
During our work, we focused on:
■ Counterparty business ratings: we assessed the risk level of a sample
of outstandings under surveillance. During our work, we paid particular
attention to the geographical regions and sectors impacted by the
macro-economic climate, which remains uncertain;
■ measuring provisions recorded individually: we verified that a periodic
review of the counterparties under surveillance had been carried out
by BNP Paribas and, based on a sample, assessed the assumptions
and data used by management to estimate impairment;
■ measuring collective provisions: assisted by our credit risk experts,
we assessed the methods used by BNP Paribas across the various
business lines, as well as the effectiveness of the data quality controls.
In addition, we examined the disclosures in the notes to the financial
statements with respect to credit risk.
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Statutory Auditors' report on the financial statements
Valuationꢀofꢀfinancialꢀinstruments
(See Notes 1, 2.d, 3.c, 3.h, 3.i and 6.c to the financial statements)
Description of risk
How our audit addressed this risk
As part of its trading activities, BNP Paribas holds financial instruments
(assets and liabilities) which are recognised in the balance sheet at
market value.
Market value is determined according to different approaches, depending
on the type of instrument and its complexity: (i) using directly observable
quoted prices; (ii) using valuation models whose main inputs are
observable; and (iii) using valuation models whose main inputs are
unobservable.
The valuations obtained may be subject to additional value adjustments
to take into account certain specific trading, liquidity or counterparty
risks.
The techniques adopted by management to measure these instruments
may therefore involve significant judgement as regards the models and
data used.
At 31 December 2023, the market value of trading securities represented
EUR 116 billion, the bank's negative net position on firm transactions
was valued at EUR 263 million and the market value of the bank's net
short position on conditional transactions was valued at EUR 8.3 billion.
In light of the materiality of the outstandings and the judgement used
to determine market value, we deemed the measurement of financial
instruments to be a key audit matte r, i n particular the measurement of
instruments requiring the use of unobservable inputs.
Assisted by our valuation experts, we verified that the key controls used
by BNP Paribas with respect to the valuation of financial instruments
function properly, in particular those relating to:
■ the approval and regular review by management of the risks of the
valuation models;
■ the independent verification of the valuation inputs;
■ the determination of value adjustments.
Based on a sample, our valuation experts:
■ nalysed the relevance of the assumptions and inputs used;
■ analysed the results of the independent review of the inputs by BNP
Paribas;
■ performed independent counter valuations using our own models.
We also analysed, on a sample basis, any differences between the
valuations obtained and collateral calls with counterparties.
In addition, we examined the disclosures in the notes to the financial
statements with respect to the valuation of financial instruments.
Measurementꢀofꢀequityꢀinvestments,ꢀotherꢀequityꢀsecuritiesꢀheldꢀforꢀlong-termꢀinvestmentꢀandꢀinvestmentsꢀinꢀsubsidiariesꢀandꢀaffiliates
(See Notes 1, 3.c and 3.e to the financial statements)
Description of risk
How our audit addressed this risk
Equity investments, other equity securities held for long-term investment
and investments in subsidiaries and affiliates are recognised on the
balance sheet at a carrying amount of EUR 53 billion.
They are measured individually at the of lower cost or value in use.
Value in use is determined, for each investment, using a valuation
approach based on available information including discounted future
cash flows, net asset value and the related multiples commonly used
to assess future yields.
When their carrying amount exceeds value in use, an impairment loss is
recognised for the difference.
Given their materiality in the balance sheet and the sensitivity of the
models used to the assumptions underlying the estimated values, we
deemed the measurement of these investments to be a key audit matte r.
Our audit work consisted in:
■ assessing, using sampling techniques, the justification for the valuation
methods and data used by management to estimate values in use;
■ testing, using sampling techniques, the accuracy of the calculation of
values in use used by the company.
Lastly, we reviewed the disclosures on equity investments, other equity
securities held for long-term investment and investments in subsidiaries
and affiliates in the notes to the financial statements.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Statutory Auditors' report on the financial statements
General IT controls
Description of risk
How our audit addressed this risk
The reliability and security of IT systems plays a key role in the
preparation of BNP Paribas SA's financial statements.
We thus deemed the assessment of the general IT controls of the
infrastructures and applications that contribute to the preparation of
accounting and financial information to be a key audit matte r.
In particula r, a s ystem for controlling access rights to IT systems and
authorisation levels based on employee profiles represents a key control
for limiting the risk of inappropriate changes to application settings or
underlying data.
For the main systems used to prepare accounting and financial
information, assisted by our IT specialists, our work consisted primarily in:
■ obtaining an understanding of the systems, processes and controls
which underpin accounting and financial data;
■ assessing the general IT controls (application and data access
management, application changes/developments management and
IT operations management) on key systems (in particular accounting,
consolidation and automatic reconciliation applications);
■ examining the control for the authorisation of manual accounting
entries;
■ performing additional audit procedures, where appropriate;
■ taking into account the cybersecurity risk increased by the crisis in
Ukraine and the widespread use of remote working.
Specific verifications
In accordance with professional standards applicable in France, we have also performed the specific verifications required by French legal and regulatory
provisions.
Information given in the management report and in the other documents provided to the shareholders with respect to the
Company's financial position and the financial statements
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the Board of
Directors' management report and in the other documents provided to the shareholders with respect to the Company's financial position and the
financial statements, with the exception of the item described below.
Concerning the fair presentation and the consistency with the financial statements of the information about payment terms referred to in article D.441-6
of the French Commercial Code, we have the following matter to report:
As indicated in the management report, this information does not include banking transactions and related transactions, as the Company has decided
that such transactions do not fall within the scope of the required information.
Report on corporate governance
We attest that the corporate governance section of the Board of Directors' management report sets out the information required by articles L.225-37-4,
L.22-10-10 and L.22-10-9 of the French Commercial Code.
Concerning the information given in accordance with the requirements of article L.22-10-9 of the French Commercial Code relating to remuneration
and benefits paid or awarded to corporate officers and any other commitments made in their favou r, w e have verified its consistency with the financial
statements, or with the underlying information used to prepare these financial statements, and, where applicable, with the information obtained by
your Company from controlled companies within its scope of consolidation. Based on this work, we attest to the accuracy and fair presentation of this
information.
Concerning the information given in accordance with the requirements of article L.22-10-11 of the French Commercial Code relating to those items the
Company has deemed liable to have an impact in the event of a takeover bid or exchange offe r, w e have verified its consistency with the underlying
documents that were disclosed to us. Based on this work, we have no matters to report with regard to this information.
Other information
In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling interests and
the identity of shareholders and holders of the voting rights has been properly disclosed in the management report.
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INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
Statutory Auditors' report on the financial statements
Other verifications and information pursuant to legal and regulatory requirements
Presentation of the financial statements to be included in the annual financial report
In accordance with professional standards applicable to the Statutory Auditors' procedures for annual and consolidated financial statements presented
according to the European single electronic reporting format, we have verified that the presentation of the financial statements included in the annual
financial report referred to in paragraph I of article L.451-1-2 of the French Monetary and Financial Code (Code monétaire et financier) and prepared under
the Chief Executive Officer's responsibility, complies with this format, as defined by European Delegated Regulation No. 2019/815 of 17 December 2018.
On the basis of our work, we conclude that the presentation of the financial statements to be included in the annual financial report complies, in all
material respects, with the European single electronic reporting format.
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of BNP Paribas SA by your Annual General Meetings held on 23 May 2006 for Deloitte & Associés, 26 May 1994
for PricewaterhouseCoopers Audit and 23 May 2000 for Mazars.
At 31 December 2023, Deloitte & Associés, PricewaterhouseCoopers Audit and Mazars were in the eighteenth, the thirtieth and the twenty-fourth
consecutive year of their engagement, respectively.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for preparing financial statements giving a true and fair view in accordance with French accounting principles, and for
implementing the internal control procedures it deems necessary for the preparation of financial statements that are free of material misstatement,
whether due to fraud or erro r.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern, and using the going concern basis of accounting, unless it expects to liquidate the Company or to cease
operations.
The Financial Statements Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risk
management systems, as well as, where applicable, any internal audit systems relating to accounting and financial reporting procedures.
The financial statements were approved by the Board of Directors of BNP Paribas SA.
Responsibilities of the Statutory Auditors relating to the audit of the financial statements
6
Objective and audit approach
Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance about whether the financial statements
as a whole are free of material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions taken by users on
the basis of these financial statements.
As specified in article L.821-55 of the French Commercial Code, our audit does not include assurance on the viability or quality of the Company's
management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise professional judgement
throughout the audit. They also:
■ identify and assess the risks of material misstatement in the financial statements, whether due to fraud or erro r, d esign and perform audit procedures
in response to those risks, and obtain audit evidence considered to be sufficient and appropriate to provide a basis for their opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from erro r, a s fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control;
■ obtain an understanding of the internal control procedures relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control;
■ evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management and the related
disclosures in the notes to the financial statements;
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6
INFORMATION ON THE PARENT COMPANY FINANCIAL STATEMENTS 31 DECEMBER 2023
6
Statutory Auditors' report on the financial statements
■ assess the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern.
This assessment is based on the audit evidence obtained up to the date of the audit report. Howeve r, f uture events or conditions may cause the
Company to cease to continue as a going concern. If the Statutory Auditors conclude that a material uncertainty exists, they are required to draw
attention in the audit report to the related disclosures in the financial statements o r, i f such disclosures are not provided or are inadequate, to issue
a qualified opinion or a disclaimer of opinion;
■ evaluate the overall presentation of the financial statements and assess whether these statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Report to the Financial Statements Committee
We submit a report to the Financial Statements Committee which includes, in particula r, a d escription of the scope of the audit and the audit programme
implemented, as well as the results of our audit. We also report any significant deficiencies in internal control that we have identified regarding the
accounting and financial reporting procedures.
Our report to the Financial Statements Committee includes the risks of material misstatement that, in our professional judgement, were the most
significant for the audit of the financial statements and which constitute the key audit matters that we are required to describe in this report.
We also provide the Financial Statements Committee with the declaration provided for in article 6 of Regulation (EU) No. 537/2014, confirming our
independence within the meaning of the rules applicable in France, as defined in particular in articles L.821-27 to L.821-34 of the French Commercial
Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our independence and the related safeguard
measures with the Financial Statements Committee.
Paris La Défense, Neuilly-sur-Seine and Courbevoie, 15 March 2024
The Statutory Auditors
PricewaterhouseCoopers Audit
Deloitte & Associés
Mazars
Patrice Morot
Laurence Dubois
Virginie Chauvin
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A COMMITTED BANK: INFORMATION
7
CONCERNING THE ECONOMIC,
SOCIAL, CIVIC AND ENVIRONMENTAL
RESPONSIBILITY OF BNP PARIBAS
BNP Paribas' company purpose
633
Summary
634
7.1
Strategy
638
The corporate social responsibility (CSR) strategy
638
A CSR strategy implemented by reinforced governance and strong public commitments
641
7.2
Our economic responsibility: financing the economy in an ethical manner
645
Commitment 1: Financing and investments with a positive impact
645
Commitment 2: Ethics of the highest standard
648
Commitment 3: Systematic integration and management of Environmental, social
and governance risks (ESG)
652
7.3
Our social responsibility: supporting our employees by offering them an
environment and pathways adapted to their expectations
659
Commitment 4: Promotion of diversity, equality and inclusion
664
Commitment 5: "A g ood place to work" and responsible employment management
670
Commitment 6: A learning company supporting dynamic career path management
676
7.4
Our civic responsibility: being a positive agent for change
681
Commitment 7: Products and services that are widely accessible
681
Commitment 8: Supporting human rights and combatting social exclusion
683
Commitment 9: Corporate philanthropy policy focused on the arts, solidarity and the
environment
685
7.5
Our environmental responsibility: accelerating the ecological and energy
transition
687
Commitment 10: Enabling its clients to transition to a low-carbon economy
respectful of the environment
687
Commitment 11: Reducing the environmental impacts of ITS operations
692
Commitment 12: Advancing awareness and sharing of best environmental practices
695
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
7.6
Extra-financial performance statement
698
A diversified and integrated model, creating value
698
Analysis of issues, risks and opportunities
700
Definitions of indicators for csr issues
702
7.7
Vigilance plan
704
7.8
Statement on modern slavery and human trafficking
720
7.9
Aligned activities within the meaning of the european taxonomy
724
7.10
Cross-reference tables
761
7.11
Report of one of the Statutory Auditors, appointed as independent third party, on the
verification of the consolidated non-financial performance statement
766
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
BNP PARIBAS' COMPANY PURPOSE AND CONSIDERATION OF SOCIAL
AND ENVIRONMENTAL ISSUES
BNP Paribas' company purpose was adopted by the Board of directors at
the end of 2019, and was published in early 2020.
"We are at the service of our clients and the world we live in.
The BNP Paribas Group was formed by banks that have been deeply
embedded in the European and global economies over the last 200 years.
They have adapted to the challenges of their times and helped clients
and other stakeholders during moments of great change.
BNP Paribas' mission is to contribute to responsible and sustainable
growth by financing the economy and advising clients according to the
highest ethical standards.
We offer secure, sound and innovative financial solutions to individuals,
professional clients, enterprises and institutional investors while striving
to address the fundamental challenges of today with regard to the
environment, local development and social inclusion.
We are engaged with our clients to create a better future.
We are mobilising resources that have a positive impact.
At BNP Paribas, we want to be a long-term partner for our clients. We
want to support their projects, manage their investments and savings,
and, through insurance, protect people, their goods and property.
Our employees aim to deliver services that have purpose and relevance
for clients and the world around them. They do this most clearly
through their daily mission in the Company but also through corporate
volunteering.
We are working with stakeholders and have adopted social and
environmental goals aligned with global standards such as the United
Nations Sustainable Development Goals and those of the financial
community such as the Principles for Responsible Banking and the
Principles for Responsible Investment.
We ensure that ethics and our commitment to economic, social, civic and
environmental responsibility are integrated into our business operations.
This commitment is reflected in our organisation and the procedures and
policies governing our activities.
We innovate in order to be a leader in sustainable finance.
We take action to support causes by bringing together financial solutions,
stakeholder partnerships, employer and procurement initiatives,
support for solidarity-based projects, philanthropy, volunteering and
intrapreneurship programmes.
We are developing the tools to measure our environmental and social
impact and we are focusing on actions that involve all employees.
BNP Paribas. The bank for a changing world."
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Summary
Summary
HALFW A Y T HROUGH THE GTS 2025 STRATEGIC PLAN, 2023 CEMENTS
BNP PARIBAS' POSITION AS A LEADER IN GREEN FINANCE
As a leading financial institution, BNP Paribas considers environmental,
social and governance challenges to be a major focus of its business
model and its social and environmental responsibility.
For over a decade, BNP Paribas has integrated environmental and social
criteria into its financing and investment policies to direct its business
model towards the support of the energy and ecological transition, by
making pioneering commitments to restrict the financing of activities that
are most harmful to the environment and the climate.
The Group has participated in numerous collective efforts to structure
sustainable finance in line with the 2015 Paris Climate Agreement Goals.
BNP Paribas' Social and Environmental Responsibility (CSR) strategy
is based on an in-depth analysis of its environmental, social and
governance (ESG) issues through a materiality matrix developed in
consultation with its stakeholders(1), backed by a scientific framework(2)
and benchmark principles(3). These environmental, social and governance
issues are integrated at the heart of BNP Paribas' company purpose (see
7.1 Strategy).
This strategy allows it to consolidate a leading position in sustainable
finance thanks to numerous solutions to support its clients' transition,
including sustainable bonds, positive impact loans, sustainability-linked
loans (SLL) and sustainability-linked bonds (SLB), socially responsible
savings, inclusive financial offers, dedicated offers for energy efficiency
home renovation, sustainable mobility offers, etc.
In 2023, BNP Paribas was the world leader with USD 62.5 billion in ESG
loans and bonds(4).
(1) See 7.6 EFPS and 7.7 Vigilance plan.
(2) Based primarily on publications by the IPCC (Intergovernmental Panel on Climate Change), the IPBES (Intergovernmental Science and Policy Platform on Biodiversity and Ecosystems)
and the IEA (International Energy Agency).
(3) Based primarily on the United Nations Sustainable Development Goals and Guiding Principles on Business and Human Rights, and on the fundamental conventions of the ILO
(International Labour Organization).
(4) Source: Dealogic.
In 2023, BNP Paribas accelerated the shift from financing fossil fuels to low-carbon energy
At 30 September 2023, BNP Paribas' credit exposure to low-carbon
energy production stood at EUR 32 billion (including EUR 28.8 billion
for renewable energy), up EUR 3.8 billion in one yea r. T his represents
65% of energy production-related credit exposure, and an increase
of 10 points in one yea r. F aced with this momentum, the objective
set in 2023 to reach at least EUR 40 billion in credit exposure to
low-carbon energies representing 80% of outstanding energy
production by 2030 was put forward two years, to the end of 2028.
The new objective is now 90% by 2030.
Please note that this is a stock of loans granted over a number of
years which customers will repay over a number of years. The major
action taken from 2023 to accelerate new low-carbon loans and the
divestment of fossil fuels will make it possible to achieve the 2028
and 2030 objectives.
At the same time, the Group is continuing its trajectory of reducing
financing for the sectors that emit the most greenhouse gases, with
a EUR 1.4 billion decrease in its credit exposure for oil exploration-
production, EUR 1 billion for gas exploration-production and
EUR 3.1 billion for refining between the end of September 2022 and
the end of September 2023.
The Group has amended its oil and gas policy: it no longer grants
financing for the development of new oil or gas projects, regardless
of the financing terms, nor to non-diversified players in oil
exploration and production.
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Also in 2023, BNP Paribas modified its mining policy to exclude any
project financing related to the extraction of metallurgical coal, in
addition to its commitment to phase out thermal coal.
BNP Paribas Asset Management and BNP Paribas Cardif have also set
decarbonisation targets for their investment portfolios and updated their
environmental footprint measurement this yea r. W ithin the framework
of their activities, they are engaging in dialogue on ESG issues with the
corporate clients in which they invest, in order to preserve and improve
the medium- and long-term value of investments made on behalf of third
parties, and encourage the transition. BNP Paribas Asset Management
encourages these corporate clients to make robust ESG commitments
through their voting rights policies.
Through all of these actions, the Group is continuing its focus on the
immense transformation effort that the entire economy must make.
BNP PARIBAS IS ON TRACK TO ACHIEVE
ITS SUSTAINABILITY OBJECTIVES
UNDER THE GTS 2025 PLAN
Aware of the necessity to integrate its CSR strategy into its business model
in order to achieve its ambitious environmental, social and governance
targets, in 2022, the Group launched its 2025 strategic plan entitled GTS
(Growth, T e chnology, Sustainability). The Sustainability component is
built around three strategic areas to serve its clients and society:
■ aligning the Group's portfolios with trajectories compatible with
collective carbon neutrality by 2050: BNP Paribas has published
financed targets to reduce its emissions by 2030 for three new
industrial sectors (steel, aluminium, cement) in its climate report(1).
These are added to the objectives of the first three sectors (energy
production, oil and gas, automotive). The 2023 results for a reduction
in the intensities of financed greenhouse gas emissions are in line with
the intermediate alignment objectives of the loan portfolio, which are
part of a Net-Zero emissions trajectory for 2050;
■ supporting clients in the transition to a sustainable and low-carbon
economy is enabled by the ever-widening range of sustainable finance
products. For the second consecutive yea r, in 2023 BNP Paribas was
the world leader in green bonds at USD 25.6 billion(2). This was made
possible thanks to the expertise of its employees and in particular the
200 specialist bankers of the Low-Carbon Transition Group;
■ strengthening an ESG culture, with a particular emphasis on the
ESG Assessment roll-out for almost all of the Group's 3,000 largest
corporate clients, and on increasing ESG knowledge in the Group
thanks to the Sustainability Academy, which enabled more than
86,000 employees to take training courses on these topics in 2023.
TRANSITIONING
TOWARDS CARBON
NEUTRALITY
NATURAL
CAPITAL AND
BIODIVERSITY
COMBATTING
EXCLUSION
CIRCULAR
ECONOMY
SUSTAINABLE
SAVINGS,
INVESTMENTS AND
FINANCING
THE OBJECTIVES OF THE GTS 2025 PLAN
ARE ROLLED OUT THROUGH QUANTITATIVE
INDICATORS WITH OBJECTIVES FOR 2025
BNP Paribas has set its own specific targets in terms of sustainable
finance that can be found within the 10 indicators of the Group's CSR
dashboard. The monitoring of this CSR dashboard is carried out on an
annual basis by the Group's Executive Committee and Board of directors.
At the end of 2023, the Group can highlight results that are in line with
its objectives (see 7.1 Strategy).
A LEADER IN GREEN FINANCE, ENERGY
AND THE ECOLOGICAL TRANSITION
In 2023, BNP Paribas consolidated its leading position in ecological
transition financing. Examples include the following:
■ in terms of the energy transition, BNP Paribas was a major player in the
Baltic Power project in Poland. The loan of more than EUR 4.4 billion
is enabling the construction of the first offshore wind farm in Polish
waters: it includes 76 wind turbines that will provide renewable energy
to more than 1.5 million households from 2026. This was the largest
offshore wind project in Europe in 2023;
■ in terms of mobility, BNP Paribas participated in the financing of
AESC (Automotive Energy Supply Corporation), a Japanese company
and world leader in the design and production of batteries, for
the construction of a gigafactory in France costing more than
EUR 800 million. The plan is for 9 GWh of batteries to power 200,000
Renault electric vehicles per year from 2025;
(1) https://cdn-group.bnpparibas.com/uploads/file/bnp_paribas_2022_climate_report.pdf.
(2) Source: Dealogic.
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■ in terms of the circular economy, CPBF financed a foundry sand
regeneration installation project reaching EUR 3.3 million. This
innovative project will enable La Fonte Ardennaise, a major player
in the foundry industry worldwide, to recycle 90% of black moulding
sand, and thus save natural resources, stop the landfilling of sand
waste and reduce CO2 emissions by 20,000 t/year;
■ the BNP Paribas Climate Impact Infrastructure Debt is a fund launched
in 2023 which aims to raise EUR 500-750 million from institutional
investors. With an initial investment from BNP Paribas Cardif, it will
support projects working for the energy transition in Europe focused on
renewable energy, clean mobility and the circular economy, including
new sectors such as batteries, hydrogen and carbon capture.
Financing of innovative solutions and research
BNP Paribas supports innovation in areas related to the ecological
transition. Through its Ecological Transition Capital investment line, at
the end of 2023, BNP Paribas had already invested EUR 87.2 million
in 12 innovative companies, including CarbonWorks in France (CO2
capture and recovery using microalgae) and Protix in the Netherlands
(manufacturing for insect-based animal feed), and in eight funds.
In addition, the BNP Paribas Solar Impulse Venture fund invested in
four innovative companies in 2023, including Hello Watt, which helps
individuals reduce their carbon footprint through home renovations for
energy efficiency.
BNP Paribas Asset Management acquired a majority stake in IWC
(International Woodland Company), based in Denmark, which specialises
in investment and advisory services for sustainable forestry, agriculture
and natural ecosystems, as well as carbon credits and conservation
projects.
At the end of 2023, a multi-year partnership was launched with the
Naturalis Biodiversity Cente r, m arking a new chapter in BNP Paribas'
approach to protecting and restoring biodiversity. Bringing together
more than 150 scientists, this institution is one of the main biodiversity
knowledge and research centres in the world.
COMMITMENT TO SOCIETY AT THE HEART
OF BNP PARIBAS' OBJECTIVES
Three years after launching the very first impact bonds in France and
in the European Union, BNP Paribas is crossing a second milestone
with the BNP Paribas European Impact Bonds Fund 2, managed by
BNP Paribas Asset Management and with a target size of EUR 70 million.
Nine new impact bonds were launched in 2023 for a total amount of
EUR 28 million, in which the fund invested EUR 13 million. These include
the EUR 2.9 million impact bond operated by Andes, which aims to
combat food waste and food insecurity on a large scale by recovering
unsold food which does not meet standards.
With regard to impact investments, through its own budget of
EUR 200 million or funds on behalf of third parties, the Group opts
for direct equity investments in companies with a strong social and/or
environmental impact. The 16 new investments (excluding reinvestments)
made in 2023, for a total of nearly EUR 56 million, included the following:
■ Ecov, a shared mobility operator in areas where public transport is
limited or non-existent;
■ Urbilog, an iconic player in digital accessibility for people with
disabilities (visual, auditory, moto r, s pecific cognitive disorders, etc.).
2023 also marks the 30th year of the partnership between BNP Paribas
and Adie (Association for the Right to Economic Initiative), which was
renewed for three years. Since 1993, EUR 192 million in cumulative
financing has been granted by CPBF to its partne r, s upporting nearly
40,000 entrepreneurs, (of which 22% do not have a diploma, 32% are
under 30 years old and 46% are women) with more than 47,000 micro-
loans granted by Adie.
In addition, BNP Paribas co-developed the first ISLF+ (inclusive &
sustainability-linked financing) with its historical partners: Adie in France,
PerMicro in Italy and Banco da Familia in Brazil. In particula r, t hey provide
dedicated technical support and/or subsidised rates to these microfinance
players, depending on the achievement of social, environmental and/or
just transition objectives.
Attentive to the societal challenges of the countries in which it
operates, and to disadvantaged populations in particula r, B NP Paribas
has continued its efforts in terms of financial inclusion. Nickel, a Group
subsidiary present in five European countries, offers opening a bank
account with an IBAN and a payment card. It allows everyone, including
people without access to traditional banking services, to pay and be paid.
In 2023, Nickel reached nearly 3.7 million accounts, and of the people
helped: 77% have an income of less than EUR 1,500 per month; 30% are
unemployed, without regular income or living on benefits; and 30% do
not have their own address.
Lastly, the BNP Paribas Foundation has also reinforced its actions,
notably with a budget of EUR 20 million from the funds supporting the
share buyback programme operated by the Group. This amount was
paid to more than 90 organisations working in three current priority
areas: the fight against extreme poverty and violence against women,
integrating disadvantaged people into society (supporting refugees,
equal opportunities, integration into the workplace) and climate and
biodiversity. For example, there has been support for Les Restos du
Cœur in France and its German equivalent T a fel, for food banks in
France and Belgium, for the Abbé Pierre Foundation, for the Fédération
nationale Solidarité Femmes and expanding support to associations for
disadvantaged neighborhoods from France into Italy, as well as support
for the IUCN and The Transition Institute 1.5°.
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Summary
SUPPORTING OUR EMPLOYEES BY
OFFERING THEM AN ENVIRONMENT
AND PATHWAYS ADAPTED TO THEIR
EXPECTATIONS
In 2023, against a complex economic and geopolitical backdrop, the Group
continued its actions to:
■ protect its employees by providing assistance wherever they may
need it (Ukraine, Türkiye, Morocco, Middle East), and by deploying its
prevention, health and well-being at work offer throughout the world
through the We Care programme;
■ widely promote its diversity and inclusion policy in all its areas,
particularly during its Inclusion Days, which provided an opportunity to
raise employee awareness on equal opportunities, prejudice, disability
and financial inclusion, and measure employees' perception of these
issues as part of the general Conduct & Inclusion survey re-run in 2023;
■ reach the ambitious target in terms of gender equality of 37% women
in senior management(1) in 2023;
■ develop the skills of its employees, particularly in I T, D ata, Digital, and
Sustainable Finance jobs, while offering them career development
opportunities within the Group notably during the Career Days.
The Group employee engagement score(2) measured around the themes
of pride in belonging to the Group, adherence to the strategy and
involvement in work reached a high level of nearly 85 out of 100 in 2023.
THE GROUP'S CSR ACTIONS AND RESU L T S
ARE RATED POSITIVE L Y
The relevance, ambition and comprehensive nature of its CSR strategy
have earned BNP Paribas several awards recognising its ambition and
achievements:
■ Euromoney Best Bank for Sustainable Finance in 2023;
■ one of the best financial institutions in all extra-financial rating
agency rankings, and an A rating from CDP for the first time in 2023.
BNP Paribas is the only large diversified bank to be awarded this top
rating (see 7.1 Strategy);
■ member of the Global 100 most sustainable companies in the world
prepared by Corporate Knights, for the 10th year running;
■ recognised for its commitments to combat deforestation in the
Forest500 2023 ranking by the NGO Global Canopy.
(1) The Group's Senior Management Position (SMP) population is composed of employees holding approximately 3,000 positions considered to have the most significant impact from
a strategic, commercial, functional and expertise point of view.
(2) Measured from surveys carried out during 2023 by the Group's various business lines and entities, covering 86% of the Group's workforce at 31/12/2023, and for which 69% of the
employees questioned responded.
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Strategy
The Group's CSR strategy, in line with the 17 United Nations Sustainable
Development Goals, consists of supporting all clients, individuals,
companies and institutions in their transition to a carbon-neutral
economy that makes reasonable use of the planet's resources, allows
the inclusion of the most vulnerable and respects human rights.
It is structured around four pillars and 12 commitments that reflect
the Bank's CSR challenges, as well as its concrete achievements. This
strategy, which is part of a process of continuous improvement, aims
to contribute to building a more sustainable world while ensuring the
Group's stability and performance. This ambition is reflected in the
GTS 2025 strategic plan (Growth, T e chnology, Sustainability), of which
Sustainability issues are one of the pillars. Its deployment involves all of
the Group's business lines, networks, subsidiaries and countries, under
the aegis of governance organised at the highest level of the Bank.
OUR 4 PILLARS
OUR 12 COMMITMENTS
A BANK COMMITTED TO A
BETTER FUTURE
Our ECONOMIC
Financing the economy
in an ethical manner
Our SOCIAL
responsibility
responsibility
responsibility
Supporting our employees
by offering them an environment
and pathways adapted
to their expectations
Our CIVIC
Being a positive
agent for change
Our ENVIRONMENTAL
responsibility
Accelerating the ecological
and energy transition
1
4
FINANCING AND INVESTMENTS
WITH A POSITIVE IMPACT
PROMOTION OF DIVERSIT Y,
EQUALITY AND INCLUSION
7
PRODUCTS AND SERVICES THAT
ARE WIDE L Y A CCESSIBLE
10
ENABLING ITS CLIENTS TO
TRANSITION TO A LOW-CARBON
ECONOMY RESPECTFUL OF THE
ENVIRONMENT
8
SUPPORTING HUMAN RIGHTS AND REDUCING THE ENVIRONMENTAL
COMBATTING SOCIAL EXCLUSION
11
IMPACT OF ITS OPERATIONS
9
CORPORATE PHILANTHROPY
POLICY FOCUSED ON THE
ARTS, SOLIDARITY AND
THE ENVIRONMENT
12
ADVANCING AWARENESS
AND SHARING OF BEST
ENVIRONMENTAL PRACTICES
5
A "GOOD PLACE TO WORK" AND
RESPONSIBLE EMPLOYMENT
MANAGEMENT
A LEARNING COMPANY
SUPPORTING DYNAMIC CAREER
PATH MANAGEMENT
2
ETHICS OF THE HIGHEST
STANDARD
3
6
SYSTEMATIC INTEGRATION
AND MANAGEMENT OF
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE RISKS (ESG)
Governance
- driven by a culture of responsibility and integrit y,
- based on best practices,
- involving the Board of Directors, the shareholders, the management and the whole Group,
- to ensure a sustainable future for our business and deliver a positive impact on societ y.
7.1 Strategy
THE CORPORATE SOCIAL RESPONSIBILITY (CSR) STRATEGY
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THE CSR POLICY MANAGEMENT DASHBOARD
The GTS 2025 strategic plan defines quantified CSR objectives. The indicators were renewed at the beginning of the plan (2022) in order to reflect a
higher ambition and cover broad areas: the energy transition, biodiversity, social inclusion, employee training, etc. which correspond to the four pillars
of the aforementioned strategy. The scope of consolidated financial reporting and extra-financial reporting is the same.
The achievement of these CSR objectives determines the payment of 20% of the amount of the loyalty plan awarded in 2023 to more than 8,200 key
Group employees (see A competitive compensation policy, Commitment 5). The achievement of the CSR objectives is also included for one third in
the calculation of 15% of the variable compensation awarded for 2023 to the Group's corporate officers. These CSR objectives taken into account for
corporate officers are those that correspond to the loyalty plan payments to the Group's key employees during the year (see chapter 2, Compensation
and benefits awarded to the Group's directors and corporate officers).
Pillar
Indicator
2022 Results
2023 Results
2025
Objectives
Our economic
responsibility
1
Amount of sustainable loans (in billions of euros)
87
117
150
2
Amount of sustainable bonds (in billions of euros)
32
67
200
3
Amount of assets under management in open-ended funds
distributed in Europe under article 8 & 9 according to the
SFDR (in billions of euros)
223
254
300
Our social
responsibility
4
Share of women among the SMP population
(Senior Management Position)
35.2%
37.1%
40%
5
Number of solidarity hours performed by employees
over two rolling years (#1MillionHours2Help)
1,126,142
(in 2021 and 2022)
1,268,515
(in 2022 and 2023)
1,000,000
6
Share of employees who completed at least four
training courses during the year
97.4%
98.2%
90%
Our civic
responsibility
7
Number of beneficiaries of products and services
supporting financial inclusion (in millions)
3.3
3.9
6
Our environmental
responsibility
8
Amount of the support enabling our clients to transition
to a low-carbon economy (in billions of euros)
44
104
200
9
Amount of financing to companies contributing
to protecting terrestrial and marine biodiversity
(in billions of euros)
1.8
4.3
4
10
Greenhouse gas emissions in teqCO2/FTE
1.65
1.56
1.85
Dashboard definitions
Amount of sustainable loans: amount of loans at the end of 2023, drawn
and undrawn, identified as sustainable by an internal classification
system, granted by BNP Paribas to its clients. The Group's transaction
classification principles are based on external market standards such
as those of the Loan Market Association and the European T a xonomy
in Europe.
Amount of sustainable bonds: cumulative amount at the end of the year
of all types of bonds identified as sustainable according to the guidelines
of the ICMA (International Capital Market Association) issued by corporate
clients, financial institutions and sovereign clients, and arranged by
BNP Paribas (total amount divided by the number of bookrunners).
Amount of assets under management at year-end in open-ended funds
distributed in Europe under articles 8 and 9, according to SFDR. These
are BNP Paribas Asset Management funds.
Share of women among the SMP population: the Group's Senior
Management Position population is composed of employees holding
approximately 3,000 positions considered to have the most significant
impact from a strategic, commercial, functional and expertise point of
view. The percentage is calculated on the basis of SMP positions occupied.
Number of solidarity hours performed by employees: as part of the
#1MillionHours2Help programme including the long-term corporate
volunteering set up under the Diversity and Inclusion Agreement in
France.
Share of employees who completed at least four training courses during
the year, including mandatory training such as compliance.
Number of beneficiaries of products and services promoting financial
inclusion: number of Nickel accounts opened since the creation and
number of beneficiaries of microloans distributed by microfinance
institutions financed by the Group (pro rata of the financing) at the end
of the yea r.
Amount of support for our clients in the transition to a low-carbon
economy: cumulative amount at year-end of financial support identified
as contributing to the transition to a low-carbon economy, according to
an internal classification system. This amount covers part of the amounts
of indicators 1 (sustainable loans) and 2 (sustainable bonds), as well
as the financial support provided in some cases in the form of private
placements, financial advice and IPOs.
Amount of financing to corporate clients contributing to the protection
of terrestrial and marine biodiversity: cumulative amount at the end
of the year of financial products and services (loans, bonds, etc.) that
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Strategy
help protect terrestrial and marine biodiversity. The contribution to
the protection of biodiversity is identified by an internal classification
system(1). This amount covers part of the amounts of indicators 1
(sustainable loans) and 2 (sustainable bonds).
Greenhouse gas emissions in teqCO2/FTE (kWh buildings and business
travel): greenhouse gas emissions for scope 1 (direct emissions from the
combustion of fossil fuels), scope 2 (indirect emissions from the purchase
of energy) and, for a part of scope 3 (emissions related to employee
business travel), in proportion to the number of Group employees (FTE).
2023 RESU L T S
2023 was once again marked by geopolitical and economic events that
negatively impacted economic activity. Despite this difficult backdrop,
BNP Paribas is pursuing its ambitious economic, social, civic and
environmental objectives, and is moving towards achieving the objectives
of its CSR dashboard for 2022-2025, primarily due to its position as a
leader in sustainable finance.
In a sustainable lending market (particularly sustainability-linked loans)
which is down by around 30% year-over-year according to Dealogic,
BNP Paribas is resilient and has maintained its 5th position worldwide
for SLL according to (Dealogic). It has also succeeded in achieving strong
growth in its specialised business lines, and home renovations for energy
efficiency (indicator No. 1).
Despite the bond issue market suffering a sharp decline in 2022, and
remaining low in volume in 2023, BNP Paribas confirmed its position
as global and EMEA leader in sustainable bonds in 2023 according to
Dealogic (indicator No. 2).
Thanks to positive inflows, the amount of assets under management in
BNP Paribas Asset Management's open-ended funds distributed in Europe
and classified under articles 8 and 9 of the SFDR regulation (indicator
No. 3) increased by 14%, with 21 new funds launched in 2023.
On the three social objectives, the Group is perfectly in line with its 2025
objectives. The number of women in management is increasing, and has
reached 37% of the SMP population (indicator No. 4). The million solidarity
hours was exceeded by more than 25% thanks to employee engagement
(indicator No. 5). Finally, the number of training courses completed
exceeded the target and was even higher than last yea r, w ith 98% of
employees having completed four training sessions (indicator No. 6).
The growth of Nickel, whose services are now available in Germany,
meant that the large increase in the number of beneficiaries of products
and services promoting financial inclusion was able to continue (indicator
No. 7), with more than 700,000 new accounts opened. The number of
microfinance institutions financed by the Group remains stable.
The indicator relating to support for clients in the transition to a low-
carbon economy (indicator No. 8) has seen significant growth this yea r,
given that the sector is dynamic and that a number of Group entities
are better able to pinpoint energy transition projects. It continues to
be fed by the work of the 200 specialised bankers in the Low-Carbon
Transition Group.
The indicator relating to biodiversity (indicator No. 9) increased
significantly this year thanks to better identification of biodiversity issues
and associated indicators, in a year in which biodiversity became a focal
point. For example, BNP Paribas has participated in SLLs with objectives
relating to the protection of biodiversity, and participated in bond issues
including the financing of actions aimed at preserving the quality of
natural environments (see details in Commitment 10).
Lastly, the level of greenhouse gas emissions per employee in BNP Paribas'
operating scope (indicator No. 10) improved following the sale of Bank of
the West, which was one of the Group's highest-emitting entities. On a
like-for-like basis, this indicator is stable, reflecting the Group's efforts to
continue to reduce its energy consumption (-15% on a like-for-like basis
worldwide), despite a strong recovery in business travel.
(1) Examples: implementation of more biodiversity-friendly practices in the upstream supply chains of agricultural commodities, increase in the share of agricultural commodities
that do not contribute to deforestation, rehabilitation of quarries after use, etc.
RESU L T S ACKNOWLEDGED BY EXTRA-FINANCIAL RATING AGENCIES AND EXTERNAL
STAKEHOLDERS
The following table displays the most recent evaluations from the main extra-financial rating agencies and the inclusion of BNP Paribas in the related
extra-financial indexes. In 2023, the Group maintained its leading position in ratings, with scores well above the average for the banking secto r.
Rating agencies
Rating (year of
latest rating)
Comments/Related indices
FTSE Russell
4.4/5 (2023)
In the top 11% of the banking industry
FTSE4Good Global Index Series
Moody's ESG
70/100 (2023)
Above-average for the sector and 2nd in the Diversified banks category
Euronext-Vigeo Eiris: World 120, Europe 120, Euro 120 and France 20
S&P Global (Corporate
Sustainability Assessment)
73/100 (2023)
In the top 4% of the banking industry (1% for the environment)
DJSI World – DJSI Europe
MSCI
AA (2023)
Above average for financial institutions
Leader in the environmental sector (10/10 compared to 5/10 for the sector average)
Sustainalytics
Medium risk –
24.6/40 (Feb. 2024)
Above-average performance for the Banks sector and Diversified banks sub-sector
ISS
C + (2023)
Prime status, in the top 10% of Commercial Banks & Capital Market
CDP
A (2023)
On the A-list which covers the top 1.5% of
companies according to the climate questionnaire rating
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Strategy
More specifically, BNP Paribas' social responsibility actions are also
recognised by extra-financial rating agencies, where the Group has
obtained:
■ a score of 74/100 on the social component of the Corporate
Sustainability Assessment ranking by Standard & Poor's, placing it
in the top 5%;
■ a score of 70/100 on the social component of the Moody's ESG
Solutions evaluation, in particular thanks to its anti-discrimination
measures and the health and safety policies it has implemented. This
rating places it among the best players in the European diversified
banking industry, well above the sector average of 57/100;
■ a score of 84/100 in the Workforce Disclosure Initiative (WDI) ranking,
which places BNP Paribas well above the average for the Financials
category (64/100).
Finally, since 2022, BNP Paribas has held the "A lliance" label, awarded in
France by Afnor(1). The Group is the first and only bank in France to have
obtained this label, demonstrating its long-term commitment to gender
equality and the fight against discrimination.
Other entities and specialised magazines have acknowledged the Group's
improved CSR performance. Indeed, BNP Paribas:
■ was named "Best bank for sustainable finance" in the world in 2023 for
the third year running, by Euromoney, the leading finance magazine(2),
and "ESG Financing House" by the Institutional Financing Review
(IFR)(3);
■ is the only French bank in the 2024 ranking of the "Global 100 most
sustainable companies" by the Canadian magazine Corporate Knights(4)
where it appears for the 10th consecutive year;
■ was used as an example by the NGO ShareAction in its 2023 report
on green finance for having defined a renewable energy target in the
production portfolio of the International Energy Agency (IEA), and an
electric vehicle target for its automotive portfolio(5);
■ was recognised for its commitments to fight against deforestation by
the NGO Global Canopy, which ranked BNP Paribas at the top of 150
financial institutions in its Forest500 ranking for 2023(6).
(1) Association française de normalisation (French Standardisation Organisation).
(2) https://www.euromoney.com/article/2bpje7xcxrnilt4ivixa9/awards/awards-for-excellence/the-worlds-best-bank-for-sustainable-finance-2023-bnp-paribas.
(3) https://www.ifre.com/story/4287643/esg-financing-house-bnp-paribas-vrzps73ggq.
(4) https://www.corporateknights.com/rankings/global-100-rankings/2024-global-100-rankings/the-20th-annual-global-100/.
(5) https://cdn2.assets-servd.host/shareaction-api/production/resources/reports/Green-Ambitions-Grey-Realities.pdf.
(6) h ttps://forest500.org/sites/default/files/forest_500-2023_annual_report.pdf.
A CSR STRATEGY IMPLEMENTED BY REINFORCED GOVERNANCE
AND STRONG PUBLIC COMMITMENTS
CSR TAKEN TO THE HIGHEST LEVEL IN THE
ORGANISATION
Thanks to the involvement of its 182,656 employees at the end of 2023
(in FTE) and its GTS 2025 strategic plan, for which one of the three
pillars (S: Sustainability) is dedicated to incorporating environmental
and social issues into all of the Group's activities, CSR continues to be a
high priority for BNP Paribas.
A strategy driven by management bodies
The Board of directors determines BNP Paribas' business orientations and
supervises their implementation by the Executive Management, taking
the social and environmental challenges of BNP Paribas' activities into
consideration. In particula r, o ne of its committees, the Governance, Ethics,
Nominations and CSR Committee (CGEN), specifically ensures the Group's
contribution to sustainable and responsible economic development,
primarily by financing the economy in an ethical manne r, b y promoting
the development and commitment of employees, by protecting the
environment and by combating climate change, and through the Group's
positive commitment to society. In addition, the Internal Control, Risk
and Compliance Committee (CCIRC) examines the main guidelines of the
Group's risk policy, including those of a social and environmental nature,
based on the ESG risk measurements it receives. As such, the Board is
regularly informed of the progress made in the implementation of the
Group's CSR strategy. In 2023, it addressed ESG topics on 29 occasions,
including the financing of the energy transition and BNP Paribas' net-
zero trajectory, as well as the preliminary analyses of the corporate loan
portfolio with regard to ESG risk factors.
Since 2021, three high-level sustainable finance committees have been
working to strengthen the integration of these issues into the Group's
strategy and within each entity:
■ the Strategic Committee, under the direction of the Director and
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Chief Operating Office r, m et five times in 2023 and made decisions
on the Group's commitments to the alignment of loan portfolios
for new sectors, and on updating of the Risk Appetite Statement or
information on ESG pillar 3. A number of small, ad hoc meetings were
also organised to discuss key issues such as NZBA targets and CSRD
reporting changes;
■ the Infrastructure Committee, under the direction of the Group
Chief Operating Office r, m et nine times to monitor the deployment
of processes and reports related to sustainable finance, such as for
example the ESG Assessment, at the methodological, normative and
operational levels;
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■ the Regulatory Committee, chaired by the Group General Counsel and
by the director of Corporate Engagement, met three times in 2023
to inform its members about the main regulations. In particula r, t he
concept of sustainable investment was addressed in the context of the
SFDR regulation(1) and the French and European legal frameworks on
the duty of care (CS3D(2)).
(1) SFDR: Sustainable Finance Disclosure Regulation.
(2) Corporate Sustainability Due Diligence Directive.
A strategy supported and rolled out by a cross-functional CSR division
A dedicated department is responsible for managing the Group's CSR commitments, reporting to the Company Engagement Department and represented
in the Group Executive Committee. At the Head Office, the CSR Department is structured as follows:
CSR Function
Company Engagement Department
Transparency
and ESG Performance
Positive Impact Enterprise Accelerator
ESG Risks and
Opportunities
Relations with
advocacy NGOs
ESG Methodology
and Data
Chief Operating
Ofce
Impact Bonds
Impact Investments
The CSR Department is based on a network which operates in the
divisions, business lines, retail networks, departments and subsidiaries
in order to facilitate the roll-out of the CSR policy across the entire Group.
In total, more than 220 employees spend all or a majority of their time
on CSR matters.
There are communities of ESG expertise within the Group and its
entities to accelerate, streamline and industrialise the consideration
of sustainable finance issues in BNP Paribas' activities. For example,
the Low-Carbon Transition Group, formed in 2021, is composed of
more than 200 fully dedicated bankers (target of 250 in 2025) bringing
together several areas of expertise and specialists in the financing of
the energy transition, whose mission is to support corporate clients in
their decarbonisation. The BNP Paribas Asset Management Sustainability
Center brings together 37 ESG specialists.
BNP PARIBAS' PUBLIC POSITIONS
BNP Paribas' approach to corporate social responsibility (CSR) is framed
by the thematic and sector-specific public positions it has adopted. With a
presence in 63 countries, the Group acts within numerous working groups
and platforms, in compliance with and for the operational implementation
of numerous commitments. Thus, for example, BNP Paribas' actions
follow the framework of the 10 principles for sustainable business
transformation, as defined by the United Nations Global Compact.
Sustainable finance initiatives
The Group actively participates in designing and implementing long-term
social and environmental solutions within the framework of:
■ the Principles for Responsible Banking (PRB);
■ the Principles for Responsible Investment (PRI), for BNP Paribas Asset
Management, BNP Paribas Real Estate Investment Management,
BNP Paribas Cardif;
■ the Equator Principles.
Environmental and climate initiatives
and commitments
Amongst BNP Paribas' environmental commitments:
■ the Net-Zero Banking Alliance, Net-Zero Asset Owner Alliance
(BNP Paribas Cardi f) and Ne t-Zero Asset Managers Initiative
(BNP Paribas Asset Management);
■ the Institutional Investors Group on Climate Change (IIGCC);
■ the Roundtable on Sustainable Palm Oil (RSPO);
■ the act4nature initiative;
■ the Poseidon Principles;
■ the Sustainable Markets Initiative (SMI) Financial Services T a sk Force
(FSTF).
BNP Paribas is also involved in flagship social initiatives, including:
■ the Collectif des entreprises pour une économie plus inclusive en
France (Business collective for a more inclusive economy in France);
■ Business for Inclusive Growth (B4IG).
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Voluntary commitments defined by BNP Paribas
BNP Paribas has been committed for several years to going further in
terms of CSR in several major sensitive sectors by setting itself additional
obligations, through:
■ its financing and investment policies in the following sectors:
agriculture, defence, nuclear energy, coal energy, mining, palm oil,
paper pulp, oil and gas(1);
■ its positions on ocean protection, the preservation of biodiversity and
carbon credits;
■ an exclusion list of specific goods and activities that the Group is
unwilling to finance, such as tobacco, driftnets for fishing, asbestos
fibre production, products containing polychlorinated biphenyls or
trade in any species regulated by the CITES convention without the
necessary permit(2);
■ monitoring and restriction lists grouping businesses which do not meet
the Group's CSR requirements;
■ a Declaration on Human Rights;
■ an Anti-Corruption Policy;
■ a Responsible Business Relations Charter;
■ a charter for responsible representation with respect to the public
authorities;
■ a Responsible Purchasing Charter;
■ a T a x Code of conduct.
Think tanks
Several members of BNP Paribas' General Management as well as Group
experts play an active role in strategic active marketplace coalitions on
CSR topics, for example:
■ Laurence Pessez, CSR Director at BNP Paribas Group, sits on the
Banking Board of the Principles for Responsible Banking of the UNEP
FI (PRB) and is also Vice-President of the European think tank, Institut
du développement durable et des relations internationales (IDDRI);
■ Jane Ambachtshee r, H ead of Sustainability at BNP Paribas Asset
Management, is a member of the T a skforce on Climate-related
Financial Disclosure (TCFD);
■ Sébastien Soleille, Head of Energy Transition and Environment, is a
member of the T a skforce on Nature-related Financial Disclosures
(TNFD).
FOSTERING DIALOGUE
WITH STAKEHOLDERS
Dialogue with stakeholders is at the heart of BNP Paribas' actions to
promote social and environmental responsibility. This dialogue has a
three-fold objective: anticipating change in our businesses developments
and improving our products and services, optimising risk management,
and finding innovative solutions which positively impact society.
■ Dialogue with the employees or employee representatives is described
in the social pillar of this document (see Strong Focus on Employees
and High Quality Social Dialogue, Commitment 5). Employees and
external third parties may use the Company's whistleblowing system
(see The whistleblowing system, Commitment 2).
■ Individual and small business clients of all of BNP Paribas' Commercial
Banking entities have access to a complaint management system (see
Protecting customer interests, Commitment 2). Numerous entities
provide their clients with the opportunity to use an independent
ombudsman.
■ In the framework of its asset management activities, BNP Paribas Asset
Management engages with companies in which it invests on ESG topics
in order to preserve, or even enhance, the medium and long-term
value of the investments made on behalf of its clients. BNP Paribas
Asset Management supports the ESG commitments of these companies
through its voting rights policy (see Integrating ESG criteria into assets
management, Commitment 3).
■ BNP Paribas regularly talks to its main suppliers primarily through
business reviews, annual "Partners for Strategic Sourcing" events
dedicated to the Group's key suppliers, and satisfaction surveys (SME
Pact Barometer). The Group also offers them a redress procedure
in case of difficulties (see Ethics at the heart of supplier relations,
Commitment 2).
■ BNP Paribas presents its CSR strategy to investors several times a
year and regularly keeps extra-financial analysts informed. The
CSR Department talked about ESG topics 96 times with 77 different
investors in 2023.
■ The Group pursues a policy and a management process for its relations
with advocacy NGOs, in order to ensure a constructive dialogue with
them. In 2023, BNP Paribas had 183 different exchanges with these
NGOs throughout the world.
■ With regard to regulatory organisations, governments and
parliamentarians, BNP Paribas adopted a "charter for responsible
representation with respect to the public authorities" in 2012. This
was completed in 2022 with a commitment to ensure that its public
commitments relating to the environment and climate change are
consistent, in particular its support for the Paris Agreement goals. The
Bank is also registered in the digital register of lobbyists managed by
the Haute Autorité pour la transparence de la vie publique (HATV P,
High Authority for Transparency in Public Life), on the EU transparency
register and now in Germany on the new Bundestag Lobbyregister. It
is also registered in the United States with the Senate and the House
of Representatives under the Lobbying Disclosure Act. Lastly, the Group
follows the principles of the Transparency International France Joint
Declaration on Transparency in Lobbying, signed in February 2014,
and its revised version of May 2019, which takes into account the
provisions of the Sapin 2 law on the representation of interests. The
Group's main public positions on banking and financial regulations
and its responsible representation practices are also available on the
corporate website(3).
(1) These policies can be found online: https://group.bnpparibas/en/our-commitments/transitions/financing-and-investment-policies.
(2) Convention on International T r ade in Endangered Species of Wild Fauna and Flora.
(3) https://group.bnpparibas/en/key-public-positions-banking-financial-regulation.
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■ The stakeholder mapping and BNP Paribas dialogue initiatives with
each stakeholder are described in detail in the document "How
BNP Paribas listens to and takes into account the expectations of
its stakeholders(1)", available on the corporate website. A materiality
matrix presenting the most important issues for the Group's internal
and external stakeholders is also available (see Vigilance plan,
section 7.7).
CHANGES IN OUR EXTRA-FINANCIAL
REPORTING INFORMATION
Section 5.11 Environmental, social and governance risk meets the
regulatory requirements of Pillar 3 of the European Banking Authority.
In addition, the Green Asset Ratio (GAR) has been published for the first
time this yea r, i n section 7.9 Aligned activities under the meaning of the
European taxonomy of this chapte r.
(1) https://cdn-group.bnpparibas.com/uploads/file/bnp_paribas_csr_dialogue_with_stakeholders_2024.pdf.
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Our economic responsibility: financing the economy in an ethical manner
7.2 Our economic responsibility: financing
the economy in an ethical manner
BNP Paribas' primary mission is to meet its clients' needs, in particular by
financing in a responsible manner the projects of individual clients and
businesses, drivers of economic development and jobs' creation. Given
its leading positions in financial services in the 63 countries in which
it operates, the Group's financing capacity and the way it conducts its
business can have a direct impact on local economies. Thus, aware of
its economic responsibility, BNP Paribas acts in coherence with its three
commitments:
■ Commitment 1: Financing and investments with a positive impact;
■ Commitment 2: Ethics of the highest standard;
■ Commitment 3:Systematic integration and management of
environmental, social and governance risks (ESG).
COMMITMENT 1: FINANCING AND INVESTMENTS WITH A POSITIVE IMPACT
OFFERING A WIDE RANGE OF SUSTAINABLE
PRODUCTS
For several years, BNP Paribas has been developing a wide range of
sustainable products linked to extra-financial indicators, intended for
all its corporate clients, financial institutions and sovereigns such as:
■ sustainability-linked loans (SLL), and impact loans for which the
interest rate is subsidised according to the achievement of CSR
objectives. BNP Paribas was the world's fifth-largest SLL provider in
2023 at USD 16.2 billion(1);
■ sustainability-linked bonds;
■ sustainable deposits and cross-currency sustainability linked swaps;
■ ISLF+ (inclusive and sustainability-linked financing), sustainable
inclusive financing based on the SLL model (see Continued support
for microfinance institutions, Commitment 7).
The Group also supports its clients with sustainable bond issues, which
include social bonds and green bonds, for which BNP Paribas is the
world leader for the second year running with USD 25.6 billion in 2023(1).
Examples of green bonds are detailed in Commitment 10, Supporting
corporate clients in their energy and ecological transition.
(1) Source: Dealogic.
Examples of sustainable transactions in 2023
BNP Paribas Fortis acted as co-sustainability coordinator when
negotiating a sustainability-linked loan of EUR 400 million for
Renewi, a waste recycling and recovery company. The interest
margin on the loan will depend on whether Renewi achieves the
objectives it has set itself, namely, to recycle 75% of its waste by
2025 and to reduce its scopes 1 and 2 carbon emissions.
In 2023, the Republic of Slovenia issued its largest sustainable bond
in the amount of EUR 1.25 billion. BNP Paribas took on the role of
sole structuring advisor and joint lead manager for this transaction.
In addition to green projects, funds will be allocated to social
projects for access to essential services in education, healthcare
and social inclusion.
In 2023, BNP Paribas co-developed the first ISLF+ (inclusive
& sustainability-linked financing). They specifically enable
microfinance players to receive dedicated technical support and
subsidised rates based on the achievement of social, environmental
and/or just transition objectives. The first three ISLF+ were signed
with some of the Group's long-standing partners: Adie in France,
PerMicro in Italy and Banco da Familia in Brazil.
Launched in 2023, BNP Paribas Climate Impact Infrastructure Debt is
a fund classified under article 9 of the SFDR which includes an initial
investment by BNP Paribas Cardif. It aims to raise between EUR 500
and EUR 750 million from institutional investors. It will support
projects working for the energy transition in Europe focused on
renewable energy, clean mobility and the circular economy, including
new sectors such as batteries, hydrogen and carbon capture.
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Our economic responsibility: financing the economy in an ethical manner
These operations contribute to the objectives set out in the CSR dashboard
as part of the GTS plan (Growth, Technology, Sustainability) 2025 (see
7.1 Strategy), and specifically:
■ EUR 150 billion in sustainable loans (EUR 117 billion at the end of
2023);
■ EUR 200 billion in sustainable bonds (EUR 67 billion at the end of
2023);
■ EUR 300 billion in assets under management in open-ended funds
distributed in Europe, articles 8 and 9 of the SFDR (EUR 254 billion
at the end of 2023).
BNP Paribas Personal Finance is a major player in the
financing of individuals in Europe, operating in around
20 countries, under several trademarks including Cetelem,
Findomestic, AlphaCredit and Cpay and covering nearly
23 million customers. At the end of 2023, sustainable
finance (financial inclusion, the energy transition of housing,
sustainable mobility and the circular economy) outstandings
reached EUR 8.9 billion, i.e. 8% of its total outstandings. This
includes financing of the energy transition of housing for the
amount of EUR 4 billion.
FINANCING IMPACT ENTREPRENEURSHIP
Thanks to their hybrid business model, impact enterprises aim to generate
a strong positive social and/or environmental impact, while seeking
economic sustainability. They may be start-ups or SMEs, associations,
cooperatives or microfinance institutions (MFIs, see Continued support for
microfinance institutions, Commitment 7), and work on various themes
such as the circular economy, access to healthcare, child protection,
professional integration and equal opportunities. Primarily in France,
through the "A ct For Impact" initiative, the Group supports impact
entrepreneurship through bank financing at subsidised rates, impact
bonds and capital investments.
➤
THE GROUP'S COMMITMENT TO SUPPORT
ENTREPRENEURSHIP FOR IMPACT AMOUNTS
TO EUR 2 BILLION
0.7%
Impact Bonds
16.8%
Loans to MFIs
68%
10.9%
Own investments
3.6%
Investments on behalf
of third parties
Loans
The Group's support for impact entrepreneurship was stable overall
compared to the previous year at an amount of EUR 2 billion, including
support for the microfinance sector for EUR 345 million. The number
of impact enterprises that have benefited from the Group's support
continues to increase, from 3,170 in 2022 to 3,450 in 2023.
Development of the Impact Bond activity
Impact Bonds are a financing tool based on a unique model of
collaboration between the public, private and social and solidarity
economy (SSE) sectors. They provide positive solutions for society or
the environment that promote innovation in public policies with a limited
cost for the State. In 2023, BNP Paribas continued the development and
thematic diversification of Impact Bonds as an arranger and investo r.
Three years after launching the very first Impact Bonds fund in France
and the European Union, BNP Paribas launched a second edition, the
BNP Paribas European Impact Bonds Fund 2, managed by BNP Paribas
Asset Management. Three strategic investors have already committed to
the creation of this fund alongside BNP Paribas: Banque des Territoires
of the Caisse des Dépôts Group, the European Investment Fund and
BNP Paribas Cardif. With a target size of EUR 70 million, this fund aims
to change the scale of the Impact Bonds market in the European Union.
Nine new Impact Bonds were launched in 2023 for a total amount of
EUR 28 million, in which the fund invested EUR 13 million. These include
the EUR 2.9 million Impact Bond operated by Andes, which aims to
combat food waste and food insecurity on a large scale by adding value
to food that would otherwise go unsold and helping to diversify and
improve the diet of food aid beneficiaries.
Since 2016, BNP Paribas has supported (as arranger or investo r, o ften
both) 24 Impact Bonds for a total amount of EUR 82 million, of which
18 are still active.
Impact investments
This is a medium- or long-term investment strategy with the objective
of financing concrete solutions that meet barely or poorly targeted social
or environmental needs and generate a positive and quantifiable impact,
with a financial return that may be lower than the market rate. This
impact investments complies with the following criteria:
■ intentionality: the explicit search for a positive social or environmental
impact;
■ additionality: the investor's commitment and contribution (financial or
extra-financial) enable the financed company to maximise its positive
impact;
■ measurability: the measurement of the impact is based on the
implementation of social or environmental objectives, the monitoring
of results and a continuous assessment process.
In 2023, the Group continued to deploy its impact investments, via its
own budget of EUR 200 million or its funds on behalf of third parties (such
as the FCP BNP Paribas Social Business Impact France), by favouring
direct equity investments in corporate clients with a strong social and/
or environmental impact. 16 new investments (excluding reinvestments)
were made for a total of EUR 56 million, including:
■ Ecov, a shared mobility operator in areas where public transport is
limited or absent, to promote mobility that is accessible to as many
people as possible while avoiding CO2 emissions;
■ Urbilog, an iconic player in digital accessibility for people with
disabilities (visual, auditory, moto r, d ys disorders, etc.).
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Our economic responsibility: financing the economy in an ethical manner
DESIGNING AND PROMOTING FUNDS
WHICH INCLUDE SUSTAINABILITY
CRITERIA
As part of the GTS 2025 strategic plan, BNP Paribas Asset Management
aims to reach at least 90% of its assets under management in open-
ended funds classified in categories 8 or 9 of the SFDR (Sustainable
Finance Disclosure Regulation), i.e. EUR 300 billion. At the end of 2023,
this proportion of 90% had been reached for assets of EUR 254 billion.
For several years, BNP Paribas Asset Management has broadened its
range of investment solutions by focusing on corporate clients making
a positive contribution to the transition to a more sustainable economy.
Its sustainability-focused product offering is structured around two main
ranges covering the main listed and unlisted asset classes. Solutions
include:
■ labelled funds: products that adhere to one or more European
sustainability labels such as general labels (SRI in France or Towards
Sustainability in Belgium), green label (Greenfin) or solidarity label
(Finansol). The labelling processes are certified, which guarantees
compliance with their specifications. In 2023, the SRI label was obtained
for the ETF BNP Paribas Easy ECPI Circular Economy Leaders fund, and
the Towards Sustainability label for BNP Paribas Emerging Climate
Solutions and BNP Paribas Global Climate Solutions funds, created in
2022. Also in 2023, as the specifications of the Towards Sustainability
and SRI labels have evolved, BNP Paribas Asset Management has acted
to implement the new criteria as soon as they come into force (2024),
in particular the one on the exclusion of fossil fuels.
In total, BNP Paribas Asset Management's labelled funds represented
EUR 139.5 billion at the end of December 2023, i.e. nearly 26% of total
assets under management;
■ thematic sustainability solutions: see Enabling its clients to transition
to a low-carbon economy, Commitment 10.
SRI label
Greenfin
Finansol Sustainability
Towards
FNG
LuxFLAG
ESG
LuxFLAG
Environment
Funds with
at least
one label
TOTAL
LABELLED
ASSETS
(in millions
of euros)
Shares
63
60
9
3
94
51,537
Bonds
16
2
2
36
4
36
22,036
Monetary
3
2
3
33,229
Real estate funds
1
2
2
191
Diversified
2
6
27
1
2
36
32,469
139,462
TAILORED ADVICE AND SUPPORT:
START-UPS AND INNOVATIVE COMPANIES
BNP Paribas channels all of the Bank's expert knowledge into serving
innovative companies through strategic partnerships, raising of funds
and adapted financing solutions.
In France, BNP Paribas has for several years developed recognised
expertise and a strong commitment to the innovation ecosystem.
Under the "We Are Innovation" WAI label, 100 specialised account
managers advise innovative companies of all sizes and provide them
with financing, equity capitalisation, global fund-raising, IPOs or direct
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investment solutions through BNP Paribas Développement subsidiary.
The vast majority of innovative companies are supported by BNP Paribas
teams, i.e. 85% of the companies in the Next40, 78% of companies in the
FrenchTech120 and 75% in the FrenchTech 2030.
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Our economic responsibility: financing the economy in an ethical manner
COMMITMENT 2: ETHICS OF THE HIGHEST STANDARD
The respect of the most rigorous ethical standards is a prerequisite at
BNP Paribas. All Group employees are required to strictly respect all laws,
rules and regulations in effect in all domains, as well as all professional
standards that apply to their activities. In the event of conflict between
the laws of a country and BNP Paribas' ethical rules, employees are
required to respect local legislation while at the same time looking for
ways to apply and respect internal ethical rules.
ETHICS OF THE HIGHEST STANDARD
Code of conduct
The BNP Paribas Code of conduct, published in 2016 and enhanced in
2022, is translated into 20 languages and is published on the Group's
website(1). It covers the following topics:
■ customer's interest;
■ financial security;
■ market integrity;
■ conflicts of interests;
■ professional ethics;
■ respect for colleagues;
■ protection of the Group;
■ commitment to society;
■ the fight against corruption and influence peddling.
A training course on all the topics of the Code of conduct (Conduct
Journey) is mandatory for new employees in the Group, and every two
years for all employees (see chapter 2 Internal control).
The whistleblowing system
All employees have the right to signal an alert.
Alert subjects include, but are not limited to:
■ acts of corruption, influence peddling or any other infringement
pertaining to probity;
■ acts of fraud;
■ professional behaviour contrary to the provisions on respect for
persons;
■ breaches of the rules of professional ethics;
■ financial security breaches;
■ anti-competitive practices;
■ breaches of market integrity;
■ breaches of the rules for the protection of customer interests;
■ unauthorised disclosure of confidential information, theft or leaking
of data;
■ violations of human rights and fundamental freedoms, personal
health and safety or the environment, committed by a Group entity,
by a supplier or the subcontractor of a supplie r, u nder a commercial
relationship established with the Group or one of its entities;
■ violations of the Group's policies regarding suppliers;
■ violations of the Group's policies regarding the use of social media.
Deployed in all BNP Paribas entities, the whistleblowing system(2) is
based on dedicated channels under the responsibility of "Compliance
alert referents" and "Conduct HR referents, Respect for colleagues", who
ensure that alerts are processed in compliance with confidentiality rules.
Initially open to the Group's employees, it has now been extended to
certain external players and in particular to former Group employees,
its suppliers and their subcontractors since December 2022, and can be
accessed via the Group's website(3).
The protection of whistleblowers against the risk of retaliation has been
strengthened by the French law No. 2022-401 of 21 March 2022. Any
person that needs to know of an alert during its processing is formally
committed to respecting the confidentiality of the information relating
to the whistleblowers and any person involved. In addition, the Group
guarantees the protection of whistleblowers against the risk of retaliation,
and any person considering themselves the victim of retaliation may issue
an alert that will be dealt with according to the standards defined by the
Human Resources Department. This protection applies regardless of the
channel used by the whistleblowe r.
The whistleblowing system Is presented in the mandatory Code of
conduct training course.
Executive Management and the Board of directors are regularly informed
of its use.
Alerts
2021
2022
2023
Number of alerts received
296
313
333
The fight against corruption, money laundering
and the financing of terrorism
In all of its entities, BNP Paribas maintains mechanisms for detecting
money laundering and terrorist financing operations, which are based
on a set of standards and controls, on employee vigilance, maintained
through mandatory training programmes, and on constantly evolving
computerised tools. A strengthened system for the prevention and
detection of corruption has also been generalised (see section Compliance
activity in 2023, chapter 2).
(1) https://cdn-group.bnpparibas.com/uploads/file/220204_bnpp_compliance_codeofconduct_2022_eng.pdf.
(2) Summary of the system – BNP Paribas' whistleblowing procedure. (https://cdn-group.bnpparibas.com/uploads/file/summary_of_bnp_paribas_wb_framework_eng_june_2022.pd f).
(3) Whistleblowing framework (https://group.bnpparibas/en/direct-access/whistleblowing).
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Our economic responsibility: financing the economy in an ethical manner
The fight against tax evasion
Compliance with all tax obligations is one of the Group's commitments
in terms of economic and civic responsibility. The tax compliance of
operations intended to meet its needs or those of its clients is thus a
major objective of its governance. To this end, principles and procedures
have been defined and are applicable to all operations in which the Group
is involved. These items are included in the BNP Paribas T a x Code of
conduct(1) the last updated version of which was published in June 2023.
The Group's fiscally responsible behaviour is reflected in the fair
contribution it makes to the revenues of the countries or territories in
which it operates.
Each yea r, t he Group is fully transparent by publishing a table presenting,
country by country, net banking revenue, workforce and income, as well
as corporate income tax paid (see section 8.6 Information on locations
and businesses for 2023).
(1) https://invest.bnpparibas/en/document/code-of-tax-conduct.
The Group's tax principles
The decisions taken by BNP Paribas are guided by the will to meet
the needs of the real economy, and not by tax considerations.
The choice of location results from the Group's will to provide its
customers with the best possible service. BNP Paribas entities have
real economic substance.
In all the jurisdictions in which it operates, the Group undertakes
to comply not only with the letter but also with the spirit of the tax
laws and fiscal regulations in force. The Group ensures compliance
with tax rules pursuant to treaties, laws and regulations, as well as
the payment of all corresponding taxes whatsoeve r.
The transfer pricing policy applicable to intra-group cross-border
transactions excludes any search for tax optimisation.
All around the world, BNP Paribas seeks to establish and maintain
a cooperative relationship with tax authorities.
The Group takes the greatest care in ensuring the tax compliance
of its clients.
BNP Paribas ensures the proper application of all provisions
governing withholding taxes as well as the transfer of these funds
to the budgets of the countries or territories concerned.
The Group also ensures the quality and completeness of information
it transmits automatically, on request, or spontaneously, to public
authorities.
Amount of taxes and levies paid by BNP Paribas
Globally, the amount of taxes and levies owed by BNP Paribas reached
EUR 6.8 billion in 2023. In France, the Group paid taxes and levies of
EUR 2.1 billion in respect of the same yea r.
PROTECTING CLIENT'S INTERESTS
Protecting clients' interests is a major concern for the Group. For this
reason, it has chosen to place this issue at the heart of its Code of conduct
and has set up a dedicated expert group within Compliance Function.
A global Group-wide policy
The clients' interest protection policy defines the rules of organisation
and conduct that must be applied throughout the relationship with the
client and at all stages of the product and service life cycle, in order to
ensure that:
■ products and services offered to clients meet their needs and situation;
■ information provided to clients is clear and honest, and enables them
to make informed decisions;
■ conflicts of interest are managed in such a way as to favour the
interests of the clients and not those of the Group, its employees or
its partners;
■ complaints are handled promptly and rigorously.
The protection of clients' interests is the subject of trainings for the
employees concerned, in particular the teams in charge of customer
relations and management.
Compliance with the Code of conduct and the clients' interest protection
policy is verified by all internal control players: the business lines as the
first line of defence, Compliance and General Inspection as the second
and third lines respectively.
These rules are translated into concrete practices deployed in all Group
business lines and entities, depending on their specific characteristics:
■ dialogue with consumer associations and other stakeholders is
encouraged to gather their opinions on new ways to improve the
protection of clients' interests;
■ approval procedures for new products and services include the
protection of clients' interests;
■ questionnaires to identify needs and the situation of clients are
gradually being enriched with environmental, social and governance
(ESG) criteria, in order to integrate their preferences in the context of
advice and portfolio management;
■ compensation of sales teams is structured so as not to encourage
operations that would be contrary to clients' interests.
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For Commercial & Personal Banking in France (CPBF), for example, the
variable compensation system for sales teams is structured around four
aspects of its job, illustrating the performance that is expected from
the employee: the quality of the customer relationship, commercial
development, the management of risks and compliance, as well as
management (for the employees concerned). In Belgium, part of the
collective variable compensation is linked to the achievement of several
objectives, including client satisfaction (NPS – Net Promoter Score).
Complaints management and mediation
The processing of complaints is a key element of the client interest
protection policy, and is subject to specific operational procedures. The
complaints statistics are an indicator monitored at Group level.
2021
2022
2023
Number of complaints received
(in thousands)
1,161
1,150
975
➤
BREAKDOWN OF COMPLAINTS (2023)
IPS
12.6%
0.1%
CIB
87.3%
CPBS
The nature of the activity is the dominant factor and explains the
preponderance of retail activities in these statistics.
■ BNP Paribas Personal Finance deploys a system for handling customer
complaints in all its entities with a specific governance that brings
together all the players concerned in order to implement the necessary
corrective actions, and qualitative analyses to identify the causes.
Thus, the entire "Termination" process, for example, has been revised
from pre-sale to litigation, to better meet customers' expectations.
■ At BNP Paribas Cardif in France, complaints analysis is used to prepare
a formal document. This is presented to the "Complaints and Customer
Voice" committee, which meets at least once a yea r. I t aims to share
quantitative and qualitative analyses of complaints and how they have
evolved. In addition, an annual document entitled "Claims report",
listing the volumes, complaints, causes and action plans by major
product range, is distributed annually within the Company.
Many Group entities offer the services of independent mediators who can
be used by customers. In France, Italy and Belgium, customers contact
the national ombudsman services organised by the relevant regulatory
bodies.
■ BNP Paribas Personal Finance uses external ombudsmen in most
countries. In France, an independent ombudsman studies the requests
and provides proposed responses.
■ Since 2022, BNP Paribas Cardif in France has strengthened its
relationship with the Insurance Ombudsman in order to take into
account the mediator's perspective on the cases that customers submit
to it. In 2023, the continuous improvement of this system continued by
identifying the causes of each complaint in the database.
Monitoring customer satisfaction to better meet
customer needs and interests
Measuring customer satisfaction enables product and service offerings to
be adapted to their requests, in order to always best serve their interests
by analysing their complaints and areas of dissatisfaction. At CPB F, a
centre of expertise called Voices provides continuous improvement to
serve both customers and employees. The cross-functional missions
of Voices are to promote the methodology of the NPS and NPE (Net
Promoter Employee) standards, as well as the methodology for redefining
priority pathways. A team of experts listens to and analyses feedback
from both customers and employees in order to detect the main causes
of dissatisfaction. Another team of experts supports the business lines
and redefines pathways as well as defining and deploying continuous
improvement loops. In 2023, Voices collected more than 1.2 million
customer feedback items (Retail Banking, Private Banking and corporate),
and more than 4,000 employee feedback items. 15 priority pathways have
also been redefined since 2022, including 8 in 2023, and 14 continuous
improvement loops active at the end of 2023.
The Advocacy programme and the Net Promoter
System
At the level of the BNP Paribas Group, monitoring of customer satisfaction
is part of the Advocacy programme, rolled out since 2017, in order to listen
to the voice of customers and employees throughout the relationship with
them and improve their experience. Thus, customer expectations and
perceptions are better understood and the Group's decisions are guided
at all levels (strategy, offering, distribution, customer experience, etc.).
The programme is adapted to any types of customers, and is rolled out
by the "Client & Employee Advocacy" teams through the Net Promoter
Score (NPS) methodology, which measures the level of recommendation
of BNP Paribas customers and compares it with competitors each yea r.
The Group's objective is to ensure that these entities improve their
rankings year-on-year in comparison with their competitors in the
countries in which they are based. The NPS covers all domestic and EM
(Europe-Mediterranean) markets within the CPBS division, as well as all
the business lines and countries of the IPS division.
In 2023, in the four Domestic Markets (France, Belgium, Italy and
Luxembourg), 7 million e-mail surveys were sent to customers to collect
their feedback, with a return rate of 8%. In addition, nearly 800,000
feedback items were collected via live surveys on digital channels (pop-
in, pop-up).
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Regarding the Group's market positioning:
■ of the Group's 26 banking entities, 65% had an NPS score at or above
the average for their market in 2023 (vs 50% in 2018). This year's
progress is mainly based on business clients:
■
CPBF consolidated its evident progress with business clients (+39
points since 2018) and more specifically with SME clients (+18
points since 2018) and large companies (+16 points since 2018); TEB
(Türk Ekonomi Bankasi) is one of the leading banks with business
clients; BNL (Banca Nazionale del Lavoro) has become a leader
among SMEs and large corporate clients (with respectively +19
points and +34 points since 2018),
■
in Commercial & Personal Banking: Hello bank! returned to its
highest level (+15 points since 2017) and TEB retained its third
place in Türkiye. In addition, it has become easier to contact an
advisor at CPBF (call acceptance rate: +7 points in one year) and
at BNP Paribas Fortis (+9 points in one year),
■
in Private Banking: BNP Paribas Fortis Wealth Management is the
leader among private banks in Belgium for the fourth consecutive
year;
■ BNP Paribas Personal Finance has ensured that the Customer voice
and service excellence is prioritised in operational excellence and
strategy. The CES (Customer Effort Score) is now equal to the NPS
(Net Promoter Score) as a key performance indicator to improve the
customer journey. A shared reference framework called the Experience
System has been set up to help countries define strategic challenges
in terms of customer experience. Areas for improvement include better
consideration of "relationship" paths, more emotion in interactions or
even more efficient digital technology;
■ BNP Paribas Cardif has included a customer NPS target in its 2025
strategic plan for all the countries in which it operates. Systematic
listening and in-depth analysis of customer needs and expectations
are thus deployed at the service of the continuous improvement of
insurance solutions and the customer journey. With this in mind,
BNP Paribas Cardif in France deployed a Close The Loop system in
2023, which involves making further contact with customers who
responded to a satisfaction survey, with their prior agreement, to
directly gain a more in-depth understanding of which factors are
causes of customer satisfaction and dissatisfaction.
ETHICS AT THE HEART OF SUPPLIER
RELATIONS
In 2023, the Group's purchases amounted to around EUR 10 billion
excluding tax in expenditure globally. BNP Paribas strives to develop
balanced relationships with its suppliers, a desire reflected in its
Sustainable Sourcing Charter(1) which details the commitments applicable
to both the Group and its suppliers. In addition, the Group holds the label
"Relations fournisseurs et achats responsables" (the Responsible Supplier
Relations and Procurement label), the first and only label awarded by
the French public authorities. It recognises French companies or public
entities that have demonstrated sustainable and balanced relationships
with their suppliers.
In addition, the Procurement division abides by strict ethical principles,
in order to manage the risks of mutual dependency, adapt its practices to
allow small and medium-size suppliers to compete in its call for tenders
and implement processes for faster payment of supplier invoices.
The Group offers its suppliers an remedy for any problems. In France, an
internal ombudsman, appointed in accordance with the commitments
of the BNP Paribas Sustainable Sourcing Charter and independent of
the Procurement & Performance (P&P) function, can be contacted by
any supplier in the event of a dispute with a view to resolving it (contact
details can be found online on BNP Paribas' website). 10 referrals were
recorded in 2023.
Finally, in France, under its Diversity & Inclusion policy, the Group
undertakes a committed policy to develop its business relations with
suppliers working with vulnerable and disabled employees and those
isolated from work (STPA)(2) and SIAE(3). BNP Paribas SA's agreement in
France on the employment, professional integration and retention of
people with disabilities includes the objective of reaching EUR 2 million
in revenue excluding tax by 2025 with the STPA. This agreement was
renewed for a period of three years (2023-2025), and approved by the
French Ministry of Labou r. T his commitment to diversity in procurement is
gradually being extended to the entire social entrepreneurship secto r. T he
BNP Paribas Group, part of the Collectif d'Entreprises pour une économie
plus inclusive (Business collective for a more inclusive economy)(4), aims
to increase its inclusive purchases in France by 30% by 2025 (from STPAs
and SIAEs), compared to 2022.
(1) https://cdn-group.bnpparibas.com/uploads/file/sustainable_sourcing_charter_eng.pdf.
(2) Sheltered and adapted work secto r.
(3) Integration through economic activity secto r.
(4) https://www.collectif-economie-plus-inclusive.f r.
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COMMITMENT 3: SYSTEMATIC INTEGRATION AND MANAGEMENT
OF ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISKS (ESG)
A COMPREHENSIVE ESG RISK
MANAGEMENT APPROACH
BNP Paribas is continually strengthening its system for managing ESG
risks that may affect its business activities. Initially, this system focused
on the most sensitive sectors from an ESG point of view, by developing
sectoral policies. It is now more comprehensive, covering all sectors of
the economy in which the Group has customers and clients, in particular
through the development of sectoral ESG Assessment questionnaires.
Binding financing and investment policies
As part of the implementation of its strategy to combat climate change
and align its activities with an objective to contribute to carbon neutrality
by 2050, BNP Paribas has developed ESG policies covering, currently, eight
major sectors(1), both at the level of projects and corporate clients. They
also address fundamental issues such as human rights and biodiversity,
and apply to all of the Group's activities. Sectoral policies are regularly
adapted to better take into account the new challenges of the sectors
covered by being more ambitious.
The Group ensures that the companies and projects it finances comply
with the criteria set out in its policies throughout the yea r. S ectoral
policies are monitored, in the same way as all Group policies, as part
of the three lines of defence structure (see section 2.4 Internal control):
the implementation and first-level controls are the responsibility of the
business lines, the second-level permanent control is the responsibility
of the control functions, and the RISK Function in particular (when it
comes to credit processes), and periodic control is the responsibility of
the Audit Function and the General Inspection, as a third line of defence.
Respect of the Equator Principles
in project financing
As a signatory to the Equator Principles alongside 135 other financial
institutions worldwide, and in its role as a financial service provider
and adviso r, B NP Paribas works with its clients to identify, assess, and
manage the risks and environmental and social impacts linked with major
industrial and infrastructure projects. According to these principles, the
negative impacts of these projects on communities, ecosystems or the
climate must be avoided or minimised, mitigated and/or offset. Projects
graded A present significant risks and systematically involve an external
review; those graded B present more limited risks; and those graded C
present minimal or no risks.
2021
2022
2023
Number of transactions concerned in the year
17
15
29
Number of grade A transactions in the year
3
2
6
Number of grade B transactions in the year
13
11
23
Number of grade C transactions in the year
1
2
0
An internal ESG performance and risk assessment
tool: ESG Assessment
Gradually developed and then rolled out since 2021, the ESG Assessment
has become the preferred tool for monitoring the ESG performance and
associated risks of the Group's corporate clients. The ESG Assessment
covers the environmental (climate and biodiversity), social (health and
safety at work and impact on communities) and governance (business
ethics) dimensions through numerous questions divided according to
these five themes. It is supplemented by an analysis of controversies
affecting clients. The assessment is a systematic ESG analysis that applies
as part of the credit process, and is being rolled out in the KYC (Know
Your Customer) system. Thus, like other criteria (financial, strategic), ESG
criteria are taken into account in the assessment of the counterparty's
credit profile. The ESG Assessment, therefore, enables BNP Paribas to
deepen and document its ESG knowledge of clients. The ESG Assessment
also assesses clients' compliance with the Bank's sectoral policies, as well
as the maturity of their ESG strategy and its implementation.
The questionnaires developed in this context are specific to each sector
in order to better integrate the challenges and issues specific to related
activities. Aware that ESG issues are changing rapidly, the Group plans to
adjust these questionnaires, as necessary, taking into account regulatory
changes and feedback from clients and relationship managers (RMs),
the RISK and CSR teams.
19 sectoral questionnaires (with several sub-sectors) were rolled out
in 2023, to assess the maturity of its corporate clients in terms of ESG
risks. More than 3,000 analyses of very large and large corporate clients
were carried out at the end of 2023, covering almost all of our clients
in these segments.
This assessment tool has been adapted for medium-sized corporate
customers (companies with revenue in excess of EUR 50 million) and
financial institutions, with a target of covering customers in these
segments by the end of 2024.
(1) https://group.bnpparibas/en/our-commitments/transitions/financing-and-investment-policies.
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IMPLEMENTATION OF FINANCING
AND INVESTMENT POLICIES
Restriction of activity lists
In order to identify the companies presenting the highest environmental
and social risks, in addition to financing and investment policies,
the Group manages activity restriction lists according to the level of
ESG risks observed. At end 2023, these lists included 1,718 companies,
including 86 under monitoring and 1,432 under restrictions. Those under
monitoring are subject to engagement measures by the Group, in order
to monitor that they make lasting changes to their practices and reduce
their ESG risks, and that they are aligned with the Group's policies
and objectives. The Group prohibits any financing or investment with
companies subject to restrictions.
BNP Paribas has also drawn up an exclusion list(1) for certain goods
and activities that the Group does not wish to finance, such as tobacco,
driftnets, the production of asbestos fibres, products containing PCBs
(polychlorinated biphenyls), or trade in any species regulated by the
CITES convention.
These lists, implemented at the level of legal entities and groups, are
periodically updated using data supplied by clients and external sources,
and by analysing the key controversies involving corporate clients
accused of serious violations of respect for the environment or human
rights. The implementation of clients' exit strategies or amounts invested
is regularly monitored internally.
The overall ESG Risk Management system is therefore evolving and can be represented as follows:
Deployment of ESG issues
in investment strategies
(BNP Paribas Asset Management
and BNP Paribas Cardif)
Global shareholding policy
(BNP Paribas Asset Management)
Risk Appetite Framework
BNP Paribas Code of conduct approved by the Board of directors
Corporate financing (CIB + CPBS)
Analysis of all ESG elements
Unsatisfactory
assessment results
assessment results
Interim evaluation
results
Satisfactory
Know Your Customer Process (KYC)
Investments (IPS)
ESG Assessment
Restriction
of activity list
Monitoring and regular
follow-up of the client
Start or continuation of activity
Sector
policies
policies
Ad hoc CSR
analysis
Project
-nancing
Speci-c credit
7
and rating
Monitoring and
exclusion list
Global Credit Policy
Complementary monitoring
and exclusion list
Investment /
Engagement /
Termination of a relationship
Divestment
The detail of this table appears in the Group Vigilance plan (see 7.7 Vigilance plan).
(1) https://cdn-group.bnpparibas.com/uploads/file/bnpparibas_csr_exclusion_list.pdf.
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Quantitative information and vision of the ESG risk
portfolio according to European regulations
Information on the portfolios is published in accordance with the rules
prescribed by the European Banking Authority (EBA). This information
is detailed in section 5.11 Environmental, social and governance risk
and in section 7.9 Aligned activities within the meaning of the european
taxonomy.
OTHER ESG RISK MANAGEMENT TOOLS
Integration of ESG criteria into supply
chain management
The Group expects its suppliers to conduct their activities in compliance
with its environmental, social and governance requirements (see Ethics
at the heart of relationship with suppliers, Commitment 2). Within its
scope of operations, the Procurement & Performance (P&P) business line
applies ESG criteria at several different levels:
■ at the central level, with the inclusion of a central ESG risk mapping
relating to the products or services purchased. This mapping helps
identify high-risk purchasing categories according to 13 issues related
to ethics (corruption, data protection, etc.), environmental (pollution,
biodiversity, greenhouse gases, etc.) and social issues (human rights,
working conditions, discrimination, etc.);
■ through ESG assessments of suppliers, carried out through onboarding
processes and in the context of calls for tenders. Internal purchasing
standards provide for a minimum 15% weighting of CSR criteria during
calls for tenders. In France, this system was enhanced in 2023 by
using information from the Ecovadis platform for the ESG assessment
of suppliers.
Finally, a significant effort was also devoted to employee training
(475 people worldwide trained in CSR criteria, and more than 150 in
inclusive purchasing).
In total, at the end of 2023, 5,312 supplier ESG assessments had been
carried out, and 1,287 suppliers had signed the Group's Sustainable
Sourcing Charter(1).
Integrating ESG criteria into asset management
BNP Paribas Asset Management strengthened its commitment to
the Paris Agreement by signing the Net Zero Asset Manager (NZAM)
initiative(2). Its net zero roadmap covers investment activities, voting and
engagement activities, and operations and is based on 10 commitments
including:
■ reducing the carbon footprint of its investments;
■ aligning investments with the objective of carbon neutrality;
■ increasing sector-specific investments in environmental and climate
solutions;
■ voting in favour of climate action by corporate clients at Annual
General Meetings and engaging in dialogue with corporate clients
on carbon neutrality;
■ reducing the operational carbon footprint.
As part of its membership of the Net Zero Asset Owner Alliance (NZAOA),
BNP Paribas Cardif has made commitments that meet the four pillars
identified by the alliance(3):
■ measure the alignment of investment portfolios with the Paris
Agreement and reduce its carbon footprint;
■ set decarbonisation targets for the sectors that emit the most
greenhouse gases;
■ develop investments related to the climate transition;
■ talk to companies and asset managers to encourage them to implement
a climate strategy consistent with the Paris Agreement.
BNP Paribas Asset Management and BNP Paribas Cardif implement their
ESG strategies, which include, among other things, the application of the
Group's sector policies. Thus:
■ BNP Paribas Asset Management's Global Sustainability strategy,
launched in 2019 and updated at the beginning of 2024(4), details the
way in which ESG issues are deployed in investment strategies. It is
based on the exclusion of certain sectors, engagement and dialogue
with invested companies (stewardship) as well as responsible business
conduct and a long-term perspective;
■ in 2023, 95% of BNP Paribas Cardif's general assets in euros in France
were subject to an ESG analysis.
In order to promote best ESG practices within the companies in
which the asset management company and its clients have invested,
BNP Paribas Asset Management systematically exercises its voting rights
as a shareholde r, v oting this year at 1,931 Annual General Meetings.
BNP Paribas Asset Management abstained or opposed about 36% of these
resolutions (33% in 2022). It supported 88% of shareholder proposals
on climate change and 96% of shareholder proposals on social issues.
In 2023, BNP Paribas Asset Management objected to 1,521 resolutions
proposed by 271 companies due to environmental or biodiversity-related
considerations. Finally, BNP Paribas Asset Management ranked second
in Point of No Returns 2023(5) ShareAction on the responsible investment
practices of the 77 largest asset managers in the world.
(1) Number of suppliers in the portfolio that have signed the BNP Paribas Sustainable Sourcing Charte r. N ew indicator defined in 2023.
It is based on the number of suppliers in the priority monitoring quadrant of the supplier portfolio, i.e. the sensitive suppliers list that had signed up to the BNP Paribas Sustainable
Sourcing Charter at the end of 2023.
This list is composed of "A ctive suppliers with a level of risk that could have a negative impact on BNP Paribas in the following categories":
■ suppliers of sensitive outsourcing services;
■ sensitive external suppliers;
■ high-risk suppliers from a Compliance perspective;
■ sensitive suppliers identified for onboarding;
■ suppliers for whom a risk triggering event occurs during the contract life cycle.
(2) https://viewpoint.bnpparibas-am.com/10-commitments-to-net-zero/.
(3) www.bnpparibascardif.com/en/article/-/article/net-zero-asset-owner-alliance-bnp-paribas-cardif-pursues-and-expands-its-commitments.
(4) https://mediaroom-f r.bnpparibas-am.com/download-pdf/659ed788fd25cc0c0b051cc6.
(5) https://cdn2.assets-servd.host/shareaction-api/production/resources/reports/Point-of-No-Returns-2023-General-Findings_2023-03-01-115320_htgw.pdf.
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Our economic responsibility: financing the economy in an ethical manner
BNP Paribas Asset Management and BNP Paribas Cardif use collaborative
dialogue (working groups or coalitions whose members cooperate to act
jointly with companies) to encourage improvements in practices. For
example, these two entities are members of the Climate Action 100+
Initiative(1) and, as such, regularly engage in dialogue with companies
ranked among the world's top greenhouse gas emitters to improve their
climate change governance and strategy. BNP Paribas Asset Management
is also a founding member of Nature Action 100(2).
Operational control plan
In order to verify the strict application of ESG risk management tools,
BNP Paribas has rolled out a CSR operational control plan which
establishes a continuous improvement process. This control plan, linked
to the application of sectoral policies, exclusion and monitoring lists,
and questionnaires on the duty of care, is applied to the business lines
and functions (see Our systems' controls in section 7.7 Vigilance plan).
ALIGNMENT OF THE LOAN PORTFOLIO WITH THE OBJECTIVE OF A NET ZERO WORLD BY 2025
A strong acceleration in the switch to low-carbon energy sources
In 2020, BNP Paribas announced its total exit from the thermal coal value chain by 2030 in the European Union and OECD (Organisation for
Economic Cooperation and Development) countries, and by 2040 in the rest of the world. In 2023, aware of the impact of metallurgical coal on
CO2 emissions, the Group amended its mining policy to exclude any project financing related to its extraction.
In addition, BNP Paribas decided to massively reduce its financing to the oil and gas secto r. For several years now, it no longer finances projects
related to unconventional oil and gas, and oil and gas activities located in areas that are particularly sensitive in terms of biodiversity (the
Arctic and the Amazon). In addition, BNP Paribas no longer grants financing for the development of new oil or gas projects, regardless of the
financing terms, and terminates, on a scheduled basis, the financing granted to independent oil companies intended to support oil production
(loans granted to companies or financing of reserve based lending), thus drastically reducing its exposure to fossil fuels.
In 2028, at least 80% of BNP Paribas' credit exposure to energy production will be focused on low-carbon energies, and at least 90% in 2030.
At the end of September 2023, credit exposure to low-carbon energy represented EUR 32 billion, i.e. 65% of financing for energy production.
Partnerships and loan portfolio measurement
and alignment methodologies
BNP Paribas has committed to aligning its activities with the objectives
of the Paris Agreement, then financing a carbon neutral world by 2050.
In this context, the Group has joined various initiatives and coalitions,
including the Net Zero Banking Alliance (NZBA), through which the Group
has committed to applying its alignment strategy to the sectors that emit
the most greenhouse gases.
In 2023, BNP Paribas published its Climate report(3) in which the stages
of the loan portfolio alignment are presented in detail. In particula r,
this report explains what data is used, details of the calculation
methodologies, including the calculation of the alignment trajectory
and the strategy implemented by the Group, and specifies the methods
for managing the portfolio. It also covers an update of the three sectors
published in 2022 in the report Climate Analytics and Alignment(4) (power
generation, oil and gas, and automotive) as well as three new sectors:
steel, aluminium and cement.
Given the relative weight of each sector in the Group's credit exposure,
on average the results at the end of 2023 are in line with BNP Paribas'
ambition to finance a carbon neutral economy by 2050.
Power generation: a loan portfolio aligned with the
netzero 2050 objectives
The electricity mix is representative of the Group's client base as 99%
of credit exposures to electricity producer clients are taken into account
in this calculation. It shows a less carbon-intensive loan portfolio, that
is more oriented towards renewable energies both in 2023 and by 2025
when compared to the IEA's Net Zero 2050 scenario.
(1) https://www.climateaction100.org.
(2) https://www.natureaction100.org.
(3) https://group.bnpparibas/uploads/file/bnp_paribas_2022_climate_report.pdf.
(4) https://group.bnpparibas/uploads/file/bnpp_climateanalytics_alignmentreport_final.pdf.
➤
ELECTRICITY MIX CALCULATED BY CAPACITY
2020
2021
2022
2023
2025 Objectives
Share of renewables
57%
62%
60%
65%
> 66%
Share of coal
10%
8%
7%
5%
< 5%
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Our economic responsibility: financing the economy in an ethical manner
At 31 December 2023, low-carbon capacities (i.e. renewable and nuclear) increased compared to 2022 (from 69% to 74%), while coal and oil capacities
were collectively down by three points (10% to 7%). This reduction is notably linked to the implementation of the Group's commitment to fully exit the
coal value chain by 2030 for Europe and the OECD countries and 2040 for the rest of the world, and to our clients' investments in renewable capacity.
➤
BNP PARIBAS' ELECTRICITY MIX BY CAPACITY COMPARED TO GLOBAL ELECTRICITY MIX
0%
20%
18%
40%
9%
60%
16%
80%
42%
100%
BNPP 2020
BNPP 2021
BNPP 2022
BNPP 2023
World 2022*
World 2025 IEA Net Zero
10%
8%
7%
5%
20%
4%
4%
24%
3%
2%
4%
21%
4%
21%
19%
21%
18%
8%
9%
9%
4%
12%
11%
14%
5%
10%
15%
50%
49%
55%
31%
39%
Other renewables capacity
Hydroelectric capacity
Nuclear capacity
Gas capacity
Oil capacity
Coal capacity
*
Published in the IEA World Energy Outlook (WEO) 2023.
At 31 December 2023, the emission intensity of electricity portfolio
amounted to 148 gCO2/kWh compared to 179 gCO2/kWh at 31 December
2022. This reduction is due to a decrease in the share of coal and oil in the
electricity mix of our clients (these two energy sources being the highest
CO2 emitters), the growth in the financing of renewable projects and the
updating of client data. The CO2 intensity of the portfolio at 31 December
2023 and projected in 2025 is significantly lower than the global average
and the IEA's Net Zero 2050 scenario by 2025.
➤
PORTFOLIO EMISSIONS INTENSITY FOR ELECTRICITY PRODUCTION
Emission intensity in gCO2 / kWh
2020
2021
2022
2023
2025
BNP Paribas
208
182
179
148
≤ 146
Global Average and Net Zero IEA projection for 2025
518
512
507
471
397
The fossil fuel extraction sector
At 31 December 2023, BNP Paribas has significantly exceeded its initial 2025 targets (compared to the end of 2020) for reducing its credit exposure to
oil and gas exploration and production activities.
➤
CREDIT EXPOSURE TO OIL AND GAS EXPLORATION-PRODUCTION
At 31 December
2022
2023
At 31 December
At 31 December
2025
Credit exposure, oil exploration and production
-15%
-43%
T a rget of -25%
Credit exposure, oil and gas exploration and production
-12%
-37%
T a rget of -12%
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Our economic responsibility: financing the economy in an ethical manner
These objectives were strengthened in January 2023 to aim for an 80% reduction in financing for oil exploration-production by the end of 2030 (compared
to 30 September 2022) and a 30% reduction in gas exploration-production over the same period. The Group is on track to reach them with a total 37%
drop in oil and gas credit exposure between 30 September 2022 and 31 December 2023.
➤
CREDIT EXPOSURE TO OIL AND GAS EXPLORATION-PRODUCTION
In billions of euros
2022
At
30 September
At
31 December
2022
At
30 September
2023
At
31 December
2023
Change
Credit exposure, oil exploration and production
5.0
4.4
3.6
3
-40%
Credit exposure, gas exploration and production
5.3
4.6
4.3
3.5
-34%
➤
LOAN PORTFOLIO EMISSIONS INTENSITY FOR OIL AND GAS
2020
2022
2023
2025 Objectives
Emissions intensity in gCO2eq/MJ
68
67
67
≤ 61
More broadly, the transition to a low-carbon economy also relies on the development of low-carbon energy financing (see the box at the beginning of
this section).
The automotive sector
Since 2022, BNP Paribas has calculated each year the share of electrified
vehicles(1) for its portfolio and the emission intensity measured in grams
of CO2 per kilometre in WLTP standard(2), focusing on "tank-to-wheel"
emissions. Financing related to this activity includes all financing
dedicated to automotive manufacturers and their financing captives, for
light vehicles only.
(1) Electrified vehicles: plug-in hybrid vehicles, battery electric vehicles, vehicles equipped with fuel cells.
(2) W L T P: Worldwide Harmonized Light Vehicle T e st Procedures defined by the United Nations Economic Commission for Europe.
➤
LOAN PORTFOLIO EMISSIONS INTENSITY FOR AUTOMOTIVE
2020
2021
2022
2023
2025 Objectives
Share of electrified vehicles
4%
7%
14%
15%
≥ 25%
Emissions intensity
in gCO2/km (WLTP)
183
176
167
151
≤ 137
The share of electric vehicles continues to grow, albeit at a slower pace due to slower growth in demand, while emissions intensity is decreasing thanks
to the combined effect of the increase in the rate of electric vehicles and the reduction in average emissions from internal combustion engine cars.
The steel sector
Since 2023, BNP Paribas has calculated the intensity of its clients'e missions
in the (crude) steel sector annually for its loan portfolio, measured in
tonnes of CO2 per tonne of primary crude steel (made from iron ore) and
secondary crude steel (made from recycled steel). The measure includes
direct emissions (scope 1), energy purchases (scope 2) and purchases of
partially processed raw materials (partial scope 3) for non-fully-integrated
players. The preparation of commodities and the manufacture of cast iron
and steel are also taken into account in the value chain. Upstream activities
(iron extraction) and downstream activities (finishing, for example) are
excluded.
➤
PORTFOLIO EMISSIONS INTENSITY FOR STEEL
2022
2023
2030 Objectives
Emissions intensity in tonnes of CO2 per tonne of steel
1.6
1.5
≤ 1.2
The carbon intensity of the oil and gas portfolio, calculated by combining exploration-production, refining and final use, was 67 gCO2eq/MJ at the end
of December 2023, a very slight improvement year-on-year (-0.4 gCO2eq/MJ).
The results at the end of 2023 show that the BNP Paribas portfolio is in line with the target set, and the IEA's NZE 2050 scenario of 1.2 tCO2/tonne of
steel by 2030.
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Our economic responsibility: financing the economy in an ethical manner
The results at the end of 2023 show that the BNP Paribas portfolio is in line with the defined objective and displays an intensity significantly lower than
the 1.5°C 2050 scenario of the IAI(1) based on the IEA NZE 2050 scenario, with 8.9 tCO2eq/tonne of aluminium in 2030.
The cement sector
Since 2023, BNP Paribas has been calculating its loan portfolio emissions
intensity for its clients in the cement sector annually, measured in tonnes
of CO2 per tonne of cementitious product. The measurement includes gross
direct emissions (scope 1) and purchased energy emissions (Scope 2).
The gross direct emissions include emissions of alternative fuels and
exclude those related to biomass. The segment of the value chain under
consideration is cement production. Upstream activities (extraction of
raw materials) and downstream activities (e.g. concrete production) are
excluded. Based on latest available client data, the portfolio's emission
intensity at the end of 2022 was 0.64 tCO2/tonne of cementitious product,
in line with the defined target. The data are available later than for the
other sectors because they are taken from client's annual reports.
(1) IAI: International Aluminium Institute.
(2) https://www.poseidonprinciples.org/finance/.
➤
LOAN PORTFOLIO EMISSIONS INTENSITY FOR CEMENT
2021
2022
2030 Objectives
Emissions intensity in tonnes of CO2 per tonne of cementitious product
0.67
0.64
≤ 0.51
Maritime transport
BNP Paribas has measured the carbon intensity of its portfolio in the
field of maritime transport for the fourth year running, according to the
Poseidon Principles(2). The new strategy of the International Maritime
Organization (IMO) announced in July 2023 provides for "minimum"
objectives as well as more ambitious or "striving" objectives, thus
implying two possible trajectories. At 31 December 2022, the alignment
score for the maritime transport loan portfolio was:
■ 3.6% above the alignment score according to the initial trajectory
(before revision in 2023);
■ 27.2% above the IMO Minimum Trajectory;
■ 32% above the IMO Striving Trajectory.
The aluminium sector
Since 2023, BNP Paribas has been calculating its clients' emission
intensity in the aluminium sector annually, measured in tonnes of CO2
equivalent per tonne of primary aluminium (made from bauxite). The
measurement includes direct emissions (Scope 1) and emissions from
purchased (Scope 2) for the manufacture of aluminium (electrolysis).
Upstream activities (bauxite extraction), alumina manufacturing and
downstream activities (e.g. extrusion) are excluded.
➤
LOAN PORTFOLIO EMISSIONS INTENSITY FOR ALUMINIUM
2022
2023
2030 Objectives
Emissions intensity in tonnes of CO2eq per tonne of aluminium
6.2
5.8
≤ 5.6
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Our social responsibility: supporting our employees by offering them an environment and pathways adapted to their expectations
7.3 Our social responsibility: supporting our
employees by offering them an environment
and pathways adapted to their expectations
As part of the Growth, T e chnology, Sustainability 2025 (GTS) strategic
plan presented by the Group in February 2022, which places people at the
heart of its priorities, in 2023 Human Resources continued to implement
the ambitions of the People Strategy within the Group's business lines
and functions, around three pillars: Ethics and Inclusion, Employee
Experience, and Human Capital.
Faced with the current major societal, environmental and technological
challenges, BNP Paribas has a greater responsibility than ever to support
its clients in their transitions towards solutions that are both sustainable
and practical. Meeting these challenges requires the commitment of all
employees in all of the Group's business lines and functions.
To this end, the Human Resources function plays a key role in rolling out
people-focused ambitions.
The Group Human Resources Director leads the Company's social
responsibility towards its employees, in particular in terms of:
■ working conditions (health and safety at work, organisation of work,
social dialogue and collective agreements, freedom of association,
social protection and work-life balance);
■ fair treatment and opportunity for all (equal treatment, fair and
equitable compensation, diversity and inclusion, training and skills
development, anti-harassment and discrimination);
■ respect for labour rights.
She is a member of the Group Executive Committee. She reports regularly
on the People Strategy and its implementation to the Governance, Ethics,
Nominations and CSR Committee (CGEN) and the Board of directors. She
also sits on the Board of directors' Remuneration Committee.
With more than 4,000 employees worldwide, the Human Resources
function uses its structure and governance (including the bimonthly
Executive Committee meeting with the Group managers of the function
and the HR managers of the main business lines and territories) to
disseminate and deploy its People Strategy, while listening to employees
and partnering with the business lines in order to ensure that their own
strategy is implemented. The People Strategy continues to be deployed
in line with the objectives set for 2025.
In 2023, against a complex economic and geopolitical backdrop, the
Group continued its actions to:
■ protect its employees by providing assistance wherever they may
need it (Ukraine, Türkiye, Morocco, Middle East), and by deploying its
prevention, health and well-being at work offer throughout the world
through the We Care programme;
■ widely promote its diversity and inclusion policy in all its areas,
particularly during its Inclusion Days, which provided an opportunity to
raise employee awareness on equal opportunities, prejudice, disability
and financial inclusion, and measure employees' perception of these
issues as part of the general Conduct & Inclusion survey re-run in 2023;
■ reach the ambitious target in terms of gender equality of 37% women
in senior management(1) in 2023;
■ develop the skills of its employees, particularly in I T, D ata, Digital, and
Sustainable Finance jobs, while offering them career development
opportunities within the Group notably during the Career Days.
This enabled the Group to be recognised as Top Employer Europe in 2023
for the tenth year running. In addition, employees themselves helped
to promote the Group as an employer during the #UnexpectedJobs
campaign. BNP Paribas continues to rank first in the banking and
insurance sector in France, according to the 2023 Ranking of preferred
companies for students and young graduates produced by Epoka/Harris
Interactive.
BNP Paribas' actions in terms of social responsibility are also recognised
by extra-financial rating agencies (see chapter 7.1 Strategy).
Finally, since 2022, BNP Paribas renewed its "Diversity" and "Professional
equality" labels brought together under an "A lliance" label awarded
in France by Afnor (Association Française de Normalisation – French
standardisation organisation). The Group is the first and only bank
in France to have obtained this double label for the past four years,
demonstrating its long-term commitment to gender equality and the
fight against discrimination.
(1) The Group's Senior Management Position (SMP) population is composed of employees holding approximately 3,000 positions considered to have the most significant impact from
a strategic, commercial, functional and expertise point of view.
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OUR EMPLOYEES AROUND THE WORLD
➤
CHANGES IN GROUP WORKFORCE
Men(1)
Women(1) Total 2022
Men(1)
Women(1) Total 2023
Change
2023/2022
Workforce (physical headcounts)
94,678
102,422
197,157
90,873
95,289
186,162
-6%
Of which PTC(2)
92,710
99,331
192,096
89,146
92,653
181,799
-5%
Of which FTC(3)
1,968
3,091
5,061
1,727
2,636
4,363
-14%
Workforce (FTE)(4)
93,969
99,090
193,122
90,241
92,415
182,656
-5%
Of which PTC(2)
92,037
96,047
188,144
88,541
89,820
178,360
-5%
Of which FTC(3)
1,933
3,043
4,977
1,700
2,596
4,296
-14%
Workforce (financial FTE)(5)
91,090
94,195
185,467
87,624
87,755
175,498
-5%
(1) This breakdown takes into account employees whose gender has been completed in the HR tools.
(2) Permanent-term contract.
(3) Fixed-term contract.
(4) Full-time equivalent workforce of entities for which the Group holds an HR management mandate: workforce pro-rated to their contractual working time,
with all figures rounded to the nearest whole numbe r.
(5) Full-time equivalent workforce of fully consolidated entities (see chapter 8 Income statement items and workforce by country).
At the end of 2023, the Group was established in 63(1) countries (65 countries in 2022). The 5.4% decrease in workforce (in FTE) compared to 2022 is mainly
due to the sales of Bank of the West in the United States, the BNP Paribas Personal Finance business line in Bulgaria and the Europe-Mediterranean
entities in Ivory Coast and Senegal. The workforce remains stable on a like-for-like basis (-0.1% compared to 2022).
➤
WORKFORCE IN FTE BY GEOGRAPHICAL AREA AND GENDER AT 31/12/2023
Men(1)
Women(1)
Total 2022
Men(1)
Women(1)
Total 2023
France
25,600
30,536
56,136
25,596
30,114
55,710
Italy
8,104
7,998
16,102
8,008
7,923
15,931
Belgium
6,437
6,410
12,847
6,363
6,369
12,732
Luxembourg
1,905
1,668
3,573
1,881
1,671
3,552
Total domestic markets
42,047
46,612
88,659
41,849
46,076
87,924
7
Europe (excluding domestic markets)
27,215
31,274
58,490
27,516
30,610
58,127
Total Europe
69,261
77,886
147,149
69,365
76,686
146,051
Asia-Pacific
12,263
7,960
20,263
12,894
8,454
21,348
Africa
2,892
4,053
6,952
2,272
3,388
5,661
North America
6,728
6,859
13,598
3,104
1,742
4,846
South America
2,500
2,153
4,656
2,281
1,982
4,263
Middle East
325
179
504
325
163
488
Rest of the world
24,708
21,203
45,973
20,876
15,729
36,605
TOTAL
93,969
99,090
193,122
90,241
92,415
182,656
(1) This breakdown takes into account employees whose gender has been completed in the HR tools.
(1) The Group left Senegal and Ivory Coast.
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➤
WORKFORCE IN FTE BY BUSINESS LINE AT 31/12/2023
55.6% CPBS(1)
10.1% IPS(2)
COMMERCIAL & PERSONAL BANKING (37.2%)
SPECIALISED BUSINESSES (18.4%)
(1) CPBS: Commercial, Personal Banking & Services.
(2) IPS: Investment & Protection Services.
21.9%
CORPORATE
& INSTITUTIONAL BANKING
12.4%
5.2%
GROUP FUNCTIONS
& OTHER ACTIVITIES
BNP Paribas Wealth
Management, BNP Paribas
Asset Management,
BNP Paribas Real Estate,
Principal Investments
12.7%
Europe-Mediterranean
12.8%
CPBF (France)
6.3%
Arval & BNP Paribas
Leasing Solutions
9.5%
BNP Paribas Personal Finance
BNP Paribas Cardif
0.9% CPBL (Luxembourg)
5.3%
BNL bc (Italy)
5.5%
CPBB (Belgium)
2.6%
4.9%
New
digital
businesses,
BNP
Paribas
Personal
Investors
➤
WORKFORCE (PHYSICAL HEADCOUNTS) BY AGE, GENDER AND GEOGRAPHICAL AREA AT 31/12/2023
3,453
293
7,428
9,952
13,619
16,416
14,412
13,587
10,694
3,292
This breakdown takes into account 98% of the Group workforce (permanent + ꢀxed-term contracts) whose age and gender are completed in the HR tools and which is composed of a total
of 186,162 employees in physical headcounts.
4,299
488
7,487
Men: 49%
Women: 51%
Under 25
2,722
25 to 29
10,672
30 to 34
13,158
35 to 39
13,561
40 to 44
14,339
45 to 49
12,442
50 to 54
9,963
55 to 59
60 to 64
65 years
and above
Europe (excluding
domestic markets)
4 domestic
markets
Rest of the world
Rest of the world
Europe (excluding
domestic markets)
4 domestic
markets
In 2023, the overall average age is 41.8 years (41.7 in 2022): 42 years for men and 41.7 years for women. In 2023, the average seniority in the Group is
12.1 years (11.7 in 2022): 11.4 years for men and 12.6 years for women.
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➤
PART-T IME WORKFORCE (PHYSICAL HEADCOUNTS) BY GENDER
Men(1)
Women(1)
Total 2022
Men(1)
Women(1)
Total 2023
Number of part-time employees
1,950
13,017
14,970
1,748
11,366
13,114
Of which part-time at 80% or more
1,222
8,803
10,026
1,194
7,892
9,086
% by gender of part-time employees
13%
87%
13%
87%
(1) Physical workforce taking into account 98% of the Group's workforce, for which the gender and part-time status have been completed in the HR tools.
In 2023, 13,114 employees worked part-time, representing 7% of the Group's workforce (8% in 2022). 69% of them work part-time at 80% or more
(67% in 2022). Globally, 2% of men and 12% of women work part-time.
Changes in workforce
➤
RECRUITMENTS (PERMANENT CONTRACTS) BY GENDER AND GEOGRAPHICAL AREA
Men(1)
Women(1)
Total 2022
Men(1)
Women(1)
Total 2023
France
2,724
2,624
5,348
2,196
1,930
4,126
Domestic markets (excluding France)
1,193
872
2,065
928
765
1,693
Europe (excluding domestic markets)
4,942
5,280
10,223
4,000
4,697
8,698
Rest of the world
6,169
4,969
11,256
3,600
2,727
6,327
TOTAL
15,028
13,745
28,892
10,724
10,119
20,844(2)
(1) This breakdown (in physical headcounts) takes into account employees whose gender has been completed in the HR tools.
(2) Recruitments(permanent contracts) in FTE: 20,774.
In 2023, the Group recruited 20,844 employees on permanent contracts worldwide (-27.9% compared to 2022, stable compared to 2021), including
4,126 in France. With 70% of the hires in Europe (61% in 2022), BNP Paribas reaffirms its status as a leading European bank. For the sixth year running,
France is the leading recruiting country with 19.8% of the total, followed by India (15.7%), Portugal (9.1%), Türkiye (8.7%) and United Kingdom (5.3%).
➤
DEPARTURES (PERMANENT CONTRACTS) BY GENDER AND REASON
Men(1)
Women(1)
Total 2022
Men(1)
Women(1)
Total 2023
Retirement/early retirement
902
943
1,845
1,114
1,182
2,296
7
Resignation
8,741
7,797
16,549
5,588
5,093
10,681
Dismissals
773
791
1,564
715
627
1,342
Mutually agreed departures
651
1,083
1,734
500
821
1,321
Assisted departure plans
314
433
747
265
265
530
Other ends of permanent contracts(2)
1,592
1,433
3,028
1,728
1,633
3,402
TOTAL
12,973
12,480
25,467
9,910
9,621
19,572(3)
(1) This breakdown (in physical headcounts) takes into account employees whose gender has been completed in the HR tools.
(2) Of which end of trial period, death, unspecified.
(3) Departures from permanent contracts in FTE: 19,291.
The fall in departures in 2023 (-23%) is mainly due to a general decrease in resignations, particularly in India, slightly offset by an increase in retirement
mainly in Türkiye due to a change in local legislation. Of the 19,572 departures in 2023, more than 5,600 were in the domestic markets (6,700 in 2022),
including more than 3,800 in France (nearly 4,500 in 2022), more than 8,300 in the rest of Europe (9,000 in 2022) and more than 5,600 in the rest of
the world (nearly 9,700 in 2022).
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➤
DEPARTURE RATE BY GENDER
Men
Women
Total 2022
Men
Women
Total 2023
Departure rate (physical headcounts)(1)
13.7%
12.1%
12.9%
11.1%
10.3%
10.7%
Departure rate (FTE)
13.7%
12.3%
13.0%
11.1%
10.4%
10.8%
Voluntary departure rate (FTE)(2)
9.8%
8.6%
9.2%
6.8%
6.4%
6.6%
France
5.1%
4.0%
4.5%
3.7%
2.6%
3.1%
Domestic markets (excluding France)
4.3%
3.6%
3.9%
4.1%
2.9%
3.5%
Europe (excluding domestic markets)
10.9%
12.1%
11.5%
8.1%
10.0%
9.1%
Rest of the world
18.8%
16.3%
17.7%
11.2%
10.9%
11.1%
(1) Departure rate, based on permanent contracts: (Number of departures in year N)/(Average number of employees in year N).
(2) Voluntary departure rate, based on permanent contracts: (Number of resignations in year N + Number of mutually agreed departures in year N)/(Average
number of employees in year N).
The fall in the departure rate, calculated on a like-for-like basis, is mainly due to the decrease in voluntary departures, particularly in India.
➤
INTERNAL MOBILITIES BY GENDER AND GEOGRAPHICAL AREA(1)
Men(2)
Women(2)
Total 2022
Men(2)
Women(2)
Total 2023
France
4,275
6,177
10,452
3,538
4,736
8,274
Domestic markets (excluding France)
2,207
2,217
4,424
2,738
2,417
5,155
Europe (excluding domestic markets)
2,778
3,135
5,913
2,627
2,902
5,529
Rest of the world
2,232
1,890
4,122
1,860
1,423
3,283
TOTAL
11,492
13,419
24,911
10,763
11,478
22,241
(1) Changes in the assignment and/or standard position of employees on permanent contracts. Changes related to reorganisations are not considered as
mobilities.
(2) This breakdown (in physical headcounts) takes into account employees whose gender has been completed in the HR tools.
(1) The absenteeism rate is based on the number of days of absence (paid and unpaid) calculated according to the local method used by each entity. The days of absence, all reported
on a number of calendar days, are consolidated on a Group common basis, and the calculated rate depends on the average number of employees (paid and unpaid).
(2) The Group HR teams manage a social reporting process with entities in 61 countries (the "Social Reporting Entities") to collect data not available in the information systems,
representing 93% of the workforce in FTE managed at 31/12/2023, hereinafter referred to as the "Social Reporting Workforce".
Absenteeism
The Group's absenteeism rate(1) is calculated for 61 countries(2) and includes illness, work-related accidents and occupational illness, excluding commuting
accidents and other authorised absences.
2022
2023
Absenteeism rate
Maternity,
Paternity,
Adoption,
Parental leave
Absenteeism rate
Maternity,
Paternity,
Adoption,
Parental leave
France
5.0%
1.9%
4.6%
1.6%
Domestic markets (excluding France)
5.5%
1.3%
4.9%
1.3%
Europe (excluding domestic markets)
2.7%
3.8%
2.6%
3.2%
Rest of the world
1.4%
1.2%
1.1%
1.3%
TOTAL
3.6%(1)
2.2%
3.4%(1)
2.0%
(1)
99% of the absenteeism rate is related to illness in 2022 and 2023.
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Work-related accidents
2022
2023
Work -related
Commuting
Total Work-related
Commuting
Total
France
251
333
584
266
311
577
Domestic markets (excluding France)
150
175
325
70
198
268
Europe (excluding domestic markets)
112
102
214
158
134
292
Rest of the world
85
56
141
70
63
133
TOTAL
598
666
1,264(1)
564
706
1,270(1)
(1) Including one fatal accident in 2022 and three fatal accidents in 2023.
The frequency rate(1) for work-related accidents amounts to 1.07 and increases to 2.41 if commuting accidents are added (2.3 in 2022). The severity
rate(2) is 0.05 excluding commuting accidents, and 0.09 if days lost due to commuting accidents are added (0.08 in 2022).
(1) The frequency rate corresponds to the number of accidents per one million hours.
(2) The severity rate corresponds to the number of days lost per 1,000 hours.
COMMITMENT 4: PROMOTION OF DIVERSIT Y, E QUALITY AND INCLUSION
Commitment 4 is at the heart of the "Ethics and Inclusion" pillar of
the People Strategy, the purpose of which is to ensure that our teams
are united around a shared culture of ethics and inclusion, and to
encourage respect, non-discrimination and exemplarity in our actions.
This commitment is monitored through various channels, of which
the Group CSR dashboard indicator which is the share of women in
Senior Management Positions (see 7.1 Strategy).
A SOLID FRAMEWORK, A MU L T I-ACTOR
COMMITMENT
Effective and cross-functional Diversity
& Inclusion governance with a constant
commitment of Executive Management
The Group Head of Diversity, Equality and Inclusion reports to the
Group Head of Human Resources, and is a member of the HR Executive
Committee and of the Executive Committee for Company Engagement.
The Global Diversity and Inclusion Committee is made up of 40 members
from throughout the Group. It meets twice a year and is rolled out at
the country, business line and function levels. In 2023, this community
was extended to Nickel and the Consulting & Transformation function.
Promoting diversity and inclusion also requires the mobilisation and
active support of Executive Management. The personal commitment
of the Group Chief Executive Officer is also regularly recognised with
regard to the gender balance in jobs, the greater representation of women
on governing bodies, and the inclusion of LGBT+ people (Lesbian, Gay,
Bisexual and Transgender).
An inclusive framework, all over the world
Since the signature of the first Diversity Agreement within BNP Paribas
SA in 2004, the mechanisms have been enhanced with each renegotiation
to cover all stages of employees' career paths.
After coming into force on 1 October 2020 for four years, the 5th Diversity
and Inclusion Agreement within BNP Paribas SA in France remains valid.
The Group's companies in France take the same proactive approach
to defining initiatives to promote diversity as part of social dialogue.
Agreements have been signed in this area: professional gender
equality, integration and job retention of employees with disabilities,
employment of seniors, and the situation of employees holding employee
representative mandates in the context of negotiations on trade union
rights. This negotiated approach is periodically renewed in order to track
progress, as well as updating and setting new quantified targets.
The 2014 European Agreement on gender equality includes all the key
elements of the Group's policy in this area.
These agreements are supplemented by the signing of numerous
commitments such as the United Nations Women's Empowerment
Principles (WEP) (2011), the charter of the International Labour
Organization and Disability Network (2016) and the United Nations LGBT
Standards (2017).
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Diverse and active employee networks, constantly
growing and promoting social well-being
Internal employee networks offering a space for cross-functional (multi-
entity, multi-country, etc.) and informal discussions are key players in
promoting diversity, inclusion and social well-being. They are both a
source of information and a source of innovation. They are continuing to
grow and develop synergies. For the past three years, a "World Networks
Day" has been held during the Inclusion Days (see below).
Thousands of employees took part in events organised throughout 2023
in 32 countries(1) around themes as varied as gender equality, sexual
orientation, generational inclusion, parenting, ethnocultural origins and
disability. In addition, the Group's web of networks continues to expand:
in 2023, the Pride Poland network was created, marking the presence of
Pride in more than 30 countries across the Group, and Mixcity networks
were created in the Nordic countries, Colombia and Morocco, increasing
the number of Mixcity networks to 27.
PROMOTING AN INCLUSIVE CU L T URE
Training and developing
All entities(1) offer training and awareness-raising actions on the fight
against discrimination and the promotion of diversity and inclusion.
Some countries and entities systematically include diversity awareness
modules in their manager training courses, such as at CPB F, B NP Paribas
Fortis, CIB Asia-Pacific and the Group IT function. In addition, the HR
teams deploy specific training to the teams responsible for recruitment
and to hiring managers.
Moreove r, s everal inclusive personal development and leadership
programmes focus on women's career paths(2).
Three markers show that all employees are concerned by inclusion:
■ in order to raise awareness among all Group employees, mandatory
Conduct Journey training was enhanced in 2023 through a
module entitled "Diversity, Equality & Inclusion" dedicated to non-
7
discrimination, addressing unconscious bias and stereotypes through
practical cases of situations that may affect colleagues or candidates
during the recruitment process. The Group provides awareness-
raising programmes on stereotypes and unconscious bias for 96% of
employees(1) in the Group;
■ as a result of the Group's work on promoting inclusion culture,
more than 3,000 employees (i.e. three times more than in 2022)
spontaneously checked the "Diversity, Equity & Inclusion" skill in their
About Me profile, which is included in the Group skills catalogue;
■ as a responsible employe r, s ince 2014, BNP Paribas has been using the
structured interview method, which is a more objective and reliable
recruitment method. All French recruitment teams and managers are
also trained on bias and stereotypes.
Communicating and raising awareness among
employees and managers
Awareness-raising campaigns are continuing and are based on a wide
range of formats (interactive conferences, round tables, podcasts and
screenings) in order to attract more employees either face-to-face, online,
or through replays.
In 2023, Diversity and Inclusion Week was reinvented to become
Inclusion Days. For more than two weeks, the HR Diversity, Volunteering,
BNP Paribas Foundation, Engagement teams and employee networks
highlighted the following themes: gender equality, prejudices &
stereotypes, role models, equal opportunities, mentoring, disability and
financial inclusion.
The first edition of this new format in around 30 countries, including
France, was a great success with more than 200 solidarity events and
actions organised, bringing together nearly 17,000 employees.
Four new episodes were added to the "In My Shoes" podcast series on
the theme of Diversity and Inclusion, which has now been listened to
more than 22,500 times.
The Conduct & Inclusion 2023 survey: maintaining
broad employee support for the Group's Diversity
& Inclusion policy
After an initial survey conducted in 2021, the 2023 edition of this
consultation with all Group employees remains very positive, with stable
results and an overall favourable opinion rate of 83% on the Inclusion
component of the survey. Employees were keen to get involved with this
second edition: out of the 175,000 employees surveyed(3), more than
90,000 responded, i.e. a participation rate of 52% (compared to 43% in
2021). More than 60,000 verbatim statements were collected, including
more than 25,000 on the Inclusion component.
Two factors show that inclusion is now fully embedded into the Group's
culture:
■ 87% of respondents agreed with "being able to be yourself at work
without worrying about how you will be accepted";
■ the vast majority of respondents state that they represent one or
more diversity groups, and they are the most positive about the
actions carried out by the Group. This option offered to respondents
is considered an innovative practice in France and in several countries.
On the Conduct component, the results show a high level of employee
approval of the values and behaviours defined in the Code of conduct. In
addition, 93% of respondents state that they have "a good knowledge"
of the channels which they can use to report alerts.
(1) Of the social reporting campaign.
(2) For example: "She Leads" (Portugal), "Women Leadership Program" (Canada and Switzerland), "Women Up" (Poland), "Mentoring Program" (BNP Paribas Fortis), "A LL Equal"
(BNP Paribas Cardi f), "Boost Her Career" (CPBF), "Women's Impact Programme" (Germany) and "Women in Action" (Arval).
(3) Employees on permanent contracts for more than three months.
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The main lessons of this survey were shared with the Governance, Ethics,
Nominations and CSR Committee (CGEN), and the results will be subject
to an in-depth analysis, in order to adapt action plans locally if needed.
OUTSTANDING ACTIONS IN THE AREA
OF PROFESSIONAL EQUALITY
Gender equality targets at all levels: strong
ambitions for 2025
The Group has set itself ambitious gender equality targets: by 2025,
40% women on the Group Executive Committee (ExCo), G100(1), Leaders
for Change(2) and Senior Management Positions(3) (SMP), as well as
50% women among the Leaders for Tomorrow ("T a lents (4)").
Significant progress has already been noted in 2023. By way of
illustration, among the 92 members of the G100, the Group has 35 women
in management positions in the Group's strategic business lines such as
CPBF in France, BNL in Italy, BNP Paribas Cardif, BNP Paribas Personal
Finance, BNP Paribas Leasing Solutions, in country management (Spain,
United Kingdom, Switzerland, Canada, Australia) and in the Executive
Management of BGL BNP Paribas in Luxembourg. Women are also
Heads of the Human Resources, Compliance, CSR and Communication
Departments. Six women are also members of the Group Executive
Committee.
In 2023, the ambitious level of 37% women in Senior Management
Positions was achieved thanks to the actions of Executive Committee
members and the active involvement of HR teams through eight cross-
functional projects(5).
In addition, nearly 40% of the Group's managers are women, and around
one-third of managers of managers (middle management) are women.
(1) The G100 represents around a hundred people, corporate officers and senior managers holding key responsibilities within the Group. The members of the G100 include, among
others, the Heads of the operating divisions, of the major business lines, of Commercial Banking networks, of Group Functions, of geographical areas and of strategic countries in
which the Group is present.
(2) The Leaders for Change (LfC) population is composed of the members of the main Group-level cross-functional Executive Committees considered as making a major contribution
to its operations and its development.
(3) This rate is calculated based on the number of women holding SMP positions as a proportion of the total number of SMP positions filled at 31/12/2023 (based on 100% of the Group's
SMP workforce).
(4) The Leaders for T o morrow (LfT) programme includes women and men who have a unique combination of skills, experiences, motivations and personal attributes ("Leadership
Profile"), which the Group considers necessary to drive transformation in the future.
(5) In particula r, a q uarterly dashboard shared within the Group Executive Committee and awareness-raising actions dedicated to managers of SMP:: "Being an inclusive leader".
➤
PERCENTAGE OF WOMEN AT ALL LEVELS OF THE ORGANISATION
31/12/2022
31/12/2023
2025 Objectives
Board of directors
8 women out of 15 members,
including one elected by employees
and one representing employee
shareholders(1)
6 women out of 13 members,
including one elected by employees
and one representing employee
shareholders(1)
Executive Committee
33% (6/18)
33% (6/18)
40%
G100
37%
38%
40%
Leadership for Change (Top 500)
32%
34%
40%
Senior Management Positions
35%(2)
37%(2)
40%
T a lents – Leaders for Tomorrow
50%
52%
50%
Top
46%
51%
50%
Advanced
48%
50%
50%
Emerging
52%
53%
50%
(1)
50% in 2022 and 40% in 2023 according to the rules of the Copé-Zimmermann law. This ratio is calculated by excluding the three directors representing
the employees or the employee shareholders. This information complies with the requirements of article L.22-10-10 2° of the French Commercial
Code relating to the balanced representation of women and men on the committee established, where appropriate, by Executive Management to
assist it regularly in the performance of its general duties and on the results in terms of gender diversity in the top 10% of positions with the highest
responsibilities.
(2) Indicator monitored in the Group's CSR dashboard.
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In France, the "Rixain" law of 24 December 2021 includes several
measures to improve gender equality in companies, by requiring gender-
balanced representation among senior managers and members of the
governing bodies of large companies. The objectives set by law are to
be achieved gradually: 30% by 1 March 2026 and 40% by 1 March 2029.
BNP Paribas SA published the following overview(1) of women and men
for 2023:
■ population of senior executives corresponding to BNP Paribas SA's
G100: 43% women and 57% men;
■ members of the governing bodies corresponding to the BNP Paribas
Group Executive Committee: 33% women and 67% men.
New Group commitments as part of the
Generation Equality Forum
In order to accelerate this movement towards gender balance at all levels
of the company, BNP Paribas is continuing and expanding its actions by
partnering with the Generation Equality Forum, the global assembly for
gender equality, organised by UN Women.
Since 2021, by becoming a member of the two coalitions below, by 2026,
the Group has committed to the following:
■ "gender-based violence": to develop, strengthen and internationalise
its actions and systems for its employees who are victims, to work
alongside the members of the OneInThreeWomen network to convince
at least 50 private sector organisations to get involved and better
support their customers who are victims of economic abuse, in
particular by raising awareness among its advisors and building on
its Nickel services;
■ "technology and innovation for gender equality": to be among
the champions in the recruitment and percentage of women in IT
professions, to help associations supporting women in technology and
innovation and to continue its financial commitment and advocacy for
the Agrifed programme(2).
Developing and spotlighting women's career paths
In line with the GTS 2025 plan and in accordance with the Group's desire
to promote the career paths of women, BNP Paribas is committed to
gender diversity in structurally unbalanced business lines, particularly
in terms of recruitment and retention.
With regard to capital markets activities within Corporate and Investment
Banking, the action plan focuses on pre-recruitment and recruitment, on
specific groups and their succession, and on development programmes.
With regard to the IT business lines, the Group aims to be among the
champions in recruitment and boosting the percentage of women in this
secto r. S ince 2020, the Group has continued to develop its global diversity
programme for IT professions, entitled Women in I T.
The ambition of Women in IT is based on the following quantitative
objectives for 2025 within the Group IT function: to achieve 32% women,
through hires and departures of women in these roles,, and to achieve
50% women in LfT populations.
2023 was marked by new actions, with:
■ increased action by IT Departments and the appointment of operational
points of contact within the activity;
■ the continuation and expansion of training programmes and reskilling
developed by the Group for women (see A learning company supporting
dynamic career path management, Commitment 6);
■ close links with the Women & Girls in Tech initiative, to strengthen ties
and the presence of women in all Tech business lines and proactive
sourcing actions to broaden the female recruitment pool;
■ the effective implementation of partnerships with eight associations
benefiting from the budget of EUR 1.1 million over three years.
Thus, at the end of 2023, the Group's IT function has nearly 30.3% women.
A pioneer among CAC 40 companies and the financial sector by signing the
#JamaisSansElles Charter in 2019, BNP Paribas continues to strengthen
its action, and now has more than 700 signatories (of which 70% men),
from management bodies in 24 countries that undertake not to participate
in public events or panels with at least three speakers that do not include
the presence of at least one woman. In June 2023, BNP Paribas Leasing
Solutions' senior management team joined the community of signatories.
BNP Paribas remains the company with the largest number of signatories
of #JamaisSansElles in France and around the world.
Fight against gender-based violence and its
impacts at work
BNP Paribas has been a member of OneInThreeWomen, the first European
network of companies committed to combatting violence against
women, since 2018, and joined the network's Executive Committee
on 1 January 2021. Domestic violence inevitably impacts professional
life, and is a factor of inequality at work and an obstacle to gender
equality. The OneInThreeWomen network aims to equip employers to
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raise awareness and better support female employees who have been
victims. The network continues to strengthen its awareness-raising
system (e-learning available in eight languages, podcast series, etc.)
and in 2023, it welcomed 15 new companies as signatories to the
OneInThreeWomen Charte r.
After the launch of the intranet page accessible to all employees
worldwide (bringing together resources, testimonials from female victims
and key contacts on the subject of violence), on 25 November 2023,
the International Day for the Elimination of Violence Against Women,
the Group strengthened its commitment to the fight against domestic
economic abuse.
(1) Percentage based on attendance during the year in question.
(2) Since 2018, the Group has been associated with the Agrifed programme in line with the UN Sustainable Development Goals, whose aim is to promote and strengthen food security
in Senegal by promoting female entrepreneurship.
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In France, BNP Paribas joined the #StOpE (Stop everyday sexism in the
workplace) initiative from its creation in 2018, by signing an undertaking
comprising eight principles. This collective now includes 199 member
organisations.
The fight against sexism is the subject of numerous actions within
the Group. BNP Paribas took part in the second edition of the survey
on everyday sexism in the workplace, alongside 14 other member
organisations of #StOpE. As in the first edition in 2021, nearly 12,000
employees based in France responded to the 2023 questionnaire. While
sexism is still a reality in the eyes of different generations, it is beginning
to recede and the company's action is widely recognised. At the same
time, the awareness-raising e-learning module on "Preventing and
combatting everyday sexism in the workplace", available to all Group
employees, has been taken by more than 9,800 employees in France
since its launch.
360° parenting and work-life balance
The Group implements numerous actions to promote gender equality
around 360° parenting. The 11th Parenthood Week event in France was
attended by more than 2,200 employees, and organised around thematic
events such as adolescence, early childhood, family and intergenerational
solidarity, and carers.
In addition, business lines and countries are developing their own
systems. For example: BNP Paribas Cardif supports both carers and young
parents; BNL is rolling out workshops for new parents; in Germany and
Austria, the Group has gained its first certification following the "Work
and Family" audit, highlighting the robustness and effectiveness of its
systems in terms of work-life balance and supporting parenthood. At the
same time, childcare assistance, either in the form of financial assistance
or childcare, is offered by entities covering nearly 80% of the workforce(1).
In addition, more than 85% of the entities(1) grant adopting couples and/or
same-sex couples parental leave rights similar to maternity and paternity
leave. Nearly three quarters of entities(1) encourage their employees to
take their paternity leave (second parent) through communication and
awareness-raising actions.
In addition, in July 2023, BNP Paribas signed an agreement with the
French Ministry of the Armed Forces in France reaffirming its commitment
to employees who are in the operational reserve. In addition to the legal
provisions, BNP Paribas maintains full pay for reservists for up to 10
working days per calendar yea r, s o that they can fully commit to their
civic duty.
CONSTANT PROGRESS, PIONEERING INITIATIVES FOR GREATER DIVERSITY
Promoting the employment and insertion of people with disabilities
➤
NUMBER OF EMPLOYEES RECOGNISED AS HAVING A DISABILITY(1)
Employees with disabilities
Of which hires
2022
2023
2022
2023
France
2,882(2)
3,106(3)
73
74
7
Domestic markets (excluding France)
828
907
24
40
Europe (excluding domestic markets)
976
978
59
69
Rest of the world
265
119
34
52
TOTAL
4,951(4)
5,110
190
235
(1) Workforce(physical headcounts) out of 93% of the Group's workforce (permanent + fixed-term contracts).
(2) The definitive results for 2022 known in June 2023 for France amount to 2,882 compared to 2,876 declared in February 2023.
(3) As the annual declaration is postponed to March 2024, the data communicated for France in 2023 are not definitive.
(4)
4,571 Full-T ime Equivalents worldwide.
(1) Of the social reporting campaign.
(2) In 2023, the employment rate in entities that report that they specifically monitor the number of employees with disabilities in their workforce is approximately 3%.
(3) The 2023 rate will only be available in 2024.
At 31 December 2023, there were 5,110 employees with disabilities in
28 countries, representing a Group employment rate of employees with
disabilities of 2.7% compared to the total workforce(2), up compared to
the previous year (2.5% in 2022).
In France, as part of the renewal of the Disability Agreement for three
years (2023-2025), BNP Paribas SA has recruited 57 disabled candidates.
More than 2,000 job retention and nearly 200 awareness-raising actions
were also carried out in 2023. The direct employment rate of employees
with disabilities rose to 5.3% in 2022(3), from 5.4% in 2021.
In accordance with the International Labour Organisation's Business and
Disability Charte r, B NP Paribas carries out numerous actions, notably
in Germany with the My Ability programme that offers coaching and
training to facilitate access to employment. Several other business lines
also stand out for their systems promoting better inclusion of people with
disabilities in the workplace, such as BNP Paribas Cardif and BNP Paribas
Canada.
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In addition, to better reconcile long-term illness and work, BNP Paribas
Fortis is launching a dedicated coaching programme, and BNP Paribas
Personal Finance is a signatory of the Cancer@work Charte r.
Designed by a Group employee affected by a hidden disability and
with the support in 2022 of People'sLab4Good(1), the immersive game
"Disability Strikes Back" is part of the disability awareness programme,
which primarily raises awareness of hidden disabilities(2). It was rolled out
across the Group throughout 2023 to help people with disabilities to cope,
and to raise awareness among people who do not consider themselves
as concerned. In 2023, this innovative approach impacted nearly 3,500
employees based in 11 countries.
Finally, in France, the first edition of the public-speaking contest
dedicated to the theme of disability received 139 applications across
the business lines.
Diversity of social and ethnocultural origins:
strong and targeted actions
With 168 nationalities present within the Group, including 15(3) within
the G100, BNP Paribas has been working for several years to promote
diversity of origins and gender equity.
In March 2023, the Group continued its partnership with the International
Day for the Elimination of Racial Discrimination. This yea r, e mployees
were able to take part in an unprecedented conference in the presence
of Makaziwe Mandela, daughter of Nelson Mandela and Chairperson of
the "House of Mandela".
In France, following the Diversity and Inclusion Index experiment in 2022,
BNP Paribas SA commissioned a consulting firm to conduct a qualitative
survey in the form of 60 individual, confidential and anonymous interviews
on the subject of actual or perceived ethnocultural origin. This survey
was also carried out by BNP Paribas Personal Finance.
In addition, around 15 internal professional networks (including HOLA,
Latamigos and CulturALL) have developed and actively contributed to
raising awareness and promoting diversity of origins in several countries
(Brazil, United States of America, Canada, France, Belgium, United
Kingdom, Portugal and the Nordics).
7
LGBT+: international engagement and reach,
pioneering initiatives
During the 5th edition of the "LGBT+ role models and allies at work"
initiative organised by L'A utre Cercle in France in 2023, with its English
counterpart OU T s tanding, the Group once again distinguished itself this
year with two employees being nominated for awards in the categories
of "LGBT+ Leaders Role Models" and "A lly Leaders Role Models".
On the International Day Against Homophobia, Transphobia and
Biphobia(4), the Group reiterated its commitments to the inclusion of
LGBT+ people, with a focus on gender identity and transidentity. At its
conference jointly organised with Pride France on the theme of "Sexual
orientation and gender identity: why is it a corporate issue", Nickel was
able to highlight its "True name" feature, allowing the account holder to
choose their first name, surname and title.
More broadly, many initiatives were held to mark this day. During
Inclusion Days in India, support for LGBT+ people was illustrated this year
by organising a pride walk bringing together more than 1,200 employees,
as well as an awareness-raising session and group workshops producing
posters in LGBT+ colours.
Age diversity, to promote generational inclusion
Intergenerational issues are also the subject of conferences and
workshops every yea r, n otably during the Inclusion Days.
In France, the Group is stepping up its actions in favour of generational
inclusion, and in 2022 signed a Commitment Act. It has since been joined
by nearly 50 signatory organisations. This act is broken down into 10
key commitments around recruitment, training, job retention, support
for career development, well-being at work, retirement and raising
awareness of age-related stereotypes. An action plan based on these
10 commitments was drawn up in 2023, and will be rolled out in 2024.
Within the Group, mainly in Europe, innovative inclusive programmes and
initiatives are being developed. In Italy, at BNL, the Senior Experts Network
project enables an effective transfer of knowledge between generations,
while promoting the skills and knowledge of the most experienced
employees. In Portugal, the Build to Shift development programme is
dedicated to employees with more than 15 years of experience, to create
a common platform of knowledge shaping the banking sector and the
associated working environment.
Within BNP Paribas SA in France, the Diversity and Inclusion
agreement allows 150 employees to benefit from the end-of-career
corporate volunteering scheme, while broadening the circle of partner
associations (see Corporate volunteering and other solidarity activities,
Commitment 5).
RESPECT FOR HUMAN RIGHTS AND CODE
OF CONDUCT
Promoting and respecting human rights
In its Code of conduct, the Group has, in particula r, c ommitted itself to
promoting the respect for human rights in its sphere of influence and
to treat all employees in a dignified manne r. Forced labour is prohibited
within the Group.
BNP Paribas carries out an annual review of countries that are classed
as very high-risk in terms of human rights(5) (see chapter 7.7 Vigilance
plan). The Group did not identify any employees under the age of 18 at
31/12/2023.
(1) Group intrapreneurship programme.
(2) 80% of disabilities are hidden disabilities.
(3) Including French.
(4) IDAHOT: International Day Against HOmophobia, Biphobia, and T r ansphobia.
(5) Source: Verisk Maplecroft (Human Rights Risk Index) identifies 22 very high-risk countries and 90 high-risk countries.
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"Respect for People" policy: preventing
discrimination, harassment and violence at work
and dealing with inappropriate behaviour
In order to strengthen the culture of compliance, a target relating to
compliance with the Code of conduct, rules and regulations was assigned
to all Group employees in early 2023. Any breach of these principles,
including respect for people, must be formalised by the manager as part
of the employee's annual performance review.
In addition, the Group's "Respect for People" policy was strengthened
and fully rolled out worldwide in 2023:
■ the entities have implemented the rules defined at Group level locally
in terms of respect for people. The principles defined for the entire
Group are directly applicable and may therefore be more protective
than local regulations;
■ approximately 150 employees were appointed as HR Conduct "Respect
for People" Contacts. As they are responsible for handling alerts
relating to behaviour which breaches the policy, they were trained in
their new roles, which involve a high level of expertise and impartiality;
■ workshops were held to raise awareness among managers and HR
teams on the importance of respect for people, the detection of
worrying signs in teams, and reporting and formalising alerts;
■ in order to facilitate the collection and handling of alerts, a common
tool for all Group entities has been selected, which will be rolled out
to all employees in 2024.
Thus, at Group level, 347 "respect for people" alerts were recorded in
2022, and 587 in 2023. As soon as the analysis of the alert and the
investigations carried out, if necessary, established inappropriate
behaviour or situations requiring action, appropriate measures were
taken, mainly individual, including disciplinary measures and/or support
measures. In the event of disciplinary measures, the entire range of
sanctions in force in the relevant setting is used. The vast majority of
alerts resulted in measures, including 74 sanctions in 2022 (including 23
dismissals) and 101 in 2023 (including 22 dismissals).
COMMITMENT 5: "A GOOD PLACE TO WORK" AND RESPONSIBLE EMPLOYMENT
MANAGEMENT
Commitment 5 is included in the "Employee Experience" pillar of the
People Strategy, the objective of which is to strengthen the attention paid
to employees by offering them an experience adapted to their expectations,
in particular through new ways of working in an agile environment. The
Group CSR dashboard indicator on this commitment is the number
of solidarity hours performed
by employees (#1MillionHours2Help)
(see section 7.1 Strategy).
STRONG FOCUS ON EMPLOYEES
A solid framework for people safety and strong
mobilisation in crisis situations
All Group employees as well as anyone else who is present at a Group
site (subcontractors, clients, customers, visitors, etc.) benefit from a
reference corpus on the safety of people and property, which was subject
to an external audit in 2021. It establishes the fundamental principles
of security (with regard to risks related to intentional or malicious acts
likely to harm people or the Group's assets and activities), safety (with
regard to natural and climatic events, or related to the technological
environments of our sites likely to harm people or the Group's assets and
activities), business continuity and crisis management. This framework,
approved by the Group's Executive Management, is rolled out country
by country by local management.
The functions within the Group in charge of safety and security organise
the basic measures intended to protect the integrity of BNP Paribas'
activities, resources and interests against safety and security measures
affecting the Group, through a constant risk analysis approach. Health
and safety conditions at each site comply with the regulations applicable
in the various countries. Given the nature of the Group's activities, the
risks related to the Group's health and safety are relatively low (see
Work-related accidents, Our employees around the world). Howeve r,
each entity may implement specific provisions locally in line with local
HR policies.
Employees receive assistance with their business travels. In France,
they receive 24/7 telephone support with an external service provider
following traumatic events (attacks, climate events).
In 2023, the Group and the HR function continued to take action to help
employees in all crisis situations.
HR teams pursued strong support for Ukraine in 2023, notably through
the continued provision of housing and the payment of housing allowance,
as well as the allocation of substantial catering subsidies. HR also
continued to support Ukrsibbank employees with their internal mobilities
(61 international transfers were completed). Employees continue to
receive psychological support from a company specialising in psycho-
social risks.
Following the earthquake in Türkiye in February 2023, the TEB Crisis
Committee was called upon to prioritise help for those affected. 587
employees and members of their families were evacuated and relocated,
and a psychological support platform was immediately set up with
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239 consultations led by psychologists experienced in managing post-
traumatic stress. Survival equipment was delivered to the affected regions.
The Group provided widespread psychological support to its employees
via a dedicated crisis line in regions and countries experiencing crisis
situations, in particular in Türkiye, in Morocco following the powerful
earthquake that struck in September 2023, and following events in the
Middle East. It has also either provided donations directly or collected
around the world via the Rescue & Recover Fund, for the benefit of
NGO partners or associations in support of local people affected (see
chapter 7.4 Our civic responsibility: being a positive agent for change).
Continuation and reinforcement of the We Care
In 2022, the BNP Paribas Group launched a global programme – We
Care – dealing with health and well-being at work. This programme is
supported by a regular global governance under the sponsorship of the
Group Human Resources Directo r, a nd a community of 30 ambassadors
in the Group's regions and entities.
The We Care programme offers workplace health and well-being based
around three pillars:
1. basic social benefits and insurance for all employees in the Group,
including life insurance, incapacity insurance, disability insurance and
health insurance, minimum maternity and paternity leaves;
2. health priorities defined at Group level and directly in line with the
banking activity: combatting psycho-social risks and combatting the
risks associated with a sedentary lifestyle;
3. a package of support with social, emotional, physical and financial
well-being.
Employee benefits relating to social protection
as a common base
In addition to the legal and contractual arrangements, according to the
regulations and practices of the countries in which the Group operates,
employees may benefit from supplementary social protection and/or
health insurance.
In accordance with the Global agreement, at the end of 2023, all of the
Group's employees receive social protection in terms of health expenses
coverage, incapacity/disability and life insurance, as well as social
protection in terms of maternity leave, paternity leave and flexible days.
Depending on the situation, this coverage comes either from a government
plan, an insurance plan, or a combination of both. Particularly attentive
to the protection of employee health, in accordance with its regulatory
environment, each business/country determines what coverage is
provided, the specific applicability conditions and the terms of financing.
In France, the Group offers comprehensive supplementary social
protection coverage through mandatory employee health insurance
schemes, incapacity/disability protection insurance, and life insurance,
enabling employees to adapt their level of protection to their personal
situation.
Furthermore, flexible employee benefits enable employees to select, to
a certain extent, their level of coverage from a range of benefits offered
aiming at long-term employability and offering sustainable choices. These
benefits are available in particular at BNL in Italy, at BNP Paribas Fortis
in Belgium and at BNP Paribas in the United Kingdom.
The Group ensures that employees have access to information relating
to employee benefits, offers and other schemes provided to them by the
Group's various entities.
A solid occupational health framework, focusing on
mental health and combatting sedentary lifestyle
programme
In line with the We Care programme, 84% of Group employees(1) are
covered by an Employee Assistance Programme enabling them to better
manage their mental health on a daily basis and in the case of traumatic
events (attacks, climate events, etc.). In France, the Occupational Health
and Prevention Service supports the HR line and managers by opening
an external psychological assistance hotline in the case of serious events
within a team (death of an employee, assault, robbery, etc.).
The European agreement on preventing stress in the workplace, signed
in January 2017, outlines the principles and common framework and also
stipulates the means to be implemented (information, awareness-raising,
evaluation, training, support, communication).
Worldwide, almost all employees benefit from training initiatives related
to the prevention of stress at work, some specifically dedicated to
managers, others accessible to all employees.
In France and Luxembourg, regular training is offered to employees and
managers to help them with their mental health and with improving
their stress management. The employee engagement rate is measured
each year in Pulse surveys. This rate is analysed by entity and country
and is the subject of action plans.
In France, BNP Paribas measures the level of stress and well-being of
its employees, through a regular survey. The rates measured in 2023,
which are an improvement on the previous two years, show the positive
impact of the action plans put in place (training, transparent sharing of
organisational changes, professional development opportunities, etc.).
In line with the health priority related to the risk of a sedentary lifestyle:
■ ergonomic advice and measures to improve the working environment,
prevent occupational risks or musculoskeletal disorders are offered to
almost all employees(2);
■ entities covering 93% of the workforce(2) also offer health awareness
campaigns, which include information and prevention actions on
various topics such as nutrition, sleep, addictions, women's health
and physical activities.
Finally, BNP Paribas signed up to the "Working with cancer" commitment
in early 2023, with the aim of being more open when talking about cance r,
and providing empathetic and caring support for employees and teams
affected by the disease.
(1) Based on reporting covering 91% of the Group's workforce.
(2) Of the social reporting campaign.
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Our social responsibility: supporting our employees by offering them an environment and pathways adapted to their expectations
An offer focused on social, emotional, physical
and financial well-being
Well-being is the final pillar of the We Care programme, and has been
defined around four main areas: social, emotional, physical and financial
well-being.
There are a number of initiatives throughout the Group, and the inventories
launched in 2022 are now being analysed. Action in the Asia-Pacific region
intended for Singapore employees under the Energise banner aims to
improve health and well-being around four pillars: physical well-being,
social well-being, mental well-being and financial well-being.
Some programmes even include certifications as is the case in Germany
with the Beruf & Family audit accreditation or in the UK with the
Well-being certification.
With regard to the provisions planned at Group level, in particular for
carers, the Global agreement provides for the possibility for employees
to take up to five flexible days per year for personal convenience. Nearly
two-thirds of the workforce(1) are covered by a specific policy for carers.
In addition there are other highly innovative initiatives, such as the
Tilia mobile app (developed in intrapreneurship), offered by certain
Group entities which provides personal support, features and a useful
information space for carers and those receiving care.
In France, in the BNP Paribas SA entity, the Group has implemented
a set of measures to support employees who are carers, in particular
an agreement on the donation of days of leave to employees helping a
seriously ill child or spouse, awareness-raising actions (communication,
regular group events, practical guides, group discussions with a
psychologist), as well as training and partnerships with experts and
discussion groups.
The We Care programme is reflected in HR processes with the
implementation of a Health and Well-being component in performance
reviews, and guides offered to managers and HR to support them and
propose language elements to address these topics with their teams.
Regular communications are made to all Group employees on topics
as varied as disconnecting from work before the summe r, P ink Octobe r,
walking challenges and solidarity runs.
In France, all employees are monitored by an Occupational Health and
Prevention Service (OHPS) and benefit from a social assistance service.
This service has implemented numerous occupational health prevention
actions: Covid and flu vaccination campaigns, diabetes and cardiovascular
risk screening workshops, consultations for sleep-related conditions,
smoking cessation consultations, diet consultations, workshops on
first aid in the event of a life-threatening emergency and breast cancer
screening workshops.
To protect the mental health of Group employees in France, a
psychological assistance system gives employees access to permanent
listening and psychological support in the event of professional or
personal difficulties. In addition, an occupational psychologist has been
recruited to support employees individually and in groups, and HR staff,
particularly in the event of transformation of entities. All these measures
have been supported by communication materials, particularly on hybrid
work, on the use of digital tools and on mental health in companies.
TRANSFORMING WORKING PRACTICES AND
MAINTAINING THE STRONG CORPORATE
CU L T URE
Smart Working and team project
BNP Paribas aims to continue to develop its working methods based on
a model of trust, autonomy and collaboration. This is evidenced by the
Group France Agreement on remote working signed in July 2021, and
supplemented by an amendment in May 2023 covering more than 90% of
the Group's workforce in France, as well as the European Remote Working
Charte r, w hich covers all countries within the scope of the European
Works Council (22 countries). Developed on the basis of the experience
acquired during the health crisis, the analysis of market practices and
above all, feedback from employees and managers, Smart Working
integrates four dimensions:
■ working methods: the Group continued its discussions on new ways
of working(2) in order to better respond to the challenges of employee
attractiveness, retention and engagement, while maintaining a sense
of community and a sense of belonging to the company. The locations,
eligibility, equipment and compensation conditions have been
extended. The working hours and remote working arrangements have
been opened up to ensure the development of remote working, taking
into account the diversity of activities and employee expectations. At
the end of December 2023, 72% of employees in France were working
remotely (on average two days a week) and around 75% of employees
in Europe (on average two days a week);
■ workspaces: the hybrid organisation of the teams, the emphasis on
collaborative work and its real estate strategy have led the Group to
change the configuration of its office spaces to give more meaning to
work on site;
■ digital tools: the constant development and adaptation of collaborative
tools, applications or IT equipment allowing flexible and hybrid
collaborative work;
■ People care: the Group continues to support its employees towards a
hybrid way of working by adapting managerial practices ("Managing in
a hybrid environment" module available in French, and in English from
the start of 2024) and developing preventive actions around employee
health and well-being (maintaining social link, combatting physical
inactivity and digital fatigue with a disconnection alert message after
10.5 hours of remote connection within Europe, work-life balance).
Agile transformation at scale, progress report
In order to respond more effectively to the challenges of our environment,
since 2020, the Group has chosen Agile at scale as a priority driver to
meet three major challenges: "Faster" - delivering value to the clients
and customers as soon as possible; "Better" - meeting the needs of the
clients, customers and users through quality products and services and
innovative experiences; "Happier" - enabling employees to develop and
perform in a respectful and positive work environment.
(1) Of the social reporting campaign.
(2) Balance between remote working and on-site presence, with a maximum of 50% remote working per employee for activities that allow it.
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The Group is continuing to deploy the agile culture by communicating
the 5 BNP Paribas agile values(1), and training which aims to foster
understanding this new working approach. In 2023, CPBS (Commercial,
Personal Banking & Services) entities continued their journey of agile
transformation at scale with nearly 108 Tribes(2) rolled out as well
as 43 new Tribes in other functions (Risk, Compliance, HRM) and IPS
(Investment & Protection Services) entities such as Wealth Management
and Asset Management.
The "A gile Essentials" training module continues to be rolled out to all
Group employees, providing widespread training on agile culture. Nearly
11,000 employees have completed or are in the process of completing
the training module since it was created in 2021. In 2023, three new
training courses were created to enable employees to strengthen their
skills in key roles within the organisation, including Product Owne r, S crum
Master and Agile Coach.
New agile job titles have been created (UX Designer and Product
Manager) to complete the positioning offer and bring consistency to the
administrative description of employees within Group systems.
The employee journey inspired by the customer
experience
In order to promote the Group's attractiveness, employee engagement
and the retention of T a lents, the Group has launched an initiative to
improve the employee experience, mirroring the approach deployed to
clients and customers over a number of years. HR teams have worked
to produce a global reference framework for employee career paths, by
listening to more than 300 employees around the world. This reference
framework brings together 27 employee pathways structured around six
macro-needs (including: onboarding, working environment and career
management). The Group aims to improve the pathways that have the
greatest impact on the experience and satisfaction of its employees.
Corporate volunteering and other solidarity
activities
The #1MillionHours2Help programme embodies the Group's ambition
to do more for civil society (NGOs, associations) by promoting the skills
of employees. Through this initiative, BNP Paribas aims to foster more
sustainable, shared growth by allowing all employees to use working
time to help charitable organisations build a more inclusive, eco-
friendly world. In 2023, a total of 651,972 hours either during working
hours or outside of working hours with compensatory leave(3) were
carried out for solidarity actions in favour of civil society as part of the
#1MillionHours2Help programme, i.e. a total of more than 1.26 million
hours(4) over two rolling years, far exceeding the target of one million
hours set by the Group.
Now integrated into the BNP Paribas SA Diversity and Inclusion Agreement
in France, the corporate volunteering system was renewed for four years
from 1 October 2020. The French subsidiaries BNP Paribas Personal
Finance, BNP Paribas Leasing Solutions, BNP Paribas Cardif, BNP Paribas
Asset Management, BNP Paribas Arbitrage (now BNP Paribas Financial
Markets) and Arval have implemented similar systems since 2017. In
2023, 315 employees(5) (of whom 133 started during the year) were able
to participate in work with general interest or public utility non-profit
associations lasting 6 to 24 months.
HIGH-QUALITY SOCIAL DIALOGUE
In 2023, 1,758 official meetings (2,167 in 2022) took place, including 1,105
in France, illustrating the richness of social dialogue. These meetings
led to the signature, in 2023, of 306 corporate collective agreements
within the Group (287 in 2022), of which 111 in France, 188 in the rest
of Europe and 7 in the rest of the world, reflecting the high quality of
collective bargaining.
Global agreement
The BNP Paribas Global agreement, signed in 2018 with UNI Global
Union(6), was extended until 30 June 2024, with the aim of broadening
the provisions of this global framework, particularly in terms of
health and quality of life at work (see 7.7 Vigilance plan). An overall
assessment of its implementation was presented on 10 October 2023 to
the monitoring committee, composed of UNI Global Union representatives
and Management representatives.
This assessment highlighted the strengthening of the global social
framework: 100% of the workforce(7) can claim paid maternity leave for
a minimum period of 14 weeks, incapacity/disability and life insurance,
and healthcare coverage. Following the recommendations of the Global
agreement, 53 countries covering 80% of the workforce(7) offer paid
paternity leave of at least six days.
European Works Council and European social
dialogue
At the end of 2023, the European Works Council(8) (EWC) covered
22 countries and around 72% of the total workforce.
In 2023, the implementation of the GTS 2025 plan and the People
Strategy were presented to the European Works Council. The Group's
Diversity, Equality and Inclusion policy was also included on the agenda
of the European Works Council meetings. The European Works Council
contributes significantly to the implementation of the European Social
Charte r, i ncluding the European agreements on employment management
(2012), gender equality (2014) and on stress prevention (2017),
supplemented in 2021 by the Remote Working Charte r.
(1) 5 fundamental BNP Paribas agile values: customer focus, openness, responsiveness, discipline and courage.
(2) A tribe is a grouping of autonomous multidisciplinary teams that work on one or more products and services, to maximise the value delivered to its customers.
(3) Number of hours declared in HR tools as part of the #1MillionHours2Help programme including the long-term corporate volunteering in application of the Diversity and Inclusion
Agreement in France (permanent and fixed-term employees).
(4) Indicator monitored in the Group's CSR dashboard.
(5) On a like-for-like basis (long-term volunteering in the middle and end of their career) in 2022, 313 employees were able to get involved in these missions.
(6) Defining the fundamental rights and the global social foundation which applies to all Group employees.
(7) Of the social reporting campaign.
(8) European Works Council comprising the employee representatives from entities based in all countries within the European Economic Area, excluding entities that are not majority-owned.
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The Remote Working Charter defines a common framework for the
deployment and strengthening of remote working in the 22 countries
covered by the BNP Paribas EWC for activities where this form of work
organisation is possible. This framework may be supplemented, where
appropriate, by agreements specific to Group companies in order to meet
specific requirements.
Social dialogue in France
In 2023, 111 collective agreements were signed (including amendments)
within the BNP Paribas Group in France, including two Group-level
agreements relating to remote working and Group-level negotiation
procedures. 109 collective agreements were signed at Group company
level, including 48 agreements related to compensation, employee
savings and retirement savings. It should be noted that the Group's
entities in France all renewed their SECs in 2023, excluding BNP Paribas
Leasing Solutions and GAM, which had held their professional elections
in 2022, given the expected duration of their term of office. In this
respect, 33 agreements relating to professional elections were signed at
Group company level. Finally, most of the mandatory annual negotiation
meetings within the Group's entities in France, specifically covering
compensation for 2024, began earlier than the schedules of previous
years and ended at the end of November 2023.
Corporate social responsibility taken to the highest
level in the organisation
BNP Paribas SA's Central Social and Economic Committee (CSEC) and
the SECs of the Group's French subsidiaries are regularly informed of
the Group's CSR commitments.
In 2023, the Group's Head of Company Engagement confirmed to
BNP Paribas SA's CSEC, in line with the presentation made in 2022 on the
GTS 2025 plan, that we would accelerate our commitments to respond
to the climate crisis.
Employment management
BNP Paribas practises responsible employment management by
anticipating changes necessary to maintain its economic performance, its
capacity for development and therefore employment over time. It relies
on dynamic internal mobility, a source of skills enhancement, supported
by significant investments in training.
Employment is managed under collective agreements concluded at
different levels: Global, European and French. In France, in 2022, the new
Agreement signed on the management of employment and career paths
was renewed, and strengthened the commitments made by the Group
until 2026. In this context, the Group in France does not carry out any
forced redundancies, favouring internal mobility and voluntary solutions
for its projects impacting employment. In the other countries around the
world, redundancies are exceptional, in line with the commitments of
the European Agreement on employment management of 2012 (renewed
by tacit agreement every three years) and with the "Employment
management" section of the Global agreement of 2018.
In France, the Group's workforce also remained stable with a change in
FTE of -0.8% (-0.4% excluding scope effect).
In Belgium, 2023 was marked by the implementation of the New
Commercial Organisation plan from 1 January 2023, with this plan
impacting the work content and/or positions in the organisation of nearly
4,500 employees. For the employees concerned, this approach enriches
their career paths as well as providing new learning opportunities
through training and change management. Following the merger with
Bpost bank in January 2024, nearly 250 employees will join BNP Paribas
Fortis. Their integration was prepared in detail, in consultation with
employee representative bodies. This merger is one of the key elements
of the GTS 2025 plan in Belgium.
In Poland, an agreement was signed with the trade unions concerning
a social plan providing for the loss of a maximum of 800 jobs over the
2021-2023 period, aimed at supporting the company's industrial plan.
This agreement integrates support measures including the reinforcement
of internal mobility, the increase in benefits, the introduction of social
protection guarantees and a voluntary departure plan. Within this
framework, there were 86 departures in 2021, 262 in 2022 and 91 in 2023.
In Italy, BNL has set up two IT and back-office partnerships. These
partnerships involve staff movements involving 820 positions, the terms
of which are currently being set out.
In France, the BNP Paribas Personal Finance subsidiary has set up a plan
to strengthen internal mobility and voluntary departures to support its
transformation plan, which is necessary to restore its competitiveness
regarding to the economic, regulatory and competitive backdrop. In this
context, it plans to lose 950 roles, i.e. approximately 17% of the workforce
by the end of 2024. Negotiations with the BNP Paribas Personal Finance
trade unions led to the signing of a unanimous agreement in June 2023.
They provide for support measures dedicated to voluntary departures
from the company (maximum 691) and internal mobility in conjunction
with the teams responsible for recruitment and internal mobility for
France.
In addition, as part of its transformation plan, BNP Paribas Personal
Finance initiated the disposal/run -off, depending on the entities, of four
branches and one subsidiary in Eastern Europe, in compliance with the
European Agreement on employment management. Measures dedicated
to supporting employees have been rolled out, including mobility
assistance within the Group in the country and region in question,
outplacement for certain types of positions, departure conditions that
are better than those provided for by the legislation of each country
concerned, measures to support change and stress management, and
health insurance extension periods where applicable.
A COMPETITIVE COMPENSATION POLICY
BNP Paribas' compensation policy is founded upon principles of fairness,
notably with regard to gende r, a nd transparency, which are notably
supported by a single annual compensation review process for all
employees. The principles on the composition of compensation and its
evolution are common throughout the Group and consistent with the
objectives of risk management.
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A compensation policy that complies with regulations
The Group's compensation policy, which applies to all entities, aims
to ensure consistency between the behaviours of employees whose
professional activities have a significant impact on the Group's risk profile,
and its long-term objectives in terms of risk management in accordance
with CRD regulatory provision(1). Since 2009, the implementation of
this policy has helped to improve governance, identify employees that
are Material Risk T a kers (MRT), and to apply provisions on the award
and terms of payment applicable to their variable compensation. The
compensation policy and principles of employees identified as MR T s a re
published annually in a report posted on the BNP Paribas website(2).
The compensation policy complies with laws, regulations (in particular
European prudential regulations) and the requirements of regulators
(ECB, FED, etc.), both at local and consolidated level, including in terms
of minimum wages where they exist locally.
A socially responsible, fair and competitive
compensation policy
In the majority of the countries in which it operates, BNP Paribas applies
a salary grid upon hiring as part of its recruitment process, as well as
a market compensation review during the annual review process. The
Group ensures that proposed salary levels are salaries appropriate with
regard to the local standard of living and are consistent with local market
practices (particularly with regard to local benchmarks).
This salary level is supplemented by a set of social benefits to which
all Group employees have access according to the Global agreement.
Faced with the economic context, the Group endeavours to integrate
specific local factors into the framework of the budgets allocated in
terms of compensation, taking into account local government measures
for each country/entity. The annual compensation review process has
incorporated these elements, with particular attention paid to the first
salary levels that may be most impacted by the current economic context.
In France, following discussions within the framework of BNP Paribas SA's
mandatory annual negotiations, a certain number of decisions were taken,
in particular in terms of collective increases and exceptional bonuses.
Since 2019, BNP Paribas SA and its various entities in France have
published their Gender Equality Index. The scores earned by the banking
and insurance entities(3), which represent more than 48,000 employees,
are above the statutory minimum, demonstrating the Group's long-term
commitment to gender equality. All Group entities in the United Kingdom
also publish their gender pay gap report(4). BNP Paribas is continuing to
increase its attention to equal treatment for all, particularly when it comes
to gender equality. Since 2016, the consistent allocation of compensation
between women and men has been monitored by indicators included in
the annual compensation review process, for all the Group's business
lines and functions, under the supervision of Executive Management.
For a number of years, measures are taken locally to reduce any pay gap
between men and women. As part of 2022 mandatory annual negotiations
of BNP Paribas SA in France, a budget of EUR 10 million to be divided
equally in 2023 and 2024 was dedicated to the company's actions to
promote gender equality in career paths and the promotion of women
and to correct any discrepancies in annual compensation. Each yea r, t he
Group's other entities also have the option of requesting dedicated budgets
as part of the budget discussions on the annual compensation review
process. It should be noted that in 2023, more than 5% of women were
promoted (change in classification) compared to less than 5% for men.
In addition, in 2023, the Group awarded more than 8,200 key employees(5)
a loyalty plan (expiring in June 2026) called the Group Sustainability and
Incentive Scheme (GSIS) the payment of which is subject to 20% of the
initial award on achieving the objectives of the CSR criteria(6), the rest is
indexed to the Group's operating performance(7).
Social benefits relating to retirement and savings
The BNP Paribas Group has set up employee pension plans, the
characteristics of which are defined according to local legislation as well
as the HR practices and policies defined locally. These plans, set up and
financed by the Group, supplement the mandatory and legal plans which
the entities contribute to for employees. They can be of two different types
(defined-benefit plans or defined-contribution plans), as presented in
chapter 4 Financial statements – Salaries and employee benefits.
Over the past few years, the BNP Paribas Group has implemented a wide
campaign of converting defined-benefit plans into defined-contribution
plans.
In France, employees benefit from defined-contribution retirement savings
schemes under the conditions set out in chapter 4 Financial statements
– Salaries and employee benefits. Several other countries have set up
defined-contribution pension plans (Belgium, Switzerland, Italy, etc.). In
the United Kingdom and the United States, defined-benefit pension plans,
closed to new entrants, co-exist with defined-contribution plans.
(1) European Directive CRD 5 of 20 May 2019, amending European Directive CRD 4 of 26 June 2013, as transposed into French law in the French Monetary and Financial Code, as well
as Delegated Regulation 2021/923 on the criteria for identifying Material Risk T a kers (MR T s) and the European Banking Authority guidelines on prudent compensation policies of
2 July 2021.
(2) https://invest.bnpparibas/en/search/reports/documents/regulated-information Publication date: before the Shareholders' Annual General Meeting.
(3) Gender equality index of the Group in France: https://group.bnpparibas/uploads/file/index_egalite_hf_022023.pdf. Scope: Entities with more than 1,000 employees.
(4) UK Gender Pay Gap Reports: https://www.bnpparibas.co.uk/en/bnp-paribas-in-the-uk/legal-notice/gender-pay-gap-reports/.
(5) Key employees: SM P, T a lents or key local resources.
(6) For the 2020 plan, payable in 2023, the achievement of six out of the nine CSR criteria defined when the plan was allocated, triggered the payment of the amount initially allocated
for CSR performance to the plan beneficiaries, in accordance with the plan's regulations.
(7) For employees subject to special regulatory frameworks, this loyalty scheme is adjusted in accordance with the CRD European Directive.
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In France, employees are involved in the Group's performance through
profit-sharing and incentive schemes.
In respect of the 2023 financial yea r, E UR 212.6 million will be distributed
to the 63,668 beneficiaries of entities that are members of the Group
profit-sharing agreement in France (compared with EUR 201 million to
63,264 beneficiaries in 2022). This amount, calculated on the basis of a
special formula, is nearly 10 times higher than the legal formula.
With regard to incentive schemes, almost all Group employees in France
(nearly 99%) were covered by an incentive agreement at the end of 2023.
The incentive agreement between BNP Paribas SA and BNP Paribas
Financial Markets (formerly BNP Paribas Arbitrage) links employees with
the financial objectives defined as part of the GTS 2025 plan.
The amount distributed is based on three components:
■
gross operating income based equally on that of the Group and that of
CPBF;
■
dividends and share buybacks for the purpose of redistributing earnings;
■
a component based on two CSR criteria(1).
It should be noted that the dividend component integrated from 2013
makes it possible to link employees to results in the same way as
shareholders. Since its introduction more than ten years ago, a cumulative
amount of EUR 440 million has been paid in respect of the dividend
component in the calculation of incentive schemes, which is equivalent
to nearly three years of incentives.
Under this agreement, an amount of EUR 164 million will be divided
between 46,606 beneficiaries for 2023 (exactly the same amount as was
distributed to 46,314 beneficiaries in 2022).
Elsewhere in the world, similar schemes exist. At BNP Paribas Fortis in
Belgium, part of the so-called "collective" variable compensation is linked
to the achievement of CSR objectives. The 2023 objectives were met,
thus a total of EUR 23.3 million was paid to all employees. Similarly, in
Luxembourg, in 2023, the Group's entities paid non-managerial employees
an incentive bonus with respect to 2022, which amounted to nearly
EUR 3.3 million.
In terms of collective savings, in France, the management offering to
employees in the Group's savings schemes (PEE, PERECO and PERO)
changed in early 2023. The expansion of the financial management
offering negotiated with the representative trade unions has made it
possible to introduce new investment vehicles incorporating ESG criteria,
including SRI-certified funds(2). This change also makes it possible to cover
the different investor profiles, investment horizons, more risk levels, and
to diversify the geographical areas of investment beyond the euro zone.
In addition, most of the Group's companies in France support employees'
voluntary savings efforts through savings plans (PEE and PERECO) with a
matching cumulative contribution of EUR 69 million paid in 2023.
(1) An environmental criterion for the annual reduction of greenhouse gas emissions per employee and a societal criterion linked to the number of solidarity hours completed by
employees.
(2) SRI: Socially responsible investment.
(3) The score of 88.75% obtained by BNP Paribas means that the Group applies at least 88.75% of best practices in the field of Human Resources.
(4) Belgium, France, Italy, Luxembourg, Poland, T ü rkiye, Spain, Portugal and Germany, which is certified T o p Employer for the first yea r. I t should be noted that Ukraine did not
participate this yea r.
(5) Latin America (Argentina, Brazil, Colombia, Mexico), BNP Paribas Personal Finance (United Kingdom, Italy, Belgium, Spain, Portugal and South Africa and the Netherlands for the
first year), Algeria as well as BNP Paribas Real Estate France.
COMMITMENT 6: A LEARNING COMPANY SUPPORTING DYNAMIC CAREER
PATH MANAGEMENT
Commitment 6 is included in the "Human Capital" pillar of the People
Strategy whose objective is to anticipate and constantly adapt
resources by continuing to recruit, promoting the mobility of talents and
strengthening the development of their skills. The Group CSR dashboard
indicator on Commitment 6 is the share of employees who completed at
least four training courses (see 7.1 Strategy).
ATTRACTING CANDIDATES AND RETAINING
EMPLOYEES
In 2023, BNP Paribas is still seen as a top employer
For more than 25 years, the Top Employers Institute has certified the
quality of candidate companies' Human Resources practices. To do this,
it carries out an audit covering 20 topics. For the tenth consecutive yea r,
BNP Paribas was awarded the "Top Employer Europe 2023" label by the
Top Employers Institute with an overall score of 88.75%(3) thanks to the
certification of nine of the Group's European countries(4). Other Group
countries and entities(5) also benefit from the "Top Employer" certification.
France, for its part, has renewed its Happy Trainees survey of students
who have had professional experience at BNP Paribas. 89% among them
recommend the Group.
Changing the perception of our jobs through the
#UnexpectedJobs campaign
The unprecedented and innovative #UnexpectedJobs campaign launched
by the Group in 2023 aims to break down the clichés about banking
jobs in order to strengthen our attractiveness as an employe r, a s well as
employee engagement and pride in belonging. Thousands of employees
from all BNP Paribas countries and activities have become ambassadors
by showcasing their profession in an exciting and creative way. They have
chosen job titles presented in an original way on LinkedIn, while explaining
how these unusual titles reflect, in their opinion, the way in which they
make a useful contribution to the Group's transformation, serving all of
its clients and customers.
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In terms of results, this campaign had a major positive impact, with:
■ more than 5,400 spontaneous posts viewed 14.7 million times;
■ a quarter of French people between the ages of 18 and 55 said they
had seen the campaign;
■ a strong increase in views of the Group's job offers (+54% compared
to 2022).
#UnexpectedJobs has since been nominated for the 2023 Digital HR
Awards, Innovation category.
The second wave was launched in September 2023 in 10 countries, and
many other local initiatives are being rolled out, such as the creation of an
"#UnexpectedJobs generator" launched at Vivatech, and an #UnexpectedDay
in Paris, at which 80 bankers were recruited in a single day.
Several initiatives to attract the best candidates
To reinforce its attractiveness to candidates and employees, BNP Paribas
is committed to a process of constantly improving its employer brand:
■ the Employer Promise, updated in 2022 and structured around
BNP Paribas' purpose as a leader in sustainable finance, promotes
three main pillars: Sustainability & Impact, Development & Career
Perspectives and a Good place to work. In 2023, it was rolled out in
many countries and Group entities to bring consistency and clarity to
the way in which BNP Paribas is positioned as an employer throughout
the world;
■ in conjunction with Universum, the Group renewed a study to measure
the perception and effectiveness of its Employer Promise among more
than 27,000 students from business schools in five major markets
(France, Italy, Germany, Spain, and for the first year India). Although
their priority expectations still relate to compensation, the benchmark
for a future job and training, in 2023 the study noted a significant
increase in expectations around work-life balance and job security.
The Universum study allows to adjust the employer brand strategy at
the level of the Group and the participating countries.
In France in 2023, the Group maintained its commitments to training
and integrating young people by recruiting more than 2,500 new work-
study students and more than 1,500 interns, along with nearly 300 on
International Volunteer Programme (VIE) missions. Moreove r, t wo-thirds
of the offers offered on permanent contracts are accessible to young
people entering the job market. In 2023, more than 19,000 employees
under the age of 30, including all contract types, were recruited by the
Group worldwide, of which 10,444 were under 25 (permanent, fixed-term
contracts, work-study students, interns).
In September 2023, B-School by BNP Paribas completed its third start of
the academic year scheme with 220 students preparing for their certifying
training programmes in Paris, Lyon, Marseille, Bordeaux and Lille. Its
range of certifications has been extended to those dedicated to business
development with a BTS and Master's in addition to the Bachelor's. The
school also welcomed its first class of students in Bac+5 Master's level
2 in IT Development, 52% of which were women.
In 2023, a new Graduate Programme marketing offer was created in
order to capitalise on existing programmes and offer business school
students a consistent global offer across the Group. This integrated offer
is structured around three main themes in line with the Group's strategic
priorities: (i) Investment and financing jobs, (ii) Tech & Transformation,
and (iii) Jobs.
It proposes nine common principles specific to the Group's Graduate
Programmes(1). This offer clarifying the programmes, will help external
candidates to better understand the specific nature of a Graduate
Programme and what is involved.
Sustainable finance at the heart of the employee
journey
In line with the GTS 2025 plan, BNP Paribas is continuing its change
management plan, with the aim of embedding and disseminating the
sustainable finance culture throughout its employees' career journeys. This
plan is based on the key moments of this journey, including recruitment,
onboarding, performance assessments, mobility and training.
Particular attention is paid at the time of recruitment, via awareness-
raising actions on the sustainable finance culture offered to employees
responsible for recruitment.
The Group has also enhanced its skills catalogue with the sustainable
finance theme, and a new professional Sustainability family was created
to support the Group in its transformation.
In addition, employees have the opportunity to train and acquire new
skills through the Sustainability Academy. At the end of 2023, more than
4,500 employees had declared a skill related to sustainable finance.
Finally, BNP Paribas has also updated the Management Principles
common to the entire Group, by reaffirming the pivotal role of the
manager as a relay for its sustainability strategy. During the 2023 annual
performance review process, managers were encouraged to promote any
employees' sustainability initiative.
A company that listens to its employees (Voice of
Employees)
In 2023, 71 relationship "Pulse" surveys were carried out in 57 of the
Group's countries, with increasingly high participation rates of 71% on
average. Nearly 176,000 Group employees were surveyed during this
period. The Engagement/Management/Well-being and Cooperation/
Operational Efficiency themes are those which occur most often now,
and the sustainable finance theme is starting to appear more often.
The vast majority of surveys launched in 2023 by the Group's various
business lines and entities(2) incorporated three common questions
related to employee engagement, in particular pride in belonging to the
Group, adherence to the strategy and involvement in work. The overall
engagement score, based on a consolidation of all local engagement
scores, reached a high level of 85 out of 100.
(1) (i) type of contract, (ii) length, (iii) years of experience, (iv) number of promotions per yea r, (v) desired turnove r, (vi) networking opportunities, (vii) training opportunities, (viii)
recruitment process and (ix) career management.
(2) Covering 86% of all Group employees at 31/12/2023.
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DEVELOPING SKILLS AND IMPROVING
EMPLO Y A BILITY
Skills management
The work that BNP Paribas does on defining, identifying and developing
skills is an essential foundation for all of our actions, to develop each
person's potential and commitment.
In 2023, 13 new business skills were created jointly with the entities,
particularly in the Data, Risk, Finance and Budget and Insurance families.
In addition, since this yea r, e mployees, managers and HR have access
to a new tool to identify the skills acquired and those that need to be
developed. This tool now enables Group HR to measure soft skills and
two families of business skills: sustainable finance and data. Thus,
all employees can take ownership of their skills development and
employability. Finally, they have the option of declaring their skills in
the About Me Group tool, which allows HR teams to gain an in-depth
knowledge of each employee's skills in real time. This mapping process
has enabled us to fulfil our goal of creating a real employee journey
by focusing on development, mobility and strengthening commitment.
Anticipating the skills needs of the future
The skills anticipation exercise, also called Strategic Workforce Planning
(SWP) is a joint approach between Human Resources and the business
lines. Its aim is to identify, in advance, the skills needs required for
the different business lines over the next three years in order to offer
employees appropriate career paths (upskilling or reskilling), particularly
towards the jobs with a shortage of workers and the skills of tomorrow.
More than 30 business lines and functions have been involved in this
process. The work consists of interviewing members of the Executive
Committees within the Group to understand their vision of the change or
transformation of their scope/business. Translating this vision into skills
makes it possible to create the jobs of the future or develop current jobs.
It then remains to compare the skills required over the next three
years with those declared by employees in the same scope, in order
to understand the skills gap. The results of the exercise thus give each
business line and HR manager a clear view of the so-called sought-
after jobs. Members of the Executive Committee have the necessary data
to implement an action plan in order to reduce these gaps (mobility,
employee development and retention of rare profiles).
In order to take account of the impact of artificial intelligence (AI) on our
activities, an exercise was carried out in 2022 on the Data and AI jobs,
and a second exercise is planned for 2024.
The report, entitled "The Evident AI T a lent"(1) places BNP Paribas Group as
the number 1 bank in Europe and 6th worldwide in terms of AI. Currently,
700 employees have a job fully dedicated to AI, and 5,744 employees
have declared AI skills.
Skills anticipation exercises have also made it possible to create a new
offer: "Internal Work-study contracts" for employees. This system allows
employees to be promoted to a sought-after role by taking up their duties
immediately, combined with work-study training in their new job. The
first promotions were implemented in 2023 for IT and Human Resources
positions.
On-the-job development: the importance of
discussions between employees and managers
At the heart of career management and at the service of employees,
managers and HR, the About Me platform aims to:
■ identify the skills of all employees: in December 2023, approximately
134,000 employees at Group level (of which approximately 53% were
women) declared their skills;
■ help employees implement their development plan and pursue their
professional development;
■ streamline interactions between employees, managers and HR, thus
promoting cross-functional mobility;
■ carry out the annual performance review process.
The performance review process, which is systematic for all employees,
is digitised and simplified in About Me: it starts at the beginning of the
year with the definition of individual, collective and/or cross-functional
objectives. These objectives must be clea r, a chievable, defined over
time, measurable and relevant to the nature of the activity and the
responsibility of the position. Feedback is provided over the course of
the year to identify skills development needs and to enhance the Personal
Development Plan.
The annual performance review is an important time for discussion
between the employee and their manager: it enables them to assess the
past yea r, t o define development opportunities and to look ahead to the
coming yea r. 9 6.6% of the Group's eligible employees receive a performance
assessment in the About Me tool for 2023.
Mobility: one of the major issues for the strategic plan,
essential for employability and skills development
Mobility is embedded in the culture of BNP Paribas. It is an essential
vector for developing on-the-job skills.
In total, the Group counted 22,241 mobilities in 2023 (down 11%
compared to 2022) including 21% cross-functional mobilities(2) (stable
compared to 2022). In France, 8,274 mobilities were made (down 21%
compared to 2022), of which 25% were cross-functional mobilities (stable
compared to 2022). Internal mobility is managed through an internal job
market management tool covering almost all employees in the Group.
Thus, in 2023, more than 25,000 ads were published in the Group tool,
and more than 10,500 positions were filled through these advertisements.
In order to better meet the needs of the business lines/functions and
the Group's transformation challenges, pooled centres of expertise
in France, Portugal and India manage all of the Group's internal and
external recruitments for all types of contracts. Thanks to their proximity
to the business lines and their global and cross-functional vision of the
internal job market, these teams strive to optimise the candidate mobility
experience.
(1) The Evident AI T a lent Report June 2023, (evidentinsights.com).
(2) Internal Group inter-entity and inter-business mobilities.
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Career Days: a key event dedicated to professional
development
After nine editions of the Mobility Days, and with a view to creating a 360°
career event, in 2023, the Group launched the first edition of the Career
Days for one month in 45 countries. This event, rolled out at Group level,
provided an opportunity for each employee to gain a better understanding
of the Group, its strategic challenges and opportunities for development.
It also allowed them to take stock of their skills, training and development
needs, to work on their career projects, and for those who wish to go
ahead, to start the mobility process with their manage r. T he hybrid or
digital formats brought together more than 26,200 participants at more
than 400 events around agile, data, tech, sustainable finance, diversity and
inclusion. The enthusiasm of countries to offer international events (20
in 2023) as well as the centralised coordination system (20 conferences)
led to a very high level of participant satisfaction.
Training offer
➤
TRAINING COURSES ATTENDED: AVERAGE RATE AND NUMBER OF HOURS(1)
2022
2023
Share of employees who completed at least one training course (including mandatory training courses)
98.4%
98.8%
Share of employees who completed at least four training courses (including mandatory training courses)
97.4%
98.2%(2)
Average number of hours per employee
21.8h
24.2h
Average number of hours per employee (excluding mandatory training courses)
18.6h
19.8h
(1) Only those training courses mentioned as "terminated" in 2023 are counted in the Group's My Development tool.
(2) Of which 51% are women, and nearly 24% are employees over the age of 50, demonstrating fair access to training regardless of gender or age.
Indicator monitored in the Group's CSR dashboard.
➤
TRAINING: OVERVIEW BY CONTENT(1)
2022
2023
Hard skills
52%
48%(2)
Risks & compliance
28%
35%(3)
Culture & awareness of the Group
14%
13%
Soft skills (including cross-functional and behavioural skills)
6%
4%
(1) Percentage of training actions by content out of all training courses attended in the Group (including mandatory training courses). An employee may attend
several training sessions.
(2) Of which 20% on technology.
(3) Of which 80% mandatory training courses.
7
Forging a culture of continuous development
The training strategy is based on two major pillars to support the GTS
plan and the People Strategy: strengthening the learning culture and
improving the training experience, in order to allow everyone to quickly
and easily access the right resource at the right time.
Many entities have organised their own Learning festival to promote
available offers (Corporate & Institutional Banking, BNP Paribas Personal
Finance, Compliance, BNP Paribas Leasing Solutions and Arval) and some
were linked to the Group major Learning moment, "Learn & Grow", during
the Career Days. This first edition of a Group-level career event was
organised based on a system that enabled entities and regions to deploy
their own local promotion organisation. The common thread was the
GTS plan, and more than 3,000 unique participants from 54 countries
connected to one or more of the 19 sessions and conferences offered.
A development model by the academies to support
the GTS 2025 plan
The GTS 2025 plan has positioned T e chnology and Sustainability as
pillars of the strategy.
Regarding T e chnology, the Group offers numerous training courses:
■ the Digital, Data & Agile Academy (DDAA) continues to offer training
courses to support skills development associated with the key roles
of Digital, Data and Agile. 2023 was the opportunity to review the offer
to incorporate the results and guidelines of the skills anticipation
exercises, in particular on Data. Two new roles were created with the
associated pathways, including those of Machine Learning Engineers
and AI/ML Model Reviewe r. T he methods are also evolving, with the
introduction of cohorts of learners or internal work-study programmes
in order to best help employees work towards new target positions.
The internal work-study programme associated with the Reskilling
Business Analyst training programme facilitated the mobility of
15 employees in 2023, 80% of whom were women.
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The DDAA includes 42 upskilling courses, 17 reskilling courses and 38
reskilling boost courses. In 2023, there were 1,454 registrations for
the DDAA programme, corresponding to 1,368 registered employees,
of which 42% were women (the share of women among learners was
26% at the launch in 2018);
■ the IT Academy is a portal launched by the Group IT function in early
2023, which centralises all training content on technologies open to
all Group employees. It had nearly 41,000 visits in 2023;
■ Data City is a collaborative platform launched in February 2023 around
Data. It aims to meet the needs of the business lines by improving
collaboration and simplifying access to content and tools. Since its
launch, there were 13,700 unique users;
■ the transformation hub Bivwak! also offers thematic packages and
workshops in the fields of Data and new technologies;
■ the sixth "A rtificial Intelligence Summer School" permitted to bring
together the Data Scientists, ML engineers, Analytics and IT Group
communities for two full days of presentations, demonstrations and
discussions on the latest progresses in Artificial Intelligence. The event
was attended by more than 2,000 employees around the world;
■ in Agile, three career paths to take new positions were created in 2023
(see Agile transformation at scale, progress report, Commitment 5).
To measure its technology skills development, the Group monitors these
two indicators: the number of Group employees having completed at
least 7 hours of training in the technological field reaches 9,948 in 2023
(16,546 in 2022), and the number of Group employees having completed
at least 35 hours of training in the technological field reaches 1,385 in
2023 (1,088 in 2022).
Regarding Sustainability, the Sustainability Academy, launched at the end
of 2022, materialises the Group's ambition to equip all its employees with
the knowledge and skills necessary to achieve its objectives in terms of
sustainable development and finance. Whatever their job, function or type
of business activity, each employee can take ownership of the challenges
of Sustainable Development and Finance and understand the Group's role
and commitments on the five themes(1) of the "Sustainability" Pillar of
the GTS 2025 plan, using the "Common Base" area. A "Specific Content"
area provides access to the knowledge and techniques required for each
scope of the Group's activity, to support the transition of its clients and
customers. In 2023, more than 86,000 employees completed at least one
Sustainability Academy training course, with an average of 1.7 hour of
training per person.
The Group also supports the deployment of "fresks"(2), which are
collaborative workshops facilitating the transition to action. The fresks
have raised awareness on climate and biodiversity issues among
employees in more than 20 countries, the Executive Committees of
entities and countries as well as shareholders. In 2023, more than 15,770
employees took part in these workshops.
Dedicated programmes strengthening the Group's
culture at the highest level of the organisation
As Group leaders (Top Executives (LfC), Senior Managers, T a lents) are key
to contributing to the success of the GTS 2025 plan, a global training
offer is provided, particularly on sustainability topics.
The Leadership Corner is the space dedicated to this community built as
an academy of rich and varied resources to strengthen the leadership
culture, which includes:
■ a webinar series Preparing for T o morrow, observing, from a leadership
perspective, future trends in positive innovation technology and
business development with positive impact;
■ certification programmes: digital programmes co-built with Harvard in
the field of Smart Working/hybrid management and new technologies
and programmes with some major universities recognised around the
world, in the field of transformation management;
■ programmes to accelerate understanding of BNP Paribas' challenges
and ambitions in terms of sustainable finance, adapted to each level
of leadership.
To meet the ambitions of the GTS 2025 plan on the Sustainability
component, the certifying training course on Positive Impact Business
co-created by BNP Paribas and the University of Cambridge has again
met with great success this year with the pioneers of positive impact.
Over the past five years, it has provided hybrid training and certification
to 500 pioneers in sustainable development, so that they can incorporate
it into their customer discussions and solutions.
In addition, the Shape The Future programme launched in 2022 has
continued to strengthen in 2023. The Mastering Sustainable Finance
certification programme was built, launched and completed with a first
cohort of 130 Top Executives. A second cohort of 150 Top Executives was
launched in September 2023. At the same time, discussion and action
workshops dedicated to the Executive Committees have been built and
implemented, in partnership with Insead, with the aim of integrating
positive impact into the business lines' revenue strategies.
News from the T a lents programme "Leaders for
Tomorrow"
At the end of 2015, the Group launched the "Leaders for Tomorrow"
initiative, aimed at identifying, developing and promoting high-potential
employees in order to ensure the succession of the members of the
Group's cross-functional Executive Committees for business, functions
and regions (LfC).
These "Leadership T a lents" are selected according to a rigorous Group
process by their managers and HR managers on the basis of their skills,
experience, sources of motivation and personal predisposition to become
leaders. At the end of 2023, the programme brought together nearly 7,000
Leadership T a lents belonging to the three levels (Emerging, Advanced
or Top) through different business lines, functions and geography. More
than 4,500 Leadership T a lents of some 40 nationalities from all business
lines/functions have benefited from dedicated support and development
systems. In addition to Group offers grouped by theme (My Positive
Impact, Me and Change, Me with my Team), initiatives are proposed
locally by the business line or function.
(1) Circular economy, T r ansition to carbon neutrality, Biodiversity conservation, Social inclusion and the Development of sustainable savings, finance and investment.
(2) Climate, Biodiversity, Circular Economy and Mobility Fresks, and 2 tonnes workshop.
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Our civic responsibility: being a positive agent for change
7.4 Our civic responsibility: being a positive
agent for change
COMMITMENT 7: PRODUCTS AND SERVICES THAT ARE WIDE L Y A CCESSIBLE
THE GROUP'S ACTION TO PROMOTE
THE INCLUSION AND FINANCIAL
HEA L T H OF ITS CLIENTS
The Group has set a target to serve by 2025 6 million beneficiaries of
products and services promoting financial inclusion (see section 7.1
CSR policy management dashboard), combining the number of Nickel
accounts opened since its creation and the number of beneficiaries of
microloans distributed by the microfinance institutions financed by the
Group (pro rata to the financing). The strong development of the Nickel
inclusive offer enabled the Group to exceed 3.9 million inclusive product
beneficiaries at the end of 2023.
Continued support for microfinance institutions:
EUR 345 million in 2023
For almost 35 years, BNP Paribas has been committed to inclusive finance
by directly financing 86 microfinance institutions (MFIs) in 35 countries,
for a cumulative amount of EUR 1.5 billion, through various initiatives
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including: direct financing to MFIs, investment in financial inclusion
funds and the distribution of savings products dedicated to microfinance.
BNP Paribas' support for microfinance has historically benefited nearly
three million people since 1989, of which 84% are women.
At the end of 2023, this support reached EUR 345 million (up by
EUR 13 million compared to last year), thereby directly financing 21 MFIs
in 13 countries and indirectly more than 100 MFIs around the world, by
investing in 14 dedicated funds benefiting nearly 260,000 people. New
credit commitments were made to these institutions in 2023, particularly
in countries where the Group has a significant presence, such as Morocco,
India, Indonesia and Brazil.
The Group is very attentive to the social performance of its MFIs portfolio,
which obtained a score of 78% when assessed by the SPI5 tool (Social
Performance Indicator 5) of Cerise (a NGO), placing it well above the
global average score of 61%.
30 years of partnership with Adie to promote
Entrepreneurship in France
2023 marks the 30th year of the partnership established between
BNP Paribas and Adie (Association pour le droit à l'initiative
économique – Association for the Right to Economic Initiative),
which was renewed for three years.
This partnership helped to finance Adie's micro-loan portfolio and
develop financial innovation with a strong social impact, including
the first Impact Bond and the first ISLF+ (Inclusive Sustainability
Linked Financing). The Group is proud to support ADIE whose
beneficiaries for 50% have income below the poverty line, for
22% have no qualifications, for 32% are under the age of 30 and
46% are women.
Since 1993, CPBF has granted its partner EUR 192 million in total
financing to support nearly 40,000 small businesses and refinance
more than 47,000 Adie micro-loans.
Nickel, a powerful tool for financial inclusion
Nickel is a Group subsidiary present in five European countries. It allows
everyone, including people who have been banned from banking, to
unconditionally open an account with an IBAN and a payment card,
and thus to pay and to be paid freely. In 2023, Nickel reached nearly
3.7 million customers, up by more than 700,000 in a yea r, o f which 77%
have an income of less than EUR 1,500 per month, 30% are unemployed,
without regular income or living on benefits and 30% do not have a
personal address. Nickel's first impact report – published in 2023 – shows
convincing results achieved in terms of financial inclusion: 28% of its
customers have opened their first current account. Of these newcomers
to banking, 24% went on to find a job and 18% a home.
Since it was created, Nickel has collaborated with charitable organisations
such as the French Red Cross, Crésus and Action Against Hunge r. N ickel
distributes its products through a network of more than 10,000 newsagents
and points of sale in France, Belgium, Portugal, Spain and Germany.
BNP Paribas' commitment to society is divided into three objectives:
■ Commitment 7: Products and services that are widely accessible;
■ Commitment 8: Supporting human rights and combatting social exclusion;
■ Commitment 9: Corporate philanthropy policy focused on the arts, solidarity and the environment.
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Our civic responsibility: being a positive agent for change
Support for vulnerable customers
The Group considers that the role of a responsible bank is to support
its customers both financially and personally, even in the most
difficult times. By way of example, CPBF systematically identifies its
financially vulnerable customers and offers them a special banking
offe r, t he Account Package (Forfait de Compte), to help them manage
their expenses. These customers may also be supported by advisors
trained in budgeting solutions to help with account management. Nearly
20% of those customers have signed up to this offe r, a nd 40% of the
customers monitored have not exceeded their agreed banking limits,
as a consequence.
In early 2024, AXELLE, the CPBF's platform for vulnerable customers,
was updated. It is now easier for them to find the help, advice and
opportunities offered by partner associations, social enterprises and
companies members of the French Collectif des Entreprises pour une
Economie plus Inclusive (Business collective for a more inclusive
economy), to better manage their budget. AXELLE is 100% free and
anonymous.
Finally, financial education has proven to be effective in combatting
over-indebtedness, promoting economic development and improving
financial health. Hence, several Group entities are rolling out training
programmes on this topic:
■ BNP Paribas Personal Finance's "Responsible Budget" online platform
is dedicated to young people, helping them to learn about key concepts
of budget management, savings, loans and banking. In 2023, more
than 59,000 young people received financial education through this
platform, partnerships and webinars;
■ in Italy, the tenth edition of BNP Paribas Personal Finance's
Findomestic Camp was held in May 2023, closing the PerCorsi Young
financial education programme, delivered this year to more than
46,000 students.
TAKING CUSTOMERS' SPECIFIC NEEDS
INTO ACCOUNT
BNP Paribas' role is to welcome its customers by providing them with
structures, teams, products and services adapted to their specific
situation. Whether supporting women-led small businesses, being
accessible to people with disabilities or offering products adapted to a
pivotal moment in life (childcare, studies, retirement, illness, etc.), each
year the Group extends its customer support system in order to best
meet their specific needs.
Accelerating female entrepreneurship
The role of women in economic and social development is a major
issue, which is why BNP Paribas has been involved in supporting female
entrepreneurship and small women-led businesses for several years:
■ in France, the ConnectHers programme helps women entrepreneurs
to create and develop their projects, through the mobilization of
a network of 300 referents, access to an ecosystem of partners,
networking workshops and events (200 in 2023), acceleration and
support programmes (70 women entrepreneurs supported in 2023).
This programme was also rolled out by BGL BNP Paribas in Luxembourg
in 2023 with workshops that hosted more than 200 people;
■ in Ukraine, in 2023, Ukrsibbank launched the Smart Lady programme,
a commercial offer dedicated to female entrepreneurs by exempting
them from payment and cash handling fees. In addition, and for the
fifth consecutive yea r, a s eries of seminars offered mentoring sessions
to help women to set up and grow their businesses, even in war time.
A range of offers tailored to various audiences
In order to best support its customers in their life projects, the Group's
entities have developed offers adapted to each individual's specific needs.
Since 2019, BNL has developed a range of products dedicated to
supporting families and young people, at preferential rates and without
fees. They include: Adottami and Nuovi Nati to help new parents,
Futuriamo and Scuola Piu to help students to continue their studies
regardless of the cost, thanks to loans with a maximum term of 10
years, and Arte & Cultura che passione to allow more people to become
art students, with loans from EUR 500 to EUR 5,000 over two years.
In 2023, BNP Paribas Personal Finance in France offered a long-term lease
option to single-parent families, giving them easier access to cleaner
vehicles (Crit'A ir 0 or 1). While their temporary status prevents temporary
workers from accessing traditional bank loans, BNP Paribas Personal
Finance and the FASTT (Fonds d'A ction Sociale du T r avail T e mporaire
– Temporary Work Social Action Fund) have signed a partnership to
give them access to a range of loan products designed especially for
them, such as personal loans, loan repurchase solutions and adapted
insurance pricing.
In France, in conjunction with associations hosted by L'A scenseur, such
as Article 1, BNP Paribas renewed its student loan without a guarantor
scheme to facilitate access to higher education for scholarship holders.
Between March 2021 and December 2023, nearly 1,800 students had
benefited from this offe r, f or a total amount of EUR 19 million in loans.
In order to provide appropriate support for its senior customers, since
2021 BNL offers Futuro Pensione (Future Pension), for customers wishing
to buy back three-month periods they spent studying, in military/
civilian service or in professional training in order to bring forward their
retirement, due to a job loss or a desire for early retirement.
Improved accessibility for people with disabilities
BNP Paribas takes action to improve the accessibility of its products,
services, documents and branches open to the public in all of its entities
around the world. Thus, a regularly updated public accessibility register
of CPBF branches is distributed to the branch network in order to
accommodate people with disabilities under the best possible conditions.
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In Italy, BNL since 2019 has a team of hearing-impaired advisors to
support its hearing-impaired customers. Meanwhile, BNP Paribas Polska
has launched a sign language translation service in all its customer
centres, and has made its call-centers accessible to hearing-impaired
people. Since the launch of this service in 2020, more than 1,500 calls
assisted by an interpreter have been conducted.
In Belgium, 53% of BNP Paribas Fortis branches are accessible to people
with reduced mobility. People with partial or complete blindness can
receive all their account statements in Braille language free of charge
and use ATMs equiped with voice recognition system. Hearing-impaired
people have the possibility of being accompanied by sign language
interpreters for all their appointments.
TEB has also improved the accessibility of its services for visually
impaired or with reduced mobility customers, increasing the number of
ATMs adapted for the visually impaired to 205, and those adapted for
people with reduced mobility to 1,103 in 2023.
Support for victims of financial domestic abuse
Active for several years in the fight against gender-based violence,
BNP Paribas chose in 2023 to strengthen its approach regarding financial
domestic abuse, a term designating acts aimed at maintaining dependency
on household members or withholding their financial resources. The
Group is committed to strengthening its support for customers affected
by financial abuse, primarily by training its advisors to listen to and guide
victims. In addition, BNP Paribas Personal Finance took part in a coalition
along with associations (Solidarité Femmes, la Fondation des Femmes,
Samusocial, etc.) and public authorities to collaborate on the creation
of awareness-raising videos on this topic.
Support for sick patients
BNP Paribas Cardif promotes access to insurance in the event of
aggravated health risks, and is continually boosting its offer to make it
more inclusive. In France, adapted and specific pricing exists for people
with certain conditions such as gestational diabetes, psychological
disorders or Parkinson's disease. In 2023, this approach was extended
to chronic inflammatory bowel diseases (IBD). BNP Paribas Cardif takes
into account medical research and the improvement of treatment
strategies to offer insurance coverage and pricing better suited to the
situation of patients. In 2023, 99% of home loan insurance applications
were accepted, thanks to the cover offered in the "A tout Emprunteur"
(Borrower Insurance) policy marketed in BNP Paribas branches.
Finally, BNP Paribas Cardif France decided to supporting its most
vulnerable customers by creating a social action fund. It aims to offer
complementary financial assistance to customers who are in a vulnerable
situation due to a serious health problem or an accident. This help is
separate to policy cover and governed by a legal regulation that defines
the eligibility conditions.
COMMITMENT 8: SUPPORTING HUMAN RIGHTS AND COMBATTING
SOCIAL EXCLUSION
BNP PARIBAS IS COMMITTED
TO RESPECTING HUMAN RIGHTS
Commitment at the highest level
BNP Paribas adheres to internationally-recognised human rights
standards. This commitment is expressed at the highest level in the
BNP Paribas Declaration on Human Rights(1), signed by the Group's
Executive Management and promoting the respect of these rights within
BNP Paribas' sphere of influence. The Chairman of the Board of directors
and the Group Chief Executive Officer also co-sign the statement on modern
slavery and human trafficking that BNP Paribas publishes annually.
The Group supports the United Nations Guiding Principles on Business
and Human Rights, as well as the OECD's Guidelines for Multinational
Enterprises, in accordance with the "Protect, Respect and Remedy"
framework. It has chosen to follow the recommendations of the United
Nations Guiding Principles reporting framework.
BNP Paribas takes part in the annual meetings of several initiatives,
associations and working groups dedicated to human rights, including
Entreprises pour les Droits de l'Homme (EDH) and the Human Rights
Working Group of the French network of the Global Compact. In addition,
BNP Paribas Asset Management is a member of the PRI (Principles for
Responsible Investment) Advance initiative, bringing together investors
committed the advancement of human rights through their stewardship
policy. Finally, in 2023, BNP Paribas Asset Management joined the
Investors Against Slavery and Trafficking initiative, and is tackling modern
slavery through this initiative in the Asia-Pacific region.
Awareness-raising and training
The Group focuses on employee training and awareness-raising, which
are important components of its human rights risks management
process. A "Human Rights and Business" training module, established
in collaboration with EDH and available in eight languages, has been
assigned since 2016 to Group employees tackling human rights issues
as part of their professional missions.
Since 2016, more than 22,000 employees have completed this training.
Lastly, a Business & Human Rights newsletter is sent monthly to Group
employees working on human rights issues.
(1) Statement of BNP Paribas on Human Rights https://cdn-group.bnpparibas.com/uploads/file/uk_declaration_bnp_sur_droit_de_l_homme.pdf.
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Management of "salient(1)" risks as part of
the distribution of products and services
BNP Paribas has identified two "salient" risks in the distribution of its
products and services:
■ non-discrimination in access to financial services;
■ right to privacy (protection of clients' personal data).
Non-discrimination in access to financial services
The Group believes that sustainable economic development promotes
wider access to fundamental rights, which is why it strives to contribute to
the accessibility of financial services in the communities where it operates
(see Products and services that are widely accessible, Commitment 7).
The right to privacy
The protection of privacy remains an ethical priority for the Group, as
evidenced by its inclusion in the Code of conduct. In 2023, BNP Paribas
continued to reinforce and develop its global network of data protection
specialists, integrated into all Group's territories and businesses.
Worldwide, job assignments to apply the principles of data confidentiality
and increase personal data protection knowledge occupy more than 100
full-time equivalents (2nd line of defence).
Created in 2018 and reporting to the RISK Function, the Group Data
Protection Office (GDPO) support, advise and supervise data protection
activities, including the implementation of continuous development
programmes for Data Protection project managers and correspondents,
and to identify and deploy good practices.
During 2023, improved procedures and guidance were created. The
tools developed by the Group have also been updated to reflect these
improvements (see Management of risks related to personal data
protection in 2.4 Internal Control).
Key tools
Available to all employees, they cover:
■ data protection risk assessment to identify and address data processing
risks;
■ reporting personal data breaches. Each employee can report any
suspicious personal data breach for investigation(2);
■ the recording of personal data processing activities;
■ evaluating the impact of data sharing.
Thesee tools provide a single view on how the Group manages and
assesses personal data protection.
In 2023, a Personal Data Protection Awareness module was completed by
96% of employees, boosting understanding of the Group's commitment
to data privacy, and their own data protection responsibilities. This
e-learning module is taken by newcomers. All external teams with
assignments for BNP Paribas and third parties are required to complete
a training module which covers data privacy standards and obligations.
These trainings were completed by awareness campaigns during the yea r.
Management of "salient" risks of breaches
in human rights in the Group's financing
and investment activities
The activities of corporate clients may pose a risk to human rights,
particularly in the area of workers' rights, and have an impact on local
communities.
The Group endeavours to identify, assess (due diligence process), monitor
and encourage the improvement of the current and future performance
of its clients operating in sensitive sectors, through the application of
its investment and financing policies (see Systematic integration and
management of Environmental, social and governance risks (ESG),
Commitment 3). The implementation of the ESG Assessment, an internal
tool for assessing the maturity of the Group's clients on five major ESG
issues, including respect for human rights, continued in 2023. At the end
of the yea r, a ll of the Group's strategic clients had been covered by an ESG
Assessment, and the rollout to other major corporate clients is ongoing.
To ensure that the existing system meets the requirements of the French
Duty of Care, BNP Paribas set up a risk mapping of its clients taking into
account both their business sectors and the countries they operate in.
This tool covers human rights issues through the analysis of several
criteria, such as child labou r, f orced labou r, h uman trafficking and failure
to respect the rights of local communities. These issues are weighted
based on the sector and location. This mapping thus strengthens the
ability of the business lines and functions concerned to implement
the most appropriate in-depth vigilance measures (see section 7.7
Vigilance plan).
Workers' rights
The human rights criteria of financing and investment policies in sensitive
sectors deal with issues related to workers' rights in particula r. I n addition
to child labour and forced labou r, w orkers' health and safety as well as
freedom of association are assessed. These themes are also taken into
account in the analysis of projects covered by the Equator Principles (see
Systematic integration and management of Environmental, social and
governance risks (ESG), Commitment 3).
Rights of local communities
Identified as another "salient" issue, the rights of local communities are
at the heart of most controversies related to large industrial projects.
Therefore, for its project finance activities, BNP Paribas encourages its
clients to obtain the Free, Prior and Informed Consent (FPIC) of the
local communities impacted by their projects. In addition, in the event
that a project results in the relocation of neighbouring communities, a
Relocation Action Plan (RAP) must be drawn up by the client in order to
compensate the people affected.
(1) "Salient" is the term used by the drafters of the United Nations Guiding Principles Reporting Framework.
(2) In accordance with the General Data Protection Regulation (GDPR), customers can exercise their rights in order to control the use made of their personal data. See page Data
protection at the corporate site (https://group.bnpparibas/en/data-protection)
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Our civic responsibility: being a positive agent for change
As a signatory of the Equator Principles (EP) since 2008, BNP Paribas
ensures that negative environmental and social impacts are avoided,
and where applicable, remedied in its project financing activities.
The application of the 4th version of the EP (2020), results in a better
recognition of the United Nations Guiding Principles and an expanded
use of certain standards recognised by the Equator Principles, such as
the systematic use of FPIC in "designated countries", whereas previously
it was only optional.
Due diligences and dialogue
In the event of suspected or identified serious abuses of human rights
by a BNP Paribas customer or a company in its portfolio, the Group
conducts in-depth due diligences and discusses the matter with the
company concerned (see Systematic integration and management of
Environmental, social and governance risks, Commitment 3).
For example, in 2023, the construction of a road in Africa displaced local
communities from their homes. One of the conditions for the financing
was the elaboration and execution of a RA P, i ntegrated with a Stakeholder
Engagement Plant to ensure the involvement of the people affected in the
discussions concerning the resettlement. BNP Paribas, with other lenders
involved in the transaction, required an independent consultant to review
and monitor the RAP implementation, which include site visits. Regular
meetings are organized with the independent consultant and if needed
with the client to discuss the implementation of the plan.
COMBATTING SOCIAL EXCLUSION
As a committed and responsible organization, the fight against social
exclusion is a priority for BNP Paribas, with two main areas of intervention:
the integration of young people and support for local regions. The majority
of these actions are carried by the Group's Foundation and described
in Commitment 9 (Corporate philanthropy policy focused on the arts,
solidarity and the environment).
The Group's active participation in the Collectif d'entreprises pour une
économie plus inclusive (Group of Companies for a More Inclusive
Economy) and Business for Inclusive Growth (B4IG) coalition also
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contributes to this. In addition to these actions, BNP Paribas supports
employee's skills-based volunteering to non-profit organisations involved
in tackling social inclusion (see A Good place to work and responsible
employment management, Commitment 5).
In France, the Group contributes to several major programmes that have
a positive impact on the professional integration of young people excluded
from employment due to their social, geographical or ethnocultural
origins, and in this respect supports nearly 280 associations committed
to this cause. In addition, BNP Paribas joined the government "One young
person, one solution" (Un jeune, une solution) plan as soon as it was
launched.
In addition, through the solidarity funds offered in its collective savings
schemes (PEE, PERECO, PERO), BNP Paribas allows its employees to use
their company savings to support 30 Social and Solidarity Economy
organisations working in favor of vulnerable groups.
Projet Banlieues (Neighbourhoods Project)
supports those working on the ground in France,
and is being extended to Italy
The Projet Banlieues aims to support associations operating in the
priority city neighbourhoods (QPV), which work in multiple areas such
as education, social and professional integration and strengthening social
bonds among communities. Since 2006, EUR 32 million has been raised,
including EUR 9.1 million dedicated to 1,200 local associations benefiting
1.2 million people in the priority neighbourhoods, and the the rest to Adie,
Afev, Proxité and Entreprendre pour Apprendre.
In 2023, Projet Banlieues supported 443 local associations spread over a
large part of the territories covered by the CPBF branch network, including
153 new associations providing help to approximately 177,000 vulnerable
people. Determined to take very concrete action in favour of social
inclusion, in 2023, BNL launched an initiative mirroring Projet Banlieues
in Italy, known as Progetto IncluCity. In close collaboration with local
associations, it aims to create professional and cultural opportunities
for young people from disadvantaged neighbourhoods in Milan, Padua,
Prato, Rome and Naples.
COMMITMENT 9: CORPORATE PHILANTHROPY POLICY FOCUSED ON THE ARTS,
SOLIDARITY AND THE ENVIRONMENT
The BNP Paribas Foundation has been major and expert player in
corporate philanthropy since 1984. It structures and coordinates the
international development of the BNP Paribas Group's philanthropy
everywhere the latter is present, as well as its 11 foundations and
endowment funds around the world. Its focus is towards projects
promoting solidarity, culture, and the environment.
In 2023, the BNP Paribas Group's philanthropy allocated more
than EUR 90 million to public interest activities, of which more than
EUR 30 million coming from exceptional donations:
■ more than EUR 12 million allocated by TEB to support the victims of
the earthquake that struck Türkiye;
■ nearly EUR 3 million allocated by BMCI to help victims of the
earthquake that hit Morocco;
■ EUR 20 million stemming from the share buyback programme were
paid to more than 90 organisations working in three current priority
areas(1): the fight against extreme poverty and violence against women,
integrating disadvantaged people into society (looking after refugees'
welcome, equal opportunities, professional integration), the climate
and biodiversity.
The remaining EUR 60 million (figure estimated at 1 February 2024),
excluding exceptional support for extreme poverty, was divided into the
following three areas of action: solidarity, culture and the environment.
(1) List can be consulted on the Group's website: https://group.bnpparibas/en/news/more-than-30-million-euros-in-exceptional-donations-in-2023-to-address-urgent-needs
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Our civic responsibility: being a positive agent for change
SOLIDARITY
Responding to emergencies
Combatting extreme poverty
While the global economy is experiencing inflation that affects the most
vulnerable groups, the Group's commitment to combatting extreme
poverty amounts to nearly EUR 10 million worldwide over three years,
primarily thanks to its share buyback programme in 2023. In France,
EUR 3.5 million was dedicated to supporting people in food and housing
emergencies with the help provided to the Group's partner associations,
including Restos du Cœur, Habitat & Humanisme and Food Banks,
amongst others.
Responding to natural and humanitarian disasters
The Rescue & Recover Fund makes it possible to react quickly and
effectively worldwide in the event of a humanitarian or environmental
disaste r. T he Fund collects donations from employees, CPBF customers
and retirees who are members of the Amicale des retraités (Retired
Employees Circle). The Group generally doubles the amount, or even
triples it in exceptional cases, in order to finance the projects of four
partner NGO: Doctors Without Borders, CARE, the French Red Cross and
the International Fund for Animal Welfare (IFAW). In 11 years, more than
EUR 15 million (including EUR 5 million for Ukraine in 2023) has been
used to finance tangible actions on the ground benefiting more than
6 million people. Since it was created, the Rescue & Recover Fund has
been associated with 45 campaigns in more than 30 countries around
the world.
In 2023, the Rescue & Recover Fund took action to support two crises
caused by destructive earthquakes: in Türkiye and Syria in February, and
in Morocco in Septembe r. T he annual Rescue & Recover Fund campaign
also supported women, the first victims of poverty and violence, through a
number of international development projects with our partner NGO. These
projects received a total of nearly EUR 2.5 million from the Fund in 2023.
In 2023, the BNP Paribas Foundation and the Group received the Grand
Prix de la Philanthropie awarded by the Ficade Group, in the "Emergency"
category, thus recognising the importance of action within the Group and
the variety of initiatives launched during severe humanitarian crises.
Accelerating social inclusion
Refugee Programme: helping the integration
of refugees
In 2023, BNP Paribas continued its sponsorship programme to promote
the integration of refugees in Europe with the same objective: to enable
refugees, minors as well as adults, to learn the language of the host
country in order to better integrate, find professional training, resume
studies, gain autonomy and find a job. To contribute to this, in 2023, the
global philanthropy programme managed by the BNP Paribas Foundation
provided nearly EUR 1.8 million to the programmes of 30 associations in
12 European countries(1). In total, since 2015, EUR 17.3 million has been
allocated to the aid and integration of refugees in Europe(2).
Help2Help: Supporting employee engagement
Since 2003, the BNP Paribas Foundation has supported projects carried
out by the Group's employees in France that are members of solidarity
organizations on their personal time. In 2023, this Help2Help programme,
rolled out in around 20 countries, supported projects from over 185
associations.
Whitaker Peace & Development Initiative: A first in
France
Since 2018, BNP Paribas has supported the Whitaker Peace & Development
Initiative NGO in its actions in South Africa, enabling young women and
men from disadvantaged neighbourhoods to become ambassadors for
peace and entrepreneurs in their communities, and improving access to
information and communication technologies by giving them access to
vocational training and scholarships.
In 2023, the Group supported the launch of the NGO's activity in France.
A training centre was opened in Aubervilliers in a facility provided by
BNP Paribas.
Encouraging equal opportunities
through mentoring and other actions
Declared a major national cause in 2023, mentoring was already at the
heart of the Group's and the Foundation's youth support actions, through
various partnerships with pioneering associations which have specialised
in supporting young people for the past 15 years. In 2023, more than
1,000 Group employees were mentors, making BNP Paribas the leading
French company in terms of the number of mentors.
Supporting young people and vulnerable women
T a king stock of the issue of poverty amongst young people, the
BNP Paribas Foundation continued its actions in this area around three
main topics: access to education, poverty, and psychological trauma. It
has thus supported partners and associations that work on the ground
with the most vulnerable groups.
In 2023, the BNP Paribas Foundation reaffirmed its support for women, by
partnering associations whose solidarity and awareness-raising actions
help to combat gender-induced hardships, through access to healthcare,
housing and basic necessities.
CU L T URE
Contemporary creation is at the heart of the BNP Paribas Foundation's
cultural philanthropy programme. Engaged alongside many artists and
the institutions hosting and featuring their works, the Foundation in
particular supports contemporary dance, jazz and new circus arts. Its
actions foster cultural transmission and thus resonate with the social
programmes the Foundation also supports.
(1) Germany, Austria, Belgium, Spain, France, Greece, Italy, Luxembourg, Poland, Portugal, Switzerland, United Kingdom.
(2) And excluding emergency donations for Ukraine.
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Our environmental responsibility: accelerating the ecological and energy transition
Cultural transmission and access to it for all:
a new commitment focus
Passing down, sharing an artistic heritage and musical knowhow
are all levers that enable younger generations to succeed and move
towards excellence while being supported and guided. The BNP Paribas
Foundation has forged new partnerships in this area, for example with the
hip-hop section of the Turgot high school. This class offers academic and
artistic excellence unique in Europe, and is the only free training of this
type within a public institution. It aims to integrate students from lower-
income neighbourhoods, and break the spiral of academic failure through
dance. Furthermore, the sale of fine art furniture from the BNP Paribas
collection made it possible to support around 15 additional associations.
Contemporary creation is at the heart
of the BNP Paribas Foundation's cultural
philanthropy programme
Committed to many artists and institutions, the Foundation continues
its support for creativity by supporting new artists like the drumme r,
composer and producer Arnaud Dolmen, and the vocalist and musician
Leïla Martial. Both are symbolic choices, demonstrating the new direction
of the BNP Paribas Foundation's cultural philanthropy, which aims to
promote younger generations and female artists.
THE ENVIRONMENT
See Advancing awareness and sharing of best environmental practices,
Commitment 12.
7.5 Our environmental responsibility: accelerating
the ecological and energy transition
The Group deploys its environmental responsibility in three priority areas:
■ Commitment 10: Enabling its clients to transition to a low-carbon economy respectful of the environment;
■ Commitment 11: Reducing the environmental impacts of its operations;
■ Commitment 12: Advancing awareness and sharing of best environmental practices.
COMMITMENT 10: ENABLING ITS CLIENTS TO TRANSITION TO A LOW-CARBON
7
ECONOMY RESPECTFUL OF THE ENVIRONMENT
A STRONG AMBITION FOR THE TRANSITION
TO A LOW-CARBON ECONOMY
As set out in Commitment 1 (Financing and investments with a positive
impact), the Group supports its clients in the transition to a more
sustainable economy. It has an ambitious target for 2025: EUR 200 billion
to support its clients in the transition to a low-carbon economy (see
section 7.1 The CSR Policy Management Dashboard). The amount at the
end of 2023 was EUR 104 billion.
In terms of energy, BNP Paribas makes the following distinction:
■ renewable energy, including wind and marine energy, photovoltaic
solar energy, concentrated solar energy, hydroelectricity, geothermal
energy, bioenergy (including biofuels except for first generation(1));
■ low-carbon energy, including renewable and nuclear energy sources.
The scope of low-carbon energy could evolve according to technological
progress to gradually go beyond the production of energy and include
other steps in the value chain such as transport, storage or distribution
of low-carbon energy.
(1) In the presentation of our energy exposures, this distinction is not made to date, which is why the amount of our exposure to biofuels is isolated.
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Our environmental responsibility: accelerating the ecological and energy transition
In 2023, BNP Paribas accelerated its financing to low-carbon energy.
In January 2023, BNP Paribas set a 2030 target of EUR 40 billion of credit exposure to low-carbon energy, representing at least 80% of its credit
exposure to energy production. It was nearly 55% at 30 September 2022.
At 30 September 2023, BNP Paribas' credit exposure to low-carbon energy production already represented EUR 32 billion (including EUR 28.8 billion
for renewable energy sources), i.e. 65% of the Group's financing for energy production. Thus, in one yea r, B NP Paribas increased its credit exposure
to renewable energy by EUR 3.8 billion, and its share of low-carbon energy in total energy financing is up by more than 10 points.
The commitment to achieve EUR 40 billion in credit exposure and 80% low-carbon energy in the Group's energy production financing has been
brought forward to the end of 2028. The target for 2030 is now 90%.
➤
EXPOSURE TO LOW-CARBON ENERGY AND FOSSIL FUELS
Credit facilities + contingent liabilities + securities on balance sheet, in billions of euros, at 30 September 2022 and 30 September 2023
Upstream Gas
Reꢀning
Coal
Nuclear
Upstream Oil
Biofuel
Renewables
5
5
10
5.3
15
24.8
20
20
25
23.7
30
28.2
35
35
Low-carbon
Fossil fuels
10
15
25
30
Low-carbon
Fossil fuels
1.3
5.0
12.1
0.3
3.0
0
3.1
0
0.4
3.6
4.3
9.0
0.2
32.0
17.3
28.8
54%
2022
X%
46%
65%
35%
Share of total ꢀnancing
to energy production
2023
Please note that this is a stock of loans granted over the years, and which clients still repay over a number of years. The major action taken over
the past few years to accelerate new low-carbon loans and the fossil fuel divestment makes it possible to achieve the 2028 and 2030 objectives.
SUPPORTING CORPORATE CLIENTS
IN THEIR ENERGY AND ECOLOGICAL
TRANSITION
Climate change, circular economy and preserving biodiversity have
become systemic challenges for companies. The Group offers its clients
support throughout their energy and ecological transition strategy, which
may cover efforts to reduce their energy consumption, decarbonise it,
reduce their greenhouse gas emissions, develop more circular business
models and minimise their impact on biodiversity.
The Low-Carbon Transition Group
In 2021, BNP Paribas created the Low-Carbon Transition Group, a strong
platform made up of 200 bankers at end-2023 (with a target of 250 specalist
bankers by end-2025) dedicated to supporting international clients,
companies and institutional investors in accelerating their transition
to a sustainable and low-carbon economy. A continuum of banking and
non-banking solutions, is therefore provided for the decarbonisation of
the economy, and particularly the energy, mobility and industry sectors.
In addition to renewable energy and the battery secto r, t his platform is
particularly attentive to future technology projects, specifically green
hydrogen.
In addition, the Low-Carbon Transition for SMEs & MidCaps initiative
supports SMEs and mid-sized companies in the transition to Net-Zero
emissions(1) in the Group's five main Domestic Markets (France, Belgium,
Italy, Luxembourg and Poland).
Increased support for renewable energy
BNP Paribas is strongly committed to increasing its financing for
renewable energy. Among the concrete achievements in the renewable
energy sector in 2023 worldwide, BNP Paribas jointly arranged financing
for the renovation of three wind farms located in Hauts-de-France
covering a total of 35 MW, operated by Kallista Energie, an independent
renewable energy produce r. T he entire electricity production of these
three wind farms, i.e. around 100 GWh per yea r, w ill be purchased by
Groupement Les Mousquetaires, via its subsidiary Bonacieux Energies,
over a period of 20 years. This is the second Corporate Power Purchase
Agreement, following that of Lhyfe, one of the world leaders in green
hydrogen.
(1) SMEs: small and medium-sized enterprises.
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Our environmental responsibility: accelerating the ecological and energy transition
In Poland, BNP Paribas was a major player in the Baltic Power project led
by Orlen and Northland Powe r. T he loan of more than EUR 4.4 billion will
enable the construction of the first offshore wind farm in Polish waters.
This farm comprises 76 wind turbines that will provide renewable energy
to more than 1.5 million households from 2026. This was the largest
offshore wind project in Europe in 2023.
The Abu Dhabi company, Masda r, d eveloper and operator of public
utility renewable energy infrastructure, active in 40 countries and with
a portfolio with a total capacity of 20 GW, issued USD 750 million in green
bonds to finance the development of new renewable energy infrastructure
around the world. It plans to expand its capacity to 100 GW of renewable
energy by 2030. BNP Paribas acted as joint ESG structuring advisor on
Masdar's Green Finance Framework, and as joint lead manager on this
issue.
BNP Paribas was coordinating lead arranger and bookrunner for a
USD 2.5 billion financing to support renewable energy generation projects
from AES Corporation, an American company specialised in the energy
secto r. T his credit facility will finance more than 3 GW of new clean
energy construction (sola r, w ind and energy storage) in the United States
over a 12-month period.
ReNew Powe r, a m ajor Indian player in renewable electricity production,
obtained a loan of USD 1 billion to finance a portfolio of wind and solar
projects of 1.3 GW, backed up by batteries to provide an uninterrupted
energy supply. It is the most significant financing for a round-the-clock
renewable energy project in India. The energy produced will be sold to
the Solar Energy Corporation of India (SECI). BNP Paribas played the role
of lead arranger and hedge bank in this transaction. Hybrid projects of
this nature, combining wind, solar and energy storage, make it possible
to optimise land resources and grid infrastructure, while generating a
reliable electricity supply day and night. The purpose of such projects is
to play a key role in India's energy transition.
Development of more sustainable mobility
In 2023, the "BNP Paribas Mobility" brought together all of the Group's
mobility expertise to support its partners and serve its customers through
infrastructure financing, support for players in the automotive secto r, a nd
the development of adapted offers for new players with large vehicle
fleets, the creation of new mobility offers and services for companies
and individual customers. To this end, BNP Paribas Mobility launched the
integrated "Mobility4you" platform for individuals, which incorporates
the carbon footprint and promotes soft mobility.
BNP Paribas played the key role of joint sustainability structuring
coordinator during the successful placement of the first EUR 1.25 billion
green bond for Stellantis, whose funds will be mainly dedicated to the
design, development and manufacture of 100% electric vehicles and
electric vehicles fuel cells.
AESC (Automotive Energy Supply Corporation), the world's leading
Japanese company in the design and production of batteries, was financed
for an amount of more than EUR 800 million for the planned construction
of a gigafactory in France. During the first phase of this large-scale
project, it is expected that 9 GWh of batteries will power 200,000 electric
vehicles produced each year from 2025 by the manufacturer Renault.
Through its role as mandated lead arrange r, B NP Paribas is therefore
helping accelerate the development of the sector in Europe.
ChargePoint, a major player in electric vehicle charging networks, has
signed an international agreement with Arval to accelerate the transition
to electric mobility for international companies, SMEs and individuals.
This agreement will support fleet managers with a complete portfolio
of e-mobility services (smart charging stations, digitisation, payment,
assistance, etc.).
At the same time, Arval has set itself a target of 350,000 electric vehicles
in 2025 and more generally of 700,000 electrified vehicles in its rental
fleet, contributing to its target of reducing average CO2 emissions per
leased vehicle by 35% compared to 2020. In 2023, its fleet included
more than 166,000 electric vehicles, an increase of 85% in one yea r, a nd
438,000 electrified vehicles.
In addition, around the world, Arval had nearly 20,000 users of alternative
mobility solutions to private cars, such as car-sharing, mobility cards
and bicycle rentals.
Deployment of circular economy
In order to reduce the consumption of non-renewable raw materials and
waste production, BNP Paribas continues to support the development
of circular economy, which resulted in various achievements in 2023.
CPBF financed a foundry sand regeneration installation project for an
amount of EUR 3.3 million, an innovative project enabling La Fonte
Ardennaise, a major player in the foundry industry worldwide, to recycle
90% of black moulding sand, and thus save natural resources, stop the
landfill of sand waste and reduce CO2 emissions by 20,000 tonnes per
yea r.
Brambles, a company in the logistics sector and a pioneer in the field
of circular economy thanks to its model of sharing and reuse of goods,
issued a green bond of EUR 500 million in March 2023 for which
BNP Paribas was joint bookrunne r. T his is the first green bond issued
by an Australian company exclusively dedicated to financing circular
economy. It will reduce the use of natural resources, the production of
waste and supply chain carbon emissions.
On the investment side, BNP Paribas Asset Management offers investors
the BNP Paribas Easy ECPI Circular Economy Leaders fund, whose
assets amounted to more than EUR 900 million at the end of 2023,
demonstrating the strong appeal of this area for both individual and
professional investors.
Circular economy also plays a role in the transport sector: "A rval car
sharing" offers a digital solution for the reservation and pooled use
of service vehicles between employees within their company, thus
maximising the fleet usage rate, and optimising the number of vehicles
actually needed and therefore their cost, with a reduction of up to 20%
in the road fleet.
Responsible real estate for companies
BNP Paribas was the advisor to Covivio, a French real estate management
company, for the implementation of its Sustainable Bond Framework
which enabled the issuance of green bonds or bonds backed by
sustainable performance indicators. This framework enabled the
successful placement of EUR 500 million in green bonds.
60% of a building's carbon footprint is related to construction materials. By
forging a partnership with Materrup, a young French company that produces
low-carbon construction materials based on uncalcined clay, BNP Paribas
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Our environmental responsibility: accelerating the ecological and energy transition
Real Estate has an additional solution to achieve its carbon footprint
reduction targets. In this context, five pilot programmes were launched in
France representing 81,800 m2 of floor space, or 700 housing units.
Promoting high-quality voluntary carbon
credit markets
BNP Paribas actively supports its customers and corporate clients in
its investment portfolio in their carbon neutrality approach, by offering
them products and services for energy efficiency and the decarbonisation
of their activity, as well as carbon offsetting. To this end, the Group
published its position on voluntary carbon credits in 2023(1), in which
it defines the general principles according to which BNP Paribas uses,
supports, advises or sells voluntary carbon credits for its own use or
that of its customers.
The robust and rigorous development of voluntary carbon credits has a
role to play in the global transition to carbon neutrality, with a specific
attention to several sensitive aspects: emission reduction actions should
always be a priority over using carbon credits; the greenhouse gas
reductions linked to these voluntary carbon credits should be effective
and permanent; the projects generating carbon credits should also have
positive impacts on biodiversity and local populations.
SUPPORTING ITS INDIVIDUAL CUSTOMERS
IN REDUCING THEIR CARBON FOOTPRINT
AND PARTICIPATING IN THE ENERGY
TRANSITION
Support for energy-efficiency home renovation
The energy footprint of housing is a major issue in the ecological
transition. At the European level, in France, Belgium, Luxembourg, Italy
and Poland, BNP Paribas is accelerating by offering dedicated solutions
to its individual customers. These new "beyond banking" offers help
decarbonise the residential real estate loan portfolio.
Thus, CPBF offers its customers "Energibio" for the financing of energy
renovation. In Belgium, BNP Paribas Fortis offers energy loans and
renovation loans to finance insulation work, and launched "HappyNest",
which offers to rent a new energy-efficient building and then buy it a few
years late r. I n Italy, BNL launched "Mutuo Green", a new green mortgage
product with preferential interest rates for residential buildings of energy
classes A and B.
Domofinance, created in 2003 at the initiative of EDF and BNP Paribas
Personal Finance, is the only financial institution fully dedicated to
financing energy renovation and home improvement works. Between 2004
and 2023, Domofinance financed nearly 800,000 loan applications. Since
2013, it has also financed the renovation of shared housing. Domofinance
has outstanding loans of EUR 1.7 billion for energy renovation projects,
including personal loans, loan with a professional and shared property
loans.
The EIB Group (European Investment Bank and European Investment
Fund) signed its first securitisation transaction with BNP Paribas Personal
Finance. This enables the latter to free up equity for financing, over a
three-year period, of EUR 627 million for home energy renovation and
renewable energy projects for private individuals in France.
Support for the purchase of less polluting vehicles
and sustainable mobility
BNP Paribas Personal Finance and Arval signed a pan-European
partnership agreement with the automotive manufacturer ZEEKR, a
subsidiary of the Geely group, to deploy a full range of services. The
partnership will enable ZEEKR's end customers to access financing,
leasing and insurance services covering all aspects of mobility.
In Germany, Arval is stepping up its cooperation with MG Motor by
launching in 2023 a joint car subscription offer called "MG Auto Abo
Powered by Arval". This offer allows individuals to benefit from a more
flexible lease term with all the benefits of long-term lease with services
(reduction of the financial risks associated with owning a vehicle,
including services, insurance, etc.).
In France, to meet the expansion of bicycle use, BNP Paribas Personal
Finance launched a new long-term rental offer for electric bicycles. The
service is provided as a monthly subscription, with different cost levels
depending on the bike, the options chosen and the length of the contract.
Users can use a high-quality bike for a period of 24 or 36 months, which
is covered by insurance (breakage, theft, etc.) and serviced annually by
a professional.
CONTRIBUTING TO PROTECTING
BIODIVERSITY
"Natural capital and biodiversity" is one of the five priority areas of
the Sustainability pillar in BNP Paribas' GTS 2025 strategic plan. One
of the CSR Policy Management Dashboard indicators (see section 7.1
CSR Policy Management Dashboard) measures the amount of financing
to companies contributing to the protection of terrestrial and marine
biodiversity, with a target of EUR 4 billion by the end of 2025. The amount
at the end of 2023 already exceeds the target with EUR 4.3 billion.
This yea r, B NP Paribas took part in SLLs with objectives relating to the
protection of biodiversity, in particular with agrifood companies seeking to
increase the traceability of their supply chain and the share of agricultural
commodities not linked to deforestation (for example, through criteria
on the quantity of imported soybeans not linked to deforestation). The
Group has also participated in bond issues including the financing
of actions aimed at preserving the quality of natural environments
(maintaining 100% of primary forests, improving the quality of surface
and groundwate r, etc.).
Financing and investment policies to limit
impacts on biodiversity
Since 2012, BNP Paribas has set up financing and investment policies(2)
governing its activities in sectors considered sensitive from a biodiversity
point of view, including agriculture (including livestock and forestry), palm
oil, paper pulp, mining, oil and gas. In 2021, the Group strengthened its
(1) https://cdn-group.bnpparibas.com/uploads/file/bnpparibas_csr_voluntary_carbon_credits_position.pdf.
(2) https://group.bnpparibas/en/our-commitments/transitions/financing-and-investment-policies
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Our environmental responsibility: accelerating the ecological and energy transition
contribution to the fight against deforestation in the Amazon and Cerrado,
by adopting new criteria for the beef and soybean sectors. In addition, in
2022, BNP Paribas announced that it would not finance any greenfield
or brownfield oil and gas projects, nor any associated infrastructure, in
the Amazon region or in the Arctic region.
In addition to these policies, in order to assess and contribute to
reducing the impact of its customers on biodiversity, the Group includes
questions relating to biodiversity in the sectoral questionnaires of the
ESG Assessment (see Systematic integration and management of
Environmental, Social and Governance risks, Commitment 3).
Moreove r, B NP Paribas Asset Management is making progress in
implementing its biodiversity roadmap(1), in accordance with its new
Global Sustainability Strategy 2023-2025(2). In 2023, BNP Paribas Asset
Management re-analysed the impact of its investments on biodiversity(3),
helping to identify commitment targets for its stewardship and asset
management activities.
The analysis of the biodiversity footprint of investment portfolios
(shares and corporate bonds) of BNP Paribas Cardif was published for
the first time in 2022, renewed in 2023 and supplemented by a second
measurement, using a complementary methodology(4). The results show
that the average dependency of portfolios on all ecosystem services is
low.
Positive actions for biodiversity
In parallel with these measures to manage the potential impacts of
its activities on biodiversity, BNP Paribas incorporates the sustainable
management of nature into its commercial activities. BNP Paribas Asset
Management is thus expanding its sustainable investment offering, for
example with the acquisition of a majority stake in the International
Woodland Company (IWC), thus meeting the needs of investors who
are increasingly diversifying in this market segment. Based in Denmark,
IWC specialises in investment and advisory services for sustainable
forestry, agriculture and natural ecosystems, as well as carbon credits
and conservation projects.
BNP Paribas acted as joint lead manager and bookrunner in the
combined EUR 1 billion green bond and SLB issued by Stora Enso, a
Finnish company and one of the largest private forest owners in the
world. Thanks to this green bond, the company has committed to more
sustainable management of forests, energy, water and waste, as well as
to increased pollution control.
Support for the transition to
more sustainable agriculture
In addition to its sectoral policy of responsible financing of the agricultural
sector(5), the Group is committed to developing products and services to
promote the transition to more sustainable agriculture. Thus, the Group
benefits from a centre of expertise for the agrifood sector known as
BNP Paribas International Food & Agri, an entity of BNP Paribas Bank
Polska, which all Group entities can use. The centre has developed the
"A gronomist.pl" platform, a toolbox for producers and agrifood companies,
to support the agroecological transition with experts, including bankers
and analysts, specialised in cooperation with agricultural producers and
agrifood stakeholders. The aim is to develop and promote a harmonised
set of measures for sustainable agriculture.
ASSET MANAGEMENT FOR THE ENERGY
AND ECOLOGICAL TRANSITION
Funds to direct financial flows towards
the energy and ecological transition
For several years, BNP Paribas Asset Management has broadened its
range of investment solutions by focusing on corporate clients making
a positive contribution to the transition to a more sustainable economy.
Its sustainability-focused product offering is structured around two main
ranges covering the main listed and unlisted asset classes. Solutions
include certified funds (see Designing and promoting funds which include
sustainability criteria, Commitment 1) and thematic solutions.
These thematic solutions enable private and institutional investors to
access specific ecological transition themes (such as the energy transition,
biodiversity and the circular economy), by focusing their investments
on a universe of companies or projects whose products, services and/
or transactions make a positive contribution. For example, BNP Paribas
Energy Transition fund, launched in 2019 with assets of EUR 1.5 billion
at the end of 2023, invests in companies that are committed to the
energy transition, such as the production of renewable energy or energy
technology and infrastructure. A large part of these themes is found in
the range of BNP Paribas Asset Management Article 9 funds (within the
meaning of the SFDR directive) representing EUR 20.1 billion in assets
at the end of 2023.
Exercising of voting rights and shareholder
dialogue for the energy and ecological transition
BNP Paribas Asset Management strengthened its ESG voting guidelines(6),
with particular attention given to the climate and biodiversity. It now
opposes the major resolutions of large companies in the sectors that
emit the most greenhouse gases, which have not set themselves a carbon
neutrality target by 2050. In terms of biodiversity, companies, and in
particular those in sectors with a high potential impact on biodiversity,
must now assess and report on their main impacts and dependencies on
nature, particularly in terms of deforestation and water issues.
(1) https://docfinde r.bnpparibas-am.com/api/files/940B42EF-AFFF-4C89-8C32-D9BFBA72BF24.
(2) https://docfinde r.bnpparibas-am.com/api/files/2818EAAE-D3CF-4482-A3BA-A2EA898AFD0D.
(3) https://docfinde r.bnpparibas-am.com/api/files/3F133AE1-6792-438F-8786-2D3C39D04D35.
(4) For its legal entities Cardif Assurance Vie and Cardif Retraite:
https://www.bnpparibascardif.com/documents/348001/348117/Rapport29LEC_Cardif_Retraite_300623_EN_.pdf/3bd08dd6-80e5-851c-9bcf-4033032f7b7a?t=1699438282616 and
https://www.bnpparibascardif.com/documents/348001/348117/Rapport29LEC_Cardif_Ass_Vie_300623_EN_.pdf/46b6556b-b0ad-2e3d-5c9f-946e29b7de2b?t=1699438281806.
(5) https://cdn-group.bnpparibas.com/uploads/file/bnpparibas_csr_sector_policy_agriculture.pdf.
(6) https://www.bnpparibas-am.com/en/sustainability-bnpp-am/stewardship-future-maker-in-action/.
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Our environmental responsibility: accelerating the ecological and energy transition
FINANCING INNO V A T IVE START-UPS TO
ACCELERATE THE ECOLOGICAL TRANSITION
BNP Paribas has been supporting innovation in the areas of ecological
transition by committing a total of EUR 250 million of equity since
2016 to support start-ups. At the end of 2023, through its Ecological
Transition Capital investment line, BNP Paribas had already invested
EUR 87.2 million in 12 innovative companies, including CarbonWorks in
France (CO2 capture and recovery using microalgae) and Protix in the
Netherlands (insect factory for animal feed), and in eight funds, including
Shift4Good, Clay Capital and Seaya Andromeda.
Within this same investment line, the SFDR Article 9 fund BNP Paribas
Solar Impulse Venture, to which BNP Paribas committed EUR 75 million,
completed a closing of EUR 131.2 million at the end of 2023. In 2023, this
fund invested in Hello Watt, which helps individuals reduce their carbon
footprint through the energy renovation of their homes.
The Bank also supports start-ups by partnering with them on projects
with high added value. TEB, a subsidiary of the Group in Türkiye, has
joined forces with the German start-up Plan A to calculate CO2 emissions
for its clients in the Turkish textile and automotive sectors. In Poland,
BNP Paribas Bank Polska invested in the start-up Envirly to offer their
solution to the bank's MidCap customers in order to calculate their CO2
emissions. Finally, BNP Paribas advised ChargePoly, a specialist in ultra-
fast charging solutions for electric vehicles, on its raising of EUR 15 million
in equity. BNP Paribas Leasing Solutions signed a partnership in France
to develop its sales through adapted financing solutions.
COMMITMENT 11: REDUCING THE ENVIRONMENTAL IMPACTS OF ITS OPERATIONS
The Group has set itself a target to reduce greenhouse gas emissions
in its operational scope (scopes 1, 2 and business travel) to below
1.85 tonnes of CO2 equivalent per FTE by 2025, down 25% compared to
2018. To achieve this, BNP Paribas strives first and foremost to reduce
its greenhouse gas emissions by reducing energy consumption and using
low-carbon energy. In addition, actions are carried out on impacts beyond
greenhouse gas emissions including waste management and recycling,
water consumption, mobility, responsible pape r, etc. Finally, BNP Paribas
also offsets its residual emissions by purchasing voluntary carbon credits.
To deploy its commitment to reduce the environmental footprint related
to its own operations, the Group uses the Green Company For Employees
scheme, which puts employees at the heart of action.
GREEN COMPANY FOR EMPLOYEES (GC4E):
EMPLOYEE ENGAGEMENT WORLDWIDE
The Green Company for Employees programme accelerates the reduction
of all of BNP Paribas' direct impacts on the environment, by assigning a
central role to the participation of all employees. The priorities include
the promotion of soft mobility by encouraging the sharing of journeys
(carpooling) and vehicles (car-sharing, bicycle-sharing), monitoring
digital footprints, the fight against single-use plastic, as well as the
proposal for more sustainable food (responsible sourcing, food waste
reduction, waste recovery). Particular emphasis is placed on raising
the awareness of all Group employees, via dedicated thematic actions
such as digital cleaning weeks, as well as training in environmental and
climate issues.
With regard to IT management, the Group has set up the Sustainable IT
programme. In this context, an internal "responsible digital" charte r, b uilt
around 10 fundamental principles, was distributed to the entire IT sector
worldwide and published in the Group's Procedures database which is
accessible to all employees.
STRENGTHENED EFFORTS TO REDUCE THE
ENERGY CONSUMPTION OF OPERATIONS
The Group continued its efforts to continue to reduce its energy
consumption, comply with the government's sobriety plan launched in
France in 2022, deploy these principles internationally and to perpetuate
this reduction over time. Thus, for the second consecutive yea r, v ery
significant reduction in energy consumption was recorded, with a
decrease of 26% in 2023 for the entire Group in absolute terms, which
represent a decrease of 15% without taking into account the scope effect.
Robust and multi-use environmental indicators
The indicators monitored each year as part of environmental reporting
allow the Group to accurately measure the change in its direct
environmental impacts, to ensure effective management by reporting
detailed data to the business lines and regions, and to implement
appropriate policies and actions to further reduce BNP Paribas'
operational environmental footprint.
The data required to calculate these indicators is collected annually for
the Group's main regions in terms of number of employees (20 countries
in 2023 covering more than 85% of full-time equivalents - FTE). The
results obtained for this scope are then extrapolated to cover all of
BNP Paribas. The period taken into account for the data collected covers
12 months from October (year-1) to September (year 0). The number
of FTEs is officially determined by Group HR at 31 December of the year
in question.
The measurement of the CO2 emissions for the Group's operating scope is
based on the reference methodology of the GHG Protocol. The following
are taken into account: energy consumed (electricity, gas, fuel oil, district
heating and cooling) in the buildings occupied by the Group, and the
energy consumed in the means of transport used by employees for
their business travel (excluding commuting) by ca r, t rain or plane. Only
the combustion of fossil fuels is taken into account; the extraction and
transportation of fuels are excluded from this calculation.
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Our environmental responsibility: accelerating the ecological and energy transition
➤
MAIN ENVIRONMENTAL INDICATORS AT 31 DECEMBER 2023
Indicators
2019
2020
2021
2022
2023
2025 Objectives
Greenhouse gas emissions – scopes 1
and 2 and business travel (teqCO2/FTE)
2.32
1.85
1.50
1.65
1.56
≤ 1.85
Water consumption (m3/FTE)
21.8
15.8
18.2
10.7
10.39
Qualitative improvement
of the indicator
Paper consumption (kg paper/FTE)
86
58
49
44
39
≤ 70
Share of sustainable paper (in %)
71.3
74.6
78.7
74.9
86.7
≥ 90
Waste production (kg/FTE)
171
109
87
92.3
84
Qualitative improvement
of the indicator
➤
MAIN CONSUMPTION SITUATION AT 31 DECEMBER 2023
Total consumption/production
2019
2020
2021
2022
2023
Energy consumption (in GWh)
1,399
1,209
1,171
1,123
830
Water consumption (in m3)
4,339,270
3,058,462
3,453,976
2,072,981
1,897,531
Paper consumption (in tonnes)
17,018
11,162
9,363
8,428
7,153
Waste production (in tonnes)
33,905
21,085
16,451
17,771
15,260
Share of recycled waste (in %)
21
31
34
26
39
Note: through its activities, the Group is not a significant source of noise
pollution or any other specific industrial pollution.
certifications
Use of low-carbon electricity
To continue reducing its environmental impact, the Group has been
increasing its share of low-carbon electricity for several years. In 2023,
low-carbon electricity represented 79% of total electricity consumption.
The share of renewable electricity represented 34.8%. This electricity
came either from the purchase of renewable electricity certificates,
or from the direct consumption of renewable energy produced by the
Group's buildings. Renewable energy consumption accounted for 27.3%
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of total energy consumption (830 GWh in 2023).
This commitment is strengthened with the introduction of exclusively
renewable electricity purchase contracts (Power Purchase Agreements or
PPAs). After signing PPA contracts in Poland to cover 100% of its electricity
supply and in the United Kingdom, France also signed a contract in 2023,
which will eventually provide at least 25% of its electricity supply from
photovoltaic sources.
These systems are allowing the Group to limit CO2 emissions associated
with its electricity consumption, a reduction recognised in the market-
based approach(1). Based on this approach, the CO2 emissions amounted
to 214,859 teqCO2 in 2023, i.e. a reduction of 70,464 teqCO2 over the year
compared to the location-based calculation(2).
Numerous environmental and commitment
In 2023, 15 ISO 14001 environmental certifications were in progress at
BNP Paribas, covering nearly 75,000 employees, i.e. 40% of its workforce,
demonstrating the renewed commitment of the building management
business lines (France, Belgium in particular), IT assets (France, Belgium,
Italy and the United Kingdom), leasing (France), automotive (France,
Germany, Belgium, Spain, Italy, Poland, Romania, Slovakia and the United
Kingdom), housing and private finance.
In 2023, the Group is also ISO 50001 certified for its data centres in
France, as well as for two BGL BNP Paribas buildings in Luxembourg. In
addition, several Group entities also hold the Responsible Digital Label
(Agence Lucie), while the purchasing department holds the Supplier
Relations and Responsible Purchasing label (Corporate Mediation).
GREENHOUSE GAS EMISSIONS
IN THE OPERATIONAL SCOPE
In 2023, the Group's total emissions in its operational scope (direct
emissions (Scope 1), indirect emissions related to energy purchases
(Scope 2) and indirect emissions related to business travel) amounted
to 285,323 teqCO2 (based on the location-based approach) down by
10% compared to 2022 (representing a reduction of 33,166 teqCO2), and
38% compared to 2019, the pre-Covid reference yea r. They represent
1.56 teqCO2 per FTE, i.e. below the maximum target for 2025 which is
set to 1.85 teqCO2 per FTE . This indicator has benefited from the sale of
Bank of the West, which was one of the Group's highest emitting entities.
(1) The Market-based approach quantifies Scope 2 greenhouse gas emissions based on the GHG emissions emitted by the producers from which the Group purchases the electricity
it consumes. This makes it possible to take into account the Group's efforts to decarbonise its electricity via renewable energy purchase certificates or contracts. The Group uses
it to calculate the quantity of tonnes of residual GHG emissions to offset with voluntary carbon credits.
(2) The Location-based approach quantifies Scope 2 greenhouse gas emissions by taking into account the emission factors of the average mix of each country. The emissions factors
used are taken from the International Energy Agency. The Group uses it to report tonnes of GHG emissions annually and to define the reduction target.
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Our environmental responsibility: accelerating the ecological and energy transition
The results of the energy sobriety and building occupancy rationalisation
plans contributed to a significant decrease in the share of buildings in the
overall emissions, while at the same time, the share of travel continued to
increase in 2023 following the resumption of travel after the health crisis.
57% of these emissions come from the energy consumption of buildings,
and 43% from business trips. In more detail, the breakdown of the Group's
greenhouse gas emissions in 2023 is as follows:
➤
BREAKDOWN BY TYPE OF GREENHOUSE GAS
EMISSIONS
9.2%
Car
0.7%
District cooling
2.5%
Rail travel
31.2%
Air
0.6%
Fuel oil
3.6%
District heating
8.3%
Natural gas
43.9%
Electricity
➤
BREAKDOWN OF THESE EMISSIONS BY SCOPE
OF GHG/ISO PROTOCOL IN TEQCO2
Scope 1
25,437 in teqC02
Direct emissions
related to burning
fossil fuels
Scope 3(partial)
122,599 in teqC02
Indirect
mobility-related
emissions
Scope 2
137,287 in teqC02
Indirect emissions
related to the
consumption
of imported energy
RESPONSIBLE REAL ESTATE INITIATIVES
The Green Buildings programme of the Real
Estate Department
The Group real estate operating function (IMEX) is a key player in reducing
the environmental footprint of BNP Paribas' operating scope. As such,
the Green Buildings programme implements a process to improve the
operation and maintenance of its sites, thereby reducing the Group's
environmental impact on a long-term basis. Programmes are also
deployed to encourage waste sorting and recycling, the circular economy,
water management, facilitate sustainable mobility and promote the
purchase of sustainable and less energy-consuming equipment.
The plan to reduce the carbon footprint
of the real estate portfolio
This plan is broken down into three levers involving the business lines,
the Group's employees and IMEX. The first lever involves the continuous
improvement of the energy performance of buildings via a monitoring tool
that centralises energy consumption data for 90% of the portfolio, enabling
the monitoring of optimisation plans. The second lever is based on work
and investment plans to modernise and improve the efficiency of facilities
(heat pumps, LED lighting, façade insulation, roof repairs, etc.). Finally,
raising employees' day-to-day awareness of how buildings are used
(offices, bank branches, data centres) is one of the plan's major focuses.
These efforts have been rewarded each year in which BNP Paribas has
taken part in the Cube competition organised by the IFPEB (French
Institute for Building Performance) under the high patronage of the
French Ministry of Ecological Transition. This competition rewards users
of commercial buildings who have saved the most energy over a yea r. I n
2023, the Group registered 18 sites, including 15 in France.
RESPONSIBLE CONSUMPTION
Initiatives with our operational subcontractors
In France, the BPG (Business Partners Group) Department builds
and operates shared service centres with its subcontractors for the
various Group entities: logistics and transport platforms, vehicle
fleet management, mobile telephony, document management (for
example, industrial desktop publishing, etc.), management of banking
AT (Automated Teller Machines). Operational efficiency, including the
search for a reduction in environmental impacts, has made it possible
to obtain the following results in 2023:
■ the development of ATM recycling (47% of banknotes recycled) has
made it possible to reduce the cash transport journey by 15% to 20%
and therefore reduce the related CO2 emissions;
■ the complete overhaul of the road network, now 98% shared, has
produced a cumulative fall in transport-related CO2 emissions of 70%,
i.e. a reduction of 130 tonnes of CO2 emissions per month;
■ BPG recovered nearly 5,000 phones at the end of the usage period
(+50% compared to 2022). These phones are passed on to BNP Paribas
3 Step IT to be reconditioned or recycled;
■ in 2023, the first declaration of greening the vehicle fleet was carried
out for the Group in France. The result (27%) significantly exceeded the
legal requirement for 2022 (10%). Ambitious objectives have also been
defined to green the car fleet (50% low-emissions vehicles by 2025).
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Mandatory use of responsible paper since 2022
In order to contribute to the protection of forest ecosystems and
biodiversity, the Group has been committed for many years to responsible
paper purchasing (from recycled or sustainably managed forests, i.e. more
than 50% recycled or PEFC or FSC certified). Since 2022, the purchase
of responsible paper has become an obligation for all of the Group's
business lines, except in the event of technical impossibility. This has
made it possible to set an ambitious overall target for 2025 of 90% of
responsible paper and 95% for the regions that consume the most pape r.
In 2023, 86.7% of the paper consumed by the Group met the responsible
criteria detailed above.
OFFSETTING RESIDUAL GREENHOUSE GAS
EMISSIONS
Since 2017, BNP Paribas has purchased voluntary carbon credits annually
for an amount equivalent to the residual greenhouse gas emissions
emitted the previous year within its operating scope. These emissions
amounted to 241,855 teqCO2 in 2022 (market-based approach). The
carbon credits purchased in 2023 come from four projects:
■ the Kasigau project in Kenya, supported by the Group since 2017, is a
programme to protect and restore 200,000 hectares of forest. Led by
the NGO Wildlife Works, it also finances access to healthcare, water
and education for local populations;
■ in India, the project is based on a ten-year voluntary carbon offset
programme as part of a partnership between BNP Paribas and the
GoodPlanet Foundation, via the construction of 13,000 biodigesters.
They provide four hours of gas daily, thus avoiding cooking over a wood
fire and deforestation, as well as improving the living conditions of
nearly 70,000 people;
■ in Guatemala, hundreds of landowners including local communities
have come together to protect nearly 60,000 hectares of forest by
developing sustainable livelihoods, which restore rather than degrade
the forest and create better living conditions for its inhabitants;
■ the Qori Q'oncha programme in Peru is deploying improved wood-
burning stoves in several regions of the country, which reduces the
amount of wood used and reduces carbon emissions while removing
noxious smoke from homes.
COMMITMENT 12: AD V A NCING AWARENESS AND SHARING
OF BEST ENVIRONMENTAL PRACTICES
SUPPORTING RESEARCH AND
DEVELOPMENT ON CLIMATE CHANGE
AND BIODIVERSITY
The purpose of this support is to better know and understand the
interaction between climate change and the erosion of biodiversity,
in order to identify the most appropriate solutions. Two BNP Paribas
Foundation philanthropy programmes are working in this field:
7
■ by 2025, the Climate & Biodiversity Initiative, launched in 2010, will
already have supported 35 research projects, with more than 500
researchers, for an amount of EUR 24 million. Since 2022, eight new
research projects, ranging from the study of underwater animal forests
to the impacts of climate change in the African savannah or on coastal
ecosystems, have been supported until 2025 with a dedicated budget
of EUR 6 million;
■ the One Planet Fellowship programme is operated by AWARD(1) and
supported by the BNP Paribas and Bill & Melinda Gates Foundations,
the European Commission and the International Development Research
Centre (IDRC, Canada). Endowed with USD 20 million over five years,
its ambition is to support African women in research, and create a
community of African and European researchers working on climate
change adaptation in the agricultural sector in Africa. To date, 270
scientists have benefited from the mentoring programme.
In 2023, the Group also strengthened its support for some of its partners
such as the International Union for Conservation of Nature (IUCN), or
by providing assistance to new entities such as The Transition Institute
1.5 launched by Mines Paris, Naturalis in the Netherlands (see box), or
Business for Nature, within the framework of budgets accompanying its
share buyback programme (see Corporate philanthropy policy focused
on the arts, solidarity and the environment, Commitment 9).
At the end of 2023, a multi-year partnership was launched with
the Naturalis Biodiversity Cente r, m arking a new chapter in
BNP Paribas' approach to protecting and restoring biodiversity.
Bringing together more than 150 scientists, this institution is
one of the main biodiversity knowledge and research centres
in the world. This partnership has four objectives: education
and awareness, research and data, financial innovation by
accelerating the development of tools to direct more capital
towards protecting and restoring biodiversity, and scientific
measurement to guide project financing decisions.
(1) African Women in Agricultural Research and Development.
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Our environmental responsibility: accelerating the ecological and energy transition
RAISING AWARENESS AMONG INTERNAL
AND EXTERNAL STAKEHOLDERS
A network of internal experts and employee
awareness
In order to accelerate the environmental and social transition,
BNP Paribas launched the NEST (Network of Experts in Sustainability
Transitions) at the end of 2021. This network is now composed of more
than 700 experts from all BNP Paribas entities in areas such as the
energy transition, the circular economy, biodiversity, social inclusion
and sustainable finance. The objective of this international network is
to strengthen and share expertise, by developing knowledge, supporting
the Group's various entities and promoting internal ecosystems, in order
to accelerate the transition of its employees, customers and clients. In
2023, NEST organized 25 internal webinars attended by more than 3,000
participants.
In addition, in November 2023, the Company Engagement Department
and the RISK Department organised "48 Hours of Biodiversity". These
two days of conferences and internal discussions highlighted the Group's
major initiatives, common challenges, the words of external experts as
well as training offers, and enabled participants to understand how
BNP Paribas' business lines and functions incorporate biodiversity into
their daily activities.
The creation of informative content dedicated
to the ecological transition
BNP Paribas regularly publishes information dedicated to the ecological
transition for its employees and external stakeholders. Thus, in 2023,
NEST distributed four newsletters (entitled "Perspectives") capitalising
on the knowledge of more than 100 internal and external experts, with
a special edition on the just transition based on a study conducted on
10,000 Europeans, which analyses the drivers of the energy transition
as well as its social repercussions. In addition, since 2022 the Group has
published a monthly newsletter on LinkedIn dedicated to the challenges
of sustainable finance "Sustainable Finance at Scale" which is followed
by nearly 420,000 subscribers. In 2023, the topics covered include the
financial inclusion, the energy transition, the TNFD and the carbon
credits.
Raising client awareness through high-level
presentations
In addition to communications dedicated to ESG, BNP Paribas also
organises targeted events with its clients on the theme of the energy and
ecological transition. In 2023, the Group offered its clients and customers
a forum dedicated to ESG experts, which was an opportunity to discuss
the challenges of Net-Zero emissions, ESG regulations, biodiversity
and the circular economy. In addition, throughout September 2023,
BNP Paribas organised the 8th edition of the Sustainable Future Forum
(SFF), with events in more than 17 countries around the theme "The
transition compass: going in the right direction?".
Awareness-raising efforts for students
and the general public
The second cohort of the ESSEC Business School "T a lents for the Ecological
Transition" chair was certified in 2023. Supported by BNP Paribas, this
chair focuses on the themes of climate change and biodiversity, but also
other themes essential to the ecological transition such as managing
resources (wate r, a ir) and waste, energy and food, new forms of mobility,
the regional transition and the impact of digital technology.
The BNP Paribas Foundation and raising awareness
among internal and external audiences
Alongside its support for research on climate change and the erosion of
biodiversity, the BNP Paribas Foundation works to disseminate knowledge
in various forms, including conferences (four conferences per year for
employees), the creation of content for the general public (articles in The
Conversation or We Demain) or by supporting exhibitions related to the
theme, such as the Bio-Inspirée exhibition at the Cité des sciences et de
l'industrie. All these actions carried out since 2010 have raised awareness
among nearly one million people.
TAKING AN ACTIVE ROLE IN PARTNERSHIPS
AND COLLECTIVE INITIATIVES
In order to maximise the impact of the Group's actions for a massive
and rapid transition, it is important that a large number of financial
institutions engage in this movement. That is why BNP Paribas has
chosen to initiate or play a leading role in coalitions that work to promote
the United Nations sustainable development goals and the transition to
a low-carbon economy.
An active contribution to the T a skforce
on Nature-related Financial Disclosures (TNFD)
Since 2020, BNP Paribas has been part of the initial design work of
the TNFD with the co-Chairmanship of Antoine Sire, Head of Company
Engagement, on the informal working group. Since its official launch in
October 2021, BNP Paribas has been represented among the 40 members
of the working group, by two experts from the Group. In 2023, the TNFD
published its final recommendations on the reporting framework, thus
taking a major step forward in the fight against biodiversity loss by
creating a common language for companies, financial institutions and
enabling better analysis, management and communication of nature-
related dependencies, impacts, risks and opportunities.
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Our environmental responsibility: accelerating the ecological and energy transition
Working to accelerate renewable energy
within the Cercle de Giverny
As a partner of the Cercle de Giverny since 2020, BNP Paribas co-chaired
the working group on renewable energy to increase their development
in France for the benefit of regions, populations and companies. These
discussions produced six very concrete proposals, which were reflected
in an opinion co-signed with Boralex and presented primarily to the
Ministry of Ecological Transition.
Participation in the work of Entreprises
pour l'Environnement (EpE)
Member of the committee and former Chairman of the EpE (Entreprises
pour l'Environnement) association, Jean-Laurent Bonnafé, Director
and Chief Executive Officer of BNP Paribas, helped to highlight and
promote the actions and reports from the EpE association while public
positions were being adopted. In 2023, EpE completed an ambitious
study identifying the main 2030 challenges for achieving the carbon
neutrality objective in France by 2050, and the priority actions to be
taken to overcome these challenges.
Other global and local partnerships
BNP Paribas has also partnered with various stakeholders to raise
awareness and promote solutions to climate and environmental
challenges, including:
■ being a founding membe r, w ith BNP Paribas Asset Management, of
Nature Action 100 launched on the sidelines of the Montreal COP 15
on biodiversity, the first global investor engagement initiative calling
on key companies to take urgent and necessary measures to protect
and restore nature and ecosystems, and thus mitigate financial risks;
■ actively contributing to the Hydrogen Council, which brings together
nearly 150 international companies convinced that low-carbon
hydrogen can be a key resource for the decarbonisation of industry
and the energy system;
■ being part of the Low-Carbon Building Initiative (LCBI), which brings
together major European real estate players, and which in 2023
revealed the methodology for the first version of the LCBI label, based
on life cycle analysis, and the first Pan-European low-carbon label. The
challenge is to adopt common practices and standards in Europe to
measure the carbon footprint of buildings throughout their life cycle,
and reduce it by half;
■ participating in the Ambition4Circularity initiative, a platform that
brings together the commitments made by member companies of
the Association française des entreprises privées – AFEP (French
Association of Private Companies) to promote circular economy.
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Extra-financial performance statement
7.6 Extra-financial performance statement
A DIVERSIFIED AND INTEGRATED MODEL, CREATING V A LUE
OUR STRENGTHS
OUR DIVERSIFIED AND INTEGRATED MODEL
A European Group with
international reach
present in 63 countries and territories
Committed employees
182,656(1) people worldwide
Broad diversification
by customer segment, geographical
area, sector and business line
A solid capital structure with
EUR 128.9 billion in equity
Cooperation between business lines
allowing us to meet all our customers'
18,501
needs
Technology and innovation at
the heart of our model
with more than 750 use cases of artificial
intelligence in 2023
A leading group in
sustainable finance
No. 1 worldwide in ESG bonds
and loans in 2023(2), with
a total amount of USD 62.5 billion
OUR GTS 2025 STRATEGIC PLAN
Growth
Technology
Sustainability
(1) This figure includes the employees of each of the three divisions presented opposite, as well as those of the central functions.
(2) Dealogic 2023: total ESG bonds (sustainable, green, social, sustainability-linked bonds) and ESG loans (green, social, ESG-linked loans/
sustainability-linked loans). (3) Full time Equivalent figure (workforce pro-rated to their working hours) for permanent contracts and fixed-
term contracts; unpaid absent employees are not included in workforce figure. (4) NBI: net banking income – For CPBS, NBI includes 100%
of Private Banking in Commercial & Personal Banking (excluding PEL/CEL effect).
Integrated
platforms
& approaches
Industry
diversification
& prudent risk
management
Commercial,
Personal Banking
& Services (CPBS)
employee s(3)
NB I(4)
EUR 26.6 billion
employees(3)
NBI:
EUR 5.6 billion
Investment
& Protection
Services (IPS)
40,005
101,456
employee s(3)
NBI:
EUR 16.5 billion
Corporate
& Institutional
Banking (CIB)
Customer-centric,
global and long-term
approach
Solid capital
structure
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Extra-financial performance statement
OUR SOLUTIONS
CREATING VALUE
Payments
Everyday banking
Advice
Financing
Investments
Savings
Protection
for all our stakeholders: customers, shareholders
and investors, employees, partners and suppliers,
local authorities, territories and civil society.
(5) Figure as of 31/12/2023; open funds distributed in Europe. The European Sustainable Finance Disclosure Regulation (SFDR) identifies funds
according to their sustainability potential. The Article 8 classification concerns funds declaring that social and/or environmental criteria are
taken into account. The Article 9 classification concerns funds with a sustainable investment objective. (6) Renewable, biofuel and nuclea r.
(7) Cumulative amount over the 2022-2023 period of all types of bonds identified as sustainable and arranged by BNP Paribas.
Promoting useful
innovation for our
customers
(individuals, entrepreneurs,
SMEs, large companies,
institutional, associations)
—
Nickel :
~3,7 million
accounts opened since
its creation, in France, Spain,
Belgium and Portugal, and launch
in Germany in September 2023
—
900 Application
Programming
Interfaces (APIs)
to achieve
700 million
transactions per month
—
45% of cloud-based
apps
Promoting sustainable
growth for the
economy
—
EUR 254 billion
in assets managed
by BNP Paribas Asset
Management in open-ended
funds distributed in Europe
and classed as Article 8 or 9
under the SFDR regulation(5)
EUR 32 billion
credit exposure to
low-carbon energy
production(6) at the end
of September 2023
—
EUR 67 billion
of sustainable bonds
issued for client
1,2 6—8,515
in 2022 and 2023(7)
Growing our
contribution
to society
—
More than
EUR 90 million
budget for the Group's
philanthropy in 2023
(including EUR 20 million
stemming from the share
buyback programme)
—
—
EUR 6.8 billion
in taxes and levies
paid in 2023
—
More than 1,000
employees involved in
mentoring
solidarity hours
performed by employees
in 2022 and 2023
(#1MillionHours2Help)
Thanks to the Group's solidity and the strength of its diversified and integrated model, BNP Paribas
supports its clients, customers and society as a whole through its teams, resources and expertise.
Its long-term commitment to them covers all phases of the economic cycle. By leveraging its
leading business platforms and its unique position as a European leade r, t he Group creates value
and supports the development of a sustainable economy.
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Extra-financial performance statement
ANA L Y SIS OF ISSUES, RISKS AND OPPORTUNITIES
Information requested pursuant to article R.225-105-1 of the
French Commercial Code and Ordinance No. 2017-1180 relating to
the publication of extra-financial information. The processes and
responsibilities relating to the analysis, review and validation of non-
financial risks are described in Commitment 3 Systematic integration
and management of Environmental, social and governance risks. They
are also described in the dedicated sections of chapter 5 Risks and capital
adequacy – Pillar 3, which also deals with operational risks, including
regulatory compliance risk.
BNP Paribas' business model is included in the preceding pages. In order
to complete its materiality matrix, described by a graph(1), BNP Paribas
relied on an assessment of materiality criteria to classify approximatively
one hundred extra-financial subjects brought together in 21 themed
issues based on their relevance to the Group's external and internal
stakeholders. Carried out for the first time in 2018, this analysis was
repeated in 2021 using a very similar methodology. It is based on an
assessment of the importance for BNP Paribas of these 21 extra-financial
issues from two points of view: on the one hand, that of BNP Paribas
employees, on the other hand, that of its external stakeholders. The
internal perception is established by a survey to which more than
1,200 top management employees responded, while the external point of
view is assessed by the importance of these issues in several databases:
publications of ten of our main peers, more than 2,500 regulations
applicable to our activities and locations, more than 20,000 industry
press articles and more than 450 million tweets on social networks.
The results of this study, presented in the graph indicated above, make
it possible to distinguish three groups of issues: important, major and
crucial. As part of the implementation of the Corporate Sustainability
Reporting Directive, starting in 2024, the Group has begun to analyse
and update its materiality issues.
As in 2018, data privacy and security, climate change and energy transition,
and ethics and compliance, were categorized as crucial issues. Three
other issues joined this category of crucial issues in 2021: human rights,
responsible investments and financing, and business continuity. Together
with the eight major challenges identified in the materiality matrix, they
form the 14 most important challenges for BNP Paribas and are listed in
the table below. The indicators, policies and associated due diligence are
then further developed in the relevant chapters.
(1) See 7.7 Duty of care.
Domain
Issue
Paragraph
Policy
Description pages
Risks/Opportunities
Indicator
Pages
(Paragraph;
Indicator)
Social
Fair and inclusive
workplace
Outstanding
actions in the area
of professional
equality
Global
agreement
Discrimination risks
– 668
Share of women
among the SMP
population (Senior
Management Position)
639
Employment
practices
Our employees
around the world
Global
agreement
Code of conduct
Risks of employee
demotivation
and increased
absenteeism,
psychosocial risks
– 670
Percentage of
employees on
permanent contracts
within the Group
660
T a lent
management
Developing skills
and improving
employability
Global
agreement
Loss of talent risk
– 676
Share of employees
who completed at
least four training
courses during the
year
639
Civic
Transparent
practices
Protecting clients'
interests
Code of conduct,
Group Policy
on Protecting
the Interests
of clients and
customers
Risks of
discrimination for
some customers
and lack of sales
information – 649
Number of alerts
received by the Group
via the whistleblowing
channel
648
Data privacy &
security
Cyber security and
technological risk
Ethics of the
highest standard
Code of conduct
Legal risk,
Reputational and
operational risks:
leaking, alteration or
loss of data – 327
Percentage of
employees who
completed the training
on Personal Data
Protection Awareness
684
Social/
Environment
Responsible
investing and
financing
Financing and
investments with a
positive impact
Engagement
manifesto
Reputational risk
and opportunity to
limit societal and
environmental risks
– 327
Amount of sustainable
bonds
639
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Domain
Issue
Paragraph
Policy
Description pages
Risks/Opportunities
Indicator
Pages
(Paragraph;
Indicator)
Environment
Climate change &
energy transition
Systematic
integration and
management of
Environmental,
Social and
Governance risks
652, 687
Enabling its clients
to transition to
a low-carbon
economy respectful
of the environment
Engagement
manifesto,
Commitments by
BNP Paribas to
the Environment
Transition,
physical, pollution,
biodiversity,
reputational, legal
liability risks – 327,
Amount of the support
enabling our clients
to transition to a low-
carbon economy
639
Economic
Customer
expectations
The Advocacy
programme and
the Net Promoter
System
Group policy
on protecting
clients' interests
Operational risk
– 515
Response rates to
surveys sent to clients
in Domestic Markets
650
Digital
transformation
and Innovation
Cyber security and
technological risk
Domestic Markets
Plan 2025
Cyber security and
technological risk
– 327
Number of customers
active on mobile
applications in
Domestic Markets
699
Corporate
economic value
Resilience of results
in a context marked
by the health crisis
– Scissor effect
(positive)
Plan 2025
Operational risk
– 515
Return on T a ngible
Equity (ROTE)
5
Human rights
Human rights
BNP Paribas is
committed to
respecting Human
Rights
BNP Paribas
statement on
Human Rights,
Responsible
Business
Principles
Risks of violations
of human rights
and fundamental
freedoms, and of
harm to human
health and
safety and to the
environment – 683
Number of employees
who completed
the e-learning on
"Business & Human
Rights"
683
Fight against
corruption and
tax evasion
Ethics and
compliance
Ethics of the
highest standard
Code of conduct
Financial risk – 321
Percentage of
employees who
completed ethics or
conduct trainin g
118
Governance
Governance
Composition of the
Board of directors
Independence of
directors
Report on
Corporate
governance
Legal, operational
and reputational
risks – 319
Number of
independent members
of the Board of
directors
53
Business
continuity
Cyber security and
technology
Policy and
requirements in
terms of business
continuity
Operational risk
– 515
Percentage of
coverage of the
Group's business plans
519
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Extra-financial performance statement
DEFINITIONS OF INDICATORS FOR CSR ISSUES(1)
(1) The definitions of the indicators Share of women among the SMP population, Share of employees who completed at least four training courses during the yea r, A mount of sustainable
bonds and Amount of the support enabling our clients to transition to a low-carbon economy are given under the CSR Dashboard, p. 639.
The definitions of the 10 indicators of the CSR policy dashboard are
described in section 7.1 Strategy.
PERCENTAGE OF EMPLOYEES
ON PERMANENT CONTRACTS
WITHIN THE GROUP IN 2023
The "Percentage of employees on permanent contracts" corresponds to
the percentage of employees on permanent contracts as of 31/12/2023,
among the workforce managed by the Group on a full-time equivalent
basis. The Group's managed workforce includes employees on permanent
and fixed-term contracts. A permanent employment contract, unlike a
fixed-term contract, does not specify the date on which it ends.
NUMBER OF ALERTS RECEIVED
BY THE GROUP VIA THE
WHISTLEBLOWING CHANNEL
Number of alerts received by the Compliance Function through the
BNP Paribas Group whistleblowing system in 2023 (from 1 January
to 31 December 2023). Employees can send a report either through
Compliance Alert channels (by email, post, orally or in a dedicated system
such as in the United States and the United Kingdom), or to a manager
who will send it through a compliance alert reporting channel. External
third parties can also send a report to the compliance alert channels
(by email). Reports are treated confidentially by the Compliance officers.
PERCENTAGE OF EMPLOYEES WHO
FOLLOWED THE "PERSONAL DATA
PROTECTION AWARENESS" TRAINING
This indicator measures the percentage of employees who completed the
Personal Data Protection Awareness module during the year (on a scope
of 98% of the workforce monitored in the Mydevelopment tool), compared
to the total number of Group employees on permanent + fixed-term
contracts at 31/12/2023 (as indicated in the HR systems).
RESPONSE RATES TO SURVEYS SENT
TO CUSTOMERS IN DOMESTIC MARKETS
The four Domestic Markets are France, Luxembourg, Belgium and Italy.
The surveys are sent to customers by email, SMS or telephone. Time
scope: 2023 calendar yea r.
NUMBER OF CUSTOMERS ACTIVE ON
MOBILE APPLICATIONS IN DOMESTIC
MARKETS
Number of connections from individual, professional and Private
Banking customers of commercial banking and digital banks, Nickel and
BNP Paribas Personal Finance (monthly average).
RETURN ON TANGIBLE EQUITY (ROTE)
Indicator that measures the BNP Paribas Group's return on tangible equity.
The ROTE divides the net income attributable to owners of the parent
restated for the remuneration net of tax on Undated super subordinated
notes and the foreign exchange effect by the average of tangible
permanent non-revalued equity. The average of tangible permanent
non-revalued equity is defined as the average between the beginning of
the year and the end of the period of tangible permanent equity. T a ngible
permanent equity is equal to accounting equity attributable to the owners
of the parent, restated for changes in assets and liabilities recognised
directly in equity, the assumption of dividend payments, intangible assets
and goodwill.
NUMBER OF EMPLOYEES WHO COMPLETED
THE E-LEARNING MODULE ON "BUSINESS
& HUMAN RIGHTS"
This indicator measures the number of Group employees who completed
the "Human Rights into Business" training at the end of year n,
cumulatively since the module was rolled out in 2016.
PERCENTAGE OF EMPLOYEES
WHO COMPLETED TRAINING
ON ETHICS OR CONDUCT
This indicator measures the percentage of employees who have completed
the second part of the Conduct Journey training course, assigned in 2023
to all Group employees (on a scope of 98% of the workforce monitored
in the Mydevelopment tool), compared to the total number of Group
employees on permanent + fixed-term contracts at 31/12/2023 (as
indicated in the HR systems). The Conduct Journey comprises 11 modules,
covering the topics addressed in the BNP Paribas Code of conduct
(protection of clients' interests; respect for colleagues; engagement with
society; conflicts of interest; confidential information relating to financial
markets; fight against corruption; financial security; competition law;
cybersecurity; data protection; responsible communication).
NUMBER OF INDEPENDENT MEMBERS
OF THE BOARD OF DIRECTORS
This indicator compares the number of independent directors, within
the meaning of the Afep-MEDEF Governance Code, out of the total
number of directors on the Board of directors of a company. Directors
are independent when they have no relationship of any kind whatsoever
with the Company, its Group or its management that could compromise
the exercise of their freedom of judgment.
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PERCENTAGE OF COVERAGE OF THE
GROUP'S BUSINESS CONTINUITY PLANS
It measures the number of entities with a business continuity plan that
have been approved in the last 12 months by the Business Continuity
Committee. In accordance with the Group's requirements, this plan must
include:
■ the description of the roles and responsibilities of the various
stakeholders in the process, whether internal or external to the Group;
■ organisational and functional procedures enabling the activation of
business continuity and return-to-normal solutions. They provide for
the organisation of remote work and critical activities requiring specific
equipment on a dedicated fallback site;
■ contact lists.
In accordance with article L.225-102-1 of the French Commercial Code,
amended by article 29 of Law No. 2023-703 of 1 August 2023, BNP Paribas
has included information on the actions carried in the following areas
in its Annual Reporting.
Information
Section/Paragraph
Pages
Consequences of the Company's business activities
and of the use of goods and services that it
produces, on climate change
655, 692
Alignment of the loan portfolio with the net-zero by 2050 objective (Eng. 3)
Strengthened efforts to reduce the energy consumption of operations (Eng. 11)
Societal commitments to:
■ sustainable development;
645
Offering a wide range of sustainable products (Eng. 1)
■ the circular economy;
Deployment of the circular economy (Eng. 10)
689
■ combatting food waste;
Development of Impact Bonds (Eng. 1)
Green Company For Employees (GC4E): employee engagement worldwide
(Eng. 11)
646, 692
■ combatting food insecurity;
Combatting extreme poverty (Eng. 9)
686
■ respect for animal welfare;
Vigilance plan
704
■ responsible, fair and sustainable food.
Green Company For Employees (GC4E): employee engagement worldwide (Eng. 11)
692
Collective agreements made within the Company
and their impact on the Company's economic
performance and on the working conditions
of employees
673-674
Global agreement; European Works Council and European social dialogue;
Social dialogue in France (Eng. 5)
Actions to fight against discrimination
and promote diversity
664
Promotion of diversity, equality and inclusion (Eng. 4)
Actions to promote the nation-army bond
and support engagement in the reserves
668
360° parenting and work-life balance (Eng. 4)
Actions to promote physical and sporting activities
An offer focused on social, emotional, physical and financial well-being (Eng. 5)
672
Measures taken to support people with disabilities
Promoting the employment and integration of people with disabilities (Eng. 4)
668
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Vigilance plan
7.7 Vigilance plan
FRAMEWORK AND GOVERNANCE
REGULATORY FRAMEWORK
Law No. 2017-399 of 27 March 2017 on the Duty of Care of parent
companies and of companies using subcontractors applies to the Group as
a whole and requires a vigilance plan to be established and implemented
to identify and prevent the risk of serious violations of human rights and
fundamental freedoms, and of harm to human health and safety and
to the environment. The law also requires the preparation of an Annual
Report on the effective implementation of the Group's vigilance plan.
BNP Paribas' vigilance plan applies to all subsidiaries controlled by
the Group and is published in its Universal registration document.
BNP Paribas updates its vigilance plan each yea r, i n particular by drawing
on best practices in this area, and reports on its framework for monitoring
the measures implemented and assessing their effectiveness in section 5
of this chapte r.
ELABORATION OF THE VIGILANCE PLAN
Internal and external contributions
to the BNP Paribas' vigilance plan
BNP Paribas' vigilance plan is prepared taking into account the Group's
business model, the specificities of its activities and geographical
locations, as well as the information and requests of its stakeholders.
The vigilance plan is therefore updated on an annual basis, fed by these
elements and an ongoing dialogue, in particular with its employees and
representative bodies, its investors and its clients and customers, as
well as with civil society, including NGOs (see section 4.1 Whistleblowing
system).
In order to enhance its roadmap, BNP Paribas has developed tools that
enable it to be aware of its stakeholders' expectations. In particula r, t he
Group has produced a materiality matrix to classify about a hundred
extra-financial topics, grouped into 21 thematic issues according to their
relevance for the Group's internal and external stakeholders, considered
crucial, major or important (see section 1.1.1 Materiality matrix).
Drafting and approval process
BNP Paribas' vigilance plan is drafted under the lead of the CSR
Department, with contributions from:
■ the Human Resources Department (HR) with regard to the Group's
employees;
■ the Technology & Operational Performance (TOP) Department,
including the Procurement & Performance (P&P) department for
BNP Paribas suppliers and subcontractors;
■ the main business lines within BNP Paribas' three divisions
(Commercial, Personal Banking & Services - CPBS, Investment &
Protection Services - IPS, and Corporate and Institutional Banking -
CIB) for the distribution of financial products and services to individuals
and for financing, investment and business advisory activities;
■ the Finance, Compliance, RISK and LEGAL Departments, which
contribute to overseeing the Group's Environmental, Social and
Governance (ESG) issues.
The Corporate Governance, Ethics, Nominations and CSR Committee
(CGEN) reviews BNP Paribas' vigilance plan and issues recommendations
to the Group's Board of directors. Among other duties, the CGEN is
responsible for monitoring CSR issues and for the integration of the
integration of the CSR issues into the fulfilment of the Group's missions.
The Group's Board of directors, which has a specific role with regard to
CSR, is responsible for approving the BNP Paribas' vigilance plan.
STRATEGY & GOVERNANCE
Purpose and Strategic Plan
Contributing to a more sustainable and responsible economy is at the
heart of BNP Paribas' purpose. In early 2022, BNP Paribas launched its
2025 Strategic Plan entitled GTS (Growth, T e chnology, Sustainability),
one of whose three pillars is to accelerate and mobilise all of the Group's
business lines around the challenges of sustainable finance. The Group has
set itself ambitious objectives in terms of energy transition, biodiversity,
social inclusion and sustainable savings, investments and financing by
2025 (see section 5.1 The CSR Policy Management Dashboard). 2023 was
a year of a major shift of BNP Paribas' financing from the energy sector
to low-carbon, mainly renewable energies, which already accounted
for 65% of its total credit exposure to the energy production sector at
30 September 2023. By 2030, the Group's new objective is for this share
to reach 90%.
CSR Policy and Governance
The Group as a whole is involved in monitoring ESG issues.
A sustainable finance strategic committee meets every two months,
chaired by the director and Chief Executive Officer of BNP Paribas,
validates the overall sustainable finance strategy and decides on the
commitments made by the Group. This committee met five times in
2023. The CSR policy is managed by the CSR Department, reporting to
the Company Engagement Department, and represented on the Group
Executive Committee, which regularly decides on CSR issues.
BNP Paribas' Board of directors determines BNP Paribas's business
orientations and supervises their implementation by the Executive
Management, taking the social and environmental challenges of
BNP Paribas' activities into consideration. CSR-related topics were
specifically addressed 48 times during Boards and committees in 2023,
in particular during meetings of the Board of directors, the Governance,
Ethics, Appointments and CSR Committee (CGEN) and the Internal
Control, Risk Management and Compliance Committee (CCIRC).
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SUSTAINABLE FINANCE COMMITMENTS
Convinced of the importance of collective action, the Group is a member of
Principles for Responsible Banking (PRB),(1) the United Nations Principles
for Responsible Investment (PRI) for the environment (UNEP FI) and
the United Nations Global Compact through its subsidiaries BNP Paribas
Asset Management, BNP Paribas Real Estate Investment Management
and BNP Paribas Cardif, the OECD guidelines for multinational companies
(internationally accepted), and the Equator Principles.
ENVIRONMENTAL COMMITMENTS
For more than 10 years, BNP Paribas has been committed to the fight
against climate change. Since 2015, the Group has committed to aligning
its activities with the objectives of the Paris Agreement. To do this, it has
continuously reduced its support for fossil fuels and at the same time
accelerated its financing for low-carbon technologies. BNP Paribas is
a founding member (2021) of the Net-Zero Banking Alliance (NZBA)(2),
thus making a very active contribution to the development of alignment
methodologies, practical guides and open-source software. Group
entities, BNP Paribas Asset Management and BNP Paribas Cardif, have
respectively joined the Net-Zero Asset Managers initiative (NZAMi) and
the Net-Zero Asset Owners Alliance (NZAOA). BNP Paribas' objective is
not only to meet its climate commitments, but also to share its approach
to make it more effective and powerful.
For several years, BNP Paribas has been committed to preserving
biodiversity through its financing and investment policies, a constructive
dialogue with its clients, the coalitions in which it participates,
philanthropy and support for research. The Group published a Biodiversity
Position(3) in order to clarify issues on this topic.
SOCIAL COMMITMENTS
Respect for human rights is one of the pillars on which BNP Paribas' CSR
strategy is based. The Group is committed to respecting the principles
and standards that form the foundation of its activities, including the
10 principles of the United Nations Global Compact, the United Nations
Guiding Principles on Business and Human Rights, human rights
standards (internationally accepted as defined in the International
Bill of Human Rights) and the core labour standards (as defined by the
International Labour Organization).
Among the major voluntary commitments made by BNP Paribas to
address the many issues surrounding human rights are its Code of
conduct(4) (which covers client/customer interests, financial security,
market integrity, conflicts of interest, professional ethics, respect for
colleagues, protection of the Group, commitment to society and combatting
corruption and influence peddling), its Human Rights Statement(5) and its
Fundamental Rights and Workplace Social Foundation Agreement (Global
Agreement(6))signed in 2018 with UNI Global Union and renewed until
30 June 2024.
(1) https://cdn-group.bnpparibas.com/uploads/file/bnp_paribas_2023_prb_reporting.pdf.
(2) https://group.bnpparibas/en/press-release/bnp-paribas-joins-net-zero-banking-alliance-launched-unep.
(3) https://group.bnpparibas/uploads/file/biodiversity_position_2021.pdf.
(4) https://group.bnpparibas/uploads/file/220131_bnpp_compliance_codeofconduct_2022_f r.pdf.
(5) https://group.bnpparibas/uploads/file/uk_declaration_bnp_sur_droit_de_l_homme.pdf.
(6) https://group.bnpparibas/uploads/file/accord_monde_18_09_2018_gb.pdf.
OUR VIGILANCE APPROACH
As part of the preparation of its vigilance plan, BNP Paribas conducted,
in line with its commitments, risk mapping and a review of its existing
risk assessment and control process and tools, on a scope consistent
with the text of the law.
1
RISK MAPPING
1.1 Environmental,social and governance risks
(ESG) taken into account by BNP Paribas
1.1.1 Materiality matrix with regard to internal
and external stakeholders' expectations
BNP Paribas produced a materiality matrix to classify about a hundred
extra-financial topics, grouped into 21 thematic issues, according to their
relevance for the Group's internal and external stakeholders. Internal
perception is established by a survey to which more than 1,200 top
management employees responded, while the external point of view is
assessed by the weighting given to these issues in several of databases:
publications of the Group's main peers, more than 2,500 regulations
applicable to our activities and locations, more than 20,000 industry press
articles and more than 450 million tweets on social networks. The results
of this study, presented below, make it possible to classify issues into
three main groups: important, major and crucial; the crucial issues being:
■ human rights (which are included in all the mappings detailed in
sections 1.3 to 1.7 inclusive);
■ climate change and the energy transition (which are included in the
mapping related to the Group's suppliers – see section 1.4, and in the
mapping related to the business sectors and countries of operation of
BNP Paribas' corporate clients – see section 1.7);
■ data privacy and security (identified as one of the main issues related
to the distribution of financial products and services to individuals –
see section 1.5);
■ ethics & compliance as well as business continuity (which are directly
linked to the Group's cross-functional governance);
■ responsible investments and financing (which are one of the major
priorities of BNP Paribas' GTS 2025 Strategic Plan).
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Importance for BNP Paribas employees
Environmental and social issues
Ethics and governance
Employees
Clients and Innovation
Important issues
Major issues
Crucial issues
Political and societal risk
Customer expectations
Talent management
Digital transformation & Innovation
Human rights
Business continuity
Accessibility for
all to products and services
Local community support
Operational environmental impact
Responsible procurement
Biodiversity
Corporate economic value
Climate change
& energy transition
Data privacy
& security
Responsible investing
and nancing
Ethics & compliance
Fair and inclusive
workplace
Governance
Employment practices
Transparent practices
Fair competitive practices
1.1.2 Risks taken into account in the development
of different mapping exercises
In line with its CSR commitments, the Group has included in its
vigilance approach the risks of serious violations of human rights and
fundamental freedoms, and of harm to human health and safety and to
the environment, and the following issues in particular:
■ Issues related to human rights and fundamental freedoms: child
labour; forced labour and human trafficking; use of violence, torture,
cruel treatment and failure to respect the right to life; protection of the
rights of migrant workers; self-determination rights of people; non-
respect of the rights of local communities, the right to property, the
right to privacy, the freedom of association and collective bargaining,
the freedom to exercise the right to strike; discrimination; harassment;
inadequate housing standards; over-indebtedness; failure to respect
the right to an adequate standard of living; unfair compensation
methods; excessive working hours; lack of respect for diversity (social
and ethnocultural origins), (professional) equality and inclusion;
■ Issues related to individual health and safety: health and safety at
work for employees and consumers; industrial accidents; respect for
work-life balance (remote working);
■ Environmental issues: climate, physical and transition risks; GHG
emissions (CO2, methane, etc.); pollution and water scarcity; air
pollution; soil quality (pollution, erosion and depletion); scarcity and
depletion of commodities; excessive waste production; damage of
ecosystems and biodiversity; environmental impacts related to the
use of products and their end of life.
To take these issues into account, BNP Paribas:
■ builds on benchmark scientific work, such as that of the IPCC
(Intergovernmental Panel on Climate Change) and IPBES
(Intergovernmental Science-Policy Platform on Biodiversity and
Ecosystem Services);
■ builds on forward-looking scenarios compatible with the objective of
collective carbon neutrality in 2050, such as the IEA (International
Energy Agency)'s Zero Net Emissions by 2050 Scenario.
Risk mappings were, among others, carried out with regard to Group
employees, purchase categories for BNP Paribas' suppliers and
subcontractors, as well as business sectors and operating countries for
BNP Paribas' banking and financial activities.
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1.2 Mapping with regard to Group employees
In 2023, the Group is present in 63 countries. With regard to all the
human rights risks that could impact its employees, the Group has relied
on indicators based on reference sources provided by Verisk Maplecroft,
enabling it to determine a level of criticality by risk type (arithmetic
average of each theme by country, updated annually):
■ risks related to freedom of association and collective bargaining,
including freedom of association and trade union negotiations, and
freedom of assembly;
■ risks of discrimination, inequality and exclusion, including workplace
discrimination, minority rights, gender minorities, and women's rights;
■ occupational health and safety risks;
■ risks related to working conditions, including living wages, decent
working hours, child labour and forced labou r.
At the end of 2023, the breakdown of BNP Paribas' workforce by social
risk category and the level of criticality in the countries in which the
Group operates is as follows:
Criticality
Freedom of
association Discrimination,
and collective
bargaining
inequality and
exclusion
Occupational
health and
safety conditions
Working
Very high
0%
0%
0%
0%
High
0.7%
13.2%
8.0%
0.3%
Average
25.6%
26.9%
16.8%
26.9%
Low
73.7%
59.9%
75.2%
72.8%
TOTAL
100%
100%
100%
100%
On the basis of these analyses, more than 85% of the Group's workforce
is located in countries with a low or medium criticality on all the social
risk themes selected.
In the Discrimination, Inequality and Exclusion category, the "high" level
of criticality mainly relates to two countries, which represent 12.5% of the
Group's workforce. In the Occupational Health and Safety category, the
"high" level of criticality relates mainly to two countries, which represent
7.7% of the Group's workforce.
1.3 Mapping of BNP Paribas' suppliers
and subcontractors
An ESG risk mapping on purchasing categories, covering 13 ESG issues
enables the identification of those that carry a significant level of
environmental and social risk. This mapping is the result of a market
initiative led by AFNOR in 2018, which resulted in four levels of criticality
being assigned to the categories and subcategories of BNP Paribas'
purchases, such as air transport, databases, data centres, office supplies,
etc. In 2023, the Group refined its purchasing subcategory coverage and
therefore covers 105 additional purchasing subcategories compared to
2022. The issues taken into account are as follows:
■ fair practices and ethics: fraud and corruption, protection of personal
data, property rights and patents;
■ human rights and social conditions: child labou r, f orced labour and
modern slavery, discrimination, health and safety, working conditions
and freedom of association;
■ environment: climate change and greenhouse gases, damage to
biodiversity, depletion of natural resources, pollution (wate r, a i r, s oil),
waste and end-of-life management.
The breakdown of BNP Paribas' purchasing subcategories (covering 99%
of total expenses for 2023,) by level of criticality is as follows at the
end of 2023:
Criticality
Purchasing
subcategories
%
of total
Corresponding
amount
%
of total
Very high
15
6%
€0.3 bn
3%
High
44
19%
€1.0 bn
10%
Medium
133
57%
€7.7 bn
78%
Low
42
18%
€0.9 bn
9%
TOTAL
234
100%
€9.9 bn
100%
1.4 Mapping of the distribution of financial
products and services to individuals
The Group has identified two main risks in the distribution of its products
and services for individuals: non-discrimination in access to financial
services, and the right to privacy.
1.5 ESG risk mapping related to BNP Paribas'
financing, investment and corporate
client advisory activities
Since 2011, BNP Paribas has gradually deepened and broadened its
framework to manage the ESG risks that may affect its activities. Initially
focused on the most sensitive sectors from an ESG point of view (with
the development of sectoral policies), the system now covers all sectors
of the economy in which the Group has clients. Sectoral policies are
regularly adapted to better take into account the new challenges of the
sectors covered by increasing the level of ambition. BNP Paribas has eight
sectoral policies(1), covering: Agriculture, Palm oil, Paper pulp, Energy
production from coal,Mining industry, Oil and Gas, Nuclear energy and
Defence.
(1) https://group.bnpparibas/en/our-commitments/transitions/financing-and-investment-policies.
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1.5.1 Mapping of environmental and social risk levels
in the countries of operation of the Group's
corporate clients
A level of environmental and social risk (E&S) was defined for each
country in which the corporate clients of the Group operate on the basis
of reference sources provided by Verisk Maplecroft and Reporters Without
Borders, and issued by recognised international organisations and NGOs,
such as the International Labour Organization, the World Bank, the United
Nations Environment Programme, Human Rights Watch, Transparency
International and the World Resources Institute.
15 indicators cover the following topics: child labour; forced labour; rights
to land, property and housing; freedom of association and collective
bargaining; living wages; decent working time; migrant workers;
occupational health and safety; environmental regulatory framework;
biodiversity and protected areas; deforestation; waste management;
water quality; water stress; freedom of the press.
The 15 indicators are weighted, which gives the breakdown of the
countries of operation of the Group's corporate clients according to
the following four levels of environmental and social risk (data from
May 2023):
Level of environmental
and social risk
Countries of operation of
corporate clients
% of total
Very high
7
5%
High
26
19%
Average
48
36%
Low
53
40%
TOTAL
134
100%
1.5.2 Mapping of the salient E&S risks of the Group's
business sectors
For each business secto r, B NP Paribas analysed the ones that had salient
risks related to human rights and fundamental freedoms, individual health
and safety and the environment. These risks were defined according to
a methodology for rating the level of severity and occurrence of each
risk, which is based on the United Nations Guiding Principles reporting
reference framework. The level of risk inherent in each business sector
was then determined based on the presence of salient risks.
All business sectors of the Group's corporate clients are covered, including those that do not present intrinsic salient environmental and social risks,
such as finance or insurance. Those with at least one risk are detailed below according to the number of salient environmental and social risks:
Business segments of corporate clients
Human rights and
fundamental freedoms
Consumer health
and safety
Environment
Total
Agriculture, food, tobacco
7
1
6
14
Materials and minerals
6
1
6
13
Energy excluding electricity
4
1
6
11
Transport & storage
6
1
4
11
Suppliers (electricity, gas, wate r, e tc.)
3
1
6
10
Equipment excluding IT
5
1
4
10
Chemicals excluding pharmaceuticals
3
2
3
8
Construction & public works
6
1
1
8
Information Technology (IT)
6
0
1
7
Consumer goods
4
0
2
6
Healthcare & pharmaceutical industry
2
2
1
5
Hotels, tourism, leisure
3
1
1
5
Automotive
0
1
1
2
TOTAL
55
13
42
110
It should be noted that the same risk may exist for different sectors, such
as the risk related to water pollution or the risk of child labou r. T hese
mappings make it possible:
■ on the one hand, to provide a more specific framework for the
business sectors of the Group's corporate clients that carry salient
environmental and social risks;
■ on the other hand, to develop financing and investments in activities
with a positive impact.
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1.6 Representation of the overall ESG Risk Management system
Deployment of ESG issues
in investment strategies
Global shareholding
policy
Integration of ESG criteria
Exclusion of some sectors
(RBC policy - Responsible
Business Conduct)
Responsible business conduct
and long-term perspective
Risk Appetite Framework
Group risk management framework approved by Executive Management: culture of risk management
and control, including the environmental, social and governance (ESG) risks of BNP Paribas
Dialogue with issuers
Application of a voting policy
Engagement with companies
BNP Paribas Code of conduct approved by the Board of directors
Corporate financing (CIB + CPBS)
Analysis of all ESG elements
Unsatisfactory
assessment results
assessment results
Interim evaluation
results
Satisfactory
Know Your Customer Process(KYC)
Integration of the ESG performance and risks analysis for the client in the KYC process, when entering
into a relationship with a Business Group and during the various stages of the relationship, such as the
periodic KYC recertiꢀcation of Legal Entities
Investments (IPS)
Goods and services
excluded (tobacco,
asbestos, etc.)
Systematic ESG analysis
Companies that the
controversies**
Group does not wish
to ꢀnance or wishes
to monitor for ESG
reasons
ESG Assessment
Restriction
of activity list
Mandatory
ESG criteria
Additional
assessment
criteria
Issuance of
speciꢀc expert
opinions on:
transactions
and/or companies
and/or sectors
and/or
(on a sector
and/or
counterparties)
Termination of a relationship
Monitoring and regular
follow-up of the client
Start or continuation of activity
Application of
the Equator
Principles
Systematic
respect of the
Free, Prior and
Informed
Consent (FPIC)
of local
populations
Sector
policies
Ad hoc CSR
analysis
Project
nancing
Global Credit Policy
22 of them have
ESG criteria
Specic credit
and rating
policies
Monitoring and
exclusion list
Systematic identiꢀcation, assessment and monitoring of the ESG performance and risks of corporate
clients to establish their "ESG proꢀle", as part of the credit process and the annual client review
Initial assessment, then regular assessment (frequency determined by the client's ESG risk level)
Questionnaires covering ESG dimensions and integrating sectoral policies, supplemented by an
analysis of ESG controversies*
Complementary
monitoring
and exclusion list
Investment /
Engagement /
Divestment
List extended to cover the
entire investment universe
Sources:* external ESG data providers (Reprisk, Moody's ESG Solutions, Sustainalytics), as well as ** media, NGOs, customers.
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2
PROCEDURES FOR REGULAR
ASSESSMENT OF THE SITUATION
OF SUBSIDIARIES, SUBCONTRACTORS
OR SUPPLIERS, WITH REGARD
TO RISK MAPPINGS
2.1 Systems used to manage these risks
The Group has made an inventory of its existing systems, and compared
them against the elements required for the preparation of the vigilance
plan and its risk mappings, ensuring that these existing systems fully
cover the main risks for employees, the main suppliers and banking and
financial activities.
BNP Paribas' risk identification & assessment process (Risk ID) is part
of the Group risk management framework. Risk ID is a fully integrated
process, involving business lines, the RISK Function and the other control
functions throughout the Group. It serves to maintain up-to-date Risk
Inventories (both at local and Group levels). The Risk ID process aims
to identify and assess all the risks the Group is, or might be exposed to
in the future.
BNP Paribas' Risks ID process covers:
■ all sets of activities and exposures, on and off-balance sheet, as well
as new products and activities;
■ all risk types and all geographies;
■ all business lines and legal entities.
ESG dimensions are taken into account as risk factors, i.e. likely to trigge r,
promote or exacerbate the occurrence of a risk, whether financial or
extra-financial (see section 5 Risks and capital adequacy – Pillar 3 of
this Universal registration document, Appendix 5: Environmental, social
and governance risk).
2.2 The system concerning Group employees
In order to assess and prevent the risks that could impact its employees,
the Group relies on Group-level Human Resources (HR) policies, which
apply up to the Group's highest level and to all its companies, and on
agreements negotiated with employee representative bodies, in particular
on the BNP Paribas Global Agreement which covers all employees, as
well as Group-level or regional-level charters:
■ freedom of association and collective bargaining: the Global Agreement
specifically includes the Group's commitments in terms of freedom of
association and the fundamental right to collective bargaining; social
dialogue is particularly developed within the scope of the European
Works Council (covering more than 70% of the Group's workforce);
■ discrimination, inequality and exclusion: issues related to the fight
against discrimination, diversity, inclusion and equality are at the heart
of the Group's Code of conduct, with in particular the chapter "Respect
for people" which aims to combat inappropriate behaviou r. T hese
issues are also integrated into recruitment and career management
processes. Finally, gender equality issues are well reflected in the
content of the Global Agreement;
■ occupational health and safety:
■
under the Global Agreement, all Group employees are covered
in terms of health, death and disability insurance and receive a
minimum period of maternity leave. The We Care occupational
health and well-being programme has boosted the Group's actions,
particularly in the prevention of psychosocial risks, employee
mental health and risks related to a sedentary lifestyle. Crisis units
are also set up during major events, such as crises related to health
or geopolitical situations,
■
in terms of occupational safety, all Group employees benefit from
a reference corpus for the safety of people and property, which
establishes fundamental principles in terms of security (with regard
to the risks related to voluntary or malicious acts likely to harm
people or Group assets and activities), and safety (with respect
to natural and climatic events, or related to the technological
environments of our sites likely to harm people or Group assets
and activities);
■ working conditions: forced labour is prohibited within the Group, and
BNP Paribas had no employees under the age of 18 at the end of
December 2023. Employment is managed under collective agreements.
In addition, respect for work-life balance is incorporated in the
European Remote Working Charte r.
The policies and actions already undertaken by Group HR will continue
to be implemented and monitored over time.
2.3 The system concerning BNP Paribas
suppliers and subcontractors
Dedicated teams in the Procurement & Performance (P&P) Department
deal with supplier- and subcontractor-related ESG risks.
In accordance with the deployment of the law on the duty of care,
BNP Paribas' ESG Risk Management system for its suppliers and
subcontractors is based on the following elements, in line with the ESG
risk mapping for purchasing categories:
■ ESG questionnaire templates used to assess ESG risks when entering
into relationships with external suppliers and subcontractors
representing a contract value of more than EUR 200,000, including
taxes (from the first euro for suppliers of outsourced services), and
during calls for tenders. ESG performance is assessed with a minimum
weighting of 15% of ESG criteria (measured in 2023 compared to a
minimum of 5% in 2022);
■ supplier monitoring rules, targeting certain ESG criteria used during the
selection process and completed by the thematic regulatory watches;
■ training of Procurement Function employees.
In addition to this system, in France, BNP Paribas as a signatory of
the Responsible Supplier Relations Charter promoted by the Business
Mediation body of the French Ministry of Economy and Finance, has
an internal procurement ombudsman which is independent from the
P&P Department, whose contact details are provided on the Group's
institutional website, to offer advice in the event of a dispute.
The use of ESG evaluation questionnaires in calls for tenders and the
inclusion of their results in the overall evaluation of the supplier form
part of the Procurement control plan.
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2.4 The system related to the distribution of
financial products and services to individuals
The Group has identified two main issues in the distribution of its products
and services for individuals: non-discrimination in the access to financial
services and the right to privacy (protection of customers' personal data).
Non-discrimination in access to financial services is included in the
internal Clients' Interests Protection (CIP) policy. This subject is at the
top of the BNP Paribas Code of conduct and is a specific area of expertise
within the Compliance teams, which monitor these issues. The CIP policy
defines the rules of organisation and conduct that must be applied by the
Group throughout the relationship with the custome r, a nd at all stages
of the product and service life cycle.
In addition, BNP Paribas is committed to being exemplary in the
protection of their personal data. With the development of the global
digital economy, regulators and data protection authorities around
the world have considered that rapid technological change requires
appropriate laws and regulations for data protection and their privacy.
Data protection laws are being strengthened globally, some of which
are applicable to a large number of Group entities (e.g. GDPR) and
compliance with data protection rules has a paramount importance
for BNP Paribas. The Group has strict internal procedures governed by
the RISK Department to oversee the processing of personal data and
implement best practices in this area.
2.5 The system related to corporate
financing activities
The activities of BNP Paribas' corporate clients may involve risks in
relation to human rights and fundamental freedoms, human health and
safety, and the environment. The Group has published its Responsible
Business Principles Charter(1) for its corporate clients, thus reaffirming
BNP Paribas' will to engage with clients whose business practices
demonstrate a high level of governance and responsibility with respect
to human rights, fundamental freedoms, human health and safety and
the environment.
ESG risks related to corporate financing and investment activities are
managed under the lead of the Group's Risk Appetite Framework, a Group
Risk Management framework validated by Executive Management, which
includes ESG risks (see section 1.5.1). The general credit policy includes
a systematic ESG analysis, while 22 specific credit and rating policies
include ESG criteria.
Considering the ESG aspect to be one of the Group's major challenges
and a fundamental component of Know Your Client, the Group has
generalised the integration of ESG assessment criteria into the client
life cycle (Know Your Client – KYC process): in the process of entering
into a relationship and during the various stages of the relationship, such
as the KYC recertification, the Credit Committee or the annual review.
The analysis of the client's ESG profile (enabled, among other things,
by the ESG Assessment) will be integrated as a step of the KYC process,
according to a deployment by client typology.
Gradually implemented since 2021, the ESG Assessment has become
the preferred tool for monitoring the ESG performance and associated
risks of the Group's corporate clients. The ESG Assessment covers the
environmental (climate and biodiversity), social (health and safety at
work and impact on communities) and governance (business ethics)
dimensions through several questions splited within these five themes.
It is supplemented by an analysis of controversies affecting clients. The
Assessment consists of a systematic ESG analysis that is applied as part
of the credit process. Like other criteria (financial, strategic), ESG criteria
are taken into account in the assessment of the counterparty's credit
profile. The ESG Assessment, therefore, enables BNP Paribas to deepen
and document its ESG knowledge of clients. The ESG Assessment also
assesses clients' compliance with the Group's sectoral policies, as well
as the maturity of their ESG strategy and its implementation.
The deployment of the ESG Assessment, included in the credit files for
all business sectors and business groups, will enable the RISK Function
to exercise greater control over the ESG dimensions during Credit
Committees, on a documented basis. Initially designed for the Group's
large corporate clients, for which roll-out was almost completed at the
end of 2023, the ESG Assessment has been adapted for corporate clients
with revenue of over EUR 50 million, and for financial institutions. In
2024, the objective is to cover all clients in these client segments.
Until the deployment of the ESG Assessment has been completed for all
of the Group's corporate clients, additional ESG risk assessment tools
remain, such as questionnaires related to the law on the duty of care,
which apply to corporate clients operating in countries with very high or
high environmental and social risk and in business sectors with salient
risks, as defined by the mapping related to the Group's banking and
financial activities (see sections 1.5.1 and 1.5.2).
2.6 The system related to investment activities
The Group's asset management subsidiary, BNP Paribas Asset
Management, and the Group's insurance subsidiary, BNP Paribas Cardif,
implement their ESG strategies, which include, among other things, the
application of the Group's sectoral policies (see section 1.5 Mapping of
ESG risks related to BNP Paribas' financing, investment and corporate
client advisory activities).
BNP Paribas Asset Management's Global Sustainability strategy, launched
in 2019 and updated at the start of 2024, details the way in which ESG
7
issues are deployed in investment strategies. It is based on the exclusion
of certain sectors, engagement and dialogue (stewardship) as well as
responsible business conduct and a long-term perspective. In order to
promote ESG best practices within the companies in which the asset
management company and its clients have invested, BNP Paribas
exercises its voting rights as a shareholder at Annual General Meetings.
In addition, BNP Paribas Asset Management and BNP Paribas Cardif use
collaborative dialogue (working groups or coalitions whose members
cooperate to act jointly with companies) to encourage improvements in
practices. For example, these two entities are members of the Climate
Action 100+ initiative and, as such, regularly engage in dialogue with
companies ranked among the world's top greenhouse gas emitters to
improve their climate change governance and strategy. BNP Paribas
Asset Management is also a founding member of the initiative Nature
Action 100.
(1) https://group.bnpparibas/uploads/file/bnpp_responsible_business_principles_ven.pdf.
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3
APPROPRIATE ACTIONS TO MITIGATE
RISKS OR PREVENT SERIOUS HARM
3.1 Concerning the Group's employees
In order to reduce the risks of discrimination and promote respect for
people, the Group has:
■ in early 2023 set an objective relating to compliance with its Code of
conduct, rules and regulations for all Group employees, in order to
strengthen the culture of compliance, specifically including respect
for people;
■ strenghtened and fully rolled-out worldwide in 2023 its policy:
BNP Paribas entities have applied the principles defined at Group
level locally;
■ widely promoted its policy on inclusion in all its dimensions,
particularly during the 2023 Inclusion Days, which raised employee
awareness on equal opportunities, prejudice, disability and financial
inclusion;
■ set up specific training on human rights.
In order to promote professional equality, the Group:
■ has set itself ambitious gender equality targets at all levels of the
organisation by 2025, including 40% of women on the Group's Executive
Committee and in Senior Management Positions (SMP). In 2023, the
ambitious level of 37% of women in the SMP population was achieved
thanks to the actions of the Executive Committee members and the
strong commitment of all Human Resources teams in all business
lines and regions;
■ has continued its actions based on the development of employee
skills, particularly in roles that are structurally unbalanced in terms
of gender such as I T, D ata, Digital, market activities within CIB and
sustainable finance;
■ for several years now, has introduced specific equal pay measures as
part of the mandatory annual negotiations.
In terms of work-life balance, the Group:
■ is continuing its preventive actions around the health and well-being
at work of its employees while adapting its managerial practices;
■ is setting up programmes related to the prevention of psychosocial
risks and stress at work.
3.2 Concerning BNP Paribas' suppliers
and subcontractors
In addition to the assessment system described above (see section 2.3
The system concerning BNP Paribas suppliers and subcontractors),
BNP Paribas:
■ published a "Sustainable Sourcing Charter", setting out the reciprocal
commitments of the Group and its suppliers and subcontractors from
an ethical, environmental and social standpoint;
■ integrated standard contractual clauses covering requirements in
order to meet environmental and social criteria. Since 2018, they have
also included the option of ending contracts if suppliers do not comply
with the Group's ESG requirements.
3.3 Concerning the distribution of financial
products and services to individuals
In order to reduce the risk of discrimination in access to financial services,
the Group:
■ optimises the sale of products and services adapted to the needs and
situation of customers, according to the rules defined by the internal
policy for the protection of clients' interests (CIP);
■ ensures that the information provided is clear and enables customers
to make informed decisions;
■ ensures the accuracy of information relating to the environmental or
social characteristics of the products offered;
■ prioritises the interests of customers rather than those of the Group
or its employees;
■ trains all employees concerned (particularly Front Office and
Management) to protect customer interests;
■ manages customer complaints;
■ implements a financial inclusion approach, by supporting microfinance
through financing and services provided to specialised institutions, by
improving access to credit and insurance, and by supporting customers
facing difficulties because of their disability or their financial situation.
BNP Paribas acts both to facilitate access to credit and to prevent over-
indebtedness. It considers that the role of a responsible bank is to support
its customers, even in the most difficult times.
■ It is in this spirit that Commercial & Personal Banking in France (CPBF)
launched the AXELLE platform in 2019 as part of its commitment
to banking inclusion, updated in early 2024. The platform allows
customers to find help, advice and tips offered by partner associations,
social enterprises and member companies of the Collectif des
entreprises pour une économie plus inclusive en France (Business
collective for a more inclusive economy in France), to help them to
manage their budget. AXELLE is 100% free and anonymous, and is
aimed at all those on low incomes;
■ In terms of financial education, BNP Paribas Personal Finance's online
platform, Budget Responsible is dedicated to helping young people
learn the key concepts of budget management, savings, loans and
banking. In Italy, the Findomestic Camp by BNP Paribas Personal
Finance also aims to raise awareness of financial education among
young people.
In addition to the regulatory requirements related to the duty of care,
the Group has developed several initiatives that fall within its civic
responsibility, such as:
■ the Nickel offering, currently marketed in five European countries
(launched in Germany in 2023), which offers an unconditional account
open to all, including sort code, account number and a payment card;
■ support for microfinance, with microloans benefiting people in 11
countries, including many new emerging countries;
■ training in financial issues, such as financial education;
■ the offer by BNL, the Group's subsidiary in Italy, for seniors wishing
to bridge the gap with their pensions (loss of employment less than
36 months before retirement or early retirement up to four years in
advance).
In order to reduce the risk of non-compliance with personal data
protection, BNP Paribas has set up a training course entitled "Personal
Data Protection Awareness" for all of its employees, in order to raise their
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awareness of personal data protection and help them understand data
protection requirements as well as data privacy laws. The training focuses
on understanding key data protection principles and the implementation
of personal data protection within the Group.
3.4 Concerning financing, investment
and corporate client advisory activities
The risk mitigation and serious harm prevention system is based on the
results of the application of the Group's eight sectoral policies. These
are regularly updated and added to by internal application guides.
For example, the oil and gas policy was amended in 2023 to include
conventional oil and gas resources.
In addition, the Group's risk mitigation and serious harm prevention
system also relies on specific actions implemented with regard to
risk mapping, such as the management of controversies concerning
environmental, social and governance issues.
3.4.1 Activity restriction according to the severity
of the environmental and social impacts
BNP Paribas has defined strict ESG criteria in many sectors, compliance
with which determines the activity with its corporate clients, whether at
the level of a client (which does not comply with the prohibitive criteria
of a sectoral policy), a sub-sector (unconventional hydrocarbons), or a
sector as a whole (such as tobacco).
In order to identify the companies presenting the highest environmental
and social risks, the Group defines and applies sectoral policies, while
managing activity restriction lists according to the level of ESG risks
observed, i.e. a list of excluded companies and a list of companies
placed under monitoring. Companies placed on the monitoring list are
subject to an engagement by the Group to make lasting changes to their
practices and reduce their ESG risks. For excluded companies, the Group
prohibits any financing or investment relationship. Lastly, BNP Paribas
has compiled an exclusion list(1) of specific goods and activities that the
Group is unwilling to finance, such as tobacco. These lists are periodically
updated using data supplied by clients and external sources, and by
analysing the key controversies involving corporate clients accused of
serious violations of environmental standards or human rights.
With regard to the drastic reduction in support for fossil fuels:
■ in 2017, the Bank stopped supporting companies and infrastructure
whose primary business is exploration, production and export of gas/
oil from shale, oil from tar sands or gas/oil production in the Arctic. In
2022, BNP Paribas decided to no longer provide products and services
to companies where more than 10% of the activity is related to tar
sands and shale oil and gas;
■ in 2020, BNP Paribas announced a strategy for a complete exit from
the thermal coal value chain by 2030 in the European Union and
OECD countries, and by 2040 in the rest of the world. Sectoral policies
covering the mining and dedicated infrastructure sectors were also
reviewed;
■ 2023 was a year of a major shift of BNP Paribas' financing from the
energy sector to low-carbon, mainly renewable energy sources, which
already accounted for 65% of the Group's total credit exposure to
the energy production sector on 30 September 2023. BNP Paribas is
accelerating its transition strategy, with the aim of low-carbon making
up 80% of the Group's credit exposure to energy production by 2028,
and 90% by 2030. Please note that this is a stock of loans granted over
the years, which clients will repay over a number of years. The major
action taken from 2023 to accelerate new low-carbon loans and the
divestment of fossil fuels will make it possible to achieve the 2028
and 2030 objectives.
With regard to combatting deforestation:
■ in early 2021, BNP Paribas strengthened its commitment to combatting
deforestation through its policy on Agriculture(2), the scope of which
includes all financial products and services provided by the Group,
including participation in the issuance of bonds;
■ in accordance with its agriculture sectoral policy, BNP Paribas asks all
its clients producing or purchasing beef or soybeans in the Amazon and
Cerrado in Brazil, to be zero legal and illegal deforestation by 2025
and to have full traceability of their direct and indirect value chain in
the Amazon and Cerrado. This requirement applies to the entire direct
and indirect value chain of the Group's clients;
■ since 2021, an analysis of the portfolio of producers, meat packers
and traders involved in the value chain of beef from Brazil has been
carried out in order to assess their progress and engage in a dialogue;
■ in addition, in 2022, BNP Paribas announced that it would not finance
any greenfield or brownfield oil and gas projects, nor any associated
infrastructure in the Amazon region or the Arctic region.
3.4.2 Project financing
For all of its project financing activities, BNP Paribas encourages its
clients to obtain the Free, Prior and Informed Consent (FPIC) of the local
communities impacted by their projects.
Specific restrictions concerning protected areas (such as those listed
by the IUCN) are also included in the Group's financing and investment
policies.
The Group has been a signatory of the Equator Principles since 2008.
These aim to avoid, reduce, mitigate or offset the negative impacts of
major industrial or infrastructure projects on communities, ecosystems
and the climate, with additional measures in certain countries.
3.4.3 Controversy management
The Group monitors controversies targeting its clients, with sources such
as NGOs, the media, and alerts generated as part of the ESG Assessment
(controversies identified by RepRisk and Sustainalytics). These
controversies can be raised by the business lines, the CSR managers of
the business lines, or the Group CSR.
When a controversy arises in relation to one of its clients, the Group first
approaches risks according to the geography and criticality of the subject
(such as a violation of human rights). An internal analysis combines the
available information, in connection with the business line hierarchy
and the Group's CSR, in order to estimate the severity of the controversy
(1) https://cdn-group.bnpparibas.com/uploads/file/bnpparibas_csr_exclusion_list.pdf.
(2) https://cdn-group.bnpparibas.com/uploads/file/bnpparibas_csr_sector_policy_agriculture.pdf.
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and to determine the list of questions that the client must answe r. A fter
contact with the latte r, i ts additional responses and any action plan
(taking into account the time horizon) are analysed in order to reach a
final decision: continue the activity if everything is deemed satisfactory;
suspend operations if doubts remain (with request for the implementation
of a remediation plan and monitoring until satisfaction); exclusion if the
situation cannot be remedied.
BNP Paribas also deepens its sector analyses on controversies affecting
an entire secto r. T he Group then issues internal recommendations as
to the criteria to be monitored, and specific issues are included in the
assessment system for clients in these sectors.
3.5 Alignment of the loan and investment
portfolio with the Net-Zero in 2050 objective
Continuing its commitments to combat global warming, BNP Paribas
signed up to the Net-Zero Banking Alliance (NZBA) from its launch on
21 April 2021, committing to finance a carbon neutral economy by 2050,
which corresponds to a temperature increase limited to 1.5°C compared
to the pre-industrial era.
Other Net-Zero initiatives are grouped within the Glasgow Financial
Alliance for Net-Zero (GFANZ). The Net Zero Asset Owner Alliance (NZAOA)
signed by BNP Paribas Cardif in September 2021 and the Net-Zero Asset
Managers initiative (NZAMi) signed by BNP Paribas Asset Management
in November 2021 are examples. The two entities are committed to
supporting the goal of zero net greenhouse gas emissions by 2050.
3.5.1 Significant resources for applying the Group's
climate vigilance
BNP Paribas has dedicated a large number of employees from several
teams to help to implement the Group's alignment strategy:
■ the Climate Analytics & Alignment (C2A) Data Analytics team, co-
managed by the CSR Department and CIB Global Banking EMEA, which
is responsible for:
■
developing and deploying sectoral alignment methodologies
(including modeling of missing data, analysis of different
methodological options, testing of different climate change
scenarios, etc.) in coordination with business teams and sectoral
specialists,
■
calculating Group-scope portfolio-level metrics for external
■
reporting,
■
calculating client-level metrics for portfolio management and client
■
engagement;
■ the Low-Carbon Transition Group, an internal organisation of 200
specialist bankers at the end of 2023 (with a target of 250 by the
end of 2025), which is dedicated to supporting international clients,
companies and institutional investors in accelerating their transition
to a sustainable and low-carbon economy, with a particular focus on
projects of the future, such as green hydrogen;
■ the CSR network, which operates in the divisions, business lines, branch
networks, functions and subsidiaries to facilitate the deployment of
the CSR policy throughout the Group, with more than 220 employees
devoting all or most of their time to managing CSR issues;
■ the RISK Function, which continuously performs a second-line control
over credit and counterparty risks, market risk, interest rate and foreign
exchange rate risks on the banking book, liquidity risks, insurance risks,
and operational risk, including technological and cybersecurity risks,
data protection risks, modeling risks and environmental and social
risk factors, as well as the associated governance risks;
■ the Finance, RISK and ALM Treasury functions have created a shared
team called Stress Testing & Financial Simulations (STFS), responsible
for rolling out stress testing activities, ICAAP (Internal Capital Adequacy
Assessment Process) tests and internal capital tests together with
financial planning across the Group's entities and activities. Stress test
methodologies are tailored to the main categories of risk and subject
to independent review.
3.5.2 Objectives for six of the highest-emitting sectors
In its climate report(1), published in 2023, BNP Paribas presents in detail
the stages of the alignment of its loan and investment portfolio. In
particula r, t his report explains what data is used, details of the calculation
methodologies, including the calculation of the alignment trajectory
and the strategy implemented by the Group, and specifies the methods
for managing the portfolio. The climate report details the progress in
achieving the objectives of the three business sectors published in 2022,
and presents the targets for the reduction of financed greenhouse gas
(GHG) emissions that have been set for three new sectors. These six
sectors, which are all among the highest emitters, are as follows:
■ Electricity production, for which the Group has undertaken to:
■
increase the share of renewable energies in the energy mix that
it finances to reach more than 66% in 2025 and reduce the share
of coal in the energy mix that it finances to less than 5% in 2025,
■
reduce the CO2 intensity of its financing by at least 30% in 2025
compared to 2020;
■ Oil and gas, for which the Group has undertaken to:
■
reduce its credit exposure to oil exploration and production activities
by 80% between September 2022 and 2030,
reduce its credit exposure to oil & gas production activities by 12%
in 2025 compared to 2020,
reduce its credit exposure to gas exploration and production
activities by 30% between September 2022 and 2030,
■
reduce the intensity of GHG emissions of its financing by at least
10% in 2025 compared to 2020;
■ Automotive secto r, f or which the Group has undertaken to:
■
increase the share of electrified vehicles in the automotive mix that
it finances to reach more than 25% by 2025,
■
reduce the CO2 intensity of its financing by at least 25% in 2025
compared to 2020;
(1) https://group.bnpparibas/uploads/file/bnp_paribas_2022_climate_report.pdf.
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■ Steel, for which the Group has undertaken to:
■
reduce the CO2 intensity of its financing by at least 25% in 2030
compared to 2022;
■ Aluminium, for which the Group has undertaken to:
reduce the intensity of GHG emissions of its financing by at least
10% in 2030 compared to 2022;
■ Cement, for which the Group has undertaken to:
■
reduce the CO2 intensity of its financing by at least 24% in 2030
compared to 2021.
In 2022, BNP Paribas Asset Management and BNP Paribas Cardif
published their "Net-Zero" commitments:
■ regarding BNP Paribas Asset Management's investments, these
commitments are as follows:
■
reduce the carbon footprint (scopes 1 and 2) of the investments
concerned (around 50% of assets under management to date, with
the objective of reaching 100% over time), by 30% by 2025 and by
50% by 2030 (vs. 2019),
■
align the relevant investments (also around 50% of assets under
management to date) with the "Net-Zero" principle: by 60% by 2030
(meeting, aligned or in the process of aligning with the "Net-Zero"
objective) and by 100% by 2040,
■
substantially increase investment solutions in climate and
environmental issues,
■
dialogue with clients on their "Net-Zero" transition;
■ regarding BNP Paribas Cardif's investments, these commitments are
as follows:
■
reduce the carbon footprint of directly held equity and corporate
bond portfolios by at least 23% by 2024 (vs. 2020),
■
reduce the carbon intensity of directly owned office buildings by at
least 12% by 2030 (vs. 2020),
■
allocate at least EUR 800 million per year to environment-themed
investments;
■ regarding shareholder engagement or stewardship, these commitments
are as follows:
■
vote for climate action (in favour of the most relevant climate
initiatives or shareholder proposals),
■
foster dialogue with companies on the "Net-Zero" principle,
■
advocate for a climate policy aligned with the "Net-Zero" principle.
3.6 Investment and financing activities
with a positive impact
The Group's CSR strategy has long been structured to contribute to
achieving the United Nations' 17 Sustainable Development Goals (SDG).
This strategy involves supporting all customers, individuals, companies
and institutions, in their transition to a low-carbon economy, respectful of
the planet's resources and allowing the inclusion of the most vulnerable
as well as respect for human rights.
To this end, the Group continues to expand the range of products and
services to support or even accelerate this transition including:
■ support for impact enterprises (including microfinance institutions):
■
through banking services or investment,
■
■
through financing, in particular with impact bonds, which enable
the financing of innovative projects led by associations or impact
enterprises, with a payment for results model dependent on social,
environmental and development indicators, or the circular economy;
■ sustainable investment funds, which make it possible to direct
investments towards assets incorporating ESG criteria, in other words
funds classified as articles 8 and 9 according to the Sustainable Finance
Disclosure Regulation (SFDR), whether they promote environmental
or social characteristics (article 8), or have a sustainable investment
objective (article 9);
■ sustainable bonds, including green bonds and social bonds;
■ sustainable loans, including sustainability linked loans(SLL), i.e. loans
whose rate is adjusted according to the achievement of environmental
and/or social objectives by the borrower;
■ financing renewable energy: the Group has set a target of EUR 40 billion
in credit exposures for low-carbon energy production by 2028.
4
ALERT MECHANISM
(WHISTLEBLOWING)
4.1 Whistleblowing framework
BNP Paribas Group pays particular attention to the concerns of customers,
employees, shareholders, suppliers and society as a whole. The Group
is committed to listening, understanding and seeking to respond to the
concerns raised by its stakeholders in a fair and effective manne r.
BNP Paribas employees are required to report any effective or suspected
breach of the Code of conduct, Group policies and procedures, or
regulations. Employees can report issues to their line manager or another
manager for issues relating to Respect for People, or to a Compliance
alert channel.
Any suspicion by a BNP Paribas employee of a serious or potentially
serious violation of human rights and fundamental freedoms, the health
and safety of people, and the environment may be reported according
to this whistleblowing system, except when specified otherwise by local
regulations or procedures.
Initially open to Group employees only, the whistleblowing system is now
also open to external third parties. The alert form to be completed is
freely accessible on the BNP Paribas institutional website(1).
(1) https://group.bnpparibas/en/direct-access/whistleblowing.
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The protection of whistleblowers against the risk of retaliation was
strengthened in 2022, in line with the transposition of the European
Directive 2019-1937. Any person that needs to know of an alert during its
processing is formally committed to respecting the confidentiality of the
information relating to the whistle-blower and any person involved. In
addition, the Group guarantees the protection of whistleblowers against
the risk of retaliation, and any person considering themselves the victim
of retaliation may issue an alert that will be dealt with according to the
standards defined by the Human Resources Department. This protection
applies regardless of the channel used by the whistle-blowe r.
The whistleblowing system is presented in the mandatory Code of
conduct training course.
In addition, alerts are analysed and processed, with 333 alerts reported
in 2023.
4.2 Dialogue with external stakeholders
Dialogue with stakeholders is at the heart of BNP Paribas' social and
environmental responsibility and is a key lever for achieving its corporate
social responsibility (CSR) objectives. The Group maintains an open and
constructive dialogue with its stakeholders, which involves listening
to them, understanding them and aiming to meet their expectations,
in line with BNP Paribas' CSR strategy. This dialogue has three main
challenges: anticipating changes in the business lines and improving
products and services by better understanding expectations; optimising
risk management by listening, and having a positive impact on society.
BNP Paribas has four groups of contractual stakeholders: its clients
and customers (individuals, professionals, corporate customers and
institutions); its employees and employee representative bodies; its
shareholders (individual and institutional investors) and its suppliers.
The Group has also identified other strategic stakeholders, in particular:
candidates, companies in which BNP Paribas invests on behalf of third
parties and on its own behalf, regulatory bodies and public authorities,
financial and extra-financial rating agencies, networks and think tanks,
civil society and its organisations (local communities, NGOs, consumer
associations, charities, etc.), the media and opinion leaders.
Each of the Group's stakeholders has identified contacts within
BNP Paribas. These dialogue channels are adapted and deployed
according to the objectives and expectations of the stakeholders.
The Group endeavours to analyse the views and interests of its key
stakeholders, in relation to its strategy and business model. Its Executive
Management and Board of directors receive regular updates.
The main dialogue channels by stakeholder type are as follows:
■ for BNP Paribas clients and customers, exchanges are based on the
close relationship they may have with the Group's subsidiaries and
business lines, supplemented by independent ombudsman services
(organised by the regulatory bodies) in many Group entities, such as
the Commercial & Personal Banking networks in France, Belgium, Italy,
Morocco and Poland. Specialist expert teams also provide dedicated
support to clients/customers or sectors (large companies, financial
institutions, SMEs and mid-sized companies, small businesses,
associations, etc.);
■ for employees and employee representative bodies, the Group's Human
Resources are responsible for social dialogue. For candidates, there
are dedicated recruitment teams;
■ for shareholders (individual and institutional investors) and financial
and extra-financial rating agencies, the main contacts are Investor
Relations and Financial Information (IRFI) and Group CSR;
■ for BNP Paribas suppliers and subcontractors, in addition to the
P&P Department, BNP Paribas also has an independent internal
ombudsman, whose contact details are published on the Group's
institutional website, offering a means of appeal in the event of a
dispute;
■ companies in which BNP Paribas invests on behalf of third parties
are in contact with investment teams, such as those of BNP Paribas
Asset Management;
■ the Institutional Affairs Department is responsible for relations with
regulatory bodies and public authorities;
■ networks, think tanks, civil society and its organisations (local
communities, civil NGOs, advocacy NGOs, consumer associations,
charities) are in contact with the Company Engagement, CSR,
Communication and business lines teams;
■ the Group Communication Department is the main contact for the
media and opinion leaders.
5
SYSTEM FOR MONITORING THE
MEASURES IMPLEMENTED AND
ASSESSING THEIR EFFECTIVENESS
5.1 The CSR Policy Management Dashboard
BNP Paribas has set up a dashboard comprising 10 CSR indicators to guide
its strategy in this area. The monitoring of the CSR Policy Management
Dashboard is carried out on an annual basis by the Group's Executive
Committee and Board of directors.
The achievement of the CSR objectives govern the payment of 20% of the
amount of the loyalty plan awarded in 2023 to more than 8,200 key Group
employees (see A competitive compensation policy, Commitment 5).
The achievement of the CSR objectives is also included for one third
in the calculation of the 15% of the variable compensation awarded for
2023 to the Group's corporate officers. These CSR objectives are those
corresponding to the loyalty plan paid during the year to the Group's key
employees (see chapter 2, Compensation and benefits awarded to the
Group's corporate officers).
These indicators include our results for:
■ our employees (indicator 4 on gender equality; indicators 5 and 6 on
solidarity hours and training performed by employees);
■ our distribution of financial products and services to individuals
(indicator 7);
■ our corporate financing and investment activity (indicators 1, 2, 3, 8
and 9 on supporting our clients in the transition to a sustainable and
low-carbon economy);
■ our own activity (indicator 10).
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5.2 Our employees
In addition to the three indicators relating to the Group's social
responsibility included in the CSR dashboard (see section 5.1 Our CSR
Policy Management Dashboard), the Group monitors other objectives
with regard to its employees.
As part of the Global Agreement, a joint monitoring committee responsible
for the implementation of the Agreement meets once a year to assess
the progress made under the agreement and to take stock of the past
year on the basis of a grid of indicators by country and geographical area.
In terms of gender pay equality, the Group set a dedicated budget of
EUR 10 million for BNP Paribas SA over two years in 2022.
BNP Paribas remains attentive to its employees through Pulse surveys,
with 71 surveys carried out in 57 countries, with increasingly high
participation rates within the Group. In 2023, it was a 71% participation
rate on average among nearly 176,000 employees surveyed.
The vast majority of surveys launched in 2023 by the Group's various
business lines and entities incorporated three common questions
related to employee engagement, in particular pride in belonging to the
Group, adherence to the strategy and involvement in work. The overall
engagement score based on the consolidation of all local engagement
scores(1) reached a high level of nearly 85 out of 100.
One of the indicators that the Group tracks is the percentage of employees
contributing directly to the promotion of human rights who have received
specific human rights training. Since 2016, more than 22,000 BNP Paribas
employees have completed this training.
5.3 Our suppliers and subcontractors
The number of ESG assessments of suppliers and sub-contractors that
are conducted as part of calls for tende r, i n particular those relating to
categories of at-risk purchases, is a metric of BNP Paribas monitoring
actions towards this type of stakeholde r.
At the end of 2023, 5,312 ESG assessments had been carried out
(compared to 5,188 in 2022), and 1,287 BNP Paribas suppliers had signed
up to the Group's Sustainable Sourcing Charte r.
5.4 Our distribution of financial products
and services to individuals
In 2023, BNP Paribas made a training course entitled "Personal Data
Protection Awareness" mandatory for all its employees. The training was
completed by 95% of Group employees.
5.5 Our financing, investment and corporate
advisory activities
At the end of 2023, our system for our corporate financing and investment
activities as well as the restriction of activity according to the severity
of the environmental and social impacts produced the following results:
■ more than 3,000 ESG Assessment questionnaires were carried out with
the Group's very large and large corporate clients in 2023 (compared
to 1,500 in 2022), covering almost all clients in these segments;
■ at the end of 2023, the restriction of activity lists included 1,718 companies
(compared to 1,490 in 2022, i.e. +15%), of which 1,432 companies were
excluded and 86 monitored;
(1) Covering 86% of all Group employees at 31/12/2023.
Pillar
Indicator
2022 Results
2023 Results
2025 Objectives
Our economic
responsibility
1
Amount of sustainable loans (in billions of euros)
87
117
150
2
Amount of sustainable bonds (in billions of euros)
32
67
200
3
Amount of assets under management in open-ended
funds distributed in Europe under article 8 & 9
according to the SFDR (in billions of euros)
223
254
300
Our social
responsibility
2022)
4
Share of women among the SMP population
(Senior Management Position)
35.2%
37.1%
40%
5
Number of solidarity hours performed by employees
over two rolling years (#1MillionHours2Help)
1,126,142
(in 2021 and
1,268,515
(in 2022 and
2023)
1,000,000
(over two
rolling years)
6
Share of employees who completed at least four
training courses during the year
97.4%
98.2%
90%
Our civic
responsibility
7
Number of beneficiaries of products and services
supporting financial inclusion (in millions)
3.3
3.9
6
Our environmental
responsibility
8
Amount of the support enabling our clients to transition
to a low-carbon economy (in billions of euros)
44
104
200
9
Amount of financing to companies contributing
to protecting terrestrial and marine biodiversity
(in billions of euros)
1.8
4.3
4
10
Greenhouse gas emissions in teqCO2/FTE
1.65
1.56
1.85
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■ in 2023, BNP Paribas Asset Management voted at 1,931 General
Meetings, abstaining or opposing around 36% of these resolutions
(compared to 33% in 2022), and supporting 88% of shareholder
proposals on climate change and 96% of those on social topics. In 2023,
BNP Paribas Asset Management opposed 1,521 resolutions proposed
by 271 companies, primarily due to environmental or biodiversity-
related considerations;
■ BNP Paribas Asset Management ranked second in ShareAction Point
of No Returns 2023 on the responsible investment practices of the 77
largest asset managers in the world;
■ in 2023, 95% of BNP Paribas Cardif's general assets in euros in France
were subject to an ESG analysis.
With regard to our positive impact financing and investing activities, the
results are as follows (also see section 5.1 Our CSR Policy Management
Dashboard):
■ support for impact enterprises (including microfinance institutions),
which reached EUR 2 billion at end-2023, with support for more than
3,450 impact enterprises;
■ sustainable investment funds, which make it possible to direct
■
investments towards assets incorporating ESG criteria, in other
words funds classified as articles 8 and 9 according to the Sustainable
Finance Disclosure Regulation (SFDR), either promote environmental
or social characteristics (article 8), or have a sustainable investment
objective (article 9). Assets under management under articles 8 and
9 of the SFDR in BNP Paribas Asset Management's distributed open-
ended funds reached EUR 254 billion at the end of 2023;
■ sustainable bonds, for which BNP Paribas was number one worldwide
at the end of 2023 according to Dealogic, with USD 38.7 billion as
bookrunner for its clients, including USD 25.6 billion for green bonds
at the end of 2023;
■ sustainable loans of EUR 117 billion at the end of 2023, including
sustainability-linked loans (SLL), loans whose rate is modulated
according to the achievement of environmental and/or social targets
by the borrower;
■ financing for the production of low-carbon, mainly renewable energy:
at the end of 2023, this financing represented EUR 32 billion, of
which EUR 28.8 billion for renewable energy sources, i.e. 65% of the
Group's energy production financing. At the end of 2022, this financing
represented EUR 28.2 billion, of which EUR 24.8 billion for renewable
energy sources, i.e. nearly 55% of the Group's energy production
financing.
With regard to the alignment of our credit portfolio, given the relative
weighting of each sector in the Group's credit exposure, the average
results for end-2023 in the six business sectors for which the Group has
set intermediate targets are in line with BNP Paribas' ambition to finance
a carbon neutral economy by 2050 (see section 3.5 Alignment of the loan
and investment portfolio with the Net-Zero in 2050 objective):
■ Electricity production:
■
148 gCO2/kWh at end-2023 (179 in 2022),
■
65% renewable in the Group's electricity mix at end-2023 (60%
in 2022),
■
5% coal in the Group's electricity mix at end-2023 (7% in 2022);
■ Oil and gas:
■
67 gCO2eq/MJ at the end of 2023 (67 in 2022),
■
EUR 3 billion in credit exposure to oil extraction and production at
the end of 2023 (EUR 5 billion at the end of 2022),
■
EUR 3.5 billion in credit exposure to gas extraction and production
at the end of 2023 (EUR 5.3 billion at the end of 2022);
■ Automotive sector:
■
151 gCO2/km travelled at end-2023 (167 in 2022),
15% electrified vehicles at the end of 2023 (14% in 2022),
■ Steel: 1.5 tCO2/tonne of steel at the end of 2023 (1.6 in 2022),
■ Aluminium: 5.8 tCO2eq/tonne of aluminium at the end of 2023 (6.2
in 2022),
■ Cement: 0.64 tCO2/tonne of cement product at the end of 2022 (0.67
in 2021).
BNP Paribas has measured the carbon intensity of its portfolio in the
maritime secto r, f or the fourth year running, according to the Poseidon
Principles. It should be noted that in July 2023, the International Maritime
Organization (IMO) announced a more ambitious reference trajectory, now
aiming for carbon neutrality in 2050. At 31 December 2022, the alignment
score of the loan portfolio dedicated to maritime transport was:
■ 3.6% above the alignment score according to the initial trajectory
(before revision in 2023);
■ 27.2% above the IMO Minimum Trajectory;
■ 32% above the IMO Striving Trajectory.
In addition to our investments, our asset management subsidiary
BNP Paribas Asset Management analysed the impact of its investment
portfolio on biodiversity for the second year in 2023(1), in order to identify
commitment targets for the voting team and for the managers.
The analysis of BNP Paribas Cardif's investment portfolios (shares and
corporate bonds) was published for the first time in 2022, repeated in
2023 and supplemented by a second measurement, using an additional
methodology(2). The results show a low average dependency of portfolios
on all ecosystem services.
(1) https://doc finde r.bnpparibas-am.com/api/files/0E35D6C1-0B41-43E0-9E0 C-5CE342951719.
(2) https://www.bnpparibascardif.com/documents/348001/348117/Rentreprise29LEC_Cardif_Retraite_300623_VF_.pdf/f125d4c9-3dfc-b0d3-2a55-57d150205f83?t=1699438283685 &.
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Vigilance plan
5.6 Our own activity
Every yea r, B NP Paribas measures its environmental footprint of its own
operations "scopes 1 and 2" which includes, among other things, the
electricity and heating of the Group's buildings, as well as employee
travel.
At the end of 2023, the Group's greenhouse gas emissions (expressed in
tonnes of CO2 equivalent per Full-T ime Equivalent – FTE) amounted to
1.56 teqCO2 per FTE (compared to 1.65 teqCO2 per FTE at the end of 2022).
5.7 Our interactions with the Group's external
stakeholders
Interactions with our stakeholders are key for the Group. The number of
stakeholders is constantly changing, with in particular:
■ 183 interactions with advocacy NGOs in 2023, up 51% since 2022 and
76% since 2020, on topics such as climate, fossil fuels and human
rights;
■ 96 interactions with investors in 2023, up 30% since 2022 and 43%
since 2020, on various topics such as ESG risk management, portfolio
alignment, social inclusion and sectoral policies.
5.8 Our systems' controls
Risk management is central to the banking business and is one of the
cornerstones of operations for BNP Paribas. The Group has an internal
control system covering all types of risks to which it may be exposed,
including environmental and social risks, organised around three lines of
defence (see section 2 Corporate governance and internal control of this
Universal registration document, chapter 2.4 Internal control):
■ as the first line of defence, internal control is the business of every
employee, and the Heads of the operational activities are responsible
for establishing and running a system for identifying, assessing and
managing risks according to the standards defined by the functions
exercising an independent control in respect of the second line of
defence;
■ BNP Paribas' second line of defence is handled by the Compliance,
RISK and LEGAL Departments. Their managers report directly to the
Director and Chief Executive Officer and report on the performance of
their duties to the Board of directors, primarily through its specialised
committees;
■ General Inspection provides a third line of defence responsible for
periodic control.
In addition, BNP Paribas' consolidated extra-financial performance
statement is audited by an independent third party.
In order to verify the strict application of ESG risk management tools,
BNP Paribas has rolled out a CSR operational control plan which
establishes a continuous improvement process. This control plan, linked
to the application of sectoral policies, exclusion and monitoring lists, and
questionnaires on the duty of care, is applied to the Group's business
lines and functions.
OUR COMMITMENT TO CONTINUOUS IMPROVEMENT
BNP Paribas' vigilance approach is part of a drive for continuous improvement. As such, the Group will complete, where necessary, its identification,
control and management tools for identified risks, and will report on them each year in its Universal registration document.
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Statement on modern slavery and human trafficking
7.8 Statement on modern slavery and human
trafficking
INTRODUCTION
This Statement outlines the steps that BNP Paribas has taken to ensure
that human trafficking(1) and modern slavery(2) are not taking place
in its business or in any of its supply chains. It also refers to the risk
management processes that the Group has put in place in the context of
its financing and investment activities, which govern the potential cases
of human rights violations that may affect the activities of its clients.
This Statement is for the financial year ended 31 December 2023. The
Board and the Director and Chief Executive Officer attest annually that
the Group complies with this Statement through the information provided
by the respective departments of Corporate Social Responsibility (CSR),
Procurement & Performance, and Human Resources (HR).
This Statement applies to all companies within the BNP Paribas Group
that are required to have a slavery and modern trafficking statement.
Those who have chosen to prepare their own declaration are not
concerned.
(1) The expression "human trafficking" means: "Recruitment, transportation, transfe r, h arbouring or receipt of persons, by means of the threat or use of force or other forms of coercion,
of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person
having control over another person, for the purpose of exploitation", United Nations Convention against T r ansnational Organized Crime.
(2) "Slavery is the status or condition of a person over whom any or all of the powers attaching to the right of ownership are exercised." United Nations Convention on Slavery.
(3) Arval, BNP Paribas Leasing Solutions, BNP Paribas Personal Finance, BNP Paribas Investors, new digital business lines (Nickel, Floa).
THE BNP PARIBAS GROUP
BNP Paribas is Europe's leading provider of banking and financial
services. It operates in 63 countries and employs 182,656 full-time
equivalent workforce. It holds key positions in its three main areas of
activity: Corporate and Institutional Banking (personalised solutions
for our corporate and institutional customers), Commercial, Personal
Banking & Services (network of commercial & personal banks in the
Eurozone and the Europe-Mediterranean zone, as well as some of the
Group's specialised business lines(3)), and Investment & Protection
Services (expertise in savings, investment and protection solutions).
More information on BNP Paribas operations can be found in section 1.4
Presentation of operating divisions and business lines. The Group
purchases over EUR 10 billion of expenditures worldwide broken
down into nine categories: Real Estate, Market Data, Marketing &
Communication, Consumables & General Services, Banking Services,
Professional Services, Technology, Transaction Fees and Travel.
RISKS OF MODERN SL A V ERY & HUMAN TRAFFICKING
Academic studies, field investigations and recent news coverage have
all clearly demonstrated that all sectors, industries and areas may be
affected, to varying degrees, by these types of serious infringements to
human rights.
In this regard, risk assessment policies devoted to the matter of modern
slavery practices need to be multi-factorial (with complementary
thematic screenings performed, on sector & industry, products & services,
geographical and entity level) and regularly updated, in order to tackle
this complex issue as fully and efficiently as possible. The risk-assessment
process BNP Paribas implements to address the risks of modern slavery
and human trafficking takes into account the vastly different situations
of its stakeholders and is complemented by the ad hoc monitoring and
regular discussions performed by Group teams on this subject.
WORKFORCE'S INHERENT RISKS
Risks of modern slavery and human trafficking have been deemed low in
business operations as, to the best of our knowledge, no publicly available
study has categorised the banking sector and its employees, most of
them being highly skilled professionals, as particularly exposed to these
practices.
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Statement on modern slavery and human trafficking
SUPPLIERS' INHERENT RISKS
As a bank, BNP Paribas' supply chains are mainly focused on indirect
procurements and expenditure (consulting services, IT services, security,
IT equipment, office furniture, promotional items, cleaning and catering
services). Depending on the procurement categories, supply chains may
be simple or very complex, with human rights related risks being highe r,
and more difficult to monito r, w here supply chain arrangements are
complex. Based on the risk mapping tool developed by BNP Paribas,
less than 20% (in spending) of the Group procurement categories are at
high or very high risk in terms of human rights and labour conditions
(including modern slavery and child labour).
FINANCING AND INVESTMENT ACTIVITIES'
INHERENT RISKS
BNP Paribas meets the needs of millions of individual and professional
customers, entrepreneurs, small, medium and large companies in
business sectors facing multiple environmental, social and governance
(ESG) challenges. The Group also operates in countries where legal and
governance systems are at diverse levels of development. This diversity of
context calls for structured, comprehensive and expert-driven review and
analysis processes, in order to identify potential risks of modern slavery
and human trafficking in BNP Paribas clients' activities, or in the activities
of the entities in which BNP Paribas invests on the behalf of its clients.
BNP PARIBAS POLICY ON MODERN SL A V ERY AND HUMAN TRAFFICKING
Respect for human rights is one of the pillars on which BNP Paribas' CSR
strategy is based. The Group has committed itself to the promotion of the
following principles and standards that form the basis of its activities:
■ the United Nations Sustainable Development Goals;
■ the Ten Principles of the United Nations Global Compact;
■ the United Nations Guiding Principles on Business and Human Rights
(United Nations Guiding Principles);
■ the internationally-accepted OECD Guidelines for multinational
enterprises;
■ the internationally-accepted standards of human rights, as defined in
the International Bill of Human Rights;
■ the core labor standards set out by the International Labor
Organization.
These public commitments are backed by internal policies implemented
at Group level, with the goal of handling the many subjects revolving
around social, environmental and governance matters, including human
rights. These policies include:
■ BNP Paribas Group Code of conduct;
■ the BNP Paribas Statement on Human Rights;
■ the BNP Paribas Sustainable Sourcing Charter;
■ the BNP Paribas Asset Management Business Conduct Policy;
■ the BNP Paribas Responsible Business Principles.
Early and efficient identification of modern slavery risks is the first
step towards its prevention, alleviation and remediation, and calls for
specific policies and practices. In this regard, BNP Paribas has taken the
following steps and actions in order to exert its duty of care with all
due seriousness.
TOWARDS ITS EMPLOYEES
BNP Paribas is committed to providing a working environment in which
all employees are treated fairly. In particula r, t he Group focuses on
respect and the need to apply the most stringent norms of professional
behaviour and rejects all forms of discrimination. BNP Paribas' policies
and procedures notably include an annual review of high-risk countries
in terms of human rights, as well as a monitoring of employees under
the age of 18 (the Group did not have any in 2023).
Furthermore, the existing policies and procedures within the Group,
including notably a diversity and inclusion policy as well as compensation
principles are in line with the principles of non-discrimination in the
recruitment process and career management of employees. The
BNP Paribas Code of conduct, which applies to all employees, reaffirms
the Group's commitment to changing behaviour and combatting
disrespectful behaviour towards people, including harassment and
discrimination. The Group's "Respect for People" policy aims to combat
inappropriate behaviou r, i n particula r, h arassment and discrimination.
In line with these policies and principles, all employees of the Group are
required to treat all people with respect, make sure their interactions are
professional and efficient, and be receptive of their contributions, even if
they express different views from their own.
The Global agreement, signed on 18 September 2018 and extended to
30 June 2024, has set up an ambitious plan to contribute to improving
quality of life and working conditions of employees, and thus achieve
greater diversity, equality and inclusive growth.
AWARENESS AND TRAINING
BNP Paribas took part in the development of an awareness-raising
e-learning module called "Human Rights into Business", co-created
with the other members of the French association Entreprises pour les
Droits de l'Homme (Businesses for Human Rights – EDH). This e-learning
module is mandatory for all employees who directly contribute to the
promotion of human rights. It is available in eight languages and freely
accessible to all Group employees.
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RAISING CONCERNS
BNP Paribas Group pays particular attention to the concerns of customers,
employees, shareholders, suppliers and society as a whole. The Group
is committed to listening, understanding and seeking to respond to the
concerns raised by its stakeholders in a fair and effective manne r.
BNP Paribas employees are required to report any effective or suspected
breach of the Code of conduct, Group policies and procedures, or
regulations.
Employees can report issues to their line manager or another manage r,
or to Human Resources for issues relating to respect for people, or to a
Compliance alert channel.
Any violation or suspected violation of human rights in the context of
the Group's activities or its suppliers may be reported in the Group's
whistleblowing system, except if local regulations or procedures prevent
this.
Pursuant to the Sapin II law, amended by the Waserman law, the Group's
whistleblowing system is now open to certain external third parties
(depending on local regulations, but at least for suppliers and former
employees). The alert form to be completed is freely accessible on the
BNP Paribas institutional website(1).
The whistleblowing policy guarantees employees exercising their right
to raise an alert protection against reprisal for having raised an internal
alert in accordance with the terms of the policy.
A summary note(2) on whistleblowing is available on the BNP Paribas
Group website.
TOWARDS ITS SUPPLIERS
Within the Procurement & Performance Function, dedicated teams
address ESG risks linked to suppliers and subcontractors. BNP Paribas
ESG risk management related to its suppliers and subcontractors hinges
around the following elements:
■ a responsible purchasing policy that aligns the Function's objectives
with the Group's CSR objectives, as expressed in the Group purpose;
■ the definition by the Function of a normative reference framework.
This framework includes:
■
an ESG risk mapping tool encompassing 13 themes, including
modern slavery and child labou r, a llowing the identification of
procurement categories at high environmental or social risk,
■
a 'Sustainable Sourcing Charter', setting out the reciprocal
commitments of the Group and its suppliers and subcontractors
from an environmental and social standpoint,
■
contractual clauses requiring compliance with the ILO conventions
in supplier contract standard templates in all countries where
suppliers are located, allowing contract termination in case of
non-compliance by the suppliers of the Group ESG requirements;
■
ESG questionnaire models, used during the onboarding of new
suppliers and during calls for tenders, and including environment,
ethics and human rights targeted questions. BNP Paribas
Procurement Norms set a minimum weight of 15% for CSR-related
criteria in calls for tenders.
■
supplier monitoring rules, targeting ESG criteria used during
the selection process and completed by the thematic regulatory
watches, and
■
training for Procurement & Performance employees(3).
TOWARDS ITS CLIENTS (FINANCING
AND INVESTMENT ACTIVITIES)
BNP Paribas strives to reduce potential violation of social and
environmental rights, including human rights, from its financing and
investment activities (see Systematic integration and management of
Environmental , Social and Governance risks, Commitment 3).
These provisions are based on:
■ the development of financing and investment policies managing the
Group's activities in sectors with significant ESG issues;
■ the respect of the United Nations Guiding Principles in the financing
and investment activities;
■ the respect of the Equator Principles for major industrial and
infrastructure projects;
■ the integration of ESG criteria in the Know Your Customer (KYC)
process;
■ the progressive integration of ESG criteria in lending and rating
policies;
■ the development and use of management and monitoring tools for
these risks, including specific questionnaires for activities with salient
environmental and social risks;
■ the training of financing and investing business lines and control
functions on the ESG risk framework;
■ an operational control plan.
In addition to the tools described above, a new ESG Assessment framework
was deployed in June 2021. It enables the identification, assessment and
monitoring of the performance and ESG risks of corporate customers, in
a sector-specific manne r, w ith a common approach within the Group for
a given customer segment. The ESG Assessment covers five major extra
financial topics, including respect for human rights.
At the end of 2023, all large corporate clients of the Group had had an
ESG Assessment,and the tool has been adapted for medium-sized clients
(companies with turnover of more than EUR 50 million) and financial
institutions, with a target of covering all our clients in these segments
by the end of 2024.
(1) BNP Paribas whistleblowing framework (https://group.bnpparibas/en/direct-access/whistleblowing).
(2) Summary of the system – BNP Paribas' whistleblowing procedure (https://cdn-group.bnpparibas.com/uploads/file/summary_of_bnp_paribas_wb_framework_eng_june_2022.pdf).
(3) In the process of being rolled out for the Australian Purchasing function.
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Statement on modern slavery and human trafficking
ASSESSING EFFECTIVENESS
Acknowledging the challenges of assessing and addressing modern
slavery and human trafficking issues, BNP Paribas remains committed
to the review and enhancement of its own processes and policies, in order
to continually improve their range and effectiveness.
FOR EMPLOYEE-TARGETED POLICIES
BNP Paribas tracks the effectiveness of its actions in this field through
the percentage of employees contributing directly to the promotion of
human rights who have received specific training. Since 2016, more than
22,000 employees of the Group have completed this training.
FOR SUPPLIER-TARGETED POLICIES
The number of ESG assessments of suppliers and sub-contractors that
are conducted as part of calls for tende r, i n particular those relating to
categories of at-risk purchases, is a metric of BNP Paribas monitoring
actions towards this type of stakeholde r. I n 2023, 5,312 ESG assessments
were completed (compared with 5,188 in 2022) and 1,287 suppliers
signed BNP Paribas Sustainable Sourcing Charter (compared with 1,519
in 2022)(1).
FOR FINANCING AND INVESTMENT
ACTIVITIES
The opening and maintenance of a high-quality dialogue between
the Group and the entities it finances or in which it invests, plays an
important role in monitoring and remedying certain issues, including
those relating to human rights. The changes in exclusion and monitoring
lists (i.e., the companies with which the Group does not wish to maintain
commercial relations or invest in, or which are subject to increased
monitoring, which may result from serious violations of human rights)
is another indicator monitored by BNP Paribas. At the end of 2023, these
lists numbered 1,718 legal entities (1,432 under exclusion and 286 under
monitoring), against 1,490 at the end of 2022.
(1) Number of suppliers in the portfolio who signed the BNP Paribas Sustainable Sourcing Charte r. A n ew indicator has been defined in 2023, tracking the number of suppliers in the
priority monitoring segment of the supplier portfolio (Sensitive Suppliers List, SSL) that endorsed the BNP Paribas Sustainable Sourcing Charter at the end of 2023. Suppliers are
placed on the SSL if they belong to following categories:
1.Providers of sensitive outsourced services;
2. Sensitive external suppliers;
3. Suppliers deemed at high risk in terms of Compliance;
4. Sensitive suppliers identified as such during the onboarding;
5. Suppliers having triggered a risk event during the contract life cycle.
(2) BNP Paribas also publishes its statement on modern slavery and human trafficking on the Modern slavery statement registry, a platform run by the British government.
PROCESS OF CONSU L TA T ION FOR PREPARING THIS STATEMENT
The information on this statement has been prepared thanks to the work and collaboration of relevant subject matter specialists, as well as members of
the BNP Paribas CSR network, reaching through all functions, business lines and countries of the Group, where applicable (see CSR taken to the highest
level in the organisation). The Group CSR and Group LEGAL Functions have coordinated this collaborative process over the past yea r, a nd in particular
have consulted the designated contacts and experts for the United Kingdom and Australia.
CONCLUSION
7
This statement has been used by BNP Paribas to establish the annual statements required by the Modern Slavery Act 2015 of the United Kingdom
and Modern Slavery Act 2018 (Cth) of Australia. The annual statement can be found on the Publications page of the Group website(2) (https://group.
bnpparibas/en/group/publications).
This statement for the Group was approved by the Board of BNP Paribas SA as the parent entity on 27 February 2024.
Jean-Laurent BONNAFÉ
Director and Chief Executive Officer
Jean LEMIERRE
Chairman of the Board of directors
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Aligned activities within the meaning of the european taxonomy
7.9 Aligned activities within the meaning
of the european taxonomy
REMINDER OF THE REGULATORY FRAMEWORK AND REPORTING OBLIGATIONS
FOR FINANCIAL INSTITUTIONS
The European T a xonomy (hereinafter referred to as the T a xonomy) is a
system for classifying economic activities according to their contribution
to the six environmental objectives defined by the European Commission
in the various Regulations and Delegated Acts published between
June 2020 and November 2023(1).
The T a xonomy is based on two central concepts that are associated with
the economic activities of companies subject to the NFRD(2) (and the CSRD
when it comes into force(3)):
■ eligibility, if the activity is described in one of the Delegated Regulations
of the T a xonomy because of its high potential to contribute to any one
of the six environmental objectives;
■ alignment, which confirms the significant contribution of an eligible
activity to one of the six environmental objectives, based on measurable
criteria. An aligned activity is defined(4) as an activity that makes
a substantial contribution to one of the environmental objectives
without causing harm to the other objectives, i.e. that firstly satisfies
all the technical screening criteria described in one of the delegated
regulations, and secondly that meets the minimum guarantees.
European financial companies must publish their alignment indicators
for the first time for the 2023 financial yea r, i n addition to the eligibility
indicators published in the previous two years.
The main alignment indicator is the ratio of green assets, or Green Asset
Ratio (GAR), which concerns financing instruments (loans and advances,
debt securities, equity instruments and repossessed collaterals)
carried on the institution's balance sheet. This disclosure of the GAR is
accompanied by the green ratio for financial guarantees and the green
ratio for assets under management.
(1) Regulation (EU) 2020/852 of 18 June 2020, Delegated Regulation (EU) 2021/2139 of 4 June 2021, Delegated Regulation (EU) 2022/1214 of 9 March 2022, Delegated Regulation (EU)
2023/2486 of 27 June 2023, Delegated Regulation (EU) 2023/2485 of 27 June 2023 amending Delegated Regulation (EU) 2021/2139.
(2) Non-Financial Reporting Directive 2014/95/EU of 22 October 2014.
(3) Corporate Sustainability Reporting Directive EU 2022/2464 of 14 December 2022.
(4) EU Regulation No. 2020/852 of 18 June 2020.
SCOPE OF FINANCIAL ASSETS SUBJECT TO THE ELIGIBILITY ANA L Y SIS
Each indicator is calculated based on the prudential scope of consolidation
as presented in chapter 5 Risks and capital adequacy – Pillar 3, in
accordance with Commission Delegated Regulation (EU) 2021/2178 of
6 July 2021.
GREEN ASSET RATIO (GAR)
The measurement of financial assets covered by the taxonomy regulation
is based on the gross carrying amount, i.e. before taking into account
any provisions.
The ratio numerator measures the amounts of financial assets
corresponding to aligned activities within the meaning of the taxonomy.
Its scope of analysis covers the following financial assets (in the form
of loans and advances, debt securities, equity instruments of listed
counterparties and repossessed collaterals):
■ outstandings on European companies subject to the NFRD;
■ outstandings on European households in the three loan categories
covered by the regulations (home loans; energy renovation loans; car
loans granted since 1 January 2022);
■ outstandings on local authorities for financing of public housing and
other specialised financing, i.e. for which the allocation of funds is
known;
■ the carrying amount of repossessed property collateral.
The ratio denominator includes the following asset categories (in addition
to the financial assets subject to alignment analysis for the calculation
of the numerator):
■ interbank current accounts;
■ outstandings on hedging derivatives;
■ outstandings to European companies not subject to the NFRD and
outstandings with non-European counterparties;
■ outstandings on households that do not fall within the three loan
categories covered by the GAR (which are housing loans, energy
renovation loans and car loans);
■ cash on hand;
■ other assets (e.g. property, plant and equipment, intangible assets,
deferred tax assets).
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Aligned activities within the meaning of the european taxonomy
The inclusion of assets excluded from numerator alignment analysis in the
asset denominator (22.6% of total balance sheet assets, in gross carrying
amount) causes a structural imbalance of the indicato r. C onsequently, this
ratio cannot be a representative measurement indicator for alignment.
Exposures to central governments, central banks or supranational issuers
are not covered by the regulations.
Details of the assets excluded by the regulations, which represent 49.4%
of total balance sheet assets in gross carrying amount, are available in
section 5.11 Environmental, Social and Governance Risk.
RATIOS OF GREEN OFF-BALANCE
SHEET ASSETS
Concerning the green ratio of financial guarantees, the scope of analysis
for aligning guarantees, used to calculate the ratio numerato r, c overs
financial guarantees whose counterparties are European companies
subject to the NFRD. The denominator includes all financial guarantees
granted to companies regardless of whether they are covered by the
regulation. Yet again, a structural imbalance of the ratio must be
considered, and consequently this ratio cannot be a representative
measurement indicator for alignment.
Concerning the green ratio of assets under management, the scope of
alignment covers instruments invested in European companies subject
to the NFRD and investments in real estate assets. This covers both
the asset management activities carried out by the Group, and the
discretionary management of client portfolios in respect of investment
funds, equity instruments, debt securities and investments in real estate
assets. The same structural imbalance is observed, as the denominator
includes all instruments regardless of whether they are covered by
the regulations. Consequently, this ratio cannot be a representative
measurement indicator for alignment.
Exposures to central governments, central banks or supranational issuers
are also excluded from the off-balance sheet indicators.
METHODOLOGY FOR ALIGNMENT QUALIFICATION UNDER
THE EUROPEAN TAXONOMY
The analysis of the eligibility and alignment of financial assets with
the taxonomy is based on differentiated approaches according to the
categories of counterparties: companies subject to the NFRD, local
governments, European households and investment funds.
For counterparties subject to the NFRD, if the financial instrument funds
are not allocated, the Group collects, via data providers, the share of
alignment published by the counterparties, measured firstly based on
their turnover and secondly based on their capital expenditure (CapEx).
Within this category, given that financial companies will only publish
their alignment indicators for the first time in 2024, the aligned share of
financial instruments for these counterparties is zero by default for this
disclosure. This treatment applies to the three ratios: the Green Asset
Ratio – GAR, the green ratio for financial guarantees and the green ratio
for assets under management.
In the GAR, the assets of the Group's specific entities, Cardif and Arval,
recognised in the prudential balance sheet using the equity method, were
treated similarly, respectively taking into account Cardif's investment
indicators and Arval's turnover and CapEx.
Where the use of funds is known, the alignment measure should be
based on information collected from the counterparty. The European
Commission's draft communication published on 21 December 2023(1)
on the interpretation of certain provisions of Delegated Regulation (EU)
2021/2178 specifies that banking institutions must collect evidence of
alignment for each of the technical criteria on contribution to the climate
objectives, but also document the justification for the absence of impact
causing harm to the other four environmental objectives. Compliance
with each of these criteria must also be certified by an independent
third party. The level of collection of supporting documents required by
the Commission's draft communication since December 2023 is not fully
achievable, as the criteria required are neither subject to a professional
standard in most cases, nor subject to a disclosure obligation. There can
therefore be no valid certification. This is why no financial instrument
whose use of funds is known has been reported in the GAR numerato r,
whether with respect to companies or local governments.
With regard to households, a similar approach should be conducted
to assess the alignment of housing loans, energy renovation loans and
car loans, with the collection of evidence justifying each of the criteria
for both key energy or low-carbon performance criteria, as well as for
other criteria justifying the absence of negative impacts on the other
four environmental objectives. With regard to the latte r, n o professional
standard is currently available. The Group collects evidence from
households for key energy or low-carbon performance criteria, such as
energy performance certificates or vehicle registration numbers. It is not
able to collect evidence for each of the other criteria, which is why the
GAR numerator does not include any outstanding loans to households.
With regard to the investment funds covered by the green ratio of assets
under management, and in particular those included in the portfolios
under management mandate, the Group faces the problem of a lack of
eligibility indicators and the alignment of funds. This lack of alignment
indicators is specific to this yea r, s ince the first disclosures of the
fund alignment indicators must take place no later than June 2024, in
accordance with the EU Sustainable Finance Disclosure Regulation (SFDR)
2019/2088. The asset amounts for these funds are therefore currently
considered as non-eligible and non-aligned.
(1) https://ec.europa.eu/finance/docs/law/231221-draft-commission-notice-eu-taxonomy-reporting-financials_en.pdf.
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AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
ALIGNMENT INDICATOR AMOUNTS AT 31 DECEMBER 2023
On the basis of the methodological elements presented above, the main alignment ratios required by the regulations are presented in the table below
as of 31 December 2023:
➤
SUMMARY OF KEY PERFORMANCE INDICATORS (KPIs) TO BE PUBLISHED BY CREDIT INSTITUTIONS IN ACCORDANCE
WITH ARTICLE 8 OF REGULATION (EU) 2020/852
in millions of euros
Total environmentally
environmentally
sustainable assets
(turnover)
Total
sustainable
assets
(CapEx) (turnover)
KPI
KPI
% coverage
(CapEx) (over total assets)
% of assets
excluded from the
numerator of the
GAR (Article 7 (2) and
(3) and Section 1.1.2.
of Annex V)
% of assets
excluded from the
denominator of the
GAR (Article 7
(1)) and Section 1.2.4
of Annex V)
Main KPI
Green asset
ratio (GAR)
stock
9,254
19,793
0.78%
1.66%
28.06%
22.57%
49.36%
in millions of euros
Total environmentally
sustainable assets (turnover)
Total environmentally
sustainable assets (CapEx)
KPI (turnover)
KPI (CapEx)
Additional KPIs
Financial guarantees
5,751
9,492
4.65%
7.68%
Assets under management
8,659
14,456
1.98%
3.31%
Details of the other tables(1) are presented in the ESG regulatory
indicators document on the Group's investor relations website(2). The
detailed calculation of the green asset ratio is presented in section 5.11
Environmental, Social and Governance Risk, in accordance with the
disclosure requirements under ESG Pillar 3. The Group's green asset
ratio, measured from counterparty revenue, was 0.8% of hedged assets
at the end of December 2023. Eligible and non-aligned assets represent
22.5% of these same assets.
LIMITS OF THE REGULATORY RATIOS
FOR ALIGNMENT WITH THE EUROPEAN
TAXONOMY
The ratio of green assets and the other indicators of alignment with the
taxonomy applicable to banks, due to their methodological imbalances
and their operational complexity, cannot reflect all of the Group's
financing of the transition to a low-carbon economy.
Firstly, the analysis of the alignment with the European taxonomy
only concerns companies subject to the NFRD, European households
and specialised financing granted to European local governments. The
regulations exclude the financing of SMEs and non-European companies.
Specifically, they exclude from the analysis the financing of projects
housed in dedicated vehicles, not subject to the NFRD regulation, even if
they concern the financing of low-carbon infrastructure in Europe. Finally,
the scope of the ratio limited to large companies subject to the NFRD
regulation is very restrictive, given the Group's diversified business model.
Consequently, the imbalance between the assets falling within the scope
of analysis of alignment under the numerator and the total assets covered
by the denominator sets a structural ceiling for each of the Group's ratios,
which was 55.4% in 2023. This cap is lower the more the business model
is diversified in terms of clients and customers, products and locations.
The taxonomy alignment criteria are ambitious by definition, since they
correspond to thresholds scientifically compatible with the European
Union's carbon neutrality objective by 2050. Howeve r, b y proposing only
aligned or non-aligned results, the transition trajectory is not taken
into account, even though it is the subject of a long-term effort already
undertaken by the Group and its clients.
Finally, the climate performance criteria are accompanied by multiple
additional conditions, aimed at ensuring that the activity does not cause
significant harm to one of the T a xonomy's other five environmental
objectives. The assessment of these conditions is complex, including
issues of both interpretation of legislation and access to information.
Most of the information to be collected by banks from their clients is not
yet standardised or available. The need to take into account these final
criteria significantly reduces the share of activities aligned by companies,
especially since banks' collection of information for each of the criteria
is currently not feasible.
This last finding has even more impact on loans to households, for
which asset alignment would require the collection of data not related
to climate performance, which individual customers are unable to collect.
Also, by default, their efforts to contribute to a low-carbon economy are
made invisible in the green asset ratios, even though outstanding home
loans, renovations and car loans constitute a very significant portion of
eligible assets.
These regulatory alignment indicators do not reflect the share of the
Group's assets contributing to alignment with the European climate
change mitigation and adaptation objectives, nor the efforts made by
the Group to steer its business model towards a low-carbon economy, in
(1) The Group has interpreted that the date on which the flow indicators are first applied (for the GAR, for the ratio of financial guarantees and for assets under management) is 2025,
for the year 2024.
(2) https://invest.bnpparibas/document/aligned-activities-under-the-meaning-of-the-european-taxonomy.
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AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
particular through the alignment commitments of its loan portfolio and
its assets under management (see Commitment 3, section 7.2).
Also, given the restrictive nature of these indicators, and in accordance
with regulations, the Group aims to build and monitor an additional
indicator comprising what it knows to be aligned elements of its portfolio
which are not included in the regulatory calculations to date. This will
enable the Group to measure the share of its assets financing activities
which are aligned with European carbon neutrality objectives in all
eligible activities. It better represents the efforts undertaken by a large
international bank such as BNP Paribas, with a very diversified business
model.
PERCENTAGE OF ASSETS ALIGNED
WITH THE PERFORMANCE CRITERIA
IN ELIGIBLE ASSETS
The Group's proposed ratio of assets aligned with the climate performance
criteria for all eligible assets enables trends to be monitored in financing
granted by the Bank to assets contributing to Europe's carbon neutrality
objectives.
At 31 December 2023, outstandings aligned with the T a xonomy's
key performance criteria represented 11.6% of the Group's eligible
outstandings.
This ratio covers the financing of European Union companies subject to
the NFRD, whether or not the use of the funds is allocated, specialised
financing granted to European local governments, and loans to European
households which are covered by the T a xonomy, namely home loans,
energy renovation loans and car loans.
The alignment measurement uses a simplified approach, based solely
on compliance with the technical climate performance criteria, based
on the following categories:
■ For financing to companies subject to the NFRD whose use of funds is
allocated, the alignment amount is identified based on a certificate of
alignment with the T a xonomy collected from the client, which shows
the percentage of alignment of the financed asset or project, and the
environmental objective to which it contributes;
■ For loans to households, alignment is assessed on the basis of a
simplified approach(1), based on the criteria of substantial contribution
to the climate change mitigation objective (for example, for housing
loans, verifying the energy performance certificate collected to ensure
that the asset meets the energy performance criteria defined by the
T a xonomy).
For financing to companies subject to the NFRD whose use of funds is
not allocated, the measurement of the alignment is based on the key
performance indicators disclosed by the counterparties, according to
the methodology described previously in the section on methodology for
alignment qualification under the European T a xonomy.
This ratio reflects the European market for the Group's strategy in favour
of low-carbon energy financing, and the policy of supporting households
with low-carbon housing, renovation and mobility solutions. The strategy
for aligning its loan portfolio, applied to all its markets, is detailed in
section 7.2, Commitment 3.
(1) As described in Annex 2 of the Implementing Regulation (EU) 2022/2453 of 30 November 2022, T e mplate 7 – Mitigating actions: Assets for the calculation of GAR.
in millions of euros
31 December 2023
Total assets eligible for
the Taxonomy
Total assets potentially
aligned withe the
Taxonomy*
Share of assets
aligned* with all
eligible assets
Exposures to counterparties subject to the NFRD
49,513
10,836
21.9%
Exposure to households
227,656
21,266
9.3%
7
TOTAL EXPOSURES
277,169
32,101
11.6%
*
According to the simplified approach as described in the paragraph above, and on the basis of the turnover performance indicators
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A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
in millions of euros
Total [gross]
carrying
amount
Climate Change
Mitigation (CCM)
Climate Change
Adaptation (CCA)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
GAR - Covered assets in both numerator and
denominator
660,050
276,571
9,137
5,808
2,631
598
117
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
659,823
276,571
9,137
5,808
2,631
598
117
2
Financial undertakings
82,051
6,803
546
495
403
34
4
3
Credit institutions
12,674
978
4
Loans and advances
1,356
253
5
Debt securities
6,137
725
6
Equity instruments
5,181
7
Other financial corporations
69,377
5,825
546
495
403
34
4
8
of which investment firms
47,567
3,108
323
323
231
21
3
9
Loans and advances
31,470
1,799
221
221
130
21
3
10
Debt securities
11,305
1,309
102
102
102
11
Equity instruments
4,792
12
of which management companies
8,039
2,231
172
172
171
13
1
13
Loans and advances
6,424
2,219
172
172
171
13
1
7
14
Debt securities
752
12
15
Equity instruments
863
16
of which insurance undertakings
13,771
487
51
0
0
17
Loans and advances
5,727
48
0
0
0
18
Debt securities
3,445
8
19
Equity instruments
4,599
431
51
20
Non-financial undertakings
258,850
42,107
8,590
5,313
2,228
564
113
21
Loans and advances
250,750
37,862
7,585
4,769
1,935
564
113
22
Debt securities
2,045
1,137
534
534
290
23
Equity instruments
6,055
3,108
471
9
3
24
Households
307,637
227,656
25
of which loans collateralised by residential
immovable property
208,499
208,499
26
of which building renovation loans
4,617
4,617
27
of which motor vehicle loans
14,540
14,540
28
Local governments financing
11,286
4
29
Housing financing
30
Other local government financing
11,286
4
31
Collateral obtained by taking possession: residential
and commercial immovable properties
227
➤
1. ASSETS FOR THE CALCULATION OF GAR (GAR MEASURE BASED ON TURNOVER)
The following tables are also available at: https://invest.bnpparibas/document/aligned-activities-under-the-meaning-of-the-european-taxonomy.
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A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine
resources (WTR)
Circular economy (CE)
Pollution (PPC)
and Ecosystems (BIO)
Biodiversity
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
277,169
9,254
5,808
2,631
277,169
9,254
5,808
2,631
6,837
550
495
403
978
253
725
495
403
5,859
550
3,128
326
323
231
1,820
224
221
130
1,309
102
102
102
172
171
2,244
173
2,233
173
172
171
12
7
0
0
487
51
48
0
0
0
8
431
51
42,672
8,704
5,313
2,228
38,427
7,698
4,769
1,935
1,137
534
534
290
3,108
471
9
3
227,656
208,499
4,617
14,540
4
4
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A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
in millions of euros
Total [gross]
carrying
amount
Climate Change
Mitigation (CCM)
Climate Change
Adaptation (CCA)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
32
Assets excluded from the numerator for GAR
calculation (covered in the denominator)
530,952
33
Financial and Non-financial undertakings
190,696
34
SMEs and NFCs (other than SMEs) not subject to
NFRD disclosure obligations
60,919
35
Loans and advances
59,684
36
of which loans collateralised by commercial
immovable property
24,358
37
of which building renovation loans
0
38
Debt securities
177
39
Equity instruments
1,058
40
Non-EU country counterparties not subject to
NFRD disclosure obligations
129,776
41
Loans and advances
125,265
42
Debt securities
4,207
43
Equity instruments
305
44
Derivatives
21,814
45
On demand interbank loans
7,139
46
Cash and cash-related assets
2,694
47
Other categories of assets
(e.g. Goodwill, commodities etc.)
308,610
48
Total GAR assets
1,191,002
49
Assets not covered for GAR calculation
1,161,082
50
Central governments and Supranational issuers
141,256
51
Central banks exposures
300,225
52
Assets Held for Trading
719,602
53
Total assets
2,352,085
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees
126,240
13,654
5,691
5,735
3,545
144
60
55
Assets under management
294,086
72,010
8,512
626
3,897
1,246
147
56
of which debt securities
153,372
31,553
4,949
487
2,152
328
51
57
of which equity instruments
65,146
11,781
2,891
139
1,756
388
95
2023 Universal registration document and annual financial report - BNP PARIBAS
731
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine
resources (WTR)
Circular economy (CE)
Pollution (PPC)
and Ecosystems (BIO)
Biodiversity
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
5,735
3,545
13,798
5,751
73,256
8,659
626
3,897
31,881
5,001
487
2,152
12,169
2,987
139
1,756
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A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
Breakdown by sector
in millions of euros
Climate Change Mitigation
(CCM)
Climate Change Adaptation
(CCA)
Water and marine resources
(WTR)
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
[Gross]
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross]
carrying amount
1
A - Agriculture, forestry and fishing
25
-
2
B - Mining and quarrying
120
22
1
-
3
B.05 - Mining of coal and lignite
4
B.06 - Extraction of crude petroleum and
natural gas
89
11
5
B.07 - Mining of metal ores
2
1
6
B.08 - Other mining and quarrying
15
3
-
-
7
B.09 - Mining support service activities
15
7
-
-
8
C - Manufacturing
5,081
1,115
303
62
9
C.10 - Manufacture of food products
106
1
2
-
10
C.11 - Manufacture of beverages
12
11
C.12 - Manufacture of tobacco products
0
12
C.13 - Manufacture of textiles
3
13
C.14 - Manufacture of wearing apparel
0
14
C.15 - Manufacture of leather and related
products
1
15
C.16 - Manufacture of wood and of
products of wood and cork,
13
5
1
-
16
C.17 - Manufacture of paper and paper
products
2
-
87
19
7
17
C.18 - Printing and reproduction of
recorded media
4
-
18
C.19 - Manufacture of coke and refined
petroleum products
47
17
19
C.20 - Manufacture of chemicals and
chemical products
386
25
12
1
20
C.21 - Manufacture of basic pharmaceutical
products and pharmaceutical preparations
3
21
C.22 - Manufacture of rubber products
69
1
61
1
22
C.23 - Manufacture of other non-metallic
mineral products
101
29
36
11
23
C.24 - Manufacture of basic metals
572
164
16
5
24
C.25 - Manufacture of fabricated metal
products, except machinery and equipment
125
17
4
-
25
C.26 - Manufacture of compute r, e lectronic
and optical products
114
15
1
-
26
C.27 - Manufacture of electrical equipment
599
245
-
-
27
C.28 - Manufacture of machinery and
equipment n.e.c.
309
67
1
-
➤
2. GAR SECTOR INFORMATION (GAR MEASURE BASED ON TURNOVER)
2023 Universal registration document and annual financial report - BNP PARIBAS
733
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A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WMR + CE + P + BE)
Non-Financial SMEs and
corporates other NFC
(Subject to NFRD)
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
25
-
121
22
89
11
2
1
15
4
15
7
5,383
1,177
108
1
12
-
3
-
1
15
5
89
19
7
4
-
47
17
398
26
3
130
2
137
40
587
168
129
18
115
15
599
245
310
67
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AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
Breakdown by sector
in millions of euros
Climate Change Mitigation
(CCM)
Climate Change Adaptation
(CCA)
Water and marine resources
(WTR)
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC not
subject to NFRD
[Gross]
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross]
carrying amount
28
C.29 - Manufacture of motor vehicles,
trailers and semi-trailers
1,294
60
81
25
29
C.30 - Manufacture of other transport
equipment
966
372
30
C.31 - Manufacture of furniture
6
-
31
C.32 - Other manufacturing
6
3
32
C.33 - Repair and installation of machinery
and equipment
343
94
1
-
33
D - Electricity, gas, steam and air conditioning
supply
4,635
1,339
34
D35.1 - Electric power generation,
transmission and distribution
4,452
1,323
35
D35.11 - Production of electricity
3,695
824
36
D35.2 - Manufacture of gas; distribution of
gaseous fuels through mains
80
13
37
D35.3 - Steam and air conditioning supply
104
3
38
E - Water supply; sewerage, waste
management and remediation activities
209
89
3
1
39
F - Construction
1,768
374
16
2
40
F.41 - Construction of buildings
1,214
134
13
1
41
F.42 - Civil engineering
297
70
3
1
42
F.43 - Specialised construction activities
257
171
0
0
43
G - Wholesale and retail trade; repair of motor
vehicles and motorcycles
1,927
654
67
23
44
H - Transportation and storage
1,303
311
11
3
45
H.49 - Land transport and transport via
pipelines
428
93
3
1
46
H.50 - Water transport
162
6
47
H.51 - Air transport
48
H.52 - Warehousing and support activities
for transportation
712
212
9
3
49
H.53 - Postal and courier activities
2
-
50
I - Accommodation and food service activities
25
1
-
-
51
L - Real estate activities
2,410
212
51
5
52
K - Financial and insurance activities
3,892
454
67
9
53
Exposures to other sectors
(NACE codes J, M - U)
20,712
4,019
45
8
2023 Universal registration document and annual financial report - BNP PARIBAS
735
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WMR + CE + P + BE)
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and
other NFC
not subject to NFRD
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
1,374
85
966
372
6
-
6
3
344
94
4,635
1,339
4,452
1,323
3,695
824
80
13
104
3
213
91
1,785
377
1,227
135
301
70
257
171
1,994
677
1,314
314
430
93
162
6
720
214
2
-
25
1
2,461
217
3,959
462
20,757
4,027
2023 Universal registration document and annual financial report - BNP PARIBAS
736
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
% (compared to total covered assets in the denominator)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
GAR - Covered assets in both numerator and denominator
23.22%
0.77%
0.49%
0.22%
0.05%
0.01%
1
Loans and advances. debt securities and
equity instruments not HfT eligible
for GAR calculation
23.22%
0.77%
0.49%
0.22%
0.05%
0.01%
2
Financial undertakings
0.57%
0.05%
0.04%
0.03%
3
Credit institutions
0.08%
4
Loans and advances
0.02%
5
Debt securities
0.06%
6
Equity instruments
7
Other financial corporations
0.49%
0.05%
0.04%
0.03%
8
of which investment firms
0.26%
0.03%
0.03%
0.02%
9
Loans and advances
0.15%
0.02%
0.02%
0.01%
10
Debt securities
0.11%
0.01%
0.01%
11
Equity instruments
12
of which management companies
0.19%
0.01%
0.01%
0.01%
13
Loans and advances
0.19%
0.01%
0.01%
0.01%
14
Debt securities
0.00%
15
Equity instruments
16
of which insurance undertakings
0.04%
0.00%
17
Loans and advances
0.00%
0.00%
18
Debt securities
0.00%
19
Equity instruments
0.04%
20
Non-financial undertakings
3.54%
0.72%
0.45%
0.19%
0.05%
0.01%
21
Loans and advances
3.18%
0.64%
0.40%
0.16%
0.05%
0.01%
22
Debt securities
0.10%
0.04%
0.04%
0.02%
23
Equity instruments
0.26%
0.04%
24
Households
19.11%
25
of which loans collateralised by residential immovable property
17.51%
26
of which building renovation loans
0.39%
27
of which motor vehicle loans
1.22%
28
Local governments financing
29
Housing financing
30
Other local government financing
31
Collateral obtained by taking possession: residential and
commercial immovable properties
32
Total GAR assets
➤
3. GAR KPI STOCK (GAR MEASURE BASED ON TURNOVER)
2023 Universal registration document and annual financial report - BNP PARIBAS
737
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
23.27%
0.78%
0.49%
0.22%
28.06%
23.27%
0.78%
0.49%
0.22%
28.05%
0.57%
0.05%
0.04%
0.03%
3.49%
0.08%
0.54%
0.02%
0.06%
0.06%
0.26%
0.22%
0.49%
0.05%
0.04%
0.03%
2.95%
0.26%
0.03%
0.03%
0.02%
2.02%
0.15%
0.02%
0.02%
0.01%
1.34%
0.11%
0.01%
0.01%
0.01%
0.48%
0.20%
0.19%
0.01%
0.01%
0.01%
0.34%
0.19%
0.01%
0.01%
0.01%
0.27%
0.03%
0.04%
7
0.04%
0.59%
0.24%
0.15%
0.04%
0.20%
3.58%
0.73%
0.45%
0.19%
11.01%
3.23%
0.65%
0.40%
0.16%
10.66%
0.10%
0.04%
0.04%
0.02%
0.09%
0.26%
0.04%
0.26%
19.11%
13.08%
17.51%
8.86%
0.39%
0.20%
1.22%
0.62%
0.48%
0.48%
2023 Universal registration document and annual financial report - BNP PARIBAS
738
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
% (compared to total eligible off-balance sheet assets)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
1
Financial guarantees (FinGuar KPI)
11.04%
4.60%
4.64%
2.87%
0.12%
0.05%
0.00%
0.00%
2
Assets under management (AuM KPI)
16.49%
1.95%
0.14%
0.89%
0.29%
0.03%
0.00%
0.00%
➤
5. KPI OFF-BALANCE SHEET EXPOSURES (GAR MEASURE BASED ON TURNOVER)
2023 Universal registration document and annual financial report - BNP PARIBAS
739
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-aligned)
11.16%
4.65%
0.00%
4.64%
2.87%
16.77%
1.98%
0.00%
0.14%
0.89%
2023 Universal registration document and annual financial report - BNP PARIBAS
740
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
in millions of euros
Total [gross]
carrying
amount
Climate Change
Mitigation (CCM)
Climate Change
Adaptation (CCA)
of which towards
taxonomy relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
GAR - Covered assets in both numerator and
denominator
660,050
290,828
19,383
10,111
4,561
1,332
410
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
659,823
290,828
19,383
10,111
4,561
1,332
410
2
Financial undertakings
82,051
7,248
1,207
1,116
928
48
8
3
Credit institutions
12,674
978
0
0
0
4
Loans and advances
1,356
253
0
0
0
5
Debt securities
6,137
725
6
Equity instruments
5,181
0
7
Other financial corporations
69,377
6,270
1,207
1,116
928
48
8
8
of which investment firms
47,567
3,550
613
613
457
34
4
9
Loans and advances
31,470
2,181
283
283
135
34
4
10
Debt securities
11,305
1,368
330
330
322
11
Equity instruments
4,792
12
of which management companies
8,039
2,239
503
503
470
14
3
13
Loans and advances
6,424
2,226
503
503
470
14
3
14
Debt securities
752
14
15
Equity instruments
863
0
16
of which insurance undertakings
13,771
480
92
0
0
17
Loans and advances
5,727
3
0
0
0
18
Debt securities
3,445
0
0
19
Equity instruments
4,599
477
92
20
Non-financial undertakings
258,850
55,919
18,176
8,995
3,634
1,283
402
21
Loans and advances
250,750
50,224
15,741
7,856
3,104
1,263
396
22
Debt securities
2,045
1,442
1,121
1,121
521
0
0
23
Equity instruments
6,055
4,253
1,314
18
10
20
6
24
Households
307,637
227,656
25
of which loans collateralised by residential
immovable property
208,499
208,499
26
of which building renovation loans
4,617
4,617
27
of which motor vehicle loans
14,540
14,540
28
Local governments financing
11,286
4
29
Housing financing
30
Other local government financing
11,286
4
31
Collateral obtained by taking possession: residential
and commercial immovable properties
227
➤
1. ASSETS FOR THE CALCULATION OF GAR (GAR MEASURE BASED ON CAPEX)
The following tables are also available at: https://invest.bnpparibas/document/aligned-activities-under-the-meaning-of-the-european-taxonomy.
2023 Universal registration document and annual financial report - BNP PARIBAS
741
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine
resources (WTR)
Circular economy (CE)
Pollution (PPC)
and Ecosystems (BIO)
Biodiversity
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
292,159
19,793
10,111
4,561
292,159
19,793
10,111
4,561
7,296
1,215
1,116
928
978
0
0
0
253
0
0
0
725
1,116
928
6,318
1,215
3,584
618
613
457
2,215
287
283
135
1,368
330
330
322
503
470
2,254
506
2,240
506
503
470
14
0
7
480
92
0
0
3
0
0
0
0
477
92
57,202
18,578
8,995
3,634
51,487
16,137
7,856
3,104
1,442
1,121
1,121
521
4,273
1,320
18
10
227,656
0
208,499
4,617
14,540
4
4
2023 Universal registration document and annual financial report - BNP PARIBAS
742
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
in millions of euros
Total [gross]
carrying
amount
Climate Change
Mitigation (CCM)
Climate Change
Adaptation (CCA)
of which towards
taxonomy relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
32
Assets excluded from the numerator for GAR
calculation (covered in the denominator)
530,952
33
Financial and Non-financial undertakings
190,696
34
SMEs and NFCs (other than SMEs) not subject to
NFRD disclosure obligations
60,919
35
Loans and advances
59,684
36
of which loans collateralised by commercial
immovable property
24,358
37
of which building renovation loans
38
Debt securities
177
39
Equity instruments
1,058
40
Non-EU country counterparties not subject to
NFRD disclosure obligations
129,776
41
Loans and advances
125,265
42
Debt securities
4,207
43
Equity instruments
305
44
Derivatives
21,814
45
On demand interbank loans
7,139
46
Cash and cash-related assets
2,694
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
308,610
48
Total GAR assets
1,191,002
49
Assets not covered for GAR calculation
1,161,082
50
Central governments and Supranational issuers
141,256
51
Central banks exposures
300,225
52
Trading book
719,602
53
Total assets
2,352,085
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees
126,240
18,184
9,368
5,735
3,545
241
124
55
Assets under management
294,086
82,902
14,130
1,029
6,260
1,237
326
56
of which debt securities
153,372
37,045
8,764
823
4,029
495
117
57
of which equity instruments
65,146
16,640
4,685
205
2,228
742
209
2023 Universal registration document and annual financial report - BNP PARIBAS
743
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine
resources (WTR)
Circular economy (CE)
Pollution (PPC)
and Ecosystems (BIO)
Biodiversity
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which towards
taxonomy
relevant sectors
(Taxonomy-eligible)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
of which
environmentally
sustainable
(Taxonomy-aligned)
5,735
3,545
18,425
9,492
84,139
14,456
1,029
6,260
37,540
8,881
823
4,029
17,382
4,894
205
2,228
2023 Universal registration document and annual financial report - BNP PARIBAS
744
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
Breakdown by sector
in millions of euros
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
[Gross]
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross]
carrying amount
1
A - Agriculture, forestry and fishing
24
0
2
B - Mining and quarrying
231
152
2
0
3
B.05 - Mining of coal and lignite
0
0
4
B.06 - Extraction of crude petroleum and
natural gas
192
144
5
B.07 - Mining of metal ores
6
0
6
B.08 - Other mining and quarrying
13
2
1
0
7
B.09 - Mining support service activities
20
6
1
0
8
C - Manufacturing
6 174
1 511
201
140
9
C.10 - Manufacture of food products
143
4
1
0
10
C.11 - Manufacture of beverages
117
31
11
C.12 - Manufacture of tobacco products
0
-
12
C.13 - Manufacture of textiles
1
0
4
1
13
C.14 - Manufacture of wearing apparel
7
0
14
C.15 - Manufacture of leather and related
products
7
2
15
C.16 - Manufacture of wood and of
products of wood and cork,
18
4
16
C.17 - Manufacture of paper and paper
products
63
1
31
23
17
C.18 - Printing and reproduction of
recorded media
19
2
18
C.19 - Manufacture of coke and refined
petroleum products
139
67
1
0
19
C.20 - Manufacture of chemicals and
chemical products
502
98
9
2
20
C.21 - Manufacture of basic pharmaceutical
products and pharmaceutical preparations
130
8
0
0
21
C.22 - Manufacture of rubber products
156
4
16
2
22
C.23 - Manufacture of other non-metallic
mineral products
154
48
26
22
23
C.24 - Manufacture of basic metals
523
129
16
9
24
C.25 - Manufacture of fabricated metal
products, except machinery and equipment
124
20
3
1
25
C.26 - Manufacture of compute r, e lectronic
and optical products
126
19
1
0
26
C.27 - Manufacture of electrical equipment
724
263
0
0
27
C.28 - Manufacture of machinery and
equipment n.e.c.
317
73
5
1
➤
2. GAR SECTOR INFORMATION (GAR MEASURE BASED ON CAPEX)
2023 Universal registration document and annual financial report - BNP PARIBAS
745
7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WMR + CE + P + BE)
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
24
-
232
152
-
-
192
144
6
-
13
2
21
6
6 375
1 651
143
4
117
31
0
-
4
1
7
0
7
2
18
4
95
24
19
2
140
68
511
99
131
8
172
5
180
70
539
138
127
21
127
19
724
263
322
74
2023 Universal registration document and annual financial report - BNP PARIBAS
746
7
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Aligned activities within the meaning of the european taxonomy
Breakdown by sector
in millions of euros
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
[Gross]
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross] [Gross]
carrying amount
carrying amount
[Gross]
carrying amount
28
C.29 - Manufacture of motor vehicles,
trailers and semi-trailers
1,417
263
87
79
29
C.30 - Manufacture of other transport
equipment
1,022
357
-
-
30
C.31 - Manufacture of furniture
6
0
31
C.32 - Other manufacturing
58
3
1
0
32
C.33 - Repair and installation of machinery
and equipment
400
114
1
0
33
D - Electricity, gas, steam and air conditioning
supply
5,556
2,520
34
D35.1 - Electric power generation,
transmission and distribution
5,284
2,443
35
D35.11 - Production of electricity
4,296
1,572
36
D35.2 - Manufacture of gas; distribution of
gaseous fuels through mains
144
72
37
D35.3 - Steam and air conditioning supply
128
5
38
E - Water supply; sewerage, waste
management and remediation activities
234
117
2
1
39
F - Construction
1,364
437
2
1
40
F.41 - Construction of buildings
824
225
1
0
41
F.42 - Civil engineering
270
50
3
1
42
F.43 - Specialised construction activities
268
162
0
0
43
G - Wholesale and retail trade; repair of motor
vehicles and motorcycles
3,507
1,228
169
59
44
H - Transportation and storage
1,457
432
10
3
45
H.49 - Land transport and transport
7
via pipelines
465
97
3
1
46
H.50 - Water transport
208
36
47
H.51 - Air transport
16
3
48
H.52 - Warehousing and support activities
for transportation
765
294
7
2
49
H.53 - Postal and courier activities
3
1
50
I - Accommodation and food service activities
58
1
6
0
51
L - Real estate activities
1,647
338
770
158
52
K - Financial and insurance activities
6,113
2,226
25
9
53
Exposures to other sectors
(NACE codes J, M - U)
29,555
9,215
96
31
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Aligned activities within the meaning of the european taxonomy
31 December 2023
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WMR + CE + P + BE)
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
Non-Financial
corporates
(Subject to NFRD)
SMEs and other
NFC not subject
to NFRD
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
[Gross]
carrying amount
1,503
342
1,022
357
6
0
59
3
400
114
5,556
2,520
5,284
2,443
4,296
1,572
144
72
128
5
236
118
1,366
438
825
225
273
51
268
162
3,677
1,287
1,467
435
468
98
7
208
36
16
3
772
297
3
1
63
1
2,417
496
6,138
2,235
29,651
9,245
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7
Aligned activities within the meaning of the european taxonomy
% (compared to total covered assets in the denominator)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
GAR - Covered assets in both numerator and denominator
24.42%
1.63%
0.85%
0.38%
0.11%
0.03%
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR calculation
24.42%
1.63%
0.85%
0.38%
0.11%
0.03%
2
Financial undertakings
0.61%
0.10%
0.09%
0.08%
3
Credit institutions
0.08%
4
Loans and advances
0.02%
5
Debt securities
0.06%
6
Equity instruments
0.00%
7
Other financial corporations
0.53%
0.10%
0.09%
0.08%
8
of which investment firms
0.30%
0.05%
0.05%
0.04%
9
Loans and advances
0.18%
0.02%
0.02%
0.01%
10
Debt securities
0.11%
0.03%
0.03%
0.03%
11
Equity instruments
12
of which management companies
0.19%
0.04%
0.04%
0.04%
13
Loans and advances
0.19%
0.04%
0.04%
0.04%
14
Debt securities
15
Equity instruments
16
of which insurance undertakings
0.04%
0.01%
17
Loans and advances
18
Debt securities
19
Equity instruments
0.04%
0.01%
20
Non-financial undertakings
4.70%
1.53%
0.76%
0.31%
0.11%
0.03%
21
Loans and advances
4.22%
1.32%
0.66%
0.26%
0.11%
0.03%
22
Debt securities
0.12%
0.09%
0.09%
0.04%
23
Equity instruments
0.36%
0.11%
0.00%
0.00%
24
Households
19.11%
25
of which loans collateralised by residential immovable property
17.51%
26
of which building renovation loans
0.39%
27
of which motor vehicle loans
1.22%
28
Local governments financing
29
Housing financing
30
Other local government financing
31
Collateral obtained by taking possession: residential and
commercial immovable properties
32
Total GAR assets
➤
3. GAR KPI STOCK (GAR MEASURE BASED ON CAPEX)
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7
Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets funding
taxonomy relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
24.53%
1.66%
0.85%
0.38%
28.06%
24.53%
1.66%
0.85%
0.38%
28.05%
0.61%
0.10%
0.09%
0.08%
3.49%
0.08%
0.54%
0.02%
0.06%
0.06%
0.26%
0.22%
0.53%
0.10%
0.09%
0.08%
2.95%
0.30%
0.05%
0.05%
0.04%
2.02%
0.19%
0.02%
0.02%
0.01%
1.34%
0.11%
0.03%
0.03%
0.03%
0.48%
0.20%
0.19%
0.04%
0.04%
0.04%
0.34%
0.19%
0.04%
0.04%
0.04%
0.27%
0.00%
0.03%
0.04%
0.04%
0.01%
0.59%
0.24%
0.15%
0.04%
0.01%
0.20%
4.80%
1.56%
0.76%
0.31%
11.01%
4.32%
1.35%
0.66%
0.26%
10.66%
0.12%
0.09%
0.09%
0.04%
0.09%
0.36%
0.11%
0.26%
19.11%
13.08%
17.51%
8.86%
0.39%
0.20%
1.22%
0.62%
0.48%
0.48%
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7
Aligned activities within the meaning of the european taxonomy
% (compared to total eligible off-balance sheet assets)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible)
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
1
Financial guarantees (FinGuar KPI)
14.71%
7.58%
4.64%
2.87%
0.20%
0.10%
0.00%
0.00%
2
Assets under management (AuM KPI)
18.98%
3.24%
0.24%
1.43%
0.28%
0.07%
0.00%
0.00%
➤
5. KPI OFF-BALANCE SHEET EXPOSURES (GAR MEASURE BASED ON CAPEX)
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Aligned activities within the meaning of the european taxonomy
31 December 2023
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
TOTAL (CCM + CCA + WTR + CE + PPC + BIO)
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible
Proportion of
total covered assets
funding taxonomy
relevant sectors
(Taxonomy-eligible)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
Proportion of total
covered assets
funding taxonomy
relevant sectors
(Taxonomy-aligned)
14.90%
7.68%
0.00%
4.64%
2.87%
19.27%
3.31%
0.00%
0.24%
1.43%
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7
Aligned activities within the meaning of the european taxonomy
The table below meets the transparency requirements of the Delegated Act of July 2022 on the financing of activities related to nuclear energy and
fossil gas
➤
TEMPLATE 1: NUCLEAR AND FOSSIL GAS RELATED ACTIVITIES
31 December 2023
Nuclear energy related activities
1
fuel cycle.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of
innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the
YES
2
hydrogen production, as well as their safety upgrades, using best available technologies.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations
to produce electricity or process heat, including for the purposes of district heating or industrial processes such as
YES
3
production from nuclear energy, as well as their safety upgrades.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen
YES
Fossil gas related activities
4
that produce electricity using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities
YES
5
heat/cool and power generation facilities using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined
YES
6
generation facilities that produce heat/cool using fossil gaseous fuels.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat
YES
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7
Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 2: TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (DENOMINATOR) (GAR MEASURE BASED ON TURNOVER)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139
1. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139
2. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139
3. in the denominator of the applicable KPI
241
0.02%
241
0.02%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139
4. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139
5. in the denominator of the applicable KPI
9
0.00%
9
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139
6. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
7. KPI
9,005
Amount and proportion of other taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in the denominator of the applicable
0.76%
8,888
0.75%
117
0.01%
8
TOTAL APPLICABLE KPI
9,254
0.78%
9,137
0.77%
117
0.01%
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7
Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 3: TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (NUMERATOR) (GAR MEASURE BASED ON TURNOVER)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139
1. in the numerator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139
2. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139
3. in the denominator of the applicable KPI
241
2.60%
241
2.63%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139
4. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139
5. in the denominator of the applicable KPI
9
0.09%
9
0.09%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139
6. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of other taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in the numerator of the applicable
7. KPI
9,005
97.31%
8,888
97.27%
117
100.00%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY-ALIGNED ECONOMIC
ACTIVITIES IN THE NUMERATOR OF THE APPLICABLE KPI
9,254
100%
9,137
100%
117
100%
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Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 4: TAXONOMY-ELIGIBLE BUT NOT TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (GAR MEASURE BASED ON
TURNOVER)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
1. KPI
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.00%
0.00%
2. KPI
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.00%
0.00%
3. KPI
86
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.01%
86
0.01%
0.00%
4. KPI
85
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.01%
85
0.01%
0.00%
5. KPI
5
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.00%
5
0.00%
0.00%
6. KPI
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the denominator of the applicable
0.00%
0.00%
Amount and proportion of other taxonomy-eligible but not taxonomy-
aligned economic activities not referred to in rows 1 to 6 above in the
7. denominator of the applicable KPI
267,740
22.48%
267,258
22.44%
481
0.04%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY ELIGIBLE BUT NOT
TAXONOMY-ALIGNED ECONOMIC ACTIVITIES IN THE DENOMINATOR
267,915
22.49%
267,434
22.45%
481
0.04%
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Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 5: TAXONOMY NON-ELIGIBLE ECONOMIC ACTIVITIES (GAR MEASURE BASED ON TURNOVER)
Economic activities
in millions of euros
31 December 2023
TOTAL
Amount
%
1.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
2.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
3.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
70
0.01%
4.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
5.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
6.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
7.
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
382,811
32.14%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY-NON-ELIGIBLE ECONOMIC ACTIVITIES IN THE DENOMINATOR OF
THE APPLICABLE KPI
382,881
32.15%
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Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 2: TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (DENOMINATOR) (GAR MEASURE BASED ON CAPEX)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139
1. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139
2. in the denominator of the applicable KPI
51
0.00%
51
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139
3. in the denominator of the applicable KPI
400
0.03%
400
0.03%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139
4. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139
5. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139
6. in the denominator of the applicable KPI
0.00%
0.00%
0.00%
7. KPI
19,341
Amount and proportion of other taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in the denominator of the applicable
1.62%
18,931
1.59%
410
0.03%
8
TOTAL APPLICABLE KPI
19,793
1.66%
19,383
1.63%
410
0.03%
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7
Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 3 TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (NUMERATOR) (GAR MEASURE BASED ON CAPEX)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139
1. in the numerator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139
2. in the numerator of the applicable KPI
51
0.26%
51
0.27%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139
3. in the numerator of the applicable KPI
400
2.02%
400
2.06%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139
4. in the numerator of the applicable KPI
0
0.00%
0
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139
5. in the numerator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139
6. in the numerator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of other taxonomy-aligned economic activities not
7. referred to in rows 1 to 6 above in the numerator of the applicable KPI
19,341
97.72%
18,931
97.67%
410
100.00%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY-ALIGNED ECONOMIC
ACTIVITIES IN THE NUMERATOR OF THE APPLICABLE KPI
19,793
100%
19,383
100%
410
100%
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Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 4: TAXONOMY-ELIGIBLE BUT NOT TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (GAR MEASURE BASED ON
CAPEX)
Economic activities
in millions of euros
31 December 2023
TOTAL
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation (CCA)
Amount
%
Amount
%
Amount
%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.26 of Annexes I and II to
1. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.27 of Annexes I and II to
2. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.28 of Annexes I and II to
3. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
52
0.00%
52
0.00%
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.29 of Annexes I and II to
4. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
26
0.00%
26
0.00%
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.30 of Annexes I and II to
5. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.31 of Annexes I and II to
6. Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0.00%
0.00%
0.00%
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1 to 6 above
7. in the denominator of the applicable KPI
272,289
22.86%
271,367
22.78%
922
0.08%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY ELIGIBLE BUT NOT
TAXONOMY-ALIGNED ECONOMIC ACTIVITIES IN THE DENOMINATOR
272,367
22.87%
271 445
22.79%
922
0.08%
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Aligned activities within the meaning of the european taxonomy
➤
TEMPLATE 5: TAXONOMY NON-ELIGIBLE ECONOMIC ACTIVITIES (GAR MEASURE BASED ON CAPEX)
Economic activities
in millions of euros
31 December 2023
TOTAL
Amount
%
1.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
2.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
378
0.03%
3.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
39
0.00%
4.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
5.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0
0.00%
6.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in
accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the
applicable KPI
0.00%
7.
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
382,464
32.11%
8
TOTAL AMOUNT AND PROPORTION OF TAXONOMY-NON-ELIGIBLE ECONOMIC ACTIVITIES IN THE DENOMINATOR OF
THE APPLICABLE KPI
382,881
32.15%
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Cross-reference tables
7.10 Cross-reference tables
Cross-reference table GRI, ISO 26000, Global Compact, Sustainable Development Goals, Principles for Responsible Banking and T a skforce on Climate-
related Financial Disclosures
2023 Universal registration
document
Pages
Global Reporting
Initiative(*)
ISO 26000
Principles
of the
United
Nations
Global Development
Compact
Goals (SDG)
Sustainable Principles for
Responsible
Banking
TCFD(**)
BNP Paribas' company purpose
and consideration of social and
environmental issues
633 D2-6,D2-9, D2-22
5.2.2, 5.2.3, 6.2.3
1 – 10
1 – 17
1 – 6
S. a)
Summary
634
D3-2, D405-1
D2-14, D2-22, 5.2.1, 5.2.2, 6.6.3,
6.6.4, 6.6.6
1 – 10
1 – 17
1 – 6
MT c)
The Corporate Social Responsibility (CSR) Strategy
A bank committed to a better future
(4 pillars 12 commitments)
638
D3-2, D405-1
D2-14, D2-22, 5.2.1, 5.2.2, 6.6.3,
6.6.4, 6.6.6
1 – 10
1 – 17
1 – 6
MT c)
The CSR Policy Management
Dashboard
639
4.3, 7.7.2, 7.7.3
1, 6, 7, 8
1 – 17
5, 6
M T.a), MTb),
MTc)
Results acknowledged by extra-
financial rating agencies and
external stakeholders
640
D413-1
7.6.2
CSR taken to the highest level in the
organisation
641 D2-9,D2-12, D2-13
6.2.2
5
G. a), G. b)
BNP Paribas' public positions
642
D2-28
6.8.9, 7.3.3
1, 3, 6, 8,10
1 – 17
3, 4, 6
Fostering dialogue with stakeholders
643
D2-29 5.3.2, 5.3.3, 7.5.4
1, 3, 9
17
4
OUR ECONOMIC RESPONSIBILITY: FINANCING THE ECONOMY IN AN ETHICAL MANNER
Commitment 1: Financing and investments with a positive impact
Offering a wide range of sustainable
products
645
D2-24
6.8.2
1 – 10
17
1
M T.c)
7
Financing impact entrepreneurship
646
D203-1 6.8.7, 6.7.9, 7.3.1
1, 4, 6
8, 10, 11, 17
2, 4
Designing and promoting funds
6,7, 10,11,13,14,
incorporating sustainability criteria
647
D2-24, D203-1
6.7.3, 6.7.9
1, 9
15,17
1 – 3
M T.a), M T.c)
T a ilored advice and support:
start-ups and innovative companies
647
D203-1 6.3.7, 6.7.3, 6.7.9
6
5, 8, 9
3, 4
Commitment 2: Ethics of the highest standard
Ethics of the highest standard
D2-23, D2-24,
D205-2, D207-1,
4.7, 6.6.3, 6.6.4,
648 D207-2,D3-2, D3-3
6.6.6, 6.6.7, 6.8.7
10
10, 16
1, 2, 5, 6
Protecting clients' interests
649
D3-2, D3-3
5.3.3, 6.6.7, 6.7.3,
D2-23, D2-24, 6.7.4, 6.7.5, 6.7.6,
6.7.7
10
5, 8, 10
3, 4, 5
Ethics at the heart of supplier
relations
651
D2-23, D308-1,
D414-1 5.2.1, 6.6.3, 6.7.3
2 – 8
12, 16
4, 5
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7
Cross-reference tables
2023 Universal registration
document
Pages
Global Reporting
Initiative(*)
ISO 26000
Principles
of the
United
Nations
Global Development
Compact
Goals (SDG)
Sustainable Principles for
Responsible
Banking
TCFD(**)
Commitment 3: Systematic integration and management of environmental, social and governance risks (ESG)
A comprehensive ESG risk
management approach
652
D2-17, D2-23,
6.3.4, 6.3.5, 6.5.5,
D2-24, D3-1,
D101-1
4.4, 4.6, 6.2,
6.5.6, 6.6.3,
6.6.7, 6.8.7
1 – 10
3, 5, 6, 7, 8, 9,
13, 14, 15, 16
1 – 6
R.a), R.b),
R.c), M T.c)
An internal ESG performance and
risk assessment tool:
6.3.5, 6.4.7,
ESG Assessment
652
D2-23, D2-24
6.7.4, 6.7.5
1 – 10
5, 10, 11, 12, 13,
14, 15, 16
1, 2, 3, 5, 6 R.a), R.b), R.c)
Implementation of financing and
5, 10, 11, 12, 13,
investment policies
653
D2-24, D203-1
1 – 10
14, 15, 16
1–6 R.a), R.b), R.c)
Other ESG risk management tools
654
D2-24, D3-1
1 – 10
14, 15, 16
5, 10, 11, 12, 13,
3, 4, 5 R.a), R.b), R.c)
Alignment of the loan portfolio with
7, 9, 12, 13,
the net zero by 2050 objective
655
D2-24, D201-2
6.5.5, 6.7.5
7, 8, 9
14, 15
1 – 6
S.a), S.b)
OUR SOCIAL RESPONSIBILITY: SUPPORTING OUR EMPLOYEES BY OFFERING THEM AN ENVIRONMENT AND PATHWAYS ADAPTED TO THEIR
EXPECTATIONS
Our employees around the world
660
D2-7, D401-1,
D401-3, D405-1
6.4.3
5, 8
6
Changes in workforce (recruitments,
departures and mobility)
662
6.4.3, 6.4.4
5, 8
6
Absenteeism and Work-related
accidents
663
D403 6.4.3, 6.4.4, 6.4.6
6
3, 5, 8
1, 5, 6
Commitment 4: Promotion of diversity, equality and inclusion
A solid framework, a multi-actor
commitment
664
D3-2, D3-3
6.3.7, 6.4.3, 6.4.7
1, 6
5, 8, 10
5
Promoting an inclusive culture
665
D3-2, D3-3
5.3.3, 6.6.6
1, 6
5, 8, 10, 16
4, 5
Outstanding actions in the area of
6.3.7, 6.3.10,
professional equality
666
D3-2, D3-3
6.4.3, 6.6.6
1, 6
5, 8, 10, 16
5, 6
Constant progress, pioneering
intiatives for greater diversity
668
D3-2, D3-3
5.3.3
1, 6
5, 8, 10, 17
5, 6
Respect for human rights and code
of conduct
669
D3-2, D3-3
6.3.3, 6.3.5
1, 2, 6
5, 8, 10, 17
5, 6
Commitment 5: "A g ood place to work" and responsible employment management
Strong focus on employees
(health and safety, risk prevention,
context of health crisis and conflict
in Ukraine)
670
D403-1, D403-4,
D403-6 6.4.3, 6.4.4, 6.4.6
6
3, 5, 8
1, 5, 6
Transforming working practices and
maintaining the strong corporate
culture
672
6.4.3
4, 8
4, 5
R. c), M T. c)
High-quality social dialogue
673
D2-30
5.3.3, 6.4.3,
6.3.10, 6.4.5
3
3, 5, 8, 17
1, 4, 5
A competitive compensation policy
674
D2-20
6.4.3, 6.4.4
6
5, 8
4, 6
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AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Cross-reference tables
2023 Universal registration
document
Pages
Global Reporting
Initiative(*)
ISO 26000
Principles
of the
United
Nations
Global Development
Compact
Goals (SDG)
Sustainable Principles for
Responsible
Banking
TCFD(**)
Commitment 6: A learning company supporting dynamic career path management
Attracting candidates and retaining
employees
676
6.4.7
6
4, 5, 8, 10
1, 4
Developing skills and improving
employability – training, skills
678
D404-2, D404-3
6.4.7, 6.8.5
1, 8
4, 5, 8, 17
1, 4
R. c), M T. c)
OUR CIVIC RESPONSIBILITY: BEING A POSITIVE AGENT FOR CHANGE
Commitment 7: Products and services that are widely accessible
The Group's action to promote the
inclusion and financial health of its
clients
681
D3-2, D3-3
6.8.3, 6.8.9
6, 8, 9
1, 8, 10, 17
1 – 3
T a king customers' specific needs into
account
682
D3-2, D3-3
6.7.4, 6.7.8, 6.8.6
6
8, 10
1 – 3
Commitment 8: Supporting human rights and combatting social exclusion
BNP Paribas is committed to
6.3.3, 6.3.4, 6.3.5,
respecting human rights
683
D3-2, D3-3
6.3.7, 6.7.7
1 – 6
1, 2, 8, 16
1 – 6
Combatting social exclusion
685
D3-2, D3-3
6.8.3, 6.8.4, 6.8.5
6
8, 10, 11
1, 2
Commitment 9: Corporate philanthropy policy focused on the arts, solidarity and the environment
Solidarity
686
D3-2, D3-3
6.4.7, 6.8.3
1, 6
3, 4, 6, 7, 8, 13,
14, 15
1, 2, 4
Culture
686
6.8.4
11
4
OUR ENVIRONMENTAL RESPONSIBILITY: ACCELERATING THE ECOLOGICAL AND ENERGY TRANSITION
Commitment 10: Enabling its clients to transition to a low-carbon economy respectful of the environment
A strong ambition for the transition
6.5.3, 6.5.4, 6.5.5,
to a low-carbon economy
687 D3-2,D3-3, D302-5
6.6.6, 6.7.5
7 – 9
7, 9, 11, 13
1 – 6
M T.a), M T.c)
Supporting corporate clients in their
energy and ecological transition
688
D3-2, D3-3, 6.5.3, 6.5.4, 6.5.5,
D302-5 6.6.6, 6.7.5
7 – 9
7, 9, 11, 12, 13
1, 3, 4
M T.a), M T.c)
Supporting its individual customers
7
in reducing their carbon footprint
and participating in the energy
transition
690
D302-5
D3-2, D3-3, 6.5.3, 6.5.4, 6.5.5,
6.6.6, 6.7.5
7 – 9
7, 11, 13
1, 3, 4
M T.a), M T.c)
Contributing to protecting
biodiversity
690
D101-1, D101-2,
D101-4 6.5.4, 6.5.6, 6.7.5
7 – 9
5, 9, 11, 12, 14,
15, 17
1, 2, 4, 5
Asset management to support the
6.5.4, 6.5.5, 6.6.6,
energy and ecological transition
691
6.7.5
7 – 9
6, 7, 8, 9, 11, 13,
14, 15
1, 2, 3, 4, 5
R. c), M T.a)
Financing innovative start-ups as
an accelerator of the ecological
transition
692
D302-5
D3-2, D3-3, 6.5.3, 6.5.4, 6.5.5,
6.6.6, 6.7.5
7 – 9
7, 9, 11, 12, 13
1, 3, 4
M T.a), M T.c)
Commitment 11: Reducing the environmental impact of its operations
Green company for employees
(GC4E): employee engagement
6.5.3, 6.5.4,
worldwide
692
6.5.5, 6.7.5
7, 9
12, 13
1, 5, 6
Strengthened efforts to reduce the
energy consumption of operations
692
D302-1, D305-1,
D305-4, D305-5
6.5.3, 6.5.4,
6.5.5, 6.7.5
7, 8, 9
9, 11, 12, 13
1, 5, 6
M T.b)
Responsible real estate initiatives
694
6.5.3, 6.5.4,
6.5.5, 6.7.5
9
9, 11, 12
2, 6
M T.c)
Responsible consumption
694
D302-2
6.5.3, 6.5.4,
6.5.5, 6.7.5
9
12
2, 6
M T.c)
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7
Cross-reference tables
2023 Universal registration
document
Pages
Global Reporting
Initiative(*)
ISO 26000
Principles
of the
United
Nations
Global Development
Compact
Goals (SDG)
Sustainable Principles for
Responsible
Banking
TCFD(**)
Commitment 12: Advancing awareness and sharing of best environmental practices
Supporting research and
development on climate change and
6.5.5, 6.6.6,
biodiversity
695
D101-1
6.8.6, 6.8.9
8, 9
13, 14, 17
4, 5
S.b)
Raising awareness among internal
6.5.5, 6.6.6,
and external stakeholders
696
D2-23, D413-1
6.8.6, 6.8.9
9
17
4, 5
S.b)
T a king an active part in partnerships
6.5.5, 6.6.6,
and collective initiatives
696
D2-23, D413-1
6.8.6, 6.8.9
9
17
4, 5
S.b)
EXTRA-FINANCIAL PERFORMANCE STATEMEN T, V IGILANCE PLAN, AND MODERN SLAVERY AND HUMAN TRAFFICKING STATEMENT
Extra-financial performance
statement
698
D2-23, D3-1,
D3-2, D3-3
5.2.2, 5.3.3, 6.3.3,
6.3.4, 6.3.5, 6.3.7,
6.3.8, 6.3.9,
6.3.10, 6.4.3,
6.4.4, 6.4.5, 6.4.6,
6.5.3, 6.5.5, 6.5.6,
6.6.7, 6.7.7
3, 4, 5, 6, 8, 13,
1 – 7
15, 16, 17
1 – 6
G.b), R.a),
R.b), M T a)
Vigilance plan
Risk mapping
705
D2-24, D3-1
5.3.3
2, 7, 10
1, 5
G. b), S. a),
R.a)
Appropriate actions to mitigate risks
3, 5, 6, 8, 10, 12,
or prevent serious harm
712
D3-3
6.3.6
1 – 10
13, 14, 15, 16
2, 4, 6
R. b)
Alert mechanism (Whistleblowing)
715
D2-26
6.3.3, 7.5.3
2 – 8, 10
4, 5
R. b)
System for monitoring the measures
implemented and assessing their
effectiveness
716
D3-3 7.7.3, 7.7.4, 7.7.5
2, 7, 10
5, 6
R. b), M T. a)
Statement on modern slavery and
6.3.4, 6.3.5, 6.3.6,
human trafficking
720
D408-1, D409-1
5.2.2, 5.2.3, 6.3.3,
6.3.10, 6.4.7
1,2, 4, 5, 6
5, 8, 10, 16, 17
2, 4, 6
Aligned activities under the meaning
of the European T a xonomy
724
D3-1, D4-2
7.6.2
17
6
(*) "GRI Universal Standards" published in 2021 and applicable in 2023.
(**) T a sk force on Climate related Financial Disclosures - G: Governance, S: Strategy, R: Risk Management, MT: Metrics and T a rgets
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AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
Cross-reference tables
The table below takes into account the codified standards of the Sustainability Accounting Standards Board (SASB) for the "Commercial Banking" category.
It should be noted that the SASB standards present, at this stage, a "United States"-oriented approach to defining the criteria. This table best represents
the information and data mapping according to the SASB indicators for Commercial & Personal Banking. Note that this mapping has not been audited.
Domain
SASB indicator
SASB code of
the indicator
References of information and data available in the Universal
registration document and the 2023 Annual financial report
Data
security
Description of the approach to identify
and address data security risks
FN-CB-230a.2 Chapter 2.4 Internal control: p112 to 121, in particular p119-120
"Management of risks related to information and communication
technologies" and "Management of risks related to the protection of
personal data"
Chapter 5.9 Operational risk: p518-519 "Cybersecurity and technology"
Financial
inclusion
and capacity
building
(1) Number and (2) amount of
outstanding loans eligible for
programmes to promote the
development of small businesses and
local authorities
FN-CB-240a.1 Chapter 7.2 Our economic responsibility: p645-647 "Commitment 1:
financing and investments with a positive impact", p646-647 "Financing
entrepreneurship for impact"
Chapter 5.4 Credit risk: p372 table 25 "Gross credit risk exposure by
asset class and approach"
Chapter 7.4 Our civic responsibility: p681 "Commitment 7: products and
services that are widely accessible"
(1) Number and (2) amount of past
due loans or loans with unrecognised
interest eligible for programmes
to promote small business and
community development
FN-CB-240a.2 Chapter 5.4 Credit risk: p372 table 25 "Gross credit risk exposure by asset
class and approach type"
Number of fee-free bank accounts
opened for previously unbanked or
under-banked individual customers
FN-CB-240a.3
Chapter 7.4 Our civic responsibility: p681 "Commitment 7: products and
services that are widely accessible"
Number of participants in financial
education initiatives for unbanked,
underbanked or underserved customers
FN-CB-240a.4
Incorporation
of ESG factors
in credit
analysis
Commercial and industrial credit
exposure by industry
FN-CB-410a.1 Chapter 5.4 Credit risk: p381 table 28 "Credit risk exposure by asset class
and approach type"
Description of the approach for
integrating environmental, social and
governance (ESG) factors into the
credit analysis
FN-CB-410a.2 Chapter 5.4 Credit risk: p376 "Credit risk management system -
Consideration of social and environmental responsibility (CSR)"
Chapter 5.11 Environmental, Social and Governance risk
Chapter 7.2 Our economic responsibility: p652 to 658 "Commitment 3:
Systematic integration and management of environmental, social and
governance (ESG) risks"
Chapter 7.5 Our environmental responsibility: p687 to 692 "Commitment
10: enabling our clients to transition to a low-carbon economy respectful
of the environment"
7
Corporate
ethics
Total amount of monetary losses
resulting from legal proceedings
related to fraud, insider trading,
antitrust practices, anti-competitive
behaviou r, m arket manipulation,
abusive practices or other financial
industry laws or regulations
FN-CB-510a.1 Chapter 4.6 Notes to the financial statements prepared in accordance
with IFRS as adopted by the European Union: p279-280 Note 9.c "Legal
and arbitration proceedings"
Chapter 2.4 Internal control: p112 to 121, in particular p117-118
"Compliance", p118-119 "Legal", p119-120 "Risk and Permanent Control"
and p120-121 "Periodic control"
Description of whistleblower policies
and procedures
FN-CB-510a.2 Chapter 7.2 Our economic responsibility: p648 "Commitment 2: the
highest ethical standards"
Risk
management
system
Global Systemically Important Bank
(G-SIB) score, by category
FN-CB-550a.1 Chapter 5.2 "Capital management and capital adequacy": p350-351
"Requirements related to banking regulations and banking supervision"
https://invest.bnpparibas/en/document/notification-by-the-ecb-of-the-2023-srep
Chapter 5 Appendix 3: counter-cyclical capital buffer and G-SIB buffer
p564
Description of the approach for
integrating the results of mandatory
and internal stress tests into capital
adequacy planning, long-term
organisational strategy and other
operational activities
FN-CB-550a.2 Chapter 5.2 "Capital management and capital adequacy"
Chapter 5.3 Risk management: p363 to p371 in particular "Stress tests"
Chapter 5.4 Credit risk: p379 "Stress tests - credit risk"
Chapter 5.6 Counterparty risk: p467 "Stress tests and adverse correlation
risk"
Chapter 5.7 Market risk: p491 "Stress tests - market risk"
Chapter 5.8 Liquidity risk: p501-502 "Stress tests and liquidity reserve"
Activity
metrics
(1) Number and value (2) of loans
by segment: a) retail customers and
b) small businesses
FN-CB-000.A Chapter 1.4 Presentation of operating divisions and business lines: p7 to
p19
Chapter 6 Notes to the parent company financial statements: p596-597
note 3.b "Customer transactions"
(1) Number and value (2) of loans by
segment: a) retail customers, b) small
business and c) corporate clients
FN-CB-000.B Chapter 5.4 Credit risk: p428-429 table 48 "Performing and
non-performing exposures and corresponding provisions (EU CR1)"
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Report of one of the Statutory Auditors, appointed as independent third party, on the verification of the consolidated non-financial performance statement
7.11 Report of one of the Statutory Auditors,
appointed as independent third part y, o n the
verification of the consolidated non-financial
performance statement
This is a free English translation of the report by one of the Statutory Auditors issued in French and is provided solely for the convenience of English-
speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable
in France.
Year ended December 31, 2023
To the Shareholders' Meeting,
In our capacity as Statutory Auditor of BNP Paribas SA (hereinafter the "Company"), appointed as independent third party ("third party") and accredited
by the French Accreditation Committee (Cofrac), under number 3-1886 (C ofrac Inspection Accreditation, scope available at www.cofrac.fr), we have
conducted procedures to express a limited assurance conclusion on the historical information (observed or extrapolated) in the consolidated non-financial
performance statement, prepared in accordance with the Company's procedures (hereinafter the "Guidelines"), for the year ended December 31, 2023
(hereinafter the "Information" and the "Statement", respectively), presented in the Group management report pursuant to the legal and regulatory
provisions of Articles L. 225-102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code (code de commerce).
Conclusion
Based on our procedures as described in the section "Nature and scope of procedures" and the evidence we have obtained, no material misstatements
have come to our attention that cause us to believe that the non-financial performance statement does not comply with the applicable regulatory
provisions and that the Information, taken as a whole, is not fairly presented in accordance with the Guidelines.
Preparation of the non-financial performance statement
The absence of a generally accepted and commonly used reference framework or established practices on which to base the assessment and measurement
of the Information enables the use of different but acceptable measurement techniques that may impact comparability between entities and over time.
Accordingly, the Information must be read and interpreted with reference to the Guidelines, summarised in the Statement and available on the Company's
website or on request from its headquarters.
Limits inherent in the preparation of the information relating to the Statement
The Information may be subject to uncertainty inherent to the state of scientific and economic knowledge and the quality of external data used. Some
information is sensitive to the choice of methodology and the assumptions or estimates used for its preparation and presented in the Statement.
2023 Universal registration document and annual financial report - BNP PARIBAS
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Report of one of the Statutory Auditors, appointed as independent third party, on the verification of the consolidated non-financial performance statement
RESPONSIBILITY OF THE COMPANY
Management is responsible for:
■ selecting or determining the appropriate criteria for the preparation
of the Information;
■ preparing a Statement pursuant to legal and regulatory provisions,
including a presentation of the business model, a description of the
main non-financial risks, a presentation of the policies implemented
with respect to these risks as well as the outcomes of these policies,
including key performance indicators and the information set-out in
Article 8 of Regulation (EU) 2020/852 (Green taxonomy);
■ implementing such internal control as it determines is necessary
to enable the preparation of Information that is free from material
misstatement, whether due to fraud or erro r.
The Statement has been prepared by applying the Company's Guidelines
as referred to above.
Based on our work, our responsibility is to express a limited assurance
conclusion on:
■ the compliance of the Statement with the requirements of Article
R. 225-105 of the French Commercial Code;
■ the fairness of the information provided pursuant to part 3 of sections
I and II of Article R. 225-105 of the French Commercial Code, i.e. the
outcomes of policies, including key performance indicators, and
measures relating to the main risks, hereinafter the "Information."
As it is our responsibility to issue an independent conclusion on
the information prepared by management, we are not authorised
to participate in the preparation of the Information, as this could
compromise our independence.
It is not our responsibility to provide a conclusion on:
■ the Company's compliance with other applicable legal and regulatory
provisions (particularly with regard to the information set-out in Article
8 of Regulation (EU) 2020/852 (Green taxonomy), the fight against
corruption and tax evasion;
■ the fairness of information set-out in Article 8 of Regulation (EU)
2020/852 (Green taxonomy);
■ the compliance of products and services with the applicable regulations.
Applicable regulatory provisions and professional
guidance
We performed the work described below in accordance with our audit
verification programme in application of Articles A. 225-1 et seq. of the
French Commercial Code, the professional guidance issued by the French
Institute of Statutory Auditors (Compagnie Nationale des Commissaires
aux Comptes) relating to this engagement and with the international
standard ISAE 3000 (revised - Assurance engagements other than audits
or reviews of historical financial information).
Independence and quality control
Our independence is defined by Article L. 821-28 of the French
Commercial Code and French Code of Ethics for Statutory Auditors
(Code de déontologie). In addition, we have implemented a system of
quality control including documented policies and procedures aimed at
ensuring compliance with applicable legal and regulatory requirements,
ethical requirements and the professional guidance issued by the French
Institute of Statutory Auditors (Compagnie Nationale des Commissaires
aux Comptes) relating to this engagement.
Means and resources
Our work engaged the skills of five people between December 2023 and
March 2024 and took a total of twelve weeks.
To assist us in conducting our work, we referred to our corporate social
responsibility and sustainable development experts. We conducted
around fifteen interviews with people responsible for preparing the
Statement.
This work involved the use of information and communication
technologies allowing the work and interviews to be carried out remotely,
without hindering the good execution of the verification process.
Nature and scope of procedures
We planned and performed our work taking account of the risk of material
misstatement of the Information.
RESPONSIBILITY OF THE STATUTORY AUDITOR APPOINTED AS INDEPENDENT
THIRD PARTY
2023 Universal registration document and annual financial report - BNP PARIBAS
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7
A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL, CIVIC
AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS
7
Report of one of the Statutory Auditors, appointed as independent third party, on the verification of the consolidated non-financial performance statement
We consider that the procedures conducted in exercising our professional
judgement enable us to express a limited assurance conclusion:
■ We familiarized ourselves with the activities of all companies in the
consolidation scope and the description of the principal risks.
■ We assessed the suitability of the Guidelines with respect to their
relevance, completeness, reliability, neutrality and clarity, taking into
account, where appropriate, best practices within the secto r.
■ We verified that the Statement covers each category of information
stipulated in section III of Article L. 225-102-1 governing social and
environmental affairs, respect for human rights and the fight against
corruption and tax evasion.
■ We verified that the Statement provides the information required under
Article R.225-105 II of the French Commercial Code where relevant
with respect to the principal risks, and includes, where applicable, an
explanation for the absence of the information required under Article
L.225-102-1 III, paragraph 2 of the French Commercial Code.
■ We verified that the Statement presents the business model and a
description of the principal risks associated with the activities of all
the consolidated entities, including where relevant and proportionate,
the risks associated with their business relationships, their products or
services, as well as their policies, measures and the outcomes thereof,
including key performance indicators associated to the principal risks.
■ We referred to documentary sources and conducted interviews to:
■
assess the process used to identify and confirm the principal risks
as well as the consistency of the outcomes, including the key
performance indicators used, with respect to the principal risks
and the policies presented; and
■
corroborate the qualitative information (measures and outcomes)
that we considered to be the most important(1) ; for certain
information, our work was carried out on the consolidating entity,
while for other risks, our work was carried out on the consolidating
entity and on a selection of entities.
■ We verified that the Statement covers the consolidated scope, i.e. all
companies within the consolidation scope in accordance with Article
L. 233-16, with the limits specified in the Statement.
■ We obtained an understanding of internal control and risk management
procedures implemented by the Company and assessed the data
collection process aimed at ensuring the completeness and fairness
of the Information.
■ For the key performance indicators and other quantitative outcomes(1)
that we considered to be the most important, we implemented:
■
analytical procedures that consisted in verifying the correct
consolidation of collected data as well as the consistency of changes
thereto;
■
substantive tests, on a sample basis and using other selection
methods, that consisted in verifying the proper application of
definitions and procedures and reconciling data with supporting
documents. These procedures were conducted for a selection of
contributing entities(3) and covered between 20% and 100% of the
consolidated data selected for these tests.
■ We assessed the overall consistency of the Statement in relation to
our knowledge of the entire Company.
The procedures conducted in a limited assurance review are substantially
less in scope than those required to issue a reasonable assurance opinion
in accordance with the
professional guidelines of the French National
Institute of Statutory Auditors (Compagnie Nationale des Commissaires
aux Comptes); a higher level of assurance would have required us to carry
out more extensive procedures.
Paris-La Défense, March 15, 2024
One of the Statutory Auditors,
Deloitte & Associés
Laurence Dubois
Julien Rivals
Partne r, A udit
Partne r, S ustainability Services
(1) Presence of implemented methodologies and/or processes with regard to the following themes, mentioned in the Statement : binding financing and investment policies, contributing
to protecting biodiversity, integrating ESG criteria into asset management, BNP Paribas policy on modern slavery and human trafficking – towards its clients, alignment of the loan
portfolio with the net-zero in 2050 objective.
(2) T o tal workforce, by gender ; workforce movements, breakdown by reason for departure;share of women among the SMP population (Senior Management Position) (4) ; number
of solidarity hours performed by employees (#1MillionHours2Help) (5) ; share of employees who completed at least four training courses during the previous 12 months (6) ;
greenhouse gas emissions in tons of CO2 equivalent (teq CO2)/full-time employees of the Group (10) ; paper consumption ; amount of sustainable loans (2) ; assets under management
of SFDR Article 8 and 9 open funds distributed in Europe (3) ; number of beneficiaries of products and services supporting financial inclusion (7) ; amount of the support enabling
our clients to transition to a low-carbon economy (8); amount of financing to companies contributing to protect terrestrial and marine biodiversity (9). The parenthesized numbers
are labelled in order of appearance within the 2023 CSR Dashboard.
(3) BNP Paribas France (social and environmental data, including KPI 4, 5, 6 and 10), BNP Paribas UK (environmental data, including KPI 10), BNP Paribas CIB, CPBS (including ARVAL
and CPBB/Fortis, KPI 1) BNP Paribas CIB (KPI 2, 8 and 9) BNP Paribas Asset Management (KPI 3), Nickel (KPI 7).
8
2023 Universal registration document and annual financial report - BNP PARIBAS
769
GENERAL INFORMATION
8.1
Documents on display
770
8.2
Material contracts
770
8.3
Dependence on external parties
770
8.4
Significant changes
771
8.5
Investments
771
8.6
Information on locations and businesses in 2023
772
8.7
Founding documents and Articles of Association
779
8.8
Statutory Auditors' special report on related party agreements
784
8.9
Person responsible for auditing the financial statements
786
8.10
Person responsible for the Universal registration document
787
2023 Universal registration document and annual financial report - BNP PARIBAS
770
8
GENERAL INFORMATION
8
Documents on display
8.1 Documents on display
This document is available on the BNP Paribas website, https://invest.bnpparibas/en/, and the Autorité des Marchés Financiers (AMF) website,
https://www.amf-france.org/en.
Any person wishing to receive additional information about the BNP Paribas Group can request documents, without commitment, as follows:
■ by writing to:
BNP Paribas – Finance & Strategy
Investor Relations and Financial Information
Palais du Hanovre
16 rue de Hanovre – CAT03B2
75002 Paris
FRANCE
■ by calling: +33 (0)1 40 14 63 58
BNP P aribas' regulatory information can be viewed at: https://invest.bnpparibas.com/en/regulated-information.
Head office: 16, boulevard des Italiens, 75009 Paris, France
Legal form: BNP Paribas is a limited company authorised as a bank under the provisions of the French Monetary and Financial Code (Book V, Title 1)
on banking institutions.
Legal identity identifier: R0MUWSFPU8MPRO8K5P83
Law governing its activities: BNP Paribas is a company incorporated under French law and operates in many countries, both in Europe and outside
Europe. Many foreign regulations can therefore govern its activities.
Country of origin: France
8.2 Material contracts
To date, BNP Paribas has not entered into any material contracts – other than those entered into during the normal course of business – that create
an obligation or commitment for the entire Group.
8.3 Dependence on external parties
To date, BNP Paribas is not dependent on external parties.
2023 Universal registration document and annual financial report - BNP PARIBAS
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GENERAL INFORMATION
8
8
Investments
8.4 Significant changes
There have been no significant changes in the Group's financial or business situation since the end of the last financial year for which audited
financial statements were published, and in particular since the signature of the Statutory Auditors' report on the consolidated financial statements
on 15 March 2024.
8.5 Investments
Investments since 1 January 2021 that are individually valued at over EUR 500 million and considered material at Group level are as follows:
Country
Announcement date
Transaction
Transaction amount
Comments
Canada
16 December 2022
Participation of BNP Paribas SA in a
capital increase organised via a private
placement by Bank of Montreal, in the
amount of CAD 750 million for a price
of CAD 118.60 per share.
CAD 750 M
In connection with the
acquisition of Bank of the
West by BMO Financial Group
Germany
Austria
United Kingdom
17 December
2021 (non-binding
agreement signed on
16 December 2021)
Reorganisation of the partnership
between BNP Paribas Personal Finance
and Stellantis: BNP Paribas would
become the exclusive partner of
Stellantis captive for Financing activities
of all its brands in three strategic
markets: Germany, Austria and the
United Kingdom.
Not public
Subject to customary
approvals
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8
GENERAL INFORMATION
8
Cardif Assurance Vie (Belgium branch)
Information on locations and businesses in 2023
8.6 Information on locations and businesses
in 2023
In accordance with article L.511-45 of the French Monetary and Financial
Code and Decree No. 2014-1657 of 29 December 2014, credit institutions,
financial holding companies, mixed financial holding companies and
investment firms are obliged to disclose information about their locations
and activities, included in their scope of consolidation, in each State or
territory.
➤
I.
LOCATIONS BY COUNTRY
Locations
1. European Union member states
Austria
Arval Austria GmbH
Arval
Cardif Assurance Vie (Bulgaria branch)
BNPP Asset Management France (Austria branch)
Asset Management
Cardif Assurances Risques Divers (Bulgaria branch)
BNPP Leasing Solutions GmbH (Ex- All In One Vermietung)
Leasing Solutions
BNPP Personal Finance (Austria branch)
Personal Finance
Arval CZ SRO
BNPP SA (Austria branch)
Corporate and Institutional Banking
BNPP Cardif Pojistovna AS
Cardif Assurance Vie (Austria branch)
Cardif Assurances Risques Divers (Austria branch)
Insurance
BNPP Personal Finance (Czech Republic branch)
CNH Industrial Capital Europe GmbH
Leasing Solutions
BNPP SA (Czech Republic branch)
Stellantis Bank SA (Austria branch) (Ex- Opel Bank (Austria branch))
Personal Finance
Belgium
AG Insurance
Alpha Crédit SA
Personal Finance
BNPP Factor AS
Arval Belgium NV SA
Arval
BNPP Leasing Solutions AS
Astridplaza
Insurance
BNPP SA (Denmark branch)
Axepta BNPP Benelux
Retail Banking
Cardif Forsakring AB (Denmark branch)
Bancontact Paytoniq Company
Retail Banking
Ekspres Bank AS
BASS Master Issuer NV
Retail Banking
Batopin
Retail Banking
Arval OY
Belgian Mobile ID
Retail Banking
BNPP SA (Finland branch)
BNPP 3 Step IT (Belgium branch)
Leasing Solutions
BNPP Asset Management Be Holding
Asset Management
2SF - Société des Services Fiduciaires
BNPP Asset Management France (Belgium branch)
Asset Management
AEW Immocommercial
BNPP B Institutional II
Asset Management
Agathe Retail France
BNPP Fortis
Retail Banking
BNPP Fortis Factor NV
Retail Banking
BNPP Fortis Film Finance
Retail Banking
Aprolis Finance
BNPP FPE Belgium
Retail Banking
Artegy
BNPP FPE Expansion
Retail Banking
Artel
BNPP FPE Management
Retail Banking
Arval Fleet Services
BNPP Lease Group Belgium
Leasing Solutions
Arval Service Lease
BNPP Partners
for Innovation Belgium
Property Companies (Property used in operations)
Arval Trading
and Others
Auguste Thouard Expertise
BNPP Real Estate Belgium SA (Ex- BNPP Real Estate Holding Benelux SA)Real Estate Services
BNPP Real Estate Investment Management Belgium
Real Estate Services
Autonoria DE 2023
BNPP SA (Belgium branch)
Corporate and Institutional Banking
Axa Banque Financement
Bpost Banque
Cardif Assurances Risques Divers (Belgium branch)
Insurance
BNP Paribas SA
CNH Industrial Capital Europe (Belgium branch)
Credissimo
Retail Banking
BNPP Actions Croissance
Credissimo Hainaut SA
Retail Banking
BNPP Actions Euro
Crédit pour Habitations Sociales
Retail Banking
BNPP Actions Monde
Demetris NV
Retail Banking
BNPP Actions PME ETI
Eos Aremas Belgium SA NV
Personal Finance
BNPP Agility Fund Equity SLP
Epimede
Retail Banking
BNPP Agility Fund Private Debt SLP
ES Finance
Leasing Solutions
BNPP AM International Hedged Strategies
Esmee Master Issuer
Financière des Paiements Electroniques (Belgium branch)
New Digital Businesses
BNPP Aqua
FL Zeebrugge
Leasing Solutions
BNPP Asset Management France
Fortis Lease Belgium
Leasing Solutions
BNPP Asset Management Holding
FScholen
Corporate and Institutional Banking
BNPP Best Selection Actions Euro
Gambit Financial Solutions
Asset Management
BNPP Cardif
Immobilière Sauveniere SA
Retail Banking
BNPP Convictions
Investissement Private Equity (a)
Retail Banking
BNPP CP Cardif Private Debt
Isabel SA NV
Retail Banking
BNPP CP Infrastructure Investments Fund
Locadif
Arval
BNPP Dealing Services
Microstart
Sagip
Retail Banking
BNPP Développement Humain
Sowo Invest SA NV
Terberg Leasing Justlease Belgium BV
Arval
BNPP Diversiflex
Business
Locations
Business
Bulgaria
BNPP SA (Bulgaria branch)
Corporate and Institutional Banking
Insurance
Insurance
Czech Republic
Arval
Insurance
Insurance
BNPP Cardif Services SRO
Insurance
Personal Finance
Corporate and Institutional Banking
Denmark
Arval AS
Arval
Insurance
BNPP Cardif Livforsakring AB (Denmark branch)
Insurance
Retail Banking
Leasing Solutions
Corporate and Institutional Banking
Insurance
Personal Finance
Finland
Arval
Corporate and Institutional Banking
France
Retail Banking
Insurance
Insurance
Antin Participation 5
Property Companies (Property used in operations)
and Others
Leasing Solutions
Leasing Solutions
Arval
Arval
Arval
Arval
Real Estate Services
Autonoria 2019
Personal Finance
Personal Finance
Personal Finance
Retail Banking
Banque de Wallis et Futuna
Retail Banking
Insurance
Becquerel
Insurance
Banking
Leasing Solutions
BNPP 3 Step IT
Leasing Solutions
Insurance
Insurance
Insurance
Insurance
Asset Management
Asset Management
Asset Management
Retail Banking
BNPP Antilles Guyane
Retail Banking
Insurance
Asset Management
Asset Management
Insurance
Insurance
Insurance
Insurance
Insurance
Asset Management
Retail Banking
BNPP Développement
Retail Banking
Insurance
Retail Banking
BNPP Développement Oblig
Retail Banking
Insurance
BNPP Diversipierre
Insurance
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GENERAL INFORMATION
8
8
Information on locations and businesses in 2023
Locations
BNPP Factor
Retail Banking
EP L
BNPP Financial Markets (Ex- BNPP Arbitrage)
Corporate and Institutional Banking
EP1 Grands Moulins
BNPP France Crédit
Insurance
Eurotitrisation
BNPP Global Senior Corporate Loans
Insurance
Evollis
BNPP Home Loan SFH
Property Companies (Property used in operations)
Exane Asset Management
and Others
Exane Finance
BNPP Immobilier Promotion (Ex- BNPP Immobilier Résidentiel)
Property Companies (Property used in operations)
FCT Juice
and Others
BNPP Immobilier Résidences Services
Real Estate Services
BNPP Indice Amerique du Nord
Insurance
BNPP IRB Participations
Europe-Mediterranean
BNPP Lease Group
Leasing Solutions
BNPP Multistratégies Protection 80
Insurance
BNPP Nouvelle Calédonie
Retail Banking
FCT Pulse France 2022
BNPP Partners for Innovation
BNPP Personal Finance
Personal Finance
FDI Poncelet
BNPP Procurement Tech
Property Companies (Property used in operations)
Financière des Paiements Electroniques
and Others
Financière du Marché Saint Honoré
BNPP Public Sector SA
Property Companies (Property used in operations)
Fleur SAS
and Others
Floa
BNPP Real Estate
Real Estate Services
Foncière Partenaires
BNPP Real Estate Conseil Habitation & Hospitality
Real Estate Services
BNPP Real Estate Consult France
Real Estate Services
et la Distribution
BNPP Real Estate Financial Partner
Real Estate Services
Fortis Lease
BNPP Real Estate Investment Management France
Real Estate Services
FP Cardif Convex Fund USD
BNPP Real Estate Property Management France SAS
Real Estate Services
GIE BNPP Cardif
BNPP Real Estate Transaction France
BNPP Real Estate Valuation France
Real Estate Services
BNPP Réunion
Retail Banking
BNPP Sélection Dynamique Monde
Insurance
BNPP Smallcap Euroland
Insurance
BNPP Social Business France
Insurance
GIE Ocean
C Santé
Cafineo
Personal Finance
Harmony Prime
Capital France Hotel
Cardif Alternatives Part I
Cardif Assurance Vie
Cardif Assurances Risques Divers
Cardif BNPP AM Emerging Bond
Insurance
JCB Finance
Cardif BNPP AM Euro Paris Climate Aligned
(Ex-Natio Fonds Collines Investissement N 3)
Cardif BNPP AM Global Environmental Equity
(Ex- Natio Fonds Colline International)
Cardif BNPP AM Sustainable Euro Equity
(Ex- Natio Fonds Collines Investissement N 1)
Insurance
Louveo
Cardif BNPP AM Sustainable Europe Equity
(Ex- Natio Fonds Athenes Investissement N 5)
Insurance
Lyf SAS
Cardif BNPP IP Signatures
Insurance
MGF
Cardif BNPP IP Smid Cap Euro
Insurance
Nanterre Arboretum
Cardif CPR Global Return
Insurance
Insurance
Cardif Edrim Signatures
Insurance
Natio Energie 2
Cardif IARD
Insurance
Natio Fonds Ampère 1
Cardif Retraite
Insurance
Natiocredibail
Cardimmo
Insurance
Neuilly Contentieux
Carma Grand Horizon SARL
Insurance
New Alpha Cardif Incubator Fund
Carrefour Banque
Personal Finance
Noria 2021
Cedrus Carbon Initiative Trends
Insurance
Noria 2023
Cent ASL
Arval
Opéra Rendement
Centre Commercial Francilia
Insurance
Parilease
CFH Bercy
Insurance
Partecis
CFH Bercy Hotel
Insurance
Partner's & Services
CFH Bercy Intermédiaire
Insurance
Paylib Services
CFH Boulogne
Insurance
Permal Cardif Co Investment Fund
CFH Cap d'Ail
Insurance
Personal Finance Location
CFH Montmartre
Insurance
Pixel 2021
CFH Montparnasse
Insurance
Portzamparc
Claas Financial Services
Leasing Solutions
Preim Healthcare SAS
CNH Industrial Capital Europe
Leasing Solutions
Public Location Longue Durée
Cofica Bail
Personal Finance
PWH
Cofiparc
Arval
Reumal Investissements
Cofiplan
Personal Finance
Rueil Ariane
Compagnie pour le Financement des Loisirs
Retail Banking
Same Deutz Fahr Finance
Construction-Sale Companies (c)
Real Estate Services
SAS HVP
Copartis
Retail Banking
SCI 68/70 rue de Lagny - Montreuil
Corosa
Insurance
SCI Alpha Park
Crédit Moderne Antilles Guyane
Personal Finance
SCI Batipart Chadesrent
Crédit Moderne Océan Indien
Personal Finance
SCI Biv Malakoff
Défense CB3 SAS
Insurance
SCI BNPP Pierre I
Diversipierre DVP 1
Insurance
SCI BNPP Pierre II
Domofinance
Personal Finance
SCI Bobigny Jean Rostand
DVP European Channel
Insurance
SCI Bouleragny
DVP Green Clover
Insurance
SCI Cardif Logement
DVP Haussmann
Insurance
SCI Citylight Boulogne
DVP Heron
Insurance
Business
Locations
Business
Insurance
Insurance
Corporate and Institutional Banking
Personal Finance
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
FCT Lafayette 2021
Property Companies (Property used in operations)
and Others
FCT Laffitte 2021
Property Companies (Property used in operations)
and Others
FCT Opera 2023
Property Companies (Property used in operations)
and Others
Arval
FCT Pyramides 2022
Property Companies (Property used in operations)
Property Companies (Property used in operations)
and Others
and Others
Insurance
New Digital Businesses
Corporate and Institutional Banking
Insurance
New Digital Businesses
Insurance
Fonds d'Investissements Immobiliers pour le Commerce
Insurance
Leasing Solutions
Insurance
Insurance
Real Estate Services
GIE BNPP Real Estate
Real Estate Services
GIE Groupement Auxiliaire de Moyens
Property Companies (Property used in operations)
and Others
GIE Groupement d'Etudes et de Prestations
Property Companies (Property used in operations)
and Others
Retail Banking
Insurance
GPinvest 10
Insurance
Insurance
Insurance
Hemisphere Holding
Insurance
Insurance
Hibernia France
Insurance
Insurance
Icare
Insurance
Insurance
Icare Assurance
Insurance
Leasing Solutions
Jivago Holding
Retail Banking
Insurance
Karapass Courtage
Insurance
Korian et Partenaires Immobilier 1
Insurance
Insurance
Korian et Partenaires Immobilier 2
Insurance
Loisirs Finance
Personal Finance
Arval
Lyf SA
Leasing Solutions
Leasing Solutions
Leasing Solutions
Real Estate Services
Natio Assurance
Leasing Solutions
Insurance
Leasing Solutions
Personal Finance
Insurance
Personal Finance
Personal Finance
Insurance
Corporate and Institutional Banking
Retail Banking
Real Estate Services
Retail Banking
Insurance
Personal Finance
Leasing Solutions
Retail Banking
Insurance
Arval
Insurance
Insurance
Insurance
Leasing Solutions
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
Insurance
SCI Clichy Nuovo
Insurance
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Cardif Assurance Vie (Germany branch)
Information on locations and businesses in 2023
Locations
SCI Défense Etoile
Insurance
SCI Défense Vendôme
Insurance
Arval Magyarorszag KFT
SCI Etoile du Nord
Insurance
BNPP SA (Hungary branch)
SCI Fontenay Plaisance
SCI Imefa Velizy
Insurance
Magyar Cetelem Bank ZRT
SCI Le Mans Gare
Insurance
SCI Nanterre Guilleraies
Insurance
Aries Capital DAC
SCI Nantes Carnot
Insurance
BGZ Poland ABS1 DAC
SCI Odyssée
Insurance
BNPP Fund Administration Services Ireland Ltd
SCI Pantin Les Moulins
Insurance
BNPP Ireland Unlimited Co
SCI Paris Batignolles
Insurance
BNPP Prime Brokerage International Ltd
SCI Paris Cours de Vincennes
Insurance
BNPP Real Estate Advisory and Property Management Ireland Ltd
SCI Paris Grande Armée
Insurance
BNPP SA (Ireland branch)
SCI Paris Turenne
Insurance
BNPP Vartry Reinsurance DAC
SCI Portes de Claye
SCI Rue Moussorgski
SCI Rueil Caudron
Insurance
Madison Arbor Ltd
SCI Saint Denis Landy
Insurance
Matchpoint Finance PLC
SCI Saint Denis Mitterrand
Insurance
SME Alternative Financing DAC
SCI Saint-Denis Jade
Insurance
SCI SCOO
Insurance
Artigiancassa SPA
SCI Vendôme Athènes
Insurance
Arval Service Lease Italia SPA
SCI Villeurbanne Stalingrad
Insurance
AutoFlorence 1 SRL
Secar
Insurance
AutoFlorence 2 SRL
Services Epargne Entreprise
Insurance
AutoFlorence 3 SRL
Services Logiciels d'Intégration Boursière
Securities Services
Banca Nazionale Del Lavoro SPA
SNC Batipart Mermoz
Insurance
BNL Leasing SPA
SNC Batipart Poncelet
Insurance
BNPP 3 Step IT (Italy branch)
SNC Natiocredimurs
Leasing Solutions
BNPP Asset Management France (Italy branch)
SNC Taitbout Participation 3
Corporate and Institutional Banking
BNPP Cardif Vita Compagnia di Assicurazione E Riassicurazione SPA
Société Francaise d'Assurances sur la Vie
Insurance
BNPP Lease Group (Italy branch)
Société Orbaisienne de Participations
Corporate and Institutional Banking
BNPP Lease Group Leasing Solutions SPA
Stellantis Bank SA (Ex- Opel Bank)
Personal Finance
Theam Quant Europe Climate Carbon Offset Plan
Insurance
Tikehau Cardif Loan Europe
Insurance
BNPP Real Estate Advisory Italy SPA
United Partnership
Personal Finance
Uptevia SA
Corporate and Institutional Banking
BNPP Real Estate Investment Management Italy SPA
Valeur Pierre Epargne
Insurance
Valtitres FCP
Insurance
BNPP Real Estate Property Management Italy SRL
Velizy Holding
Insurance
BNPP Rental Solutions SPA
Germany
Arval Deutschland GmbH
Arval
Cardif Assurance Vie (Italy branch)
AssetMetrix
Securities Services
Cardif Assurances Risques Divers (Italy branch)
BGL BNPP (Germany branch)
Retail Banking
CFH Algonquin Management Partners France Italia
BNPP 3 Step IT (Germany branch)
Leasing Solutions
CFH Milan Holdco SRL
BNPP Asset Management France (Germany branch)
Asset Management
Claas Financial Services (Italy branch)
BNPP Emissions Und Handels GmbH
Corporate and Institutional Banking
CNH Industrial Capital Europe (Italy branch)
BNPP Factor GmbH
Retail Banking
Diamante Re SRL
BNPP Lease Group (Germany branch)
Leasing Solutions
EMF IT 2008 1 SRL
BNPP Real Estate Consult GmbH
Real Estate Services
Era Uno SRL
BNPP Real Estate GmbH
Real Estate Services
Eutimm SRL
BNPP Real Estate Holding GmbH
Real Estate Services
Financit SPA
BNPP Real Estate Investment Management Germany GmbH
Real Estate Services
Findomestic Banca SPA
BNPP Real Estate Property Development & Services GmbH
Real Estate Services
Florence Real Estate Developments SPA
BNPP Real Estate Property Management GmbH
Real Estate Services
Florence SPV SRL
BNPP SA (Germany branch)
Corporate and Institutional Banking
Fundamenta
Insurance
Horti Milano SRL
Cardif Assurances Risques Divers (Germany branch)
Insurance
Immera SRL
CFH Berlin GP GmbH
Insurance
International Factors Italia SPA
Claas Financial Services (Germany branch)
CNH Industrial Capital Europe (Germany branch)
Diversipierre Germany GmbH
Insurance
Permicro SPA
Financière des Paiements Electroniques (Germany branch)
New Digital Businesses
Servizio Italia SPA
Horizon Development GmbH
Insurance
Sviluppo HQ Tiburtina SRL
ID Cologne A1 GmbH
Insurance
Sviluppo Residenziale Italia SRL
ID Cologne A2 GmbH
Insurance
Tierre Securitisation SRL
JCB Finance (Germany branch)
Leasing Solutions
Vela OBG SRL
MGF (Germany branch)
Leasing Solutions
Worldline Merchant Services Italia SPA
OC Health Real Estate GmbH
Insurance
PF Services GmbH
Personal Finance
AM Select
Seniorenzentren Reinbeck Oberursel München Objekt GmbH
Insurance
Arval Luxembourg SA
Seniorenzentrum Butzbach Objekt GmbH
Seniorenzentrum Heilbronn Objekt GmbH
Insurance
BGL BNPP
Seniorenzentrum Kassel Objekt GmbH
Insurance
BNPP Asset Management Luxembourg
Seniorenzentrum Wolfratshausen Objekt GmbH
Insurance
BNPP Easy
Stellantis Bank SA (Germany branch) (Ex- Opel Bank (Germany branch))
Personal Finance
BNPP Flexi I
Greece
Arval Hellas Car Rental SA
Arval
BNPP Funds
BNPP SA (Greece branch)
Corporate and Institutional Banking
BNPP Lease Group Luxembourg SA
Business
Locations
Business
Hungary
Arval
Corporate and Institutional Banking
Insurance
Cardif Biztosito Magyarorszag ZRT
Insurance
Personal Finance
Ireland
Corporate and Institutional Banking
Europe-Mediterranean
Securities Services
Corporate and Institutional Banking
Corporate and Institutional Banking
Real Estate Services
Corporate and Institutional Banking
Corporate and Institutional Banking
Insurance
Darnell DAC
Insurance
Insurance
Greenval Insurance DAC
Arval
Corporate and Institutional Banking
Corporate and Institutional Banking
Asset Management
Italy
Retail Banking
Arval
Personal Finance
Personal Finance
Personal Finance
Retail Banking
Leasing Solutions
Leasing Solutions
Asset Management
Insurance
Leasing Solutions
Leasing Solutions
BNPP Partners for Innovation Italia SRL
Property Companies (Property used in operations)
and Others
Real Estate Services
BNPP Real Estate Investment Management Germany GmbH (Italy branch) Real Estate Services
Real Estate Services
BNPP Real Estate Investment Management Luxembourg SA (Italy branch) Real Estate Services
Real Estate Services
Leasing Solutions
BNPP SA (Italy branch)
Corporate and Institutional Banking
Insurance
Insurance
Insurance
Insurance
Leasing Solutions
Leasing Solutions
Corporate and Institutional Banking
Retail Banking
Retail Banking
Retail Banking
Retail Banking
Personal Finance
Personal Finance
Personal Finance
Insurance
Real Estate Services
Retail Banking
Retail Banking
Leasing Solutions
JCB Finance (Italy branch)
Leasing Solutions
Leasing Solutions
MGF (Italy branch)
Leasing Solutions
Retail Banking
Retail Banking
Retail Banking
Real Estate Services
Retail Banking
Retail Banking
Retail Banking
Luxembourg
Insurance
Arval
Insurance
Batipart Participations SAS
Insurance
Retail Banking
Asset Management
Asset Management
Asset Management
BNPP Fortis Funding SA
Retail Banking
Asset Management
Retail Banking
BNPP Leasing Solutions
Leasing Solutions
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8
Information on locations and businesses in 2023
Locations
BNPP Real Estate Advisory & Property Management Luxembourg SA
Real Estate Services
Central Europe Technologies SRL
BNPP Real Estate Investment Management Luxembourg SA
Real Estate Services
BNPP SA (Luxembourg branch)
Corporate and Institutional Banking
Arval Slovakia SRO
BNPP SB Re
Retail Banking
BNPP Personal Finance (Slovakia branch)
Cardif Lux Vie
CFH Alexanderplatz Hotel SARL
Insurance
CFH Berlin Holdco SARL
Insurance
Arval Service Lease SA
CFH Hostel Berlin SARL
Insurance
Autonoria Spain 2019
CFH Hotel Project SARL
Insurance
Autonoria Spain 2021 FT
Compagnie Financière Ottomane SA
Retail Banking
Autonoria Spain 2022 FT
Exane Solutions Luxembourg SA
Corporate and Institutional Banking
Autonoria Spain 2023 FT
Greenstars BNPP
Corporate and Institutional Banking
Banco Cetelem SA
Le Sphinx Assurances Luxembourg SA
Retail Banking
BNPP 3 Step IT (Spain branch)
Luxhub SA
PBD Germany Auto Lease Master SA
Personal Finance
BNPP Fortis (Spain branch)
Rubin SARL
Insurance
BNPP Lease Group (Spain branch)
Schroder European Operating Hotels Fund 1
Insurance
Securasset SA
Corporate and Institutional Banking
(Spain branch)
Seniorenzentren Deutschland Holding SARL
Insurance
BNPP Real Estate Investment Management Spain SA
Single Platform Investment Repackaging Entity SA
Corporate and Institutional Banking
BNPP Real Estate Spain SA
Société Immobilière du Royal Building SA
Insurance
BNPP SA (Spain branch)
Theam Quant
Asset Management
Cardif Assurance Vie (Spain branch)
Visalux
Retail Banking
Cardif Assurances Risques Divers (Spain branch)
Netherlands
Arval BV
Arval
Cetelem Gestion AIE
BNPP 3 Step IT (Netherlands branch)
Leasing Solutions
Cetelem Servicios Informaticos AIE
BNPP Asset Management France (Netherlands branch)
Asset Management
Claas Financial Services (Spain branch)
BNPP Cardif BV
Insurance
CNH Industrial Capital Europe (Spain branch)
BNPP Factoring Support
Retail Banking
Financière des Paiements Electroniques (Spain branch)
BNPP Islamic Issuance BV
Corporate and Institutional Banking
GCC Consumo Establecimiento Financiero de Credito SA
BNPP Issuance BV
Corporate and Institutional Banking
International Development Resources AS Services SA
BNPP Leasing Solutions NV
Leasing Solutions
Kantox European Union SL
BNPP Personal Finance BV
BNPP Real Estate Advisory Netherlands BV
Real Estate Services
Ribera Del Loira Arbitrage
BNPP SA (Netherlands branch)
Corporate and Institutional Banking
Securitisation funds UCI and RMBS Prado (b)
Cardif Assurance Vie (Netherlands branch)
Insurance
Servicios Financieros Carrefour EFC SA
Cardif Assurances Risques Divers (Netherlands branch)
Insurance
Union de Creditos Inmobiliarios SA
CNH Industrial Capital Europe BV
Leasing Solutions
Wapiti Development SL
Dynamic Credit Group BV
Asset Management
XFERA Consumer Finance EFC SA
Fortis Vastgoedlease BV
Leasing Solutions
Heffiq Heftruck Verhuur BV
Leasing Solutions
Alfred Berg Kapitalforvaltning AS (Sweden branch)
Phedina Hypotheken 2010 BV
Personal Finance
Arval AB
Poland
Arval Service Lease Polska SP ZOO
Arval
BNPP Leasing Solutions AB
BNPP Bank Polska SA
Europe-Mediterranean
BNPP SA (Sweden branch)
BNPP Faktoring Spolka ZOO
Europe-Mediterranean
Cardif Forsakring AB
BNPP Group Service Center SA
Europe-Mediterranean
Cardif Nordic AB
BNPP Lease Group SP ZOO
Leasing Solutions
Dreams Sustainable AB
BNPP Leasing Services
Leasing Solutions
Ekspres Bank AS (Sweden branch)
BNPP Real Estate Poland SP ZOO
Real Estate Services
BNPP SA (Poland branch)
Corporate and Institutional Banking
Cardif Assurances Risques Divers (Poland branch)
Insurance
BNPP SA (Guernsey branch)
Cardif Polska Towarzystwo Ubezpieczen Na Zycie SA
Insurance
BNPP Suisse SA (Guernsey branch)
Claas Financial Services (Poland branch)
Leasing Solutions
CNH Industrial Capital Europe (Poland branch)
Leasing Solutions
BNPP SA (Jersey branch)
Portugal
Arval Service Lease Aluger Operational Automoveis SA
Arval
TEB SH A
BNPP Factor (Portugal branch)
Retail Banking
BNPP Lease Group (Portugal branch)
Leasing Solutions
BNPP SA (Monaco branch)
BNPP Personal Finance (Portugal branch)
Personal Finance
BNPP Wealth Management Monaco
BNPP Real Estate Investment Management Germany GmbH
Lisbon Representative Office
Real Estate Services
Alfred Berg Kapitalforvaltning AS
BNPP Real Estate Portugal Unipersonal LDA
Real Estate Services
Arval AS Norway
BNPP SA (Portugal branch)
Corporate and Institutional Banking
BNPP Cardif Livforsakring AB (Norway branch)
Cardif Assurance Vie (Portugal branch)
Insurance
BNPP Leasing Solution AS
Cardif Assurances Risques Divers (Portugal branch)
Insurance
BNPP SA (Norway branch)
Cardif Services AEIE
Cardif Support Unipessoal Lda
Insurance
Drypnir AS
Exeo Aura & Echo Offices Lda
Real Estate Services
Ekspres Bank AS (Norway branch)
Expo Atlantico EAII Investimentos Imobiliarios SA
Corporate and Institutional Banking
Expo Indico EIII Investimentos Imobiliarios SA
Corporate and Institutional Banking
Arval LLC
Financière des Paiements Electroniques (Portugal branch)
Leasing Solutions
BNPP Bank JSC
Services Logiciels d'Intégration Boursière (Portugal branch)
Securities Services
BNPP Technology LLC
Romania
Arval Service Lease Romania SRL
BNPP Leasing Solutions IFN SA
BNPP Personal Finance (Romania branch)
Personal Finance
BNPP SA (Switzerland branch)
BNPP SA (Romania branch)
Cardif Assurance Vie (Romania branch)
Cardif Assurances Risques Divers (Romania branch)
Business
Locations
Business
Personal Finance
Slovakia
Arval
Personal Finance
Insurance
Poistovna Cardif Slovakia AS
Insurance
Spain
Arval
Personal Finance
Personal Finance
Personal Finance
Personal Finance
Personal Finance
Leasing Solutions
Retail Banking
BNPP Factor (Spain branch)
Retail Banking
Corporate and Institutionnal Banking
Leasing Solutions
BNPP Real Estate Investment Management Germany GmbH
Real Estate Services
Real Estate Services
Real Estate Services
Corporate and Institutional Banking
Insurance
Insurance
Cariboo Development SL
Real Estate Services
Personal Finance
Personal Finance
Leasing Solutions
Leasing Solutions
New Digital Businesses
Personal Finance
Personal Finance
Corporate and Institutional Banking
Personal Finance
Noria Spain 2020 FT
Personal Finance
Corporate and Institutional Banking
Personal Finance
Personal Finance
Personal Finance
Real Estate Services
Personal Finance
Sweden
Asset Management
Arval
BNPP Cardif Livforsakring AB
Insurance
Leasing Solutions
Corporate and Institutional Banking
Insurance
Insurance
Europe-Mediterranean
Personal Finance
2. Other European countries
Guernsey
Corporate and Institutional Banking
Corporate and Institutional Banking
Jersey
Corporate and Institutional Banking
Kosovo
Europe-Mediterranean
Monaco
Corporate and Institutional Banking
Wealth Management
Norway
Asset Management
Arval
Insurance
Leasing Solutions
Corporate and Institutional Banking
Insurance
Cardif Forsakring AB (Norway branch)
Insurance
Asset Management
Personal Finance
Russia
Arval
Corporate and Institutional Banking
Corporate and Institutional Banking
Switzerland
Arval
Arval Schweiz AG
Arval
Leasing Solutions
BNPP Leasing Solutions Suisse SA
Leasing Solutions
Corporate and Institutional Banking
Corporate and Institutional Banking
BNPP Suisse SA
Corporate and Institutional Banking
Insurance
Cardif Assurance Vie (Switzerland branch)
Insurance
Insurance
Cardif Assurances Risques Divers (Switzerland branch)
Insurance
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8
GENERAL INFORMATION
8
Banque Marocaine pour le Commerce et l'Industrie
Information on locations and businesses in 2023
Locations
Opel Finance SA
Personal Finance
BNPP Yatirimlar Holding AS
United Kingdom
Allfunds Group PLC
Securities Services
TEB Arval Arac Filo Kiralama AS
Arval UK Group Ltd
Arval
TEB Faktoring AS
Arval UK Leasing Services Ltd
Arval
TEB Finansman AS
Arval UK Ltd
Arval
TEB Holding AS
Auto ABS UK Loans PLC
Personal Finance
TEB Yatirim Menkul Degerler AS
BNP PUK Holding Ltd
Corporate and Institutional Banking
Turk Ekonomi Bankasi AS
BNPP 3 Step IT (United Kingdom branch)
Leasing Solutions
BNPP Asset Management UK Ltd
Asset Management
BNPP Real Estate (United Arab Emirates branch)
BNPP Commercial Finance Ltd
Retail Banking
BNPP SA (United Arab Emirates branch)
BNPP Fleet Holdings Ltd
Arval
BNPP Lease Group PLC
Leasing Solutions
BNPP Leasing Solutions Ltd
Leasing Solutions
BNPP SA (Argentina branch)
BNPP Net Ltd
Corporate and Institutional Banking
BNPP Real Estate Advisory & Property Management UK Ltd
Real Estate Services
Decart Re Ltd
BNPP Real Estate Facilities Management Ltd
Real Estate Services
BNPP Real Estate Investment Management Ltd
Real Estate Services
Arval Brasil Ltda
BNPP Real Estate Investment Management UK Ltd
Real Estate Services
Banco BNPP Brasil SA
BNPP Real Estate Property Development UK Ltd
Real Estate Services
BGN Mercantil E Servicos Ltda
BNPP SA (United Kingdom branch)
Corporate and Institutional Banking
BNPP Asset Management Brasil Ltda
BNPP Trust Corp UK Ltd
Securities Services
BNPP EQD Brazil Fund Fundo de Investmento Multimercado
Cardif Insurance Holdings PLC (Ex- Cardif Pinnacle Insurance
Holdings PLC)
Insurance
Insurance
Claas Financial Services Ltd
Leasing Solutions
Cardif do Brasil Vida e Previdencia SA
CNH Industrial Capital Europe Ltd
Leasing Solutions
Cardif Ltda
Creation Consumer Finance Ltd
Personal Finance
Personal Finance
Creation Financial Services Ltd
Personal Finance
Personal Finance
E Carat 12 PLC
Personal Finance
Luizaseg Seguros SA (Ex- Luizaseg)
Fortis Lease UK Ltd
Leasing Solutions
NCVP Participacoes Societarias SA
Harewood Helena 1 Ltd
Asset Management
Harewood Helena 2 Ltd
Insurance
BNPP Canada Corp
Impax Asset Management Group PLC
Asset Management
BNPP IT Solutions Canada Inc
JCB Finance Holdings Ltd
Leasing Solutions
BNPP SA (Canada branch)
Kantox Holding Ltd
Corporate and Institutional Banking
Kantox Ltd
Corporate and Institutional Banking
Arval Relsa SPA
Manitou Finance Ltd
Leasing Solutions
Bancoestado Administradora General de Fondos SA
Parker Tower Ltd
Real Estate Services
BNPP Cardif Seguros de Vida SA
Pinnacle Pet Holding Ltd
Insurance
Insurance
REPD Parker Ltd
Real Estate Services
BNPP Cardif Servicios y Asistencia Ltda
Stellantis Financial Services UK Ltd
Personal Finance
Comercializadora de Vehiculos SA
Vauxhall Finance Ltd (Ex- Vauxhall Finance PLC)
Personal Finance
Rentaequipos Leasing SA
Ukraine
Joint Stock Company Ukrsibbank
Europe-Mediterranean
Arval Relsa Colombia SAS
3.Africa & Mediterranean basin
Algeria
BNPP El Djazair
Europe-Mediterranean
Cardif El Djazair
Insurance
BNPP Mexico Holding
Bahrain
BNPP SA (Bahrain branch)
Corporate and Institutional Banking
Cardif Mexico Seguros de Vida SA de CV
Botswana
RCS Botswana Pty Ltd
Personal Finance
Personal Finance
Kuwait
BNPP SA (Kuwait branch)
Corporate and Institutional Banking
BNPP Cardif Compania de Seguros y Reaseguros SA
Morocco
Arval Maroc SA
Arval
Arval
Europe-Mediterranean
Banque Marocaine pour le Commerce et l'Industrie Banque Offshore
Europe-Mediterranean
BNPP Asset Management USA Holdings Inc
BDSI
Europe-Mediterranean
BNPP Asset Management USA Inc
BMCI Leasing
Europe-Mediterranean
BNPP Capital Services Inc
Namibia
RCS Investment Holdings Namibia Pty Ltd
Personal Finance
BNPP Fortis (United States branch)
Qatar
BNPP SA (Qatar branch)
Corporate and Institutional Banking
Corporate and Institutional Banking
Saudi Arabia
BNPP Investment Co KSA
Corporate and Institutional Banking
Corporate and Institutional Banking
BNPP SA (Saudi Arabia branch)
Corporate and Institutional Banking
Corporate and Institutional Banking
South Africa
BNPP Personal Finance South Africa Ltd
Personal Finance
BNPP USA Inc
BNPP SA (South Africa branch)
Corporate and Institutional Banking
Corporate and Institutional Banking
RCS Cards Pty Ltd
Personal Finance
BNPP VPG EDMC Holdings LLC
Türkiye
Bantas Nakit AS
Europe-Mediterranean
BNPP VPG I LLC
BNPP Cardif Emeklilik AS
Insurance
BNPP VPG II LLC
BNPP Cardif Hayat Sigorta AS
Insurance
BNPP VPG III LLC
BNPP Cardif Sigorta AS
Insurance
BNPP VPG IV LLC
BNPP Finansal Kiralama AS
Leasing Solutions
BNPP VPG Master LLC
BNPP Fortis Yatirimlar Holding AS
Europe-Mediterranean
FSI Holdings Inc
Business
Locations
Business
Europe-Mediterranean
TEB ARF Teknoloji Anonim Sirketi
Europe-Mediterranean
Arval
Europe-Mediterranean
Europe-Mediterranean
Europe-Mediterranean
Europe-Mediterranean
Europe-Mediterranean
United Arab Emirates
Real Estate Services
Corporate and Institutional Banking
4.Americas
Argentina
Corporate and Institutional Banking
Bermuda
Corporate and Institutional Banking
Brazil
Arval
Corporate and Institutional Banking
Personal Finance
Asset Management
Corporate and Institutional Banking
BNPP Proprietario Fundo de Investimento Multimercado
Corporate and Institutional Banking
Cardif do Brasil Seguros e Garantias SA
Insurance
Insurance
Cetelem America Ltda
Cetelem Servicos Ltda
Insurance
Insurance
Canada
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
Chile
Arval
Asset Management
Insurance
BNPP Cardif Seguros Generales SA
Insurance
Arval
Arval
Colombia
Arval
BNPP Colombia Corporacion Financiera SA
Corporate and Institutional Banking
Cardif Colombia Seguros Generales SA
Insurance
Mexico
Corporate and Institutional Banking
BNPP Mexico SA Institucion de Banca Multiple
Corporate and Institutional Banking
Insurance
Cardif Mexico Seguros Generales SA de CV
Insurance
Cetelem SA de CV
Peru
Insurance
Cardif Servicios SAC
Insurance
Rentaequipos Leasing Peru SA
USA
Asset Management
Asset Management
Corporate and Institutional Banking
BNPP Financial Services LLC
Securities Services
Corporate and Institutional Banking
BNPP FS LLC
Corporate and Institutional Banking
BNPP RCC Inc
BNPP SA (United States branch)
Corporate and Institutional Banking
BNPP Securities Corp
BNPP US Investments Inc
BNPP US Wholesale Holdings Corp
Corporate and Institutional Banking
Corporate and Institutional Banking
BNPP VPG Brookline Cre LLC
Corporate and Institutional Banking
BNPP VPG Express LLC
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
Corporate and Institutional Banking
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GENERAL INFORMATION
8
8
Information on locations and businesses in 2023
Locations
Starbird Funding Corp
Corporate and Institutional Banking
Cardif Life Insurance Japan
5.Asia & Pacific
Australia
BNPP Fund Services Australasia Pty Ltd
Securities Services
BNPP Malaysia Berhad
BNPP SA (Australia branch)
China
Bank of Nanjing
Europe-Mediterranean
BNPP Fund Services Australasia Pty Ltd (New Zealand branch)
BNPP ABC Wealth Management Co Ltd
Asset Management
BNPP China Ltd
BOB Cardif Life Insurance Co Ltd
Insurance
BON BNPP Consumer Finance Co Ltd
Personal Finance
BNPP SA (Republic of Korea branch)
Cetelem Business Consulting Shanghai Co Ltd
Personal Finance
BNPP Securities Korea Co Ltd
Genius Auto Finance Co Ltd
Personal Finance
Cardif Life Insurance Co Ltd
Haitong Fortis Private Equity Fund Management Co Ltd
Asset Management
HFT Investment Management Co Ltd
Asset Management
BNPP Real Estate Singapore Pte Ltd
Securitisation funds Genius (d)
Personal Finance
BNPP SA (Singapore branch)
Securitisation funds Wisdom (e)
Personal Finance
BPP Holdings Pte Ltd
Zhejiang Wisdom Puhua Financial Leasing Co Ltd
Personal Finance
Hong Kong
BNPP Arbitrage Hong Kong Ltd
Corporate and Institutional Banking
BNPP Cardif TCB Life Insurance Co Ltd
BNPP Asset Management Asia Ltd
Asset Management
BNPP SA (Taiwan branch)
BNPP Finance Hong Kong Ltd
BNPP SA (Hong Kong branch)
Corporate and Institutional Banking
Cardif Assurance Vie (Taiwan branch)
BNPP Securities Asia Ltd
Corporate and Institutional Banking
Cardif Assurance Risque Divers (Taiwan branch)
India
Baroda BNPP AMC Private Ltd
Asset Management
BNPP India Holding Private Ltd
BNPP India Solutions Private Ltd
Corporate and Institutional Banking
BNPP SA (India branch)
BNPP Securities India Private Ltd
Corporate and Institutional Banking
Espresso Financial Services Private Ltd
Personal Investors
Geojit Technologies Private Ltd
Personal Investors
Human Value Developers Private Ltd
Personal Investors
Sharekhan BNPP Financial Services Ltd
Personal Investors
Sharekhan Ltd
Personal Investors
Indonesia
Andalan Multi Guna Pt
Corporate and Institutional Banking
Bank BNPP Indonesia Pt
Corporate and Institutional Banking
BNPP Asset Management Pt
Asset Management
BNPP Sekuritas Indonesia Pt
Corporate and Institutional Banking
Japan
BNPP Asset Management Japan Ltd
Asset Management
BNPP SA (Japan branch)
Corporate and Institutional Banking
BNPP Securities Japan Ltd
Corporate and Institutional Banking
Business
Locations
Business
Insurance
Cardif Non Life Insurance Japan
Insurance
Malaysia
Corporate and Institutional Banking
Corporate and Institutional Banking
BNPP SA (Malaysia branch)
Corporate and Institutional Banking
New Zealand
Securities Services
Philippines
Corporate and Institutional Banking
BNPP SA (Philippines branch)
Corporate and Institutional Banking
Rep. of Korea
Corporate and Institutional Banking
Corporate and Institutional Banking
Insurance
Singapore
Real Estate Services
Corporate and Institutional Banking
Corporate and Institutional Banking
Taiwan
BNPP Asset Management Taiwan Co Ltd
Asset Management
Insurance
Corporate and Institutional Banking
Corporate and Institutional Banking
BNPP Securities Taiwan Co Ltd
Corporate and Institutional Banking
Insurance
Insurance
Paris Management Consultant Co Ltd
Insurance
Thailand
Corporate and Institutional Banking
BNPP SA (Thailand branch)
Corporate and Institutional Banking
Viet Nam
Corporate and Institutional Banking
BNPP SA (Viet Nam branch)
Corporate and Institutional Banking
(a) At 31 December 2023, 14 Private Equity investment entities versus 14 Private Equity investment entities at
31 December 2022.
(b) At 31 December 2023, the securitisation funds UCI and RMBS Prado include 13 funds (FCC UCI 11, 12, 14 to 17, RMBS
Prado VII to XI, Green Belem I and RMBS Belem No 2) versus 14 funds (FCC UCI 11, 12, 14 to 17, RMBS Prado V to X,
Green Belem I and RMBS Belem No 2) at 31 December 2022.
c) At 31 December 2023, 117 Construction-sale companies (82 Full and 35 Equity) versus 125 Construction-sale
companies (91 Full and 34 Equity) at 31 December 2022.
(d) At 31 December 2023, the Genius Securitization Mutual Funds comprised 11 funds (Generation 2021-4 Retail Auto
Mortgage Loan Securitization, Generation 2022-1 to 5 Retail Auto Mortgage Loan Securitization, Generation 2023-1
to 5 Retail Auto Mortgage Loan Securitization).
(e) At 31 December 2023, the Wisdom Securitization Funds include 13 funds (Wisdom Puhua Leasing 2021-2 & 3
Asset-Backed Securities, Wisdom Puhua Leasing 2022-1 Asset-Backed Notes, Wisdom Puhua Leasing 2022-1 to 3
Asset-Backed Securities, Wisdom Puhua Leasing 2023-1 & 2 Asset-Backed Notes, Wisdom Puhua Leasing 2023-1
& 2 Asset-Backed securities, Wisdom Puhua Leasing Zhixing 2023-1 & 2 Asset-Backed Notes, Wisdom Puhua
Leasing Xinghe 2023-1 Asset-Backed Securities).
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8
GENERAL INFORMATION
8
Information on locations and businesses in 2023
FY 2023(*) (in millions of euros)
Financial
headcount(**) as
Corporate at 31 December
2023
Revenues
Public
received
subsidies Income before
Tax
Current
tax Deferred
expense
tax income tax
European Union member
states
Austria
70
0
5
1
(7)
(6)
206
Belgium
5,036
0
1,848
(353)
(161)
(514)
12,663
Bulgaria
54
0
60
(5)
0
(5)
91
Czech Republic
116
0
26
(8)
(5)
(13)
374
Denmark
121
0
6
(10)
2
(8)
319
Finland
11
0
5
0
0
0
44
France
11,272
0
(1,527)
191
169
360
55,068
Germany
2,606
0
1,039
(312)
(28)
(340)
6,060
Greece
12
0
1
0
(3)
(3)
86
Hungary
53
0
14
(2)
(1)
(3)
452
Ireland
342
0
211
(28)
1
(27)
524
Italy
5,090
0
1,573
46
(553)
(507)
15,779
Luxemburg
1,612
0
885
(152)
(49)
(201)
3,511
Netherlands
609
0
327
(81)
(25)
(106)
1,208
Poland
1,792
0
501
(187)
(10)
(197)
9,642
Portugal
185
0
86
(26)
(1)
(27)
8,743
Romania
96
0
45
(6)
(2)
(8)
608
Spain
1,208
0
532
(81)
(69)
(150)
4,563
Slovakia
23
0
(22)
0
(2)
(2)
447
Sweden
137
0
(12)
(7)
(7)
(14)
393
Other European
countries
Guernsey
12
0
4
27
Jersey
30
0
(1)
238
Kosovo
50
0
25
(3)
(3)
599
Monaco
169
0
109
(4)
(4)
70
Norway
63
0
(3)
1
(2)
181
Russia
123
115
(22)
(3)
(25)
111
Switzerland
390
30
(12)
(2)
(14)
982
0
0
0
0
0
0
United Kingdom
4,011
0
1,557
(385)
(50)
(435)
7,675
Africa &
Mediterranean basin
Algeria
90
0
35
(11)
(1)
(12)
1,200
Bahrain
27
0
(55)
0
0
0
261
Botswana
2
0
1
(1)
0
(1)
7
Ivory Coast(2)
9
0
3
0
0
0
0
Kuwait
5
0
(1)
(1)
0
(1)
4
Morocco
325
0
48
(49)
18
(31)
2,932
Namibia
1
0
0
0
0
0
10
Qatar
36
0
23
(3)
0
(3)
22
Saudi Arabia
46
0
29
(5)
0
(5)
54
FY 2023(*) (in millions of euros)
Financial
headcount(**) as
Corporate at 31 December
2023
Revenues
Public
received
subsidies Income before
Tax
Current
tax Deferred
expense
tax income tax
Senegal(2)
17
0
3
0
1
1
0
South Africa
164
0
39
(10)
(3)
(13)
1,408
Türkiye
1,058
0
291
(190)
(101)
(291)
9,281
United Arab Emirates
108
0
62
(11)
(1)
(12)
137
Americas
Argentina
94
0
59
(5)
0
(5)
77
Bermuda
0
0
0
0
0
0
0
Brazil
331
0
(19)
(22)
32
10
1,446
Canada
56
0
46
(17)
1
(16)
1,170
Chile
113
0
80
(15)
1
(14)
538
Colombia
88
0
52
(23)
2
(21)
501
Mexico
158
0
63
(26)
10
(16)
931
Peru
16
0
11
(4)
1
(3)
68
United States of America
4,073
0
5,156
(1,399)
363
(1,036)
3,675
Asia & Pacific
Australia
234
0
85
(32)
(3)
(35)
500
China
160
0
45
(10)
11
1
526
Hong Kong
993
0
77
(10)
80
70
2,377
India
324
0
232
(91)
7
(84)
13,646
Indonesia
58
0
21
(10)
4
(6)
159
Japan
706
0
465
(156)
30
(126)
671
Malaysia
38
0
20
(4)
(1)
(5)
95
New Zealand
17
0
6
(2)
0
(2)
54
0
0
0
Philippines
0
0
0
0
0
0
0
0
0
0
Republic of Korea
133
0
56
(80)
67
(13)
318
0
Singapore
826
0
277
(30)
(1)
(31)
1,867
0
Taiwan
183
0
75
(23)
14
(9)
716
2
Thailand
43
0
29
(6)
0
(6)
83
0
Viet Nam
49
0
32
(7)
0
(7)
102
0
GROUP TOTAL
45,874
0
14,790
(3,702)
(274)
(3,976)
175,498
Ukraine(1)
0
Reclassification of
discontinued activities
(note 9.e)
0
0
(3,658)
639
71
710
Total continuing
activities
45,874
0
11,132
(3,063)
(203)
(3,266)
175,498
(*) The financial data correspond to the contribution income of fully consolidated entities under exclusive control.
(**) Financial headcount: Full-Time Equivalents (FTE) at 31 December 2023 in wholly controlled, fully consolidated
entities.
(1) Ukrsibbank is accounted for by the equity method since 1 march 2022.
(2) The entities of this country were sold during the year.
➤
II. PROFIT AND LOSS ACCOUNT ITEMS AND HEADCOUNT BY COUNTRY
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GENERAL INFORMATION
8
8
Founding documents and Articles of Association
8.7 Founding documents and Articles of Association
SECTION I
FORM – NAME – REGISTERED OFFICE –
CORPORATE PURPOSE
Article 1
BNP PARIBAS is a French Public Limited Company (société anonyme)
licensed to conduct banking operations under the French Monetary and
Financial Code, Book V, Section 1 (Code Monétaire et Financie r, L ivre V,
Titre 1er) governing banking sector institutions.
The Company was founded pursuant to a decree dated 26 May 1966. Its
legal life has been extended to 99 years with effect from 17 September
1993.
Apart from the specific rules relating to its status as an establishment in
the banking sector (Book V, Section 1 of the French Monetary and Financial
Code - Code Monétaire et Financie r, L ivre V, Titre 1er), BNP PARIBAS shall
be governed by the provisions of the French Commercial Code (Code
de Commerce) concerning commercial companies, as well as by these
Articles of Association.
Article 2
The registered office of BNP PARIBAS shall be located in Paris
(9th arrondissement), at 16, Boulevard des Italiens (France).
Article 3
The purpose of BNP PARIBAS shall be to provide and carry out the
following services with any individual or legal entity, in France and
abroad, subject to compliance with the French laws and regulations
applicable to credit institutions licensed by the Credit Institutions and
Investment Firms Committee (Comité des Etablissements de Crédit et
des Entreprises d'Investissement):
■ any and all investment services,
■ any and all services related to investment services,
■ any and all banking transactions,
■ any and all services related to banking transactions,
■ any and all equity investments,
as defined in the French Monetary and Financial Code Book III – Section 1
(Code Monétaire et Financie r, L ivre III, Titre 1er) governing banking
transactions and Section II (Titre II) governing investment services and
related services.
On a regular basis, BNP PARIBAS may also conduct any and all other
activities and any and all transactions in addition to those listed above, in
particular any and all arbitrage, brokerage and commission transactions,
subject to compliance with the regulations applicable to banks.
In general, BNP PARIBAS may, on its own behalf, and on behalf of third
parties or jointly therewith, perform any and all financial, commercial,
industrial or agricultural, personal property or real estate transactions
directly or indirectly related to the activities set out above or which
further the accomplishment thereof.
SECTION II
SHARE CAPITAL - SHARES
Article 4
The share capital of BNP PARIBAS shall stand at 2,294,954,818 euros
divided into 1,147,477,409 fully paid-up shares with a nominal value
of 2 euros each.
Article 5
The fully paid-up shares shall be held in registered or bearer form at
the shareholder's discretion, subject to the French laws and regulations
in force.
The shares shall be registered in an account in accordance with the terms
and conditions set out in the applicable French laws and regulations in
force. They shall be assigned by transfer from one account to anothe r.
The Company may request disclosure of information concerning the
ownership of its shares in accordance with the provisions of article
L. 228-2 of the French Commercial Code (Code de Commerce).
Without prejudice to the legal thresholds set in article L. 233-7,
paragraph 1 of the French Commercial Code (Code de Commerce), any
shareholde r, w hether acting alone or in concert, who comes to directly
or indirectly hold at least 0.5% of the share capital or voting rights of
BNP PARIBAS, or any multiple of that percentage less than 5%, shall be
required to notify BNP PARIBAS by registered letter with return receipt
within the timeframe set out in article L. 233-7 of the French Commercial
Code (Code de Commerce).
Above 5%, the disclosure obligation provided for in the previous paragraph
shall apply to 1% increments of the share capital or voting rights.
The disclosures described in the previous two paragraphs shall also apply
when the shareholding falls below the above-mentioned thresholds.
Failure to report either legal or statutory thresholds shall result in the
loss of voting rights as provided for by article L. 233-14 of the French
Commercial Code (Code de Commerce) at the request of one or more
shareholders jointly holding at least 2% of the Company's share capital
or voting rights.
Article 6
Each share shall grant a right to a part of ownership of the Company's
assets and any liquidation surplus that is equal to the proportion of share
capital that it represents.
In cases where it is necessary to hold several shares in order to exercise
certain rights, and in particular where shares are exchanged, combined
or allocated, or following an increase or reduction in share capital,
regardless of the terms and conditions thereof, or subsequent to a
merger or any other transaction, it shall be the responsibility of those
shareholders owning less than the number of shares required to exercise
those rights to combine their shares o r, i f necessary, to purchase or sell
the number of shares or voting rights leading to ownership of the required
percentage of shares.
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8
GENERAL INFORMATION
8
Founding documents and Articles of Association
SECTION III
GOVERNANCE
Article 7
The Company shall be governed by a Board of Directors composed of:
1/Directors appointed by the Ordinary General Shareholders' Meeting
There shall be at least nine and no more than eighteen Directors.
Directors representing employees as well as Directors representing
employee shareholders shall not be included when calculating the
minimum and maximum number of Directors.
They shall be appointed for a three-year term.
When a Director is appointed to replace another Directo r, i n accordance
with applicable French laws and regulations in force, the new Director's
term of office shall be limited to the remainder of the predecessor's term.
A Director's term of office shall end at the close of the Ordinary General
Shareholders' Meeting convened to deliberate on the financial statements
for the previous financial year and held in the year during which the
Director's term of office expires.
Directors may be re-appointed, subject to the provisions of French law,
in particular with regard to their age.
Each Directo r, w ith the exception of Directors representing employees
and Directors representing employee shareholders, must own at least
10 Company shares.
2/Directors elected by BNP PARIBAS SA employees
The status of these Directors and the related election procedures shall
be governed by Articles L. 225-27 to L. 225-34 of the French Commercial
Code (Code de Commerce) as well as by the provisions of these Articles
of Association.
There shall be two such Directors – one representing executive staff and
the other representing non-executive staff.
They shall be elected by BNP PARIBAS SA employees.
They shall be elected for a three-year term.
Elections shall be organised by the Executive Management. The
timetable and terms and conditions for elections shall be drawn up
by the Executive Management in consultation with the national trade
union representatives within the Company such that the second round
of elections shall be held no later than fifteen days before the end of the
term of office of the outgoing Directors.
Each candidate shall be elected on a majority basis after two rounds held
in each of the electoral colleges.
Each application submitted during the first round of elections shall
include both the candidate's name and the name of a substitute, if any.
Applications may not be amended during the second round of elections.
The candidates shall belong to the electoral college where they stand
for election.
Applications other than those presented by a trade union representative
within the Company must be submitted together with a document
including the names and signatures of one hundred electors belonging
to the electoral college where the candidate is running for election.
3/Director representing employee shareholders
Where the report presented by the Board of Directors at the Annual
General Meeting, in accordance with article L. 225-102 of the French
Commercial Code, establishes that shares held by company employees
or by employees of related companies within the meaning of article
L. 225-180 of said Code, account for over 3% of the Company's share
capital, a Director representing the employee shareholders is appointed
by the Ordinary Shareholders' Meeting in accordance with the procedures
set out in current regulations as well as by these Articles of association.
Candidates for election to the office of Director representing employee
shareholders are selected on the following basis:
■ when the voting right attached to the shares held by the employees,
and former employees, referred to in article L. 225-102 of the French
Commercial Code is exercised by the Supervisory Board, or Boards, of
one, or more, mutual funds (FCPE), the Board, or Boards, of the FCPE
or FCPEs, jointly selects two candidates;
■ when the voting right attached to the shares, held directly or via an
FCPE by the employees, and where applicable, former employees, as
referred to in article L. 225-102 of the French Commercial Code, is
exercised directly by said employees, they appoint two candidates,
given that each employee shareholder will have the same number of
votes as the number of shares that they directly, or indirectly, hold.
The two employees with the most votes are appointed as candidates.
Only employee shareholders or employees who are members of the
Supervisory Board of an FCPE holding company shares may be selected
as candidates.
Each candidate must be presented together with a replacement who
meets the same requirements as the said candidate.
The Board of Directors presents the candidates to the Annual General
Meeting under separate resolutions and, where applicable, approves
the resolution relating to its preferred candidate. The Ordinary General
Meeting of Shareholders decides, under the conditions of quorum and
majority applicable to the appointment of any member of the Board of
Directors, on the appointment of the Director representing the employee
shareholders. Out of the candidates referred to above, the one who has
received the most votes from shareholders present, or represented, at the
Ordinary General Meeting of Shareholders, will be appointed as Director
representing employee shareholders.
This Director's term and the conditions under which the term of office is
exercised are exactly the same as for Directors appointed by the Annual
General Meeting.
Should the Director cease to be an employee, or in the event of a vacancy
arising due to death or resignation of office, the term of office of the
Director representing employee shareholders ends automatically.
Under these circumstances, the Director representing the employee
shareholders shall be replaced at the next Ordinary Annual General
Meeting.
Should the next Annual General Meeting be held within four months of
the date on which the term of office is expected to end, the replacement
is appointed at the next Annual General Meeting.
The new Director is appointed by the Annual General Meeting for the
remainder of his/her predecessor's term of office.
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GENERAL INFORMATION
8
Founding documents and Articles of Association
Should the Director cease to be an employee, or in the event of a vacancy
arising due to death or resignation from office, the replacement's term
of office automatically ends and new candidates must be selected as
described above. The candidates selected by this process shall be voted
on by shareholders at the next Annual General Meeting. The new Director
is appointed by the Annual General Meeting as described above. This
Director's term of office and the conditions under which the directorship
is exercised are identical to those of Directors appointed by the Annual
General Meeting. Should the next Annual General Meeting be held within
six months of the date on which the replacement's term of office is due to
end, the replacement is appointed at the next Annual General Meeting.
Under the different circumstances mentioned above, the Board of
Directors may meet and validly deliberate until the date on which the
Director representing the employee shareholders is replaced.
The provisions of the first paragraph of 3/ shall cease to apply when,
at year-end, the percentage of capital owned by Company employees
and employees of related companies under the aforementioned article
L. 225-102, accounts for less than 3% of the share capital, given that the
term of office of any Director appointed in accordance with this article
shall end on its expiry date.
Detailed procedures relating to the organisation and holding of the
vote by all the shareholders referred to in the aforementioned article
L. 225-102, particularly with regard to the timetable for the selection
of candidates, are approved by the Executive Management directly, or
by delegation.
Article 8
The Chairman of the Board of Directors shall be appointed from among
the members of the Board of Directors.
Upon proposal from the Chairman, the Board of Directors may appoint
one or more Vice-Chairmen.
Article 9
The Board of Directors shall meet as often as necessary in the best
interests of the Company. Board meetings shall be convened by the
Chairman. Where requested by at least one-third of the Directors, the
Chairman may convene a Board meeting with respect to a specific agenda,
even if the last Board meeting was held less than two months before.
The Chief Executive Officer (CEO) may also request that the Chairman
convene a Board meeting to discuss a specific agenda.
Board meetings shall be held either at the Company's registered office,
8
or at any other location specified in the notice of meeting.
Notices of meetings may be communicated by any means, including
verbally.
The Board of Directors may meet and make valid decisions at any time,
even if no notice of meeting has been communicated, provided all its
members are present or represented.
Article 10
Board meetings shall be chaired by the Chairman, by a Director
recommended by the Chairman for such purpose o r, f ailing this, by the
oldest Director present.
Any Director may attend a Board meeting and take part in its deliberations
by videoconference (visioconférence) or all telecommunications and
remote transmission means, including Internet, subject to compliance
with the conditions set out in applicable legislation at the time of its use.
Decisions within the remit of the Board of Directors referred to by article
L. 225-37 French Commercial Code (Code de Commerce) may be taken
by means of written consultation.
Any Director who is unable to attend a Board meeting may ask to be
represented by a fellow Directo r, b y granting a written proxy, valid for
only one specific meeting of the Board. Each Director may represent only
one other Directo r.
At least half of the Board members must be present for decisions taken
at Board meetings to be valid.
Should one or both of the offices of Director elected by employees remain
vacant, for whatever reason, without the possibility of a replacement as
provided for in article L. 225-34 of the French Commercial Code (Code
de Commerce), the Board of Directors shall be validly composed of the
members elected by the General Shareholders' Meeting and may validly
meet and vote.
Members of the Company's Executive Management may, at the request
of the Chairman, attend Board meetings in an advisory capacity.
A permanent member of the Company's Central Social and Economic
Committee, appointed by said Committee, shall attend Board meetings
in an advisory capacity, subject to compliance with the provisions of
French laws in force.
Decisions shall be made by a majority of Directors present or represented.
In the event of a split decision, the Chairman of the meeting shall have
the casting vote, except as regards the proposed appointment of the
Chairman of the Board of Directors.
The Board of Directors' deliberations shall be recorded in minutes entered
in a special register prepared in accordance with French laws in force
and signed by the Chairman of the meeting and one of the Directors who
attended the meeting.
The Chairman of the meeting shall appoint the Secretary to the Board,
who may be chosen from outside the Board's members.
Copies or excerpts of Board minutes may be signed by the Chairman,
the Chief Executive Office r, t he Chief Operating Officers (COOs) or any
representative specifically authorised for such purpose.
Article 11
The Ordinary General Shareholders' Meeting may grant Directors'
remuneration under the conditions provided for by French law.
The Board of Directors shall split these fees among its members.
The Board of Directors may grant exceptional compensation for
specific assignments or duties performed by the Directors under the
conditions applicable to agreements subject to approval, in accordance
with the provisions of Articles L. 225-38 to L. 225-43 of the French
Commercial Code (Code de Commerce). The Board may also authorise the
reimbursement of travel and business expenses and any other expenses
incurred by the Directors in the interests of the Company.
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8
GENERAL INFORMATION
8
Founding documents and Articles of Association
SECTION IV
DUTIES OF THE BOARD OF DIRECTORS,
THE CHAIRMAN, THE EXECUTIVE
MANAGEMENT AND THE NON-VOTING
DIRECTORS (CENSEURS)
Article 12
The Board of Directors shall determine the business strategy of
BNP PARIBAS and supervise the implementation thereof. Subject to the
powers expressly conferred on the Shareholders' Meetings and within
the limit of the corporate purpose, the Board shall handle any issue
concerning the smooth running of BNP PARIBAS and settle matters
concerning the Company pursuant to its deliberations. The Board of
Directors shall receive from the Chairman or the Chief Executive Officer
all of the documents and information required to fulfil its duties.
The Board of Directors' decisions shall be carried out either by the
Chairman, the Chief Executive Officer or the Chief Operating Officers, or
by any special representative appointed by the Board.
Upon proposal from the Chairman, the Board of Directors may decide to
set up committees responsible for performing specific tasks.
Article 13
The Chairman shall organise and manage the work of the Board of
Directors and report thereon to the General Shareholders' Meeting.
The Chairman shall also oversee the smooth running of BNP PARIBAS's
management bodies and ensure, in particula r, t hat the Directors are in
a position to fulfil their duties.
The remuneration of the Chairman of the Board shall be freely determined
by the Board of Directors.
Article 14
The Board of Directors shall decide how to organise the Executive
Management of the Company: the Executive Management of the Company
shall be conducted, under his responsibility, either by the Chairman of
the Board of Directors or by another individual appointed by the Board of
Directors and who shall have the title of Chief Executive Office r.
Shareholders and third parties shall be informed of this choice in
accordance with the regulatory provisions in force.
The Board of Directors shall have the right to decide that this choice be
for a fixed term.
Once the Board of Directors has decided to dissociate the functions of
Chairman and Chief Executive Office r, t he Chairman shall be deemed to
have automatically resigned at the close of the General Shareholders'
Meeting held to approve the financial statements for the year in which
he reaches seventy-five years of age. Howeve r, t he Board may decide to
extend the term of office of the Chairman of the Board until the close of the
General Shareholders' Meeting held to approve the financial statements for
the year in which he reaches seventy-six years of age. The Chief Executive
Officer shall be deemed to have automatically resigned at the close of the
General Shareholders' Meeting held to approve the financial statements
for the year in which he reaches sixty-five years of age. Howeve r, t he
Board may decide to extend the term of office of the Chief Executive Officer
until the close of the General Shareholders' Meeting held to approve the
financial statements for the year in which he reaches sixty-six years of age.
In the event that the Board of Directors decides that the Executive
Management shall be conducted by the Chairman of the Board, the
provisions of these Articles of Association concerning the Chief Executive
Officer shall apply to the Chairman of the Board of Directors who will in
such case have the title of Chairman and Chief Executive Office r. H e shall
be deemed to have automatically resigned at the close of the General
Shareholders' Meeting held to approve the financial statements for the
year in which he reaches sixty-five years of age.
Article 15
The Chief Executive Officer shall be vested with the broadest powers to
act in all circumstances in the name of BNP PARIBAS. He shall exercise
these powers within the limit of the corporate purpose and subject to
those powers expressly granted by French law to Shareholders' Meetings
and the Board of Directors.
He shall represent BNP PARIBAS in its dealings with third parties.
BNP PARIBAS shall be bound by the actions of the Chief Executive Officer
even if such actions are outside the scope of the corporate purpose,
unless BNP PARIBAS can prove that the third party knew that the relevant
action was outside the scope of the corporate purpose or had constructive
knowledge thereof in view of the circumstances. The publication of the
Company's Articles of Association alone shall not constitute such proof.
The Chief Executive Officer shall be responsible for the organisation and
procedures of internal control and for all information required by French
law regarding the internal control report.
The Board of Directors may limit the powers of the Chief Executive Office r,
but such limits shall not be binding as against third parties.
The Chief Executive Officer may delegate partial powers, on a temporary
or permanent basis, to as many persons as he sees fit, with or without
the option of redelegation.
The remuneration of the Chief Executive Officer shall be freely determined
by the Board of Directors.
The Chief Executive Officer may be removed from office by the Board of
Directors at any time. Damages may be payable to the Chief Executive
Officer if he is removed from office without a valid reason, except where
the Chief Executive Officer is also the Chairman of the Board of Directors.
In the event that the Chief Executive Officer is a Directo r, t he term of
his office as Chief Executive Officer shall not exceed that of his term of
office as a Directo r.
Article 16
Upon proposal from the Chief Executive Office r, t he Board of Directors
may, within the limits of French law, appoint one or more individuals, who
shall have the title of Chief Operating Office r, r esponsible for assisting
the Chief Executive Office r.
In agreement with the Chief Executive Office r, t he Board of Directors
shall determine the scope and term of the powers granted to the Chief
Operating Officers. Howeve r, a s far as third parties are concerned, the
Chief Operating Officers shall have the same powers as the Chief Executive
Office r.
When the Chief Executive Officer ceases to perform his duties or is
prevented from doing so, the Chief Operating Officers shall, unless
the Board of Directors decides otherwise, retain their functions and
responsibilities until a new Chief Executive Officer is appointed.
The remuneration of the Chief Operating Officers shall be freely determined
by the Board of Directors, at the proposal of the Chief Executive Office r.
The Chief Operating Officers may be removed from office by the Board
of Directors at any time, at the proposal of the Chief Executive Office r.
Damages may be payable to the Chief Operating Officers if they are
removed from office without a valid reason.
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GENERAL INFORMATION
8
Founding documents and Articles of Association
Where a Chief Operating Officer is a Directo r, t he term of his office as Chief
Operating Officer may not exceed that of his term of office as a Directo r.
The term of office of the Chief Operating Officers shall expire at the latest
at the close of the General Shareholders' Meeting convened to approve
the financial statements for the year in which the Chief Operating Officers
reach sixty-five years of age. Howeve r, t he Board may decide to extend
the term of office of the Chief Operating Officers until the close of the
General Shareholders' Meeting held to approve the financial statements
for the year in which they reach sixty-six years of age.
Article 17
Upon proposal from the Chairman, the Board of Directors may appoint
one or two non-voting Directors (censeurs).
Non-voting Directors shall be convened to and take part in Board
meetings in an advisory capacity.
They shall be appointed for six years and may be reappointed for further
terms. They may also be removed at any time under similar conditions.
They shall be selected from among the Company's shareholders and may
receive a remuneration determined by the Board of Directors.
SECTION V
SHAREHOLDERS' MEETINGS
Article 18
General Shareholders' Meetings shall be composed of all shareholders.
General Shareholders' Meetings shall be convened and deliberate subject
to compliance with the provisions of the French Commercial Code (Code
de Commerce).
As an exception to the last paragraph of article L. 225-123 of the French
Commercial Code (Code de Commerce), each share carries one voting
right, and no double voting rights are conferred.
They shall be held either at the registered office or at any other location
specified in the notice of meeting.
They shall be chaired by the Chairman of the Board of Directors, o r, i n his
absence, by a Director appointed for this purpose by the Shareholders' Meeting.
Any shareholder may, subject to providing proof of identity, attend a
General Shareholders' Meeting, either in person, or by returning a postal
8
vote or by designating a proxy.
T a king part in the meeting is subject to the shares having been entered
either in the BNP PARIBAS' registered share accounts in the name of
the shareholde r, o r in the bearer share accounts held by the authorised
intermediary, within the timeframes and under the conditions provided
for by the French regulations in force. In the case of bearer shares, the
authorised intermediary shall provide a certificate of participation for
the shareholders concerned.
The deadline for returning postal votes shall be determined by the Board
of Directors and stated in the notice of meeting published in the French
Bulletin of Compulsory Legal Announcements (Bulletin des Annonces
Légales Obligatoires – BALO).
At all General Shareholders' Meetings, the voting right attached to the
shares bearing beneficial rights shall be exercised by the beneficial owne r.
If the Board of Directors so decides at the time that the General
Shareholders' Meeting is convened, the public broadcasting of the entire
General Shareholders' Meeting by videoconference (visioconférence) or all
telecommunications and remote transmission means, including Internet,
shall be authorised. Where applicable, this decision shall be communicated
in the notice of meeting published in the French Bulletin of Compulsory
Legal Announcements (Bulletin des Annonces Légales Obligatoires – BALO).
Any shareholder may also, if the Board of Directors so decides at the
time of convening the General Shareholders' Meeting, take part in the
vote by videoconference (visioconférence) or all telecommunications and
remote transmission means, including Internet, subject to compliance
with the conditions set out in the applicable laws at the time of its use.
If an electronic voting form is used, the shareholder's signature may
be in the form of a secured digital signature or a reliable identification
process safeguarding the link with the document to which it is attached
and may consist, in particula r, o f a user identifier and a password. Where
applicable, this decision shall be communicated in the notice of meeting
published in the French Bulletin of Compulsory Legal Announcements
(Bulletin des Annonces Légales Obligatoires – BALO).
SECTION VI
STATUTORY AUDITORS
Article 19
At least two principal auditors shall be appointed by the General Shareholders'
Meeting for a term of six financial years. Their term of office shall expire after
approval of the financial statements for the sixth financial yea r.
SECTION VII
ANNUAL FINANCIAL STATEMENTS
Article 20
The Company's financial year shall start on 1st January and end on
31st Decembe r.
At the end of each financial yea r, t he Board of Directors shall draw up annual
financial statements and write a management report on the Company's
financial position and its business activities during the previous yea r.
Article 21
Net income for the year is composed of income for the year minus costs,
depreciation, amortizations and impairment.
The distributable profit is made up of the year's profit, minus previous
losses as well as the sums to be allocated to the reserves in accordance
with French law, plus the profit carried forward.
The General Shareholders' Meeting is entitled to levy all sums from
the distributable profit to allocate them to all optional, ordinary or
extraordinary reserves or to carry them forward.
The General Shareholders' Meeting may also decide to distribute sums
levied from the reserves at its disposal.
Howeve r, e xcept in the event of a capital reduction, no amounts may be
distributed to the shareholders if the shareholders' equity is, or would
become following such distribution, lower than the amount of capital
plus the reserves which is not open to distribution pursuant to French
law or these Articles of Association.
In accordance with the provisions of article L. 232-18 of the French
Commercial Code (Code de Commerce), a General Shareholders' Meeting
may offer to the shareholders an option for the payment, in whole or
in part, of dividends or interim dividends through the issuance of new
shares in the Company.
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8
GENERAL INFORMATION
8
Statutory Auditors' special report on related party agreements
SECTION VIII
DISSOLUTION
Article 22
Should BNP PARIBAS be dissolved, the shareholders shall determine the
form of liquidation, appoint the liquidators at the proposal of the Board
of Directors and, in general, take on all of the duties of the General
Shareholders' Meeting of a French Public Limited Company (société
anonyme) during the liquidation and until such time as it has been
completed.
SECTION IX
DISPUTES
Article 23
Any and all disputes that may arise during the life of BNP PARIBAS or
during its liquidation, either between the shareholders themselves or
between the shareholders and BNP PARIBAS, pursuant to these Articles
of Association, shall be ruled on in accordance with French law and
submitted to the courts having jurisdiction.
8.8 Statutory Auditors' special report on related
party agreements
Annual General Meeting for the approval of the financial statements for the year ended 31 December 2023.
This is a free translation into English of the Statutory Auditors' special report on related party agreements issued in French and is provided solely
for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and
professional auditing standards applicable in France.
To the General Assembly of the company,
In our capacity as Statutory Auditors of BNP Paribas SA, we hereby report to you on related party agreements.
It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of agreements that have
been disclosed to us or that we may have identified as part of our engagement, as well as the reasons given as to why they are beneficial for the
Company, without commenting on their relevance or substance or identifying any undisclosed agreements. Under the provisions of article R. 225-31 of
the French Commercial Code (Code de commerce), it is the responsibility of shareholders to determine whether the agreements are appropriate and
should be approved.
Where applicable, it is also our responsibility to provide shareholders with the information required by article R. 225-31 of the French Commercial Code
in relation to the implementation during the year of agreements already approved by the Annual General Meeting.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in France to such engagements. These
procedures consisted in verifying that the information given to us is consistent with the underlying documents.
AGREEMENTS TO BE SUBMITTED FOR THE APPRO V A L OF THE ANNUAL GENERAL MEETING
We were not informed of any agreement authorised and entered into during the year to be submitted for approval at the Annual General Meeting in
accordance with article L. 225-38 of the French Commercial Code.
AGREEMENTS PREVIOUS L Y A PPROVED BY THE ANNUAL GENERAL MEETING
Agreements approved in previous years
In accordance with article R. 225-30 of the French Commercial Code, we were informed that the following agreement, previously approved by the Annual
General Meeting on 26 May 2016, was implemented during the yea r.
2023 Universal registration document and annual financial report - BNP PARIBAS
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GENERAL INFORMATION
8
8
Statutory Auditors' special report on related party agreements
Non-compete agreement between BNP Paribas and Jean-Laurent Bonnafé (authorised by the Board of Directors on 25 February 2016)
Director concerned:
Jean-Laurent Bonnafé, Director
Chief Executive Officer of BNP Paribas
At its meeting on 25 February 2016, the Board of Directors of BNP Paribas authorised the implementation of a non-compete agreement between
BNP Paribas and Jean-Laurent Bonnafé.
Under this agreement, in the event that Jean-Laurent Bonnafé ceases to hold a position with BNP Paribas or carry out any work on its behalf, he
undertakes not to exercise, directly or indirectly, any professional activity for a period of 12 months on behalf of a banking, investment or insurance firm
whose shares are traded on a regulated market in France or abroad, or on behalf of a banking, investment or insurance firm in France whose shares
are not traded on a regulated market. As consideration for this non-compete obligation, Jean-Laurent Bonnafé will receive a payment equal to 1.2 times
the total of the fixed and variable remuneration (excluding multi-annual variable remuneration) he received during the year preceding his departure.
One-twelfth of the indemnity would be paid each month.
This agreement was concluded to protect the interests of BNP Paribas and its shareholders in the event of Jean-Laurent Bonnafé's departure.
Paris La Défense, Neuilly-sur-Seine and Courbevoie, 15 March 2024
The Statutory Auditors
Deloitte & Associés
PricewaterhouseCoopers Audit
Mazars
Laurence Dubois
Patrice Morot
Virginie Chauvin
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8
GENERAL INFORMATION
8
Person responsible for auditing the financial statements
8.9 Person responsible for auditing the financial
statements
STATUTORY AUDITORS
Deloitte & Associés
6, place de la Pyramide
92908 Paris-La Défense Cedex
PricewaterhouseCoopers Audit
63, rue de Villiers
92208 Neuilly-sur-Seine Cedex
Mazars
61, rue Henri Regnault
92400 Courbevoie
■ Deloitte & Associés was re-appointed as Statutory Auditor at the Annual General Meeting of 24 May 2018 for a six-year period expiring at the close of
the Annual General Meeting called in 2024 to approve the financial statements for the year ending 31 December 2023. The firm was first appointed
at the Annual General Meeting of 23 May 2006.
Deloitte & Associés is represented by Laurence Dubois.
Deputy:
Société BEAS, 6, place de la Pyramide, Paris-La Défense Cedex (92), France, SIREN No. 315 172 445, Nanterre trade and companies registe r.
■ PricewaterhouseCoopers audit was re-appointed as Statutory Auditor at the Annual General Meeting of 24 May 2018 for a six-year period expiring
at the close of the Annual General Meeting called in 2024 to approve the financial statements for the year ending 31 December 2023. The firm was
first appointed at the Annual General Meeting of 26 May 1994.
PricewaterhouseCoopers Audit is represented by Patrice Morot.
Deputy:
Jean-Baptiste Deschryve r, 6 3, rue de Villiers, Neuilly-sur-Seine (92).
■ Mazars was re-appointed as Statutory Auditor at the Annual General Meeting of 24 May 2018 for a six-year period expiring at the close of the Annual
General Meeting called in 2024 to approve the financial statements for the year ending 31 December 2023. The firm was first appointed at the
Annual General Meeting of 23 May 2000.
Mazars is represented by Virginie Chauvin.
Deputy:
Charles de Boisriou, 61, rue Henri-Regnault, Courbevoie (92).
Deloitte & Associés, PricewaterhouseCoopers and Mazars are registered as Statutory Auditors with the Versailles Regional Association of Statutory
Auditors, under the authority of the French National Accounting Oversight Board (Haut Conseil du Commissariat aux Comptes).
2023 Universal registration document and annual financial report - BNP PARIBAS
787
GENERAL INFORMATION
8
8
Person responsible for the Universal registration document
8.10 Person responsible for the Universal
registration document
PERSON RESPONSIBLE FOR THE UNIVERSAL REGISTRATION DOCUMENT
AND THE ANNUAL FINANCIAL REPORT
M r. J ean-Laurent BONNAFÉ, Chief Executive Officer of BNP Paribas.
STATEMENT BY THE PERSON RESPONSIBLE
I hereby declare that, to the best of my knowledge, the information contained in the Universal registration document is in accordance with the facts
and contains no omission likely to affect its import.
I further declare that, to the best of my knowledge, the financial statements are prepared in accordance with applicable accounting standards and
give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company and all the entities included in the consolidation,
and that the information provided in the management report on page 791 includes a fair review of the development and performance of the business,
profit or loss and financial position of the Company and all the entities included in the consolidation, and that it describes the principal risks and
uncertainties that they face.
Paris, 22 March 2024
Chief Executive Officer
Jean-Laurent BONNAFÉ
2023 Universal registration document and annual financial report - BNP PARIBAS
788
8
GENERAL INFORMATION
8
Person responsible for auditing the financial statements
9
Universal registration document and annual financial report - BNP PARIBAS
789
TABLES OF CONCORDANCE
In order to assist readers of the Universal registration document, the following table of concordance cross-references the main headings required by
the Delegated Regulation (EU) 2019/980 (Annex I), supplementing European Regulation 2017/1129 known as "Prospectus 3" and refers to the pages of
this Universal registration document on which information relating to each of the headings is mentioned.
Headings as listed by Annex I of Delegated Regulation (EU) No.2019/980
Page
1.
PERSONS RESPONSIBLE
1.1
Person responsible for the Universal registration document
787
1.2
Statement of the person responsible for the Universal registration document
787
1.3
Statement or report attributed to a person as an expert
1.4
Information from a third party
1.5
Approval from a competent authority
1
2.
STATUTORY AUDITORS
786
3.
RISK FACTORS
311-324
4.
INFORMATION ABOUT THE ISSUER
4-6
5.
BUSINESS OVERVIEW
5.1
Principal activities
7-19; 219-222; 772-778
5.2
Principal markets
7-19; 219-222; 772-778
5.3
History and development of the issuer
6
5.4
Strategy and objectives
153-157; 639-641; 698-699; 716-717
5.5
Possible dependency
770
5.6
Basis for any statements made by the issuer regarding its competitive position
7-19; 128-144
5.7
Investments
280-281; 624; 685-687; 771
6.
ORGANISATIONAL STRUCTURE
6.1
Brief description
4; 698-699
6.2.
List of significant subsidiaries
287-295; 614-623; 772-777
7.
OPERATING AND FINANCIAL REVIEW
7.1.
Financial condition
157; 174; 176; 584-585
7.2.
Operating results
128-144; 151-153; 161-167; 174; 220; 584
8.
CAPITAL RESOURCES
8.1.
Issuer's capital resources
178-179; 609
8.2.
Sources and amounts of cash flows
177
8.3.
Borrowing requirements and funding structure
157; 498-515
8.4.
Information regarding any restrictions on the use of capital resources that have materially
affected, or could materially affect, the issuer's operations.
N/A
8.5.
Anticipated sources of funds
N/A
Universal registration document and annual financial report - BNP PARIBAS
790
9
TABLES OF CONCORDANCE
9
Headings as listed by Annex I of Delegated Regulation (EU) No.2019/980
Page
9.
REGULATORY ENVIRONMENT
305; 326
10.
TREND INFORMATION
153-157; 771
10.1. Main recent trends
153-157; 771
10.2. Trends likely to have a material impact on the issuer's outlook
153-157; 771
11.
PROFIT FORECASTS OR ESTIMATES
11.1
Published earnings forecasts and estimates
N/A
11.2
Statement on the main forecast assumptions
N/A
11.3
Statement on the comparability of information
N/A
12.
ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES, AND SENIOR MANAGEMENT
12.1
Administrative and management bodies
35-48; 111
12.2
Administrative and management bodies' conflicts of interest
53-54; 68-69; 73-79; 85; 107
13.
REMUNERATION AND BENEFITS
13.1. Amount of remuneration paid and benefits in kind granted
79-106; 266-273; 283-284
13.2. Total amounts set aside or accrued by the issuer or its subsidiaries to provide pension,
retirement or similar benefits
79-106; 266-273; 283-284
14.
BOARD PRACTICES
14.1. Date of expiry of the current terms of office
35-47
14.2. Information about members of the administrative bodies' service contracts with the issuer
N/A
14.3. Information about the Audit Committee and Remuneration Committee
56-64
14.4. Corporate Governance regime in force in the issuer's country of incorporation
49-56
14.5. Potential material impacts on the Corporate Governance
47
15.
EMPLOYEES
15.1. Number of employees
4; 660-661; 698
15.2. Shareholdings and stock options
79-106; 200-201; 674-676
15.3. Description of any arrangements for involving the employees in the capital of the issuer
16.
MAJOR SHAREHOLDERS
16.1. Shareholders owning more than 5% of the issuer's capital or voting rights
20-21
16.2. Existence of different voting rights
20
16.3. Control of the issuer
20-21
16.4. Description of any arrangements, known to the issue r, t he operation of which may at a
subsequent date result in a change of control of the issuer
21
17.
RELATED PARTY TRANSACTIONS
79-107; 284-285; 784-785
18.
FINANCIAL INFORMATION CONCERNING THE ISSUER'S ASSETS AND LIABILITIES, FINANCIAL
POSITION, AND PROFITS AND LOSSES
18.1. Historical financial information
5; 24; 128-296; 584-624
18.2. Interim and other financial information
N/A
18.3. Auditing of historical annual financial information
297-302; 625-630
18.4. Pro forma financial information
N/A
18.5. Dividend policy
24; 27-28; 156; 612
18.6. Legal and arbitration proceedings
279-280
18.7. Significant change in the issuer's financial or trading position
771
19.
ADDITIONAL INFORMATION
19.1. Share capital
20; 274-276; 603-605; 779; 798
19.2. Memorandum and Articles of association
779-784
20.
MATERIAL CONTRACTS
770
21.
DOCUMENTS AVAILABLE
770
Universal registration document and annual financial report - BNP PARIBAS
791
TABLES OF CONCORDANCE
9
Pursuant to Annex I of Delegated Regulation (EU) 2019/980, the following
items are incorporated by reference:
■ the consolidated financial statements for the year ended
31 December 2022 and the Statutory Auditors' report on the
consolidated financial statements at 31 December 2022, presented
respectively on pages 173-296 and 297-302 of Registration Document
No. 23-0143 filed with the AMF on 24 March 2023. The information is
available via the following link: https://invest.bnpparibas/en/document/
universal-registration-document-2022;
■ the consolidated financial statements for the year ended
31 December 2021 and the Statutory Auditors' report on the
consolidated financial statements at 31 December 2021, presented
respectively on pages 177-290 and 291-296 of Registration Document
No. D.22-0156 filed with the AMF on 25 March 2022. The information is
available via the following link: https://invest.bnpparibas/en/document/
universal-registration-document-and-annual-financial-report-2021;
■ the consolidated financial statements for the year ended 31 December
2020 and the Statutory Auditors' report on the consolidated financial
statements at 31 December 2020, presented respectively on pages
161-271 and 272-277 of Registration Document No. D.21-0114 filed
with the AMF on 12 March 2021. The information is available via
the following link: https://invest.bnpparibas/en/document/universal-
registration-document-and-annual-financial-report-2020.
In order to assist readers of the annual financial report, the following table cross-references the information required by article L.451-1-2 of the French
Monetary and Financial Code.
(1) Information on events after the Board of directors' meeting of 31 January 2024 is not included in the management report.
(2) Some of the corresponding activities and investments fall within the scope of the research tax credit base accounted in the section entitled INCOME TAX (cf. respectively note 2.h
page 595 for the Company and note 3.j page 218 for the Group).
I. Company and Group Business and Situation(1)
Information (reference texts)
Page
■ Company and Group position over the past year
(L.232-1 II and L.233-26 of the French Commercial Code)
4-5; 128-157; 174-296; 584-624
■ Objective and comprehensive analysis of business performance, results and the financial position
of the Company and Group (L.22-10-35 and L.225-100-1 I of the French Commercial Code)
128-157; 174-296; 584-624
■ Key financial and extra-financial performance indicators for the Company and Group
(L.22-10-35 and L.225-100-1 I of the French Commercial Code)
128-170; 639-640
■ Foreseeable developments of the Company and Group
(L.232-1 II and L.233-26 of the French Commercial Code)
153-156
■ Key events occurring since the financial year-end and the preparation date
of the management report (L.232-1 II and L.233-26 of the French Commercial Code)
771
■ Company and Group research and development activities
(L.232-1 II and L.233-26 of the French Commercial Code)(2)
595; 218
9
■ Equity investments in, or takeovers of, companies that have their head office in France
(L.233-6 and L.247-1 I of the French Commercial Code)
624
■ Business and results for the Company as a whole, Company subsidiaries and companies
it controls by branch of activity (L.233-6 and L.247-1 I of the French Commercial Code)
7-19; 128-153
■ Existing Company branches (L.232-1 II of the French Commercial Code)
772-778
■ Information on Company locations and businesses
(L.511-45 and R.511-16-4 of the French Monetary and Financial Code)
287-295; 772-778
Annual financial report
Page
Statement by the person responsible for the Universal registration document
787
Management report
The concordance table below makes it possible to identify in this Universel registration document the information that constitutes the management report
of the Company (including the report on Corporate Governance) and the consolidated management report, as required by legal and regulatory provisions.
Headings as listed by Annex I of European Commission Delegated Regulation (EU) No.2019/980
Universal registration document and annual financial report - BNP PARIBAS
792
9
TABLES OF CONCORDANCE
9
and hence covered by public guarantees (L.511-4-1 of the French Monetary and Financial Code)
II. Risk factors and characteristics of internal control procedures
Information (reference texts)
Page
■ Description of the main risks and contingencies faced by the Company and Group
(L.22-10-35 and L.225-100-1 I of the French Commercial Code)
311-328
■ Information on the financial risks related to the effects of climate change and measures taken by the
Company and Group to reduce these through a low-carbon strategy applicable to all aspects of their
business (L.22-10-35 of the French Commercial Code)
120; 529-556
■ Objectives and policy for hedging each main transaction category by the Company and Group
(L.22-10-35 and L.225-100-1 I of the French Commercial Code)
492-496
■ Exposure to price, credit, liquidity and cash flow risks of the Company and Group
(L.22-10-35 and L.225-100-1 I of the French Commercial Code)
365-515
■ Main features of internal control and risk management procedures set up by the Company and Group
relating to the preparation and processing of accounting and financial information
(L.22-10-35 of the French Commercial Code)
122-126
III. Information on share capital
Information (reference texts)
Page
■ Name of individuals or legal entities holding directly or indirectly more than 5% of capital or voting
rights and changes arising during the year (L.233-13 of the French Commercial Code)
20-21
■ Name of companies controlled and share of the Company's share capital held by them
(L.233-13 of the French Commercial Code)
287-295
■ Employee share ownership status (L.225-102 of the French Commercial Code)
20-21
■ Share disposals made to regularise cross-shareholdings
(L.233-29 and R.233-19 of the French Commercial Code)
N/A
■ Information on share buyback transactions undertaken by the Company
(L.225-211 of the French Commercial Code)
107-110; 274; 599
■ Any adjustments made to securities giving access to share capital (L.225-181, L.228-99, R.225-137,
R.228-91 of the French Commercial Code)
N/A
■ Summary of transactions carried out by corporate officers, executives, certain company managers
and persons with close connections to them during the past year and which have been the subject
of a declaration (223-26 of the AMF General Regulation, L.621-18-2 and R.621-43-1 of the French
Monetary and Financial Code)
106
IV. Other accounting, financial and legal information
Information (reference texts)
Page
■ Information on payment terms (L.441-14 and D.441-6 of the French Commercial Code)
601
■ Amount of dividends distributed for the prior three years and revenue distributed eligible for the 40%
tax reduction (243 bis of the French General T a x Code)
24
■ Injunctions or fines for anti-competitive practices (L.464-2 of the French Commercial Code)
765
■ Information on financial instruments with an agricultural commodity as their underlying and
measures taken by the Company to prevent this having a significant impact on agricultural
commodity prices (L.511-4-2 of the French Monetary and Financial Code)
N/A
■ Amount and features of loans financed or distributed by the Company or that they distribute as
defined in III of Article 80 of the Planning Act for Social Cohesion Law No. 2005-32 of 18 January 2005
N/A
■ Return on Company assets (R.511-16-1 of the French Monetary and Financial Code)
360
Universal registration document and annual financial report - BNP PARIBAS
793
TABLES OF CONCORDANCE
9
V. Extra-financial performance statement and vigilance plan
Information (reference texts)
Page
■ Information on the labour and environmental impact relating to the Company, subsidiaries and
controlled companies (L.22-10-36, L.225-102-1 III and R.225-105 of the French Commercial Code)
698-703
■ Information on the effects of the Company's activity with respect for Human Rights and the fight
against corruption and tax evasion (L.22-10-36 and R.225-105 of the French Commercial Code)
704-719
■ Information on the Company, subsidiaries and controlled companies, relating to:
■
the consequences of climate change on business and use of goods and services
■
social commitments to promote sustainable development, the circular economy, the fight against food
waste and food poverty, respect for animal welfare and responsible, fair and sustainable food
■
actions to fight against discrimination and promote diversity
■
measures taken in favour of people with disabilities
■
actions to promote the nation-army bond and support engagement in the reserves
(L.22-10-36, L.225-102-1 and R.225-105 of the French Commercial Code)
703
■ Collective agreements agreed in the Company, subsidiaries and controlled companies
and their impacts on the economic performance of the Company, subsidiaries and controlled
companies as well as on employee working conditions
(L.22-10-36, L.225-102-1 and R.225-105 of the French Commercial Code)
673-674
■ Information for companies operating at least one facility listed under article L.515-36 of the French
Environmental Code (L.225-102-2 of the French Commercial Code)
N/A
■ Company's business plan (R.225-105 I of the French Commercial Code)
698-699
■ Social, environmental and civic information relevant to the main risks and policies of the company,
its subsidiaries and controlled companies (R.225-105 II of the French Commercial Code)
698 - 703
■ T a xonomy information / Article 8 of Regulation (EU) 2020/852 "T a xonomy"
724-760
■ Vigilance plan (L.225-102-4 of the French Commercial Code)
704-719
VI. Report on Corporate Governance
Information (reference texts)
Page
■ Information on the remuneration policy for directors and corporate officers
(L.22-10-8 of the French Commercial Code)
79-87
■ Information on the remuneration and benefits in kind of the directors and corporate officers
87-99
■ Holding conditions for free shares allocated to corporate officers
(L.225-197-1 of the French Commercial Code)
N/A
■ Conditions for exercising and holding options granted to directors and corporate officers
(L.225-185 of the French Commercial Code)
N/A
■ List of all directorships and positions held in any company by each director and corporate officer
during the year (L.22-10-10 and L.225-37-4 1° of the French Commercial Code)
35-48
■ Agreements entered into by one of the Company's directors or corporate officers and a subsidiary
of the Company (L.22-10-10 and L.225-37-4 2° of the French Commercial Code)
49
■ Summary table of capital increase delegations
(L.22-10-10 and L.225-37-4 3° of the French Commercial Code)
107-110
■ Arrangements for exercising General Management
(L.22-10-10 and L.225-37-4 4° of the French Commercial Code)
51-52
■ Composition, and conditions governing the preparation and organisation of the work,
9
of the Board of directors (L.22-10-10 1° of the French Commercial Code)
35-47; 50-51, 56-64
■ Description of the diversity policy applied to the members of the Board of directors,
as well as the objectives, how the policy was implemented and results obtained during the past
financial year (L.22-10-10 2° of the French Commercial Code)
52-54; 73-78
■ Information on the way to ensure balanced representation of men and women in Management bodies
and gender balance results in the top 10% of positions of higher levels of responsibility
(L.22-10-10 2° of the French Commercial Code)
55; 666-667; 710
■ Any limits to the powers of the Chief Executive Officer imposed by the Board of directors
(L.22-10-10 3° of the French Commercial Code)
52
■ Corporate Governance Code prepared by corporate representative organisations
to which the Company refers (L.22-10-10 4° of the French Commercial Code)
49
Universal registration document and annual financial report - BNP PARIBAS
794
9
TABLES OF CONCORDANCE
9
■ Arrangements for shareholder participation at the General Shareholders' Meeting
(L.22-10-10 5° of the French Commercial Code)
28-31
■ Description of the procedure relating to current agreements concluded under normal conditions put
in place by the Company and its implementation
(L.22-10-10 6° and L.22-10-12 of the French Commercial Code)
78
■ Items that could have an impact in case of a public tender offer
(L.22-10-11° of the French Commercial Code)
110
Annexes
Page
■ T a ble summarising Company results over the last 5 years (R.225-102 of the French Commercial Code)
613
■ Report of one of the Statutory Auditors, appointed as independent third party, on the verification
of the consolidated statement of extra-financial performance
(L.22-10-36, L.225-102-1, R.225-105-2 and L.823-10 of the French Commercial Code)
766-768
■ Statutory Auditors' report on the Board of directors' report on Corporate Governance
(L.22-10-71 of the French Commercial Code)
111
FINANCIAL STATEMENTS
Page
■ Financial statements
584-623
■ Statutory Auditors' report on the parent company financial statements
625-630
■ Consolidated financial statements
174-296
■ Statutory Auditors' report on the consolidated financial statements
297-302
Universal registration document and annual financial report - BNP PARIBAS
795
Universal registration document and annual financial report - BNP PARIBAS
796
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HEAD OFFICE
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Tel : +33 (0)1 40 14 45 46
Paris Trade and Company Register - RCS Paris 662 042 449
Société Anonyme (Public Limited Company)
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