The Board of Directors of BNP Paribas met on 30 October 2013. The meeting was chaired by Baudouin Prot and the Board examined the Group’s results for the third quarter 2013.
€1.4 BILLION EUROS IN NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS
The Group’s results held up well in the third quarter 2013.
Revenues were 9,287 million euros, down 4.2% compared to the third quarter 2012. It includes this quarter a -138 million euro Own Credit Adjustment and Debit Value Adjustment. Thanks to the diversity of the business and geographic mix, revenues from the operating divisions confirmed their resiliency in a lacklustre economic environment (-2.6%1 compared to the same quarter a year earlier), with the impact this quarter of low client activity in the rates market. Revenues were thus resilient in Retail Banking2 (-0.4%1), with Investment Solutions up (+5.0%1), and Corporate and Institutional Banking (CIB) down (-10.7%1).
Operating expenses, at 6,426 million euros, were down 2.1%. They include this quarter a one-off 145 million euro impact of transformation costs of Simple & Efficient and the effect from the rise of the euro. At constant scope and exchange rates, operating expenses of operating divisions were up slightly 0.6%, reflecting ongoing cost containment, with Retail Banking2 down 1.1%3, Investment Solutions up 2.5%1 and CIB 2.1%1 higher.
Gross operating income was thus down 8.6% for the period, at 2,861 million euros. It was down 7.9%1 for the operating divisions.
The Group’s cost of risk was down -5.5% compared to the third quarter 2012, despite the economic environment. It came to 892 million euros, or 55 basis points of outstanding customer loans.
Non-operating items totalled 139 million euros. They came to 119 million euros in the third quarter 2012.
BNP Paribas thus posted 1,358 million euros in net income attributable to equity holders, up 2.4% compared to the third quarter 2012.
The Group’s balance sheet is rock-solid. Its solvency is one of the highest in the industry with a fully loaded Basel 3 CET1 ratio4 at 10.8% and the fully loaded Basel 3 leverage ratio, calculated on total Tier 1 capital, was 3.8% above the 3.0% regulatory threshold applicable starting on 1st January 2018. The Group’s immediately available liquidity reserve is 239 billion euros, equivalent to over one year of room to manoeuvre relative to short-term wholesale funding.
Net book value per share5 was 62.8 euros, with a compounded annual growth rate of 6.1% since 31 December 2008, demonstrating BNP Paribas’ capacity to continue to grow the net book value per share.
Lastly, the Group is quickly implementing Simple & Efficient, the ambitious programme to simplify the Group’s way of functioning and improve operating efficiency, with nearly 88% of projects identified already launched. The recurring savings generated in the first nine months of 2013 were 549 million euros, already achieving the target announced for the whole of 2013.
For the first nine months of the year, the Group posted solid results despite a challenging environment. Revenues totalled 29,259 million euros, down by 1.4% compared to the first nine months of 2012. They include this semester +161 million euros in one-off items compared to -1,200 million euros during the same period a year earlier. The operating divisions’ revenues decreased 2.2%1.
Operating expenses were down 2.6%, at 19,231 million euros (-1.5%1 for the operating divisions), such that gross operating income came to 10,028 million euros, up 0.9% compared to the first nine months of 2012.
At 2,979 million euros, the cost of risk was up 8.6% compared to the first nine months of 2012, which included considerable write-backs at CIB. Operating income was thus down 2.0% at 7,049 million euros.
Non-operating items totalled +374 million euros compared to +2,040 million euros in the first nine months of 2012, which included in particular 1,790 million euros in one-off income booked after the Group sold a 28.7% stake in Klépierre SA. The Group posted 7,423 million euros in pre-tax income in the first nine months of the year, down 19.6% compared to the same period a year earlier. It however included one-off items totalling -132 million euros compared to +590 million euros in the first nine months of 2012.
BNP Paribas posted 4,705 million euros in net income attributable to equity holders in the first nine months of the year, down 22.2% compared to the same period a year earlier, which was impacted among others by the sale of a stake in Klépierre S.A.