BNP Paribas Group: Results as at 30 June 2013

The FINANCIAL — BNP Paribas had solid performances in the second quarter 2013 in a lacklustre environment in Europe, according to BNP Paribas.

Revenues totalled 9,917 million euros, down 1.8% compared to the second quarter 2012. It includes this quarter two one-off items with a net total of 150 million euros: the 218 million euro impact of the sale of Royal Park Investments' assets and the -68 million euro own credit adjustment and Debit Value Adjustment (DVA). Thanks to the diversity of the business and geographic mix, revenues from the operating divisions were resilient, with Retail Banking(1) (+1.0%(2)) and Investment Solutions (+3.1%(2)) up and CIB (-0.4%(3)) down slightly.

Thanks to ongoing cost control and the initial effect of Simple & Efficient, operating expenses, at 6,291 million euros, were down 0.7%, according to BNP Paribas. They include a one-off 74 million euro impact of transformation costs of Simple & Efficient. Operating expenses were down 0.5%(4) at Retail Banking(1), slightly increasing by 0.2%(2) at Investment Solutions and 1.8%(2) at CIB.

Gross operating income was down during the period by 3.6%, at 3,626 million euros. It grew however by 1.7% for the operating divisions.

The Group's cost of risk remained moderate despite the economic environment, at 1,109 million euros, or 68 basis points of outstanding customer loans. It was, however, up 18 basis points compared to the second quarter 2012 when there were considerable write-backs at CIB. It rose by 8 basis points compared to the first quarter 2013 due in particular to a one-off at CIB's Advisory and Capital Markets (+4 basis points), according to BNP Paribas.

Non-operating items totalled 183 million euros. They were 77 million euros in the second quarter 2012. This quarter, they include the one-off 81 million euro impact from the sale of BNP Paribas Egypt.

The Group's pre-tax income came to 2,700 million euros, down 9.6% compared to the same quarter a year earlier. One-off items totalled +157 million euros compared to +271 million euros in the second quarter 2012. For its part, the operating divisions' pre-tax income was down 3.2%, according to BNP Paribas.

BNP Paribas posted 1,763 million euros in net income attributable to equity holders, down 4.7% compared to the second quarter 2012.

The Group's balance sheet is rock-solid. Solvency was very high with a Basel 3 fully loaded common equity Tier 1 ratio (fully loaded(5)) of 10.4%; the Basel 3 fully loaded leverage ratio(5), calculated on the sole basis of common equity Tier 1, was 3.4%(6), above the regulatory threshold of 3% starting on 1st January 2018. The Group's immediately available liquidity reserve was 236 billion euros, according to BNP Paribas.

Net book value per share(7) was 61.6 euros, with a compounded annual growth rate of 6.0% since 31 December 2008, demonstrating BNP Paribas' capacity to continue to grow the net book value per share throughout the cycle.

Lastly, Simple & Efficient, the ambitious programme to simplify the Group's way of functioning and improve operating efficiency, confirmed its rapid start with 330 million euros in recurring savings generated in the first half of the year, thanks to quick wins and projects anticipated at the end of 2012. More than a thousand programmes consisting of over two thousand projects have been identified throughout the Group. Close to 86% of them are already under way, each with a manager identified and a clearly defined budget and timetable.

For the whole first half of the year, the Group had solid results despite a challenging environment. Revenues totalled 19,972 million euros, down slightly by 0.1% compared to the first half of 2012, according to BNP Paribas.

They include this semester +299 million euros in one-off items compared to -788 million euros during the first half of last year. The operating divisions' revenues contracted 3.1%.

Operating expenses edged down 2.8%, to 12,805 million euros, such that gross operating income came to 7,167 million euros, up 5.3% compared to the first half of 2012. It declined by 2.0% for the operating divisions. At 2,087 million euros, the cost of risk was up 16.1% compared to the first half of 2012, which included considerable write-backs at CIB. Operating income was stable at 5,080 million euros (+1.5%), according to BNP Paribas.

Non-operating items totalled 235 million euros compared to 1,921 million euros in the first half 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 thus posted 5,315 million euros in pre-tax income in the first half of the year, down 23.3% compared to the same period a year earlier. One-off items totalled +151 million euros compared to +918 million euros in the first half of 2012.

BNP Paribas posted 3,347 million euros in net income attributable to equity holders in the first half of the year, down 29.1% compared to the same period a year earlier when the sale of a stake in Klépierre S.A. was booked.