The Board of Directors of BNP Paribas met on 27 July 2017. The meeting was chaired by Jean Lemierre and the Board examined the Group’s results for the second quarter 2017 and endorsed the interim financial statements for the first half of the year
Revenues totalled 10,938 million euros, down by 3.4% compared to the second quarter 2016. This decrease is due to the fact that revenues included in the second quarter 2016 an exceptional capital gain of +597 million euros from the sale of Visa Europe shares while it included this quarter a +85 million euro capital gain from the sale of Euronext shares. Separately, there were -200 million euros in Own Credit Adjustment (OCA) and own credit risk included in derivatives (DVA) this quarter compared to -204 million euros in the second quarter 2016.
The revenues of the operating divisions grew by 2.5%: they were down slightly by 0.3% at Domestic Markets1 due to the low interest rate environment, despite good business development, and rose significantly by 3.2% at International Financial Services and by 4.6% at CIB.
At 7,071 million euros, operating expenses were down by 0.3% compared to the second quarter 2016. They included the exceptional 15 million euro impact (50 million euros in the second quarter 2016) of the acquisitions’ restructuring costs2 as well as 153 million euros in transformation costs of businesses (58 million euros in the second quarter 2016) which amount was still limited this quarter due to the gradual launch of the programmes.
The operating expenses of the operating divisions were down by 0.4% compared to the second quarter 2016 thanks to the effects of cost savings measures. They were down by 6.0% at CIB where the transformation plan was launched as early as 2016. They increased by 1.6% for Domestic Markets1 as a result of the development of the specialised businesses (increase of only 0.5% on average for FRB, BNL bc and BRB) and 2.8% for International Financial Services due to increased business.
The gross operating income of the Group thus decreased by 8.6%, to 3,867 million euros due to exceptional elements but it was up by 7.4% for the operating divisions.
The cost of risk was at a low level this quarter, at 662 million euros (791 million euros in the second quarter 2016) or 36 basis points of outstanding customer loans. This 16.3% decrease reflects in particular the good control of risk at loan origination, the low interest rate environment and the continued improvement in Italy as a result of the repositioning on the better corporate clients.
The Group’s operating income was down by 6.9%, at 3,205 million euros (3,441 million euros in the second quarter 2016). It was up by 16.4% for the operating divisions.
Non operating items totalled 256 million euros (84 million euros in the second quarter 2016 which included shares depreciations).
Pre-tax income thus came to 3,461 million euros compared to 3,525 million euros in the second quarter 2016 (-1.8%). It was up sharply by 18.1% for the operating divisions.
Net income attributable to equity holders was 2,396 million euros, down by 6.4% compared to the second quarter 2016. Excluding one-off items1, it came to 2,566 million euros (+17.2%).
As at 30 June 2017, the fully loaded Basel 3 common equity Tier 1 ratio2 was 11.7% (11.6% as at 31 March 2017). The fully loaded Basel 3 leverage ratio3 came to 4.2%. The Liquidity Coverage Ratio was 116% as at 30 June 2017. Lastly, the Group’s immediately available liquidity reserve was 344 billion euros (345 billion euros as at 31 March 2017), equivalent to over one year of room to manoeuvre in terms of wholesale funding.
The net book value per share reached 73.3 euros, equivalent to a compounded annual growth rate of 5.7% since 31 December 2008, illustrating the continuous value creation throughout the cycle. A €2.70 dividend per share was paid entirely in cash on 1st June 2017.
The Group is actively implementing the 2020 transformation plan, an ambitious programme of new customer experience, digital transformation and operating efficiency. It also continues to reinforce its internal control and compliance systems. Lastly, it is carrying out an ambitious policy of engagement in the society aimed at financing the economy in an ethical manner, being a positive agent for change, developing our people and combating climate change: the Group just decided to create a Company Engagement Department, that will be represented in the Group Executive Committee, in order to strengthen its actions in this area.