8th February 2019

BNP Paribas reports drop in revenue for 2018

BNP Paribas Group has reported revenues totalled EUR42,516m for the full year 2018, down by 1.5 per cent compared with 2017, which included exceptional items: +EUR233m in capital gains from the sale of Shinhan and Euronext shares and -EUR175m in Own Credit Adjustment (OCA) and own credit risk included in derivatives (DVA).

In the operating divisions, revenues were down by 0.9 per cent (-0.4 per cent at constant scope and exchange rates): they were down slightly at Domestic Markets1 (-0.2 per cent) due to the low interest rate environment partly offset by good business development, in particular in the specialised businesses; up at International Financial Services (+3.4 per cent), despite an unfavourable foreign exchange effect (+6.6 per cent at constant scope and exchange rates2); but down at CIB (-7.5 per cent) due to a lacklustre market context and very challenging conditions at the end of the year, notwithstanding good development with targeted customers.

At EUR30,583m, the Group’s operating expenses were up by 2.1 per cent compared with 2017. They included the exceptional EUR1,235m impact of businesses’ transformation costs and acquisitions’ restructuring costs (EUR957m in 2017). Excluding these exceptional items, they rose by only 1.2 per cent.

The operating expenses of the operating divisions rose by 1.7 per cent compared with 2017 (+1.7 per cent at constant scope and exchange rates): they were up by 0.8 per cent for Domestic Markets with a rise in the specialised businesses due to business development but down in the domestic networks; up by 5.4 per cent for International Financial Services as a result of business growth support and new product development; but down by 1.3 per cent for CIB due to cost saving measures.

The gross operating income of the Group thus totalled EUR11,933m, down by 9.7 per cent. It was down by 6.0 per cent for the operating divisions (-4.7 per cent at constant scope and exchange rates).

The cost of risk was down at EUR2,764m (EUR2,907m in 2017). It was 35 basis points of outstanding customer loans. This low level reflects in particular the good control of risk at loan origination, the low interest rate environment and the continued improvement in Italy.

The Group’s operating income, at EUR9,169m (EUR10,310m in 2017), was thus down by 11.1 per cent. It was down by 6.4 per cent for the operating divisions (-5.5 per cent at constant scope and exchange rates).

Non-operating items totalled EUR1,039m (EUR1,000m in 2017). They included the exceptional +EUR101m impact of the capital gain from the sale of a building and the +EUR286m capital gain from the sale of First Hawaiian Bank shares. Last year, they included a +EUR326m capital gain realised from the initial public offering of SBI Life as well as the full impairment of TEB’s goodwill for -EUR172m.