Bnp Paribas S.a. Class A · EURONEXT:BNP
Bnp Paribas S.a. Class A — Bnp Paribas Ord — FY2023 Earnings Presentation
45 slides from Bnp Paribas S.a. Class A's earnings presentation, Feb 1, 2024
Slide 1: Results 2023 Full Year
RESULTS 2023 FULL YEAR 1 February 2024
Slide 2: Disclaimer
Disclaimer The figures included in this presentation are unaudited. As a reminder, on 2 May 2023, BNP Paribas reported restated quarterly series for 2022 to reflect for each quarter: (i) the application of IFRS 5 relating to disposal groups of assets and liabilities held for sale, following the sale
Slide 3: Contents
SUMMARY SECTION 1 contents 2023 Full Year Results SECTION 2 Operating divisions Business model, 2023 Full Year Results & Strategic Priorities Note: Business line results are presented in the Appendix SECTION 3 2025 outlook
Slide 4: Summary (1/5): Strong increase of 2023 distributable Net Income at €11.2bn
Summary (1/5): Strong increase of 2023 distributable Net Income1 at €11.2bn 2022 2023 distributable1 BNP Paribas delivered a strong increase in 20231 distributable Net Income (€11.2bn, +10.2% vs. 2022 reported) +3.3% • The increase in revenues (+3.3%) is sustained and the jaws effect is positive 3 R
Slide 5: Summary (2/5): Continue to grow faster than underlying economy, despite headwinds
Summary (2/5): BNP Paribas will continue to grow faster than its underlying economy, despite headwinds 2025 objectives 2025 objectives (February 2023) (February 2024) • On the strength of its diversified model, BNP Paribas will continue to grow faster than its Range of 11.5% to 12% underlying econom
Slide 6: Summary (3/5): Strong and resilient business model through economic cycles
Summary (3/5): BNP Paribas benefits from a strong and resilient business model through economic cycles Client-centric A resilient, growth- A balanced allocation of generating model capital A long-term approach strengthened by solid risk management Net Income1 (€) CIB Commercial & Integrated ~1/3
Slide 7: Summary (4/5): Long-term strategy reaffirmed
Summary (4/5): the long-term strategy is reaffirmed to address the main challenges of the European banking sector 1 Gain market 2 Optimise the 3 4 5 Adapt to Support the Invest in people shares at cost of capital economic cycles energy transition and in technology marginal cost constraint Prioriti
Slide 8: Summary (5/5): BNP Paribas creates long-term value for shareholders
Summary (5/5): BNP Paribas creates long-term value for shareholders Tangible net book Cash dividend per Earnings per share2 value per share1 share4 € € € CAGR +6.9% CAGR 9.2 CAGR 4.60 87.6 +7.6% +10.9% 78.7 79.3 7.8 73.2 7.3 3.67 3.90 63.3 6.0 52.4 5.2 5.3 2.70 2.66 +10% +18% +18% 32.0 vs. 2022 3.1
Slide 9: Section 1: 2023 results
2023 results SECTION 1 _ BNP PARIBAS The bank for a changing world
Slide 10: 2023 distributable Net Income (€11.2bn), in line with the 2023 objective
2023 distributable Net Income1 (€11.2bn), in line with the 2023 objective It reflects BNP Paribas’ intrinsic performance post … and enables the absorption of 2023 extraordinary sale of Bank of the West and post SRF… items negative impact, particularly: • Growth offsets the effects of the sale of Ban
Slide 11: A strong increase in 2023 distributable Net Income
A strong increase in 2023 distributable Net Income Adjustments 2023 2023 vs. €m 2023 to 2023 2022 (distributable4) distributable (distributable4) / 2022 2022 Net Income4 Revenues Note: adjustment related in particular to changes in 45,874 +1,053 46,927 45,430 +3.3% +1.0% TLTRO’s terms and conditions
Slide 12: Extraordinary items, exceptional items and effects of hyperinflation in Türkiye
Extraordinary items, exceptional items and effects of the hyperinflation situation in Türkiye1 The negative impact of extraordinary items, booked in particular in 4Q23, is absorbed over the full year through distributable Net Income to reflect the Group’s intrinsic performance Total exceptional
Slide 13: The increase in revenues is sustained by organic growth
The increase in revenues is sustained by organic growth CIB Corporate & Institutional Commercial, Personal Banking & Investment & Protection Operating divisions Banking Services1 Services +0.6% +2.0% +4.3% +4.7% -3.8% -3.6% +1.8% +2.5% at constant scope & at constant scope & at constant scope & at c
Slide 14: Operating divisions' operating expenses contained despite inflation
Operating divisions’ operating expenses contained despite the inflationary context CIB Corporate & Institutional Commercial, Personal Banking & Investment & Protection Operating divisions Banking Services1 Services +1.2% +2.9% +3.5% +3.8% +0.4% +0.6% +2.3% +3.1% at constant scope & at constant scope
Slide 15: Structural improvement in the risk profile over the past 10 years
Structural improvement in the risk profile over the past 10 years Cost of risk1 supported by a prudent risk profile Prudent growth of market activities: stable VaR (a measure of market risk) In bps / customer loans outstanding Guidance 8.0 Annual Global 6.8 Markets revenues 66 2022-2025 (€bn) <40 5.
Slide 16: Cost of risk under control in all business lines
Cost of risk under control in all business lines Cost of risk / Customer loans outstanding at the beginning of the period (in bps) CPBF1 Europe-Mediterranean1 • €485m (+€248m vs. 2022) • €44m (-€108m vs. 2022)3 • Reminder: impact of a change in • Low cost of risk method in 4Q22 (-€163m)2 98 111
Slide 17: A solid financial structure
A solid financial structure CET1 ratio: 13.2%1 as at 31.12.23 (-20 bps vs. 30.09.23) • 4Q23 result after taking a 60% payout ratio into account, net of the change in risk- weighted assets: +0 bp • Effect of the adjustment related to the distributable Net Income: -20 bps 13.4% • Other effects are lim
Slide 18: The redeployment of capital is well underway and disciplined
The redeployment of capital is well underway and disciplined Achievements since January 2022 to accelerate growth and create new opportunities €3.0bn of capital1 (~40 bps) 1/3: acceleration in organic growth, particularly at CIB redeployed 2/3: partnerships and bolt-on acquisitions since January 2
Slide 19: Energy transition: Achievements beyond rankings (1/2)
Energy transition: Achievements beyond rankings (1/2) Sharp acceleration in financing low-carbon energies and exiting fossil fuels1 Weight of fossil fuels and low-carbon energies in BNP Paribas energy production financing1 90% 90% Target of 80% of energy financing in 80% low-carbon energies moved fo
Slide 20: Energy transition: real-world accomplishments (2/2)
Energy transition: Beyond the rankings, real-world accomplishments (2/2) Remarkable renewables projects in Europe supported by BNP Paribas1 1. Internal sources and external publication 2023 Full Year Results | 20
Slide 21: Continuous gains in operational efficiency and technological advances
Continuous gains in operational efficiency and technological advances Optimising external spending Infrastructure and increased and premises Industrialisation and pooling use of new technologies • Rigorous discipline in • Simplification and automation • Acceleration in the rollout of managing
Slide 22: Artificial Intelligence: an industrial approach
Artificial Intelligence: an industrial approach Acceleration in AI use cases in production AI strategy is embedded in BNP Paribas’ transformation journey, with Generative AI strategy as a new layer of BNP Paribas’ Technology pillar of GTS ×2 2025 2025 targets: • 1,000 use cases in production • 500
Slide 23: Broad adoption of AI and gearing up on GenAI
Broad adoption of Artificial Intelligence and gearing up on GenAI AI strategy is delivering impact across all poles and Gearing up for GenAI as additional functions transformational enabler Revenues generation A Group-wide taskforce set-up to identify use cases, deliver secured platforms and def
Slide 24: A reinforced Internal Control Set-up
A reinforced Internal Control Set-up An even more solid control and compliance set-up and ongoing efforts in inserting a reinforced compliance culture into daily operations • Ongoing improvement of the operating model for combating money laundering and terrorism financing: A standards-based, ris
Slide 25: Section 2: Operating divisions
SECTION 2 Operating divisions Business model, 2023 Results & Strategic Priorities Note: Business line results are presented in the Appendix
Slide 26: CIB: Success of a long-term strategy
CIB Success of a long-term strategy A diversified model based on three powerful and Growth potential and heightened resilience to integrated franchises at the service of clients cycles - - - Quarterly average of CIB revenues (€bn) Securities Services €2.7bn 4.10 4.13 3.44 3.56 16% Global Banking
Slide 27: CIB: 2023 results
CIB 2023 results Leadership and market share gains: Continuous growth in revenues • Global market share1 up by 10 bps since 31.12.22 • No1 in sustainable finance2 worldwide and in EMEA €bn Financing: very good client activity, in particular in the Americas and EMEA 16.5 16.4 Markets: sustained activ
Slide 28: CIB strategic priorities: a CIB at scale leveraging the Group's strengths
CIB Strategic priorities: a CIB at scale leveraging the Group’s strengths Capitalise on the full potential of integrated at the service of the clients and the financing the economy • An integrated model that has enabled the strengthening of cross-selling with CPBS and IPS (8%-increase in cross-sel
Slide 29: CIB: Trends that are driving future growth
CIB Trends that are driving future growth 2023 momentum Business line objectives for 2025 Increase in global market share1 • Further market share gains, driven mainly by development plans on specific markets (Switzerland, the UK and Scandinavia) and in the major +18 bps international corridors Globa
Slide 30: CPBS: Nimble and high-performing at the service of clients and society
CPBS Nimble and high-performing at the service of clients and society • #1 in the Corporate segment in Europe2 • ~60% GOI of Commercial & Personal Banking in the • A major player in consumer finance in Europe Eurozone generated by corporate clients • A key player in sustainable mobility • #1 in Corp
Slide 31: CPBS: 2023 results
CPBS 2023 results Loans: +2.9% vs. 2022, stable in Commercial & Personal Banking in the Eurozone (+0.8%) and strong increase in Specialised Businesses Loans7 (+11.3%) +2.9% €bn Deposits: -1.6% vs. 2022, stable in 4Q23 vs. 3Q23 in Commercial & Personal Banking in the Eurozone when excluding the impac
Slide 32: Strategic priorities for Commercial & Personal Banking
CPBS Strategic priorities for Commercial & Personal Banking Corporates Private Banking Retail • Reinforcement of the cooperation • Further synergies with mass affluent • Strengthening of the upgrading of between business lines to generate customers, in order to consolidate the franchises highe
Slide 33: Strategic priorities for Specialised Businesses
CPBS Strategic priorities for Specialised Businesses Personal Finance Arval & Leasing Solutions New Digital Businesses • Finalisation of the geographical refocus Arval Nickel and continuous execution of the • Focus on business drive through a • Maintained pace of customer restructuring plan in
Slide 34: IPS: A player of reference in protection, savings and responsible investment
IPS A player of reference in protection, savings and responsible investment Complementary & connected platforms at the heart of the integrated model Savings, investment CIB Protection Real estate & retirement Insur. WM AM RE Savings, Retirement, Advisory Private Assets, Entrepreneurs & Family Offi
Slide 35: IPS: 2023 results
IPS 2023 results Insurance: increase in gross written premiums supported by Protection and Revenue growth an increased contribution by partnerships +3.7% Wealth Management: strong growth in revenues and good net asset inflows (+€17.1bn1 in 2023) in all geographical regions Asset Management2: good pe
Slide 36: IPS 2023: Deploying the plan and pursuing strategic initiatives
IPS 2023: Deploying the plan and pursuing strategic initiatives Develop franchises Expand distribution Enrich the product offering Wealth Management: Continued Insurance: Private Assets: creation of a business deployment of the Entrepreneurs and line; enriched offering with bolt-on • More than
Slide 37: IPS: Growth supported by business drive and strategic priorities
IPS Growth supported by business drive and strategic priorities 2023 momentum Business line ambitions for 2025 Gross asset inflows1 BNPP Cardif • Sustained momentum in Protection with the +10% Market expansion of partnerships Insurance +6% • Development of retirement and employee savings offering an
Slide 38: Section 3: 2025 Outlook
2025 Outlook SECTION 3 _ BNP PARIBAS The bank for a changing world
Slide 39: Macroeconomic projections have changed considerably
Macroeconomic projections have changed considerably Interest rates1: GDP growth (%): Inflation2: Decrease anticipated in 2024 after steep Lower Growth from 2022 A gradual normalisation rises in long-and short-term rates % % 10Y OAT Forward, % 5.2 5.1 2.9 2.3 Eurozone 3.12 2022 3.0 2.48 3.4 2022 2023
Slide 40: Additional revenues by 2025 generated by the interest-rate environment
Additional revenues by 20251 generated by the interest-rate environment The Group will continue to benefit from the rise in interest rates that has occurred since 2022, on the back of its fixed-rate loan structure Illustration: trend in the swap rate (based on forecasts as at 31.12.23) and structu
Slide 41: 2025 income growth targets by operating division
2025 income growth targets by operating division CIB Corporate & Institutional Commercial, Personal Banking & Investment & Protection Banking Services1 Services CAGR 21-25 CAGR 21-25 CAGR 23-25 >+6.0% ~+4.5% ~+6.5% Securities Services Specialised CAGR: Businesses WAM2 Global ~+5.5% Commercial >+3.5%
Slide 42: Growth at marginal cost in an inflationary context
Growth at marginal cost in an inflationary context 2022–2025 objective confirmed: Positive jaws effect each year >+2 pts on average1 Ongoing gains in efficiency Investment in technologies Recurring cost savings and the IT system The C/I ratio has fallen by more than 7 Cumulative €2.3bn objecti
Slide 43: A cost of risk target of <40 bps confirmed
A cost of risk target of <40 bps confirmed Proactive and long-term management reflected in a low cost of risk (<40 bps) since 20171 In bps / customer loans outstanding2 66 Guidance 57 54 Stock of stage 1 & 2 2022-2025 46 39 35 39 40 <40 provisions: ~€5bn 34 34 32 Stage 1&2 provisions in 2020 2014
Slide 44: The capital trajectory is on track to meeting CRR3 requirements
The capital trajectory is on track to meeting CRR3 requirements1 2 1 3 13.2% 4 31.12.24 (CRR2) Organic 12% 12.9% growth Redeployment of capital (CRR3) Post-Basel 3 Impact of finalisation Basel 3 finalisation (CRR3) 12.0% 2023 2025 1 CET1 organic growth ~50 bps (after taking into account the remunera
Slide 45: Conclusion
Conclusion BNP Paribas delivered a very good performance in 2023, in line with its announced objectives • 2023 distributable Net Income rose by 10.2% • 2023 distributable earnings per share was up by 18% • 2023 showed an acceleration in financing low-carbon energies • 2023 featured the widespread ad