“The strong performance in 2023 reflects the strength of our diversified and integrated business model,” said Béatrice Belorgey, chair of the executive committee of BGL BNP Paribas and head of the BNP Paribas Group entities in Luxembourg, during the announcement of the bank’s consolidated results for 2023. Photo: BGL BNP Paribas

“The strong performance in 2023 reflects the strength of our diversified and integrated business model,” said Béatrice Belorgey, chair of the executive committee of BGL BNP Paribas and head of the BNP Paribas Group entities in Luxembourg, during the announcement of the bank’s consolidated results for 2023. Photo: BGL BNP Paribas

BGL BNP Paribas reported a robust financial year in 2023, with net banking income and consolidated net profit up by 9% and 42% respectively, buoyed by strategic investments and a solid solvency ratio.

BGL BNP Paribas unveiled its consolidated results for the financial year 2023 on Wednesday 4 April 2024, showcasing a notable growth with the balance sheet total rising by €1.4bn to reach €63.3bn.

Net banking income

The bank’s net banking income saw a significant upturn, reaching €1,840.1m--a 9% increase compared to €1,689.4m in 2022. This growth stems from the bank’s dynamic commercial activities across its varied business lines, the press release. BGL BNP Paribas acknowledged that the European Central Bank’s swift interest rate hikes played a crucial role, especially considering the bank’s comprehensive and integrated approach, which covers retail, private and corporate banking, alongside specialised areas such as cash management, trade finance, asset financing and international leasing operations.

Sector-specific results

In retail and corporate banking, income surged by 27%. The bank attributed the development to its ongoing commitment to financing client projects even as the economy and real estate sectors slowed, leading to a 1% increase in average loan outstandings, despite a 4% drop in average deposit volumes.

BGL BNP Paribas Development invested €12m in two family businesses, supporting their growth and future plans. The wealth management sector enjoyed a 6% increase in assets under management, buoyed by strong market performances, although there was a slight shift in client leverage due to interest rate hikes.

The international leasing segment reported a modest increase in outstandings by 4% and income by 1%, navigating through higher financing costs and a return to normalcy in equipment delivery times after previous supply chain disruptions.

Operational expenses climbed by 7% to €911.4m, largely due to European inflation affecting wages, energy costs and service prices.

Profits

Gross operating income improved by 11% to €928.7m. The cost of risk was kept low at €97.6m, representing just 0.26% of the bank’s €38bn in client loan outstandings. Although there was a minor reduction, the share of net profits from equity affiliates remained robust at €13.8m. Noteworthy was the significant increase in net gains on fixed assets, up by €181.8m, primarily due to real estate reorganisation aligned with new working practices.

The bank’s consolidated net profit witnessed a 42% surge to €577.6m, with an 8% increase once excluding the effects of real estate reorganisation. The solvency ratio improved impressively to 24.2% from 23.3% in 2022, well above the regulatory requirements, underpinning the bank’s solid financial structure, it stated.

BGL BNP Paribas is a unit of the French banking group BNP Paribas and employs some 3,970 staff in the grand duchy.

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