Laurent Jansen, CFO, Béatrice Belorgey, Chairwoman of the Executive Committee of BGL BNP Paribas and Country Head of the BNP Paribas Group in Luxembourg, and Étienne Reuter, Chairman of the Board of Directors, on Thursday 7 April presented the bank's annual results.
As a preamble, they recalled the context of post-pandemic recovery, inflation and low or even negative interest rates, which have affected all banks for several years.
Overall, the results are fairly positive, despite a slight drop in consolidated net profit to €394.3m. This is 1% less than in 2020 (€398.3m), a year in which the bank achieved an exceptional capital gain of €40 million on the sale of real estate. It sold the building that housed some of its support services in Kirchberg. Excluding the capital gain, the net result rose by 7%. It is up by 14% compared to 2019, which the bank considers, for each aggregate, “as the last reference year, in a context of normal activity”.
50% of the consolidated net result will be returned to shareholders in the form of dividends which amounts to a total of €197.15m.
Loans, private banking and leasing in the lead
This slight drop is offset by a net banking income that has grown to €1,621.1m which excluding property gains is up by 4% compared to 2020 and 7% compared to 2019. Management expenses and gross operating income also increased by 4%. “The low interest rate environment was more than offset by a sustained commercial dynamic in the various business areas thanks to the strong mobilisation of the teams serving customers. The increase in average outstanding loans of 6% (€12.1m) in retail banking is an example of this,” commented Jansen. The bank's growth affects all types of business lines: retail and corporate banking, and all types of products: real estate loans and investment loans.
We invest to grow faster and more sustainably.
Of particular note is a 9% increase in assets under management in the private banking branch (international wealth management), driven by an increase in client portfolios and favourable market conditions in 2021. The bank claims to have been only slightly affected by the sanctions against Russia, accounting for 0.3% of the group's assets under management. Last year was also promising for the International Leasing branch (Arval) with a 7% growth thanks to the rebound of corporate activity from the end of 2020 and in 2021. New production is up 13%, and average in-force is up 5%.
A foreseeable decrease was that of the cost of risk at -41% (€76.6m) notably concerning provisions on outstanding amounts, which is explained by the updating of macroeconomic scenarios, less unfavourable than in 2020.
Focus on digital and SRI until 2025
The bank is committed to a strategic transformation plan up to 2025. It is aimed at both the bank's employees and customers and includes a broad programme to simplify and digitalise day-to-day operations, with a view to sustainability. Customers will be able to switch from one digital medium to another without interrupting their online activity. The amount of investment in this plan was not disclosed, but it is “very solid” according to the financial director. “We have seen the pre-pandemic trends strengthen and accelerate. In 2021, we recorded a 30% increase in the number of connections on smartphones and a 41% increase in the number of transfers via the application,” explains Belorgey.
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The other focus is on sustainable finance. The bank has launched a new “green mobility” loan for individuals who wish to buy an electric vehicle. On the investment front, the head of BGL BNP Paribas says she wants to “anticipate the legislation that is going to get tougher” and is offering more SRI funds to her clients, because “choosing their savings gives them the power to decide and the power to have an impact”. In conclusion, she says: “We invest to grow faster and more sustainably.”
This story was first published in French on . It has been translated and edited for Delano.