On Thursday 4 April 2019, the Ordinary General Meeting of Shareholders of BGL BNP Paribas approved the consolidated financial statements as at 31 December 2018.
Net banking income reached €1.447 billion, up 8% compared to 2017. Against a backdrop of low rates and particularly challenging market conditions in late 2018, commercial activity remained very strong in the various business sectors.
Luxembourg Retail and Corporate Banking recorded growth in average loan outstanding of 8%, boosted by mortgages and investment loans. Average deposit volumes grew by 12%, largely due to excellent inflows from corporate clients associated with the development of international cash management services.
Meanwhile, Wealth Management, which absorbed the banking business of ABN AMRO Bank (Luxembourg) S.A. in 2018, recorded growth of 23% in its assets under management. All segments showed improvement in terms of net capital inflow and, thanks to a range of financing solutions, Wealth Management’s average loan outstanding grew by 10%.
The bank similarly took advantage of its position in the international BNP Paribas Group to offer a comprehensive range of products and services to corporate and institutional investor clients through its Corporate and Institutional Banking business line. The business line was successful in achieving its goals.
Leasing international’s commercial development in strategic regions continued unabated. This generated average loan outstanding growth of 16%, which was partly attributable to several subsidiaries entering the consolidation scope.
Overheads were €763.9 million, up 12% compared to 2017 (€683.5 million). This increase was mostly attributable to several subsidiaries entering the consolidation scope, investments aimed at supporting the business development plan and digital transformation and costs associated with absorbing ABN AMRO Bank.
In addition, gross operating income was €683.1 million, up 3% compared to 2017 (€661.8 million), whilst the cost of risk amounted to €60.4 million, which is still low given outstandings in the region of €32 billion.
The bank's share of the net profits of equity affiliates were €1.1 million, compared with €23.1 million in 2017. This decrease was primarily attributable to a change in company consolidation accounting, which previously used the equity method and now uses the global integration method.
Against a backdrop of persistently low rates and substantial investment, BGL BNP Paribas Group's consolidated net profit thus amounted to €338.9 million in 2018 compared to €365.8 million in 2017. As of 31 December 2018, the balance sheet total for the bank was €54.6 billion, which is 10% higher than 1 January 2018 and reflects the healthy development of business activities. High solvency was similarly maintained with a solvency ratio of 22.6%, which is well above the regulatory minimum.
In addition to its acquisition of ABN AMRO Bank in 2018, BGL BNP Paribas was the first bank to launch a long-term vehicle leasing solution for retail clients on the Luxembourg market, developed in close collaboration with Arval Luxembourg. Moreover, over the past year, the bank focused on staff experience. For example, it set up an onboarding procedure that was key to the process of integrating former ABN AMRO Bank (Luxembourg) staff members. In early 2019, the Bank’s efforts in favour of staff members received recognition in the form of the prestigious “Top Employer Luxembourg” award, which the bank won for the fourth consecutive year.
BGL BNP Paribas will now turn its attention to its 100th anniversary celebrations this year, with events planned from the week commencing 17 June 2019 onwards. These will include an official ceremony as well as events for clients and staff.
