BGL BNP Paribas has published its financial results for the year 2019, following the approval of the financial statements by the Ordinary General Meeting; in the current exceptional context linked to COVID-19 (coronavirus), the Luxembourg-based bank has also presented its approach to support its customers during this period.
Financial Results at 31 December 2019
In light of the state of emergency in Luxembourg, the Board of Directors of BGL BNP Paribas decided to hold the Ordinary General Meeting, convened for Thursday 2 April 2020, without a physical meeting. Shareholders thus exercised their rights by remote vote. The meeting approved the consolidated financial statements at 31 December 2019 of BGL BNP Paribas, established in accordance with international financial reporting standards (IFRS).
Net banking income reached €1.515.1 billion, an increase of 5% compared to 2018 (€1.447 billion). This increase has been attributed in particular to a sustained commercial dynamic in the various fields of activity, despite a persistent environment of low rates and economic uncertainty.
Retail and Corporate Banking posted growth in average loan outstandings of 9%, driven by growth in real estate and investment loans. The average volume of deposits increased by 12%.
The Wealth Management business line, which integrated the banking activities of ABN AMRO Bank (Luxembourg) SA in September 2018, achieved growth of more than 9% in its assets under management (AuM) compared to 2018. All segments have been progressing in terms of net capital contributions. Thanks in particular to a tailor-made offer of financing solutions, the average outstanding loans in the Wealth Management business increased by 18%.
The activities of Leasing International, supported by the continued commercial development in strategic geographies, posted growth in average loan outstandings of 5%, reflecting the development of new types of services to support customers and the entry into the scope of consolidation of several subsidiaries.
General expenses amounted to €792.4 million, an increase of 4% compared to 2018 (€763.9 million). This increase is mainly explained by the entry into the consolidation scope of several subsidiaries, including in particular ABN AMRO Bank, and by investments aimed at supporting the development plan for banking and leasing activities as well than digital transformation. Current expenditure has evolved in line with the development of activities and remains under control.
Gross operating income rose 6% to €722.7 million (€683.1 million in 2018), taking into account the 5% growth in net banking income and the growth in general expenses of 4%.
The cost of risk was €101.3 million, a level which remains low compared to the outstanding amounts of €34 billion.
The share of profit of associates, which corresponds to the share of net profit achieved by subsidiaries in which the bank does not have a majority, amounted to €14.4 million, compared to €1.1 million in 2018. This change is mainly related to the favourable development of Cardif Lux Vie's net income.
The group share of consolidated net profit amounted to €345 million in 2019, representing an increase of 2% compared to the net profit of 2018 (€338.9 million).
As at 31 December 2019, the balance sheet total amounted to €56.6 billion, up 4% compared to 31 December 2018 (€54.6 billion).
The bank's solvency ratio stands at 22.7% (according to Basel III standards), very much above the required regulatory minimum. With regulatory equity attributable to the Group amounting to €6 billion, BGL BNP Paribas considers itself to be well positioned to support the projects and investments of its clients.
Since the beginning of the coronavirus health crisis, BGL BNP Paribas has been strongly mobilised to face and adapt to the constantly evolving situation. The bank has put in place a series of measures to protect its employees and customers while ensuring the continuity of its activities. The solutions implemented include the distribution of teams on several sites and teleworking.
Regarding its individual customers, the bank has organised itself to reduce physical contact to a strict minimum, in order to protect the health of both its customers and its employees. Thus, in accordance with the recommendations of the Luxembourg government to limit the spread of the coronavirus, the bank temporarily closed some branches, with the remaining branches available by appointment only for urgent and essential operations. BGL BNP Paribas has also invited its customers to use remote banking services and to regularly consult the bgl.lu site for the latest information.
In addition, BGL BNP Paribas actively participated in discussions on the financial centre to contribute to the support measures of the Luxembourg government and fully adheres to the economic stabilisation pact. For its professional and business customers, BGL BNP Paribas has implemented a decision-making process which enables it to react quickly to requests. The bank's advisers are involved in calling customers, providing them with explanations and guiding them on the various assistance possibilities.
Geoffroy Bazin, Chairman of the Executive Committee of BGL BNP Paribas and Country Manager of the BNP Paribas Group in Luxembourg, commented: “As a large Luxembourg bank, we have an important responsibility in the context of this unprecedented health crisis. Our role in the current situation is to be as close as possible to our customers to accompany and support them throughout this difficult period. I would like to thank the many collaborators of our bank who demonstrate a tremendous commitment and collective energy to ensure an adjusted service to all our customers".