On Thursday 24 September 2020, the Board of Directors of BGL BNP Paribas examined the consolidated financial statements of BGL BNP Paribas under IFRS at 30 June 2020.
Net banking income reached €792.6 million in the first half of 2020, up 5% from last year. This increase is due in particular to a sustained commercial dynamic in the various fields of activity up until mid-March 2020 and to the great efforts of the bank’s client service teams in face of the health emergency and lockdown.
Retail and Corporate Banking recorded 10% growth in average loan outstandings, boosted by an increase in mortgages and capital investment loans. Average deposit volumes grew by 2%, largely due to excellent inflows from corporate clients associated with the expansion of international cash management services.
Wealth Management posted a loss of 2% in assets under management due to an unfavourable valuation effect linked to the market downturn in Q1 2020. Net inflows remain in positive territory. Average loan outstandings grew by 17%.
Leasing International’s business operations recorded a 3% drop in average loan outstandings after new production took a hit in Q1. This was despite resilience in the development of new services for the benefit of clients.
Overheads were €388.5 million, down 2% on the first half of 2019.
Cost of risk amounted to € -50.3 million versus € -51.9 million in the first half of 2019. The collective provisions include an estimation of the impact of the COVID-19 crisis.
The share of the net profits of equity affiliates (i.e. the share of net profits of subsidiaries in which the bank does not have a majority shareholding) stood at €4.0 million, compared with €11.3 million in the first half of 2019.
Group consolidated net profit came to €199.5 million, up 9% against the net profit on 30 June 2019.
At 30 June 2020, the balance sheet total stood at €55.7 billion, 2% down on 30 June 2019.
The bank’s solvency ratio was 23.6% (under Basel III rules), well above the regulatory minimum. With the Group’s share of regulatory capital amounting to €6.2 billion, BGL BNP Paribas is well placed to back its clients’ projects and investments.
The first half of 2020 was marked by the global health crisis and the bank’s support of its clients and the Luxembourg economy. As soon as the crisis hit, BGL BNP Paribas began mobilising its teams and resources to help its clients and the economy get through these difficult times. The bank took measures to protect its staff and clients, measures which it has continued to adapt as the health crisis has developed. A large part of the bank’s employees were equipped with remote working solutions and clients were advised to use remote banking services for their day-to-day operations. Branches remained open for urgent needs or issues that required in-branch support, but by appointment only. The vast majority of the bank’s branches are now open again to the public, whether fully or by appointment only.
BGL BNP Paribas also played an active role in discussions within the Luxembourg financial centre to contribute to the support measures implemented by the Luxembourg government to help the economy. Over the past few months, the bank has granted a total of 5,275 moratoriums for operations in Luxembourg in order to help its clients with looming cashflow issues. In total, BGL BNP Paribas granted €206 million in credit in partnership with the Office du Ducroire Luxembourg, alongside government-backed loans amounting to €22.6 million.
Since the start of the lockdown, the bank has also introduced measures to support those hardest hit by the crisis. The bank has matched every donation made by an employee to healthcare organisations in the Greater Region that are assisting vulnerable people and contributing to medical research. Right at the start of the crisis, the bank provided 5,000 FFP2 masks and 30,000 surgical masks to the Ministry of Health. In addition, as part of the emergency support plan rolled out by the BNP Paribas Group across more than 30 countries, a total donation of €100,000 has been split across three charities: the Hôpitaux Robert Schuman Foundation, Caritas Luxembourg and Stëmm vun der Strooss. More recently, the bank has been running its “Coronavirus Solidarity” initiative. Every time a client made a payment using a BGL BNP Paribas credit card, the bank contributed 10 cents to a fund set up to contribute towards the housing costs of clients who have faced financial hardship due to the coronavirus crisis. This initiative has already allowed the bank to donate €30,000 to Caritas Luxembourg.
Béatrice Belorgey, Chair of the Executive Committee of BGL BNP Paribas and Country Head of the BNP Paribas Group in Luxembourg, commented: “As soon as the crisis took hold, BGL BNP Paribas’ teams pulled together to make sure our clients had all the support they needed during these difficult times and to find them the best solutions. I cannot thank the bank’s staff enough for all their incredible work over the last few months. We remain fully committed to mitigating the economic and social impact of the crisis and to helping build a sustainable recovery”.