On Monday 7 February 2022, the Board of Directors of BNP Paribas examined the Group’s results for the 2021 full year.
At €46.2 billion, overall revenues for BNP Paribas were up by 4.4% compared to 2020 and by 3.7% compared to 2019.
In the operating divisions, revenues rose by 2.4% at historical scope and exchange rates and by 3.7% at constant scope and exchange rates. They were up sharply by 5.2% at Domestic Markets, driven by the increase in the networks, in particular in France, and by very strong growth in specialised businesses, Arval in particular. International Financial Services’ revenues decreased by 1.2% at historical scope and exchange rates but rose by 1.7% at constant scope and exchange rates, with a strong increase in asset-gathering businesses, an increase at Insurance and at BancWest, and a less favourable context for the other businesses. CIB achieved a further increase in revenues (up 3.4% at historical scope and exchange rates and up 4.1% at constant scope and exchange rates), at a high level (up 17.8% compared to 2019).
The Group’s operating expenses, at €31.1 billion, rose by 3.0% compared to 2020, in relation with the support for growth and investments, and were 0.7% lower than in 2019. Operating expenses this year included the exceptional impact of restructuring and adaptation costs (€164 million) and IT reinforcement costs (€128 million) for a total of €292 million (total exceptional operating expenses of €521 million in 2020, when they also included the exceptional impact of €132 million in donations and staff-safety measures related to the public health crisis). The jaws effect was positive (up 1.4 point).
For 2021, Group operating expenses are impacted by a €193 million increase in taxes subject to IFRIC 21 (including the contribution to the SRF) compared to 2020, an equivalent of more than 20% of operating expenses increase between 2020 and 2021. The taxes subject to IFRIC 21 (including the contribution to the SRF) stood at €1.516 billion in 2021. The contribution to the SRF stood at €967 million in 2021 vs. €760 million in 2020, increasing by 27.2%.
In the operating divisions, operating expenses increased by 2.7% compared to 2020. They rose by 2.0% compared to 2020 at Domestic Markets, due particularly to support for growth in the specialised businesses and the rebound of activity in the networks, they were contained by cost-savings measures. The jaws effect was very positive (up 3.1 points). At International Financial Services, operating expenses increased by 1.1% at historical scope and exchange rates and by 4.2% at constant scope and exchange rates, mainly driven by business development and targeted initiatives. At CIB, operating expenses increased by 5.4% at historical scope and exchange rates and by 4.0% at constant scope and exchange rates, driven by business development, targeted investments, and the impact of taxes subject to IFRIC 21.
The Group’s gross operating income thus came to €15.1 billion, up by 7.4% compared to 2020 and by 14.1% compared to 2019.
The cost of risk, at €2.9 billion, decreased by 48.8% compared to 2020 and stood at 34 basis points of customer loans outstanding. It stood at a low level in particular due to a limited number of new defaults and compared to a high basis in 2020, which had a total of €1.4 billion in provisions on performing loans (stages 1 and 2). Write-backs of provisions on performing loans were marginal in 2021 (€78 million).
The Group’s operating income thus amounted to €12.2 billion, a very strong 45.9% increase compared to 2020 and up sharply, by 21.3%, compared to 2019. It rose in all divisions.
Retail banking & services: Domestic Markets
For the whole of 2021, Domestic Markets’ results were up very sharply, driven by increased activity. Loans outstanding rose by 4.2% compared to 2020 and were up in all businesses, with a good increase in individual and corporate loans. Deposits rose by 8.6% compared to 2020, driven by the effects of the public health crisis on customer behaviour. Financial savings expanded robustly, off-balance sheet savings increased strongly (up 9.7% compared to 31 December 2020). Private banking achieved very good net asset inflows of almost €7.7 billion in 2021.
Revenues, at €16.275 billion, rose by 5.2% compared to 2020. The performance in the networks was very good overall (up 3.2%), driven by the steep rise in fees and growth at the specialised subsidiaries, despite the impact of the low-interest-rate environment. Growth at the specialised businesses continued, including very strong increases at Arval (up 19.5%), Leasing Solutions (up 7.7%) and Nickel (up 24.9%).
Operating expenses, at €10.784 billion rose by 2.0% compared to 2020 in support of business development. They increased by 0.7% in the networks and by 8.1% in the specialised businesses. The jaws effect was very positive (up 3.1 points).
Gross operating income, at €5.491 billion, rose sharply by 11.8% compared to 2020.
A €1.185 billion, the cost of risk decreased by 18.6% compared to a high 2020 base, mainly due to a limited number of new defaults in 2021.
As a result, after allocating one third of Private Banking’s net income to Wealth Management (International Financial Services division), Domestic Markets achieved pre-tax income of €4.123 billion, up very sharply by 26.0% compared to 2020.
In the fourth quarter 2021, revenues, at €4.130 billion, increased by 3.9% compared to the fourth quarter 2020. They rose in the networks2, driven by the increase in financial fees and growth in loan activity, which were partly offset by the impact of the low-interest-rate environment. They rose sharply in the specialised businesses, especially at Arval. Operating expenses increased by 3.1% compared to the fourth quarter 2020, to €2.691 billion. They rose by 1.9% in the networks and by 8.1% in the specialised businesses, in connection with their growth. The jaws effect was positive (up 0.8 point). Gross operating income thus came to €1.440 billion and increased by 5.4% compared to the fourth quarter 2020. The cost of risk improved by €216 million compared to the fourth quarter 2020 to €243 million. As a result, after allocating one third of Private Banking’s net income to Wealth Management (International Financial Services division), Domestic Markets achieved pre-tax income of €1.129 billion, up sharply compared to the fourth quarter 2020 (up 26.8%).
Luxembourg retail banking & other domestic markets businesses
For the whole of 2021, all Domestic Markets specialised businesses achieved a strong increase in results and very good development in their business activity. Arval’s financed fleet expanded sharply (up 6.2% compared to 2020), and second-hand vehicle prices continued to rise. Leasing Solutions’ outstandings increased by 4.3% compared to 2020, and production momentum remained strong, hitting a level higher than in 2019 (up 8.4% compared to 2019). Personal Investors achieved a significant increase in assets under management (up 28.3% compared to 31 December 2020), driven by good market performance. The number of new customers rose in particular at Consorsbank in Germany (up 14.9% compared to 2020). Nickel continued to expand in France with almost 2.4 million accounts opened and more than 7,100 points of sale in France and Spain. Loans outstanding at Luxembourg Retail Banking (BDEL) increased by 6.1% compared to 2020, with improved margins and high production of mortgage loans. Fees rose.
Revenues of the five businesses (Luxembourg Retail Banking, Arval, Leasing Solutions, Personal Investors and Nickel) at €3.846 billion rose sharply by 12.1% compared to 2020, driven in particular by the very strong increase at Arval, and the good performances by the other businesses, Leasing Solutions in particular.
Operating expenses increased by 8.1% compared to 2020, to €2.078 billion, due to business development. The jaws effect was very positive (up 4.1 points).
The cost of risk improved by €48 million, compared to 2020 and came to €157 million (€205 million in 2020).
As a result, pre-tax income of these five businesses, after allocating one third of Private Banking’s domestic net income in Luxembourg to Wealth Management (International Financial Services division), came to €1.608 billion, up very sharply by 25.3% compared to 2020.
In the fourth quarter 2021, revenues of the five businesses, at €1.006 billion, was on the whole up very sharply, by 11.2% compared to the fourth quarter 2020, driven by the strong increase at Arval, the very good performance of Leasing Solutions and Nickel and the very positive expansion in revenues at Luxembourg Retail Banking, driven by higher fees. Personal Investors’ revenues stabilised at a high level. At €534 million, operating expenses increased by 8.1% compared to the fourth quarter 2020, due to business development and targeted initiatives. The jaws effect was very positive (up 3.1 points). The cost of risk stood at €28 million (€61 million in 2020). As a result, pre-tax income of the five businesses, after allocating one third of Private Banking’s domestic net income in Luxembourg to Wealth Management (International Financial Services division), came to €450 million, up very sharply by 30.3% compared to the fourth quarter 2020.
