BGL BNP Paribas has published its financial results for 2023, a year in which it posted a 42% increase in net profits.
On Thursday 4 April 2024, the Ordinary General Meeting of Shareholders approved the bank's consolidated financial statements for the financial year ended 31 December 2023.
At €1,840.1 million, net banking income last year was 9% higher than in 2022 (€1,689.4 million). According to BGL BNP Paribas, this increase is the result of "strong commercial momentum" in the bank's various business lines.
The bank mentioned the role played by the European Central Bank's (ECB) interest rate hikes, also taking into account the bank's diversified and integrated business model centred around three types of client (retail banking, private banking and corporate banking) and comprising specialised business lines, as well as its international leasing operations.
Income from retail and corporate banking rose by 27% over one year. As the economy, and in particular the real estate market slowed, the bank continued to finance client projects, increasing average loan outstandings by 1%. Average deposit volumes fell by 4%.
BGL BNP Paribas Development made two investments in family businesses totalling €12 million, with a view to helping them grow and plan for the future. Wealth management assets under management rose by 6% as the markets performed strongly in 2023, added the bank. Average deposits increased by 2%, while average loan outstandings fell- the bank attributed this to the reduced leverage of some clients' portfolios following the rapid hike in interest rates.
International leasing saw significantly higher financing costs in 2023, while equipment delivery times returned to normal after the supply chain disruption seen in 2022. "Strong business momentum" led to increases of 4% in outstandings and 1% in income, noted the bank.
Overheads rose by 7% to €911.4 million due to the impact of European inflation, which resulted from higher wages, energy costs and service prices, according to BGL BNP Paribas. The bank added that it had continued making investments to support business growth and transformation as part of its "Growth, Technology, Sustainability 2025" plan.
For its part, gross operating income amounted to €928.7 million, up 11% compared to 2022. At €97.6 million, the cost of risk remained low: 0.26% of €38 billion in client loan outstandings. The share of net profits of equity affiliates (i.e. that of subsidiaries in which the bank does not have a majority shareholding), amounted to €13.8 million, compared to €14.5 million in 2022. Net gains on fixed assets were up €181.8 million, an increase the bank attributed in particular to real estate reorganisation in connection with the implementation of new ways of working.
The bank's consolidated net profit came to €577.6 million at the end of 2023, up 42% compared with 2022. The increase amounted to 8% excluding real estate reorganisation in connection with the implementation of new ways of working. At 31 December 2023, the balance sheet total was €63.3 billion, up €1.4 billion compared to one year earlier.
The bank also reported that its solvency ratio was 24.2%, compared with 23.3% in 2022 (above the regulatory minimum). Its share of regulatory capital amounted to €6.7 billion.
Commenting on these results, Béatrice Belorgey, Chair of the Executive Committee of BGL BNP Paribas and Head of the BNP Paribas Group entities in Luxembourg, said: "The strong performance in 2023 reflects the strength of our diversified and integrated business model, and allows us to keep growing and meet the needs of our retail, corporate and institutional clients, and continue supporting the development of Luxembourg’s economy. We are also endeavouring to help our clients make the transition towards a more sustainable and inclusive economy by providing them with sustainable products and services and long-term support. I would like to warmly thank all of our teams for their commitment throughout the year, and our clients for continuing to place their trust in us."
