*Net profit attributable to shareholders of EUR 307 million (*)
*Solid commercial and operational performance, despite an adverse economic environment, with a 4.4% loan and 3.5% deposit growth at retail banking in Belgium
*Continued strong solvency with Tier 1 capital ratio at 15.3%, good liquidity and a loan-to-deposit ratio of 101%
*Proposal of dividend of EUR 0.53 per share
For the whole of 2012, the operating income came in at EUR 1,116 million, in spite of a credit spread net negative impact of EUR 172 million (negative on own debt and positive on a loan portfolio held at fair value).
Commercial revenues were resilient and the cost of risk declined steeply compared to 2011, which was impacted by the Greek debt restructuring. Operating income was positively influenced by EUR 194 million by acquiring control of the leasing activities.
- Net interest income amounted to EUR 4,457 million, up EUR 295 million (7%) compared to 2011. This result was driven by a good performance in Turkey and scope changes related to the full consolidation of the leasing activities, which counterbalanced the impact of the low interest rate environment and lower income from the bond portfolio.
- Net commission income reached EUR 1,317 million, up EUR 77 million (6%). The increase is thanks to Specialised Finance and capital markets activities in CIB and higher fee income in Turkey. In Retail Banking Belgium, net commission income was under pressure due to lower selling fees on off-balance products and lower management fees.
- Net results on financial instruments at fair value through profit or loss came in at EUR 89 million, EUR 220 million lower compared to 2011, mainly due to a credit spread net negative impact of EUR 172 million (negative on own debt and positive on a loan portfolio held at fair value) and the indemnity paid for the unwinding of part of the subordinated debt CASHES (EUR 69 million).
- Operating expenses amounted to EUR 4,391 million (including depreciation charges), EUR 535 million (14%) higher than in 2011, which was impacted by a one-off release of provisions of EUR 256 million. 2012 was impacted by scope changes related to leasing entities (EUR 243 million). In Belgium, the impact of the wage drift is offset by the new reward model, while the contribution to the deposit guarantee scheme, the subscription taxes on deposits and Finance Stability contribution increased by 23% to EUR 173 million.
- The cost of risk amounted to EUR 374 million, EUR 778 million lower than in 2011, which included a provision for EUR 866 million for Greek sovereign debt restructuring. Excluding the provision for Greek debt and the scope changes due to leasing (EUR 61 million), the cost of risk in 2012 was comparable to 2011.
Net profit attributable to shareholders came to EUR 307 million, impacted by an exceptional impairment of EUR 470 million on the participation in asset management activities and a net loss of EUR 236 million on non-current assets, mainly due to disposal of foreign activities.
The balance sheet total of BNP Paribas Fortis amounted to EUR 272 billion at the end of 2012, 21% lower (EUR 74 billion) compared to end-2011. The decrease was due to deleveraging and optimisation programs leading to a strong decrease in financial assets and liabilities. From a geographical point of view, 74% of assets are located in Belgium, 9% in Luxembourg and 17% in other countries.
The solvency of BNP Paribas Fortis remained strong in 2012. At 31 December 2012, the tier 1 capital ratio stood at 15.3%, 1.2% lower than on 31 December 2011, due to the full consolidation of leasing activities as well as partial redemption of CASHES and subordinated debt. The total capital ratio stood at 18.9% end of December 2012, well above the regulatory required minimum of 8%. The liquidity of BNP Paribas Fortis remained solid as shown by the loan-to-deposit ratio of 101% (excluding repo and reverse repo agreements).
The Board of Directors of BNP Paribas Fortis will propose to the annual General Meeting of Shareholders on 18 April 2013 to declare a dividend of EUR 0.53 per share for 2012, an increase of 18.9% compared to the dividend for 2011.
CEO Max Jadot comments: “Despite a challenging economic environment, very low short-term interest rates and a relatively flat yield curve, BNP Paribas Fortis has posted a solid commercial and operational performance in 2012. We continued to play to the full our role as credit provider to the real economy, with a raise of 4.4% in loans in Belgian Retail Banking. We expanded our offer for our customers through a broadening of our distribution channels, especially Mobile Banking applications and contact centers. We also expanded leasing and factoring activities.
With the integration effort completed, BNP Paribas Fortis updated its strategy in December 2012 to fully keep up with macro-economic trends. This way we want to address the increased competition, and the changing needs of our clients, who operate in a society which is transforming through the rapid digitisation and rise of interconnectivity. We will closely consider our efficiency and approachability, with the ultimate aim of providing a better overall customer experience. We reconfirm that we will remain a universal bank for families, companies and public institutions through our multi-channel approach.
Our financial performance over 2012, in particular the good operating income, shows that we are on the right track, even taking into account an impairment on our participation in investment activities. We also achieved a reduction of our balance sheet with one-fifth, further deleveraging, while our solvency and liquidity remained excellent. We will focus even more on cost control and the enhancement of our operating income, as explained in our strategic plan.
Thanks to our employees’ continued dedication, and focus on the customer, BNP Paribas Fortis is in a strong position to address the challenges ahead. Once again, we would like to thank our staff for the superb job they do every day to make our Bank successful, and our customers for the confidence they place in us. In 2013 we will continue to strive to be the bank for the future on which our customers can fully rely.”
More details are included in the consolidated and non-consolidated Financial Statements** available on http://www.bnpparibasfortis.com/ and hereunder. This press release should be read together with these Financial Statements.***
* The consolidated operating profit of EUR 1,116 million, leads as follows to the net profit attributable to shareholders of EUR 307 million:
Consolidated operating profit of EUR 1,116 million
- Other non-operating income: EUR (530) million
- Corporate Income Tax: EUR (41) million
- Net income attributable to minority interests: EUR (238) million
= Net profit attributable to shareholders: EUR 307 million
** The published Financial Statements are in English and have been substantially audited by the joint statutory auditors. The final audit reports will be included in all language versions of the Financial Statements (Dutch, French and English), which are expected to become available before the end of the month. The financial information included in this press release is unaudited. Nevertheless, the consolidated net result amounting to EUR 307 million has been derived from the 2012 consolidated Financial Statements of BNP Paribas Fortis which have been closed by the Board of Directors on 14 March 2013. The joint statutory auditors have substantially completed their audit on these aforementioned Financial Statements and anticipate issuing the following audit report:
"Unqualified opinion on the 2012 consolidated Financial Statements with an emphasis of matter paragraph relating to the existence of claims for which the outcome remains uncertain."
*** Please note that the results of BNP Paribas Fortis SA/NV announced in this press release are the consolidated results of BNP Paribas Fortis SA/NV and do not cover the contribution of BNP Paribas Fortis to the consolidated results of BNP Paribas, which have a different scope (limited to Retail Banking in Belgium and Luxembourg) and take into account the purchase accounting by BNP Paribas.
The Annual Financial Statements 2012 include forward-looking statements based on current beliefs and expectations about future events. Forward-looking statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future events, operations, products and services, and statements regarding future performance and synergies. Forward-looking statements are not guarantees of future performance and are subject to inherent risks, uncertainties and assumptions about BNP Paribas Fortis and its subsidiaries and investments, developments of BNP Paribas Fortis and its subsidiaries, banking industry trends, future capital expenditures and acquisitions, changes in economic conditions globally or in BNP Paribas Fortis’ principal local markets, the competitive market and regulatory factors. Those events are uncertain; their outcome may differ from current expectations which may in turn significantly affect expected results. Actual results may differ materially from those projected or implied in these forward-looking statements. Any forward-looking statement contained in this document speaks as of the date of this document. BNP Paribas Fortis undertakes no obligation to publicly revise or update any forward-looking statements in light of new information or future events. The information contained in this document as it relates to parties other than BNP Paribas Fortis or derived from external sources has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of, the information or opinions contained herein.