BNP Paribas : 3Q22 - Press release results

RESULTS

AS AT 30 SEPTEMBER 2022

PRESS RELEASE

Paris, 3 November 2022

A SOLID PERFORMANCE

REVENUE GROWTH, POSITIVE JAWS EFFECT

AND PRUDENT RISK MANAGEMENT

STRONG GROWTH IN REVENUES

SUPPORTED BY ALL DIVISIONS

POSITIVE JAWS EFFECT (+2.0 points)

Revenues: +8.0% vs. 3Q21

Operating expenses: +6.0% vs. 3Q21

(at constant scope and exchange rates)

Revenues: +4.9% vs. 3Q21

Operating expenses: +2.8% vs. 3Q21

PRUDENT, PROACTIVE AND LONG-TERM RISK MANAGEMENT

REFLECTED IN LOW COST OF RISK:

Underlying cost of risk1

31 bps2

VERY GOOD LEVEL OF NET INCOME

Net income3: €2,761m, +10.3% vs. 3Q21

ROBUST BALANCE SHEET AND INCREASE IN PROFITABILITY

CET1 RATIO4: 12.1%

ROTE5: 11.4%

1. Excl. the exceptional impact of the "Act on assistance to borrowers" in Poland, 39 bps including this impact; 2. Cost of risk vs. customer loans outstanding at the beginning of the period; 3. Group share; 4. CRD4, including IFRS 9 transitional arrangements; 5. Return on tangible equity non-revaluated

The figures included in this announcement are unaudited.

This announcement includes 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 and its subsidiaries and investments, developments of BNP Paribas and its subsidiaries, banking industry trends, future capital expenditures and acquisitions, changes in economic conditions globally, in particular in the context of the Covid-19 pandemic, or in BNP Paribas' 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 presentation speaks as at the date of this presentation.

BNP Paribas undertakes no obligation to publicly revise or update any forward-looking statements in light of new information or future events. It should be recalled in this regard that the Supervisory Review and Evaluation Process is carried out each year by the European Central Bank, which can modify each year its capital adequacy ratio requirements for BNP Paribas.

The information contained in this announcement as it relates to parties other than BNP Paribas 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. Neither BNP Paribas nor its representatives shall have any liability whatsoever in negligence or otherwise for any loss however arising from any use of this presentation or its contents or otherwise arising in connection with this presentation or any other information or material discussed.

The sum of values contained in the tables and analyses may differ slightly from the total reported due to rounding.

2	RESULTS AS AT 30 SEPTEMBER 2022

The Board of Directors of BNP Paribas met on 2 November 2022. The meeting was chaired by Jean Lemierre, and the Board examined the Group's results for the third quarter 2022.

Commenting on these results, Chief Executive Officer Jean-Laurent Bonnafé stated at the end of the meeting:

"We continue to develop our activities and mobilise our resources at the service of our clients and the European economy.

On the strength of its model, the Group has achieved solid third-quarter results. These results demonstrate our ability to expand and develop leading platforms at the service of the European economy. They reflect the dynamism of our clients who are adapting to economic developments, and BNP Paribas' ability to support individuals, corporates and institutionals in all phases of the economic cycle.

To meet the growing needs to transform our economies and our societies, the Group continues to implement its commitments to climate, biodiversity, the circular economy, the sustainable savings, investments and financing as well as social inclusion.

I would like to thank the teams in all Group's entities as well as our clients in placing their trust in us."

*

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Unless otherwise mentioned, the financial information and items contained in this announcement include the activity related to BancWest reflecting an operational view. Such financial information and items therefore do not reflect the effects produced by applying IFRS 5, which pertains to non- current assets and liabilities held for sale. The press release includes in appendix a reconciliation between the operational view presented without applying IFRS 5 and the consolidated financial statements based on an application of IFRS 5.

A SOLID PERFORMANCE: GROWTH IN REVENUES, A POSITIVE JAWS EFFECT AND A PRUDENT RISK MANAGEMENT

The Group's diversified and integrated model and its ability to accompany clients and the economy in a comprehensive way continued to drive strong growth in revenues and results in the third quarter 2022.

Thanks to its solid model, reinforced by its long-term approach, BNP Paribas achieved +10.3% growth in net income compared to the third quarter of 2021, while enhancing its profitability with a ROTE of 11.4%1. These performances reflect the Group's unique positioning in Europe stemming from its leading platforms.

The Group's growth potential is proven and is being sustained through robust business momentum and strategic developments crystalised in 2021 and 2022. Growth is disciplined and accompanied by positive jaws effect in all divisions. In addition, the Group benefits from long-term prudent and proactive risk management, as illustrated, for example, in its ratio of cost of risk to gross operating income, which is one of the lowest in Europe.

The Group strengths its policy of engaging with society through a group-wide approach and is engaged with clients to support them in their transition towards a sustainable economy. It is strengthening its steering tools, processes and governance. And it has taken the measures necessary for aligning its loan portfolios to meet its carbon-neutrality commitment.

1 Not revaluated

3	RESULTS AS AT 30 SEPTEMBER 2022

All in all, revenues, at 12,311 million euros, rose strongly, by 8.0% compared to the third quarter 2021 (+4.9% at constant scope and exchange rates).

In the operating divisions, revenues were up sharply, by 8.3% compared to the third quarter 2021 (+5.3% at constant scope and exchange rates). Revenues at Corporate & Institutional Banking (CIB) rose strongly (+5.9%, +2.0% at constant scope and exchange rates), driven by the very good performance of Global Markets and Securities Services and good resiliency at Global Banking in an unfavourable market. Revenues1 grew solidly, by 9.6% at Commercial, Personal Banking & Services (CPBS) (+6.9% at constant scope and exchange rates), driven by strong growth in Commercial & Personal Banking (+7.2%) and by the very strong growth in revenues in Specialised Businesses (+14.7%). Revenues also rose strongly, by 8.9% at Investment & Protection Services (IPS) (+7.1% at constant scope and exchange rates) in a highly unfavourable market environment, supported in particular by increases at Insurance and Wealth Management.

The Group's operating expenses, at 7,857 million euros, increased by 6.0% compared to the third quarter 2021 (+2.8% at constant scope and exchange rates). Operational performance was high and reflected by positive jaws effects at the Group level and in all its divisions. Operating expenses included the exceptional impact of restructuring and adaptation costs (32 million euros) and IT reinforcement costs (97 million euros) for a total of 129 million euros (62 million euros in the third quarter 2021).

In the operating divisions, operating expenses increased by 5.9% compared to the third quarter 2021 (+2.8% at constant scope and exchange rates). The jaws effect was positive (+2.4 points). Operating expenses at CIB increased by 4.5% in particular with the impact of exchange rates. They thus decreased by 0.2% at constant scope and exchange rates. The jaws effect was positive (+1.4 point). Operating expenses1 increased by 7.0% at CPBS due to growth in business activity and scope effects in Commercial & Personal Banking and the Specialised Businesses (+4.5% at constant scope and exchange rates). The jaws effect was very positive (+2.6 points). Operating expenses1 increased by 6.5% in Commercial & Personal Banking and by 8.4% in the Specialised Businesses. At IPS, operating expenses increased by 4.8% (+2.9% at constant scope and exchange rates), due mainly to support for business development and targeted initiatives. The jaws effect was very positive (+4.2 points).

The Group's gross operating income thus came to 4,454 million euros, up by 11.7% compared to the third quarter 2021 (+8.9% at constant scope and exchange rates).

At 947 million euros, the cost of risk increased by 34.1% compared to the third quarter 2021. This quarter it included the exceptional 204-million-euro impact of Poland's "Act on assistance to borrowers". It was at a low level (31 basis points of customer loans outstanding excluding this impact, 39 basis point including this impact) with provisions on non-performing loans (stage 3) at a low level. This quarter, it included provisions on performing loans (stages 1 and 2). In the third quarter 2021, it had included moderate releases of provisions on performing loans.

Group operating income, at 3,507 million euros, thus rose by 6.9% compared to the third quarter 2021 (+4.5% at constant scope and exchange rates) and was up sharply in the operating divisions (+10.7%).

Non-operating items came to 227 million euros in the third quarter 2022 (170 million euros in the third quarter 2021). The Group did not book non-operating exceptional items this quarter. In the third quarter 2021, it had recognised a 144-million-euro capital gain on the sale of Allfunds shares2, which was offset by -149 million euros in goodwill impairments.

Pre-tax income rose by 8.2% compared to the third quarter 2021, to 3,734 million euros (3,450 million euros in the third quarter 2021).

1. Including 100% of Private Banking in Commercial & Personal Banking (including PEL/CEL effects in France)
2. Disposal of 1.97% stake in Allfunds

4	RESULTS AS AT 30 SEPTEMBER 2022

The average corporate income tax rate was 24.8%.

The Group's net income thus came to 2,761 million euros in the third quarter 2022, up sharply, by 10.3% compared to the third quarter 2021. Excluding the effect of exceptional items, it amounted to 3,020 million euros, up sharply, by 16.4% compared to the third quarter 2021.

As at 30 September 2022, the Common Equity Tier 1 ratio stood at 12.1%1. The Group's immediately available liquidity reserve amounted to 441 billion euros, equivalent to over one year of room to manoeuvre in terms of wholesale funding. Its leverage ratio2 stood at 3.9%.

Tangible book value3 per share stood at 79.3 euros, equivalent to a compound annual growth rate of 6.8% since 31 December 2008.

The Group continues to reinforce its policy of engaging with society, scaling up its approach in all its business lines around five priority pillars: sustainable savings, investments and financing; the transition towards carbon neutrality; natural capital and biodiversity; social inclusion; and the circular economy. BNP Paribas has been recognised by Environmental Finance for the best net-zero progression of the year in Europe, the Middle East and Africa. It also stands out as the only bank having obtained AFNOR's Alliance label, which combines the Diversity and Professional Equality labels, and the objective of which is to measure the effectiveness of initiatives in the areas of diversity, inclusion and professional equality.

The Group continues to reinforce its internal control set-up.

For the first nine months of 2022, revenues, at 38,310 million euros, rose sharply, by 9.4% compared to the first nine months of 2021 (+6.9% at constant scope and exchange rates).

In the operating divisions, revenues were up sharply, by 10.5% (+7.8% at constant scope and exchange rates) compared to the first nine months of 2021. They rose strongly, by 14.9% at CIB (+10.2% at constant scope and exchange rates), driven by the very good performance of Global Markets and Securities Services and the good resiliency of Global Banking in an unfavourable market. Revenues4 were up sharply, by 9.8% at CPBS (+7.6% at constant scope and exchange rates), driven by very strong growth in Commercial & Personal Banking and the very strong increase in Specialised Businesses. IPS revenues rose by 3.5% (+2.9% at constant scope and exchange rates) in a very unfavourable market context.

The Group's operating expenses, at 25,229 million euros, increased by 8.8% compared to the first nine months of 2021 (+5.6% at constant scope and exchange rates). They included the exceptional impact of restructuring and adaptation costs (85 million euros) and IT reinforcement costs (229 million euros) for total exceptional items of 314 million euros (210 million euros in the first nine months of 2021).

In the operating divisions, operating expenses increased by 8.0% compared to the first nine months of 2021 (+5.0% at constant scope and exchange rates). The jaws effect was very positive (+2.5 points). Operating expenses at CIB increased by 12.5% (+6.5% at constant scope and exchange rates) with support for business development, and the impact of exchange rates and change in scope. The jaws effect was positive (+2.4 points). Operating expenses4 increased by 6.2% (+4.3% at constant scope and exchange rates) at CPBS on the back of increased business activity and scope effects in Commercial & Personal Banking and the Specialised Businesses. The jaws effect was positive (+3.6 points). Operating expenses at IPS increased by 5.0% (+4.0% at constant scope and exchange rates), driven mainly by support for business development and targeted initiatives.

1. CRD4, including IFRS 9 transitional arrangements
2. Calculated in accordance with Regulation (EU) 2019/876
3. Revaluated
4. Including 100% of Private Banking in Commercial & Personal Banking (including PEL/CEL effects in France on revenues)

5	RESULTS AS AT 30 SEPTEMBER 2022