2012 Registration document and annual financial report - BNP Paribas

4CONSOLIDATEDFINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statementsNote 2NOTES TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31 D ECEMBER 20122.a NET INTEREST INCOMEThe BNP Paribas Group includes in “Interest income” and “Interestexpense” all income and expense from financial instruments measuredat amortised cost (interest, fees/commissions, transaction costs), andfrom financial instruments measured at fair value that do not meetthe definition of a derivative instrument. These amounts are calculatedusing the effective interest method. The change in fair value on financialinstruments at fair value through profit or loss (excluding accruedinterest) is recognised under “Net gain/loss on financial instruments atfair value through profit or loss”.Interest income and expense on derivatives accounted for as fair valuehedges are included with the revenues generated by the hedged item.Similarly, interest income and expense arising from derivatives used tohedge transactions designated as at fair value through profit or lossis allocated to the same accounts as the interest income and expenserelating to the underlying transactions.4Year to 31 Dec. 2012 Year to 31 Dec. 2011In millions of eurosIncome Expense Net Income Expense NetCustomer items 29,093 (9,375) 19,718 29,146 (8,740) 20,406Deposits, loans and borrowings 27,622 (9,246) 18,376 27,424 (8,388) 19,036Repurchase agreements 21 (79) (58) 61 (203) (142)Finance leases 1,450 (50) 1,400 1,661 (149) 1,512Interbank items 1,719 (2,562) (843) 2,102 (2,621) (519)Deposits, loans and borrowings 1,645 (2,281) (636) 1,905 (2,274) (369)Repurchase agreements 74 (281) (207) 197 (347) (150)Debt securities issued - (3,445) (3,445) - (4,025) (4,025)Cash flow hedge instruments 2,849 (2,477) 372 2,903 (2,535) 368Interest rate portfolio hedge instruments 2,146 (3,577) (1,431) 1,519 (2,712) (1,193)Financial instruments at fair value through profit orloss 2,293 (1,295) 998 4,518 (2,510) 2,008Fixed-income securities 1,438 - 1,438 2,435 - 2,435Loans/Borrowings 207 (360) (153) 357 (528) (171)Repurchase agreements 648 (814) (166) 1,726 (1,776) (50)Debt securities - (121) (121) - (206) (206)Available-for-sale financial assets 5,889 - 5,889 6,268 - 6,268Held-to-maturity financial assets 487 - 487 668 - 668TOTAL INTEREST INCOME/(EXPENSE) 44,476 (22,731) 21,745 47,124 (23,143) 23,981Interest income on individually impaired loans amounted toEUR 610 million in the year ended 31 December 2012 compared withEUR 554 million in the year ended 31 December 2011.2.b COMMISSION INCOME AND EXPENSECommission income and expense on financial instruments not measuredat fair value through profit or loss amounted to EUR 3, 258 millionand EUR 601 million respectively in 2012, compared with income ofEUR 3, 583 million and expense of EUR 596 million in 2011.Net commission income related to trust and similar activities throughwhich the Group holds or invests assets on behalf of clients, trusts,pension and personal risk funds or other institutions amounted toEUR 2, 298 million in 2012, compared with EUR 2, 454 million in 2011.1262012 Registration document and annual financial report - BNP PARIBAS