2012 Registration document and annual financial report - BNP Paribas

4CONSOLIDATEDFINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements2.g CORPORATE INCOME TAX4Reconciliation of the effective tax expense to theYear to 31 Dec. 2012 Year to 31 Dec. 2011theoretical tax expense at standard tax rate in France (1)in millions of euros Tax rate in millions of euros Tax rateCorporate income tax expense on pre-tax income atstandard tax rate in France (2) (3,745) 36.1% (3,493) 36.1%Differential effect in tax rates applicable to foreign entities 216 -2.1% 187 -1.9%Effect of dividends and securities disposals taxed at reduced rate 337 -3.3% 169 -1.7%Tax effect on previously unrecognis ed deferred taxes(tax losses and temporary differences) 163 -1.6% 244 -2.5%Tax effect of using tax losses for which no deferred tax assetwas previously recognised 9 -0.1% 29 -0.3%Other items (39) 0.5% 107 -1.2%Corporate income tax expense (3,059) 29.5% (2,757) 28.5%of whichCurrent tax expense for the year to 31 December (2,696) (2,070)Deferred tax expense for the year to 31 December (note 5.k) (363) (687)(1) Including the 3.3% social security contribution tax and the exceptional 5% contribution calculated on French corporate tax at 33.33%, lifting it to 36.1%.(2) Restated for the share of income from companies accounted for under the equity method and goodwill amortisation .Note 3SEGMENT INFORMATIONThe Group is composed of three core businesses:■ Retail Banking (RB), which covers Domestic Markets, Personal Finance,and International Retail Banking. Domestic Markets include retailbanking networks in France (FRB), Italy (BNL banca commerciale),Belgium (BRB), and Luxembourg (LRB), as well as certain specialisedretail banking divisions (Personal Investors, Leasing Solutions andArval). International Retail Banking is composed of all BNP ParibasGroup retail banking businesses out of the Eurozone, split betweenEurope Mediterranean and BancWest in the United States;■ Investment Solutions (IS), which includes Wealth Management;Investment Partners – covering all of the Group’s Asset Managementbusinesses; Securities Services to management companies, financialinstitutions and other corporations; Insurance and Real Estate Services;■ Corporate and Investment Banking (CIB), which includes Advisory &Capital Markets (Equities and Equity Derivatives, Fixed Income & Forex,Corporate Finance) and Corporate Banking (Specialised and StructuredFinancing, Corporate Deposit Line) businesses.Other activities mainly include Principal Investments, Klépierre (1) propertyinvestment company, and the Group’s corporate functions.They also include non-recurring items resulting from applying the ruleson business combinations. In order to provide consistent and relevanteconomic information for each core business, the impact of amortisingfair value adjustments recognised in the net equity of entities acquiredand restructuring costs incurred in respect to the integration of entitieshave been allocated to the “Other Activities” segment.Inter-segment transactions are conducted at arm’s length. The segmentinformation presented comprises agreed inter-segment transfer prices.The capital allocation is carried out on the basis of risk exposure, takinginto account various conventions relating primarily to the capitalrequirement of the business as derived from the risk-weighted assetcalculations required under capital adequacy rules. Normalised equityincome by segment is determined by attributing to each segment theincome of its allocated equity.(1) The Klépierre group was fully consolidated until 14 March 2012, then, following the partial disposal of the Group’s interest, Klépierre has been consolidated under the equity method(see note 8.d).1302012 Registration document and annual financial report - BNP PARIBAS