2012 Registration document and annual financial report - BNP Paribas

4CONSOLIDATEDFINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statementsAs a result, the carrying value of liabilities measured at market or modelvalue is reduced by EUR 30 million compared with EUR 1, 647 million at31 December 2011 i.e a EUR -1, 617 million variation recognised in netgain/loss on financial instruments at fair value through profit or loss(note 2.c). This reduction in value represents an unrealised gain thatwill only be realised if these financial instruments issued by the Bank arebought back in the market. If this does not happen, income relating tothis unrealised gain will be written back over the remaining term of theliabilities at a pace determined by movements in the bank’s issuer risk.Derivative financial instrumentsThe majority of derivative financial instruments held for trading arerelated to transactions initiated for trading purposes. They may resultfrom market-making or arbitrage activities. BNP Paribas actively tradesin derivatives . Transactions include trades in “ordinary” instruments suchas credit default swaps, and structured transactions with complex riskprofiles tailored to meet the needs of its customers. The net position isin all cases subject to limits.Some derivative instruments are also contracted to hedge financial assetsor financial liabilities for which the Group has not documented a hedgingrelationship, or which do not qualify for hedge accounting under IFRS. Thisapplies in particular to credit derivative transactions which are primarilycontracted to protect the Group’s loan book.The positive or negative fair value of derivative instruments classified inthe trading book represents the replacement value of these instruments.This value may fluctuate significantly in response to changes in marketparameters (such as interest rates or exchange rates).4In millions of eurosPositive marketvalue31 December 2012 31 December 2011Negative marketvaluePositive marketvalueNegative marketvalueCurrency derivatives 21,532 24,697 28,097 26,890Interest rate derivatives 333,066 324,079 332,945 330,421Equity derivatives 29,682 29,467 38,140 36,377Credit derivatives 22,782 22,523 46,460 46,358Other derivatives 3,573 3,832 6,325 7,421DERIVATIVE FINANCIAL INSTRUMENTS 410,635 404,598 451,967 447,467The table below shows the total notional amount of trading derivatives.The notional amounts of derivative instruments are merely an indicationof the volume of the Group’s activities in financial instruments markets,and do not reflect the market risks associated with such instruments.In millions of euros 31 December 2012 31 December 2011Currency derivatives 2,243,150 2,249,390Interest rate derivatives 41,127,475 40,272,463Equity derivatives 1,865,666 1,818,445Credit derivatives 2,105,501 2,321,275Other derivatives 144,834 156,291DERIVATIVE FINANCIAL INSTRUMENTS 47,486,626 46,817,864Derivatives traded on organised markets (including clearing houses) represent 62% of the Group’s derivative transactions at 31 December 2012(48% at 31 December 2011).1402012 Registration document and annual financial report - BNP PARIBAS