2012 Registration document and annual financial report - BNP Paribas

CONSOLIDATED FINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements4➤ SENSITIVITY OF THE MAIN GOODWILL VALUATIONS TO A 10-BASIS POINT CHANGE IN THE COST OF CAPITAL AND A1% CHANGE IN THE COST/INCOME RATIO AND IN THE SUSTAINABLE GROWTH RATEIn millions of euros BNL bc BancWestPersonal Finance(excluding specificCGU)Cost of capital 10.2% 8.3% 10.5%Adverse change (+10 basis points) (98) (152) (114)Positive change (-10 basis points) 100 157 116Cost/income ratio 53.3% 61.6% 46.0%Adverse change (+1%) (226) (276) (339)Positive change (-1%) 226 276 339Sustainable growth rate 5.0% (1) 5.0% 5.0%Adverse change (-1%) (232) (1) (254) (779)Positive change (+1%) 240 (1) 267 820(1) From 2018 .For the BancWest and Personal Finance (excluding specific CGU) cash generating units, there are no grounds for goodwill writedowns even if the threemost adverse scenarios contained in the table are applied to the impairment test.45.p TECHNICAL RESERVES OF INSURANCE COMPANIESIn millions of euros 31 December 2012 31 December 2011Liabilities related to insurance contracts 131,070 122,494Gross technical reservesUnit-linked contracts 42,241 39,550Other insurance contracts 88,829 82,944Liabilities related to financial contracts with discretionary participation feature 10,424 10,564Policyholders' surplus reserve - liability 6,498 -TOTAL TECHNICAL RESERVES OF INSURANCE COMPANIES 147,992 133,058Policyholders' surplus reserve - asset (1) - (1,247)Liabilities related to unit-linked financial contracts (2) 1,298 1,340Liabilities related to general fund financial contracts 25 45TOTAL LIABILITIES RELATED TO CONTRACTS WRITTEN BY INSURANCE COMPANIES 149,315 133,196(1) The policyholders’ loss asset is presented under “other debtors and miscellaneous assets”.(2) Liabilities related to unit-linked financial contracts are included in “Due to customers” (note 5.g).The policyholders’ surplus reserve arises from the application of shadowaccounting. It represents the interest of policyholders within French andItalian life insurance subsidiaries in unrealised gains and losses andimpairment losses on assets where the benefit paid under the policyis linked to the return on those assets. It is obtained from stochasticcalculations modelling the unrealised gains and losses attributable topolicyholders based on economic scenarios and assumptions as regardsrates paid to customers and new business inflows. For France, thisresulted in an interest of 90% in 2012, unchanged from 2011.The application of these models led to recognise a policyholders’ surplusliability in 2012, whilst market conditions in the second half of 2011 hadled to the recognition of an asset, representing policyholders’ share ofunrealised losses and writedowns on the portfolio of financial assetswhich are taken to income or directly to equity depending on theiraccounting category.2012 Registration document and annual financial report - BNP PARIBAS 161