2012 Registration document and annual financial report - BNP Paribas

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4CONSOLIDATEDFINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements8.d BUSINESS COMBINATIONS AND LOSSOF CONTROLBusiness combinations and loss of controlin 2012KlépierreBNP Paribas and Simon Property Group signed an agreement on 14 March2012 relating to the sale by BNP Paribas of 28.7% of the share capital ofKlépierre. The disposal enabled BNP Paribas to realise a EUR 1, 516 milliongain, including a EUR 631 million gain on BNP Paribas’ interest after theoperation. An additional EUR 227 million gain from internal transactionsrevaluation is also recognized in net gains on non-current assets.Following this operation, BNP Paribas owns 22.7% of the share capitalof Klépierre valued at EUR 1, 134 million on 14 March 2012, based on amarket price of 26.93 euros per share at the transaction date.The consolidation of Klépierre under the equity method led the Group torecognise in the profit and loss account a EUR 29 million badwill.The loss of control over Klépierre leads to EUR 10.4 billion of investmentproperty being removed from the carrying value of investment propertyassets in the Group’s balance sheet.Business combinations realised in 20114AcquiredsubsidariesCorebusinessCountryFortis Commercial Finance Holding NVAcquiredpercentageIn millions of eurosAcquisitionpriceGoodwillNet cashinflowRB Netherlands 100% 100 9 (11) Loans andreceivablesdue fromcustomersFortis Luxembourg VieIS Luxembourg 16.66% 114 (1) 175 Financialassets atfair valuethroughprofit or lossBNL VitaIS Italy 51% 325 120 (144) Financialassets atfair valuethroughprofit or lossAvailablefor-salefinancialassetsKey figures on acquisition dateAssetsLiabilities1,458 Due to financialinstitutions7,280 Technicalreserves ofinsurancecompanies3,555 Technicalreserves ofinsurancecompanies6, 979867Due tocustomers 4637,75011 ,545Fortis Commercial FinanceOn 10 June 2011, BNP Paribas Fortis and ABN AMRO reached an agreementunder which BNP Paribas Fortis acquired the international network ofFortis Commercial Finance, except for its Dutch activities.The assets acquired from Fortis Commercial Finance, a leading factoringcompany operating in 12 European and Asian countries, were combinedwith BNP Paribas Factor to serve BNP Paribas’ institutional clients inEurope and Asia.The deal extends the reach of the Group’s factoring network to six newcountries: the UK, Germany, Poland, Denmark, Luxembourg and HongKong. This acquisition makes the Group one of Europe’s leading factoringplayers. Fortis Commercial Finance has been fully consolidated since4 October 2011, and did not make a material contribution to Group fullyearearnings in 2011.BNL VitaOn 22 December 2009, Cardif Assicurazioni, an Italian subsidiary ofBNP Paribas, reached an agreement with insurance group Unipol toacquire its 51% stake in their BNL Vita bancassurance joint venture.Since 29 September 2011, the BNP Paribas Group has held 100% ofBNL Vita. The application of accounting standards relating to businesscombinations resulted in the recognition of goodwill when the Group tookcontrol of BNL Vita on the Group’s total stake in this subsidiary.BNL Vita was founded in 1987 and is the sixth largest player in the Italianbancassurance market. It distributes its life insurance products throughthe branch network of BNL, the G roup’s Italian bank. BNL Vita has beenfully consolidated since 30 September 2011, and its contribution to fullyear2011 earnings was not material.The entity’s name was changed into BNP Paribas Cardif Vita Compagniadi Assicurazione e Riassicurazione.1962012 Registration document and annual financial report - BNP PARIBAS
CONSOLIDATED FINANCIAL STATEMENTS - YEAR ENDED 31 DECEMBER 2012Notes to the financial statements4Cardif Lux International/Fortis Luxembourg Vie SAOn 7 June 2011, Ageas, BGL BNP Paribas and BNP Paribas Cardifsigned an agreement to merge Fortis Luxembourg Vie with Cardif LuxInternational. Ageas and BGL BNP Paribas previously each owned 50% ofFortis Luxembourg Vie (which was accounted for under the equity methodby the BNP Paribas Group in line with its 50% stake). BNP Paribas Cardifpreviously owned 100% of Cardif Lux International (fully consolidated bythe BNP Paribas Group). After the transaction, the BNP Paribas Groupowned 66.66% of the combined unit, which has been fully consolidatedsince 31 December 2011.The business name of the combined unit is Cardif Lux Vie, which is now amajor player in the distribution of life insurance and protection insurancein the Luxemburgian market.TEB BankFollowing the acquisition of Fortis Banque SA, an agreement foreseeingthe merger of TEB and Fortis Bank Turkey was reached betweenBNP Paribas, the Colakoglu group (co-shareholder of TEB since 2005)and BNP Paribas Fortis. The merger of the two entities was appro ved bythe G eneral S hareholder’s M eetings of the two banks the 25 January 2011and was completed on 14 February. TEB’ s governance principles wereextended to the new entity which is consolidated using the proportionalintegration method. The Colakoglu group has an option to sell its sharein TEB Holding, the holding company controlling TEB, to the BNP ParibasGroup at fair value starting from 15 February 2012. This option includesa minimum price on the historical stake of the Colakoglu g roup of1, 633 million Turkish Lira starting on 1 April 2014.Through a public tender offer, the BNP Paribas Group also acquired 6% ofthe quoted shares of the new TEB Bank entity in June 2011.8.e COMPENSATION AND BENEFITSAWARDED TO THE GROUP’S CORPORATEOFFICERSRemuneration and benefits policy relating tothe group’s corporate officersRemuneration paid to the Group’s corporateofficersThe remuneration paid to the Group’s corporate officers is determined bythe method recommended by the Compensation Committee and approvedby the Board of Directors.This remuneration includes both a fixed and a variable component,the levels of which are determined using market benchmarks basedon surveys of executive remuneration established by specialised firms .Fixed remunerationThe fixed annual remuneration of Baudouin Prot, Chairman, amountsto EUR 850, 000.The fixed annual remuneration of Jean-Laurent Bonnafé, Chief ExecutiveOfficer was increased from EUR 1, 050, 000 to EUR 1, 250, 000 from1 July 2012.The fixed annual remuneration of Georges Chodron de Courcel, PhilippeBordenave and François Villeroy de Galhau, Chief Operating Officers,amount respectively to EUR 600, 000, EUR 580, 000 and EUR 450, 000.Variable remunerationThe variable portion of corporate officers’ compensation is determined onthe basis of a target compensation equal to 100% of the fixed remunerationfor Baudouin Prot, 150% for Jean-Laurent Bonnafé, Georges Chodron deCourcel and Philippe Bordenave, and 120% for François Villeroy de Galhau .It fluctuates depending on criteria linked to the Group’s performance,to the managerial performance of corporate officers and to the Boardof Directors’ assessment of BNP Paribas’ risk and liquidity policy. Thevariable portion is intended to reflect the effective contribution madeby corporate officers to the success of BNP Paribas, in relation to theChairman, notably in respect of the duties he performs pursuant to thei nternal r ules of the Board of Directors that do not relate exclusively tothe organisation and functioning of the Board, and in relation to the ChiefExecutive Officer and Chief Operating Officers, in respect to their dutiesas executives of an international financial services group.Group performance criteriaGroup performance criteria account for 75% of the target variableremuneration and are used to calculate the corresponding portion ofthe variable remuneration based on the change in the relevant indicators:■ Baudouin Prot, Jean-Laurent Bonnafé and Philippe Bordenave■■change in earnings per share (37.5% of the target variableremuneration),achievement of the Group’s budgeted gross operating income(37.5% of the target variable remuneration).■ Georges Chordon de Courcel and François Villeroy de Galhau■■■■change in earnings per share (18.75% of the target variableremuneration),achievement of the Group’s budgeted gross operating income(18.75% of the target variable remuneration),change in net income before tax of businesses for which they areresponsible (18.75% of the target variable remuneration),achievement of budgeted gross operating income of businessesfor which they are responsible (18.75% of the target variableremuneration).Personal objective-based criteriaPersonal objective-based criteria concern managerial performance asassessed by the Board of Directors in terms of foresight, decision-makingand leadership skills:■ foresight: define a vision, prepare for the future, foster a spirit ofinnovation, carry out succession planning for and open up theinternational horizons of senior executives;■ decision-making: determine, with the relevant managers, and take therequisite measures for the Group’s development, its internal efficiencyand the adequacy of its risk management, internal control and capitalmanagement policy;■ leadership: recognise behaviour consistent with the Group’s values(commitment, ambition, creativity, responsiveness). Promote initiativetakingand internal cooperation. Instil a culture of change andperformance.The variable portion of compensation linked to personal criteria is limitedto 25% of the target variable compensation.42012 Registration document and annual financial report - BNP PARIBAS 197
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2012REGISTRATION DOCUMENTAND ANNUAL
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2012 Registration documentand annua
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1GROUP PRESENTATION1.1 Group presen
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GROUP PRESENTATIONPresentation of a
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1GROUPPRESENTATIONBNP Paribas and i
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1GROUPPRESENTATION1282012 Registrat
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2CORPORATEGOVERNANCEBoard of Direct
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2CORPORATEGOVERNANCEExecutive Commi
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32012REVIEW OF OPERATIONSOutlook3.6
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32012REVIEW OF OPERATIONSLiquidity
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5RISKSAND CAPITAL ADEQUACYAppendice
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5RISKSAND CAPITAL ADEQUACYAppendix
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6INFORMATIONON THE PARENT COMPANY F
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7ARESPONSIBLE BANK: INFORMATION ON
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8GENERALINFORMATIONDocuments on dis
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8GENERALINFORMATIONFounding documen
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8GENERALINFORMATIONStatutory Audito
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8GENERALINFORMATIONStatutory Audito
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9STATUTORYAUDITORSStatutory Auditor
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10PERSON RESPONSIBLE FOR THE REGIST
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11TABLE OF CONCORDANCEHeadings as l
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HEAD OFFICE16, boulevard des Italie
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