2012 Registration document and annual financial report - BNP Paribas

32012REVIEW OF OPERATIONSCore business resultsBNL BANCA COMMERCIALE (BNL bc)In millions of euros 2012 2011 2012/2011Revenues 3,273 3,202 +2.2%Operating Expenses and Dep. (1,804) (1,829) -1.4%Gross Operating Income 1,469 1,373 +7.0%Cost of Risk (961) (795) +20.9%Operating Income 508 578 -12.1%Non Operating Items 1 0 n.s.3Pre-Tax Income 509 578 -11.9%Income Attributable to Investment Solutions (18) (14) +28.6%Pre-Tax Income of BNL bc 491 564 -12.9%Cost/Income 55.1% 57.1% -2.0 ptAllocated Equity (€bn) 6.4 6.4 +0.7%Including 100% of Italian Private Banking for the Revenues to Pre-T ax I ncome line items.For the whole of 2012, in an unfavourable economic environment,BNL bc’s business activity was reflected by 4.3% growth in deposits, drivenby loans to corporates and local public entities. Outstanding loans grewon average by 0.7% despite a deceleration during the year in line withthe market.At EUR 3,273 million, revenues (1) rose 2.2% compared to 2011. Net interestincome was up, in particular for loans to small businesses and corporatesand margins held up well. Fees decreased driven by a decline in new loanproduction and the impact of new regulations.Thanks to cost-cutting measures, in particular in IT and realestate, operating expenses (1) were down 1.4% compared to 2011, atEUR 1,804 million, helping BNL bc achieve a further 2 point improvementin its cost/income ratio (1) at 55.1%. Gross operating income (1) thereby cameto EUR 1,469 million, up 7.0% compared to last year.The cost of risk (1) , which was 116 basis points of outstanding customerloans, was up 18 basis points compared to last year due to the economicenvironment. After allocating one-third of Italian Private Banking’s netincome to the Investment Solutions division, BNL bc’s pre-tax income wasEUR 491 million, down 12.9% compared to 2011. BNL bc thus achievedgood operating performance in a challenging risk environment.(1) With 100% of Italian Private Banking.802012 Registration document and annual financial report - BNP PARIBAS