2012 Registration document and annual financial report - BNP Paribas

32012REVIEW OF OPERATIONSCore business resultsCORPORATE A ND INVESTMENT BANKING (CIB)In millions of euros 2012 2011 2012/2011Revenues 9,715 9,897 -1.8%Operating Expenses and Dep. (6,272) (6,126) +2.4%Gross Operating Income 3,443 3,771 -8.7%Cost of Risk (493) (75) n.s.Operating Income 2,950 3,696 -20.2%3Associated Companies 39 38 +2.6%Other Non Operating Items (3) 42 n.s.Pre-Tax Income 2,986 3,776 -20.9%Cost/Income 64.6% 61.9% +2.7 ptAllocated Equity (€bn) 16.3 16.9 -3.5%For the whole of 2012, CIB held up well in the context of the adaptationplan, which the division completed ahead of the schedule announced.Thus, compared to mid-2011, CIB’s funding needs in U.S. dollars werereduced by USD 65 billion by April 2012 and risk-weighted assets byEUR 45 billion by the end of September 2012. The total net cost of thesale of assets under the plan was substantially lower than expected, atabout EUR 250 million.Against this backdrop, CIB’s revenues were down 1.8% compared to 2011,at EUR 9,715 million. Excluding the impact of losses from sales of assetsand sovereign bonds (EUR 91 million in 2012 and EUR 1,024 million in2011), the decline was 10.2%, or a decrease of about EUR 1.1 billion,EUR 800 million of which was in Corporate Banking, which is in line withthe announced impact of the adaptation plan.CIB’s operating expenses, which were EUR 6,272 million, rose 2.4%compared to 2011. At constant scope and exchange rates, they weredown 1.1%, due in particular to the workforce adaptation (1,400 people)provided for in the plan and completed in full by the end of 2012, anddespite selected investments in Cash Management and the gatheringof deposits. The cost/income ratio thus came to 62.3%, excluding theadaption plan and the impact of sales of loans, illustrating the good levelof operating efficiency.The cost of risk was EUR 493 million, up EUR 418 million compared to2011 when it was particularly low due to substantial write-backs.CIB pre-tax income thus came to EUR 2,986 million, down 20.9%compared to 2011.862012 Registration document and annual financial report - BNP PARIBAS