2012 Registration document and annual financial report - BNP Paribas

32012REVIEW OF OPERATIONSBalance sheet3P rovisions on available-for-sale financial assets fell by EUR 0.9 billionto EUR 4.3 billion at 31 December 2012 from EUR 5.2 billion at31 December 2011. Impairment provisions on available-for-sale financialassets are calculated at each balance sheet date. The unrealisedgain on available-for-sale financial assets totalled EUR 9.3 billion at31 December 2012, compared with an unrealised loss of EUR 3.5 billionat 31 December 2011, due to an increase in the value of fixed-incomesecurities issued by certain E urozone governments and a rise in themarket price of listed variable-income securities due to the upturnin equity markets. This EUR 12.8 billion increase therefore reflects aEUR 11.5 billion rise in the unrealised gain on fixed-income securities anda EUR 1.2 billion rise in the unrealised gain on variable-income securities.HELD-TO-MATURITY FINANCIAL ASSETSHeld-to-maturity financial assets are investments with fixed ordeterminable payments and a fixed maturity that the Group has theintention and the ability to hold until maturity. They are recognised inthe balance sheet at amortised cost using the effective interest method,and are divided into two categories: government bonds and Treasury bills,and other fixed-income securities.Held-to-maturity financial assets shrank 3% in 2012, from EUR 10.6 billionat year-end 2011 to EUR 10.3 billion at year-end 2012, principally due tosecurities sold at maturity.ACCRUED INCOME AND OTHER ASSETSAccrued income and other assets consist of the following: guaranteedeposits and bank guarantees paid; settlement accounts related tosecurities transactions; collection accounts; reinsurers’ share of technicalreserves; accrued income and prepaid expenses; and other debtors andmiscellaneous assets.Accrued income and other assets totalled EUR 99.4 billion at31 December 2012, up 6% from EUR 93.5 billion at 31 December 2011.This growth reflects a 17%, or EUR 7.8 billion, increase in guaranteedeposits and bank guarantees paid.CASH AND AMOUNTS DUE FROM CENTRALBANKSCash and amounts due from central banks totalled EUR 103.2 billion atyear-end 2012, up 77% from EUR 58.4 billion at year-end 2011, due toan increase in short-term investments.LIABILITIESOVERVIEWThe Group’s consolidated liabilities stood at EUR 1,812.9 billionat 31 December 2012, down 4% from EUR 1,879.7 billion at31 December 2011. The main components of the Group›s liabilities arefinancial liabilities at fair or model value through profit or loss, amountsdue to credit institutions, amounts due to customers, debt securities,accrued expenses and other liabilities, and technical reserves of insurancecompanies. These items together accounted for 97% of the Group’ s totalliabilities at 31 December 2012 (the same percentage as a year earlier).The 4% decrease in liabilities in 2012 can be attributed to:■ an 8% decrease in financial liabilities at fair value through profit of loss;■ a 25%, or EUR 37.4 billion, fall in amounts due to credit institutions toEUR 111.7 billion at 31 December 2012.The above were partially offset by:■ a 10%, or EUR 15.4 billion, increase in debt securities to EUR 173.2 billionat year-end 2012;■ an 11%, or EUR 14.9 billion, rise in technical reserves of insurancecompanies to EUR 148.0 billion at 31 December 2012.FINANCIAL LIABILITIES AT FAIR OR MODELVALUE THROUGH PROFIT OR LOSSThe trading book consists primarily of short sales of borrowed securities,repurchase agreements, and derivatives. Financial liabilities at fair ormodel value through profit or loss consist mainly of originated andstructured issues, where the risk exposure is managed in combinationwith the hedging strategy. These types of issues contain signifi cantembedded derivatives, whose changes in value are cancelled out bychanges in the value of the hedging instrument.902012 Registration document and annual financial report - BNP PARIBAS