La banque d'un monde qui change 2004 - BNP Paribas

ACTIVITY2004 REVIEW OF OPERATIONSCONSOLIDATED RESULTS OF THE BNP PARIBAS GROUPIn 2004, the Group had sharply higher operating performances:• Net banking income: EUR 18,823 million (+5.0%),• Gross operating income: EUR 7,231 million (+8.7%),• Cost/income ratio improved 1.3 points at 61.6%,• Operating income: EUR 6,553 million (+23.9%).Fresh rise in profitability:• Net income, Group share: EUR 4,668 million (+24.1%).• After-tax return on equity: 16.8% (+2.5 pts).Each of the Group’s core businesses contributed to this performance:• Thanks to the significant commercial drive of its two core businesses, Retail Banking posted sustained growth in the businessand in its results (EUR 2,981 million in pre-tax income, +12.6%).• Taking advantage of the inclusion of real estate services and owing to the performances of all the business lines involved ingathering and managing financial assets, the Asset Management and Services (AMS) core business posted substantial results(EUR 993 million in pre-tax income, +37.3%).• The Corporate and Investment Banking (CIB) core business posted record results (EUR 2,448 million in pre-tax income, +30.3%)with exceptionally low provisions.Allocation of capitalRevenue from the capital allocated to each division is included in the division’s profit and loss account. The capitalallocated to each division corresponds to the amount required to comply with international capital adequacy ratios andis based on 6% of risk-weighted assets. Additional capital is allocated to Private Banking, Asset Management and CortalConsors, which is equal to 0.25% of assets under management. In Real Estate Services and Securities Services, additionalcapital is allocated in respect of operational risk. The capital allocated to the Private Equity business corresponds toa certain percentage of the net book value of investments. The percentage varies depending on the investment and isdesigned to reflect the actual risk. Capital allocated to the Insurance business corresponds to 100% of the solvency marginas determined according to insurance regulations.160BNP PARIBAS - ANNUAL REPORT 2004