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1999-BNP Paribas Annual Results-Presentation-Corporate and ...

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  • 1. Outline of the Presentation 1 Results 2 Update on the Integration 3 Corporate and Investment Banking 4 Private Banking and Asset Management 5 Retail Banking 6 The Internet revolution 1
  • 2. A New Force in Investment Banking BNP New Ambitions New Ambitions Strong Strong for focused for focused Customer Customer expansion expansion Relations Relations Greater Greater Highly Profitable Highly Profitable Leading Profitability Profitability Businesses Businesses Positions Critical Proven Risk Proven Risk Mass Control Control and Strength Range of Control over Control over Products Oper. Expenses Oper. Expenses Combined Combined culture of culture of Talent for Talent for Highly Performing Systems Highly Performing Systems Recognised Recognised Paribas innovation innovation Customisation Customisation (RAROC, VAR) (RAROC, VAR) Expertise Expertise Corporate and Investment Banking 2
  • 3. Ambitious Goals Equities Corporate Finance n Derivatives: remain a world leader In Europe, l reinforce our leading position on options n M & A: Top 10 top 5 among European banks l continue developing sales operations form an integrated operation l growth in stock lending/borrowing business n Equity Origination: Top 5 including among Top 3 European n Cash Markets: Top 5 in Asia banks Top 10 in Europe l Continue reinforcing integrated operations in Fixed Income Europe and Asia Consolidate industry-based research and n Top 3 world-wide in Euro bonds sales Expand market coverage n Top 5 world-wide in derivatives l Consolidate quantitative products and n Improve profitability of flow products research in Japanese equities (forex, treasury, govt bonds) by l Develop European and Asian product sales in streamlining back-office operations the US n Continue developing electronic distribution platforms Corporate and Investment Banking 3
  • 4. Ambitious Goals Structured Financing Media & Telecoms n A European leader with global ambitions n Thanks to the complementarity with four core businesses between BNP (large corp.) and l syndicated credits and acquisition financing, Paribas (mid-caps): strengthen our maintain its leading position in Europe position as leader in Europe (Top 3) l LBO and high yield: promote one-stop shopping l project financing: concentrate on utilities, securitisation: remain No. 1 for non-USD trans. l asset financing and optimisation International Trade Energy and Commodities n Top 5 worldwide n Capitalise on our position as Global leader n Export financing: maintain our undisputed and complementary product lines (Paribas: No 1 position in the French market oil and energy; BNP: soft commodities) n Global trade services: set up 80 trade centres, n Reinforce our position in the metals market including 20 in France n Develop cross-selling in brokerage n Speed up development of multi-source export services and derivative products credits Corporate and Investment Banking 4
  • 5. Weighted Assets: Optimising Returns 1. By Dynamic Selective Development n Develop specialised operations l for 10 main entities (accounting for 80% of Corp. & Inv. Bking weighted assets): over half of the staff working on specialised financing n Promote origination and syndication capacity l syndication: continue 1999 trend: total underwriting > € 40 bn final share < € 7 bn n Generalise RAROC Discipline l definition of target RAROC for each business and geographic area l Training Programme: 600 employees already trained, 1,000 to be trained by end 2000, all by 2001 n Reduce exposure on plain vanilla credits with low margins n Continue to accompany our customers in a favourable environment Corporate and Investment Banking 5
  • 6. Risk-Weighted Assets: Optimising Returns 2. By Active Balance Sheet Management Allocated Capital in € bn 9.2 9 8.1 1998 -2002 target: - 12 % 1998 1998 1998 1999 1999 1999 2000 2002 2002 Reduction of Weighted Assets Step Up Portfolio Management at the Best Cost n Set up a central team in Paris with a network n Securitisation: 1999: € 3,845 mn of correspondents in leading locations n Credit Derivatives: 1999: € 500 mn n Asset Sales: 1999: € 519 mn Superior Goals for 2000 Maintain customer portfolio, Maintain customer portfolio, Curb revenue losses Curb revenue losses Corporate and Investment Banking 6
  • 7. A Very Good Year Environment Results / Highlights n Strong global economic growth In € mn In € mn Var. Var. low level of risk NBI 5,540 + 30.4 % Oper. Expenses - 3,325 + 11.2 % GOI 2,215 + 75.9 % n Soaring stock markets Provisions - 434 - 56.8 % Pre-Tax Income 1,783 x 6,6 n Considerable volatility ROE 20 % +16 pts n A record year for equities and equity derivatives n Explosion in the volume of issues in € n Solid leadership in issues in € n Acquisition financing: an unprecedented year n Revival of international trade n Financing commodities and energy: after a slump in 1998 a new record year n ISO 9002 Documentary Credit Certification for France n Critical mass now achieved (14 locations in n Increased customer demands OECD countries) in multi-source export credit Corporate and Investment Banking 7
  • 8. BNP Paribas Cumulative income (€ mn) Cumulative income and use of limits (€ mn) -800 -600 -400 -200 0 200 400 600 800 1000 1200 1400 -600 -400 -200 0 200 400 600 800 1 000 1 200 1 400 Jan-98 janv-98 Jan-98 févr-98 Feb-98 mars-98 Feb-98 Mar-98 avr-98 Apr-98 mai-98 Apr-98 May-98 juin-98 Jun-98 Jun-98 juil-98 Jul-98 août-98 Jul-98 Aug-98 sept-98 Sep-98 oct-98 Sep-98 Oct-98 Daily income nov-98 Corporate and Investment Banking Nov-98 1998 Cumulative income déc-98 Nov-98 1998 Cumulative income Dec-98 janv-99 Jan-99 févr-99 Feb-99 Use of VaR Feb-99 mars-99 Mar-99 avr-99 Mar-99 Apr-99 mai-99 May-99 juin-99 Jun-99 Jul-99 juil-99 Jul-99 août-99 Aug-99 Sep-99 sept-99 Sep-99 1999 Cumulative income oct-99 Oct-99 Daily income Oct-99 nov-99 Nov-99 Dec-99 1999 Cumulative income déc-99 Use of limits in Notional Loss Risk and VaR limit Dec-99 0 0 20 40 60 80 20 40 60 80 -60 -40 -20 100 120 140 -80 -60 -40 -20 100 120 140 Daily results and use of VaR Daily results (€ mn) (€ mn with No Marked Increase in Risks Soaring Market Revenues 8
  • 9. Corp. & Invest. Banking: Breakdown of Net Banking income Excluding revenues from allocated equity capital 1998 1998 1999 1999 Markets & 25 % Corporate 22% Finance 56 % 62 % Commercial banking 19 % 16% Specialized financing Corporate and Investment Banking 9
  • 10. BNP & Paribas complementary businesses give the group a high profile in the major global financial centres fuelling growth in local markets in Europe and Asia Asia New York 4,335 employees 2,648 employees Europe 9,778 employees n Equities: No. 1 in broking of French equities n Bonds: No. 3 Euro Eurobond bookrunner No. 1 in Non-USD International Asset Backed Securities Strong positions in n Structured financing: en Europe No. 9 Syndicated Credit Arranger No. 2 in Europe No. 2 High Yield Syndicated Credit Arranger Corporate and Investment Banking 10