Contributing towards a more sustainable economy
In its 2021 responsibility report, BGL BNP Paribas presents the actions it is taking to achieve the goal it set several years ago: promoting the transition towards a more responsible and sustainable economy. These initiatives are based around three areas: the bank’s role in supporting its clients in this transition, improving its own social and environmental footprint, and finally its commitment to civil society.
Faced with the climate emergency, one of the bank’s key roles is to support its retail and corporate clients in their energy transition. It draws on its wide range of responsible financing and investment products to offer solutions to clients who wish to have a positive impact on society and/or the environment. For instance, retail clients seeking to limit their carbon emissions can now receive a green mobility loan or an energy retrofitting loan. Meanwhile, Corporate Banking has focused on training and raising awareness among its staff of sustainable products and solutions, sector trends and new technologies. This initiative has already led to corporate clients being supported in their transition.
At the same time, the bank is hard at work every day to reduce its environmental footprint and offer its staff a working environment that is aligned with its values. For example, in 2021, the bank managed to cut its paper consumption by 25% from 2020 levels through a collective challenge launched among its staff. In addition, the strategy that has been in place for several years to continuously improve the energy efficiency of its buildings has proved successful and led it to achieve ISO 50001 certification in January 2022.
Lastly, BGL BNP Paribas is helping to finance a range of projects through its patronage activities. Sharing its time and skills, and financing initiatives that make a positive impact are some concrete ways of supporting projects and charities. With a view to promoting social inclusion and the circular economy, the bank has, for instance, donated 1,400 used desktop and laptop computers to two charities specialised in giving a new life to IT hardware and getting people into work: Digital Inclusion and Ecodair. BGL BNP Paribas is also a founding member of microlux, the first microfinance institution in Luxembourg. In 2021, microlux granted 52 microloans amounting to €829,600 to new entrepreneurs.
Actively contributing to a responsible and sustainable economy is therefore fully in line with BGL BNP Paribas’ strategy, but also more broadly with that of all the entities that make up the BNP Paribas Group in Luxembourg.
The biggest employer in Luxembourg’s financial industry thus offers a comprehensive range of sustainable financial products and services. BNP Paribas Asset Management and Cardif Lux Vie apply ESG criteria to all their investment processes. In 2021, BNP Paribas Asset Management placed particular focus on biodiversity to enable its investor clients to contribute towards protecting and restoring ecosystems. Thanks to its expertise in fund administration and custody, BNP Paribas Securities Services plays an important role in green issuance and is the listing agent for more than 40% of all issues on the Luxembourg Green Exchange. Arval Luxembourg has assumed its role as an advocate of electric mobility, since the share of electric and hybrid vehicles accounted for almost 30% of total orders recorded in 2021, up from 20% in 2020.
Béatrice Belorgey, Country Head of the BNP Paribas Group in Luxembourg and Chair of the BGL BNP Paribas Executive Committee, said: “More than ever, we are committed to financing a carbon-neutral economy by 2050 and to supporting our clients in this essential transformation. We are aware that the transition to a more sustainable economy is a long-term trajectory, and we are laying the foundations for it now in our 2022-2025 Strategic Plan, which is based on three priorities: Growth, Technology, Sustainability. This plan defines our commercial objectives for sustainable investments and loans, as well as our objectives for aligning our portfolio with a low-carbon economy.”
Strong growth in commercial activities
Launch of the 2022-2025 Strategic Plan
On 7 April 2022, the Ordinary General Meeting of Shareholders, chaired by Etienne Reuter, approved the BGL BNP Paribas consolidated financial statements for the financial year ended 31 December 2021, in accordance with IFRS.
Net banking income amounted to EUR 1,621.1 million, up 2% on 2020 (EUR 1,595.5 million). Excluding the base effect relating to a capital gain on property in 2020, net banking income rose 4% (up 7% versus 2019). This increase is the result of strong commercial momentum in the bank’s various business areas, thanks to the teams’ firm commitment to their clients.
Retail and Corporate Banking recorded 6% growth in average loan outstandings, boosted by an increase in retail loans and loans to companies. Average deposit volumes increased 16%, driven by both corporate clients and retail clients.
Thanks to the rise in markets and strong inflows, assets under management in Wealth Management were up 9%. Average loan outstandings rose 10%.
The recovery in the Leasing International business, which began in the second half of 2020, continued in 2021. New production increased by 13%, and there was a 5% increase in average outstandings.
Operating costs amounted to EUR 818.3 million, up 4% on 2020 (EUR 784.2 million). This increase can primarily be explained by growth-enhancing measures, particularly in leasing, transformation investments and the increase in contributions to various mandatory funds. Excluding the contribution to mandatory funds, operating costs were up 3% compared with 2020.
Gross operating income (EUR 802.8 million) was down 1% versus 2020 (EUR 811.3 million). Excluding the capital gain on property sold in 2020, gross operating income increased 4%.
Cost of risk amounted to EUR 76.6 million, down 41% versus 2020 and 24% versus 2019. It was low compared with outstanding loans of EUR 37 billion (21 bps).
The share of the net profits of equity affiliates (i.e. the share of net profits of subsidiaries in which the bank does not have a majority shareholding), amounted to EUR 12.9 million, compared with EUR 11.9 million in 2020.
Group consolidated net profit was EUR 394.3 million, down 1% versus 2020 (EUR 398.3 million). Excluding the impact of capital gains on property sold in 2020, net profit rose by 7%. It increased 14% compared with 2019 (EUR 345 million).
At 31 December 2021, the balance sheet total stood at EUR 62.1 billion, up EUR 5.5 billion from 31 December 2020 (EUR 56.6 billion).
High solvency maintained
The solvency ratio was 23.5% (under Basel III rules), in line with 2020 and well above the regulatory minimum. With the Group’s share of regulatory capital amounting to EUR 6.4 billion, BGL BNP Paribas has a solid financial structure and is well placed to support the transformation and innovation of all of its clients.
Digital innovations in 2021
Major investments were made to enhance operational efficiency and improve the client experience:
- Since May 2021, video identification has been offered to retail clients by BGLBNP Paribas for online onboarding, which means that accounts can be opened remotely in less than 24 hours with no need for clients to attend branches in person for identification.
- The bank has also gradually set up electronic signatures, in partnership with LuxTrust, to enable its clients to submit their applications remotely, quickly, easily and securely.
- To facilitate communication between clients and the bank, regardless of their preferred channel, BGLBNP Paribas continues to expand the range of features it offers. For example, bank cards can now be activated via the Web Banking app, and card thresholds can be increased and online payments activated/deactivated.
- The bank has also introduced instant payments, making it possible to make instant transfers between BGLBNP Paribas accounts, as well as transfers to or from external institutions.
Sustainable finance and Corporate Social Responsibility at the heart of our actions
Faced with social, environmental and climate-related challenges, the principles of sustainable finance and corporate social responsibility play an essential role at every level of the bank’s activities.
The BNP Paribas Group has joined the Net Zero Banking Alliance, launched in April 2021 by the UN Environment Programme Finance Initiative (UNEP FI), and remains committed to combating climate change. This banking alliance is a decisive step in garnering support from the finance sector in favour of the climate.
BGL BNP Paribas is committed to supporting its clients’ ongoing transformation and projects, in particular by extending its product and service offering.
In 2021 the bank launched the green mobility loan, which is a low interest rate personal loan designed to finance the purchase of an electric or hybrid car and charging point.
Clients are increasingly concerned by the impact of their investments. BGL BNP Paribas offers them a wide range of socially responsible funds that have a positive impact on their areas of interest, such as water infrastructure or combating climate change.
From 7 to 11 June 2021, BGL BNP Paribas and BNP Paribas Asset Management invited all of the Group’s entities in Luxembourg to attend the “Green Week” organised by employees, for employees, to discuss various aspects of sustainable development and raise awareness on how to take action on a daily basis.
Launch of the 2022-2025 Strategic Plan
For a number of years, banks have been operating in an environment marked by rapidly changing client expectations and behaviours, increasingly strict regulations, historically low interest rates and competition from new players. The health crisis confirmed the need to step up investment in digitalisation and new technologies.
BGL BNP Paribas has therefore prepared an ambitious development plan, in keeping with the 2022-2025 Strategic Plan that the BNP Paribas Group presented in early 2022, and which focuses on three key priorities: Growth, Technology & Sustainability.
The BGL BNP Paribas 2022-2025 plan places its clients and employees at the heart of its development initiatives, which centre around three key areas:
- Modernised technological infrastructure, based on the Group’s technical and operational platforms, enabling overall performance to be improved.
- Simplified and more sustainable offerings, as well as a digitised end-to-end client experience.
- Greater balance between people and the digital world, thanks to solutions that enhance availability and increase access to expertise through new technologies.
To support these transformations, the bank is gradually deploying more agile ways of working. In agreement with social partners, it has developed remote working arrangements. The bank’s earning power made it possible to set up a participation bonus, as provided for by applicable statutory provisions. The implementation of the bank’s commitment to sustainable finance and corporate social responsibility will be stepped up.
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Béatrice Belorgey, Chair of the Executive Committee of BGL BNP Paribas and Country Head of the BNP Paribas Group in Luxembourg, said: “In a rapidly evolving environment, thanks to the commitment of our teams in supporting our clients, BGL BNP Paribas posted strong performance in 2021. I wish to thank our employees for their engagement, and our clients for their continued trust. The objective of our 2022-2025 strategic plan is to make our bank even more efficient and agile, so as to act in the best interests of our clients, employees and the Luxembourg economy as a trusted, long-term partner.”
BGL BNP Paribas’ annual report for the year ended 31 December 2021 is available in French at www.bgl.lu
- Assets under management of EUR 31.9 billion at end-2021 (+13.9%)
- Revenue of EUR 3.4 billion in 2021 (+92.9%)
- Net income[1] of EUR 50 million (+27.7%)
Cardif Lux Vie recorded solid results for 2021. Thanks to a diversified business model in terms of geography, solutions and distribution networks, the company continues to ramp up development of its activities and to invest on behalf of its clients and partners.
Cardif Lux Vie collected EUR 3.4 billion in premiums, representing a very substantial increase of 92.9% vs. 2020. Net inflows rose to over EUR 1.6 billion (of which 82.4% in units of account). The company generated net income1 of EUR 50.0 million (+27.7% vs. 2020). Assets under management increased and totalled EUR 31.9 billion (+13.9%)
In response to changing market requirements, Cardif Lux Vie has stepped up its transformation and is implementing major plans aimed at offering a new experience to clients and partners as well as speeding up the digitalisation process and enhancing operational efficiency.
Cardif Lux Vie has developed a responsible institutional investor policy in parallel, specifically by offering SRI-labelled units of account within its asset catalogues and by incorporating environmental, social and governance criteria into its strategies and investment processes within the General Fund.
Wealth Management
Cardif Lux Vie’s Wealth Management business posted a 98% year-on-year rise in revenue to EUR 3.3 billion, 71% of which is in units of account (UC).
In addition to a new service offering, 2021 was characterised in particular by an increased marketing effort; this was supported by concrete action on the digitalisation front, with fully virtual processes for partners in the e-Club platform. Business was also driven by the following developments in units of account: expanded distribution of the Specialised Insurance Fund and the External Funds range, creation of thematic Collective Internal Funds, and greater access to private equity.
Local market
Business in the Luxembourg residents market totalled EUR 169.3 million, which included EUR 74.8 million in inflows from retail clients.
In terms of distribution, business generated via brokerage networks grew 13%[2] while collaboration with the BGL BNP Paribas network was strengthened. Ongoing digitalisation of the distribution platform, as well as the full benefits of an automated, integrated operational model, should enable the company to develop new partnership-based opportunities going forward.
| “The results achieved by Cardif Lux Vie against a challenging backdrop in 2021 confirm the soundness of its business model. We achieved a successful transformation by developing a rejuvenated, enhanced proposition aimed at our partners and clients. Today we are fully committed to pursuing this approach of ongoing improvement, creating value for our stakeholders and generating lasting growth. The company will be able to count on drivers such as data utilisation and deployment of the API-sation of the IT system, with a view to strengthening our leading position and making Luxembourg life insurance more accessible across all markets,” commented Christian Gibot, CEO of Cardif Lux Vie.
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About Cardif Lux Vie
Cardif Lux Vie is a Luxembourg life insurance company positioned among the major players in the market. Committed to its clients, partners and employees, the company provides high-quality solutions and services that contribute to sustainable and responsible growth.
In Luxembourg and the Greater Luxembourg Region, Cardif Lux Vie provides bancassurance and brokerage networks with high-value-added life insurance savings, retirement and protection insurance solutions for private individuals and professionals.
For high net worth clients active internationally, the company develops bespoke and sustainable open-architecture offers through an extensive network of first-class partners. Harnessing a comprehensive range of wealth engineering tools, Cardif Lux Vie’s planning solutions support clients and partners over the long term.
Press contact Cardif Lux Vie
Emilie Sansonetti emilie.sansonetti@cardifluxvie.lu
Press contacts BGL BNP Paribas
Eliane Thines eliane.thines@bgl.lu
Emmanuelle Humann emmanuelle.humann@bgl.lu
[1] Net income after tax according to Luxembourg accounting standards, equivalent to pre-tax income of EUR 84.3 million under Group IFRS.
[2] Excludes Employee Benefits
As part of a joint initiative set up by BNP Paribas Asset Management and BGL BNP Paribas, a donation was presented to the non-profit organisation natur&ëmwelt on 12 January 2022 at the head office of BGL BNP Paribas.
Results as at 30 September 2021
Thanks to its Help2Help initiative, in 2021 the Group provided EUR 47,136 in support to 17 charitable projects
“Help2Help” is a cooperative programme through which the BNP Paribas Group in Luxembourg supports active and retired employees who volunteer their time to public interest projects. For its 12th edition, the Group provided EUR 47,136 in support to 17 charitable projects. The local and international initiatives provide assistance in a range of areas, such as education, healthcare, the environment and humanitarian aid.
This year, a EUR 2,500 prize (the “Prix Coup de Cœur”) was awarded to the Onco Gest association, which has developed an innovative, ecological and socially-minded concept by collecting and recycling products and accessories for use by cancer patients. The association is based in Lorraine and partners with a variety of associations in Luxembourg. It helps update play areas and waiting rooms in hospitals with recycled products and materials, and offers patients hair prostheses without advance payment.
Today, the Help2Help initiative provides support in around 30 countries where the BNP Paribas Group operates, and every year close to EUR 1 million is allocated to charitable projects around the world.
Béatrice Belorgey, Chair of the BGL BNP Paribas Executive Committee and Head of the BNP Paribas Group in Luxembourg, made the following comments: “Social inclusion and solidarity are core values at our bank and at the Group. It’s very encouraging to see that employee engagement hasn’t wavered – it’s actually increased – despite the challenging circumstances brought about by the health crisis in recent months.”
For more info visit: https://www.bgl.lu/en/help2help
In the first half of 2021, the bank continued to support its clients and to bolster the Luxembourg economy. Strong commercial momentum continued across all client segments.
In Retail and Corporate Banking, average loan outstandings were up 5% on the first half of 2020, boosted in particular by an increase in mortgages. Average deposit volumes grew by 9%[1], sustained primarily by inflows from corporate clients as well as by a rise in deposits from Retail Banking clients. In Wealth Management, thanks to dynamic growth, assets under management rose by 11% and average loan outstandings increased by 2%.
The bank continued to invest in improving the client experience to promote remote interactions especially and further pursued process industrialisation to enhance operational efficiency.
Since May, video identification has been offered by BGL BNP Paribas for online onboarding, which means that accounts can be opened remotely in less than 24 hours with no need for clients to attend branches in person for identification. 40% of digital onboarding is currently carried out via video identification. The bank has launched instant payments. As such, 85% of credit transfers between BGL BNP Paribas accounts and 10% of incoming external credit transfers are now credited instantly. Instant transfers will be rolled out to outgoing payments by the end of the year. The bank is also gradually setting up secure electronic signatures, in partnership with LuxTrust, to enable its clients to submit their applications remotely, quickly and easily.
To facilitate communication between clients and the bank, regardless of their chosen channel, BGL BNP Paribas continues to expand the range of features it offers them. For example, bank cards can now be activated via the Web Banking app, and card thresholds can be increased and online payments activated/deactivated. For Visa Debit cards, which clients can order themselves directly on their smartphone or through Web Banking, the percentage of digital sales stood at 36% at end-July 2021.
The bank also signed a partnership agreement with the Luxembourg branch of Wüstenrot Bausparkasse AG, a home-savings specialist authorised in Luxembourg. This new partnership expands BGL BNP Paribas’s mortgage range in order to meet clients’ needs.
In early 2021, BGL BNP Paribas launched, with BGL BNP Paribas Development, a new activity to help Luxembourg businesses by acquiring minority interests. Through direct investment in unlisted commercial, industrial or technological companies based in Luxembourg with turnover exceeding EUR 10 million, a profitable business and promising growth prospects, the bank intends to play a role in their organic and external growth plans, and to support them in business transfers.
At the 2021 Euromoney Awards for Excellence in July, Euromoney magazine named BGL BNP Paribas Best Bank in Luxembourg for the sixth year in a row. At the beginning of the year, during the Euromoney Private Banking Awards 2021, the bank won first place in the Best Private Banking Services Overall category, and ranked top in the ESG / Impact Investing category.
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Béatrice Belorgey, Chair of the Executive Committee of BGL BNP Paribas and Head of the BNP Paribas Group in Luxembourg said: “Our aim is to continue to be there for our clients as they carry out their projects and to support the Luxembourg economy. BGL BNP Paribas continues to mobilise resources to invest in digitising its processes and improving the client experience. In this context, we have achieved strong commercial momentum. I would like to thank our staff for their commitment, flexibility and capacity for change in this constantly evolving environment, and would also like to thank our clients for their trust. We remain firmly committed to supporting the Luxembourg economy and contributing to a sustainable recovery.”
[1] at constant scope
BGL BNP Paribas recently signed a partnership agreement with the Luxembourg branch of Wüstenrot Bausparkasse AG, a home-savings specialist authorised in Luxembourg.
Aimed at better meeting clients’ needs, this new partnership expands BGL BNP Paribas’ mortgage range. By signing up to a home-savings scheme, clients enjoy preferential terms for financing their future home or renovating their current dwelling.
Under certain conditions, the premiums and instalments paid in to a home-savings scheme are tax deductible: up to EUR 1,344 if the holder is aged 18 to 40 at the start of the year, and EUR 672 if the holder is over 40. These amounts may be increased according to the number of people in the household.
- Assets under management of EUR 28.0 billion at end-2020 (+0.4%)
- Revenue of EUR 1.8 billion in 2020 (-18%)
- Net income of EUR 39.1 million (+2.6%)
In conditions dominated by the health crisis, Cardif Lux Vie demonstrated the resilience of its business model, collecting EUR 1.8 billion in premiums (-18% vs. 2019). The company generated net income[1] of EUR 39.1 million (+2.6% vs. 2019). Assets under management were stable at EUR 28.0 billion (+0.4%).
Cardif Lux Vie worked hard throughout the year to support its clients and partners. A responsive, agile structure and widespread homeworking ensured business continuity.
Diversification of the business model in terms of regions, solutions and distribution channels allowed the company to sustain its momentum in 2020.
As an environmentally and socially aware insurer, the company also announced plans to accelerate the development of its responsible policy by investing an additional EUR 400 million in activities having a positive impact by the end of 2025.
Wealth Management
Cardif Lux Vie’s Wealth Management business posted revenue of nearly EUR 1.7 billion, 62% of which is in units of account (UC). The consequences of lockdowns and market volatility were visible early in the year, but the company performed well in the last quarter when it was able to take firm, bold steps to improve its offering (policies, investment vehicles, CSR approach) and customer service, both of which form the basis for strong development over the coming years.
Local market
With EUR 80.9 million in inflows on the local market despite a dip in the Investment Savings business (-44% vs. 2019) due to the difficulties arising from the health situation, Cardif Lux Vie recorded higher figures in Instalment Savings (+7%) and Retirement Savings (+3%) thanks to the resilience of the BNP Paribas Group’s bancassurance model, the alliance with the BGL BNP Paribas network and the development of Brokerage activities.
“In testing times, Cardif Lux Vie achieved respectable results in 2020 while constantly looking to protect its staff and maintain the level of service expected by its clients and partners. We went into 2021 and the next stage of our development with peace of mind, and the goal of being even more client-centric; of being a modern, innovative, responsible and committed company making insurance more accessible on all of the markets on which we operate,” comments Christian Gibot, CEO of Cardif Lux Vie.
| Key figures at 31/12/2020 | |
| Number of employees | 324 |
| Revenue | EUR 1.8 billion |
| Assets under management | EUR 28 billion |
| Net income1 | EUR 39.1 million |
About Cardif Lux Vie
Cardif Lux Vie is a Luxembourg life insurance company positioned among the major players in the segment. Committed to its clients, partners and employees, the company provides high-quality solutions and services that contribute to sustainable and responsible growth.
In Luxembourg and the Greater Luxembourg Region, Cardif Lux Vie provides bancassurance and brokerage networks with high-value-added life insurance savings, retirement and protection insurance solutions for private individuals and professionals.
For high net worth clients active internationally, the company develops bespoke and sustainable open-architecture offers through an extensive network of first-class partners. Harnessing a comprehensive range of wealth engineering tools, Cardif Lux Vie’s planning solutions support clients and partners over the long term.
[1] Net income after tax according to Luxembourg accounting standards, equivalent to pre-tax income of EUR 57.4 million under Group IFRS.
A year marked by the health crisis, support for the Luxembourg economy,
measures to help clients and highly resilient activity
The key event in 2020 was the unprecedented global health emergency. From the moment the crisis took hold, the bank took measures to protect its staff and clients, while ensuring business continuity and the proper functioning of the bank. The measures were continuously reviewed as the health crisis unfolded and the bank encouraged clients to use remote banking services for their day-to-day operations. Thanks to its omni-channel model, the bank was able to ensure service continuity for its clients during lockdown periods when branch access was limited, thus providing alternative channels for interactions with the bank, such as Web Banking, the mobile app and telephone banking. Client Service was expanded to meet clients’ increased demand for support through this channel. The teams pulled out all the stops to make sure they could be there for their clients and support them through this period of change.
Throughout the year, the bank stood alongside its clients and worked with them to offer responsiveness and pragmatism when assessing issues and finding appropriate solutions. Advisors showed great dedication to supporting clients, providing explanations and telling them about the various types of assistance available. BGL BNP Paribas thus actively played a part, alongside the Luxembourg government, in establishing moratoria and government-backed loans. At 31 December 2020, the bank had granted a total of 5,322 moratoria for operations in Luxembourg in order to help its clients with looming cashflow issues. It had also granted around one hundred government-backed loans.
From the outbreak of the health crisis, the bank introduced a number of community support initiatives. It provided 5,000 FFP2 masks and 30,000 surgical masks to the Ministry of Health and offered support to its neighbours, the Hôpitaux Robert Schuman, through a variety of means. As part of the BNP Paribas Group’s emergency support plan rolled out to the 30-plus countries in which it is located, a total donation of EUR 100,000 was made to the Hôpitaux Robert Schuman Foundation, Caritas Luxembourg and Stëmm vun der Strooss to support hospital staff and vulnerable communities. The bank also matched every employee donation to healthcare charities and organisations assisting vulnerable people and contributing to medical research in the Greater Region; EUR 45,000 was thus donated to a range of organisations. In the summer of 2020, it led the Solidarité Coronavirus initiative: every time a payment was made using a BGL BNP Paribas credit card, the bank contributed 10 cents to a fund. The funds raised meant a EUR 30,000 donation could be made to Caritas Luxembourg for its Corona-Helpline and to contribute towards the housing costs of around 100 clients facing financial difficulties as a result of the health crisis. More recently, following a joint initiative between BNP Paribas Asset Management and BGL BNP Paribas, a cheque for EUR 8,000 was awarded to Stëmm vun der Strooss to help finance a social and professional reintegration programme.
Heavily integrated in the real economy, with BGL BNP Paribas Development, BGL BNP Paribas is launching a new activity that will allow it to help Luxembourg businesses by acquiring minority interests. Through direct investment in unlisted commercial, industrial or technological companies based in Luxembourg with turnover exceeding EUR 10 million, a profitable business and promising growth prospects, the bank intends to play a role in their organic and external growth plans, and to support them in business transfers.
In November 2020, BGL BNP Paribas became a strategic partner of i-Hub. The bank’s partnership with i-Hub will enable it to offer its clients an innovative digital management and storage system for the data and ID documents they are required to provide in the context of their relationships with players in the finance sector. The proposed solution will ultimately provide every client with free access to a Centralised KYC Repository.
Financial statements at 31 December 2020
On 1 April 2021, the Ordinary General Meeting of Shareholders, chaired by Etienne Reuter, approved the consolidated financial statements of BGL BNP Paribas under IFRS at 31 December 2020.
At EUR 1,595.5 million, net banking income increased 5% on 2019 (EUR 1,515.1 million). This increase is due in particular to a sustained dynamic commercial environment in the various business areas, the great efforts of the bank’s client service teams in the face of the health emergency and lockdown, and a capital gain related to the sale of investment property. Excluding this capital gain from the property sale, net banking income was up 2.6%.
Retail and Corporate Banking recorded 8% growth in average loan outstandings, boosted by an increase in mortgages and capital investment loans. Average deposit volumes grew by 2%, with deposits from Retail Banking clients increasing in particular.
Wealth Management AUM rose by 2% because of excellent net inflows. Wealth Management’s average loan outstandings grew by 12%.
Leasing International’s business operations, for which new production took a sharp hit in the first half-year, benefited from a sharp upturn from June onwards, thus containing the drop in average loan outstandings to 3%. Leasing International continued to develop new types of services to support clients during this time.
Operating costs were well under control. They amounted to EUR 784.2 million, down 1% on 2019 (EUR 792.4 million).
Gross operating income, at EUR 811.3 million, was up 12% on 2019 (EUR 722.7 million).
Cost of risk amounted to EUR 129.7 million versus EUR 101.3 million in 2019. The collective provisions include an estimation of the expected losses on not impaired loans, assessed in light of the potential impact of the health crisis.
The share of the net profits of equity affiliates (i.e. the share of net profits of subsidiaries in which the bank does not have a majority shareholding), stood at EUR 11.9 million, compared with EUR 14.4 million in 2019.
Group consolidated net profit thus came to EUR 398.3 million, up 15% compared with 2019 (EUR 345.0 million). Excluding capital gains from property sales, net profit rose by 7%.
The balance sheet total was EUR 56.5 billion at 31 December 2020. It was stable relative to 31 December 2019 (EUR 56.6 billion).
High solvency maintained
The solvency ratio was 23.5% (under Basel III rules), which was well above the regulatory minimum. With the Group’s share of regulatory capital amounting to EUR 6.3 billion, BGL BNP Paribas is well placed to back its clients’ projects and investments.
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Béatrice Belorgey, Chair of the Executive Committee of BGL BNP Paribas and Country Head of the BNP Paribas Group in Luxembourg, said: “2020 was a challenging and difficult year in many respects. Our staff and clients have all done an outstanding job of adjusting to this new normal, and the bank’s results attest to the resilience of our operations. We are doing everything in our power to continue to help our clients through appropriate solutions, to support the Luxembourg economy and to contribute to a sustainable recovery.”
BGL BNP Paribas’ annual report for the year to 31 December 2020 is available in French at www.bgl.lu