Lyonnais Contender BNP Paribas Down 10 Per Cent In 2002

BNP Paribas published its results for 2002 today. Pleading in mitigation the difficult external environment, chairman Michel Pebereau argued that a 10.4 per cent fall in revenue, was a good result under the circumstances. BNP Paribas Group's net banking income

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BNP Paribas published its results for 2002 today. Pleading in mitigation the difficult external environment, chairman Michel Pebereau argued that a 10.4 per cent fall in revenue, was a good result under the circumstances.

BNP Paribas Group’s net banking income fell 3.8% to 16,793 million euros (-4.1% at constant scope and exchange rates). This decline was due mainly to the weak financial markets, which had a negative impact on trading revenues (-21.2% at 2,550 million euros).

Operating expenses and depreciation were virtually stable (+0.2%) at 10,955 million euros. At constant scope and exchange rates, they were down 0.5% due mainly to declines in variable fees in the business lines involved in financial markets, and a good control of retail banking expenses.

Gross operating income fell 10.4% to 5,838 million euros (-10.1% at constant scope and exchange rates). The cost/income ratio came to 65.2% (+2.5 points). Provisions rose 12% to 1,470 million euros, mainly due to increased provisions for corporate and investment banking in the US. Operating income thus totalled 4,368 million euros (-16.1%).

Capital gains from the Group’s share portfolio totalled 903 million euros, down only 19.7% despite the sharp downturn in the stock market, due to the fact that the Group’s private equity portfolio held up well.

Acquisitions completed at the end of 2001, and throughout 2002, practically doubled the goodwill, which soared from 188 to 366 million euros. In total, non-operating items, 445 million euros positive, were down 56.7% compared to 2001.

The purchase of 100% of BancWest, completed at the end of 2001, cut minority interests to 343 million euros (-13.6%) despite the increased weight of payments on preferred share issued to consolidate the Group’s equity. The tax burden, which reflects a cut in the tax rate in certain countries where the Group is present and a tax carry-back in the US, fell 35.3% to 1,175 million euros.

Net income, group share, thus totalled 3,295 million euros (-18%), with 13.5% return on equity for the period (compared to 18.2% in 2001) after amortisation of the goodwill and 14.8% (compared to 18.9% in 2001) before this.

During the course of 2002, the Group acquired the United California Bank (2.4 billion euros), Consors (0.5 billion euros), Cogent (0.4 billion euros) and Facet (0.9 billion euros) and thereby consolidated its competitive positions and its growth capacity, in particular in retail banking. The solid balance sheet was further strengthened. The Cooke ratio (tier 1) reached 8.1% as of 31 December 2002 (compared to 7.3% as of 31 December 2001) and the total ratio 10.9% (compared to 10.6%).

In addition to continuing share buybacks in order to neutralise the effect of share issues for employees, the Group will continue in 2003 its share buyback programme to the extent possible while sticking to its capital adequacy ratio targets and adhering to its opportunistic and controlled acquisition strategy.

The decisions regarding the 16.2% holding in Crdit Lyonnais, acquired for an average share price of 54.7 euros, will be taken at the appropriate time “in observance of the Group’s financial discipline.”

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