Net banking income remains high at EUR 1,345.3 million

• Luxembourg Retail and Corporate Banking recorded significant growth in average deposits of 15%. Average loan outstandings grew by 7%, demonstrating the Bank’s commitment to supporting the financing of the Luxembourg economy
• Wealth Management maintained healthy inflows, reporting 9% growth in assets under management and 28% growth in average loan outstandings
• Leasing International continued to expand its business with average sums outstanding rising by 7%

Overheads of EUR 683.5 million

• The Bank continues to invest in strategic projects dedicated to commercial development and in the expansion of the digital offer for clients

Consolidated net profit excluding minority interests came to EUR 365.8 million

High solvency maintained

• Own funds amounted to EUR 5.7 billion
• The solvency ratio was 22.5% (under Basel III rules), well above the regulatory minimum

On 5 April 2018, the Ordinary General Meeting of Shareholders, chaired by Etienne Reuter, approved the consolidated financial statements of BGL BNP Paribas under IFRS at 31 December 2017.

Net banking income performed well and reached EUR 1,345.3 million, close to the level achieved in 2016 (EUR 1,352.2 million). While weighed down by low interest rates, it was spurred on by very strong commercial activity in the various business areas.

Luxembourg Retail and Corporate Banking recorded growth in average loan outstandings of 7%, which was boosted by an increase in retail loans – mortgages in particular – and loans to companies. Average deposit volumes grew by 15%, in the wake of excellent inflows from corporate clients associated with the development of international cash management services and an increase in deposits from retail clients.

Wealth Management posted growth of 9% in assets under management. All segments are showing improvement in terms of net capital inflow. On a regional level, the European markets as well as those in the Middle East and Latin America recorded the strongest net capital inflows.

Thanks to a flexible, bespoke range of financing solutions, Wealth Management’s average loan outstandings continued to grow in 2017 (+28%). Advisory and discretionary management solutions also made good progress.

The Bank took advantage of its status as a member of the international BNP Paribas Group to offer a comprehensive range of products and services to its institutional investor clients through its Corporate and Institutional Banking business line. Driven by the strong performance and momentum of the financing business lines, profits on activities were in line with targets.

Leasing International’s business operations, which are benefiting from strong commercial development in strategic sectors and regions, recorded healthy growth in average sums outstanding of 7%. The results reported for Leasing International’s business operations drew strength from favourable financing conditions, allowing margin levels to be consolidated and interest income to grow by 3%.

Overheads amounted to EUR 683.5 million and recorded a 3% rise on 2016 (EUR 664.7 million), resulting from investment in strategic projects dedicated to commercial development and the provision of digital solutions to clients.

Cost of risk was down on 2016 (EUR 52.6 million) and stood at EUR 35.5 million, which is extremely low for around EUR 29 billion in sums outstanding.

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 23.1 million, compared with EUR 22.7 million in 2016.

Other non-operating profits stood at EUR 5.3 million and essentially came from the sale of a building for a capital gain of EUR 4.7 million.

Consolidated net profit excluding minority interests amounted to EUR 365.8 million in 2017, down 9% on 2016 (EUR 403.2 million), a year that had been affected by non-recurring items.

At 31 December 2017, the balance sheet total stood at EUR 49.6 billion, which was 10% higher than at 31 December 2016 (EUR 45.0 billion).

High solvency maintained

The Bank’s solvency ratio was 22.5% (under Basel III rules), well above the regulatory minimum. With the Group’s share of regulatory capital amounting to EUR 5.7 billion, BGL BNP Paribas is well placed to back its clients’ projects and investments.

Innovation and digitisation for the bank’s clients

In 2017, BGL BNP Paribas continued to develop its digital and mobile services as part of an omnichannel approach. This enables clients to interact with the Bank wherever they are via the channel that suits them best.

Web Banking thus underwent a complete redesign and was enhanced with new features. The new website offers smoother and more intuitive browsing, and a display adapted to smartphones and tablets. The new features notably include an improved version of the personal loan simulator, the possibility to run advanced searches on account movements and even the option for users to independently increase credit card limits using either Web Banking or the mobile app.

The bank is focusing on client journey optimization in order to offer a seamless, straightforward and efficient experience for retail and professional clients alike. For example, when it first took part in the BNP Paribas International Hackathon in 2017, the Bank initiated a project to considerably reduce the time it takes to open accounts for professional clients. Developed together with the start-up Tetrao, this solution was awarded first prize for client experience at the final of the BNP Paribas International Hackathon on 1 December 2017 in Paris.

However, innovation does not end with the client experience; it also involves current and future employees. A new welcome and induction programme for new starters was thus put in place in 2017, supported by the launch of the “Wëllkomm App” and facilitating new employees’ arrival at the company. In addition, a new HR portal called “About Me” makes it possible to support staff in managing their careers and development.

Deep involvement in the social and economic life of the country

In 2017, the Bank continued to develop its partnership with the European Investment Bank (EIB) for small, medium and intermediate-sized enterprises, in order to facilitate their development and continue to play an active role in supporting the financing of the Luxembourg economy.

5 April 2017 saw the official launch of Microlux, the first microfinance institution active in Luxembourg and the Greater Region, and in which BGL BNP Paribas is involved alongside ADA (Appui au Développement Autonome – Support for Autonomous Development), ADIE (Association pour le droit à l’initiative économique – Association for the Right to Economic Initiative) and the EIF (European Investment Fund). Microlux offers loans to individual clients or social enterprises unable to access ‘traditional’ bank loans.

With a view to supporting the work of Luxembourg dairy producers in supplying and promoting fair-trade milk, the Bank has renewed its partnership with Fairkoperativ Lëtzebuerg for another three years, remaining the lead partner in the “D’fair Mëllech” initiative.

As a responsible player, BGL BNP Paribas has reaffirmed its commitment to corporate responsibility and the sporting, cultural and social life of Luxembourg in 2017. The Bank thus extended its partnership with the Luxembourg Football Federation by three years. Furthermore,  as lead partner to the Luxembourg Olympic and Sporting Committee, the Bank attended the Games of the Small States of Europe, held from 28 May to 4 June 2017 in San Marino.

At a social level, the Bank continued its work in 2017 to support numerous associations and charitable projects and to encourage staff to get involved in public interest initiatives.

Recognised and valued performance

The magazine Euromoney named BGL BNP Paribas “Best Bank in Luxembourg” for the second consecutive year in 2017, celebrating the Bank’s excellent financial results in particular, as well as its commitment to the field of corporate financing.

The Bank’s support for companies was also recognised by Global Finance, which selected BGL BNP Paribas as the “Best Trade Finance Provider 2018” in Luxembourg.

In the area of Human Resources and for the third year running, the BNP Paribas Group in Luxembourg received the prestigious “Top Employer Luxembourg” award in 2018, reflecting the excellent working conditions provided for its staff.

Finally, the Group aimed for and was awarded triple environmental certification at European level (DGNB in Germany, BREEAM in the UK and HQE in France) for the new BNP Paribas buildings in Kirchberg. When designing the project, particularly close attention was paid to ecologically responsible technologies and minimising consumption of energy and natural resources.

Growing activities

On 20 February 2018, BGL BNP Paribas and ABN AMRO Bank N.V. announced that they had signed an agreement concerning the acquisition, by BGL BNP Paribas, of all the outstanding shares in ABN AMRO Bank (Luxembourg) S.A. and of its fully owned subsidiary ABN AMRO Life S.A. Under this agreement, the activities of ABN AMRO Life S.A. will be taken over by Cardif Lux Vie.

This acquisition seeks to reinforce the key positions that the BNP Paribas Group in Luxembourg holds in the private banking and insurance markets. The Bank strives to play an active and responsible role in the consolidation process that is currently taking place in this sector. The proposed transaction, which is still subject to regulatory approval, should be finalised by the third quarter of 2018.

BGL BNP Paribas’ Annual Report for the year to 31 December 2017 is available in French at www.bgl.lu