2014 Financial information

Transcription

1 2014 Financial information

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3 Presence in 34 countries Covering over 100 markets 8,134 administered funds 62 million transactions processed USD 8,950 billion assets under custody USD 1,717 billion assets under administration 26 proprietary local custody and clearing branches 8,800 employees worldwide All figures as of 31 December 2014 BNP Paribas Securities Services provides integrated solutions for all investment cycle players. Sell-side. Investment banks, broker-dealers, banks and market infrastructures are offered customised solutions for all their needs. BNP Paribas provides an extensive product offering that includes execution services, derivatives clearing, local and global clearing, settlement and custody for all onshore and offshore asset classes worldwide, as well as outsourcing solutions for middle and back office activities. Buy-side. Institutional investors (asset managers, alternative fund managers, insurance companies, pension funds, fund distributors and promoters) have access to a broad range of services. These include global custody, depository bank and trustee services, transfer agency and fund distribution support, fund administration and middle office outsourcing, investment reporting, and risk and performance measurement. Issuers (originators, arrangers and corporates) are provided with a wide range of corporate trust solutions: securitisation and structured finance services, debt agency services, issuer advisory, stock option and employee stock plans, and shareholder services including the management of annual general meetings. Market and financing services are also available across all client categories and include securities lending and borrowing, foreign exchange management, credit and collateral management, order trading and cash financing.

4 BNP Paribas Securities Services in 2014 BNP Paribas Securities Services was one of the fastest-growing securities services providers in the world in 2014, illustrated by a 22% rise in assets under custody compared to Buoyant market trends aside, this increase in assets under custody and assets under administration is the fruit of new mandates won in 2013 and the integration of assets linked to the acquisition of the depositary banking activities of Commerzbank in October BNP Paribas Securities Services strategic expansion continued in 2014 with the acquisition of Banco Popular s depositary banking business in Spain, and the deployment of its own depository banking network in the Netherlands and Switzerland. Today, the bank s reinforced structure means it is perfectly placed to advise and assist institutional clients with the regulatory reforms brought about by the European Union s Alternative Investment Fund Managers Directive or AIFMD. The bank s landmark deals around the world included the EUR 180 billion pan-european mandate won in July 2014 from Generali appointing BNP Paribas Securities Services as global custodian for its assets and entrusting it with the administration of its funds in Germany, Italy, France and Luxembourg. Recognised for its international reach and expertise, the different projects developed by BNP Paribas Securities Services in 2014 make it even easier for clients to access the world s markets, and include a bespoke offer designed to support fund managers investing via the new Shanghai-Hong Kong "Stock Connect" programme. Today, BNP Paribas ranks number 5 in the world and number 1 in Europe in Securities Services. Furthermore, in order to cement its services offering for alternative investment funds and its fund administration franchise, BNP Paribas Securities Services also signed a memorandum of understanding for the acquisition of Crédit Suisse s Prime Fund Services activity, set to close in BNP Paribas Group Results The strength of the BNP Paribas Group s business model lies in the diversity of its geographical presence, client base and activities. In 2014, it was divided into three complementary business lines: Retail Banking, Corporate & Investment Banking (CIB), and Investment Solutions. BNP Paribas Securities Services was one of the businesses that made up the Investment Solutions division. There was revenue growth in all operating divisions, with strong performance of the specialised businesses with the exception of one-off items, revenues rose 3.2% vs Revenues of the operating divisions rose by 1.9% compared to 2013 (2) Retail Banking: +2.0% (3) Corporate & Investment Banking: +2.1% (2) Investment Solutions: +3.7% (3) The 2014 balance sheet was rock-solid, including Fully loaded Basel 3 common equity Tier 1 ratio of 10.3% (4) Fully loaded Basel 3 leverage ratio3 of 3.6% (5) A considerable liquidity reserve of EUR 291 billion, equivalent to over one year of room to manoeuvre in terms of wholesale funding In June 2014 the Group booked the impact of a comprehensive settlement with the U.S. authorities regarding the review of certain USD transactions which included the payment by BNP Paribas of a total of USD 8.97 billion in penalties, or EUR 6.6 billion. Excluding this and other one-off items, overall yearly performance was strong.

5 Changes to the organisational structure of the BNP Paribas Group On 18 November 2014, BNP Paribas announced a new name and governance for its CIB division: Corporate and Institutional Banking. The new CIB is centred on two client sectors, namely corporates and institutionals. In order to provide institutional clients with wider access to the best of BNP Paribas CIB s products and services, and to position the Bank as their strategic partner, BNP Paribas CIB has structured its solutions on the following pillars: A newly created Global Markets division which will provide an offer across all asset classes, building on global business lines, financing and prime services capabilities, and regional franchises. A solid presence in the regions will be essential to support BNP Paribas CIB s regional development plans. Financial Institutions Coverage will offer global coverage for all CIB and other Group businesses across all institutional client segments. BNP Paribas Securities Services will continue offering its current spectrum of solutions and will remain a separate legal entity, with its own commercial and operational autonomy. The organisation of the Group s operating divisions now centres on two entities: CIB and Retail Banking & Services. The latter in turn consists of Domestic Markets and a new entity, International Financial Services, which includes BancWest, Europe-Mediterranean, Personal Finance, Wealth and Asset Management and Insurance. Highlights 2014 AIFM: supporting institutional clients as they prepare for new oversight and transparency requirements Covering 12 European fund domiciles, BNP Paribas Securities Services is one of Europe s largest depositary banks with a robust infrastructure to help institutional clients prepare for a new regulatory landscape with the application of the AIFM Directive that requires greater transparency and security. The Bank s suite of AIFM-ready services provides clients on all markets with comprehensive solutions for fund distribution, asset valuation, cash monitoring and liquidity oversight. Target2-Securities: a firm commitment A major leap forward in European market infrastructure projects, the launch of the T2S technical platform designed to harmonise the cross-border settlement and delivery of securities in Europe is scheduled for June BNP Paribas Securities Services is officially committed to becoming a direct connected participant in the platform from the very first wave of migration. T2S is a crucial milestone in the implementation of a true single and integrated market for the eurozone. The bank, which currently covers 95% of trades on the main T2S markets, has developed an array of innovative and extremely flexible solutions to facilitate client access to the platform. Expanding global reach: focus on Latin America BNP Paribas Securities Services mostly notably expanded in Latin America throughout In particular it offers local and global custody to the Brazilian market, as well as a suite of value added services including investment reporting and depositary banking. Last year, the bank published an award-winning study, Building your gateway to Latin American investors, on the fund distribution opportunities in Latin American markets.

6 Regulating engagement BNP Paribas Securities Services representatives contribute to consultation papers for the European Commission and are regularly consulted by the press for expert commentary on regulatory issues related to the securities services industry. In addition, it shares its regulatory insight though a series of publications including guides, whitepapers and research reports. Supporting clients global ambitions To support clients global expansion, BNP Paribas Securities Services launched an integrated Stock Connect solution for UCITS funds in 2014, allowing support Luxembourg-based UCITS funds that wish to invest in Chinese A-shares via the Shanghai-Hong Kong Stock Connect programme. BNP Paribas integrated broker-custodian solution encompasses execution, clearing and custody services, allowing clients to make their investments in a seamless manner and addressing the risk faced by investors when transferring stocks from their custodian to their broker. Liquidity management To respond to considerable demand from clients to help them better manage and monitor their liquid assets, BNP Paribas Securities Services launched its Liquidity Access solution in September The launch came as new regulations, such as Basel III and Dodd Frank, required market participants to hold more liquid assets, closely monitor their liquidity ratios and anticipate the evolution of their liquidity positions. Liquidity Access is available to bank and broker clients of BNP Paribas Securities Services and is offered alongside their comprehensive global and local custody offering and a range of value added services. Reporting Many recent developments in regulations require clients to provide regulators with new reports. As a result, BNP Paribas Securities Services has expanded its capabilities to complement its range of services: EMIR trade reporting service; AIFMD regulatory reporting service that complementing the AIFMD offer across its pan-european network; and FATCA reporting services in relation to transfer agent services in 10 domiciles. Supporting transparency Our advanced Data Navigation Analysis (DNA) solution, designed to enhance access to information for financial organisations across the investment cycle, was extended to more clients last year. It now provides our lending clients with flexible oversight and control over their activities. DNA delivers an interactive function that enhances transparency and improves reporting through a consolidated view of securities lending programmes and high-end data on performance. Notes (1) Source: BNP Paribas Securities Services figures at 31 December 2014 for assets under custody; financial reporting for Top 10 competitors. (2) At constant scope and exchange rates, excluding one-off items (3) At constant scope and exchange rates (4) Ratio taking in account all the CRD4 rules with no transitory provisions (5) Ratio taking in account all the CRD4 rules with no transitory provisions, calculated according to the delegated act of the Europe Commission dated 10 October 2014

7 Awards for excellence Custody Risk European Awards 2014 Securities Services Provider of the Year European Custodian of the Year Custodian of the Year France Investment Week Fund Services Awards 2014 Best Fund Services solution Best Thought Leadership Paper: Building your gateway to Latin American investors Best Compliance and Regulatory Solution Global Investor/ISF Sub-Custody Survey st place ranking in 19 markets Asia Asset Management s Best of the Best Awards 2014 Best Specialist Custodian in Asia Pacific Global Custodian Agent Banks in Major Markets Survey 2014 Highest local market scores: Austria, Australia, Hong Kong and Singapore Above average scores across 6 categories in Belgium, France, Germany, Greece, Ireland, Italy, the Netherlands, Spain, Switzerland and the United Kingdom Global Custodian Agent Bank in Emerging Markets survey 2014 Top market scores in Brazil, Hungary, Morocco, Poland and Turkey Wall Street Letter 2014 Institutional Trading Awards Best Broker Dealer Client Service Jacques d Estais Chairman of the supervisory board BNP Paribas Securities Services Member of the executive committee BNP Paribas Patrick Colle General manager BNP Paribas Securities Services

8 BNP Paribas Group Financial Statements Consolidated balance sheet Assets In millions of euros Cash and amounts due from central banks Financial instruments at fair value through profit or loss Derivatives used for hedging purposes Available-for-sale financial assets Loans and receivables due from credit institutions Loans and receivables due from customers Remeasurement adjustment on interest-rate risk hedged portfolios Held-to-maturity financial assets Current and deferred tax assets Accrued income and other assets Differed investment to benefits 0 0 Equity-method investments Investment property Property, plant and equipment Intangible assets Goodwill Total Assets Liabilities and shareholders equity In millions of euros Due to central banks and post office banks Financial instruments at fair value through profit or loss Derivatives used for hedging purposes Due to credit institutions Due to customers Debt securities Remeasurements adjustment on interest-rate risk hedged portfolios Current and deferred tax liabilities Accrued expenses and other liabilities Technical reserves of insurance companies Provisions for contingencies and charges Subordinated debt Total liabilities Share capital, additional paid-in capital and retained earnings Net income for the period attributable to shareholders Changes in assets and liabilities recognised directly in equity Shareholders equity Minority interests Total consolidated equity Total Liabilities and shareholders equity Restated according to IFRS 10 & 11 and the amendment to IAS 32

9 BNP Paribas Group Financial Statements Consolidated profit and loss account In millions of euros Net interest income Net commission income Net gain/loss on financial instruments at fair value through profit or loss Net gain/loss on available-for-sale financial assets and other financial assets not measured at fair value Net Income from other activities Net banking income Operating expense Depreciation, amortisation and impairment of property, plant and equipment and intangible assets Gross operating income Cost of risk Cost related to the comprehensive settlement with US authorities Operating income Share of earnings of equity-method entities Net gain/loss on non-current assets Change in value of goodwill Pre-tax net income Corporate income tax Net income Net income attributable to minority interests Net income attributable to equity holders Restated according to IFRS 10 & 11 and the amendment to IAS 32 Long-term credit ratings BNP Paribas Standard & Poor s A+ Negative outlook Moody s A1 Negative outlook Fitch A+ Stable outlook Long-term credit ratings BNP Paribas Securities Services Standard & Poor s A+ Negative outlook Moody s A1 Negative outlook Fitch A+ Stable outlook All figures as of 31 December 2014

10 BNP Paribas Securities Services Financial Statements Statutory balance sheet Assets In millions of euros Cash and amounts due from central banks and post office banks Treasury bills and money-market instruments Due from credit institutions Customer items Bonds and other fixed-income securities Equities and other variable-income securities Investment in undertakings and other participating interests and equities securities held for long-term investment Tangible and intangible assets and goodwill Accrued income and other assets Total Assets Liabilities and shareholders equity In millions of euros Due to to central banks and post office banks 1 2 Due to credit institutions Customer items Other liabilities Accrued expenses and other adjustments Provisions for contingencies and charges Subordinated debts 200 Shareholders equity Raised capital Premium Reserves Retained earnings 0 0 Net income Total liabilities and shareholders equity Notes BNP Paribas Securities Services has a French banking license and is therefore regulated by banking authorities in Europe and France. Thanks to its legal form ( Société en Commandite par Actions (SCA) or partnership limited by shares), the parent company is indefinitely liable for the debts of the company through its own assets. Moreover pursuant to French Banking Law (Article L511-42), it must be noted that BNP Paribas may be invited by the Banque de France to bring support to its subsidiary, if deemed necessary. The Fund Administration business carried out by BNP Paribas Fund Services companies form part of the Securities Services business line but does not impact BNP Paribas Securities Services statutory financial statements. These companies are subsidiaries (not branches) of BNP Paribas Securities Services and it should be noted that BNP Paribas Securities Services does not produce consolidated financial statements. It should also be noted that BNP Paribas Fund Services France is a subsidiary of BNP Paribas SA. The statutory accounts of BNP Paribas Securities Services are prepared in accordance with applicable regulations in France for a non-listed company (French GAAP). Since the implementation of IFRS norms in 2005, the bank continues to harmonise its statutory accounts with international norms wherever consistent with French regulations.

11 BNP Paribas Securities Services Financial Statements Statutory Profit and Loss Account In millions of euros Net interest income Net commissions income Net other banking income Net banking income General operating expenses Depreciation, amortisation and provisions on tangible and intangible assets and goodwill Gross operating income Cost of risk 0 0 Operating income Gain (losses) on disposals of long term investments and changes in provisions Goodwill amortisation 0 0 Net non recurring items 0 0 Net income before tax Income tax Net income Notes for the BNP Paribas Securities Services statutory balance sheet It is to be noted that comparability of balance sheet is partially impacted following acquisitions made in Due from/to credit institutions items amount to EUR million (on the asset side) and EUR million (on the liability side) of which main part are transactions with the BNP Paribas Group. Remaining balances on the asset side are securities received under resale agreements and on the liability side securities given under repurchase agreement. Customer items are mainly short-term overdrafts granted to selected clients, essentially institutional investors, for which BNP Paribas Securities Services applies strict credit requirements. Bonds and other fixed-income securities, Equities and other variable-income securities mainly include EUR million related to the Securities Lending and Borrowing transactions that accounting rules requires to report as such. The associated debt is accounted for on the liability side as debt on borrowed securities under other liabilities. Tangible and intangible assets and goodwill include mainly goodwill for a total of EUR 460 million related to acquisitions and legal restructuring made over the past years. The remainder is mainly information technology investments. Accrued income and other assets on the asset side and Accrued expenses and other adjustments on the liability side amount to EUR million and EUR million respectively, and include for EUR million of cash collateral related to securities lending and borrowing transactions as well as derivatives clearing activity on the asset side and cash deposits on the liability side. Provisions for contingencies and charges amount to EUR 111 million of which 44 million relate to pension liabilities. Notes for the BNP Paribas Securities Services profit and loss account In 2014, BNP Paribas Securities Services has seen a significant growth of its activity explained by stock markets re-bounce and strong commercial momentum. Consequently, assets under custody have increased by 22% compared with 2013 and assets under management have grown by more than 30%. Also, due to a higher volatility on the financial markets, the level of transactions settled in 2014 has increased by 17% compared to On the other hand, despite a decrease during the second half of 2014, interest rates have shown a favourable trend over the whole year compared to Consequently, Net banking income shows a 12% increase. Net commissions income, the major source of revenue, is driven mainly by the number of transactions settled and the value of assets held in custody and administration. Fees and commissions paid include mainly the fees and commissions paid to sub-custodians and central depositories. General operating expenses show a 10% increase versus 2013, driven mainly by investments to support business development as well as the consolidation within BNP Paribas Securities Services statutory accounts of the activities acquired in Depreciation, amortisation and provisions on tangible and intangible assets and goodwill EUR 28.9 million amortisation of goodwill related to acquisitions and internal legal restructuring made over the past years, mainly in Germany, Spain, Italy, France and the United Kingdom as well as amortisation related to other tangible and intangible assets. Income tax amounts to EUR 104 million, representing an effective income tax rate of 41%. Consequently, net income shows a 47% increase.

12 BNP Paribas Securities Services business organisation as at 31 December 2014 Business carried out via branches Business carried out via subsidiaries Business carried out via joint-ventures Australia Austria (1) Belgium Cyprus (2) Germany Greece Guernsey Hong Kong Hungary Ireland Italy Jersey Luxembourg Netherlands Poland Portugal Singapore Spain Sweden (3) Switzerland United Kingdom BNP Paribas Fund Services Espana S.L. BNP Paribas Fund Services Australasia Pty Ltd BNP Paribas Fund Services Australia Pty Ltd New Zealand Branch BNP Paribas Fund Services Dublin Ltd BNP Paribas Trust Corporation UK Ltd France Titrisation S.A.S. BNP Paribas Bank & Trust Cayman Ltd BNP Paribas Trust Services Singapore Ltd BNP Paribas Securities Services Trust Company (Jersey) Ltd BNP Paribas Trust Services Hong Kong Ltd BNP Paribas Dealing Services BNP Paribas Dealing Services UK Branch BNP Paribas Dealing Services Asia Ltd BNP Paribas Securities Services Sociedad Fiduciaria S.A. BNP Paribas Sundaram Global Securities Operations Private Ltd (4) Sundaram BNP Paribas Funds Services Ltd (5) Notes (1) Business operated remotely from Frankfurt (2) Business operated remotely from Athens (3) Business operated remotely from London (4) BNP Paribas Securities Services share of equity: 51% (5) BNP Paribas Securities Services share of equity: 49% (6) BNP Paribas share of equity: 66%

13 Business carried out via BNP Paribas subsidiaries or affiliates Business carried out via BNP Paribas branches BNP Paribas Fund Services France BNP Paribas Financial Services LLC BMCI (Morocco) BNP Paribas Brazil BNP Paribas (China) Ltd TEB Bank (Turkey) India Japan United Kingdom United States SLIB SA (6) Stichting Bewaarder BNP Paribas Beleggingsfondsen NL BNP Paribas Securities Corporation BNP Paribas Prime Brokerage Inc.

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15 Australia Austria Bahrain Belgium Brazil Cayman Islands Chile China Colombia France Germany Greece Guernsey Hong Kong Hungary India Ireland Italy Ivory Coast Japan Jersey Luxembourg Morocco Netherlands New Zealand Poland Portugal Singapore Spain Sweden Switzerland Turkey United Kingdom USA BNP Paribas Securities Services 9 rue du Débarcadère Pantin France BNPParibasSecurities +33(0) BNP Paribas Securities Services The information contained within this document ( information ) is believed to be reliable but BNP Paribas Securities Services does not warrant its completeness or accuracy. Opinions and estimates contained herein constitute BNP Paribas Securities Services judgment and are subject to change without notice. BNP Paribas Securities Services and its subsidiaries shall not be liable for any errors, omissions or opinions contained within this document. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. For the avoidance of doubt, any information contained within this document will not form an agreement between parties. Additional information is available on request. BNP Paribas Securities Services is incorporated in France as a Partnership Limited by Shares and is authorised and supervised by the ACPR (Autorité de Contrôle Prudentiel et de Résolution ) and the AMF (Autorité des Marchés Financiers). BNP Paribas Securities Services, London branch is authorised by the ACPR, the AMF and the Prudential Regulation Authority and is subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority and regulation by the Financial Conduct Authority are available from us on request. BNP Paribas Securities Services, London branch is a member of the London Stock Exchange. BNP Paribas Trust Corporation UK Limited (a wholly owned subsidiary of BNP Paribas Securities Services), incorporated in the UK is authorised and regulated by the Financial Conduct Authority. In the U.S., BNP Paribas Securities Services is a business line of BNP Paribas which is incorporated in France with limited liability. Services provided under this business line, including the services described in this document, if offered in the U.S., are offered through BNP Paribas, New York Branch (which is duly authorized and licensed by the State of New York Department of Financial Services); if a securities product, through BNP Paribas Securities Corp. or BNP Paribas Prime Brokerage, Inc., each of which is a broker-dealer registered with the Securities and Exchange Commission and a member of SIPC and the Financial Industry Regulatory Authority; or if a futures product through BNP Paribas Securities Corp., a Futures Commission Merchant registered with the Commodities Futures Trading Commission and a member of the National Futures Association. Printed on recycled paper with vegetable inks Designed by the graphics department, corporate communications, BNP Paribas Securities Services U_Financial_BR_EN

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