NBI increased for the seventh consecutive year in a difficult environment for commercial banking

BRED’s consolidated net banking income has increased for the seventh consecutive year, rising 5.1%* to €1.252bn.

The figure confirms the relevance of the banking without distance strategy implemented in 2012 and the determination to harness digital technology to enhance human relations by providing added-value advice.

• In 2019, in a persistent low-interest-rate environment, Commercial Banking France posted very good results, with NBI up 5%. This growth can be attributed to the sharp rise in the interest margin (+6.7%) stemming from an increase in outstandings and to growth in the overall business and retail banking net fees, which increased 2.6%, while applying measures to protect vulnerable customers. The BRED network posted robust commercial performances with over 73,500 new business relationships, a 14% increase in outstanding loans and a 14% rise in deposits compared with 2018.
• The International and Overseas Territories Banking division posted a 16% increase in NBI. It benefited from strong growth in Cambodia and excellent performances in international trade financing in Geneva.
• The Capital Markets business achieved NBI growth of 15%, reflecting the continued strengthening of BRED’s position as a supplier of liquidity and investment solutions to large institutional clients.
• The Investment Activities business contracted 19% following an exceptional year in 2018 for the private equity portfolio.

Expenses serving the growth strategy

• “Addressable” operating expenses (on a like-for-like basis, excluding the contribution to the Single Resolution Fund, the BPCE contribution, provisions for profit-sharing and incentives, and conversion costs) rose 3.6%, reflecting decisions in favour of investments in technology, the modernisation of the network, advisor training and international development.
• The cost-to-income ratio (all expenses included) stabilised at 60.2%. It has decreased steadily between 2012 and 2019, from 67.2% to 60.2%.
• The cost of risk came out at €80m, down 27% owing to the near absence of provisioning on performing loans.

BRED Group posted its highest net income ever in 2019, up 11%

The capital adequacy and liquidity ratios are at very comfortable levels.

Book value of capital amounts totalled €4.9bn, up 11% year-on-year thanks to an excellent net income figure and to a capital increase of €180m to cooperative members. The CET1 capital adequacy ratio stands at a solid 16.2% and the overall ratio at 16.35%.

The LCR liquidity ratio amounted to 152% on 31 December 2019, for a regulatory minimum requirement of 100%.