2007 REGISTRATION DOCUMENT
2007 REGISTRATION DOCUMENT 2007 REGISTRATION DOCUMENT
4 Balance2007 REVIEW OF OPERATIONSsheetHELD-TO-MATURITY FINANCIAL ASSETSHeld-to-maturity financial assets are investments with fixed ordeterminable payments and fixed maturity that the Group has theintention and the ability to hold until maturity. They are recorded in thebalance sheet at amortised cost using the effective interest method.Held-to-maturity financial assets break down into two categories withinthe balance sheet: negotiable certificates of deposit and bonds.Total held-to-maturity financial assets remained fairly stable, atEUR 14.8 billion at 31 December 2007 versus EUR 15.1 billion one yearearlier.< Contents >ACCRUED INCOME AND OTHER ASSETSAccrued income and other assets consist of guarantee deposits andguarantees paid; settlement accounts related to securities transactions;collection accounts; reinsurers’ share of technical reserves; accruedincome and prepaid expenses; and other debtors and miscellaneousassets.Accrued income and other assets fell 9.4% year-on-year, toEUR 60.6 billion at 31 December 2007 from EUR 66.9 billion at end-2006. This decrease was mainly driven by a 35.5% fall in guaranteedeposits and guarantees paid, partially offset by a 14.3% rise in otherdebtors and miscellaneous assets.12LIABILITIES (E XCLUDING S HAREHOLDERS’ E QUITY)3OVERVIEWAt 31 December 2007, the Group’s consolidated liabilities (excludingshareholders’ equity) totalled EUR 1,635.1 billion, up 18.0% fromEUR 1,385.5 billion at 31 December 2006. The main components of theGroup’s liabilities were financial liabilities at fair value through profitor loss, amounts due to credit institutions, amounts due to customers,debt securities, accrued expenses and other liabilities, and technicalreserves of insurance companies, which together accounted for 98.2%of total liabilities (excluding shareholders’ equity). The 18.0% year-onyearincrease was driven by a rise of 21.9% in financial liabilities at fairvalue through profit or loss, 16.1% in amounts due to customers, 18.5%in amounts due to credit institutions, and 16.0% in debt securities. A7.2% rise in technical reserves of insurance companies and a 9.6% risein accrued expenses and other liabilities also contributed to the increasein total liabilities (excluding shareholders’ equity).FINANCIAL LIABILITIES AT FAIR VALUETHROUGH PROFIT OR LOSSThis item includes trading book liabilities such as securities borrowingtransactions, short selling transactions and repurchase agreements. Italso includes derivatives and financial liabilities accounted for using thefair value option through profit or loss. Liabilities accounted for underthe fair value option consist mainly of structured products where the riskexposure is managed in combination with the hedging strategy. Thesetypes of products contain significant embedded derivatives, changesin the value of which are cancelled out by changes in the value of thehedging instrument.Total financial liabilities at fair value through profit or loss advanced21.9% year-on-year, from EUR 653.3 billion at 31 December 2006 toEUR 796.1 billion at 31 December 2007. The increase reflects a rise of23.5% in repurchase agreements (EUR 357.8 billion at 31 December2007), 32.7% in trading book derivatives (EUR 244.5 billion at31 December 2007) and 33.8% in debt securities (EUR 74.0 billion at31 December 2007). These movements were partially offset by a 2.4% fallin securities borrowing and short selling transactions, to EUR 116.1 billionat 31 December 2007.AMOUNTS DUE TO CREDIT INSTITUTIONSAmounts due to credit institutions consist of borrowings, and to a lesserextent demand deposits and repurchase agreements.Amounts due to credit institutions climbed 18.5% year-on-year,to EUR 170.2 billion at 31 December 2007 (EUR 143.7 billion at31 December 2006). This increase is mainly attributable to the 19.3%surge in borrowings and repurchase agreements, which totalledEUR 162.0 billion at end-2007.AMOUNTS DUE TO CUSTOMERSAmounts due to customers consist of demand deposits, term accountsand regulated savings accounts, and to a lesser extent retail certificatesof deposit and repurchase agreements.Amounts due to customers totalled EUR 346.7 billion at 31 December2007, an increase of 16.1% compared with the year-earlier figure(EUR 298.7 billion). This reflects the combined impact of a 29.6% jumpin term accounts to EUR 130.9 billion at 31 December 2007, and a 12.2%rise in demand deposits to EUR 159.8 billion at the same date, fuelledchiefly by organic growth.DEBT SECURITIESThis line item consists of negotiable certificates of deposit and bondissues. It does not include debt securities classified as “financial liabilitiesat fair value through profit or loss” (see note 5.a to the consolidatedfinancial statements).Debt securities advanced 16.0%, from EUR 121.6 billion at end-2006to EUR 141.1 billion at end-2007. The increase was chiefly powered bythe rise in negotiable debt securities (up 24.6% to EUR 106.4 billion at31 December 2007), partially offset by a fall in bond issues (down 4.2%to EUR 34.7 billion at 31 December 2007).SUBORDINATED DEBTSubordinated debt edged up 3.8%, to EUR 18.6 billion at 31 December2007 from EUR 18.0 billion a year earlier. The increase mainly reflects the6.2% rise in issues of redeemable subordinated debt to EUR 17.4 billionat 31 December 2007.4567891011982007 Registration document - BNP PARIBAS
2007 REVIEW OF OPERATIONSBalance sheet 4TECHNICAL RESERVES OF INSURANCECOMPANIESTechnical reserves of insurance companies moved up 7.2% toEUR 93.3 billion at 31 December 2007 from EUR 87.0 billion at end-2006. The increase was primarily attributable to a rise in technicalreserves linked to the life insurance business, which enjoyed strongorganic growth.ACCRUED EXPENSES AND OTHER LIABILITIESAccrued expenses and other liabilities consist of guarantee depositsreceived, settlement accounts related to securities transactions, collectionaccounts, accrued expenses and deferred income, and other creditorsand miscellaneous liabilities.Accrued expenses and other liabilities advanced 9.6%, fromEUR 53.7 billion at 31 December 2006 to EUR 58.8 billion at 31 December2007. This increase was powered mainly by advances in guaranteedeposits received (up 36.6% to EUR 16.8 billion at end-2007), accruedexpenses and deferred income (up 50.2% to EUR 5.5 billion at end-2007)and settlement accounts related to securities transactions (up 6.8%to EUR 23.2 billion at end-2007), partially offset by the fall in othercreditors and miscellaneous liabilities (down 16.6% to EUR 12.9 billionat end-2007).MINORITY INTERESTS< Contents >Minority interests remained stable at EUR 5.6 billion at 31 December2007 versus EUR 5.3 billion one year earlier. Minority interests in theGroup’s income (EUR 0.5 billion at end-2007) were partially offsetby the distribution of dividends and interim dividends totallingEUR 0.4 billion. Other changes reflect the redemption of preferred sharesand the dividends paid on these shares (EUR 0.9 billion), offset by (i) thesubscription by minority shareholders to EUR 1.1 billion in share issuesby subsidiaries controlled but not wholly owned by the Group, and (ii)transactions carried out with minority shareholders, including thoseresulting in additions to the scope of consolidation.1234CONSOLIDATED S HAREHOLDERS’ E QUITY A TTRIBUTABLE TO THE GROUPConsolidated shareholders’ equity attributable to the Group beforedividend payments amounted to EUR 53.8 billion at 31 December 2007,an increase of 8.7% year-on-year.This increase reflects net attributable income of EUR 7.8 billion in 2007,as well as the preferred share issue of EUR 2.3 billion, partially offset bythe EUR 2.8 billion dividend payment in respect of 2006 and the negativeEUR 1.2 billion impact of treasury share transactions.Net unrealised gains fell EUR 1.8 billion at 31 December 2007, dueessentially to the EUR 1.0 billion fall in net unrealised gains on availablefor-salefinancial assets and to the EUR 0.9 billion decrease in translationadjustments.56OFF-B ALANCE S HEET I TEMS7FINANCING COMMITMENTSFinancing commitments given to customers mainly comprise documentarycredits and other confirmed letters of credit, as well as commitmentsrelating to repurchase agreements. Financing commitments climbed3.0% to EUR 205.3 billion at 31 December 2007. Commitments to creditinstitutions declined 28.8% to EUR 25.9 billion at end-2007.Financing commitments received consist primarily of stand-by lettersof credit and commitments relating to repurchase agreements.Financing commitments received surged 41.2% to EUR 107.4 billionat 31 December 2007, compared with EUR 76.0 billion at 31 December2006. This increase reflects the rise in commitments received from creditinstitutions (up 40.7% to EUR 100.5 billion at 31 December 2007) andin financial commitments received on behalf of customers (up 49.0%to EUR 6.9 billion at 31 December 2007).GUARANTEE COMMITMENTSFinancial instruments received as guarantees and which may be sold orrepledged as a guarantee by the Group totalled EUR 42.0 billion at end-2007, up 67.5% year-on-year. Financial instruments given as guaranteesclimbed 37.9% to EUR 43.6 billion.Guarantee commitments moved up 12.5% to EUR 91.1 billion at31 December 2007 from EUR 80.9 billion one year earlier. This increasewas powered by a 16.5% rise in commitments given to customers toEUR 80.7 billion, partially offset by an 11.0% fall in commitments givento credit institutions to EUR 10.4 billion.For further information concerning the Group’s financing and guaranteecommitments, see note 6 to the consolidated financial statements.8910112007 Registration document - BNP PARIBAS 99
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<strong>2007</strong> REVIEW OF OPERATIONSBalance sheet 4TECHNICAL RESERVES OF INSURANCECOMPANIESTechnical reserves of insurance companies moved up 7.2% toEUR 93.3 billion at 31 December <strong>2007</strong> from EUR 87.0 billion at end-2006. The increase was primarily attributable to a rise in technicalreserves linked to the life insurance business, which enjoyed strongorganic growth.ACCRUED EXPENSES AND OTHER LIABILITIESAccrued expenses and other liabilities consist of guarantee depositsreceived, settlement accounts related to securities transactions, collectionaccounts, accrued expenses and deferred income, and other creditorsand miscellaneous liabilities.Accrued expenses and other liabilities advanced 9.6%, fromEUR 53.7 billion at 31 December 2006 to EUR 58.8 billion at 31 December<strong>2007</strong>. This increase was powered mainly by advances in guaranteedeposits received (up 36.6% to EUR 16.8 billion at end-<strong>2007</strong>), accruedexpenses and deferred income (up 50.2% to EUR 5.5 billion at end-<strong>2007</strong>)and settlement accounts related to securities transactions (up 6.8%to EUR 23.2 billion at end-<strong>2007</strong>), partially offset by the fall in othercreditors and miscellaneous liabilities (down 16.6% to EUR 12.9 billionat end-<strong>2007</strong>).MINORITY INTERESTS< Contents >Minority interests remained stable at EUR 5.6 billion at 31 December<strong>2007</strong> versus EUR 5.3 billion one year earlier. Minority interests in theGroup’s income (EUR 0.5 billion at end-<strong>2007</strong>) were partially offsetby the distribution of dividends and interim dividends totallingEUR 0.4 billion. Other changes reflect the redemption of preferred sharesand the dividends paid on these shares (EUR 0.9 billion), offset by (i) thesubscription by minority shareholders to EUR 1.1 billion in share issuesby subsidiaries controlled but not wholly owned by the Group, and (ii)transactions carried out with minority shareholders, including thoseresulting in additions to the scope of consolidation.1234CONSOLIDATED S HAREHOLDERS’ E QUITY A TTRIBUTABLE TO THE GROUPConsolidated shareholders’ equity attributable to the Group beforedividend payments amounted to EUR 53.8 billion at 31 December <strong>2007</strong>,an increase of 8.7% year-on-year.This increase reflects net attributable income of EUR 7.8 billion in <strong>2007</strong>,as well as the preferred share issue of EUR 2.3 billion, partially offset bythe EUR 2.8 billion dividend payment in respect of 2006 and the negativeEUR 1.2 billion impact of treasury share transactions.Net unrealised gains fell EUR 1.8 billion at 31 December <strong>2007</strong>, dueessentially to the EUR 1.0 billion fall in net unrealised gains on availablefor-salefinancial assets and to the EUR 0.9 billion decrease in translationadjustments.56OFF-B ALANCE S HEET I TEMS7FINANCING COMMITMENTSFinancing commitments given to customers mainly comprise documentarycredits and other confirmed letters of credit, as well as commitmentsrelating to repurchase agreements. Financing commitments climbed3.0% to EUR 205.3 billion at 31 December <strong>2007</strong>. Commitments to creditinstitutions declined 28.8% to EUR 25.9 billion at end-<strong>2007</strong>.Financing commitments received consist primarily of stand-by lettersof credit and commitments relating to repurchase agreements.Financing commitments received surged 41.2% to EUR 107.4 billionat 31 December <strong>2007</strong>, compared with EUR 76.0 billion at 31 December2006. This increase reflects the rise in commitments received from creditinstitutions (up 40.7% to EUR 100.5 billion at 31 December <strong>2007</strong>) andin financial commitments received on behalf of customers (up 49.0%to EUR 6.9 billion at 31 December <strong>2007</strong>).GUARANTEE COMMITMENTSFinancial instruments received as guarantees and which may be sold orrepledged as a guarantee by the Group totalled EUR 42.0 billion at end-<strong>2007</strong>, up 67.5% year-on-year. Financial instruments given as guaranteesclimbed 37.9% to EUR 43.6 billion.Guarantee commitments moved up 12.5% to EUR 91.1 billion at31 December <strong>2007</strong> from EUR 80.9 billion one year earlier. This increasewas powered by a 16.5% rise in commitments given to customers toEUR 80.7 billion, partially offset by an 11.0% fall in commitments givento credit institutions to EUR 10.4 billion.For further information concerning the Group’s financing and guaranteecommitments, see note 6 to the consolidated financial statements.891011<strong>2007</strong> Registration document - BNP PARIBAS 99
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