BRED Group 2021 interim results
NET BANKING INCOME UP BY + 25.0 %
(+ 28.1 % excluding non-recurring items)
ALL BUSINESS LINES STRONG CONTRIBUTORS TO NBI GROWTH:
COMMERCIAL BANKING IN FRANCE (+ 7.0 %)
INTERNATIONAL DIVISION (+ 18.3 % at constant exchange rates)
CAPITAL MARKETS DIVISION (+ 25.0 %)
INVESTMENTS ACTIVITIES (+ €110M)
STRONG COST-TO-INCOME RATIO OF 53.1 %
NET INCOME OF €237.1M
BRED’s half-year consolidated net banking income (NBI) significantly increased, rising 25% to €764.7m . Adjusted for non-recurring items, NBI increased by 28.1%, totalling €761.5m. Compared to the first half of 2019, this trend is confirmed with a 22.4 % increase in BRED’s consolidated NBI.
All business lines contributed to this remarkable growth:
– Commercial Banking in France (including ALM) posted good NBI growth of 7.0 %. The momentum of added value advisory services and increased market shares more than offset the effects of narrowing margins. Customer loan outstandings rose by 16.7 % over the half-year period.
– The International and Overseas Territories Banking division posted a 18.3 % increase in NBI at constant exchange rates. It benefited from strong growth in its activity in Cambodia and Fiji Islands, as well as excellent performances in international trade financing in Geneva.
– Capital Markets activities achieved an excellent first half with NBI up by €18m (+25.0%), reflecting the ongoing strengthening of BRED’s position as a supplier of liquidity and investment solutions to large institutional clients.
– Lastly, the NBI of the Consolidated Investment Management division rose by €110m, due to the strong performance of the private equity portfolio following a subdued year in 2020.
Breakdown of NBI by division
Operating expenses rose by 6.7 % on a reported basis (7.0 % excluding non-recurring items), reflecting proactive investments in technology, branch network modernisation and international development. Variable payroll costs have also been readjusted in line with interim results. Excluding these costs, growth in operating expenses amounted to 2.0 %.
Gross operating profit, up by 55.2 % (65.5 % excluding non-recurring items) has been positively impacted by the sharp rise in NBI and relatively lower rise in expenses. BRED posts a cost-to-income ratio of 53.1 % (on accounting result and 53.3 % excluding non-recurring items), a leading level of performance among French banks and a reflection of the effective conversion of costs into NBI.
The cost of risk stands at €54.0m, down by 27.0 %. No reversals of provisions on performing loans (stages 1 and 2) were made in the first half of the year.
The half-year net result group share reached a record level of €237.1m, more than double that of 2020 half-year. Adjusted for non-recurring items, it stands at €235.1m.
BRED consolidated income statement
 Proforma of the BPCE financial equation in 2019 and 2020. BPCE SA’s rules for re-invoicing expenses recognised in respect of its duties as a central institution changed in Q4 2020 with retroactive effect for 2020 et 2019.
 The NBI of the banking subsidiaries and controlling interests abroad is stated here in accordance with the percentage of the holding, independently of the accounting treatment.