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Good afternoon, ladies and gentlemen, and welcome to the presentation of BNP Paribas second quarter 2020 results. For your information, this conference call is being recorded. Supporting slides are available on BNP Paribas IR website, invest.bnpparibas.com. During today's presentation, you will be able to ask your question by pressing 01 on your telephone keypad. If you would like to ask a question, please make sure to be in a quiet area to maximize audio quality. I would like now to hand the call over to Lars Maschnil, Group Chief Financial Officer. Please go ahead, sir. Thank you.

Good afternoon, fine ladies and gentlemen. Trust you are doing well and welcome to BNP Paribas second quarter 2020 results presentation. Welcome from a sun-drenched Paris where temperatures has reached 40 degrees. or above 100 for those using body temperature as the yardstick. In the usual way, I'll take you through the first three chapters of the slides, which I assume you have under your eyes, and this before handing it back to you for Q&A. In a nutshell, the second quarter 2020 has seen certain activities being impacted by lockdown measures, especially in April, as far as Europe is concerned. with June showing a rebound in such impacted activities, in most cases to pre-crisis levels. BNP Paribas is financially very sound and has a diversified platform, allowing it to fully serve the economy, as you can see from our revenues being up 4%, from staying very close to customers existing and new. As such, the second quarter confirms our overall guidance. Before looking at slide 3, introducing the second quarter results, I want to take this opportunity to thank all the teams of the Bank that have mobilized resources and expertise. Together with our diversified banking model, our effectiveness to support clients and the economy across Europe and beyond, in front of this unprecedented health crisis has been proven. And this ability to broadly finance the economy is the result of long-term work undertaken by the Group to serve its individual, corporate and institutional clients. It is a reflection of its financial soundness, the diversification and integration of its businesses, its close relationship with its clients its prudent risk management, and the execution power of its platforms. This platform has been bearing fruits in raising for its clients globally in excess of 250 billion euros in financing during the first half 2020, out of which 166 billion euros for European clients, over 45 billion euros for sovereign issuers, over 90 billion euros in syndicated loans, and over 150 billion euros in bonds. Besides, since mid-March, BNP Paribas has participated in 70% of syndicated loans and 53% of bond issues in Europe, Middle East and Africa. On the other hand, the group has also contributed very proactively to the successful rollout of governmental support measures, including state guaranteed loans. As such, Close to 90,000 state-guaranteed loans have been granted in the group retail networks as at June 30th. If with this we can move to slide 4, we see that the group revenues reflected the strength of the group diversified and integrated model that I talked about, with revenues at 11.7 billion euros up 4% on the same quarter a year ago. Costs, moreover, were down 1.3% year-on-year, thus mechanically boosting gross operating income by 14.5%. Our cost of risk rose to 65 basis points over outstanding, out of which 15 basis points, 1.5 basis points, consist in ex-ante provisioning for expected losses on the back of updated macroeconomic anticipations. So this is the element of IFRS 9 forward-looking. Our net income for the second quarter came in at 2.3 billion euros, down 6.8% year-on-year in line with the group's 2020 objectives. Finally, our common equity T1 ratio stood at 12.4%, confirming the strength of our balance sheet. While on ratios, the return on tangible equity clocked in at 8.7%. If it is, you follow me and we go on to slide 5, which provides more detail on the impact of public health measures on the activities. In a nutshell, lockdown measures impacted negatively transaction flows as well as new loan production, especially for households. Thus, corresponding volumes reached a low point in April-May and bounced back from such low point in the latter part of the quarter following the easing of the lockdown measures and the stronger than anticipated rebound in the economic activity as evidenced by the PMI composite index evolution on this slide. Conversely, certain businesses have witnessed exceptionally high levels of activity, in particular in corporate banking, but also global markets and our retail banking networks on the back of the specific needs of the economy during this unprecedented crisis. If with this, you can swipe, because I suppose you are on digital format, to slide 10 for the revenues of the operating divisions. As said in the introduction, BNP Paribas remains fully open for business. Nevertheless, retail activities at large have been impacted by the lockdown with respect to new business origination, while on the corporate and institutional side, clients have quickly and actively managed their liquidity and balance sheet in anticipation of the effect of the health crisis. In this context, both domestic markets and international financial services, so in total our retail activities, the revenues showed resilience in a context negatively impacted by the effect of the lockdown measures on new business origination and persistent low interest rate environment. On the other hand, Revenues in corporate and institutional banking were sharply up 33% as a result of the very high level of activity from all client segments. If we now switch to slide 11 to see how the cost accompanied the evolution in the operating divisions. First, domestic markets delivered a 2.8% reduction in cost, and particularly in the networks, with a drop of 3.6%. IFS, or International Financial Services, saw a 5.7% drop in operating expenses, or 4.2% on a like-for-like basis, thanks to the effect of its cost-saving measures. On the other hand, CIB operated with very positive jaws, I don't have another word for it, while its cost rose by 11% year-on-year due to the very high level of activities. If we now move to a slide, we're starting at slide 12, where we talk about the cost of risk. So first, our updating of macroeconomic anticipations led to an uptick in ex-ante provisioning of expected losses, clocking in this uptick at 329 million euros this quarter. And this is equivalent to 15 basis points of outstanding customer loans. Our central scenario has taken into account several factors, including the longer than originally expected duration of lockdowns, the implementation of specific public health measures in certain sectors, and the impact of updated measures undertaken by authorities to support the economy. On a macro level, as you can see from the illustration on the slide, the scenario assumes a gradual recovery with a return to a level of GDP comparable to 2019, not before mid-2022. This, of course, as I mentioned also before, bearing any new crisis. Last but not least, the level of ex-ante provisioning reflects also the quality of BNP Paribas portfolio, as well as its prudent and proactive risk management. If we now take the slides one after the other, and we start with corporate banking on slide 13. Cost of risk was up from low levels in the last few years on the back of right backs and it clocked in at 366 million euros due to 52 million euros in ex-ante provisioning of expected losses. If we now turn to the other businesses, which you can see as of slide 14, cost of risk remained low in French retail saw its downward trend at B&L in Italy interrupted by the ex-ante provisioning of expected losses, and there is a moderate increase in Belgian retail with the impact of a specific file. In other retail businesses, personal finance saw an increase year-on-year on the back of a 17 basis points ex-ante provisioning for expected losses, as well as a low cost of risk in the second quarter 2019 due to some provision write-backs. Lastly, cost of risk increased in Europe met by 49 basis points and Bankwest by 88 basis points, in both cases mainly on the back of the ex-ante provisioning of expected losses. If with this we synthesize and we leave the P&L and we go into the financial structure, which you see on slide 16, you can see that the common equity T1 ratio is up 30 basis points and clocks in at 12.4%. mainly due to the combined effects of the organic capital generation during the quarter. Of course, after taking into account a 50-5-0 percent dividend payout ratio and the effect of regulatory amendments usually referred to as the CRR quick fix. The Group's immediately available liquidity reserve rose sharply to a massive 425 billion euros and the group's Basel III leverage ratio clocked in at 4.0%. If we now go to the last part of the balance sheet on slide 17, you can see that our net book value per share was up 2 euros and stands at 81 euros at the end of June. And it stands at 71.8 euros when we look at our tangible net book value per share, which has grown at an annual rate of 7.3% since 2008, highlighting our continued value creation through the cycle. Finally, I remind you of the recent announcements by the ECB with regard to the extension of the temporary and exceptional recommendation not to pay any cash dividends until the end of this year. You will find on slide 18 some key points on the continuous reinforcements of the group's internal control and compliance system. And if we go to slide 20, where you see a reflection on our ambitious policy of engagement in society. And here I would like to draw your attention to our strengthened commitment to withdraw completely from thermal coal financing by 2030 in the EU and the OECD, and by 2040 in the rest of the world. The effect is that the group does no longer finance actors that develop additional thermal coal capacity or those that do not have coal exit plans consistent with our target exit dates. The group strategy in corporate social responsibility, CSR, has been consistently recognized and BNP Paribas has once again won the Western Europe's best bank for corporate responsibility in 2020 as awarded by the euro money. I will now walk you through the results of each operating division. And let's start with domestic markets on slide 23. Activity was up, in particular with a very strong mobilization towards supporting clients during the health crisis. You can see, for instance, that close to 70,000 state guaranteed loans were granted, while close to 250,000 clients benefited from a moratorium. In addition, after a low point in April on the back of lockdown measures, the production of new loans to households, volume of payments by cards, as well as new businesses, Arval and Leasing Solutions, bounced back later in the second quarter. As a result, domestic markets showed a solid loan growth, in particular in the French and Belgian retail networks and in the specialized businesses. It also showed a steady rise in deposits in all retail networks. The strength of our digital platforms is evidenced in particular by a steady increase in the number of customers active on mobile apps, as well as in the number of daily connections during and after the respective lockdowns. If we focus now on the P&L, revenues showed resilience. but were down 5.2% on last year. This was due to the negative impact of the slower new business origination during lockdown, especially on fees, as well as the persistent low rate environment, which were only partially offset by higher loan volumes and a stronger activity in specialized business, in particular if you look at Consorzbank in Germany. As mentioned earlier, we have seen a pickup in new origination in June, in most cases back to pre-crisis level, which paved the way for healthier volumes, margins, and fees going forward. Operating costs were down 2.8% year-on-year, with cost savings in the networks reaching 3.6%. Pre-tax income was down 21% year-on-year, on the back of higher cost of risk, due in particular to the effects of the ex-ante provisioning of expected losses. If we now browse through the different business lines in slides 24 to 27, I'd like to highlight the following points. On French retail banking, was very active and mobilized in providing support to the economy with close to 57,000 state guaranteed loans amounting in aggregate to circa 15 billion euros granted to customers. The equity investment envelope was doubled to 4 billion euros to support the development of French small and mid-sized companies between now and 2024. As said, after a low point in April, French retail banking witnessed a rebound in card payments as well as an acceleration in new loan production to households in the latter part of the quarter. Nevertheless, revenues were down given lower activity during lockdown, on top of the low rate environment, which was only partially offset by enhanced credit margins. As I said earlier, transactions fell during lockdown, but most came back strongly to pre-crisis levels in June. Costs were down 2.5% with the ongoing impact of cost optimization measures. Pre-tax income down 43% on the same quarter a year ago. If we now go south, if we go to BNL, we see which granted moratoria to close to 29,000 clients and saw a pickup in the number of state-guaranteed loans in June, with close to 12,000 loans granted at the end of June. Card payments bound back after a low point in April, such that monthly volume in June exceeded pre-lockdown levels. Revenues were down 5% due to the impact of the low interest rate environment, as well as the positioning on clients with a better risk profile on that interest rate. and the impact of lower volumes on fees. Costs down 2.5% with the continued effect of cost savings and adaptation measures. With cost of risk impacted by ex-ante precisioning of expected losses, pre-tax income was down 28% compared to a year ago. If we now go to the north and we go to the Belgian retail banking, which granted moratoria to close to 40,000 clients and stepped up the frequency of its contacts with its clients, with 94% of its corporate clients having been contacted to assess their needs in response of the crisis. Activity bounced back during the quarter, as evidenced by the evolution of card payments and the rebound in new mortgage loan production. Revenues were down 4.9% year on year due to the impact of low interest rates the weaker contribution from specialized subsidiaries only partially offset by higher volumes on net interest income. Fees were up slightly on last year, thanks in particular to good resilience in financial fees. Costs were down 6.8% due to cost reduction measures, including the continuing branch network optimization. Thus, Belgian retail banking operated with positive jewels this quarter. Pre-tax income down 25% due to increase in cost of risk. Finally, the last part of domestic markets are the specialized businesses. They showed very good drive and confirmed the swift recovery in activity after a low point in April. For instance, the finance fleet in Arval rose by 7.2% year-on-year and by 2.5% on a year-to-date basis. Besides, June showed a strong pickup in vehicle orders. Similarly, leasing solutions showed financing outstanding up 1.1% on last year and a strong rebound in new lease production in June, driven by information technology and logistics equipment financing. With market volatility, personal investors saw a sharp rise in orders and increase in assets under management, in particular at Consorzbank in Germany. As a result, revenues were up 8.2% on last year with positive jaws effect thanks to moderate increase in cost to accompany this business activity. Pre-tax income rose sharply by 15.8%. To wrap up, in the second quarter, domestic markets was fully mobilized to support the economy, proved resilient in a context strongly impacted by the health crisis, and saw a rebound to pre-crisis level in the latter part of the quarter in those activities most affected by lockdown measures. If with this, you turn to slide 28, you will see that our International Financial Services Division recovered its momentum in business activity in the latter part of the quarter. Thus, outstanding loans in the international retail networks were up on last year, with a rebound in new loan production in May and June. Personal finance saw a decrease in activity due to the temporary closure of its partners' points of sale during respective lockdowns, while the unit saw a gradual recovery in new loan production since the low point in April. In IFS asset-gathering units, net asset inflow proved resilient, while assets under management remained affected by the decline in stock market valuations. Lastly, the real estate service business, which was affected by the slowdown in property transactions and moreover impacted by the suspension of construction work, saw a gradual recovery following the easing of lockdown measures. When we now look at the P&L, and we start at the top of the P&L with the revenues, they were down 5.5% year-on-year. As the good resilience of international retail networks and the positive impact of the second quarter rebound on insurance revenues only offset partially the drop in revenues in personal finance and real estate services that I talked about. Costs were down 5.7% year-on-year on the back of continued cost savings and gains in operating efficiency. With the increase in the cost of risk driven mainly by the impact of ex-ante provisioning of expected losses, IFS pre-tax income was down 33% year-on-year. If we now look through the different businesses that you can find on the slides 29 to 34, I'd like to highlight the following. If we start with personal finance, so they recorded a slight decrease in outstanding loans this quarter due to the temporary closure of its partners' points of sale. New loan production is gradually recovering with the reopening of such point of sale in auto loans in particular. the new loan production in June returned to the level seen in March. To support customers in the health crisis, personal finance increased by 50% its resources allocated to after-sale and collection and granted close to 470,000 moratoria to its clients as of June 30th, with a satisfactory level of return to payment for those first loans that benefited from such payment deferral. Looking at personal finance risk profile, it benefits from the portfolio mix in terms of products and geographies. For instance, the portfolio of personal finance is mainly focused on continental Europe to the tune of 89% of outstandings and has no US exposure. Revenues were down 9.6% on the back of an unfavorable Forex impact and a drop in new business activity due to the effects of the respective lockdown measures I talked about. Costs improved by 8.6% thanks to the sustained cost adaptation efforts. Pre-tax income was down 53.7% year-on-year due to the increase in cost of risk, while on a like-for-like basis, gross operating income remained stable in the first half 2020 compared to a year ago. If we now go to Euromed, which saw a 4.5% rise in loans at constant scope and exchange rate. As you know, Euromed is mainly, although it has Europe in its name, but it's mainly outside the Eurozone. So understanding the intrinsic flow, you have to do it at constant scope and exchange rate. And so 4.5% raise in loans with a notable increase in the corporate segment, mainly in Turkey. New loan production and card payments picked up in the latter part of the quarter, in tune with the easing of lockdown measures. Moreover, digitalization facilitated the implementation of support measures by public authorities, with, for example, 100% of related requests made online in Poland. Overall, on a comparable basis, revenues were down 2.4%, while costs evolved by 0.8%, due, amongst others, to wage drifts. Pre-tax income on a like-for-like basis was down 44% due to the increase in the cost of risk. If we now pass the ocean, well, two oceans, well, depending on where you are, but we go to Bankwest on the Californian side, saw a strong business drive with loans up 4.3% and deposits 19%. In each case, on a comparable basis. Bankwest was very actively involved in the implementation of the PPP, the federal support program aimed at SMEs, and granted in total close to 18,000 loans for a total amount of $3 billion at the end of June. Revenues were up 3.2% year-on-year on a like-for-like basis, while costs were down 2.4%, therefore generating positive jobs. However, with cost of risk up 165 million on the second quarter due to ex-ante provisioning of expected losses, pre-tax income fell by 86% on a comparable basis. If we now turn to insurance, which saw a gradual recovery in savings in Asia and in protection and savings in Europe during the quarter, while more than 20 partnerships were signed in 10 different countries. Besides, the business has no exposure to business interruption risk in France, while exposure outside France is negligible. Revenues were up 6% year on year, thanks in particular to the positive accounting impact of the rebound in financial markets in the second quarter, which was partially offset by the effect of claims. Costs have been improving by 6% compared to a year ago, due to good cost containment, and pre-tax income at €548 million up 18.9% compared to a year ago. If we now do the last part of IFS, which is called wealth and asset management, they showed good business resilience. Wealth management benefited from good net asset inflows from large clients in Europe and in Asia. Asset management business saw strong inflows into money market vehicles of 3 billion euros, mainly in Europe in the second quarter, as well as strong momentum in thematic and socially responsible funds since the beginning of the year. Real estate saw a sharp drop in activity due to the slowdown in property transactions, as I mentioned before. However, business recovered gradually following the lifting of lockdown measures. In sum, revenues were down 14.6% due to the impact of the low rate environment on net interest income in wealth management, the unfavorable market valuation effect on asset management, and the impacts of the lockdown on real estate. Costs were down 5% on the second quarter last year due to the sharp decrease in costs in real estate services and the effect of the transformation plan measures, in particular, at asset management. And pre-tax income was down 42% year on year. And so this completes the overview of our retail banking and services. And so, if I can now draw your attention to slide 35 on corporate and institutional banking. This corporate and institutional banking, called CIB, had a very sustained level of activities in all its client segments in the second quarter, by being available and ready to support the specific needs of corporate and institutional clients during the health crisis. For instance, CIB raised over 160 billion euros in the second quarter in the global syndicated loan, bond and equity markets for its clients, an increase of 91.91% compared to the second quarter a year ago. The division has thus played a driving role in financing the economy by contributing to the smooth functioning of syndicated credit, bond and equity markets. And earlier in the quarter, it led several operations that reopened primary markets that had closed at the peak of the crisis. The platform ensured liquidity on secondary markets by bridging the needs of corporates and sovereigns, borrowing clients and those of investors, institutions and asset managers. That is the key role that the platform does. It brings together all these aspects. The level of activity of the division's businesses and its exceptional mobilization capacity at the service of the economy at the height of the crisis, validate the strategic choices made in recent years to enhance the effectiveness of this integrated model and cooperation between business lines. One example of this is the capital market financing platform that was created late 2018. This CIB platform is also benefiting from the greater number of client interactions made possible by the development of digital platforms in the various business lines, as well as from operating efficiency gains that have facilitated rapid adaptation of the setup during the health crisis. If we now look at the P&L, start at the top, revenues, up 33% on the back of growth in all three businesses. with a very good performance in corporate banking, up 15%, global markets, up 63%, and in security services, 3.6%. Costs accompanied this, but to the tune of 11%, so on the back of the high level of activity, so generating, I don't know what the word is, let's call it very positive jaws. Overall, after taking into account the higher cost of risk in the second quarter, CIB's pre-tax income was up 50%, 5-0. If we now turn to the next three slides, that's 36 to 38, let's go into more detail of each of the three businesses. If we start with corporate banking, 36, page 36. Revenues were up 15%, as I said, and this on the back of a 35% rise in fees compared to a year ago in connection with intense origination activities. Revenues rose in all regions with a very strong development in Europe and a very good performance in Asia. Transactions activities were down 6% on the same quarter a year ago on the back of a decline in trade finance due to the lockdown measures and a good resilience in cash management. Thanks to an enhanced strategic dialogue with clients combined with best-in-class execution capabilities, the business continued to be the leading player in the European investment grade corporate bond market as well as in syndicated loans in EMEA. This combined with a top five equity capital markets ranking in EMEA made the business line the number one European player in EMEA investment banking. If we now swipe to the next slide, 37, global markets, showed a very strong business activity. with very high client volumes and revenues up 63% compared to a year ago. If we now zoom in first on fixed income, so fixed revenues were sharply up with very strong growth in all activities, primary and credit markets, rates, forex, emerging markets, all geographies. The activity benefited from exceptional levels of bond issues in the second quarter, together with higher volumes of interest rate forex and commodity hedging, including, for instance, over 60 significant deals for corporate clients. Also, portfolio reallocations pushed secondary bond volumes higher, while electronic platforms saw spikes in volumes at 2 to 5 times the average daily volume seen in 2019. Equity and prime services So the other part saw a gradual return to normal in a still challenging market with a residual impact of dividend restrictions in Europe and weaker volumes in prime services, however, picking up in the latter part of the quarter. Finally, glancing at slide 38, security services continue to support a very good business momentum with slightly lower asset volumes due to overall drop in market values, but with increased transaction volumes. Revenues were down 6% year-on-year, but up 3.6% when excluding the effect of a specific transaction a year ago that we mentioned at that time. Besides, the business continued to win new mandates, as with AXA in Belgium and Eurasio. Let's now look at slide 29, which will conclude today's presentation. and will give us the opportunity to share the outlook for 2020. And so, the slide summarizes in five points. So first, the group has been exceptionally mobilized towards financing the economy and supporting its clients in this unprecedented crisis. Two, standing by our clients to limit the economic and social impact of the crisis will further enhance relationships and will serve as a foundation for further market share gains and stronger positions. Three, the rise in revenues in the second quarter further validates our diversified and integrated model. Four, the rebound in commercial activity witnessed in those businesses most impacted by lockdown measures in the latter part of the quarter paves the way for improved revenue trends in such impacted businesses. And five, the common equity T1 ratio at 12.4 confirms the group's financial solidity. Based on this, Our outlook for 2020 remains unchanged, and net income for 2020 should be about 15 to 20% lower compared to a year ago. This concludes today's presentation. Ladies and gentlemen, I thank you for your attention, and I'll be pleased to take your questions.

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