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Good afternoon ladies and gentlemen and welcome to the presentation of BNP Paribas third quarter 2023 results. For your information this conference call is being recorded. Supporting slides are available on BNP Paribas IR website .bnpparibas.com. During today's presentation you will be able to ask your questions by pressing star 1 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. Now I would like to hand over the call to Mr. Lars Machinil, Group Chief Financial Officer. Please go ahead sir.

Thank you operator. Hello everyone. I trust you're all doing well and welcome to BNP Paribas third quarter results presentation. As usual at the end of the presentation I'll be pleased to take your questions. So if we look at the results driven by the strength of its unique model and positioning the group's performance is solid as reflected in its distributable results. They illustrate the intrinsic performance of the group quote unquote the new BNP Paribas after the sale of Bank of the West and after the single resolution fund ramp up. It is also the base for dividend and as such allows straightforward assessment of our performance when it comes to return to shareholders. If we take the first nine months it sounds like a birthday right? The distributable earnings per share is up .15% compared to last year further boosted by the share buyback that we've been organizing this year. So let's focus in more detail on the distributable profit and loss of the third quarter which by the way does not derive much from the reported one. So as you can see results are solid. Revenues increased by .3% -on-year. The growth which is supported by the strength of our model and the performance of all our operating divisions. We see a recurring theme sustained by the diversification of its businesses. CIB delivered a solid growth of .1% in revenues compared to last year on a -for-like basis. A healthy growth also for CPBS had plus .7% with robust commercial and personal banking activities while IPS the third division grew by .6% when we exclude real estate and principal investment also on a -for-like basis. If we then look to the operating expenses there are .4% -on-year generating positive jobs of basically one point. Thanks to a long-term approach and prudent and proactive risk management, cost of risk remains at the low level of 33 basis points and when I say low it's because it's low compared to the 2025 objective which is below. Next to that our financial structure remains solid as well with the group CET1 ratio at .4% sustained by the organic growth of 20 basis points in this quarter. On the same basis, pre-dex income is up .2% -on-year resulting in a net income of 2.7 billion euros for the third quarter. This growth is solid. It's solid if you look over nine months it's totally in line with our objectives. So after nine months it clocks in bottom line 8.8 billion euros and so our distributable net income grew by .5% versus last year reported results. So the results of last year that served the dividend of last year. So illustrating again our ability to offset the impact of the sale of Bank of the West and this through organic growth. As mentioned in the intro this is further boosted by the share buyback and leading to a very lack of a better word handsome growth in the nine months distributable EPS end of the period as I mentioned earlier .9% -on-year outpacing our plan EPS CAGR of 12% and illustrating both our growth and the benefit of the execution of the share buybacks. If you now move slide or whatever support you're on slide 4 we see the key pillars on which BNP Paribas has built a solid performance over the years. We have delivered sustained growth in revenues .1% on average in the past three years benefiting from our distinct model diversified and uniquely positioned generating growth opportunity and resilience. We have delivered constant improvement in our organic cost income ratio as well and our strict discipline on costs as well as the benefit of our industrialized platforms are illustrated by the evolution of our cost income ratio excluding exceptional items improving steadily since 2018 from .5% to reach .0% on a distributable basis illustrating the intrinsic operational efficiency of our model post the impact of the single resolution fund ramp up. So we have the year we have improved our risk profile our proactive and constant risk management leading to significant reshuffling of portfolios combined with a strong discipline and origination resulted in a specific decrease in the cost of risk on growth operating income ratio. To sum up we have built a European leader uniquely positioned to generate solid growth on a long-term basis. As you see on slide five it results in a significant growth in 2023 and indeed on a nine month basis our distributable net income increased by .5% when compared to 2022 reported results fully in line with the 2023 objective. Organic growth has clearly compensated for the sale of Bank of the West and by basing the return to shareholders in 2023 on distributable net income we have anticipated the end of the ramp up for the single resolution fund as soon as 2023 and this for 800 million euros as well we excluded extraordinary items in particular the negative impact of the adjustment of TLTA rule hedges for around 900 million. Last but not least in line with what we announced we confirmed our 2023 objectives of a distributable net income 1 billion euros higher than 2022 reported. So that's the gist of the results if we look in detail at the group level and moving to the main exceptional and extraordinary items. Slide seven. They are very limited this quarter amounting to less than 200 million euros so decreasing compared to last year. As far as the previous 2023 quarters for the first the second you also find a residual limited impact of 58 million euros related to the adjustment of hedges from the change in the ECB terms and conditions on the TLTA rule. A negative extraordinary item booked in the corporate center and excluded from the distributable income. To wrap up our full P&L on slide eight providing details of the synthesis I gave on the first page for revenues cost and cost of risk. So again good revenue growth 4% positive jobs low cost of risk and strong growth in pre-tax income clocking in up .2% -on-year on a distributable basis 6% on a report as well. Hence a net income at 2.7 billion euros which illustrates again the solid underlying performance of the group. And to conclude before we look at the operating divisions let me mention our return on tangible equity clocking in at 12.7%. That's the group. If you now look at the revenues of the operating divisions at slide nine what do we see? A good set of results for CIB thanks to a diversified and strong client franchise. Indeed CIB's revenues were solid at 5% on a super strong rise in global banking revenues up 25% on a -for-like basis as well as a strong growth at security services up 12% on a -for-like basis. Allow me to stress again this it's why this activity is called CIB right. It generates a continuous and recurring stream of earnings by bridging the needs of corporates and institutions. Here go the name CIB. And this as a result of a more -to-normal activity on micro products in Europe global markets revenues were down by .4% on a -for-like basis versus the high level in the third quarter but still a 59% increase when compared to the third quarter in 2018. An illustration of our new dimension and ability to gain market shares in that space. So that's CIB very solid very recurring and very diversified. Same is true for CPBS very positive momentum with a sharp .7% increase on a -for-like basis driven by strong performance of commercial and personal banking boosted by the rise in net interest revenues. The solid increase in revenues for ARVAL and leading solutions up 10% witnessing a healthy growth in volumes as well as maintained high level of contribution related to used car prices. And this with a less of a favorable environment for personal finance which continues its transition and selectivity at origination. The third one is IPS which delivered a good performance in revenues of up .5% when we exclude real estate and principal investments both facing challenging environments. However we see a solid performance of well management up 9% and insurance up 4%. If you now flick to slide 10 the operating divisions delivered positive jobs via recurring cost savings and cost deficit. So if we look at it division by division positive jobs 1.2 points CIB positive jobs 1.3 for CPBS also supported by the rationalization of its operating model and continued cost saving measures. Positive jobs effects for 4.3 points for IPS when we exclude real estate and principal investments supported by positive jobs again in what I mentioned earlier the solid environment for insurance and well management. Let me remind you of the under building of our cost discipline. This thing just doesn't come like this. Indeed this is at the heart of our growth plan as you can see on slide 11. Leveraging our internal platforms remains a key priority and we are moving fast to adapt. 90% of the objective of increasing resources in the main service center by 2025 is already achieved. So we wanted the objective we have is basically done two years in advance. In addition we continue the optimization of our premises and office space to integrate new and continuing work usages improving our mutualization ratio to flex office and fewer inner city locations. Last we are ensuring a strong discipline on investments with a proactive management related to external spending. As a result and despite the inflationary context we confirm our recurring savings programs up to 2.3 billion euros over the plan with 1 billion euros already achieved. This approach is key to our ability to deliver positive jobs each year in combination with the end of the ramp up of the single resolution fund representing a decrease of 0.8 billion euros in the next year. So we are now able to continue to increase our growth reading expenses between 2023 and 2024 as already anticipated through our distributable results. Having looked at the top line at the cost there is also the risk line. So with this if you look at our risk profile let's turn to page 12. These are charts you are very familiar with and consist of phrasing being variance on the team low risk. Indeed our cost of risk has been low over a long period below our guidance of 40 basis points since 2017 except for the exceptional year 2020 where we took additional provisions which are basically most still there. It is not only the credit aspects that see a disciplined approach also our CID has grown in a very disciplined way maintaining a very prudent and proactive approach in terms of risk management. The most powerful illustration of this is our capacity to significantly grow our global markets activities revenues while keeping our VAR as a measure of the risk we take at a low level. Finally we like to stress our pretty high stock of stages 1 and 2 provisioning covering 2 times our cost of risk of non performing loans. If we focus specifically on the third quarter you can see the confirmation of a low cost of risk 33 basis points at group level on one low impairments on defaulted assets the so called stage 3 and two a limited release in ex-ante provisioning including an additional provision on commercial real estate for 68 million euros.

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