BNP Paribas S.A.

Lars Machenil - CFO

Jean-Pierre Lambert - KBW Jean-François Neuez - Goldman Sachs Lorraine Quoirez - HSBC Jon Peace - Nomura Delphine Lee - J.P. Morgan Nick Davey - UBS Bruce Hamilton - Morgan Stanley Kinner Lakhani - Citigroup CIB Stefan Stalmann - Autonomous Research Guy Vijay Raja – Barclays Capital Omar Fall - Jefferies & Company Maxence Le Gouvello - Credit Suisse Flora Benhakoun - Deutsche Bank Cyril Meilland - Kepler Cheuvreux Tarik El Mejjad - Bank of America Merrill Lynch Alex Koagne - Natixis Securities

Good afternoon fine ladies and gentlemen on the call, both the analysts, our shares investors of course, one or two regulators who are listening in and our staff, welcome you all to our third quarter results presentation. In our usual way, I’d like to take some 15 minutes or so to go through the main slides before handing it over to you, if you would have any remaining questions.

And so if we start with Slide 3, you can see that one of the key messages of the quarter was the closing of two bolt-on acquisitions, namely those of LaSer, [ph] [Lafayette] in France and BGZ in Poland. In the quarter we also announced the DAB deal which we expect to close by year-end.

On this third quarter results, the net income stood at €1.5 billion, which increases to a good €1.7 billion if we exclude the typical exceptional items. I will touch on these in a minute.

Going on a bit more detail on those Q3 results, what do we observe, revenues of the operating divisions at constant scope and exchange rates were 2.6% higher on the back of growth in all divisions and most notably in international retail and fixed income and specialized businesses and I remind you specialized businesses are the likes of Arval car leasing, insurance, security services to name a few. The groups gross operating income on all that improved by over 4% versus the previous year and the group cost of risk decreased and improved this quarter standing at 47 basis points over outstanding.

Finally, the recently disclosed AQR results conference that BNP Paribas has a rock solid balance sheet. In fact, we closed the quarter with a fully loaded Basel 3 ratio of 10.1% after taking into account the AQR, but also the acquisitions that were closed this quarter and all the elements that happened earlier this year.

If you now proceed to Slide 5, I will just look at the two main exceptional items of this quarter, that is the negative OCA/DVA impact which you’re accustomed to, not that it’s negative, but you're accustomed in the exceptionals and the transformation costs related to our Simple & Efficient plan. So globally, the pre-tax income of one of these quarters stood at a minus €345 million, slightly above the minus €283 million off the third quarter last year.

As I mentioned a momentum ago, you can see by leaping to Slide 7, that revenues of the operating divisions progressed in all divisions, 2.8% in retail, 5.2% in investment solutions and 2.9% in CIB. Generally revenues grew mostly on the back of a good performance as I said, of our specialized businesses international retail and fixed income.

Now flicking to the following Slide, number 8, you will see that the main effects on cost where on the one hand the ongoing implementation of our Simple & Efficient plan and on the other the continued investments we’re making in our business development plan. And as such, on the back of all those costs were up 1.3% in retail banking, 4.3% in investment solutions and 4.8% in CIB.

If you now advance to the following slide, that is Slide 9, you can see that we’ve provided the usual update on Simple & Efficient where we notched up another €241 million of recurring cost savings this quarter. That makes a cumulative total of recurring cost savings of close to €1.5 billion at the end of September of this year.

In parallel, of course, we incurred some €150 million of transformation costs this quarter. We remind you that target is still to be around €770 million of transformation costs to be incurred for the full-year 2014.

So all in all, Simple & Efficient is well on track and generating the recurrent cost savings. And if we now shift to the cost of risk, I’d kindly ask you to turn through the three slides on the topic and they start at Slide 10.

As I said, cost of risk was lower this quarter standing at 47 basis points of outstandings. And if I take them one at a time, of course one of the main drivers as you can see was corporate banking which actually experienced net right backs this quarter.

Looking at our domestic markets on Slide 11, so BNL’s cost of risk remained high given the economic backdrop and French retail cost of risk was still low as well in Belgium were it is actually even lower. And Slide 12, in the order of retail businesses, personal finance continue to show an improvement and this is net of the LaSer acquisition in the quarter and Europe-Med was up a tad, while BancWest basically remained at a very low level of cost of risk.

With this, if we look at Slide 13, I’d like to go back to the AQR results that I touched upon earlier. The comprehensive assessment was a truly phenomenal task undertaken by the ECB and involved a 130 banks.

I can safely say that actually almost everyday of the past year, well were may be Christmas and Easter Day, I’ve had to deal with some AQR or stress test related to query. So I do feel that a very tough job has been done and significant chunks of the balance sheet have been reviewed in the process.

So for BNP Paribas the impact was quite minor at 15 basis points. I think one of lowest amongst comparable European banks.

And also the stress test confirmed the groups capacity to face an extremely severe adverse stress scenario. If we still -- if we go to Slide 14, but remaining on the AQR you will see that on the slide we’ve provided a detailed explanation of the AQR results for the bank and these adjustments how they’ve been taken into account in the core equity ratio at the end of September.

And as a reminder -- not another reminder, but as an inside you can see that more than half of the adjustments where actually already included in the core equity Tier 1 at the end of June. And some greater detail when we consider the credit exposure more than half of the specific provisions identified where already in the first half numbers one on collective provisions.

These are already covered by the prudential deduction of the surplus of expected losses versus provisions made. I’ll remind you that if there is a delta between those you already have to reduce it from your capital which is of course the case at BNP Paribas.

In terms of adjustments related to market exposure, the review of the financial assets valuation led to negligible adjustments for BNP Paribas, whereas in terms of CVA the correction was already partly included in the first quarter and the balance basically is taken up this quarter by the introduction of the Prudent value adjustment. And this is may be further clarified when we look at Slide 15, where that this prudent value adjustment that I talked about, that we have brought forward -- while brought forward we introduced it in anticipation and as you might remember, as you probably remember the PVA is normally foreseeing to enter in the regulatory scheme as of next year, but the EBA has clarified its final text, so we consider it sufficiently mature that we’ve basically implemented with anticipation.

And so this impacts the core equity Tier 1 this quarter with some 30 basis points on a fully loaded ratio in Q3 and so this is one of the large blocks of clarification for Basel 3 together with the leverage ratio. I will come back to that for a moment -- in a moment, so those two being clarified it basically means that we could reverse the prudent reserve that we set-aside for regulatory, residual regulatory uncertainty as we mentioned earlier this year and which was basically earmarked for all of the uncertainties put in particular the PVA.

So all-in-all, as I said, our fully loaded Basel 3 ratio stands at the end of the third quarter at 10.1% after taking into account the two bolt-on acquisitions as I said taking into account the AQR and of course all the elements that happened earlier just as a supplement and so on. So this is our number.

And as I said, if we move to the Basel 3 leverage ratio also there now we can assume that the definition on the calculation has been crystallized and under the definition our fully loaded ratio stands at 3.5%, well clear of the 3% minimum in the Basel text. So having settled that and in order to complete this introductory part, I’d like you to swipe to Slide 16, where we provided an update on where we stand with regard to the implementation of the stronger compliance and control procedures that we announced in July.

We are implementing the announced changes to the group’s internal control set up as well of course as a remediation plan. In our lingo, the remediation plan as what we agreed with U.S authorities and as we mentioned implementation is in line and with the action plan.

So having said that ladies and gentlemen, before I hand it over, I’d like to skim through some of the divisional results and let’s start on Slide 18 with domestic markets. As you can see deposit gathering retained a good pace, especially in France and Belgium and at Cortal Consors in Germany.

Lending activity on the other hand showed signs of stabilization. The continued development of our cash management is continuing to bear fruit as confirmed by the top ranking received and the latest what was the Euromoney survey in our three main markets that is France, Belgium and Italy.

In line with our plan for domestic markets, we’re continuing to roll out across different networks, the new branch formats as well as the new customer relation model. Now if we look at the P&L, in the end revenues were nearly 1% higher at €3.9 billion with a strong performance as I said earlier from Arval and Leasing Solutions and despite the impact of the persistently low, stubbornly low interest rate environment.

Operating costs were almost flat, meaning that we enjoyed a near 1 point jaws effect, so the delta between revenues and cost with an improvement in the cost income as a consequence of our main markets. So gross operating income marked a 2.2% increase while pre-tax income stood at €0.9 billion slightly below last year due to the high cost of risk in Italy.

Overall, quite a good quarter for domestic markets with French retail showing good resilience, BNL continuing the adaptation of its commercial model and Belgium retail generating a very good operating performance. Now if I can keep you on domestic markets just that longer, I’d like to point out a new entry in our slide this quarter.

I’d say almost raising to popular demand, which is Slide 22 on domestic markets: other activities. So the specialized businesses of our domestic market enjoyed very good business drive.

You can see that outstandings of Arval and Leasing Solutions progressed well. And at the same time deposit gathering remained dynamic as you can see for personal investors which was sustained by new customers’ acquisitions in Germany.

So overall on the back of 5 point positive jaw effect, the pre-tax income of these activities reached €231 million at close to 70% on the previous year. Still on retail, if you now advance to Slide 23 on our Europe-Med, the first thing to note is the acquisition of course of BGZ in Poland, I mentioned it.

We closed the acquisition in mid September. So its contribution to Q3 is obviously very limited.

On the P&L that is combining the capabilities of BGZ and BNP Paribas Polska and leveraging on the difference specialized businesses that we have in Poland, BGZ BNP Paribas will become a reference bank in this country. As you can see from the slides, and now turning back to Europe-Med as a whole, looking at comparisons of course at constant scope and exchange rates, Europe-Med volume growth remains sustained at double-digit level both in terms of loans and deposits with a strong contribution from -- so in Turkey on both fronts -- so on both sides of the balance sheet.

On the back of this, Europe-Med generated strong revenue growth in Q3 plus 22% as you can see we had a positive contribution from more geographies. Operating costs were 7% higher, also here mostly on the back of the continued strengthening of the commercial setup in Turkey and Morocco where we’ve been opening branches over the last couple of quarters.

So Europe-Meds costs of risk was in line with the underlying average of the past two quarters and pre-tax income came through €147 million. Now -- if we now, cross the ocean and we hop over to the U.S.

Slide 24, BancWest and let’s look at their volumes, which have continued to remain and grow strong in the third quarter, reflecting a good sales and marketing drive. As you know, that we’re of course focusing on all aspects of banking, so private banking for example had a continuous fast development this quarter, assets under management increased by 26% to reach $8.2 billion.

If we look at the P&L, revenues improved by close to 2%, thanks to this volume growth and despite I’d say the unfavorable level of interest rates. In addition, in the third quarter this year we had lower capital gains on the sale of securities.

Operating cost on the other hand were penalized by higher regulatory costs and particularly those related to CCAR which the bank will have to pass into future and this was part of the offset by the continuing streamlining of the branch network. Overall BancWest's pre-tax income was almost flat at just over €200 million that is -- which is our base grant.

To conclude retail, please cast your eyes on Slide 25, Personal Finance. Also here we completed the acquisition of 100% of LaSer basically in France, which contributed some 4,700 staff and at that mode a €9 billion of outstandings.

You can clearly see the effects on the top right hand graph which shows outstandings increasing by 23% to nearly €55 billion. In Q3, we also completed the acquisition of RCS in South Africa, which provide us with a local foothold in the activities of point of sale credit activity.

Thanks to the recent signing of several new agreements with automobile makers, you know that’s one of our spikes in Personal Finance. This quarter we have also been successful in growing car loan outstandings by close to 3%.

So if we circle back to the P&L, Personal Finance revenues increased by 19% mostly due to the full consolidation of LaSer, excluding this the revenues were up 2.1% at constant scope and exchange rate driven by increased outstandings in Germany, Belgium, Central Europe. Operating costs progressed at a pace consistent with the business plan, while cost of risk improved at -- again, those constant scope and exchange rates effects and all this basically meant that the operating income top €300 million and pre-tax income was 12% higher on the like-for-like basis.

So, I’d say to wrap it up, Personal Finance delivered quite good business growth this quarter. Now, if you could still stay with me for little longer we’re almost there and if you could kindly flick to Slide 27 or browse or whatever the device on which you are reading it, and look at the Q3 performance of the different businesses of our investment solutions.

So total assets under management reach €905 billion at the end of September, on the back of positive performance and 4X effects and also thanks to good asset inflows, particularly, in wealth management and insurance. Again, those constant scoop and exchange rates revenues were 5% higher with a positive contribution from all of its main business lines and again in particular insurance and securities services.

Wealth management continues to develop particularly well in Asia. Operating costs of the combined entities were up due to the higher level of activity in both insurance security services.

At the same time, we continue to invest in our business development plans as you can imagine. Pre-tax income stood at €538 million marking a 7.6% increase on the previous year on a like-for-like basis.

So investment solutions confront good business development and income growth at this quarter. Now if you could go and look at Slides 29 and 30, which cover our CIB, which posted a good overall performance this quarter.

If we look a bit deeper and starting with advisory and capital markets, revenues were at 3% higher. You might want to note that we achieved this with a very low level of VaR €29 million in the quarter.

As you know fixed income or as you can see fixed income had a good quarter with revenues progressing by 14%, a bit flatter by a low base for comparison in Q3 last year and this quarter basically ForEX performed well as did interest rate activity, while our credit revenues were that more subdued. And with all this we confirm the number one position in corporate bonds in euro and we ranked number 9 for all international corporate bonds.

Now if you look at the other activity, Equity and Advisory, and I remind you that for us this is mainly an equity derivatives kind of activity and that equity derivative activity was somewhat softer when compared to the high basis of the previous year. Furthermore, we saw a slowdown in flow business in most geographies with a notable exception in all region.

On the plus side, M&A and equity capital market activities progressed well in this quarter. So that’s basically the underlying reach of capital markets.

If we now turn to Corporate Banking on Slide 30, which as you know may by now, I read this more in a wrigglish kind of format and I look at the outstandings, if we look at the loans first there is €111 billion, marking a 2.3% progress on the previous year. This was driven by growth in Asia and the Americas.

For their part, outstandings in Europe tended to stabilize when compared to the previous quarter. Deposits have grown at the fast pace reaching €778 billion benefiting also from our ongoing and relentless developments of our international cash management, which gains on significant new mandate in the third quarter.

So the first nine months of the year, we also confirmed our number one spot for syndicated loans in Europe, so boarding well riding into the future. As a result of this, revenues increased 2.7% to €780 million, strong growth in Asia continued during this third quarter.

Revenues in the Americas improved slightly while activity as I said in Europe remained soft mostly on the back of the slowdown in the energy and commodity sector. In summary, corporate banks pre-tax income rose sharply in the third quarter reaching €418 million as its cost of risk benefited as I said earlier from net write-backs this quarter.

So, slide 31, almost there. So concluding my introductory remark to our third quarter results which I would sum up with the three main takeaways that you see.

So that is that on one hand, the good sales and marketing drive of our main businesses confirms the fact that our institutional corporate individual clients had remained loyal to us. The second one is that we delivered what I would deem a very good overall performance and this thanks to the diversification of our business model both in terms of businesses and geographies.

And third the confirmation of the quality of our assets by AQR results meaning that I can reiterate that BNP Paribas has a rock solid balance sheet. So thank you very much for hanging in here with me, and I will now be very, very pleased to take your questions.

Yes. Good morning.

First question if possible is on capital management, because the situation has changed. You are running a tighter sale in terms of core equity Tier 1.

And I was wondering, what's the impact on the way you managed the bank. Does it mean that there is a different trade-off between organic growth and bolt-on acquisitions?

I mean may be you prefer to precede more with organic growth. Also what does it mean in terms of dividend policy, do you feel that the dividend policy may have to change to increase the capital retention?

And finally, is there more reversals of risk weighted assets? So these are the questions related to capital management.

And the second related to reversal of provisions. Are we starting a cycle of reversal of provisions in CIB or is this more like a one-off?

And finally, third question French retail the drift in NII, can this drift accelerate if the interest rate level remains unchanged? Thank you.

Thank you very much for your questions. I’ll take them one by one.

And so with capital management our stance hasn’t changed. So we said earlier this year when we disclosed our development plan at 10% is where we want to be.

So that's 1% buffer over and above where from a regulatory point of view we have to be. And we also said that this is the yardstick where we want to be.

And I said in the past that we are not in the business of stacking of capital. So that means indeed that if we -- after having decided to put the dividend payout ratio at 45% which is what we completely confirm, and we basically -- the remainder of the earnings that we generate of course ideally we can redeploy them organically because that is where we can have growth at marginal costs, so that is ideal.

But of course that depends on several situations and therefore if the economic situation would be such that there is some excess which is generated then of course bolt-on acquisitions is something that we look at. And I’ll remind you bolt-on of course they have to be at the right price.

And secondly, they are bolt-on in the sense that they strengthen us in market share. For example with respect to with what we did in Poland or it can bring us intimacy with clients, for example what we had when we took on part of the RBS equity derivatives.

So, that is basically what we do. So, our plan unchanged.

And I think the fact that we are today at 10.1% including those acquisitions, including the AQR and including all the things that happened earlier is just a confirmation of this. And so, there is on that front nothing that is changed, and we will be very happy to pay €1.5 share dividend.

And with respect to your question on CIB, so indeed there is quite a material write-back this quarter. And as you said, there are typically cycles that you have, in particularly this quarter there is a series of outstandings that basically have been paid back and that basically led to that write-back.

So, it's not necessarily that is -- that in the future there will many more of this. It is basically on the back of elements that have been restructured several years ago and that basically now came to a term and basically allowed us to reverse the provisions.

So, that is on CIB. On French retail -- so on French retail, indeed if you look at the top line to top line is impacted by a couple of elements.

There are some that I would deem that I will say more of an exception list kind of nature which is on the commissions where we have the regulation on capping on some of the commissions which came in the beginning of this year, so that is something which is well. It bends with the trend, but it is then something that shouldn’t accelerate.

Also we have with the net interest income we had last year and a slight peak with respect to the early reimbursements which basically also lead a bit to the evolution that you see. Having said that, I mean interest rates are stubbornly low, so which means that, we do a lot of work going forward with the ambition as be fair to keep that interest income stable.

Which basically means that in these kinds of environments what you do is to be very close to your client. Watching very, very closely your operational efficiency because that is driving part of your value creation, and then basically reap the benefits of our very stringent risk management allowing us to have low cost of risk.

So that would be my three prompt answer to your questions.

Thank you very much.

Yes, good afternoon. The question relates to operational efficiency.

So, we see that BNP has returned to growth from a top line perspective, and at the same time the balance sheet is also growing again also because of the bolt-on. But my question was relating to the fact that, right now we haven’t yet seen the -- lets say the first signs of operating leverage.

There is the slide in the beginning where you show revenue growth of 2.6% which is the same as the cost growth. We are not quite bit into simple and efficient, and I suppose at that stage I would have thought that we would have started to see the benefits of operational leverage particular in the growing asset base.

And I just wanted to know what was the update there in terms of investment or cost that you have been foreseen or other items which come to this total little bigger picture. And my second question was on NSFR.

I know it’s a bit early. There has been a disclosure this morning which you may not have had time to look at it in full.

I just wanted to know that whether from your perspective there was any change that was meaningful and that made a difference to your view on that? Thank you.

Now, François, thank you very much for your questions. First maybe some clarification on the balance sheet evolution.

So if you look at the evolution of the balance sheet from the second to the third quarter, and it is noteworthy to observe that half of that evolution is basically due to exchange rate effects and parameter effects. So, basically the bringing on board even if in the P&L for example BGZ is very small, but in the balance sheet of course it is there at the end of the period.

So that is half of it. And then for the remainder part there is a big chunk which is just coming through the revaluation of the fair value on the back of the evolution of the underlying parameters like interest rates or credit spreads.

So that is on the balance sheet. With respect to OpEx, let me go back and indeed remind you of what we said at the Investor Day.

So what we said at the Investor Day is that we embark on simple and efficient to basically have all our cost stable or being equal so fighting inflation, fighting wage risks, fighting all these kinds of elements. But then we said that we would indeed invest for growth.

We would invest for growth. We would invest in innovation, technology.

We would also invest by following our clients and leveraging on our systems going into some other regions where costs are indeed ramped up more of a direct nature than of a marginal nature. And so that is basically what we said we would do.

Now, if you look at where we stand and several of these investments that we’re doing, I think you can see that they are progressing well. I think we drove your attention earlier at the start of my discussion on the specialized businesses.

The specialized businesses are those which if you go back to the Investor Day the ones where we put our growth in. For example, insurance and security services.

So these are evolving and they are growing. Sometimes there is a little delay as security services takes onboard a major Italian account.

I can tell you that takes some times and not from the investments before basically you transfer all those businesses. So that is what you see.

And then of course there are some businesses as we said where it’s more than growth. It is really adapting then to the new environment.

CIB is one of them. And there we said that it would take 2014, ’15 to invest to basically turn that around.

And so, if you look at it from a bank perspective, if you allow me. And if you look at our cost income for the bank of the nine months of this year versus the nine months of last year and you look at it excluding those exceptions.

So the ones that we typically published. Nothing else just the ones that we published you will basically see that the co-ex over the nine months basically improved from 65.1 to 64.9.

And this is something on a back where some countries are, or have over the last couple of quarter or this quarter increased some of their taxes like in Belgium or has asked for a contribution to a resolution fund like in Portugal. So all in all, I think as I said we are having a plan which is involving investments.

I think several of them are going well otherwise in others it did take some time. But as I said overall and this is in on track with what we set forth to do.

With respect to the NSFR, I just got it on my desk this morning. I quickly browsed through it, it’s too early.

Whatever I would say would have been based on a diagonal reading. So it’s just that too early, Jean-François.

Many thanks. So from your perspective from the cost base perspective you feel you’re on track, you don’t see the need to accelerate or to find other sources of savings?

No. Thank you for allowing me to clarify.

If you look at our -- if you look in detail in the kind of businesses where we are investing and we brought for example Arval forward, you can see indeed that I think we have a good blend of the speed at which we invest and at which we are reaping some of the benefits. Now, having said that of course Jean-François, be six months into our plan and we are in a budget process.

So sometimes have some harder headwinds and some other have some harder tailwinds. So of course on some detailed elements things are going faster or slower.

But I mean, give us the time to review and at the yearend results we will probably shed some more light on this. But overall the bank is on track.

Thank you very much.

Hi. Good afternoon, Lars.

Just to come back maybe on what Jean-François was asking. Is there any way we could have how much investment is actually in the cost line so far?

Hello.

Yes.

And second question is, we have seen your articles on French bank contributing to 25%, 30% to the European Resolution Fund. And I was wondering whether you had an estimate for that.

Because if I remember well, in your strategy plan you assume that basically these contribution would replace systemic tax, is that still something you are thinking? And finally my last question would be also to thank you for providing more color on the other domestic retail operation.

And I was just wondering obviously you have a Basel 3 core Tier 1 ratio of 10%. Do you feel like you would be sufficiently capitalized at present to buy back the Luxembourg minorities?

Thank you.

Thank you, Lorraine. So, first of all with respect to your investments the guidance we basically have given is that and as I said the simple and efficient effect basically neutralize other kinds of risks.

So that means that over the three year horizon the raise in cost is basically the raise in cost from investments. But I had to qualify what investments are because sometimes people think investments are CapEx and so forth.

So investments in our lingual is of course and also adding people on the ground in order to serve the clients and basically accompany the clients. But that is directionally how you should interpret the cost.

We made one exception which is basically CIB, where we said that during the period of change a part of the simple and efficient cost would be consumed by cost in order to adapt to the regulatory environment. Now talking about the regulatory environment and your question on the single resolution mechanism.

So I remind the audience at large who have dialed on this conference call, what this is about. So this is part of the banking union and the banking union consists of several levers and we welcome them very much.

The SSM is one of them, and so that the single supervisory mechanism which will kick off on November 4, and there is also the SRM the resolution mechanism. So that is something which we welcome, that fund of course has to be constituted and there has to be of course an allocation of the cost thereof.

And there has been proposal articulated. Now that proposal is relatively complicated and involves relative measures involving the whole banking sector, so we cannot give any number.

There is a rumor indeed as you say which suggest that French banks should pay more than their natural market share. If this would be the case, I would probably have to identify these cost then as excessive because if I look at the AQR outcome French banks are identified as those as having one of the lowest risk levels that there is.

So that will be my comment on this and to be monitored closely. With respect to other domestic markets, I’m not sure that I understood your question.

Luxembourg, okay right. Thank you.

So now with respect to that, as I said we are in a situation where we are at 10.1%, this is fine. So we are in a situation where we generate earnings and but with respect to what the Luxembourg State would do that is not my decision.

So, that is something that will be decided by the government and we’ll act at that moment.

Just to come back on the contribution to the resolution fund. Do you think that this contribution will replace the systemic taxes or do you think that it will be on top of the systemic taxes?

Thank you.

Yes. Initially when we made a plan we assumed that over the period there should be one.

We’ll have to see as I said there might be that it is on top. As I said, if this would be the case and if it would be for the French banks that they would contribute well above their natural market share I can only as I said articulate those costs as excessive given the low risk that the French bank represent in the year ago.

Thank you very much.

Hi. Good afternoon, Lars.

I had two questions, please. The first one on the cost of risk.

You’ve been good enough in the past to give us a little bit of color on the outlook, and I think particularly with relation to BNL and personal finance where the cost of risk is high and improving. Could you give us your feel as to how quickly that might normalize?

And then my second question is on litigation. We’ve seen a number of your peers take charges this quarter particularly for FX investigations.

Obviously, you have your issue to do with on the U.S dollar sanctions. But in terms of other investigations like FX et cetera, could you just confirm you still then anticipate to any other big issues on the Horizon?

Thanks.

Jon, thank you for your questions. Now, on the cost of risk and then -- well, what can I say?

I suddenly left my crystal ball in my office, Jon. But what I can say is that on BNL we said earlier this year that 2014 would be a difficult year.

If you look at the economic situation in Italy, one should not be surprised that the cost of risk this quarter was stubbornly high. And as we said, this is a bit as a consequence also of the economic situation.

So, I think it’s too early to say if there is a turnaround or not. I think we will have to monitor the situation over there.

With respect to personal finance, I think personal finance is doing well. As you know, our personal finance is basically short-term lending.

It is lending where we believe in areas of good quality credit counter parties, and so that basically means that well the big bulk of the portfolio has been originated under while the economic environment of the last couple of years, and so that it shouldn’t surprise you that the cost of risk at this stage is basically improving. So, I think that’s the color I can give on those two.

With respect to litigation in particularly ForEX while there is basically nothing new, we have to add as a reminder of course where our market participants albeit the relatively small one compared to other players. We observed indeed that the authorities have been stepping up investigation in several aspects thereof.

So, indeed as we said earlier we had some requests for information. We have done -- we have launched our internal review.

But as I said there is nothing new to be said. And as we said earlier while this review is ongoing the bank is not in a position to foresee the outcome of these investigations and proceedings nor their impact.

But as I said, I mean we are a relatively small player in this area, but its -- and there is nothing else to add at this stage.

Okay. Thank you.

Yes. Good afternoon, Lars.

Just a few questions on my side. First of all, if you could come back to the RWA reduction, the 40 basis points.

If you could just give a bit of color on the €44 billion that you had previously for, I mean which type of risks exactly? The second be on the subject of regulation if you could just share you thoughts on GLAC and how BNP is positioned in that context?

And then just two last questions, one on the corporate center, just in the revenues, I mean this quarter they also surprised positively on the revenue. So I think you’re well above the guidance you gave at the time of Investor Day.

So, I mean if you could just give some color on what we should expect going forward is there any revision to what you had announced for next few years at your Investor Day. And then lastly just on equities, revenues they looked a little bit weak on kind of the run rate for this quarter -- especially if you compare to the first half, and is there any impact or anything you’d like to add on this performance?

Thank you.

Delphine, many questions. Thank you very much.

So if we start with the capital. So, I indeed remind you that we have in our typical slide on the core equity Tier 1 ratio, and typically we have two major evolutions.

There is the retained earnings that’s we have and then eventually if applicable acquisitions. So that’s what we normally.

You will have seen that this time there is two other boxes that we’ve added. And one of the boxes is indeed the anticipated impact of a regulation as of next year which is a prudent value adjustment.

So, let me remind you that when basically Europe voted Basel into law in April 2013 and basically you have several open issues. And it asked several parties to clarify those open issues.

So one of those issues what the prudent value adjustment which they are seeking me to clarify. Another one had to do with the leverage ratio where they basically asked the commission to come up with a proposal on how to calculate the leverage ratio.

And so, as all of these things were interrupts, we knew that things PVA would come. But there was basically no definition at that stage and so, as we typically do when we estimated our Basel 3 we wanted to give you as we decided very quickly go into Basel 3.

We wanted to give you the most appropriate outlook, and so we included our own estimation of what that PVA would be. And that is basically what we took as a reserve for uncertainty on the risk weighted assets.

If you look at our document just before the Investor Day on the re-composition, if we basically where one observed the increase in risk weighted assets into corporate center, we would identify that, that time that we took a reserve for regulatory uncertainty. We consider at this time that basically on the Basel 3 these uncertainties are now basically left it.

We consider the final text the RTS of the EBA on it final; we consider the leverage final as well. So we thought it was a good moment given the fact that there is also the AQR and everything that we basically give you the state-of-the-art calculation which is what we did.

And so basically we released the 40 basis points, the equivalent of 40 basis points for a regulatory uncertainty because it’s basically lifted. So, that is on the core equity Tier 1.

And on the uncertainty with respect to whatever is then the core equity Tier 1 ratio, but indeed there is no end of joy because as you mentioned in your second question, there are other elements of regulation which are still in trucks. And the one that you mentioned is the GLAC, so which is the total loss-absorbing capacity.

So I remind you that this is something -- so which is in the frame of the reflection of regulators on saying listen if we have a core equity Tier 1 now well defined, this is there to absorb any potential losses. However, if push would come to shove and there is indeed such a loss, we have to be able to continue the bank operating and therefore a bail-in is a concept that is often looked at to be the one to go for it.

And so, with respect to that, when in Europe they decided on the BRDD and therefore therein defined the so-called MREL, which basically is of that concept of saying there is at least 8% of bail-inable instruments that you need, the GLAC basically continues on that idea. Now the GLAC like as I said, it’s something which should be discussed at the G20 of Brisbane next month, so in November, after which it will go through a QIS and all these kind of stuff.

So it is still something which is -- let’s say in to wings which have to be reviewed before we can say the final conclusions on it. If you and as you asked me, I will give you my opinion on this.

So if we start from the point of view that indeed regulators basically say that bail-in is something they have to cater for, we understand and we take what Europe has done on the MREL has been probably the right way to proceed. What I mean by that, I remind you is that in that kind of bail-in, one can indeed assume logically that to a reasonable level deposits by retail clients are to be protected just as one can assume that participants, the payment systems operated by the bank can be protected, but then basically we see no reason why all the other material and knowingly invested parties which provide senior funding to the bank that they would have to be any tearing in that.

So that's basically where we stand and so to reiterate with the existing regulation BNP Paribas is in line with respect to the GLAC, we’ll come back to it once its crystallized and we can say something sensible about it. With respect to the corporate center, the corporate center -- listen, I know that I’m being proven wrong quarter-after-quarter and that my guidance in your eyes is way too conservative and I know, but the thing is there is underlying this intrinsic cost of our prudence.

So I told you we put ourselves at the prudence on capital and liquidity. You’ve seen the amount of liquidity that we park at regulators and so basically that comes at the cost.

Now, I agree with you that you do not see my guidance; you see better results than that. But it's basically on the back this quarter of the -- our private investments or private equity portfolios, which have performed well and which basically lift that result.

So I’d stay for now that -- I’d stay prudent and I know that the results have been good in the past, but they’re somewhat driven by the elements that I said. So I’d stick to that at this stage.

If there is further clarity with respect to the sell-through and other stuff, I might come with an update. But for now I’d stick to the guidance going forward.

Then with respect to your last question on GSCD on the top line evolution, as I said we’re nearly an equity kind of house. We had quite a strong quarter last year and indeed overall the flow business was a little bit softer.

So this explains that. I also remind you that, we’ve indeed a quite part of the business of RBS that basically you don’t see it in the numbers.

So that is something -- that is to come. So I’ll leave it to those four answers to your question, Delphine.

Great. Thank you.

Thanks a lot, Lars.

Yes, good afternoon everybody. Three questions please from my side.

The first one on the leverage ratio, please. Lars, you mentioned now that even the definition is pretty crystallized.

I just wanted to invite you to comment please on the 3.5% Tier 1 leverage ratio level you’re at now. I think somewhere around 3.2% if we strip out the ground probably Tier 1 instruments.

Is this the ratio that you are focused on and I know you, you’ve explained some of the shift in the gross balance sheet in the last couple of quarters, but with the balance sheet starting to grow, just trying to get a flavor for where you happy for that leverage ratio as a run, and if you have a medium term idea of a target you are aiming for? Second question please on the French retail business.

Thank you for the comments already on some of the revenue trends, just a bit surprise in some of the trends and the volumes especially with mortgage credit shrinking relative to an overall system, which is a bit more resilient than that, and certainly relative to the SME credit which is stable. So I just wonder if you will be happy to make a few comments please on what you’re seeing from a volume perspective in France?

And the third question please on the TLTRO, I think you referenced it right briefly there with regards to corporate center with some positive comments from management mid quarter on the TLTRO. I just wonder if you’d be happy to spend little bit more time on your expectations or your intentions for the December option.

And then a little bit on the potential P&L implications of the funds that you will take up whether you will keep the impact with the P&L, in the corporate center or how that cash will be deployed ahead of it being extended to SMEs? Thank you.

Nick, thank you for your questions. So with respect to the leverage, so indeed it stands at 3.5% Tier 1 and that is the metric you should take, because we assume indeed that the Tier 1 instruments which are grandfathered that when they computed they will be replaced.

So 3.5% is basically where we stand and that sounds like a good level to me. As you know, we considered the leverage ratio and we believe that the European environment considers and Basel considers it basically as a backstop metric and that is kind of the way we like to see it.

And so therefore if it’s a backstop it should never become the one which is putting the beacons against which we have to manage. So 3.5% for me sounds like a kind of a good level where I can consider the leverage as a backstop and basically concentrate on running the business on it’s core equity Tier 1 and it’s core equity Tier 1 returns.

So that’s where we stand and I know that in some other parts of the world one considers that leverage to be more than a backstop to be a front stop. You know my point view in an environment where much more of the funding is happening by the debt capital markets therefore the balance sheets of the banks are more similar.

One could be tempted to go in today’s kind of environment, but in a system where today still banks are providing a lot of the landing, where if the debt capital markets will take over, they will take over from, probably, via the mid size companies which probably means that they will not go directly into the debt capital markets. But basically pass through banks that leverage ratio of a back stop if such an environment makes sense, but not as a front stop.

So that's on leverage. With respect to the French volumes, I think there is not that much I can implicitly say.

I mean, if you look at the evolution versus the last quarter, the mortgages are slightly up. I think that the main think for me if I look at it is with respect to corporates.

So corporates are basically, if again, I compare it to then last year or whatever it’s up, it’s slightly up now, so is that something that forebodes for something, it’s probably adept too early. So I’d say let’s reconvene in a quarter to see how that picks up and that in particularly then leads me to the TLTRO as you’ve said, because if they’re not listed out of Europe, out of France if you allow me and look at the European footprint because in the end we are a bank with a very relevant European kind of footprint.

One indeed observes and that an important indicator for economic growth basically the lending, which is being picked up, taken up for investments for corporates, but also to some extent to households and mid-sized companies and that is basically in Europe in negative territory. So that is something that indeed is an element that if one wants to unshackle growth in Europe that will have to have a turnaround.

Moreover in the end, our point of view the LCR is not really stimulating the stretching around of liquidity. And so that is where we still believe that the TLTRO can basically be what the doctor ordered and attend very localized to what is needed.

Why? Because in indeed it provides lending, specifically contingent -- it’s targeted the contingent, maybe captures it better.

If contingent on that growth it basically provides a low yield on the longer maturity scheme of things which normally should provide an incentive for investing or further investing or more investing to the cap. And more over the TLTRO is structured in such way that it doesn’t allow the OCR to basically melt with it, and basically bring it down.

So from that point of view I think that TLTRO is good, we’re incorporating it in our business and budget reviews which we’re doing today and, so yes, we’ll participate into this initiatives.

Thank you.

Thanks. Good afternoon, Lars.

The first two of my questions have been asked, but I've got two just follow-ups. Firstly, as we move to ECB supervision and given your sort of conversations what areas you are most focused on?

I mean, which areas of harmonization, RWA harmonization do you feel would be more significant? You have obviously given some thoughts on the leverage ratio.

So, I mean, our hunch is that comes great more in focus, but it sounds like you feel that perhaps isn’t the case. And then finally on the kind of insurance treatments and Danish compromise, can you give us your thoughts there and remind us what deduction is that were phased out early?

I know it’s far or less an impact given to some of your peers. And then second question just on the CIB gross, you had a very good performance in fixed income.

Can you give us some sense of the kind of rough split between FX rate and credit within that business just to give us a sense of the sensitivity to stay continued sort volumes and FX? Thank you.

Bruce, thank you for your questions. If I -- first of all take the SSM, there are a couple of things.

There are elements indeed that the SSM can steer on, can push on. But for example the ratio of eventually the definition of the leverage ratio is not something that is being set by them of course.

So whatever I can say about the SSM is the way they are going to implement the rules that are being given to them. From that -- well, they basically going to ramp up as of November 4.

The only thing I can say from what I read in the public environment and the way I’ve seen they conducted the AQR and the stress test is that they are going to be in my read hands on kind of regulators. So it’s a regulator who is going to be focused on reviewing models, so I take it that they will remain risk focused so they are not going to go on saying everything is on the same footing and handled in the same way.

So we observe that there is a risk focus which basically means that you have to step up the understanding of the modeling. If I look at what has happened in the stress test, I’ve basically seen them doing that.

As a reminder in the stress test, even though banks use their models they basically string that up, the SSM had their kind of models to challenge that. So I suppose that is the kind of way they will go and that is the main thing that they’ve in their hands.

So as I said, the rules I think is done by other parties, but the main thing what I observed is that they will be hands on, that they will be risk differentiated and risk focused and that is really welcome because remember I mean there were times when the risk weighted assets were creating a lot of fuzz and that is not that long ago. And basically the EBA and another organs basically did comparisons and they basically said listen there is 50% of the differences between banks that are attributed to national differences and then there is 50% which is basically stemming from really different ways of managing the risk, I mean, getting guarantees, getting out early, getting to work out on different type of work.

And so if the SSM with its workings would iron out the 50% of differences which come from natural discussions, I think that will be really good and I think that is basically what they will embark on, but -- so that would basically be my read on that and with respect Bruce to your comments on CIB, I know that you guys want the breakdown in all kind of things. For the moment, we basically break it down to what we’ve in fixed income and the fact that we guided that the fixed income was basically up on the back of ForEX and rate and basically had a weaker impact of credits.

So that gives you some guidance on that how the ponderation is.

Thank you. So let’s follow-up though in terms of your expectations around treatments in insurance that is compromised.

And can you remind us what if that was phased early or today what deduction that would drive in your sort of core Tier 1?

Oh yes. So if -- but again, for us this is something which is not imminent, but if that would -- if under today’s circumstances you’d take it away, you’d basically be reducing somewhere around 50 basis points to correct the Tier 1.

Great. Thank you.

Yes, good afternoon. So first question I had was on deposits.

In Q3, it looks like the total deposits have grown quite substantially from 573 to 617, so that’s about 44 billion. And I think it’s only about 6 billion to 7 billion might have come from the Polish acquisition.

So that looks tremendous. So just trying to understand where it’s coming from and why the notably strong performance in Q3?

And then, I just wanted to touch base on a couple of the topics, the regulatory topics from earlier, especially on MREL through GLAC. Are you thinking about the issuance of the compliant instruments?

Do you feel like you need to restructure the legal entities as one or two of your peers have embarked on? Or will there be a new separate kind of layer of debt that might be issued?

And secondly, on the RWA site, since we lost spoke and there has been a new paper on operational risk RWA and taking into account the events earlier this year. Just wondering whether that might have a bearing on your operational risk RWAs?

Thank you.

Yes, Kinner, thank you very much. On the deposit side, I agree that maybe the reading is a little bit more complicated and so there are indeed some parameter effects, there are some change, so ForEX effect with respect that whatever is in dollar basically buys you more euros.

And then, one should not forget our corporate banking. So I remind you that when we rebranded our corporate banking from investments whatever it was, it was named to corporate banking, it was to reflect that it basically acts on both sides of the balance sheet.

And if you look on slide what is it 30, you will see that the client deposit there have grown with 20% from 65 to 78. And so that amongst others is on the back of our cash management.

So all the efforts basically that we do with respect to that. And as you know, we basically have made our plan and when -- if you go back to the current regulation, in the past when you grew, you have to cover your capital.

Today, when you grow you have to cover your capital, but you also have to grow both sides of the balance sheet. And so that basically means that in the areas where you’re active, you have to be able to do this.

So in the areas where we grow like in corporate banking, we focus on both sides and that is what it is. And in the end, of course, that would be very fair.

This continued increase in deposits is just another tribute to the client confident -- client confidence that we have. So that’s on your question on deposits.

With respect to your long list of regulatory questions, so if I first take out the first one, and then -- and I don’t want to confuse the whole audience, but indeed there is on one hand, the MREL, GLAC discussion and then on other hand in my mind there is the holding discussion. So the MREL, GLAC is kind of how do you do bail-in.

right. So once the capital has absorbed eventual hits, how do you ensure that the bank can continue to run?

As I said for us the MREL which is a European concept, basically said Paribas and you have a set of instruments which basically excludes your deposit and some of your payment system derivatives and the like and then you have the GLAC which basically says should we think about a tiering within that kind of aspect. You know my point of view on it and I think that the concepts that have been shown every over and over again, in respecting the normal traditional bankruptcy rules like the MREL does or Paribas is very fine.

So that’s basically it. So I see today in the current regulation which is the one which is cast in stone, which is the MREL.

I see no reason to do any other kind of instruments. So we will talk again, if and when there would be a new regulation.

Now the holding company for me is a different kind of concept. This is again a concept which is better known for those who would be dialing in, in the morning, basically those who are on the other side of the Atlantic, its something which is better known.

But the holding company for me attends to other aspects of that question of the regulator which is how do you do your resolution, how can you handle this kind of aspect. Again, something to date and which is not in the current regulation.

Again, if these thing evolve, we will come back on it. With respect to RWA, so yes, RWA there is of course one thing which is the credit risk weighted assets and the markets related assets which I think has received quite some attention.

As I said earlier, the aspects and the working, particularly that SSM will do, could help to shed light on ensuring what would an adjacent and so on and so forth. And so that would be good.

Of course there is a continuous stream of updates which is coming out of Basel, one of them is on the operational risk and we will have to see and when this kept translated, what that would mean. But let there be no shadow of a doubt, I mean, we have an advanced model on operational risk.

This basically includes events like the one that led to the settlement of the U.S authorities. So basically the events with the U.S authorities led to a further observation, which we put in and which basically increased by €2 billion, the RWA on that front.

So that’s basically where we stand Kinner on those two aspects -- three aspects actually.

Great. Thanks a lot, Lars.

Yes, good afternoon. I have three quick questions please.

The first one, could you maybe quantify to which degree your CET1 ratio is actually sensitive to dollar moves? Your Slide 15 suggests that’s not a big issue, but I would be curious to have a bit more formal guidance.

The second question, you mentioned weakness in the European business with commodity and energy related products in CIB. Do you think that’s a BNP specific issue or is it more generally a reflection of falling commodity prices and maybe the Russian situation?

And so the final question, your coverage ratio of doubtful loans has actually gone up at 3 percentage points during the quarter. Was there any particular reason?

Thank you.

Stefan, thank you very much for your questions. On the first one, the core equity Tier 1, and let me remind you how we basically aim to structure the majority of our non-euro participations.

We basically structured in such a way that the movements in the core equity Tier 1 due to the exchange rates are similar to what we have in the RWAs. And so that is why you hardly see (technical difficulty) the ForEX effect to an exchange rate effect because its very, very limited due to the structuring that I just talked about and which is something we pursue.

So that’s on the core equity Tier 1. With respect to -- yes, the weaknesses in energy and commodities, I think there are several things.

Yes, of course there is somewhat an effect which is specific to BNP Paribas which have to do with all the things that we put in motion around the supplement. But over and above, I think there is a generic trend which has to do with the price of the barrel of crude and which also have to do indeed with the embargos related to Russia, which is also a player on that market.

So that is how I would provide color to your question. And then on the coverage ratio, does the coverage ratio indeed improved?

They basically improved on the back of several things. It improved on the back of parameter FX.

So basically the thing that we brought on, particularly LaSer came with a further improvement of the coverage ratio. There is also, although I said that on the core equity Tier 1, we neutralize the effect of ForEX, because that is basically what you want to do.

Of course, I cannot neutralize it on the coverage ratio and so there is also an effect stemming from some of the dollar areas, which basically lead to that improvement and then there is a third element which is infill situations of say a fickle growth demit economic evolutions. Of course, one focuses enormously on ensuring and stepping up as much as one can the guarantees, which is another element of my three pronged answer explaining the improvement of the coverage ratio.

Yes. Good afternoon, guys.

Just a couple of questions on Italy and the funding position there. Firstly, where are we now on the run off of the expenses corporate deposits?

Because it looks like the outlook -- the outplays there still look quite heavy year-on-year, quarter-on-quarter. And then looking a bit longer term with the single supervisor, does that cause you to rethink your funding plan in Italy in anyway?

I think particularly sort of anticipating greater fungibility of deposits across your Eurozone retail businesses? Thanks.

Thank you. So yes, with respect to BNL, as you indeed can see, so we’re in the commercial positioning that we’re pursuing in the light of our industrial plan and there was indeed a slight reduction on the lending side, which we then indeed compensate by also decline on deposit which we focus on the most costly ones and as we said in particular, the corporate.

So all that is in line with the repositioning that we’re pursuing in Italy. With respect to the funding and supervisor, I think yes, we always said that in the end the single supervisory mechanism and if you read the text which underpins the establishment of the single supervisory mechanism, it is there to promote Europe well, or at least to promote the Eurozone and bring down barriers which are hampering free flow of whatever you want.

So that is something, but that will take time and that will take time the SSM will not be the only thing which is required to do that. It’s basically the banking union and its steps that are required.

But as a glimmer of hope, I’d indicate the sell-through. The sell-through is something which the bank takes at group level and then basically redeploys as it can best optimize.

And so as I said, that is why we’re reviewing in our budgets where we can best optimize it. So that is a glimmer of hope of maybe some of the things of the future to come.

Okay, great. Thanks, guys.

Good afternoon. Firstly, you made it clear that you view the deleveraging at BNP as over which is fair enough.

But could you help us get a better sense of how much you care about the mix of the balance sheet please? Trading securities are up 40% year-to-date, assets at fair value as a percentage of the balance sheet almost back to pre-crisis levels.

Of course you’ve got falling interest rates and FX, but even in the first half trading assets grew strongly when these elements were less prominent. Is this something you monitor or care about?

Secondly, just looking at the corporate banking business in CIB. I see the loans have increased 7% in the quarter, yet the top line was quite weak, some of the reasons you mentioned whereas last quarter the top line was strong, but loan growth negative.

So can you give us a sense of what’s occurring there, especially in terms of off balance sheet? Finally, going back to previous questions on expenses, what would be very helpful is, if you could tell us how much of the 1.4 billion investment spent target from the investor day development plan has actually been achieved so far please, that would really help us get a sense for how much of the expense over runs are underlying and how much are function of the development plan?

Thank you.

Omar, thank you for your questions. A couple of things, so yes, of course deleveraging is over we’re into core equity where we want to be.

So that is fine. Now, there are indeed some evolutions in the balance sheet, but again I remind you for me the intrinsic are risk weighted.

So if indeed my trading assets go up, because basically my rates go down, that basically for me in my overall position doesn’t make much difference. So I’m not going to be tempted to go to a kind of leverage, kind of element where I say oh, it is bad that the yields basically move and that it gives that kind of situation.

Now nevertheless, having said that, I said earlier that of course the leverage is a backstop and that 3.5% looks like something which is fair, but that is basically it. I’m not going to get nervous about these reevaluations on the back of evolutions of rates and so forth.

And so what is important is that the balance sheet remains clearly within the core equity Tier 1 and that -- on that core equity Tier 1, the returns that we aspire to are basically to be reached. So that is basically how I look at the balance sheet.

With respect to your corporate banking evolution, I’m not sure, maybe my explanation wasn't very clear, but let me try it again, because if I look at the current figures I see my loans going up by 2.3% and I see my revenues going up by 2.7%. So that is kind of in line.

Now it is true that we said earlier that there will be moments where there will be more focus on kind of fee business, so where there is more rigidity to distribute or whatever is going on, and these are typically less linear and indeed in the second quarter there was more of that. But if you look at the numbers of this more typical kind of quarter, the evolution are in my read quite logical.

With respect to your question on expenses, so as I said earlier, I think I understand that the concerns that you have on it, I think at the year-end we will take a stop, or we will be one year in the plan. But intrinsically I say it again.

If you look at the core cost income ratio comparable nine months on nine months, it is improving. So that basically means we’re reaping benefits of Simple & Efficient.

We are investing for growth, we are. So we’re putting boots on the ground in the U.S., in the Asia-Pacific region.

That means that those boots arrive, it’s not exactly the next day that we generate revenues. But if you look at it, look at Arval, look at insurance, it is pretty close.

So I think there you can see that evolution is in line. And I repeat, for corporate and investment banking, we said that the turnaround will take more time and there indeed we said that the cost would run a little bit above.

So if you look at it, I say it again. Look at Asia, look at the U.S., look at Arval, look at insurance, look at security services; I think you can see the evolution as it is.

And so ballpark, I redirect you that the majority of the evolution of growth is in order to support the development plan. As I said, there are some businesses which are to be turned around where it’s a different.

And then let’s not forget there are some areas, as I said, Belgium, Portugal, where we have been impacted by additional taxes. And these are not small numbers.

Belgium 50 million this quarter, compared to last one. So that’s relevant kind of information.

But I take note Omar of the points I think with the year-end numbers we might do a review of where we stand.

Just as a follow-up to that, conceptually, the €1.4 billion, how set is that, if the revenue environment were to deteriorate further? Would you be comfortable in revising that number materially downwards and/or expanding Simple & Efficient, for instance?

Is that the kind of thing that you are thinking about ahead of the end of this year?

No, I’ll put it this way. Of course indeed there is a certain tolerance to slippage on jaws that we accept.

And so if some of the elements would go faster or slower materially than what we have in the plan, we will of course review which could be that it is just maybe spreading longer in time. It can be that the economic environment is different than what we have and so we will adapt.

Its not that people have received blank checks for €1.4 billion. That is not the way it is.

That’s not the way it works. So, yes we of course look at the facing at which it goes.

I mean we’re six months in. Headwinds are different than what we anticipated, but so our tailwinds.

We’re now six months in, we’re in the budget process. So give me time to have all businesses do a review, come up with it.

And if there are modular differences, speed differences or focus points differences, I think that the yearend results would be a good moment to talk about it. So, but let me be very clear there is not a €1.4 billion blank check that has been written.

Very clear. Thank you.

Yes. Good afternoon, everyone.

Just to follow up on Omar Fall's question, just to be crystal clear. The jaws effect over the last quarter has been close to zero.

You are giving no guidance regarding top-line growth in the retail activities and you’re extremely conservative on that side. So our main question, to be sure that on the full-year result we have a clear answer, is when can we expect to have a clear pickup on the jaws effect, as it's clear, I would say best track record of BNP Paribas?

My second question would be on BNL. Can we have the situation in terms of intragroup funding today?

And where are you on the LTRO? Thank you.

Thank you, Maxence. And with respect to the jaws, and as we said and we are indeed at 2.6 evolution quarter-on-quarter.

I said if you look at the nine months and as I said you look at it bar the exceptional elements you see an improvement of the cost income. As I said and during the additional plan BNP Paribas is dancing with its plan to two different tunes.

If you go back to the slide that we’ve shown (indiscernible).

I understand. You have been repeating that for half an hour.

My clear question is that, we have -- we can understand that it takes sometime to make some investment, but definitely it will be extremely useful for us to have a disclosure of the €1.4 or where you are and where you made it. Clearly, investment banking have been one of it; SS, Personal Finance the others.

Just to be sure that for Q4 we have a clear clarification on that side, because we have more and more questions on that element.

Maxence, I can say it for one more further half an hour or to much time that you want. But we have given during our plan a clear view that we are capping our costs in our domestic markets.

Look at our domestic markets, operating efficiency is improving. That is what we are doing.

I do agree. The question is that the revenues are collapsing more quicker that (indiscernible).

Thanks.

Again lets look at it business-by-business, Maxence. If we look at it, we go for our investment solutions.

So at investment solutions as we said earlier we have a 5.2% top-line growth and we have a 4.3% cost growth. And I’ll remind you …

Yes, there is (indiscernible) by the first one. If we look for the retail one, France is negative, BNL is flat, Belgium is good, Europe-Med is good, BancWest is flattish, personal finance is negative and CIB is negative.

Overall, it means that your revenues are up by 3.9% and the cost by 3.8%.

Maxence, I think I’m going to end it here. And I say again for the bank, quarter-on-quarter its 2.6% co revenues evolution, and its 2.6% cost evolution.

Indeed what you look at it, if you look at region by region we said it, France I explained that there is indeed a effect on the top-line which I argue for, apart due to exceptional elements for apart due to interest rates environments. And it is true that the interest rate environment is a headwind which is different from what we anticipated.

So indeed for the top-line in those activities having them stable at the high level I think is something on which we have to work hard, and which basically means that indeed the cost reduction well has to be the one which is to focus on but also the cost of risk elements. And again, if you look at the cost of risk elements in several of these countries bar Italy that is where we should be.

I talked about investment solutions and I talked about CIB. And CIB I reiterate, we said it will be one to two years 2015 where the cost of re-changing, adapting to the regulation will flaunt the top-line.

I mean there are indications if you look at the top-line of CIB which gave glamour of hope fixed income has on wealth but there is still a long way to go into the adaptation towards what the regulator wants. And that is what we said at our Investor Day and that is where we stand.

Okay. Funding, please.

On the funding, BNL so the intragroup funding stands at around €6 billion. So relatively stable or where it has been over the last couple of quarters.

And with respect to the TLTRO we said it, we will participate. We are reviewing where and by how much we can redeploy it optimally.

But like every option allow me to announce or to decide on the number or the day when the window is open.

Okay. The €6 billion does it mean now it’s clean from LTRO or its still with --?

Yes, thank you for allowing me to clarify. The €6 billion is the intragroup exposure of funding towards BNL.

Okay. Thank you very much.

Yes. Good afternoon.

Thanks for taking my questions. Actually, it's just a few clarifications on some things that we have discussed earlier on this call.

The first one is to come back on the corporate center revenues, please. You just said earlier that you maintain your guidance, which is by the way cautious, like you said.

Can you confirm this is €75 million negative revenues per quarter? Also, a small request on the corporate center revenues.

Like you said earlier, it looks like there is quite some volatility coming from the private equity revenues. Maybe if that's possible, it would be great if in the future we could get some breakdown of the contribution from the private equity line, so we can see also underlying revenues in the rest of the corporate center how they have been moving.

The second question is on the TLTRO, just actually a follow-up, how much you estimate that you can draw down in total if you use the maximum potential amount that you can use. Also, on the Danish compromise, I missed the numbers that you mentioned.

If we were to remove the Danish compromise on the insurance treatment. Did you say it was 15 basis points cost for the quarter one or 50.

Thank you. And the very last question is actually on the Latin gains in your quarter one ration coming from AFS reserves, whether you could provide us with an estimate of how much they are in Q3 or so in billion euros or basis points of quarter one?

Thank you.

So, yes on corporate center, for the moment we stick to the guidance that bar positive or negative unforeseen elements that is a minus €75 million. And I’ll take note of your suggestion on the private equity.

But and again these are things, private equity is something which is not predictable. But we can maybe shed some more light on its contribution.

With respect to the TLTRO, as I said we are reviewing in our budget process, those are one step back. So the TLTRO is conditional.

So, one has to have quite a good sense of how much one can redeploy, so that is what we’re looking at. And as I said earlier as every good option we’ll decide and we’ll go to the window -- the day the window is open.

So, at this stage there is not much more I can say because as I said this is something in our mind that will stimulate demand by the fact that it will basically lead to lower funding cost for the client. So, I wouldn’t read too much of TLTRO as an entire boost to the bottom line of the bank.

It’s more a boost to the economic situation in Europe. With respect to Danish, again let me say two things on that.

So, they basically has just been voted a year ago. So, this is something I would assume wouldn’t change every single day and so on.

And as I said the impact would be this the picture of today would be fine in the waters of 50 basis points. Then with respect to available for sales or available for sale impact, let me remind you that we are filtering the severance.

So the severance are not playing in there. Their amount is relatively stable is standing on the banking side for a lot from equity related instruments who’re not necessarily fluctuating with yields, and on those equity there is a lot of equities which are basically non-listed.

So it is not something which is very volatile. As I said, the amount stand around 60 basis points 60 and has been relatively stable.

And the remainder part is coming from fixed income product in insurance where also there are buffering effects from the way these elements are accounted for in the liabilities for clients and so forth. So it is something which is relatively stable and you shouldn’t tie it, definitely not tie it with the severance which are not included.

Thank you.

Yes. Good afternoon.

Thank you, Lars. I can only thank you for the detail on the over domestic market disclosure.

I guess that we can agree that it would have been a shame not to comment on the strong performance this quarter at least. And my first question is regarding credit demand.

You touched a bit on this for the French market. I was wondering whether you see any improvement in the other domestic markets and maybe even also shed a bit more light on France.

We have seen a pickup in at least in the banking markets data both in Italy, at least month-on-month in September, and also in France over the past months. So is there any basically, light at the end of the tunnel?

The second question is regarding your acquisition policy. You mentioned bolt-on acquisitions.

I guess after AQR and the stress test, quite a few banks do appear weak and might require backup and possibly being bought by a larger bank. Are you excluding any large acquisitions, and will you stick to small acquisitions or would you be ready for a kind of mercy killing acquisition like what you did for Fortis?

And my last question is regarding your -- also your stress test results. Basically, over the first nine months, if we exclude the US fine, you have already accumulated over three quarters the equivalent of the net profit you are expecting in the base line scenario for the next three years, which I thought were very, very conservative compared to other banks.

Basically, you have a much lower net profit contribution of a base line scenario compared to Soc Gen, [ph] [Disa], Deutsche Bank, so all banks which normally speaking have a much lower profit generation capability than BNP Paribas. So, what does it say exactly about the way you calculated this base line scenario contributions, and can you maybe elaborate a bit more on how it was done?

Thank you.

Thank you. If I take the first question on the credit demand on the other domestic markets.

So the other domestic markets as I said, if I look in particular on the specialized businesses in there alike are around leasing. Which are actually of course operating within the domestic markets and somewhat beyond.

You can basically see that it had a good run and particularly Arval, which as I said is on -- is part of the elements in domestic markets that where we allowed cost to grow and so if I come back to that, we really would part of the growth of the cost of the development is in there and you see that indeed that is working. Leasing is also working but I’ll remind you that leasing is also having a heritage portfolio which is being run down.

So never the less. So this ramping down of that heritage portfolio they are still witnessing that increase.

So from that point of view, as I said we draw the attention on it. Because indeed its one of the areas where we invest.

So yes, its one of the areas where cost go up. It is also one of the areas where we are reaping some of the benefits.

With respect to the generic outlook of credit the more run of the mill kind of credit, yes it’s a bit more -- it’s a bit different from country-to-country. Honestly I think well both if I would say France and I would say Belgium and Italy are driven by what is happening in their economy.

And France, as I said on corporate there is what, a slight up tick at 01%. It’s just too early.

I wish I could say more. But I hope that for the next quarter we will be able to shed more definitive directional light on it.

With respect to the bolt-ons, I’ll reiterate what I said. I mean let’s not forget so far Europe doesn’t really like big banks, big mergers, big growth.

Leverage ratio is impeding it, fishiness I mean if you become too big you get a free ride on 50 basis points additional capital. So there is a certain reluctance from the regulators to basically go into kind of big cross border kind of acquisition.

So for us I think all this speculation. What I can't say is look at the past, we have been doing bolt-on and bolt-on so we’re very pleased of the two that we’ve done.

They bring us on one hand or scale or they bring us market share which we needed in Poland to allow us to be a reference bank with close to 5% market share. So, that is basically what I would say.

On the -- your last question on the stress test and the baseline, yes thank you for allowing me to clarify. Let me remind you of the process.

For the processes that even in the baseline, well let’s put it the other way. I’ll start with the stress test.

So in the stress test in the model applied in Europe, it’s basically the bank that run their stress test. So they take the parameters that has been given, they run it into their models.

These numbers go into the ECB which basically runs their competitive models if I can say. And so if they observe that basically you are below on impact.

So less conservative in impact than them, they basically ask you to review. If you are more conservative than them I didn’t see probably they didn’t have time or whatever, they didn’t relay back on saying, hey you’re more conservative and can you review.

So that’s the first thing on the process, on how it went and how they basically challenged the models and how they ask for corrections. And then the second thing is let’s not forget that the baseline includes stress as well.

So for example on trading its not just you’re trading expectations, it’s a trading expectation which is corrected for the average of four scenarios that they took back from the past and that they ask to apply. And so again, even in that baseline you apply your models.

And as I said the model corrections or the expressions or whatever we had is when you’re less conservative than them. And so, maybe but that is now just me speculating.

Maybe our models are that more conservative than whatever and they didn’t got corrected -- they didn’t got corrected downwards. So, that would be the color I can provide to you.

Okay. Thank you.

Hi. Good afternoon, everyone.

I’m aware of time, so it will be very, very short questions. Just focusing again on the French retail and revenues, mostly on NII, what are the levels that are still remaining you have to -- that you can still use to offset the pressure on that item?

You mentioned you are working hard to keep it stable, so what you can still do on that sense? And do you still reiterate your midterm guidance of above 0.5% CAGR by 2016?

And in Investor day, you mentioned that actually the assumptions you factored in your plan were -- for interest rates were reasonable. Is that still in line with the sharp decrease you've seen in rates in the last months?

Thank you very much.

Tarik, yes thank you for your question. Let me be fair.

I mean these have now been for quite a while persistent low interest rates. So, that means that the buffering of your assets and liability matching are of course diminishing.

I mean if I would be able to mismatch for years and years there would be bizarre, wouldn’t it? So yes, one has to face it with persistently low interest rates.

The possibilities to basically manage those are diminishing. And so that fact combined lets be fair to the -- in this case the headwinds we had expected, and I think we will have to monitor closely and I think this is maybe one of the areas where the headwinds in the current environment can be a little bit stronger than what we put in our plan.

And as I said in some other areas the tailwinds are stronger. So yes, I would urge for some caution on this low interest rate environment.

Okay. Thank you very much.

Yes. Hi, everybody.

I’ll just ask one very last question. It regards to the corporate banking.

I don't know if you can comment a little bit on the revenue trend, because we've seen an increase quarter-on-quarter on the loan book, but revenue are still on the let’s say below your guidance of 800 million per quarter. I don’t know if it is just a scenario effect or it is also margin effect and even commission effect.

Could you just please comment on that? Thank you.

Yes. Yes, indeed.

So corporate banking as I said is indeed having some renting up of lending activities. Corporate banking is of course working also to position itself to participate and to originally to distribute which will balance on what the fees and as I said earlier fees are not as linear as our interest income.

Now let’s also be fair that for the moment, again, if you look at the situation on corporate banking, I think the deal wins are somewhat stronger than what we’ve expected in Asia and in the U.S. But there are a bit more headwinds that we see in Europe, given the overall GDP and I said, in particularly weakness, slowdown in the energy and commodity business.

So I’d say here let’s simply monitor closely how the headwinds and the tailwinds play out. Operator?