BNP Paribas S.A.

Lars Machenil - Group CFO

Maxence Le Gouvello - Jefferies Tarik El Mejjad - Bank of America Merrill Lynch Jean-François Neuez - Goldman Sachs Bruce Hamilton - Morgan Stanley Pierre Chedeville - Credit Mutuel-CIC Delphine Lee - JP Morgan Omar Fall - Mediobanca Jon Peace - Crédit Suisse Jean-Pierre Lambert - KBW Lorraine Quoirez - UBS Stefan Stalmann - Autonomous Research Anke Reingen - Royal Bank of Canada Piers Brown - Macquarie Matthew Clark - Mainfest Alex Koagne - Natixis

Thank you. Good afternoon, fine ladies and gentlemen and welcome to our third quarter 2017 results presentation.

In our usual way, I’ll take you through the first two chapters of our Q3 results presentation, and then, I’ll be pleased to take your questions. So, I hope you will have the slide presentation in front of you.

And in any case, let’s get started with our key message on slide three with BNP Paribas delivering a good level of income in the third quarter. If we look line by line, we see that the revenues were slightly lower due to an adverse ForEx but were actually stable at constant scope and exchange rates.

Costs were well under control, thanks to the continued implementation of the operating efficiency measures. Cost of risk was again at the low level this quarter, standing at 36 basis points in terms of loans outstanding.

Notably, this quarter was a successful IPO of SBI Life in India, through which we sold a 4% stake that generated a €326 million capital gain in our Q3 accounts. And as a reminder, the market value of our remaining 22% stake is around €2 billion.

So, overall, the Group delivered a good level of net income which stood at €2 billion, up 8.3% compared to last year. And our common equity Tier 1 ratio clocked in at 11.8% at the end of September versus 11.7% at the end of June.

Now, if you move to the exceptional items of the quarter, which you can see on slide five where you can see that they were overall negligible in the third quarter while they have been €300 [ph] million negative in the corresponding period of last year. They included this quarter the capital gain on the sale of the 4% in SBI Life I just talked about and also the impairment of the goodwill of TEB in Turkey.

Now, if you can swipe to slide side, you can see the performance of the Group and of the operating divisions that was affected by an unfavorable ForEx effect this quarter. As already said, the Group delivered €2 billion of net income, up 8.3% year-on-year.

Now, if you advance to slide seven, you can see the good operating performance of the operating divisions in the first nine months of the year. And in terms of net income, the Group has so far delivered €6.3 billion of net income in the first nine months.

Now, zooming on the revenues of the operating divisions. If you turn first to slide eight, you can see that the operating divisions held up well despite an unfavorable environment this quarter.

In fact, at constant scope and exchange rates, revenues of the operating divisions were down just 0.7%. Domestic Markets revenues marked a slight decrease due to the low rates, though they displayed good business development.

International Financial Services revenues marked significant growth like-for-like and CIB was affected by the unfavorable context for Global Markets, showing however growth at Corporate Banking and Securities Services on a comparable basis. So, all-in-all, showing once more the strength of our diversified business and its integrated approach.

If you now flick to the following slide, number nine, you will see that cost of our operating divisions were actually down, thanks to the implementation of the cost saving measures. At constant scope and exchange rate, they were only slightly higher.

CIB’s costs were again lower, benefiting from the launch of the CIB transformation plan at the beginning of 2016, so an average, a year before the other. IFS cost evolution reflected the business growth while Domestic Markets where costs were higher on the back of the continued development of the specialized businesses.

Indeed, if you look at the average cost evolution of the three main retail networks, France, Italy and Belgium, costs were down 0.1%. If we stay on costs and if you could swipe to slide 10, you will see that we are actively implementing our business program of new customer experience, digital transformation and savings.

And this across the Group entails total investment of €3 billion by 2020. The launch of the plan has started in line with the defined time table and the programs are being implemented gradually.

At Group level, we have already identified some 150 significant programs. In the first nine months of the year, we have already booked €484 million (sic) [€448 million] of transformation costs and generated €309 million of recurrent cost savings.

The bulk of these cost savings were as expected in CIB, which launched its plan at the beginning of last year with the remainder almost equally split between the other two divisions. I remind you that we expect to book €0.5 billion of cost savings by the end of the year.

If we now shift to the cost of risk, I would kindly ask you to flick through the three specific slides on the topic and they start at slide 11. You can see that the cost of risk was again at the low level this quarter.

On the whole, the decline of cost of risk resulted from the continued decrease at BNL combined with write-backs in some businesses. Looking at the different businesses, one at a time.

In Corporate Banking on slide 11, you see that provisions were offset by write-backs this quarter. If we now turn to the next slide 12, you see that the cost of risk was low in French Retail, very low in Belgian Retail and continued to decrease at BNL in Italy.

In the other retail businesses on slide 13, you see that Personal Finance saw a low cost of risk this quarter, benefiting from the low rate environment and the gradual shift that they are doing towards products with a better risk profile. Europe-Med’s cost of risk decreased and was positively impacted by a provision write-back and down quite still at very low level.

If we now turn to the financial structure, which is synthesized on slide 14. You can see the further improvement of our common equity Tier 1 ratio to 11.8% that I mentioned before.

Our Basel III leverage ratio was at 4.1% and our liquidity coverage ratio stood at 111%. The Group’s immediately available liquidity reserve totaled €324 billion at the end of September.

So, the Group is in good shape when it comes to these potential ratios. I’ll leave you to prove the remaining three slides of this introductory part and would now kindly ask you to advance to the divisional results starting with Domestic Markets on slide 19.

Indeed, Domestic Markets showed good drive in the business activity in the third quarter with good loan growth in all the metrics and in the specialized businesses. Deposits also continued to increase in all countries, so a positive evolution.

Moreover, private banking confirmed a good trend with assets under management increasing 5.8% and Hello bank! continued to attract new clients.

So, Domestic Markets continued to develop its digital offering. As you may remember, it closed back in July, the acquisition of Compte-Nickel in France, which will add to the setup dedicated to new banking usage and is gear to customers looking for very simple, convenient and cost-effective service.

And alongside this, Domestic Markets also continued to develop new customer experiences, launching this quarter new digital services in all of its businesses. For example, Welcome, a corporate onboarding solution and Finsy for factoring, and these are examples in French Retail.

When we talk about Italy, we have MyAccounts@OneBank, which is a digital accounts’ opening for the subsidiaries of corporate clients. And then in Belgium, we have Itsme, a digital ID application.

Looking at Domestic Markets, now, let’s look at the P&L. The third quarter revenues were almost flat at €3.9 billion.

As I mentioned, we saw a good business drive in our Domestic Markets but we continued to be impacted by the low interest rate environment. And on the back of our continuous focus, the commission income market increase in all the networks.

Operating costs were moderately higher due to business development investments in our specialized businesses. Indeed taking just three large retail networks, as I said earlier, costs in those three were actually down 0.1% on average.

Given the continued reduction in cost of risks at BNL in Italy, pre-tax income stood at close to €1 billion only slightly below last year’s level. Looking at each country and business, I can mention in particular that French Retail showed revenue resilience on the back of good sales and marketing drive.

BNL bc’s revenues were however reflecting a gradual improvement in business activity. Belgian Retail showed good business evolution in a low interest rate environment.

And finally, the specialized businesses continue to deliver a good business drive. So in conclusion, in the third quarter, our Domestic Markets showed good business activity and continued to develop their digital offering, but of course, still in a low interest rate environment.

If we now continue on these retail banking and services and if you could advance to slide 25 on your device, you can see that our International Financial Services division showed good business activity. In particular, Personal Finance continued strong drive; International Retail Banking also showed good business growth and Insurance and Wealth and Asset Management showed good rise of assets under management.

In particular, division also continued its digital transformation and continued to develop new customer experiences with the launch of new applications in its various businesses, the expansion for example of its digital banks in Turkey, which Cepteteb and in Poland with BGZ Optima, and also the acquisition in asset management of Gambit, a provider of digital investment advisory solutions. When we look at the P&L, revenues were down 0.5% compared to last year due to an unfavorable foreign exchange effect this quarter.

They were up 3.4% at constant scope and exchange rate. Costs evolved on the back of business development and cost of risk stood at the low level.

Bearing in mind that other non-operating items included the exceptional impact of SBI Life capital gain, pretax income rose sharply to €1.7 billion, up 27% compared to last year. Now, if we zoom in on to the different businesses, one a time.

You can first flick to slide 26 on Personal Finance, which continued to show very good business drive in the third quarter with outstanding loans increasing by 8.8%, thanks to higher demand in the Eurozone on the back of the initially mentioned favorable economic backdrop and also the positive effect of new partnerships. So, Personal Finance also forged ahead with its digital development as shown for example by the fact that over 70% of the loans are signed electronically in Spain and also the launch of electronic signature called Quick Sign in Belgium.

In term of results, revenues were up 3.9% on the back of this good volume growth, combined with a shift, of course, towards products offering, a better risk profile as mentioned before. Revenues progress particularly well in Italy and in Spain.

If we now look at costs, the progress on the back of the increased level of activity and cost of risk was at the low level and therefore pretax income reached €420 million, up 2.2% on last year. So, in conclusion, in a context of solid growth in Europe, Personal Finance continued to show a very dynamic business drive in the third quarter of this year.

If we now move to international retail banking, let’s start with Europe-Med on slide 27. Business activity showed good growth with loans increasing in all regions and deposits also marking good progress.

We mentioned earlier also the good growth in digital offering in Turkey and Poland. If we now look at constant scope and exchange rates, revenues were down 3.7% due to the impact of higher rates on deposits in Turkey, which has not yet been offset by the gradual loans repricing.

The other region progressed well on the back and good volume growth. Costs increased as a result of the good business development, and overall given the lower cost of risk, Europe-Med’s pretax income was up 7.3% in the third quarter of this year.

At historical scope and exchange rate, it actually showed 4% deduction due to the unfavorable ForEx evolution. If you now leap across the ocean, one ocean, the Atlantic at least and then even some more territory and we go to slide 28, we see BancWest, which confirmed a good business drive.

We see that the loans were up 6.2%, driven by both individuals and corporate lending while the deposits increased 9% compared to last year. On a comparable basis, the assets under management of our private banking marked a further progress of 13% on last year to stand at $13 billion.

On the digital front, the users of BancWest online services already exceeded 410,000. BancWest also continued to foster cross-business cooperation with other Group businesses such as CIB, leasing solutions and personal finance.

If we now look at the constant scope and exchange rates revolutions, revenues were up 6.1%, essentially on the back of good volume growth. Costs were kept well under control at Banc West, generating largely positive jaws effect in the quarter.

On the whole, BancWest pretax income increased by 9.5% on last year confirming a strong operating performance in the third quarter. It was up 3.4% at historical scope and exchange rates, as I said, given the unfavorable FX evolution.

If you could now kindly flick to slide 29 on our insurance and savings businesses, which saw assets under management increase further to stand at €1,041 billion at the end of September. Assets under management were positively impacted by good asset inflows since the beginning of the year in all our business lines and a positive performance effect, partly offset by an unfavorable ForEx effect.

In fact, over the past 11 quarters, our assets under management have increased by €147 billion with nearly two thirds coming from net asset inflows. If we now focus on the insurance business as first of the two and we look at slide 30.

Insurance continued to show solid business development with good net inflows, especially in unit-linked policies. As I mentioned, this quarter, we saw the successful IPO of SBI Life in India which was finalized at very good conditions.

Through our insurance subsidiary Cardif, we held a 26% stake in the Company and we took the opportunity to sell a 4% stake, we generated €326 million gain in the end of third quarter. In terms of value creation, you might want to note that the market value of the remaining 22% at the IPO’s price is in the region of €2 billion.

In terms of P&L, insurance revenues were a tad lower but in comparison, one must consider the high level of capital gains booked a year ago. Costs were up due to the continued development of the business; and overall after accounting for the SBI Life capital gain, pretax income marked a strong increase to stand at €740 million in this quarter.

If we now move to the second part of this activity, which is Wealth and Asset Management on slide 31 and it also showed good business activity in all its business lines. So, one, as we shorthand this activity forged ahead, we did digital transformation and development of new customer experiences with the acquisition of Gambit Financial Solutions, a leading European provider of digital investment advisory solution “robo-advisory” geared for retail and private banks in Europe.

When we look at the P&L, Wealth and Asset Management revenues progressed by 4.9%, despite an adverse ForEx effect. Indeed, if we look at constant scope and exchange rate, revenues were up 8.3%.

If we look at costs, they marked an improvement, leading to largely positive jaws. As a result, pretax income marked a near 30% improvement to stand at €208 million in the third quarter.

So, having looked at retail, if you could now kindly cast your eyes on slide 32 on Corporate and Institutional Banking, which continued a good business performance but faced a lackluster market context this quarter. So, revenues stood at €2.7 billion, down 8.5% compared to high comparison base last year, and impacted by an unfavorable for ForEx effect.

Indeed, at constant scope and exchange rate, revenues were down 5.9% only. If we now look at the operating expenses, they showed again a significant reduction of 6.2% or 3.3% on a comparable basis.

And this on the back of the cost efficiency measures that we’ve been implementing in the CIB division since 2016. Going forward and on the digital front, CIB has identified 200 processes that could be automated by end of next year.

CIB’s cost of risks marked a small net write back this quarter and as a result, the division generated €787 million of pretax income, down 4.2% compared to last six years and 1% down on -- 1.6% down on a like-for-like basis. If we now look at the next two slides that’s 33 and 34, we take a closer look at each of the businesses.

So, if we start with Global Markets, revenues were lower, marking of 14.6% contraction at constant scope and exchange rates as FICC activity was affected by challenging market conditions in the third quarter. Indeed, FICC saw lower client activity across the board in contrast with the favorable market context of the corresponding period a year ago.

So, resulting in 23.6% decrease in revenues. In lackluster context, we confirmed our top ranking on all bonds issues in euros and number nine position for international bond issues.

If we then look at the other activity in Global Markets, equities, we see that the revenues showed good growth of 9.4% on the back of solid performance of Prime Services and equity derivatives. If we now turn to the second activity within CIB and return to Securities Services, we see that revenues progressed by 4.2% on the back of growing outstandings and higher transaction levels.

The business also continued to win new significant mandates. Finally, if we look at the third part of CIB, Corporate Banking, the revenues were a tad lower due to an adverse ForEx effect; at constant scope and exchange rate, they progressed by 2.1%, transaction banking marketing good growth in particular.

It consolidated -- the Corporate Banking consolidated its leading position in trade finance in Europe and was ranked amongst the top three in Asia for the first time. The business reported good development of its digital offering with the success of the Centric platform, which already has over 7,700 corporate clients, an increase of 23% compared to the end of 2016.

So, to sum up in lackluster market context, our CIB showed a resilient performance, thanks to a diversified setup and continuing focus on cost reduction. So, ladies and gentlemen, this concludes my introductory remarks for the Group’s third quarter results.

As a takeaway, I would like to retain that first, BNP Paribas showed good business development in an improved economic backdrop across Europe. However, the market context this quarter was unfavorable for market activities.

Secondly, the Group delivered a good level of income clocking in at €2 billion, up 8.3%. Three, our CET1 ratio increased further to 11.8%.

And four, all this confirming a good start of our 2020 plan. So, fine ladies and gentlemen, thank you for your attention.

I’d now be pleased to take your questions.

The first one is, can you give us an idea of where do you expect to have the jaws effect improving the most in [2008] for business? The second one would be in Belgium, I’m little bit surprised by how the corporate loans were allocating [ph] for Belgium and Luxemburg?

Is there a special event or is it a new trend going forward? Third one would be on the cost of risk in BNL.

I’m little bit surprised that the cost of risk doesn’t address more after the keynote program that you launched in H1. And you are still very far from your 60 bps target.

So, can you give us little bit of outlook and when can we expect significant improvement? The fourth one will be on your stake in SBI Life.

Is there any kind of lockup or can you get rid of it when you want? And the last one will be on the G-SIB sector.

You have been quite vocal over the last two years about potentially having your addition of G-SIB sectors. Can you give us an update on that one, please?

Thank you.

All right. We have questions time permitting Maxence.

It’s good. So, if we look at your first question, so where do you anticipate in 2018 the jaws to improve.

And as we said, if you look at this year, you saw a strong improvement in the cost in CIB because they basically started early on their planning. So, next year, we should see the other parts also stepping up on these cost improvements, and that should be the evolution.

And when it comes to the cost of risk tapering off at BNL. So, we indeed confirmed that the new production that we’re going on, should lead to a 50 basis points over outstanding cost of risk.

And so for the moment, we’re still around 150 basis points. So, we’re tapering off towards that 50.

And that is taking time. Also in the process that we have in Italy where normally the duration of the workouts and all the related can take time, which is a bit specificity to what we see in Italy.

So, we said that we would anticipate to continue to taper off towards the 50 basis points in the coming years. And that would be more -- the 50 basis points would be a horizon 2019-2020.

When it comes to SBI Life, yes, there is one year basically lockup that we’re facing. And when it comes to G-SIB, yes, indeed, there has been, as always you fine gentlemen and ladies, you’ve seen that the bank and that’s what you basically also observe that the bank has been working on its balance sheet to improve its overall G-SIB exposure, but that’s basically all I can say.

So, we haven’t received a formal update from the supervisory authorities, which should normally happen somewhere in November or December. And so, of course, if that 50 basis points reduction would come, according to some of the figures, that is something which will be a reflection of the efforts done.

Nevertheless, probably, we will -- for the moment, we keep our overall objective of 12%, given the uncertainty around the Basel environment. So that would be my answers to your questions, Maxence.

I have a couple of questions, focused mainly on domestic retail business and one on SBI Life. So first on the retail, which is holding quite well actually, despite the pressure from negative rates.

So, in France, could you please explain little bit on the drivers for the solid volume growth? You reported this quarter, actually in nine months some mortgages growth was strong, remained high, strong despite like a slowdown in refinancing.

So, I want to understand where this mortgage growth is coming from, and also in corporate. And one thing, I mean, there were headlines saying that stabilization of revenues will be -- should be expected by end of 2018 or 2019.

What do you mean by stabilization? Should we expect the revenues to be flat year-on-year and end of 2018 or NII, what exactly you are referring to here?

And very quickly on SBI Life. So, what’s your plan for the remaining stake in there?

Thank you.

Tarik, thank you for your questions. If we look at France or in general in domestic markets, indeed we see a pick-up in growth, and a pick-up in growth which since the beginning of the year is basically across the board.

So, in the individual segment, it’s on the corporate segment, it’s on the mid-cap segment. So, it’s all of these which are reflecting the kind of growth that we mentioned earlier that we see in Europe.

So, it’s the case in France, also the case in Belgium and so forth. When it comes to revenues, allow me to clarify, because I think there was some misunderstanding.

What we have done is with France, we have revised our outlook. Initially when we did an update, we said that the revenues would go down by 3% by year-end.

Now, what we see and the evolution in the volumes and the pricing, we basically review this to minus 1%, let’s say. So, that is basically what we said.

And the other question is, when would there be a turn in the interest rate environment and there we basically said, in our plan, we haven’t basically focused on that but it’s not something that should happen or we don’t expect it to happen in 2018 somewhere soon. So, that is on France and on domestic markets.

On your question on SBI Life, so yes, no, we have this working relationship that we have with SBI Life. There was a decision to float a part of it which is basically what we have done, and so this is where we stand.

[Technical Difficulty] ask you about in France and Belgium, when you look at NII versus fees, was the interest rate pressure still present on NII. It seems to me that the quarter-over-quarter development has been maybe less worth, if you want, than what had been expected.

And the fees was rising. You mentioned the financial part of it and you see volumes growing in particular France and in Belgium 5% to 10%, leading me to think that there is a strong amount of pressure on normal transactional banking fees.

So, I just wanted to try to understand the pricing and the margin dynamics in these two areas of the revenues in the domestic markets. Now, obviously, there has been -- second question on the asset portfolio.

There is also First Hawaiian, which at the turn I think of 2015, you said that obviously you did IPO and you’ve done bids. Is the plan still to dispose off the rest of the business or now you’re happy with the 16 odd percent stake that you have.

And lastly, I wanted to ask about costs in CIB. So, the costs in CIB, they have been obviously fallen this quarter, but the revenues also have.

I’m just trying to understand what’s in the bag in terms of reduction versus what is valuable and what will come back if revenues pick up. So, say, if revenues had been flat, what would the costs have done, if you can quantify these type of things?

Thank you very much.

Thank you for your three questions. So, if we indeed look at the top-line in France and Belgium retail, there is a different dynamic.

If you take, for example, the net interest income, the dynamic between two countries is different. Net interest income for example in Belgium, which we’re paying for deposits, Belgium has basically adapted the price of deposits with the lowering in the interest rate.

So that has been a dynamic, which is different where you will see that now in France, it’s picking up, it’s turning, whereas in Belgium, it is having the impact of the lowering, of the deposits, which is coming to the end and which now has to shift into a repricing on the asset side. When it comes to fees, in an environment like we’re seeing over the last couple of quarters, there is of course a further demand on for example, assets under management, private banking related activities which generate fees.

And so that is a focus that we do and that is basically leading to a pick-up in fees. For the rest, when it comes to pricing, it is of course -- of transaction banking, it is of course a competitive market.

Nevertheless, in the overall pricing in a lower rate environment, you can imagine that pricing is done in an appropriate way. And when it comes to your question on First Hawaiian, as I said before, we’re not in a rush.

So yes, we announce that Hawaii is a bit further away from our core activities, when it comes to cross-selling and the related stuff. However, as I said, we’re not in a rush.

So, we’ll take the time and we’ll see how these things evolve. When it comes to the cost of CIB, yes, of course, there is a part of the costs, which are variable related in the activities.

But let’s be very fair that the large part of the costs are, the more traditional kind of fixed part, which has been ran down with the initiatives that we took. That would be my answers.

On First Hawaiian, is still plan to leave the whole thing regardless of the timing?

No. As I said, we have with the attention to basically do so, but as I said, we’re not in a rush.

I mean, if market -- so we’ll take time to complete this.

Just looking at the outlook of let’s say a number competitors, have given fairly cautious commentary on the outlook for the leasing, given the state of the retail market, this residual. So, I just wondered any sort of comments there.

Obviously, Q3 looks fine as it was. Secondly, just looking at the Compte-Nickel deal, which allows you to reach retail customers, an alternative source to the branch network, plus the growth in Hello bank!

Does that give you any scope to accelerate the optimization efforts in the branch network or is that really all captured in the existing cost reduction plans? And then, third and finally, just looking at the equities business within CIB, you’re obviously still showing pretty decent year-over-year momentum versus peers.

But just to understand the sequential weakness in volatility, I think that’s a function of the mix of the business, the weakness in derivative structuring in particular. And I just wanted to test that there have been any change in sort of the environment coming into Q4 or any changing competitive dynamics to make you, perhaps more optimistic as we look forward?

Bruce, not sure I understood your last question. Could you rephrase?

Yes. Sorry.

So, on the equities business, you are up year-over-year but obviously the sequential move down is quite a lot worse than many peers. I suspect that that speaks to the skew of the business to derivatives and structuring, which is being soft.

But, I just wanted to get a sense if that’s right whether you see any improvement as we run into Q4 or whether we should expect that continues to remain quite challenged?

All right, Bruce. Thank you so much.

So, if we look at first at Arval so, and our leasing activities, as you know, we have basically honed our overall approach where we basically initially when we buy the cars to basically lease them, we already make a selection to be sure that we have cars that can be “easily resold”. Secondly, we also look at the overall pricing and the duration of those contracts.

And thirdly, as you know, we basically initiate the cars in a firsthand market, and we basically resell them in a secondhand car market. And so that basically gives us sufficient flexibility in pricing and not to be totally dependent on things that might happen in that firsthand kind of market.

And that is what you see in our top line evolution, which basically holds up well. And secondly, when it comes to Nickel, so indeed in France, we basically have four different approaches to interface with the client.

So, two of them are basically the standard branch interfacing that we do. And we have Hello bank!

that we launched already a couple of years ago, which is a full bank in a digital way. And now, we have the Nickel, which is basically providing simplified banking at different pricing and so forth.

And so, this is basically, we want to have those four offerings and basically see how our customers shift eventually from one to the other, and that is then basically the speed at which we will optimize our branch network, which is what we’ve always been doing, and this is what we will continue to do. And when we look on your question on equity, so yes, we had overall a good run.

And when you look at the Q3 versus before, there is typically the summer, which is impacting our -- the evolution. So, Bruce, that would be my answers.

My first question is about company’s accounting by the equity method in the insurance business where there was SBI Life. You told us that in 2016, the net -- the participation of SBI Life in that line was around 15% of global amount in insurance.

And I wanted to know what were the other companies participating in this equity method line in the insurance business and do we have any other JV [ph] in emerging markets, what could be potential capital gain or things like that in the future? My second question is also related to another equity method line.

In Belgium, this quarter, we have a significant, I would €17 million. I wanted to know, what was it about and what kind of subsidiary is it?

And my last question is related to the asset management business compared with some of your peers, I am thinking about Amundi or Deutsche Asset Management, net inflows were quite disappointing in absolute and relative terms. And I was wondering if it was the effect of treasury products with corporate and what was your net inflows with retail networks and institutionals and corporate?

Thank you.

Thank you, Pierre. When it comes to your first question on equity method, when it comes to insurance, the one other relevant is Asia [ph] that’s Tier-1.

And then when it comes to Belgium, there is not in particular; it’s a mix of smaller entities or smaller -- so, it’s not a particular element that is acting. When it comes to the net inflow in the third quarter, it’s basically -- it has been a calmer period a bit across the board.

So in general, it’s of course the fixed income kind of products by all kind of demands that is a bit lower and that’s basically all I can on this.

Just two quick ones on my side. First of all on -- I just wanted to know your thoughts around Basel 4 about the 72.5%, if you have any color that could give us a little bit of an idea of the impact and how are you thinking about it and the likelihood in the timing?

The second is just on the assets. Looking at -- so, potentially you could have SBI Life bit later on but what about for example other assets that you would consider as non-core in terms of your strategy?

Thank you.

Delphine, thank you. When it comes to Basel 4, yes, what can I say, what I observe is that the discussion is now going on for a quite while.

There have been discussions a year ago, then again by this summer, then this again now. And so, I remind you that the G20 in Europe basically said yes that they have reflections on stabilizing the regulation.

And at that in the end, there should not be a material impact on the capital requirement. So, the other thing is what I observe as you mentioned, one of the impacts that somebody talks about essentially have a flow on the credit risk weighted assets.

Whereas, overall, let’s not forget, one should not look just at one sliver. I think if people want to come up with stabilization and uniformization, one has to look at the credit risk weights, but also the FRTB.

And so, one has to come up with an overall approach which applies to all and which is probably taking some time. Because for example, some other regions are reflecting FRTB is what they want to do.

So that is the discussion which is ongoing and we’ll see how this one settles.

Just to follow up, but FRTB is, I mean, I think at European level, it’s quite confirmed that this is going ahead. There is no -- or is there any plans to amend or did I miss something on here, on market risk?

I think Delphine you’re more in the secrete of the gods than I am. But if I talk to some U.S.

banks, for example yours, then, there is a reflection or there is an observation that maybe on the U.S. side, it is not necessarily a full review of seeing if the current FRTB should be implemented or if it should be further evolved.

And so, I think that’s whole part of the discussion. One cannot look at one sliver of regulation without looking at the other slivers.

And so, that is why it’s taking time to come up with a comprehensive and overall approach, which basically makes sense. So, I think -- yes, go ahead.

And on the other items like operational risks or mortgages rates, is there anything which is also on the table or not really?

No. But, as you say, that’s a bit of discussion.

When it comes to, for example the FRTB, some say, we shouldn’t do FRTB. Others say, we should FRTB, but we should not do notable risk, we should not do this and we should not do that.

And it’s the same thing, when it comes to credit risks. So, there is many different routes and discussion elements that are on the table.

So, we have to let that go on and see, once they have come up with an overall approach. As I said, it should be -- and what basically the G20 in Europe side, it should be stabilizing the regulation and it should be no material impact on the capital.

When it comes to your asset question, if I may, it’s a good question. But I will basically, it something happens, I cannot say this.

For the momentum, we are happy with all the participations that we have. If that changes in some time, we’ll make a statement about that.

Firstly, why has loan growth slowed so much in Corporate Banking, please? I think it’s running at just 1% now against the high-single-digit at the beginning of the year?

Secondly, can you give us a sense of the outlook for asset quality in personal finance? Should we expect it to turn towards the 170 bp target or are these product mix changes likely to offset that?

Also, what exactly are these product mix exchanges? That would be helpful.

And then, just to help us with our modeling. Could you give us an indication of the profit or revenue contribution of the GM, European car financing acquisition that I think is closing in Q4.

And sorry, lastly, what was the actual value of the provision write-back in Europe-Med? You’ve given this in the past, but I can’t see it at this quarter, I’m assuming it’s in the Ukraine?

Thank you.

Omar, thanks. If you look at, with respect to your question on corporate, the lending activity has been very fair as the world has changed a bit.

It’s a bit more cyclical. So, the lending goes on and then there is some securitization also going on.

So, typically, there is a pickup at the beginning of the year and then, with a bit of a slowdown as we said over the summer. So that is the more cyclical kind of nature in what we see.

When it comes to the asset quality of personal finance, we’ve indeed focused on an improvement of that cost of risk. So for example, what do we do, we focus on products, which have collateral.

So instead of just having a credit loan, for example, we shift more into car lending. And I know the moment you drive the car out of the dealership, it loses some money, but it doesn’t go to zero.

So, that means there is a collateral, if ever the customer has trouble paying back the car. So that is why basically the overall cost of risk is expressed as basis points over outstanding as a trend to improve.

For the moment, it’s a bit also flattered by other effects. So, we basically say that overall we would have the one that are below one 170 basis points and that we go for.

And when we -- on GM, I would be happy to basically give you the insight. So, it looks like -- but I would refer to give you the final number once we really have close and we can give you the numbers.

But what we had at end of 2016, there was a pretax profit, which was gravitating around €120 million. And so, but, let’s come back or let’s discuss once the closing is done and we have that information.

So that would be my answers Omar.

Just on the provision write-back in Europe-Med?

Oh, yes. No, it is not very material, it’s in the tens of millions and it’s in the area of Eastern Europe.

Okay. Thank you.

And very, very sorry, but I’m not sure if I caught whether you gave a value for the residual risk at Arval. I might have just missed that.

So, we basically -- to talk about the residual risk, no, we don’t disclose a residual risk. What we said is that the evolution that you might have with respect to the pricing of the residual risk is basically managed by us.

As I said initially, by doing the acquisition of the cars, of the selection of cars, so that they are resalable in an easy way. And secondly as I said, we originate them in one country and we basically sell them in a second, in a market which is dominated by secondhand car environment.

So that is basically why we said we don’t -- we really think that overall impact is very manageable, which is what you see in our profit and loss.

Yes. Thank you.

So my first question was on Europe- Mediterranean. I think the nine months stage, if an adjusted scope and exchange rates revenues up were 2% and your business plan you were looking for 10% CAGR.

Do you think you’ll still be able to get there and if so, how? And then my second question is just on the risk-weighted asset evolution into year-end.

Do you expect to see any upward pressure from the ECB TRIM exercise? Thank you.

Thank you for your question. When it comes to indeed Europe-Mediterranean, as you see in this quarter results, there is a little bit of a dip in the top line, which is stemming from the repricing in Turkey.

So in Turkey, there is repricing of the deposit, which was on the upside. And therefore, we basically will have to adapt our pricing on the asset side.

But that pricing on the asset side at this time, it’s bit of the same thing you see in Belgium, right. The deposits, it basically happens on the balance sheet; when it comes on the assets, it basically takes that fraction of the assets which are repriced.

So that is basically what we go for. So, we still believe that overall this is good.

The second thing that you should know is for example in Turkey, even if there is some overall pressure on the top line, there is a compensation, which is happening in the cost of risk line, because there is also a focus on the better quality and leading to that. So, overall, I think it’s a point of attention.

That’s basically it. And when it comes to your question RWA evolution and TRIM, I think you should call Germany.

And so for the moment, there is nothing that we can mention with respect to that.

Yes. Good afternoon.

Three questions on my side, if possible to ask. First one on the guidance you gave for French retail revenue, the plus -- the 1%.

Is that a full year or is it fourth quarter guidance? And also what’s led you to change your estimates for the full year?

Second question is related to the leverage ratio, which slightly went down this quarter. I was wondering if you have some indications of what were the moving parts?

And finally, regarding cross border consolidation, your Chairman, Jean Lemierre, indicated that cross border consolidations are unlikely for no. Do we read this as meaning there is no appetite on your side for such transactions?

Thank you.

Jean-Pierre, thank you. On your first question on French and the guidance we gave.

So, the guidance we gave is basically for the full year 2017. So, initially, at the beginning of the year, we guided that we anticipated a minus 3%; and as we saw the evolution in the price, again and the volumes, we reviewed that to be minus 1%.

So, it’s improvement from what we said earlier. And I know -- so going forward, we will not give guidance anymore.

You will see, once we have given guidance then we make a correction even a positive one, we’ll have to keep on repeating it. When it comes to leverage, leverage, there is really nothing spectacular to mention.

It is just the balance sheet, which picked up a bit towards the end of the quarter and that’s basically what has done it. So, as you know, for the moment, the current regulation suggests that the leverage ratio in Europe should be 3%; there can be an eventual G-SIB add-on.

And that’s why we basically put ourselves to be above 4% but that is it. So everything, which is above 4%, I am a very happy camper and that’s basically where we stand.

So, there is nothing else to mention. When it comes to the cross border, yes, the cross border.

So, as you know, what we are doing since a couple of years, since there has been that regulation, which impacts the cross border capital is that we’ve been doing bolt-on acquisitions. So, if we look for example in Germany, where we have a plan in organic growth and that’s basically what we’re doing in our specialized businesses.

Because indeed, it is true that if you look for example at the G-SIB, if you are -- I am rounding the numbers. But, if you are a 1 trillion -- so, a bank with the balance sheet of 1,000 billion and you are a U.S.

bank or you are a Chinese bank, you don’t get any additional capital from G-SIB, whereas, if you are spread over several countries in Europe, you basically do. So that is basically what we guided that.

So for the moment, there is no regulation that basically supports these kind of evolutions.

Just few questions for me. The first one is on the tax rate.

Obviously, we hear quite a lot of things, firstly perhaps in Belgium with lower tax rate going forward and also in France, it looks like the government is looking to fund 5 billion to from the reimbursements of the dividend tax. So, I was wondering whether you could give us a little bit of color, what we should think for next year in terms of tax rate.

The second thing is regarding IFRS 17. I was wondering, if maybe you could explain to us.

How this will impact the account for the insurance business?

When it comes to tax rate. Honestly, your guess is as good as mine.

So, I haven’t seen for the moment any legal tax basically has changed. Now, let me be clear, let me be very simple.

If these things would happen, if you would just do the math, so if you suppose that our overall tax rate of BNP Paribas would go down for example with one point, because the major countries bring it down to for several points, but you can do your math and see basically what is improved. So, of course, if the tax rate would go down, that is something which would be supportive of our overall evolution.

But, as I said, so far, I haven’t seen any tax that basically supports this. So, there are reflections going on.

So, at the moment, there are costs in stone of legal tax, we’ll let you know. So that’s basically that.

And so, for IFRS 17, that’s basically no real impact on the day-to-day or the accounts. So, Lorraine those would be my answers.

So, just to be clear, in Belgium, we should not expect anything in Q4, like special item in the P&L related to…

No. I think what your question is -- so, let’s remember, how this technically works.

If at one point in time a country decides to lower the tax rate, as of that momentum going forward in the accounts for example next year, we will have a lower tax rate. So, basically, our bottom-line will improve by that amount.

Now what can happen is that if in the past you have losses that you activated in what is called deferred tax assets and DTAs, having a lower tax rate might basically mean that you would some impairment of these tax rates. But that’s it basically and that has no impact on the capital.

So, from that point of view, that’s basically it. But, in the end, there is -- going forward, there is always a positive impact.

But as I said, it has to be eroded and we’ll let you know the impact.

So, on the DTA in Q4, you guide for zero impact?

No. The thing is what we said is that in some situations, our DTA situation like for example in Belgium is rather complex in a sense that the activations that have happened years ago has not necessarily complete.

So, that means that if there is a tax rate reduction, which might lead to some impairment of DTA, it would still mean that some DTAs, some losses can be activated. And so, the overall calculation of that is quite complex, and we basically need the tax to do those impacts.

So, it cannot be included; there is somewhat of an impact on DTA impairment, but it’s too early to say.

Yes. Good afternoon, Lars.

A couple of questions, some of them follow-ups. First one on the Indian joint venture, SBI.

Could you make it clear, whether that is actually a strategic activity for you going forward? Do you have strategic interest in the Indian insurance market?

Second point on Turkey. You made some, let’s say, relatively constructive comments on business conditions, yet you have fully impaired your good work.

What is driving the timing of that? And what are you seeing maybe a couple years out in Turkey to justify this full impairment or is just an act of prudence?

And maybe the final point, going back to the dividend tax. Assuming that is enacted, you would probably see a benefit from that.

Do you expect this benefit to be taken in the fourth quarter? And can you guide on how big this benefit could be?

Thank you very much.

Stefan, thank you. As you know, some of the activity that we have and in which we have participation like in India and like what we have in Belgium, they basically make sense for us because we can also lever on the experiences we have.

So that’s basically what we have done. And we’ve just, in this case, participated [indiscernible] which was done by the other participants.

When it comes to Turkey, yes, in Turkey, we have just been conservative. So, if we see that there is a downtick on to top line, which is what you’ve seen this quarter, we basically are very conservative and we say if this would be the steady state what would be the impact, and that’s basically what we do.

So, in our impairment testing, as you know, we’re a boring and conservative -- we have a boring and conservative approach. So, there’s nothing more to say than that.

And when it comes to the dividend tax, well, so it all depends on what the tax is. You see we can go on for hours without having a tax.

So, one could assume that for example, if Belgium would vote that tax that they would say that as of next year the corporate tax rate would be, I don’t know what, you pick a number, I’m not going to say a number because otherwise you’re going to go for hours and I cannot say it. So to specify, when it is applicable, how it is applicable, if there are essential thresholds.

So, as long as that is not clear, we cannot say. But one can assume that the minimum tax will say what the new corporate rate is.

And as of what moment, let’s say next year, or in France, it can be 2020 or whatever, they will say what it is and which it is applicable. And once we know all that, we can then do the estimate and see what it does for our multi-year plan and what it does for our balance sheet.

Just a follow-up, I am actually less interested in the ongoing impact of different tax rates; I’m more interested in the dividend tax in France and the abolishment of that seems to be fairly certain. Can you guide on the impact there?

I hear also, as long as we don’t -- haven’t seen it because, I mean there can be an abolishment of this, there can be something else that is being replaced. So, there is not much we can say.

So, we will have to wait what a tax is or what the tax is when it comes and then we will let you know what the overall impact is if there is one.

Yes. It’s from Royal Bank of Canada and it’s Anke here.

Thanks a lot. Two questions.

First is, I’m not quite sure if that is answered. But, your goodwill impairment on the Turkish operation, should we read anything encouraged with respect to the target you have given at the Investor Day earlier this year about Europe-Med?

And then secondly just on the cost control. Given your season slowdown, I was hoping the cost savings would be coming through bit faster or is that just -- should all of them -- see coming through in Q4 and I guess, is all going to plan?

But I just wondered if you couldn’t be running a bit fast on your cost saving as the revenues are coming down a bit more? Thank you.

Sure. Anke, thank you.

No, when it comes to the goodwill in Turkey, just I said, we are having a very conservative approach to goodwill. So, that’s basically it.

So, there is nothing else to read into that. And when it comes to our cost control, let’s not forget that our current plan 2020 is a tad different than the one that we had before.

The one that we had in the previous plan was simple and efficient, really had us objected to make things simple and efficient. Whereas this time, we look at how the customer journeys are changing, how we can adapt to them by digitalization and then, as a consequence, the savings we can capture because in those digitalization, maybe the customer does things himself or maybe other systems do it and so forth.

So, that is why it takes a bit more time and it’s difficult to accelerate those savings. So, that’s basically my two answers, Anke.

Yes. Lars, Hi.

Thanks for taking the question. I’ve just got two left actually, one is on the risk weighted asset development and you’re down quarter-on-quarter, which you have explained is largely due to foreign exchange move that I am sort of struggling to reconcile, because of little bit of loan growth trends even on constant scope and exchange rates are pretty much up in every division and the leverage assets look like they are up a couple of percent as well quarter-on-quarter.

So, the question is, is there anything else going on in terms of the risk-weighted asset number in terms of model or methodology changes, which is pushing that number lower? And then, the second question is on Germany, the termination of the consumer finance joint venture with Commerzbank.

I think that’s about €3.5 billion book of consumer credit that’s been ceded to commerce bank. I’m just interested to know in terms of looking ahead, do you feel, you need an alternative partner, branch-based partner in Germany or do you think that you now have a sufficiently strong digital presence in the market to be able to compete in consumer finance without branch support?

Thank you.

No. You’re absolutely right.

If you look at RWA evolution, as we mentioned, it’s indeed ForEx which basically keeps it flat. Let’s not forget there is two things first on that one, which explains a bit how the volume growth is coherent with that.

So, the first thing is that, for this quarter, the market risk is very low. If you’ve seen VaR, I have hardly seen the VaR that low, so that basically means the market risk is low.

Secondly, as you know, part of what we do is we have old portfolio -- older portfolios, which basically in the new regulation do not yield what is expected, and we basically get out of those products whenever we can. So that’s two reasons.

So yes, there is indeed volume uptick. There is a compensation coming from the fact that the ForEx is going in the other way around.

There is optimization of heritage kind of structures and then there is a market risk, which is kind of low. So that’s basically it.

And on the leverage ratio, yes, if you look at the leverage, which is not just a balance sheet, so, the leverage is selection of elements and then constraints. So, you cannot really read honestly what intrinsic evolution is.

So, the main revolution on RWA is the one that I just mentioned. When it comes to Commerz in Germany.

Yes, we use to have 50% of something that was owned 100% with Commerz and now we have 100% of 50%. And as you mentioned, we basically split, the one which are and the branches are back to Commerz and we have the other ones.

Now, as you know, in our plan that we have in Germany, it’s focused a lot around the specialized businesses. So, indeed, what we’re doing with Consors or what we’re doing with corporate banking is we have the kind of distribution angels that we believe are appropriate to capture the growth that we have in the plan.

And that’s basically it. Let’s not forget, from time-to-time, we can do or we have done or we are doing bolt-on acquisition in Germany like for example General Motors that is supposed to be announced somewhere shortly.

So, Piers, that would my answers.

Two follow-up questions for me, I’m afraid. Firstly, on the personal finance division.

It looks like the revenues are now tracking the volumes a bit more than they have been in recent quarters. Should we interpret that the big mix shift away from flat screen TVs and towards car loans is now over or should we expect that trend then and therefore the mix shift pressure on top-line margins to come back in coming quarters?

And then, second question is going back to French Retail Banking, and the comments on Bloomberg earlier this morning about a turnaround end of 2018, start of 2019. You said earlier, you don’t expect turn in the interest rate environment in 2018.

When you say that, are you just say you don’t expect the ECB to raise rates or that you don’t expect to see any improvement in your P&L from the interest rate environment? Because I would assume that your P&L is affected with a lag from whatever happens and the outside world.

So, maybe, if you could just clarify your comments there a bit more and maybe give us an idea of when from your P&L perspective, the low rate headwind should be coming to an end? Thanks.

Sure, Matthew. When it comes to personal financing, the evolution that we are seeing by shifting in the more collateralized kind of products, will start to taper off.

So, it’s something that we started several quarters ago. So, the impact will be tapering off going forward.

And when it comes to French, now, as I said, the main thing was, probably a misquoting on Bloomberg, what I really said is that when we gave a forecast for the year 2017 and top-line, I basically requalify that. When it comes to the question on the rates, you’re right.

So, even if there is a pickup in rates, it basically takes two to three years before we have the full fledged impact that is happening from that evolution. And so, we basically said that in the plan as we have -- we don’t have a specific point that we’ve taken into the plan and we haven’t taken the impact, at least on the P&L in 2018.

Yes. Hi, Lars.

Just a follow-up question for me on M&A on [Technical Difficulty] M&A basically. Is it fair to consider that if we have a full implementation of the banking union, it could be a game-changer for M&A -- cross-border M&A in the Eurozone, the Eurozone should be considered as one country?

And just on this topic, I’m just trying to understand how ECB and Financial Stability Board are demonstrating, [ph] because my understanding is that ECB is pushing for more cross-border M&A but at the same time banks are already trying to do so because of potential for [ph] increase. So, just trying to understand what is -- what could be the game between the ECB and the Financial Stability Board, if you have a foot on that that would be helpful.

Thank you.

Sure, Alex. And as a reminder, what basically Europe said a couple of years ago is that in order to have this pan-European kind of market, it would have - it would need a supervisory mechanism, it would need a resolution mechanism and it would need a deposit guarantee mechanism.

So, the first two are there. On so, probably what Europe is waiting for is basically the implementation of the third one.

So, I guess that’s basically what the status is. So, Alex, that would be my answer.

Okay. Thank you.

So, I guess, this was the last -- go ahead, operator.

All right. So, I want to thank you for your kind attention.

You’ve seen that we have overall good business development in an improved economic environment in Europe. Nevertheless, there was an unfavorable market context this quarter.

We have €2 billion bottom line, good level of income. Our prudential ratios, like for example, the common equity Tier 1 are doing well at 11.8% and we’re off to a good start of the plan.

Thank you so much. Have a good day.

Bye, bye.