Good afternoon, ladies and gentlemen, and welcome to the presentation of the Banpeparibas 2019 Full Year Results. For your information, this conference call is being recorded. Supporting slides are available on BNP Paribas IR website, investor. Bnpeparibas.com. During today's presentation, you will be able to ask I would like now to hand the call over to Jean Laurent Bonafay, Group Chief Executive Officer.
Sir, please go ahead.
Thank you. Good afternoon, ladies and gentlemen. Welcome to BNP Paribas 2019 results presentation. Today's presentation will cover the first three chapters of the slide presentation, Group results, division results and 2020 objectives. First, I will take you through the summary of our group results.
Lars, Meshenil will comment on the results by division and then I'll update you on our 2020 objectives. As usual, at the end, we'd be pleased to take your questions. So we start with Slide 3. Looking at our 2019 key messages, BNP Paribas delivered a very good overall performance With a strong growth in income, thanks to good business drive and on the back of our transformation process. In more detail, Revenues were up 4.9% on last year, with each operating division delivering revenue growth.
Costs evolved by 2.5% on the back of the continued development of the businesses in IFS, CIB and in the domestic markets. They were down in the retail networks. Thus, the group operated with positive jaws in 2019. These jaws Delivered in each of the 3 operating divisions. As a consequence, our cost income ratio improved by 1.7 points.
Cost of risk at group level was low at 39 basis points over outstandings. The group's net result Stood at €8,200,000,000 up 8.6 percent on 2018, which translates into a dividend payment of €3.10 per share, Fully paid in cash as per our 50% payout target. The group is very well capitalized with a fully loaded common equity Tier 1 ratio at 12.1% at year end. Slide 6, you can see That our net result equates to return on tangible equity of 9.8%, up 20 bps on last year. Turning now to the revenues of the operating divisions on Slide 7, you can see that they were up 5.9% on last year And that the 3 and there were revenue growth in each of the 3 operating divisions.
Domestic Markets Showed a 0.8% revenue increase on last year. The increase in business activity in domestic markets and the steady growth in specialized businesses We're partly offset by the impact of the low interest rate environment. At IFS, our engine of growth revenues were up 6.9 Thanks to a strong business drive in Personal Finance and very good performances in the Insurance Business and Euromed Retail Banking. Lastly, CIB's revenues rose sharply by 11.6% on the back of continued market share gains in Europe With very good performances in Global Markets and Corporate Banking. On Slide 8, you can see that costs of our operating divisions We're up 3.5% on last year with positive jaws and lower cost income ratio in each operating division.
In domestic markets, Costs were up just 0.3% on last year. In the retail networks, they decreased by 0.5%, Thanks to the ongoing implementation of cost saving measures and the adaptation of our operating model. In the specialized businesses, They were up as a result of the growth in business activity. Domestic Markets delivered positive jaws in 2019. Both IFS and CIB saw cost evolution reflecting business growth, which were for both largely contained by cost saving programs.
In 2019, IFS operated with positive jaws of 2.4 points or 3.2 points on a like for like basis and CIB with 5.5 points. Moving to cost of risk, starting with Slide 9. You can see that at group level, it clocked in at 39 basis in terms of outstandings at a low level. Looking at the different businesses one at a time. In Corporate Banking, Provision were low in absolute terms and the increase on last year is mainly due to write backs in 2018.
Turning to the other business lines on Slide 10, you can see that cost of risk was low in French Retail, very low in Belgian Retail It continued to decrease at BNL in Italy. In other Retail Businesses, Euromet cost of risk was up with the trend stabilized in Turkey. Bankwest cost of risk was still low and personal finance saw an increase on the back of higher outstandings, but was fairly stable in basis points. Turning to Slide 11 on the financial structure. You can see that our common equity Tier 1 increased by 40 basis points to 12.1% compared to the level of the 1st January 2019.
Our Basel III leverage ratio Stood at 4.6% and the group's immediately available liquidity reserve totaled €309,000,000,000 at the end of the year. The evolution of these ratios illustrates the very solid financial structure of the group. On Slide 12, You can see that our net book value per share stood at €79 at year end, up €4,300,000 on last year. At €69,700, our tangible net book value per share has grown at an annual rate Of 7.3% since 2008, highlighting our continued value creation through the cycle. A dividend payment of €3,100,000 per share fully in cash will be proposed at our Annual General Meeting on the 19th May.
You will find on Slide 13 some key points on the continuous reinforcement of the Group's internal control and compliance system. Last But not least, moving to Slide 14, I would like to emphasize the importance of our policy of engagement in society and reiterate ambition 2017, of being the world's number 3 player in the green bond market at the end of 2019. BNP Paribas is the 1st financer of renewable energy projects in Europe, number 3 in Asia Pacific. €47,000,000,000 in SRI Funds assets are managed by BNP Paribaset Management, which is number 1 in term of ICR Certified assets under management in France. As you can see, our efforts are also recognized through ratings and our presence in the major specialized indices.
These engagements are key elements of BNP Paribas Company purpose, which was established at the end of 2019. I now hand over to Lars To the divisional results.
Thank you, Jean Laurent. Fine, ladies and gentlemen, good afternoon from Paris. Before walking you through the divisional results, I would like to highlight that we have changed the layout of our presentation slides. We hope you will welcome them and enjoy this new format. If we turn to Slide 18 and we start with the first of our 3 divisions, domestic markets, You can see that it showed good business drive with solid loan growth in the retail network, in particular in France and Belgium, as well as in the specialized businesses, the Arvalds Leasing.
Besides, net asset inflows in Private Banking were up on 2018 at €5,600,000,000 When we look at digital transformation, domestic markets has continued to support The customers with new client experiences. I'm pleased to say that Domestic Markets has now 9,700,000 digital clients And that they are active indeed on our apps and websites. BNP Paribas is again recognized as the leader in France in terms of digital performance. And with Nickel, Domestic Markets has equipped itself with a top 5 player in the European NeoBank market with Over 1,500,000 accounts opened to date. I will provide some additional color on our digital success on Slide 19 in a second.
If we look now at the P and L, revenues were up 0.8 percent, clocking in at €15,800,000,000 with the effect of rising loan volumes across Retail Networks and Specialized Businesses being partly offset by the low rate environment in Europe. Operating costs were marginally higher Due to the continued development of the specialized businesses, but we are down 0.5% in the retail networks. Thus, domestic markets operated with positive jaws in 2019. Given the reduction of cost of risk, in particular at BNL in Italy, pretax Marked a 3.7 percent increase standing at €3,800,000,000 If you can now flick to Slide 19, which provides further details Of Domestic Markets' successful implementation of digital offerings, you can see that it accelerated its growth in active customers on mobile apps With an increase of 31% in 2019. Besides, mobile usage has continued to increase with 97,000,000 monthly connections on mobile apps.
Lastly, HelloBank continues to prove successful with its target customer segment. In Belgium, for example, 1 in 3, the youngsters under the age of 28 is a customer of HelloBank. If we now turn to Page 20, you can see that domestic markets relies on very strong franchises in an integrated model. In particular, with leading positions in corporate and private banking, for instance. BNP Paribas is number 1 in terms of customer penetration rates with corporates in France and Belgium and number 3 in Italy.
While we are the largest private banking player in France Belgium by amount of assets under management and 5th largest in Italy. If we now move forward to Slide 21, Where you will see that Domestic Markets continued the transformation of its operating model by rolling out best in class customer data management tools, Streamlining and digitalizing end to end its key customer journeys as well as further automating its processes. To illustrate this, In the last quarter of 2019, robots processed in excess of 700,000 transactions in the domestic markets networks. Moreover, the operating division continued adapting its offerings beyond banking services with, for example, the accelerated development of LifePay, Electronic wallet solution, which has seen a sharp rise in downloads in 2019 and the launch of Telepas in Italy, Mobility offering for corporate and individual customers. If we now look at the different businesses in domestic markets on Slides 22, 25, I'd like to highlight in particular.
In French, Retail Banking loans were up 5.4% on last year, In particular, due to the very active corporate lending activity, revenues were slightly up, thanks to the rise in net interest income on the back of higher loan volumes And despite a decrease in fees due in particular to the decrease in charges on fragile customers, which took effect at the beginning of 2019. Thanks to cost saving measures and the streamlining of the network, costs were slightly down thus generating a 0.4. Positive jaws effect. Pre tax income was slightly down on last year. If we now go to the South, BNLBC showed a slight decrease in revenues Due to the impact of the low rate environment and the positioning on clients with a better risk profile.
Costs were currently flat on last year, thanks to the effect of cost saving measures. Besides, new adaptation measures were launched to further reduce cost this year. With cost of risk down 17.3%, Cost income rose sharply by over 24% compared to 2018. If we now go north, Belgium Retail Banking, we had good business drive With loans up 4.4 percent and a strong rise in our balance sheet savings. Revenues were down 2% Due to the impact of low interest rates, which was only partly offset by the rise in fees, costs were down 1.6% on the back of cost measures and continuing branch network optimization.
Pretax income down 5.1% on last year. Finally, Looking at the specialized businesses, which continue to deliver very good business drive, with in particular a strong growth of 8.9% in finance fleet at Arval And the rising outstandings of 6.9 percent at Leasing Solutions. Revenues were up 6.6%, Costs accompanied this growth and were up 4.5% as a result of this development. Thus, the specialized businesses operated with positive jaws and delivered pretax income, up 9.5%. To wrap up domestic markets, good business drive and higher pretax income despite the persistent headwinds of the low interest rate environment.
If you now swipe to Slide 26, You will see that our International Financial Services division, our engine of growth showed sustained business activity. Outstanding loans were up 8.1% or 5.1% on a like for like basis with good growth in particular at Personal Finance And EuropeMed, NIFS reported good net reported good net asset inflows plus €20,200,000,000 Thus, assets under management of the savings and insurance business were up 9.3% on 2018 at slightly over 1.1 €1,000,000,000,000 In terms of profit and loss, revenues were up 6.9% or 4.7% on a like for like basis. Operating costs evolved 4.5 percent or 1.5 percent on a comparable basis, again on the back of the business development. And this increase of cost is contained by the savings and operating efficiency gains translating into a positive jaws effect of 2.4 points for this division. As a result, IFS pretax income was up 4.5% on 2018.
Now if you move to Slide 27, you will see that IFS enjoys leading positions in many of the businesses. For instance, in Personal Finance and Wealth Management, where it ranks number 1 in Europe. BNP Paribas, Cardiff is a global leader in creditor protection insurance. For its growth, IFS continue to rely on partnerships And alliances like for example, the new partnerships between personal finance and leading car manufacturers and retailers or in case of insurance, the strategic alliances, for example, with Scotiabank in 4 countries in Latin America. IFS has continued to optimize its services to clients through its digital transformation as you can see on Slide 28.
To illustrate this, IFS has now 3,900,000 digital clients across Bankwest and its Europe Med retail networks. Besides, the e signature is now widely available, for instance, at Personal Finance, where 5,800,000 e signatures were processed in 2019. IFS has carried on developing its digital offering with, for instance, an ever increasing number of self care Transactions at Personal Finance, representing 85 percent of total transactions, as well as the launch at Ceptetep in Turkey of an app dedicated to SME clients. Furthermore, as described in Slide 29, IFS continues to embrace innovation which joined initiatives with startups. If we now look at the different businesses within IFS and we take a look at Slide 30 to 35, I'd like to highlight in particular.
1st, Personal Finance continued to show strong business drive in 2019 with a strong increase In loans, thanks to a strong demand in Europe and the impact of new partnerships, revenues were up 4.8% and cost increased at a slower pace 3.3 percent, thus delivering 1.4% positive jaws effect. Pretax income was down 2.7% on last year, Due in particular to a non recurring item in one of the associate companies. If we now turn to Europe Med, we generated revenue growth in all regions, thanks to Business drive, in particular in Poland and Morocco. Thus, on a like for like basis, revenues were up 6.8%, while costs rose by 1%, They're generating largely positive jaws. Pretax income rose sharply by 23% versus previous year on a comparable basis.
If we stay on constant scope and exchange rate and we look at Bankwest, we generated slightly lower revenues on the back of lower interest rates And delivered a decrease in its operating expenses of 3.6%. Cost of risk was up on last year's low base and pretax income was down 10% on a like for like basis. Now turning to insurance. Revenues progressed by 14.5% for the full year, Thanks to a favorable market performance and good business drive. Pretax income was up 16% on the previous year or 19% on a like for like basis.
The last element within IFS is Wealth and Asset Management. Revenues were up 1% year on year, Driven by real estate and a gradual improvement over the year following the difficult market conditions stemming from the financial market turmoil at the end of 20 Globally, pretax income was up 2%. This completes the review of our second business And therefore, the total of Retail Banking and Services. And I can now draw your attention to Slide 36 on Corporate and Institutional Banking. CIB managed to pursue its market share gains and strengthen its leading positions on targeted corporate institutional client basis.
CIB ranked 3rd CIB and 1st non U. S. CIB in EMEA Based on revenues generated in the 1st 9 months of 2019, thus making it the leading European player behind 2 U. S. Institutions.
If you look at revenues, they rose sharply to €12,100,000,000 up 11.6% compared to 2018 with growth in CIB's 3 sub businesses. Costs were up 6.1% in support of this business growth. The increase in cost was contained by cost efficiency measures, including the development of shared platforms and the continued optimization of processes. Thus, CIB operated with a very positive charge effect at 5.5 points. Overall, CIB generated €3,200,000,000 of pretax income, up 19.6% compared to the year before.
If we now turn to the next three slides, That's 37% to 39%. Let's look into more detail in the 3 sub businesses. If we start with Global Markets on Slide 37. Revenues were up 17.9%, Danse in particular, to a very strong performance in FICC. FICC revenues were indeed up 36%, Excluding the effect of the introduction of the Capital Markets platform and in particular with a sharp rise in primary markets And credit and a sharp rebound in ForEx and Emerging Markets.
Besides, Ficklin's number 1 ranking for all bonds in EMEA and number 8 for international issues. If you now look at the second part within Global Markets, which is the equities, And the revenues were stable in 2019 with a gradual recovery from a low point at the end of 2018 and a good performance If we now swipe to the second part of CIB and that's on Slide 38 with Corporate Banking revenues were up 9.9% on the previous year. It has become the number one European player in terms of investment banking transactions in EMEA, Thanks in particular to the very good start in early 2019 of the Capital Markets platform. In the Americas and Asia Pacific, Corporate Banking has pursued its business development, in particular, in cross border transactions. Finally, Glancing at Slide 39 with the 3rd part of CIB, Security Services, where revenues progressed on the back of strong business drive And the positive effect of the implementation of the partnership with Janus Henderson Assets in the U.
S. If we now take the next slide, which is Slide number 40, which summarizes the achievement to date of CIB's digital transformation. The success of digitalized client journeys It's evidenced in particular by continued client onboarding on the Centric online platform for corporates, which has now over 11,500 clients at the end of 2019. It also epitomized by the over 21,000,000 electronic orders processed by Global Markets this year and over 6,000 institutional clients on Security Services' NeoLink platform. CIB has also developed new offers to clients in partnership with FinTechs in the 3 of its businesses.
It has continued to improve operating efficiency and customer service through automation of processes and ramping up Of mutualized platform and those mutualized platforms, they account for 35% of CIB's workforce. You will see on Slide 41 that CIB has continued to strengthen its leading franchises. For instance, the strengthening of its corporate franchise has relied In Europe, on the success of country specific development plans with for instance 260 new large corporate clients having been On boarded in targeted countries since 2016 as well as targeted development in the Americas through incentivized cooperation with Bank West and in Asia Pacific, in particular in trade finance. Furthermore, the agreement with Deutsche Bank in prime brokerage, On CIB, on Slide 42, we see that CIB continue to foster cross cooperation with other operating divisions, Capitalizing on the close relationship enhanced by the integrated model of BNP Paribas with, for example, joint initiatives in Transaction Banking As well as CIB Solutions marketed to major domestic markets and IFS clients. In addition, More than €2,800,000,000 of annual revenues are generated by Domestic Markets and IFS for the scope of clients covered by CIB.
So this concludes the review of the 3 divisions results. I now hand it back to Jean Laurent for the last part of the presentation.
Thank you, Lars. Let's now look at the last part of today's presentation, our 2020 objectives. On Slide 44, you can see that the adjustment of monetary policies in the summer of 2019 led to less favorable interest rates environment that anticipated at the beginning of 2019. This is impacting revenues related to interest bearing products in the Eurozone Network Banks. Nevertheless, according to the IMF forecast, economic growth for 2020 should be well oriented in the Eurozone and in emerging markets with a Slide slowdown in the United States.
In this environment, the NP5 anticipates continuing to deliver growth in all divisions, Thanks to its diversified and integrated model, strong business drive and intensified cooperation business between businesses. Turning to Slide 45, let's review the growth drivers of our operating divisions. Domestic Markets, We continue to leverage its leading positions in specialized businesses and in the Corporate and Private Banking IFS forecasts to pursue growth by leveraging its best in class offerings, its platforms, distribution partnerships and networks. As for CIB, it is anticipated to continue to leverage its leading market positions to further gain market share in Europe and globally in the Corporate and Institutional Client segments. Switching to the objectives of each operating division on Slide 46, You will see that the activities anticipated to continue to grow in all the divisions on the back of strong business drive, Strengthening of franchises and development of cooperation between businesses.
In addition, they should benefit from the full contribution of the transformation plan in terms of For Domestic Markets, 2020 is expected to be a year of Pressure on the net interest income of the Eurozone retail networks, which should result in a moderate decrease in revenues as the impact of interest rates It's expected to somewhat outweigh the increased businesses in all client bases and the strong growth in specialized businesses. Costs anticipated to decrease just generating natural jaws effect this year. For IFS, We first see revenue growth in all businesses, thanks to the strong business drive and the development of existing and new partnerships. With costs anticipated to evolve at a slower pace, we expect IFS to continue to deliver a positive jaws effect. Lastly, we forecast CIB to continue to grow its revenues sustained by market share gains, including through Intensified cooperation with other businesses in the group.
With costs reflecting the continued business growth, which reaping the benefits of the transformation, We foresee that CIB will continue to operate with positive jaws. In Tethys, on the back of continuous business development, Full contribution of its transformation plan, the group forecast continued growth in revenues and a decrease in operating expenses delivering a positive jaws The outlook is that the group should once again increase its net income in 2020. On Slide 47, you can see the update on cost savings resulting from our transformation plan. To date, We have achieved €1,800,000,000 of recurring cost savings. And as planned, these recurring cost savings should reach €3,300,000,000 by the end of 2020.
As a matter of fact, €1,500,000,000 of additional cost savings are expected for 2020. With respect to one off transformation costs, they reached €700,000,000 in 2019, in line with targets. As indicated, There will be no transformation costs in 2020.
If you
flick to Slide 48, you can see that our transformation resulted in 47 percent of our office space in the Paris metropolitan area being now earmarked as flex office. Accordingly, We're in a position to adjust our portfolio of these buildings. Around €500,000,000 capital gains are expected from the sale of such properties this year. On another note, the Group envisions exceptional costs up to €200,000,000 for the reinforcement of our IT €200,000,000 for restructuring and adaptation measures, which will give us more flexibility and opportunities to adapt to the evolving context. If you advance to Slide 49, you will see that BNP Paribas Capital Generation is regular and solid.
The average growth in our core Tier 1 Ratio has reached 35 basis points per year over the period from 2014 to 2019. The target announced in 2017 to reach a 12% core equity Tier 1 by the end of 2020 was already achieved in 2019. Moreover, 12.1% at the end of December 2019, our core TRAN ratio is well above the request notified to us as part of the threat. Switching to Slide 50, you will see that BNP Paribas is well positioned to face the finalization of Basel III, Which is, as you know, in the process of being transformed in the European Union law. The European authorities Reminded that this transposition is not expected to significantly increase the requirements for the banking industry taken as a whole.
So It's very probable that the exemptions decided during the vote of the CRD 5 will be maintained. With this assumption and to the extent necessary, By taking management actions, BNP Paribas deems that it will limit to 10% the inflation of its risk weight as a result of this transposition. Facing disinflation, BNP Paribas favorably positioned taking into consideration. Firstly, A core equity Tier 1 ratio well above current request as notified as part of the strike. Secondly, A regular and solid capital generation of 35 bps on average in the past years.
The expected adjustment with respect to Pillar 2, Starting with the application of the Article 104A of CRD V authorizing the partial coverage of P2R by hybrid Securities AT1 and T2 are no longer by Cobalt Equity Tier 1 and then the announced recalibration of the Pillar 2 requests. Turning to Slide 51, you will find a summary of the Group's objectives for 2020 to conclude this presentation. We forecast the continued growth of our businesses in all operating divisions, leveraging our diversified and integrated model, While reinforcing our franchises in particular for CIB, we should continuously strengthen its European leadership. This growth would be accompanied by the reinforcement of our leadership in sustainable finance, thus pursuing our policy of engagement in the society. Furthermore, the group should continue to benefit for the 2020 transformation plan and cost saving measures, resulting in a decrease of operating expenses in absolute terms and positive jaws effect.
On this basis, We expect the return on tangible equity to further improve to a level of 10% in 2020. Lastly, objective of 50% dividend payout This concludes today's presentation. As a takeaway, I would like you to Keep in mind the very good overall performance of the group with the net income at €8,200,000,000 up 8.6% on 2018. Positive jaws effect and decrease of the cost income ratio. The core equity Tier 1 ratio at 12.1% at year end and a good positioning for the finalization of Basel III.
The success of our transformation, our good business drive and the strength of our franchises. Ladies and gentlemen, thank you for your attention. And together with Lars, we'll now be pleased to take your questions.
Your first question from Jean Francois Lauris from Goldman Sachs. Please go ahead.
Hi, good afternoon. I just wanted to ask 2 quick things. The first one is, could you update us on the progress of the integration of The Deutsche Bank platform for the CIB prime brokerage unit and
give us
a sense of What your balances are and how many you've taken on since the announcement? So essentially to understand how much they are to come versus how much is already in. And the second thing I wanted to ask is on your Slide Essentially, what this boils down to is that, if you take into account your own capital generation and your risk weighted asset inflation, You will essentially be at 12% Core Tier 1 capital by 2023 when Basel IV is fully load if Fully load the 10% of risk weighted assets. At this stage, I guess, if you then say that the Pillar 2 might Be filled in with also different buckets or potentially be revised, I suppose, down. The question from there is, if you don't no longer need to build Capital as well as if you have a bigger MDA buffer, what happens to the capital distribution policy?
Is there scope for BNP to
So on the Deutsche Bank transaction, We're proceeding very sweetly, and we're very much in line with the original plan and balances Slightly moving up. So fair enough, we're on track. Looking at capital, you got it right. Slide 50 is very clear. On one side, you have 3 elements And those three events, I would say, are going to more than compensate the increase in The Basel III requirements.
But what will happen to kind of excess Capital generation, to be understood and this is part of the next plan. The purpose of the slide is to explain in a very clear way that This is our situation. And looking at and this is quite recent because the stance at the European level Looking at, I would say, exemptions, skipping exemption is quite recent. I mean, it became very clear last autumn. And the stance of the supervisor, the SSM regarding, for example, the P2R, even the P2 is also quite recent.
So Factoring those 2 quite new elements, yes, you are quite right. There is room for Free equity, but the answer to the question is part of the next plan. But it's a nice, I would say,
Thank you. Next question from Jon Peay from Credit Suisse. Please go ahead.
Yes, thank you. Good afternoon. My first question is just to clarify the last one in terms of how you manage your CET1 over the Few years. Do you intend to let it rise to about 13% on a Basel III basis By 2023, so that when the RWA inflation comes in, you're still at 12% under Basel IV? Or are you happy to run it to a lower number, accepting the fact that Pillar 2R can include some AT1 and maybe Pillar 2 gets So recalibrated.
And then my second question is about the lowering of the RoTE target for 2020 from 10.5% to 10. How much of that is due to slower revenue growth where I think you had recalibrated to a 1.5% CAGR Under the existing plan. And how much of it is due to carrying a higher capital level in anticipation of Basel IV? Thanks.
There is no plan to continue to move up the ratio. But again, it's too early to say with all the details what will happen next year 2021, 2022, 2023. So We just want to make that point that having heard, I would say the Comment of the European level, having received some additional comments from the SSM, it becomes very clear that Not only we can counterbalance Basel III finalization, but there is room to maneuver. Then how we will manage that To be understood and it will very much depends on the way those 2 bodies, the European level and the SSM will Ultimately, decide to I would say They will decide the way they will implement the Basel III packaging with all the details. So To be understood, but what is very clear is that what we have already in our hands is strong enough to more than counterbalance this effect.
So is the rush going up? We don't know, not necessarily. We very much depend on the way the regulator, supervisor will manage the situation. But some free capital generation will be, I would say, available, which is looking ahead, Quite a strong difference compared to the 2020 plan. In the 2020 plan, we were building what was Considered relevant and then there is a new period in which we are in a different situation.
Looking at the Return on tangible equity partly is due to the fact that we have accumulated equity during 2019. So On average, the basis on which we are computing the ratio next year is bigger, larger than the basis we have The other part is obviously the impact of very low rates In the domestic market, so if you look at the company in 2020, we're very much in line With what we said last year beginning of 2019, the major difference is very much the impact of the low rate environments.
Thank you.
Thank you. Next question
Just Few questions for me. The first one will be on CIB. I would like to know whether when you review the targets, you have actually Due to the recent agreement with Deutsche Bank or are there any other reason for that? The other thing I'd like to know is what did you assume on And finally, on BNL, it would be helpful if you could quantify the one
So looking at CIB, this is purely organic growth. As of today, we do not have any impact coming from the Deutsche Bank transaction, and we are not factoring In that year, any impact on this also? This is purely organic growth. Around BNL, Lars, if you want to Yes.
There is a series of smaller elements that Flattered a bit the results, but these are elements that we do not clarify. It's a series of smaller customers. And on the ForEx, On the ForEx, basically, when we look into the year 2020, we assume that it is stable to what we have now. So we don't take any positive or any effect actually ForEx Evolution. Laurie, that will be our answers.
Thank you very much.
Thank you. Next question from Delfin Lee from JPMorgan. Please go ahead.
Yes, good afternoon.
Thank you for taking my questions.
First of all, I just wanted to come back to your outlook on domestic markets being down. If you could just give us a
little bit of
color by country, if possible, just because when you look at The performance in 2019 has been quite resilient and obviously rates expectations have changed. But If you could just give us a little bit more color by country, that would be helpful. And secondly, if you don't mind, just So we understand a little bit the impact of low rates. If you could just remind us the sensitivity to And then lastly, just to come back on your capital management. So Is it do we understand that you would be happy to run under Basel IV with ACE-twenty one Below 12% and what level would you feel comfortable about?
Thank you very much.
Again, the last point we tried to answer, it was raised previously. So too early to say. We need very much to wait for The last details, but in absolute terms, we are entering next year in I would say, a cycle in which additional requirements will be more than, I would say, counterbalanced By capital generation, the initial position that gives us with some room to maneuver and that's it. So we'll give you in the next plan the full detail. But in absolute terms, yes, there is, I would say, kind of capital generation that is free again to be understood the purpose.
Looking at domestic market, the sensitivity is very simple. What we tend to say this is, I would say the order of magnitude 10. A drop of 50 bps as €100,000,000 impact the 1st year, 400, the second, 700, the third one. So if it's 100 bps, it's 200, 800, €1,400,000,000 So the difference in between, if you assume The impact took place in 2019 mid year, the drop in by 100 bps. You would assume that in 2020, The impact is in excess of €500,000,000 €500,000,000 The Two most impacted geographies are France and Belgium.
And the geography that is slightly less impacted, this is very much linked The deposit base of the bank is BNL. So you have to factor that The impact comparing 2020 to 2019 is in the order of magnitude of €500,000,000 which basically is 3% Of the total revenue base of domestic market, this is slightly more looking at Belgium and France, Slightly less looking at P
and L.
Delfin, these are our answers.
Thank you. Next question from Azra Agweli from Citi. Please go ahead.
Hi, good afternoon. Couple of questions on French Retail. Could you update us on the progress on the cost reduction there? And how do you find that relative to the other domestic market where we have seen already some progress there? And following on still on the domestic Marketing in France, the loan growth is very solid.
But if you look at industry data, it seems to point that there is an expectation that there could be a slowdown In the volume in France, in the demand. What do you see on the ground and what are your And quickly on the B and L, the cost of risk expectation for 2020 of 50 basis point guidance, is it confirmed? Thank you.
So on B and L, yes, we should be 50 even lower. And looking at the French retail, the cost base went down by 0.2% this year. We will deliver a better result in that respect this year in 2020. This is for sure. This is why ultimately looking at domestic market, if you consider that you have this large Impact coming from low rate environment compensated by better action on cost and I would say the growth of the commercial business, ultimately you end up with a negative evolution of the top line, but limited.
Looking at the mortgage, the volumes, the evolution in the French market, we're not typically the bank in France that is Very, I would say, very linked to the evolution of the mortgage business. We are more kind of private bank, Commercial bank, corporate bank, affluent type of platform, so do. This impact That can always take place. We'll not impact that much the French Retail.
Thank you. Next question from Jacques Henri Gaulard from Kepler Cheuvreux. Please go ahead.
Yes, good afternoon. Thank you. First of all, congrats for the guidance on capital because you said that last year. That's super clear. One very, very, very last thing, does that include the impact of the output flow As well, that would happen post 2023 because some banks tend to give you a season 1 and a season 2 of Basel IV.
And the second question, When do you think you will be able to quantify climate risk, particularly on the stranded assets? I know it's very complicated in terms of disclosure, And we don't ask you to give you any number, but it's more a matter of time line of where you would be able to give some precise figure on this? Thank you very much.
So the first question, everything is being computed. So we're not disclosing kind of Basel 3, without the flow, I mean, it's covered by the computation, of course, it would not be very fair just to give the impact Away from the floor, I mean, so everything is included. Climate change, We're already in that process. I mean, we have already changed the bank approach in a number of sectors or sub We have closed down some businesses. So There will be an impact, but this is already covered by, I would say, the current strategic plan.
And we believe it's going to be progressive, but we have also to factor the fact that there will be new sectors, new industries, New company, new technologies and most probably those banks that started first in that respect We are going to have additional market share in those new areas. If you look at us, we have globally, worldwide number 3 for green bonds, We are the leading bank for renewables in Europe and so on and so on. So the banks that started first We'll have larger market shares in those new, I would say, sectors, economies, approaches. So Even it's very difficult to compute, we don't believe that ultimately This will change, I would say, the growth long term of the company because in a way or another, You will have to provide new energy. You will have to provide new sectors.
You will have to provide new goods, new ways of, I would say moving the economy. So it's more question of rebalancing the business of the bank and it can only be done In a progressive way, knowing that, of course, it's better to start in advance than to be the last one in the process. And again, if you look at those two positions, number 3, globally in screen bonds And number 1, in Renewables in Europe, a good, I would say, measures of the situation we are already in. It's a good evidence that we are already benefiting from that transformation.
That will be our answers.
Thanks Lars.
Thank you. Next question from Kiri Vijayar from
Yes, good afternoon, gents. A couple of questions on CIB, if I may. So firstly, how active were you on the securitization front in CIB? Your slides really only talk about the full year, so more just the Q4. Are you running at 5 bps capital release per quarter that you've previously targeted.
And then secondly, just some background On the €100,000,000 restructuring charge in prime brokerage, really what's driving that? Is it from taking on The Deutsche Bank platform, you've had to write off your pre existing IT in the prime brokerage area. The reason I ask is, when that deal, Deutsche Bank deal was announced, It was supposed to be quite a clean transaction where you sort of avoid restructuring costs. So just curious as to what's driving that in prime brokerage, please? Thank you.
All right. On your questions, yes, the CIB or the securitization in general, because it's indeed our CIB We will perform it with the securitization is done on assets, which are wider than that, where at the beginning of 2019, there was basically A blocking because there was clarity needed by the supervisors. So they were not done. Since the summer, we found back The normal rhythm of doing. So that's the rhythm at which we are.
And then when it comes to your question on prime brokerage, so yes, if you look at The adaptation or restructuring costs that we have, you typically always have some of those related on the transactions that you do. It It can be relating to mergers, it can be related to software, it can be related to several things. So we do not give more guidance, But it is part of the overall costs of the integration that we had foreseen.
Okay. Thank you.
Thank you. Next question from Flora Benhakoun from Deutsche Bank. Please go ahead.
Good afternoon. The first question is regarding capital again, but this time on the TRIM guidance that you had provided. I think you have been saying so far that you are expecting probably around 20 basis points. So I was wondering if there was anything new that came up during the quarter, if you maintain that guidance and if you had Some more portfolios reviewed that give you maybe a better visibility and better confidence in that guidance. The second question is regarding the insurance Business where the revenues were a bit weaker this quarter than the usual run rate.
So I was wondering if this is linked to Some further provisioning that you would have done on the PPE reserve. And therefore, if could maybe give us even a number for the PPE reserve and the solvency II ratio. Thank you.
Flora, thank you for your questions. When it comes to the TRIM, as we said in the past, I mean, we have no idea of what the results would be, right. It is not an That is to be attained. But we said that it could be around like up to 20 basis points. In the meantime, several Evaluations have been performed by the supervisors.
So on market risk, on credit risk, counterparty risk. And as we said, there's basically the impact Nevertheless, there is still what is still ongoing is the low risk portfolio. Now that is a less statistical kind of review. So I have to repeat that the guidance we have is the impact of 20 basis points. It could be less, it could be more.
That is What there is to say about TRIM? When it comes about insurance, indeed, like every Quarter, we review the provisions we are taking. In particular, at year end, we took a prudent stance In particular to some of the activities we have, for example, in LatAm. So you know, we basically stepped that up. We see in some of those countries, We observed some risks around social crisis and that is basically what we took what we provisioned for.
So It's a one time on the stock, right? It's not something you have to assume that it happening quarter over quarter and it's we are prudent particularly on LATAM. And as I said, it's not to be done times 4. It's basically the stock which has been aligned. So Flora, those would be my 2 answers.
Thank you. Any comment on the Solvency II ratio?
I'll invite you to come back when it's going to be published A bit later, in the end, you do know that we are our provisioning on solvency as well. So there is no concern on that.
Thank you.
Thank you. Next question from Stefan Thalmann from Autonomous Research. Please go ahead.
Yes. Good afternoon, gentlemen. I have two questions, please. The first one also relates to the insurance business. There seems to be a bit of an evolving debate starting with one your friendly competitors in Italy about how to treat the Tier 2 investments of the bank into the insurance business As a deduction from Tier 2 capital or as a 370% risk weighted position under the Danish Compromise, Could you maybe tell us how you're currently doing this and how large your amounts of Tier 2 investments are into card is?
And the second point relates to, I guess, the topic of negative interest rates and what your intentions are To pass on negative interest rates to your depositors, in particular in France and Belgium. If you could maybe talk
a little bit about what you
have done so far and how much potential you see for that going forward? Thank you very much.
So on that last point, we are just looking at the situation on the case by case basis And only for counterparts that are, I would say, depositing regularly, let's say, More than €100,000,000 So this is very much the approach we have. We do not intend To charge, I would say, retail customers, SMEs and so on. So this is very much the stance we have Looking at situation that are really large, important, basically Above 100, sometimes slightly below, but this is really a case by case situation. And then this is Looking at so at the global portfolio of business, we might derive from a certain counterpart. On insurance, there are so many ways to compute everything.
And this is very much linked The local regulator, this is not at the open level that this is being handled. So it's very difficult To answer to your question and to compare because basically we don't know how it's being done in Italy. But Lars can comment maybe.
No, indeed. It is the financial conglomerate is a complex regulation and there are several triggers that can move you in one or the other, so it can For us at BNP Paribas, it has been stable the way it's handled. And just to position it, I mean, even if the total Danish Compromise would go away for us that would be an impact of So we'll leave it at that. Stefan?
Thank you very much. Lars, You could not share with us the current investment of Tier 2 Capital into the insurance entity?
No, because it's a thing on top of that where we Invest intra group and not an intra group is eliminated. So I'll leave it to that by saying that total impact is 10 basis points.
Okay. Thank you.
Thank you. Next question from Tariq El Mejjad from Bank of America.
Hi, Good afternoon. Tarek Emeljad from Bank of America. Just two quick questions, please. First one on costs. I mean, you've been very clear that there's no transformation costs From this year, 2020.
However, I mean, I'm just questioning, is it reasonable to actually stop this transformation cost? Because I agree you've done lots of work in terms of automatization, digitization and so on, but I think The work to be done is still large. So is it just a pause this year before the new plan you announced your transformation costs? Or you think That's actually the current IT systems and so on don't need more investments. And second question is on capital.
I mean, clearly, you seem more relaxed about Regulation and how you will absorb these in the next few years. I mean, what's the favorite route for you? Would you wait For regulation to materialize and then you return capital somehow or you would preempt that and continue into focusing on bolt on acquisitions
and perhaps M and A? And maybe you can give
us as well your updated view on And perhaps M and A. And maybe you can give us as well your updated view on the M and A in the sector in the coming quarters or years? Thank you.
Tarek, when it comes to transformation costs, they basically we had the last one in 20 19, so those 700, they are not there. So that's the synthesis. And when it comes to capital, There is no favorite road. As I said, we're basically ending in 2020 our plan. During 2020, one would assume that there will be some clarity With respect to how these things will unfold and at that time in the next plan, we will be able to again make a crisp detail of what it basically means.
And as you know, on the acquisition, if that's what your question is, what we the only thing we look at if at some moment in time, we can do bolt on Acquisitions like what we've done on Prime Brokerage, that's basically what we limit ourselves to.
Okay. Thank
you. Thank you. Next question from Omar Fall from Barclays. Please go ahead.
Hi, good afternoon. Just a couple of questions. Just going back on expenses, just If I remove all the 2019 exceptionals, add the new guidance for 2020 exceptionals and the cost savings It looks like you're €29,000,000,000 or so, which is €1,000,000,000 below the consensus for what it's worth. My question is twofold. Firstly, are there any other elements impacting costs that we need to know of such as higher regulatory costs?
And then secondly, what do you think the underlying annual wage or expense inflation for the group is? In the last plan In the last strategic plan, I think it was like around 2% or so, if I remember, but this was a while ago now. And then secondly, and I'm sorry if I just I'm not sure it was too clear. But just on the 2020 exceptional items on Slide 48, is this a firm commitment to no more than €200,000,000 of restructuring and adaptation costs for 2020 because I thought the adaptation costs were Somewhat flexible because you progressively reviewed businesses and decided to adjust them to the new environment. And then last question, if I may.
Just on revenues in the Belgian business, you mentioned they were encouraging, thanks to market sensitive fees. But looking at the progression of NII, it looks like that's improved meaningfully as well. It was basically flat, which is better than The previous quarters, your peers are quoting better mortgage margins. Is that what's being reflected there? Thanks.
Omar, thank you for your questions. If maybe allow me to clarify indeed on the costs because Intrinsically, you should have all elements to compute them. So if you start from the basis of 2019, What do we know that when rolling into 2020? First, we said the transformation costs, which were $700,000,000 in 2019, they will be No longer there, so you take them out. Then we also said that there would still be net cost savings and CS of an additional $1,500,000,000 which will also So those are two improvements.
But at the same time, there is this kind of what we call wage drift, yes, which is the evolution of inflation, but also the natural Of the businesses that we have, the growth that we have, which is if you look historically, which is gravitating around 3.5 So if you take all that, that's basically where you stand. Because if we take those exceptional costs that you talked about, the restructuring and the likes, They are basically the same in 2020 as in 2019. And on top of that, we have some in 2020, some exceptional events That will be offsetting those even though it's not in the cost line. So with that, you should basically have all the elements to clarify those expenses. When it comes to those 400 that we basically mentioned, listen, from the horizon we have today and what we see how we have to adapt which business Because their FinTechs are there, because the branches are different, because it is 400,000,000.
That's basically the best view we have added today. And when it comes to Belgium on the pricing, there is indeed there is the flux and there is the stock, yes. So if you look at what we see in the behavior, there is indeed some pricing, which kind of makes sense. However, there is still The history, yes, the loans that were made 4 years ago are in a different shape than the ones that are done now. So Omar, those would be my three answers.
That's brilliant. So just a follow-up, the 3.5 percentage is both natural drift and inflation And the business lines development plan, it's basically the same amount as it was when you did the plan back in 2017. Yes, that's not a real change to the pace of
It's what you call it. It's the real change or the real pace of the costs. And it's the blend of the countries in which you are. Sometimes it's the inflation which makes up for it. Sometimes it's the more natural wage that makes up for it.
But in the end, that's a bit the statistical number we come at.
Perfect. Thank you.
Thank you. Next question from Aurelia Foeff from Santander. Please go ahead.
Thank you for taking my question. Good afternoon. It's a question on Core Tier 1 regarding the Danish Compromise. Do you see any risk That the ECB request that you risk weight Tier 2 issued by Cardif has happened to Intesa?
This question, yes, we basically addressed it. So it is every time different. And as I said, For us, if you look at the overall impact of the Danish Compromise, if it would disappear, it would be 10 basis points.
Okay. Thank you.
Thank you. Next question from
Two questions. Firstly, on The Basel IV 10 percent risk weighted asset inflation, please could you clarify whether that includes FRTB in the market risk elements That I think it is a bit uncertain when they'll come in. So have you included better what assumptions that you made around market And then secondly, could you update us, aside from TRIM, are there any other regulatory headwinds You're anticipating in 2020. So the securitization framework is something some of your competitors have flagged. Is there anything we
So again, looking at the final Basel III package, our assumption is covering everything. It would not be fair just to say this is the impact and keep it out of To scope something, so both the flow of FRTB, everything is included. This is the current reception of the group For a very detailed due diligence analysis, also this is it. I There is toasting that is still in there on top. And away from TRIM that is a regular, I would say, process that Started in 2018, we've been through 2018, 2019 2020 is the last year away from TRIM.
We do not
Thank you. Next question from Anke Ringe from RBC. Please go ahead.
Yes, thank you. I have just a few numbers So coming back to the Slide 50, if I look at my model, should I basically now assume a higher AT1 cost In order to preparation for Basel III? And then secondly, on the cost of risk, the €39,000,000 for the year you said It's still relatively low 46 in the 4th quarter. What should we assume for 2020, maybe somewhere in the middle? And on the corporate center, if you can please provide us some guidance here.
Thank you.
Anke, when it comes to AT1, so what indeed We have updated the overall issuance plans for the year and they are slightly up compared to what we had That is a small change that shouldn't materially impact. When it comes to Corporate Center, the overall guidance that we give both on the top line and on the costs are unchanged. Can you repeat your second question?
That was the cost of risk, but If you can please repeat the corporate center guidance, because it's been quite volatile over the quarter. So I
Thank you.
No, I know, I know. If you look at the cost overall, we anticipate a yearly run rate of the Around €450,000,000 to €500,000,000 And when you look at the top line, We have like around €150,000,000 that we have for the top line. And when you look at cost of risk, it is basically a small amount on the cost of risk because we have some legacy portfolios in there, for Sample relate to the activities that we have ended. And so we have some exceptional elements that Weigh on the results this time, but overall, it should be negligible what we have there.
Thank you. But the cost of risk was actually for the group level. So what are you expecting for 2020? Thank you very much.
Yes, for 2020, as we said, the over the cycle is 50 basis points for us and we said that It might be that we are a tad below that. So it could gravitate towards 45 basis points.
Okay. Thank you.
Thank you. Next question from Gregor de Saintnis from Morgan Stanley. Please go ahead.
Hi, good afternoon. Just two questions from me, please. First one on the leverage ratio, which was at 4.6%, so a 60 bps increase Q on Q. Quite significant, if you could please provide some information on what's driving this increase. And also on Basel, for RW Inflation, if you could provide us with some detail about potential management actions you plan to implement?
Thank you.
On leverage, leverage typically At year end, there is a slowdown happening in the activities. I assume that all of you on the phone take holidays and so does basically the majority of So that is why there is a pickup in the leverage because there is a bit of a winding down on the balance sheet. And so that is just like last year. Last year, we ended the year last year, I mean, 2018, we ended the year on 4.5%. Now we ended it on 4.6% because we accumulated some more capital.
So if you want to look at the ratio, which You see in the Q1, the Q2 and the Q3, which is gravitating around 4%, 4.1%. That is more of the metric that reflects The Natural business and that is well above the yardstick we will have to be in 2 years. So from that point of time, we are relaxed on that one. When it comes to Basel IV is again, we looked at that. In fact, we've calculated it.
I mean, There is no use of giving you more color on what it is. Those will depends on what the rules are and what activities we have to contemplate. So it is too early to say.
Okay. Thank you.
Thank you. Next question from Pierre de Ville from CECM Market Solutions. Please go ahead.
I think he's gone. I mean, from the phone.
Okay. So we'll take the next question from Jean Pierre Lambert from KBW. Please go ahead.
Yes, good afternoon. Thank you for taking my question. It's only one question. I can see in the slides that you have more and more application know artificial intelligence, which are spreading in the business. And the question is, what do you think the impact is on the natural cost Growth, we were talking about 3.5%.
We would expect that in the medium term, these applications may help you To reduce the natural cost growth and perhaps is there an element of revenue impact as well? And I think this is more relevant because you completed your transformation, you have the data lakes and you have about 100 AI scientists, I think. So there's scope for financial impact as well. Thank you very much.
Well, I'm afraid it's too early to say. In some domains, If you want to stay as a state of the art bank, you have just to grow that technology, but it's not going to change your Position relatively to peers. So if you want to stay in the certain business, you have to be very good at that. And basically more or less all businesses are involved In that respect, in some businesses, you could potentially come across, I would say, new ideas, new services. And this will give the company, I would say, additional growth potential.
I would tend to say that Looking at the cost base, I doubt very much this will have a clear impact Because you need to feed the technology, you need to invest. It requires a lot of IT Capacity and so on and so on. But potentially, can be a driver in certain businesses for the top line. So I would rather say that than a driver to lower the cost base.
Great. Thank you very much.
Thank you. We'll take the last question from Pierre
Hello. Can you hear me this time?
Yes.
Okay. First question regarding Asia and Armani, in your current strategic plan, you are very ambitious for these two areas. And you are targeting, if I'm right, €3,000,000,000 of revenues in 2020. Can you give us a quick statement where you stand in at the end of 2019? And are you still in a position to reach this target in the current environment?
Regarding P and C, Could you give us an update regarding the development of the number of contracts in BDDF With Matt Muth. And also, what is your view regarding P and C for SMEs, Considering the fact that you told us that you wanted to be, and especially in BDDF, a reference to corporate and globally In your domestic markets, what would be your view on developing P and C for SMEs? And my last question is regarding HelloBank in your domestic market. If we Except Germany, which is a kind of exception, I would say, because it began with High level of clients, high number of clients. What is globally the impact of Hello, Bank.
And profitability, I mean, probably a negative impact on profitability. And when do you see it Contributing positively to the profitability of your networks As long as the transformation now is over. Thank you very much.
So we are having interest in Germany and China for very simple reasons. Germany is by far the largest economy in Europe and we are kind of reference banking in the Eurozone. So Yes, of course, we have a strong interest in Germany and just the same can be said around China and Asia and worldwide. So these are I would say the obvious factors in our interest cannot expand the global platform in Europe without having a strong push in Germany And being, I would say, relevant in Asia without, I would say, a kind of global growth for China. We're very much in line with the plan in those two geographies.
So nothing less, nothing more. We're making good progresses in the two regions. Looking At P&C, we're very much in line with the Medved project. So the way we are, I would say cross selling that product in the end so far, I would say retail customers in France is proceeding well. This is the beginning.
We have not reached yet the level of cross sell you can see in certain, I would Say, a cooperative of mutual banks in France, but progressively we're building the machine and for sure, ultimately We will reach the same level. It's a machine and the MatHut offering is very relevant in that context. Looking at SME, we partnered 1 year ago with AXA. AXA is a worldwide leader in that domain. And we are still In the very beginning of the learning curve, this is brand new.
We have to adapt. We have To be relevant, but it's coming. The potential is less important Compared to the potential of P and C with individuals, but still this is relevant. It will take some years to be delivered fully. Looking at Hello Banc, Hello Banc There's not a negative impact on domestic markets.
I wish the cost base is covered by the revenue. And in the coming months, we will be clearly left with a positive impact. Hello, Banque is not positioned the same way in France, Belgium and Italy because the way we are in those markets It's very different according to different geographies. And for France, for example, we're going to have a new strategy. It It was announced a couple of weeks ago in terms of pricing offering.
So the positioning we're having for those That platform in the different countries is different. But what we can say is we are not anymore In a kind of negative impact situation, we're having already something that is slightly positive That's slightly positive, should grow in the years to come.
Thank you.
Thank you. Next question from Felipe from Societe Generale. Please go ahead.
Yes. Hello. Good afternoon. Felipe Petche from SocGen. Thank you very much for taking my question.
I just have one quick one, a follow-up one on your leverage ratio actually. So I appreciate that there has been some 4Q seasonality to explain the important increase in the ratio at the end of the year. But if I look at your leverage ratio exposure, I can see that it's been growing by 4% this year more or less, which is quite high compared to the past 3 years. I just wanted to know whether you could give some color on that. Many thanks.
Sure. The intrinsic evolution that we have on the balance sheet, if you look at it in a quarter after quarter, yearly basis is basically the growth of credits. That's the one. We said that credits are growing around 5%. So that element is basically what is lifting that growth.
However, that growth is accompanied by revenue growth, by Bottom line growth, therefore, by capital growth. So from that point of view, that's the evolution, but the overall trend is very fine.
Okay. Thank you very much.
Thank you. We don't have any more questions. Back to you for the conclusion.
Maybe as you've seen, if If you can take away that there was a very good overall performance of the group with a net income at €8,200,000,000 up 8.6 percent, positive jaws in each of the divisions, Common Equity Tier 1 12.1 percent a year in advance and therefore the success of our transformation. Thank you very much and have a good day.
Ladies and gentlemen, this concludes the call of Ben Peeperibati's 2019 full year results. Thank you for participation. You may now disconnect.