BNP Paribas : 2022 Integrated report

2022 INTEGRATED REPORT

at scaleSolutions

for a sustainable world

04

Deploying our strategic vision over the long term

• Message from Jean Lemierre
• Interview with Jean-Laurent Bonnafé

10

Rethinking our industry at scale with profound changes

• A look at macroeconomic balances
• Making ecological transition an index of company performance
• Meeting technological challenges
• Encouraging social inclusion
• Listening to our stakeholders

22

Accelerating our transformation at scale with challenges of our time

• A global European leader
• GTS 2025 strategic plan, a new acceleration phase
• Three operating divisions to serve our customers
• A diversified and integrated model to create value
• Our financial and extra-financial indicators

46

Offering our customers solutions at scale with current transitions

• Supporting the transition to a low-carbon economy
• Placing technology at the heart of our solutions
• Contributing to a more inclusive economy and society

65

Relying on our governance in a changing world

• Our governance bodies
• Our shareholders and investors
• Our Board of Directors
• Our Executive Committee

Solutions

at scale

for a sustainable world

2022 has reflected the scale at which our societies are challenged. In a hyper-connected world, dominated by technology; in the face of social inequalities accentuated by successive crises that are weakening economies; with the climate emergency that requires us to reinvent our models: we are convinced that we must all find the right solutions together.

As the leading bank in the European Union and a world leader in sustainable finance, we are putting our technological innovation, the expertise of our various business lines and our leadership at the service of the transitions that will shape the world of tomorrow.

Because being "the bank for a changing world" requires us to be at the forefront of this collective dynamic, we are giving ourselves the means, with our GTS 2025 strategic plan, to scale our solutions for a sustainable world. To better meet society's new expectations and enable our customers - individuals, professionals, corporate clients and institutions - to make their own transition to a more sustainable and inclusive model.

Our commitments, our solutions, our transformation are at scale with the challenges of the current world to enable us to build a fair transition together.

London, United Kingdom.

04	2022 Integrated Report - BNP Paribas

Message from Jean Lemierre,

Chairman of the Board of Directors

of BNP Paribas

We are building

on the solid results

achieved

by BNP Paribas in 2022

to further

and amplify

our momentum

Several shocks converged

few weeks. Global growth, rebounding quite sharply at the end of the health crisis, slowed down abruptly in all major economies with, overall, for the year 2022, rates of +2.1% in the United States, +3% in China, +3.5% in the eurozone and +2.6% in France(1).

Even if the spectre of a recession seems to be diminishing, our environment remains unstable and particularly uncertain. The transition towards an exit from the crisis is proving to be longer than we might have expected. However, imbalances are being reduced thus paving the way for a return to growth. Prospects for a return to normal are thus emerging for 2024, after 2023 which, according to the latest forecasts, will remain marked by very low growth in the United States and the eurozone.

A proactive approach to the ecological transition

Whichever the exit scenario from this

crisis, in the face of the acceleration of climate change, which is tangibly reflected in the intensification of natural disasters - five times as many occur in the world compared to fifty years ago according to the World Meteorological Organization - BNP Paribas will fully play its role in supporting the transition

05

"Confident in the relevance of our strategic orientations, supported by a

solid and balanced governance, we accompany the economic and societal changes currently facing the world."

an unfavourable market environment. These results put us in a good position to deploy our GTS 2025 strategic plan with confidence and determination. We are also fulfilling

our commitments to shareholders at the sale of Bank of

the West, with a share buyback programme of €5bn in returns to offset the impact of this disposal. In a context of rising interest rates that will have a positive effect on our revenues, the fruits of the sale of our California subsidiary will also enable us to strengthen our investment capacities both to support the development of our business lines and to continue to strengthen the technologies that are critical to our performance and competitiveness. This context allows us to revise our targets upwards for growth in net income, return on tangible assets and annual growth

B	efore reviewing macroeconomic trends,
it is important for me to mention the
human tragedies that cast shadows in
2022 and the beginning of 2023.

The war in Ukraine has lasted for more than a year now and

its outcome seems distant and uncertain. At BNP Paribas, we are particularly attentive to the changes and repercussions of this conflict as they directly affect the 5,000 employees of our subsidiary UKRSIBBANK, whose exceptional courage and resilience allow us to maintain banking services that are essential to the Ukrainian economy. My sympathy also extends to our colleagues and to people in Turkey and Syria who were struck on 6 February by an earthquake which was described by the World Health Organization as, "the worst natural disaster in a century" and whose death toll was exacerbated by several deadly floods that followed. The Group naturally mobilised to support the affected populations by immediately activating the BNP Paribas Foundation Emergency & Development Fund.

Despite a series of unprecedented events since 2020, a further convergence of shocks in 2022 has had substantial consequences. First, we experienced an energy crisis of significant magnitude which led to increased prices throughout Europe, a surge in food prices throughout the world and a widespread logistics shock linked to multiple disruptions in production and supply chains.

In all, the situation contributed to creating

conditions for an historic rise in inflation combined with an increase in interest rates as had not been experienced in many years. To contain this high infla- tion, the United States Federal Reserve System (Fed) and the European Central Bank (ECB) tightened their monetary policies and carried out successive hikes in their key interest rates which wiped out a long decade of low rates in just a

towards a sustainable economy. This is why we launched a further phase of strong transition acceleration in our low-carbon energy production financing activities, early 2023.

We thus confirm our position at the forefront of sustainable finance and as leader of the major international players financing the ecological transition. And in this context, we intend, more than ever, to act in line with our responsibilities as the European Union's leading bank, particularly by contributing to the programmes and measures taken by the Twenty-Seven,as part of the Green Deal, to achieve climate neutrality and become the first carbon-neutralcontinent by 2050.

To further and amplify our momentum, we are building on the solid results achieved by BNP Paribas in 2022, despite

in net earnings per share.

Confident in the relevance of our strategic orientations and supported by a solid and balanced governance, we accompany worldwide economic and societal changes with ethics at the heart of our practices and a spirit of responsibility in the way we serve the common good. Building on the quality and solidity of our model, and thanks to the commitment of our teams, we continue to support our shareholders and to earn the trust of our customers - and remain fully mobilised to serve a more sustainable economy and a more inclusive society.

Interview conducted on 16 March 2023.

(1) Source: OECD, March 2023.

06

2022 Integrated Report - BNP Paribas

07

Interview with

Jean-Laurent Bonnafé,

Director and Chief Executive Officer

of BNP Paribas

We are entering

stagenew of

acceleration

in financing the

energy transition

As we speak, the conflict in Ukraine has lasted over a year and no way out seems to be emerg- ing. What is your take on this situation?

Jean-LaurentBonnafé → BNP Paribas is present in Ukraine, notably through its subsidiary UKRSIBBANK, with 5,000 employees. My first thoughts go naturally to all our colleagues and their families. Their courage and resilience in the face of the repercussions of the conflict command admiration and their commitment makes it possible to preserve, as far as possible, the continuity of banking services that are essential to the country's economy. I would like to thank our employees around the world who have been mobilising for many months to help the people of Ukraine. More broadly, while the war unfortunately seems set to last, we will continue to do everything in our power to translate our solidarity into action.

Beyond the human and humanitarian tragedy, the conflict has also had serious economic repercussions around the world. In this particularly troubled context, how would you rate BNP Paribas' performance?

J.-L.B.→ Indeed, far from the upturn that we were all hoping for at the end of the Covid-19 health crisis, we are experiencing a sharp contraction in economic momentum. 2022 saw the convergence of two major shocks: inflationary

- with inflation rates not seen in Europe for several years

• and monetary - with successive interest rate increases decided on by the United States Federal Reserve and the European Central Bank to try to contain inflation. The convergence of these phenomena has severely hindered the post-Covid economic recovery.

Despite this unfavourable market context, BNP Paribas achieved strong growth in its business and results in 2022. Reflecting both the relevance of our strategic orientations and the ever- increasing cross-functionality between our business lines, this performance rewards the efforts of our teams. I would like to sincerely thank them for their commitment and contribution to the success of our Group year after year.

Confirming our unique position as the leading bank in the European Union, our results are supported by the power of our diversified and integrated model, combined with our ability to support our customers over the long term thanks to the mobilisation of our expertise and resources.

The combination of these assets enables us to generate revenues which, with growth of 9% compared to 2021, crossed the €50bn mark for the first time. Our net income exceeded the €10bn mark, with a significant increase of 7.5%. We also posted a positive jaws effect of

0.7 point, the result of recurring cost savings of nearly €500m achieved in 2022 and the regular adaptation of our operating model. Lastly, we benefit from prudent and proactive long-term risk management, as illustrated by our cost of risk, which, in relation to our gross operating income, is among the lowest in Europe.

08	2022 Integrated Report - BNP Paribas

How do the Group's three operating divisions contribute to BNP Paribas' overall performance?

J.-L .B.→ All three leveraged their strengths and very solid positions in their markets to continue to grow in contrasting market environments. Driven by the very good performance of Global Markets and Securities Services, in addition to the very good resilience of Global Banking in an unfavourable market context, Corporate & Institutional Banking (CIB) saw its revenues grow by more than 15%. This success confirms that our Group has successfully built a powerful, leading platform to support its corporate clients in Europe and beyond. For its part, Commercial, Personal Banking

• Services (CPBS) posted revenue growth of 9%, fuelled by the very good results of the commercial banks and specialised businesses, particularly Arval, our business line specialising in mobility solutions. Lastly, in the face of adverse winds, Investment & Protection Services (IPS) has shown remarkable resilience, thanks to the efficiency of our Asset Management platform and the clear growth of
  Private Banking, the leader in the eurozone. This extremely robust operational performance once again demonstrates the unique contribution of our diversified model, not only between our divisions but within each of them, since it makes it possible to offset the potential temporary difficulties of certain business lines through the growth of others.

2022 is also the first year

of the GTS 2025 strategic plan deployment. How did BNP Paribas experience this launch?

J.-L.B.→ We launched our GTS 2025 plan in February 2022 in a completely different context from the one we expected, following the outbreak of the war in Ukraine. Despite these difficulties, the first year of implementation of our roadmap was very positive, again thanks to the commitment of all our employees, who are the primary architects of our plan.

The levels of growth achieved in most of our business lines, in addition to the strong development potential of

our activities in the areas of mobility, payment solutions and savings, confirm the relevance of the three components of our business plan: Growth (G), Technology (T) and Sustainability (S). In addition, thanks to two levers - the redeployment of the capital released by the sale of Bank of the West and the positive impact of the substantial increase in interest rates in 2022

• we have additional capital to invest in the growth of our business lines and complement our business model in a targeted and disciplined manner, such as with the acquisition of Kantox
• a fintech specialising in automated foreign exchange risk management - that we carried out in 2022.

Technology will play an increasingly central role in our business in the coming years, enabling us to both expand and optimise the solutions offered to our customers and strengthen our operational performance. This is a lever for strengthening our recurring cost savings targets by 2025, to the amount of €2.3bn.

Building on these strengths, we have revised upwards the net income targets associated with our GTS 2025 plan, now

aiming for growth of 9% per year up to 2025, compared to the initial 7%, and we have raised our profitability targets with a return on equity increased from 11 to 12%.

What is the outlook for

BNP Paribas in 2023 and the longer term?

J.-L .B.→ 2023 starts in a context that remains marked by high uncertainty. Clearly the unpredictable seems to

have become a norm since 2020 and the outbreak of the health crisis. The war in Ukraine, caused by the Russian aggression in February 2022, took all observers by surprise. More recently, at the beginning of the year, a violent earthquake struck southern Turkey and north-western Syria. We think of our colleagues and their loved ones, who lost their lives or were injured by this earthquake, the largest in the region since 1999. To support local populations, we activated our Emergency & Development Fund, mobilising half a million euros in 72 hours. This succession of crises shows us, as if it were still necessary, that unforeseen events can occur at any time and can significantly upset the geopolitical and economic balance.

From an economic standpoint, in the second half of 2023, we should reach some sort of plateau in the rise in interest rates and, even if the return to normal takes time, it will pave the way for disinflation in the eurozone during 2024. A marked recovery in economies is expected to follow by the end of 2024, or early 2025. Despite this context - which is more difficult than anticipated when we designed our strategic plan - and thanks to the mobilisation of its teams and the confidence of its customers, BNP Paribas has all the assets necessary to continue its growth, with a long-term perspective and in a controlled manner to support its customers and the entire economy in the move towards a more sustainable model.

Concerning the S pillar - Sustainability - of your plan, BNP Paribas recently embarked on a new phase of strong acceleration in favour of the ecological transition. More specifically, what is the course you have set?

J.-L.B.→ Faced with the emergency related to climate change, the expectations and demands are legitimately immense, and the challenge facing public authorities, companies and citizens concerns both the scale and the pace of transition. To meet this challenge, we are committed to a trajectory that should lead us to finance a carbon-neutraleconomy by 2050, and we are committed to accelerating the process of reducing our financing of fossil energy production as soon as possible.

The transition to low carbon is clearly subject to a time frame that takes into account industrial realities. However, to make it as fast and as sustainable as possible, BNP Paribas has made clear and ambitious commitments. As a result of the new phase triggered in early 2023, between 2016 and 2030 - or less than 15 years - we will have completed 80% of the transition of our financing activities to low-carbonenergy production. Renewable energies will then represent four-fifthsof our energy sector financing.

In 2022, we focused mainly on financing low-carbon energy production, which represented 60% of our energy loan portfolio at the end of December. Our oil exit trajectory is already well underway. The Group has not granted any dedicated financing for new oil field development projects since 2016. Since May 2023, we cease all financing dedicated to the development of new oil and gas exploration-productionactivities.

By 2030, BNP Paribas will have reduced financing oil exploration- production by 80% - with less than €1bn in remaining exposure

• and its gas exploration-production financing by 30%, and it will have achieved its complete phase-outof thermal coal in European Union and OECD countries. Our commitments, in this

09

"We cease all financing dedicated to

the development of new oil and gas exploration- production activities."

area as well as in that of unconventional hydrocarbons, have been scrupulously respected. The same will apply to our commitments in the oil and gas sector.

While we are driving the transition of our energy portfolio, we must not forget that it is by supporting the low-carbon transition of our customers in all sectors that we have the greatest impact. The

fact that BNP Paribas ranked #1 in green

bonds at the end of the year is a good bellwether for our ability to be, on a large scale, an accelerator of the ecological transition for all our customers.

Our progress and performance in sustainable finance is also recognised by several independent organisations. With an overall rating of 63%, we are, for example, the best-rated bank in the world by the British NGO ShareAction, which also designates BNP Paribas as a European leader in the fight against climate change and the protection of biodiversity. We see this sort of recognition as an incentive to do even better, alongside our customers.

I am convinced that the transition, due to the profound change of model that it implies, can only be carried out collectively, with all players in society. It requires massive and rapid mobilisation but must be fair and socially acceptable. This search for an optimal and sustainable balance will be at the heart of the challenges of the next decade.

Interview conducted on 15 March 2023 and updated on 11 May 2023.