forum. Balance behavior or actual resistance? Even if some groups suffer more than others, the bank’s 2020 accounting results do not seem to be affected by the health crisis as people think.
BNP Paribas Group’s net income was 7 billion euros in 2020, compared with 8.2 billion euros in 2019, and Crédit Agricole’s net income was 2.7 billion euros, compared with 4.8 billion euros in 2019; Societe Generale suffered even more losses. Large: -300 million euros, compared with 3.2 billion euros a year ago. The extent of activity seems to be less affected than profits. BNP Paribas Group’s net banking revenue (turnover) has hardly declined: in 2020 it was 44.3 billion euros, and in 2019 it was 44.6 billion euros. Crédit Agricole’s net income remained almost stable at 20.5 billion euros. The “Euro” is 20.15 euros in 2019. The decline is more pronounced, but not much: in 2020 it was 22.1 billion euros, and in 2019 it was 24.7 billion euros.
Measures taken by the government to maintain such activities are supported by government measures, such as state-guaranteed loans, partial unemployment, and tax credits granted to lessors who are exempt from the company’s rent owed. So far, these measures have largely helped enterprises and individuals maintain their livelihoods.
But most importantly, the optimistic assumptions used to assess the cost of risk, that is, the realized or potential loss of the loan, can explain these clearly reassuring accounting results.
Until 2017, loan impairment was calculated based on proven losses, and as a result, it was considered later (IAS 39).Since 2018, with the new Standard IFRS 9Now, once loans are issued, more estimates can be made upstream and these loans can be categorized according to the circumstances of the borrower.