2020 INTEGRATED REPORT

Unprecedented in its nature and scope, this crisis is unusual in that it is not the product of macro-economic or financial dysfunctions. It is the result of the reasoned choice of states in most regions of the world to protect lives by confining their populations in the face of a massive health crisis. These restrictions, of a nature that we had never experienced before, significantly slowed down economic activity for many weeks, disrupted mobility and flows, and forced companies to adapt within very tight deadlines, in particular by dematerialising part of their activities.

The first responses to the crisis, led by governments and central banks, were immediate, as well as strong and coordinated, particularly within the European Union. They took the form of a proactive policy aimed at combining budgetary leverage - through massive public subsidies, a short-time working scheme and a system of loans guaranteed by the State, and monetary leverage. Public authorities have supported the financing channels of all economic players and designed targeted loans to prevent a tightening of credit-related financial conditions and a possible upsurge in bankruptcies and redundancies. The European Central Bank also temporarily bought back, as part of the PEPP scheme*, debt securities for the benefit of governments and large companies financing themselves on the markets. While these initiatives succeeded in encouraging the partial recovery of economies from the summer of 2020 and will contribute to a recovery in the medium term, they have also raised government debt level. Even once the peak of the health crisis has passed, we may fear that some economies will be weakened for a while, faced with a potentially significant increase in unemployment and insecurity, particularly among the youngest.

The banking industry intervened from the very first hours of the pandemic to protect all economic players from a liquidity crisis and preserve their investment capacity. Fully playing its role as an essential operator in the service of the economy, BNP Paribas reorganised itself to face the crisis in an extremely responsive manner. The priority was to ensure the continuity of financial flows, to advise and support all our customers and to take care of their requests both rapidly and in a personalised way. Building on the Group’s financial strength and the power of its diversified and integrated model to deliver, we have made a significant contribution to this massive support for the economy in all our business lines and wherever we are present. Active alongside professionals and SMEs as well as large companies, to meet their funding needs, the Group has played a key role in supporting all economic players in Europe. It is incumbent upon me to underline, on behalf of the Board of Directors, the exceptional commitment of the Group’s teams, supported during these long months of crisis by the BNP Paribas executives, who acted with vision, acuity and discernment in order to support our customers on a daily basis in a difficult situation and to advise them in the face of the complexity of the crisis we are going through.

It is now important to project ourselves in the post-Covid period, despite the persistence of many sources of uncertainty, whether in terms of the shape of the recovery or the trajectory of interest rates, the ability of governments to repay their debts or trade tensions likely to disrupt the flow of international trade. Faced with the need, highlighted by this crisis, to better preserve the common good, the challenges related to climate change and the ecological transition are becoming even more important. They are at the heart of the issues that companies must address, by doing their part to promote a sustainable economy. Likewise, the economic turmoil that the health crisis brings in its wake is generating increased social inequalities, and this calls for a more inclusive economic model. Against this background, a European recovery fund of 750 billion euros was decided on in the summer of 2020 in order to mitigate the effects of the crisis and stimulate recovery by laying the foundations for a more resilient economy. At the forefront of sustainable finance, BNP Paribas will play an active role in the implementation of stimulus plans intended to support investment and revive growth. Likewise, we have long held the conviction that greater integration of the capital markets of the Member States would make it possible to direct savings, which are substantial in the period we are going through, towards significant investment needs related to the energy transition or digital innovation, the spearheads of balanced and sustainable growth. Fully aware of the responsibility incumbent upon it, our Board of Directors will act with rigour and constancy to put finance at the service of a more sustainable future and to support, with the backing of our shareholders, these new ethical, environmental and societal demands.