Jean-

Laurent Bonnafé: Good afternoon, ladies and gentlemen and welcome to the presentation of BNP Paribas First Quarter 2020 Results. For your information this conference call is being recorded. Reporting slides are available on BNP Paribas IR website invest.bnpparibas.com. [Operator Instructions] I will now turn the call over to Mr. Jean-Laurent Bonnafé Group Chief Executive Officer.

Sir please go ahead. Jean-

Laurent Bonnafé: Thank you. So good afternoon ladies and gentlemen. Welcome to BNP Paribas results presentation for the first quarter of 2020. Before we get into the specifics of the first quarter performance, I would like to say that our [indiscernible] go to the most affected by the current health crisis and the ones mobilized to support them.

In today's presentation we will update you on how the BNP Paribas group navigates these environment and we focus on group results, division results and the outlook for 2020 which will conclude our presentation. First we take you through the summary of our group results. Then last Machenil comment on the results by division and then I will update you on the outlook for 2020. As usual at the end Lars, Philippe and myself will be pleased to take your questions. So before going into key messages and results I invite you to move to slide 3, where we remind you that BNP Paribas has entered this crisis with a very solid balance sheet, capital and liquidity wise, diversified and resilient business model, a strict risk discipline at origination and long term client relationships combined with high performance digital solutions.

As such we are well equipped to accompany our clients through this crisis. Switching to slide 4, I would like to highlight the ways we’re responding to this health crisis. The groups teams have mobilized around the world to support the functioning of the economy and its financing. Our concerns have been to protect our employees who are fully mobilized to ensure banking services to quickly implement solutions to support the financing of our clients. To illustrate this some figures, first over 132,000 employees worldwide are working remotely while close to 90% of our branches remain open with a suitable public health setup.

Second, close to 70,000 applications have been received for state guaranteed loans notably in France which was launched earlier than in other countries. It is important to mention that we were very active in cooperating our clients globally across loan, bond and equity markets with over €115 billion raised with an exceptional mobilization of the Group. Last but not least BNP Paribas group has demonstrated its social engagement through a global plan of emergency financial aid of over €50 million as well as €100 million in investments to support SMEs, mid-caps and the healthcare sector. Now turning to Slide 6 with our first set of key messages. Clearly the acceleration of the health crisis towards the end resulted in extreme shocks on financial markets and in a major shift in micro economic outlook.

These triggered several negative impacts on the group's financial performance which was otherwise in line with its 2020 objectives. First, a negative €502 million impact on the group's cost of risk mainly due to the ex-ante provisioning of expected losses. Second, two one off negative impacts on revenues totaling €568 million in the first quarter. The first one off item consisted in a negative €184 million impact in revenues in our equity and Prime Services business resulting from the unexpected and certain restrictions on 2019 dividends by European authorities. The second one-off item was a negative €384 million accounting impact in our insurance revenues related to the valuation at fair market value of certain portfolio as of March 31, 2020 bearing in mind that such impact is reversible with market recovery as demonstrated in the first quarter 2019.

In this context, if we move to Slide 7 we can see that at the end of a quarter supported by an excellent business drive in line with our 2020 objectives, our results were impacted by the harshness of the health crisis. Group revenues at €10.9 billion showed resilience despite an extreme market shock at the end of the quarter with a decrease of 2.3% on last year. When excluding the Two one-off revenue impacts we have just talked about this would have translated into a 2.8% increase. Costs on the other end were significantly down by 3.5 % or €292 million in line with our objectives and testimony to the continued success of our transformation plan. The included as anticipated €45 million of restructuring and adaptation costs as well as €34 million of IT reinforcement costs and as planned no transformation costs.

A cost of [risk] 67 basis points out of which 23 basis points were due to the effect of the health crisis on credit and counterparty risk, down 85.4% increase in our cost of risk this quarter mainly for excellent provisioning of expected losses. Our net income for the first quarter stood at €1.3 billion down 33% on last year. When excluding the negative measure impacts on the health crisis on revenues and cost of risk net income was up 6.7% in line with the group's 2020 objectives. Our equity Tier 1 ratio stood at 12%. Finally the return on tangible equity reached 8% in the first quarter as a result of the impact of the health crisis this quarter.

Moving to Slide 10 for zoom on revenues in the operating divisions. Overall revenues in the operating divisions were down 3.1% while excluding the negative one-off revenue impacts of the health crisis they were up 2%. Looking at divisions individually, domestic markets revenues were [indiscernible] with a small decrease of 1.2% of last year due to the persisting impact of low interest rates in the networks which was partially offset by the increased activity in specialized businesses. International financial services saw a decrease of 5.4% year-on-year with revenue growth in personal finance, BancWest and Euro-Med but penalized by the negative one-off accounting impact in our insurance business from the sharp fall in stock markets. Excluding this one-off impact IFS r would have been up 3.6%.

Revenues in corporate and institutional banking were down 1.9% on the back of a very good performance in FICC corporate banking and security services and the one-off negative revenue impact in Equity and Prime services. Excluding this one-off impact CIB saw an increase of 4.3% in its top line. Switching to Slide 11, on cost in the operating divisions. Domestic markets deliver a 0.5% reduction in costs, is a 1.5% increase in the network and content increase in specialized businesses. When excluding the effect of taxes such as IFRIC 21 taxes, the division saw strategically [indiscernible] increase in cost continues to develop and CIB reduced significantly by 2.8% due in particular to its continued cost to be flat.

Moving to cost of risk starting with Slide 12. The impact of the effect of the health crisis was €502 million or 23 basis points. It reflects the change in macroeconomic anticipations based on several scenarios. It reflects as well the specificities of our portfolios and product risk management standards throughout their cycle. The macroeconomic anticipations take into account the specific features of the dynamic of the crisis and in particular the impacts of the lockdown measures on economic activity as well as the anticipated effects of government support measures and authorities decisions.

Finally the impact also includes a sector-specific component based on the review of certain sensitive sectors including hotels, tourism, leisure, transport and logistics, non-food retail and oil and gas. You can see from this slide the majority of the impact is borne by CIB and IFS. Looking at the different business one at the time, starting with corporate banking on Slide 13, cost of risk was up mainly related to the anticipated impact of the health crisis. Turning to the other business line on Slide 14 and 15 cost of risk remains low continue to decrease at BNL in Italy and increased moderately in Belgium retail due to the anticipated effects of the health crisis. In the other retail businesses the anticipated impact of health crisis has resulted in moderate increase of the cost of risk in Euro-Med and an increase in banks.

The increase in personal finance is mainly on the back of the anticipated effects of the health crisis as well. Turning to Slide 16. Financial structure. You can see that our common equity tier 1 ratio remains stable at 12% mainly due to the support of the economy and combined effects of the health crisis. Our Basel 3 leverage ratio clocked in at 3.9% and the group’s immediately available liquidity reserve totaled €339 billion, up €30 billion from last quarter.

On Slide 17, you can see that our net book value per share was stable at €69 as of March 31. At €69.7 our tangible net book value per share has grown at an annual rate of 7.2% since 2008 highlighting our continued value creations through the cycle. Finally, I remind you that the resolution to suspend the payment of the initially planned dividend has been submitted to the annual general meeting. Besides after the October 1, 2020 and subject to the then prevailing circumstances the board of directors may convene a general meeting in order to proceed with the distribution of reserves to shareholders in place of the dividend. You will find on Slide 18 some key points on the continuous reinforcement of the group's internal control and compliance system.

I will now hand over to Lars for the divisional results.

Lars Machenil: Thank you, Jean. Fine ladies and gentlemen good afternoon. Today I will walk you through the results of each operating division starting with the first domestic markets, if I can ask you to swipe to slide 20. You can see that it showed good business drive with solid loan growth in particular in the French and Belgian retail networks as well as in the specialized businesses.

It also showed a steady rise in deposits in all retail networks as well as good net asset inflows in private banking. Domestic markets adapted very quickly to the new environment and showed an extraordinary mobilization of its teams to support customers during the health crisis. For instance around 90% of branches remained open across retail networks to ensure continuity of service and support customers, for example with state guaranteed loans, [indiscernible] where applicable. The strength of our digital platforms illustrated in particular by a steady increase in the number of customers active on mobile apps as well as in the number of daily connections was also critical in ensuring smooth continuity of service. If we now focus on the P&L.

Top line showed resilience with a slight decrease year-on-year as guided. Indeed the impact of persisting low rate environment was partially offset by the increase in volumes and the rise in fees in particular at Consorsbank in Germany. Operating costs were 0.5% down year-on-year which when excluding the effect of taxes subject to IFRIC 21 translated into a 2.3% decrease and positive jaws. Pre-tax income was down 5.5% year-on-year but up 2.6% excluding the anticipated effect of the health crisis on the cost of risk which was described earlier by Jean-Laurent. Also if you look at pre-tax income excluding the effect of taxes subject to IFRIC 21, it was up 1% on last year.

Looking now at the different businesses part of domestic markets which you can find on Slide 21 to 24, I like to highlight in particular. In French retail banking loans were up 5% with a positive evolution across all customer segments and margins holding up well while deposits were up 8.3%. Revenues were down 4.4% due to a high base effect in the first quarter of 2019 and the impact of the low rate environment. Costs were slightly down with the ongoing impact of cost optimization measures. Pre-tax income was down 27% year-on-year and down 14% excluding the effect of taxes subject to IFRIC 21.

Thanks to its digital transformation and the strong mobilization of its teams, French retail banking was able to roll out very quickly the state guaranteed loan program in France. FRV received 44,000 applications for a total of more than 11 billion and this at the end of April. If we now go to Italy with BNL bc which showed a 2.5% decrease in revenues due to the impact of the low interest rate environment as well as the positioning on clients with a better risk profile something we have been doing now since several quarters. Costs were down 1.2% year-on-year thanks to the effect of cost-saving measures. Thanks to a sharp drop in cost of risk all over the year, pre-tax income more than doubled year-on-year.

BNL has been fully mobilized to help customers overcome the effects of the health crisis and rolled out very rapidly adapted measures like loan moratorium if we now go north we go to Belgian retail banking. It was really active in supporting their clients and for example approved 74,000 modifications of repayment schedules as of April 24 and this across all customer segments. Belgian retail banking showed the sustained business activity with loans up 5% and deposits up 5.4%. Revenues were down 3.3% due to the impact of already mentioned the low interest rate, which was only partly offset by high volumes and the rising fees. Costs were down 1.6% on the fact cost reduction measures and down 5% excluding the effect of taxes subject to IFRIC 21 those generating positive jaws.

Pre-tax income was slightly negative as a result mainly of the strong impact of IFRIC 21 taxes which I remind you have both a European and a Belgian component. Excluding taxes subject to IFRIC 21 pre-tax income was only down 3.8% compared to last year. Finally, the last part in domestic markets the specialized businesses continue to deliver very good business drive within particular a strong growth of 8.7% in the finance fleet at Arval and a significant increase in orders and number of clients and personal investors, in particular with Consorsbank in Germany with an increase of 172% year-on-year. Revenues were up 9% year-on-year with a positive jaws effects thanks to a contained increase in cost stemming from business development. Pre-tax income rose sharply 16%.

To wrap up this first quarter domestic markets showed its intrinsic capacity to deliver on the group's 2020 objectives and be very mobilized for the road ahead. With this if I can invite you to swipe to Slide 25 you will see that our second domain international financial services showed sustained business activity with loans up 4.5% with good growth in particular at personal finance and Euro-Med. Besides IFS reported good net asset in flows while assets under management were down 3.5% due to the drop in the markets at the end of the quarter. If we now look at the P&L, revenues were down 5.4% year-on-year mainly due to the one of accounting impact on our insurance revenues for €384 million, a negative impact related to the accounting valuation of certain insurance portfolios at market value. Excluding such an impact IFS revenues would have been up 3.6%.

I will come back to that. Now if we look at operating costs in IFS they evolved by 2.9% year-on-year on the back of business development contained by cost savings. With the combined effect of the one of impact in our insurance revenues and the anticipated effect of the health crisis on the cost of risk IFS pre-tax income was down 50% year-on-year but would have been down 3% without these two negative impacts. If we now look at the different business lines building the IFS and this is in Slide 26 to 31 I'd like to highlight the following. First of all when we look at personal finance, it continued to show steady growth momentum in the first quarter with a 4.4% increase in loans which was nonetheless impacted towards the end of the quarter with points of sale closing as the pandemic spread.

Personal finance reallocated its resources towards customer relationships in order to proactively put together solutions including deferrals on a case-by-case basis for those customers whose financial situation was justifiably affected by the health crisis. Revenues we're up 3.4% with growth in particular in Italy and Germany and cost increased at a slower pace of 2.3%. So delivering positive jaws. If we now turn to Euro-med which reported good business growth in particular in like Turkey, Morocco these loans were up 5.5%, deposit 6.6% across the region. The support to clients during the health crisis was facilitated by apps enabling individual and SME clients to report financial concerns and this is particularly important at Turkey.

Overall on a comparable basis revenues were up 1.6% impacted by the regulatory environment while costs evolved by 5.9% [due] amongst others to wage drift. If we now cross across the Atlantic and even more go to California in Bankwest, where we saw an overall increase in business activity with loans up 1.5% and deposits 8.5%, in each case on a comparable basis. Besides the number of accounts opened online grew sharply and BancWest adapted quickly to renew environment with 99% of branches remaining open and over 70% of employees working remotely. It is also actively involved in the implementation of the payroll protection program, the federal support program aimed at small businesses. On a comparable basis revenues we're up 3.4% thanks to the re-pricing of deposits and higher transaction fees while cost were up limited to 1.4% thus generating positive jaws.

If we now turn to insurance, it maintained a good level of activity in the first two months but witnessed a slowdown in savings and flow in Europe and Asia with the spread of the health crisis. Revenues were affected negatively by a one-off €384 million accounting impact stemming from the drop in financial markets at the end of the quarter. As a reminder part of the assets in insurance business are marked at fair value. As such this effect may be reversed in the event of a stock market recovery. Costs were slightly up due to the continued business development initiatives and pre-tax income was down 62% year-on-year.

Excluding the one-off impact it was up 11.8%. If we now turn to wealth and asset management revenues were down 3% due to the impact of the health crisis on performances of asset management and real estate services and this on the back for example the suspension of construction works only partially offset by the increase in fees in wealth management. Costs were quasi flat on last year due to the combined effect of development costs involved management in particularly Germany and the transformation plan so the reduction of cost in particularly asset management. So with this, it completes the retail banking and services business, so domestic markets and IFS and if I can now draw your attention to Slide 32 on corporate and institutional banking. CIB showed strong business drive in the first quarter, further accentuated by the intense mobilization to support the economy in the context of the COVID-19 crisis and that occurred towards the end of the quarter.

For example with over €150 billion of capital raised for clients across loan, bond and equity markets, the activity was indeed very sustained and CIB consolidated its leading positions in EMEA with the number one ranking in volume and market share in syndicated loans and Euro denominated bonds. If we now look at the P&L starting with the revenues they were slightly down by 1.9% on the back of a very strong growth in corporate banking and security services with double-digit increases compared to last year and offset by one off negative effect of €184 million for equity and prime services businesses. This stemming from the unexpected and sudden restrictions by European authorities on 2019 dividends. Excluding this one off impact revenues would have been up 4.3%. Thanks to cost-saving measures cost rate down 2.8% so generating positive jaws.

Overall CIB pre-tax income was down 60% year-on-year when excluding the one off negative impact on revenues and the component of the cost of credit and counterparty risk stemming from the health crisis they would have been up 18.8% compared to a year ago. If we now turn to the components of CIB we turn to the next three Slides 33 to 35, let's go into more detail. If we start with global markets, Slide 33. Revenues were down 14% on the back of a very strong growth in FICC impacted by the extreme shocks on European markets towards the end of the quarter on Equity and Prime services. Indeed FICC revenues were up 34.5% with a very steep rise inclined volumes in particularly on electronic platforms and the prompt recovery of market liquidity and a swift resumption of primary bond activity after the outbreak of the crisis.

Equity and Prime services revenues were sharply down on the back of the one of impact of dividend restriction and extreme market shocks. The diversification continued with the progressive integration of Deutsche bank's prime brokerage and electronic execution and the first client answers have already been achieved. If I now ask you to swipe to the next Slide 34, corporate banking showed the very strong business activity where the sustained growth in loans and higher utilization under existing revolving credit facilities to the tune of close to €25 billion in March. Between mid-March and mid-April capital markets arranged more than €75 billion of syndicated loans with aggregate final [indiscernible] not exceeding 15% of deal size and led more than 50% of all investment grade bonds in EMEA. At the same time deposits grew by 14% year-on-year.

Finally the business consolidated its number-one positions in syndicated loans and corporate banks in Europe while strengthening positions in Asia where it has achieved for the first time a top five position in cash management and corporate banking. As a result corporate banking revenues grew by 10% with fees up 18%. 24% increase in revenues on the capital markets platform and a good resilience of transaction businesses worldwide. Now finally, if I can ask you to glance at Slide 35 on the third part of CIB namely security services where the revenues were up 11.8% thanks to the increase in average of outstandings and transaction volumes. Besides the business benefited from a strong growth in Asia-Pacific to the tune of 35% as well as in the Americas to the tune of 40%.

Finally security, services pursued a strategic development with the announced acquisition of Banco Sabadell depository business in Spain and the set up of strategic alliance with Blackrock to provide asset managers with integrated services through the Aladdin platform. So ladies gentlemen this concludes the division results. I now hand back to Jean-Laurent for the last part of the presentation. Jean-

Laurent Bonnafé: Thank you Lars. Let's now look at Slide 37 which will [indiscernible] presentation give us the opportunity to share the outlook of 2020.

There are a lot of moving parts, the global health crisis leads to a drastic revision of the 2020 macroeconomic scenario. We can currently anticipate that once lockdown measures cease to apply the current recession will give way to very gradual recovery but returned to normalize health conditions should not be expected before the end of the year and a return to 2019 GDP levels is not anticipated before 2022. In this context, the unprecedented measures taken to mitigate the impact of the crisis on the economic and social fabric by governments and monetary authorities are critical. BNP Paribas taking an active part in these economic support initiatives. Going forward it should result in an increase in net interest income which could mitigate at least in part, the likely decrease in fees affected by the crisis.

Parallel the group anticipates to amplify the initially planned decrease in operating expenses but this decrease could be offset by the increase in the cost of risk. This moving context and unless new crisis or new developments of the crisis occur net income for 2020 could be about 15% to 20% lower than in 2019. This concludes today's presentation. As a takeaway, I would like you to keep in mind the excellent business drive in the first quarter in line without 2020 objectives it's not badly impacted by this unprecedented health crisis. This context the good resilience of revenues and results confirms the robustness of our diversified and integrated business model and the strength of our franchises.

The strong mobilization of our teams around the world to contribute for the resilience of the economy and ensure its financing. Ladies and gentlemen thank you for your attention. And together with Philippe and Lars we now be pleased to take your questions.

Operator: Thank you sir. [Operator Instructions] We have one first question from Mr.

Stefan Stalmann from Autonomous Research. Sir please go ahead.

Stefan Stalmann: Hi, good afternoon gentlemen. Thank you very much for taking my questions. I have two please.

The first one is you hint in the presentation at potential additional cost cutting and cost reductions. Could you maybe talk a little bit more about how much we could possibly expect here and by when and then which divisions those cuts would primarily affect? And the second question relates to the equities business. I think the impact from the dividend traits that you highlight can certainly only be part of this story that drove the weakness during the quarter. Could you maybe break down further drivers of the weakness whether it's the cost of hedging or counterparties defaulting or valuation adjustments or anything else that may have played a role here? Thank you very much. Jean-

Laurent Bonnafé: Cost cutting -- additional cost cutting could be between 300 to 500 let's say on average 400.

It's the order of magnitude we are targeting depending on the way of the business is moving. We can easily understand that accordingly to the activity of the bank and the different businesses there are some, I would say our marginal cost that can be avoided. So marginally a kind of low activity will help reduce the global cost base of the bank. So we were starting with kind of minus plus 1 billion. It could be up to minus 1.4 billion, even 1.5 billion.

So this is a total cost base. For equities maybe Lars or Phillip can talk in more details the way we are splitting the €189 million that each the platform at the very – at the end of March.

Lars Machenil: Yes. So in the equity derivative, I think we had indeed three elements of negative results. One is the €184 million due to the dividend restrictions that we are imposed in very harsh way, very swift way by the authorities.

This is easily understandable. We are selling structural product that are mostly indexed on the indexes, on equity indexes and we hedge them by holding the underlying shares, underlying equities and of course in the pricing and in the economics of the business we take into account the dividend that we are going to receive while holding the stocks, while the indexes themselves I’m not taking into accounts dividends. And so we are structurally long dividends issuer and we count on them to mark for the economics of the business and here it's about the 2019 dividends which were announced, which were in certain cases about to be paid and that retained at the end because of the strong recommendation by the authorities. And so this is a very isolated one-off loss which is clearly understandable. Then apart from that as you have observed even apart from that the equity derivative business had a very flattish result over the quarter which means that they have loss in March roughly what they had won in January and February and this is due to two factors that occurred in March.

The first one is the heavy volatility, very high volatility. We are showing the curves in the slide and of course when you sell structured s products with options embedded in it, the hedging consisting, adjusting the amount of underlying instruments we held in order to be delta neutral as much as possible throughout the life of the product and this dynamic hedging is of course much easier when the volatility is not too high and it becomes extremely difficult when the volatility becomes very high and hectic which happens in the quarter. And hence we had this kind of losses due to the dynamic hedging always a little bit lagging compared with the very high activity, very high volatility in the stocks. And then the last one is about the price I would say reserves. At the end of each month and each quarter we adjust the mark to market according to the accounting standards and it entails a certain number of reserves which were indeed significantly increased in this period of uncertainty at the end of March.

Just one example which is really understandable the mark to market, the day-to-day mark to market is based on the mid price and the middle of the bid and ask price And in the accounting standards we are at the end of each time we close the accounts we are supposed to reserve the amount which is necessary to close the position and this close out cost is depending of course of the spread between the bid and the ask. So because roughly it represents the half if the price is marked mid-priced it's represents the half the spread a bit of fair spread and this bit of a spread is in normal time is relatively small and so the adjustment is limited but at the end of March typically the bid, ask were very wide. Sometimes it was not very clear even though where is the bid or where is the ask depending on the price and so we had to reserve a much higher amounts at the moment of the of closing of the accounts. So those are the elements that explain that the March month was bad for the equity derivatives but at the same time and given the diversification of our business the FICC results were very good as you have seen; an improvement of an increase of 35% compared with last year and this is balancing to a certain extent the difficulties encountered in equity derivatives.

Stefan Stalmann: Thank you very much, very helpful.

Jean-

Laurent Bonnafé: Thank you.

Operator: Thank you, sir. Next question is for Mr. Jacques-Henri Gaulard from Kepler Cheuvreux. Sir, please proceed with your questions.

Jacques-

Henri Gaulard: Yes, good afternoon everybody. Well done, great set of result considering the circumstances. My question is about the politics of the results. You've chosen to show a cost of risk of 67 basis points. When I look at your pre-provision profitability, annualized okay, it's about €11 billion.

You could have decided to have an ex-ante which was much more aggressive and that would have put you on an annualized basis at about 1.3%, 1.4%. And you could have literally wiped out every single bit of competition in a way by saying okay we decide to really have this big ex-ante provisionally irrespective of what happens. We have such a great cash flow generation then in case we are able to do that. So, I was curious to know what really drove you to just be stuck in a way at 67 basis points. And if you could maybe be a little bit more precise by telling us what type of GDP assumptions were behind it.

Thank you. Jean-

Laurent Bonnafé: There are rules, we are not free to do thing we want first of all. Second, what we are doing of course is taking into account the quality of the balance sheet. So, I can make two very simple examples. Cost of risk had been the price of 84% to 85% at this quarter, at Sandton there it's up 80%.

And if you look at SocGen, cost of risk for the first quarter is 65, Trois Vieilles have been into by 67%. So, comparing banks that can some extent compared, we have been much in line. And again there are rules and those rules when you are looking ahead kind of forward guidance that well watching the quality of the franchise and the portfolio easily. We cannot create cost of risk that just do not exist. Jacques-

Henri Gaulard: And about your GDP assumption, can you share them?

Philippe Bordenave: Yes.

Jacques, yes the thing is GDP evolution related to the cost of risk is not kind of a linear link. So, what you have to look at is that saying indeed what kind of products are we in, are they collateralize products. What kind of countries are we active in and in those countries are there guaranteed. So, which all make the difference. So, the idea is that we basically took into account the kind of countries where we are; the kind of products that we have; the collateral that we have; and we basically apply that in a modeling that is basically operated by teams which are combination of risk and finance teams.

And that use models which are also -- which are our models that are also used in the stress testing the forecasting, so that's basically what we can say about this. Jacques-

Henri Gaulard: Okay, thank you very much.

Operator: Thank you, sir. Next question is from Madam Delphine Lee from JPMorgan. Madam, please go ahead.

Delphine Lee: Yes. Good afternoon. Thanks for the presentation. If I could just come back on cost of risk. Just trying to understand a little bit more the level of provisioning in particularly for the sector which are impacted.

I mean you mentioned on Slide 40 your exposures to oil and gas, aircraft, travel, et cetera. And would it be possible to have the level of provisioning of coverage that you have in those sectors. And also for the full-year, in terms of your guidance of 15% 20% decline in that profit what cost of risk assumption are you using? And then my second question is on capital. And would it be possible to get just some color on where you think you'll end up the year at in terms of CET1 ratio because I assume you will you might have some reversal on some of the impacts you've seen this quarter. But at the same time I guess market risk or credit risk migration and some impact from TRIM will put some pressure by year-end.

So, any color would be much appreciated. Thank you. Jean-

Laurent Bonnafé: So, again on cost of risk; I don't think we are disclosing those details. You should look at oil and gas in particular. We have an excellent franchise.

We existed in 12 and recently 17 most of the sub segments that are out there today having problems. So, it's a very good franchise we have in the oil and gas environment. Second, looking at the cost of risk, we are telling you basically how far we can go in terms of cost based reduction. You can derive from that kind of excess of provisioning compared to last year. So, from that you can derive ratio you would like to derive.

These are average numbers in absolute terms which are one that are relevant in absolute terms. We believe that the pricing states we'll cover an exceptional increase in the cost of risk. And again referred to the slide we gave you, it's Page 12 on the presentation. Cost of risk it refers to the ratio of cost of risk that to gross operating income you can see that through the cycle. It's found to be extremely resilient.

It's that very in the way this is Deutsche Bank set to a very low type of cost of risk platform and well this is it. So, well all the numbers in absolute terms. Those numbers are the one that are relevant.

Philippe Bordenave: Yes. And actually maybe on the cost of common equity one at the year-end.

If you look at so we stand at 12 and so how do we look going forward. So, indeed going forward there is a fraction of the impact in Q1 that might be returned. It might be returned because the market risk and the counterparty effect will reduce. It might be that the PVA which is the Prudent Valuation Adjustment which if we look at the regulation will basically be impacting much less than it is today. If we look at regulatory changes like the ones impacting PVA that could be regulatory impacts aligning Europe on the U.S.

on things like software and the likes. So, these are elements that could improve. So, both the reversal of those elements and the changes in regulation could be a positive effect. At the same time, I mean we at the bank we are there to support the economy in this crisis period and so this means that our risk weighted assets could go up. So, that is a bit the basis.

So, the starting point is 12, it could go up for the reason that I said it could be a bit tempered by our support of the economy.

Delphine Lee: Great, thank you.

Operator: Thank you madam. Next question is from Madam Phelbe Pace from Societe Generale. Madam, go ahead.

Phelbe Pace: Hi well, good morning, good afternoon, such as best as such done. Thank you very much for taking my questions. First of all can you comment on --. Jean-

Laurent Bonnafé: We don't hear you very well.

Phelbe Pace: Okay.

So first of all, can you comment on the differences between the moratoria and state guarantee schemes that are put in place in each of your core retail markets? Have you actually seen any disparity in terms of effectiveness from any of these measures in any of these markets? And I'm thinking actually particularly at Belgium because this is where we've seen the highest cost of risk increase quarter-on-quarter compared to France and Italy. So, does that reflect any difference in the effectiveness of the moratoria and state support measures in the country? Any comments on this would be appreciated. And then regarding dividend and distribution, would it be possible to know how firm is your commitment to maintain an official bound ratio policy of 50% for 2020? Obviously appreciate this is very early date to discuss this, you still have the little visibility on the 2019 dividend so far. But any color in your commitment your official distribution policy, would be helpful. Thank you, very much.

Jean-

Laurent Bonnafé: Well, the last one is very easy. The commitment is 50%, the outright show -- what we are say preparing the bank to today. Cost of risk in the first quarter, I cannot have tell of any impact at a divisional level because of the quality or the efficiency or any kind of guarantee scheme. France, Germany, Belgium, Luxembourg, Poland to some extent is very close in the way they are built. Belgium, it's slightly different.

It's a facility that is one commissioned. There are good reasons to believe that this scheme will be a completed in six weeks. So, nothing that can be derived from the level of cost of risk from the division and link to the efficient such plans. In Belgium, there were mainly the cost of risk of last year was extremely low I mean close to null. So, obviously that tables for end of quarters are least with or without crisis of which can only go slightly up.

And what we have seen in Belgium is as said increasing evolution to a more normalized levels of that cycle.

Phelbe Pace: Okay, thank you.

Operator: Thank you, madam. Next question is from Mr. Jon Peace from Credit Suisse.

Sir, please go ahead.

Jon Peace: Yes, hi there. So, my first question is just back again to your cost of risk provisioning and presumably you have a full case, a base case and a bare case and you've weighted them appropriately. And I just wondered if you could give us a bit of a feeling as to what those weights are and what your net profit evolution would be in those different scenarios to give us an idea of how things might evolve if the lockdowns end up being longer than we currently hope? And then my second question is just on your CET1 ratio targets. Do you think targeting 12% is the right metric still in the future or do you think it's better to switch to a buffer over your minimum regulatory amount? Thank you.

Jean-

Laurent Bonnafé: Well, if you exclude extreme scenarios that could extremely good stream get even. The one that is we said the base case is the one that is a -50% comparing to '19 in terms of group result. The bad one is -20% and basically the difference is very much linked to the cost of risk and the difference in between -50 % and -20% at the end of the year. The net result of BNP Paribas is going to be very much linked to the cost of risk. So, this is 500 prospects in between the two, which is basically a 750 or 903 pre-tax.

So, it gives the order of magnitude between the two scenarios; one that is relative say a positive and one that is a more severe at the end of the year. So, you are standing between -15% looking at the net result of the company or -20% and again this is a difference of basically 400, 500 prospects which is again the range of 600, 700 pre-tax. For Q1 ratio, the target for that plan well present. We believe this is the guidance we can give today based on the scenario we have. Under the previous guidance at the end of the year 2020, we would have been at a much better level but 12% the level we as of today we consider the company could end up at the end of the year including paying an exceptional dividend at the end of year.

Do we have to look at the distance to the minimum? Yes, we can give that information of course; it's easy to give that. 12% is also something that to some extent give some comfort looking here and be particular looking at the so-called Basel IV or finalization of the Basel package. We don't know as of today yes or no this will take place. Neuf a Bordeaux is saying that maybe this ultimate stage is not maybe required or necessary anymore. To some extent, if the banking system is able to pass that crisis based on the current Basel III, one could consider that is enough.

It's as simple as that. So, it's too early to say. Clearly 12 is not the minimum we need. It could go below but this is the guidance we have under the scenario we are and the guidance we are giving the market today and more sits slightly below what we were heading as a target internally for 2020. When we communicated at the beginning of that year for the year 2020.

So, clearly it's slightly below. But this is the target we are holding to the current guidance.

Jon Peace: Okay, thank you.

Operator: Thank you, sir. Next question is from Mr.

Tarik El Mejjad from Bank of America. Sir, go ahead. Tarik

El Mejjad: Hi, good afternoon everyone. Just a couple of questions please. Just I will go back on costs.

The €400 million to €500 million extra savings is that for 2020 only as like kind of one off cost saving due to less trouble and so on or its parts of it could be actually as well remain as the savings in the future years? And second question is, so which come back to that on the cost of risk. I mean I understand that you applying the rules and we don't have cost of risk as target. But with the COVID-19, there were some degree of flexibility in terms of interpretation of the rules. And I want you to understand that how you dealt with the integrating the macro assumptions within your models and also in terms of treatments or €4 billion and so on from -- for specific file. Thank you, very much.

Jean-

Laurent Bonnafé: Hopefully travels do not represent 400 on a yearly basis; there will be other inputs. One of them is that during that period of lockdown, you will discover it's already and we say why not to discover that the way you are banking with counterpart is slightly different. I mean it's very much the online way. The way the bank our platforms are leveraged by our counterpart is slightly different and place that we say are cost intensive. So, most probably part of this will be I would say stable or recurrent looking ahead; maybe not all of it, most probably a part of it.

It will have not force but the reality is that the way the bank is moving today is slightly different from I would say the classical way because it is not that we are forcing our customers or our counterpart but the way it is they take. For them, it's much more convenient and for everybody's much more convenient to use anything that is with the online apps, customer journeys we design -- what the recent years. So, this is less cost intensive; so most probably in terms of flexibility; in terms of efficiency, we will divide we have a number of lessons shortcut and I'm pretty sure that was probably 2/3rd even three quarters of this can be recurrent. So, the marginal part will be only we say maybe travels or gathering so on and so on but this is going to be matter on. Most of it if we're disciplined will stay the way it is and hopefully it will also accelerate to the maturity of number of business models that we've been.

To some extent but what we're in kind of acceleration what we were considering for the two, three, four years to come. I mean when we look internally to our first internal targets for the next term plan, to some extent in a number of businesses, we are already at that levels in terms of efficiency; online; digital. Because this is the, I would say this is the way to bank with us and instead of being part of it is all of a sudden this becomes the majority of the business. So, we will draw all the lessons business-by-business and there is my opinion a lot to come from that situation. A lot to learn and it will accelerate the transformation of our bank as it will accelerate in my opinion the transformation on the global sector banking hopefully.

So, we are quite confident that we to deliver those cross-cutting in a recurrent way.

Lars Machenil: Yes Tarik, maybe on the macro view that you talked about on the cost of risk. So, what we took into account is a gradual normalization by the year-end. That doesn't mean that GDP is back, right. It just that at that moment we will start to normalize.

For example, we assume that GDP could be reaching in the 2019 levels but not before the end of 2022; and so that is basically the models. The only thing in our model that we had to specify is the guarantee that have been installed in the countries that we talked about. And so that is basically how we apply and that is how those parameters will evolve. Let's be very fair the deconfination like in Paris is starting gradually only next week. I don't know where you guys are but if you are in London, it is maybe a bit later.

So, we'll have to see how that gradual normalization unfolds and how that impacts going forward. Jean-

Laurent Bonnafé: I would like to stress at this point that you should not try and look for a function -- cost of risk being a function of the size of the recession of this year. In the stage two of IFRS 9, it's about the losses, expected losses until the end of each loan. And so, it first it depends also on the recovery with the -- the shape of the recovery which will occur on in '21, '22; hence the comments of last saying that we have taken a scenario where the level of GDP of '19 is only back at the end of '22 and kind of U-shape scenario. The second thing is that, even all those macroeconomics are only a small part of the ingredients that have been put in the machine in order to get a view of the cost of risk in the future because it's obvious that with the same macroeconomic growth and conditions and two banks with very different business profiles will have very different level of cost of risk.

And so, the nature of the assets, the nature of the activities that are conducted are more important than well at least as important as the macroeconomic figures. And to that respect, again we insist on the fact that our business model is very diversified with a certain number of important businesses which have very low cost of risk like some improved security services that's an almost zero cost of risk. We have the private banking which is one of our strong points, has a very low or nil cost of risk. So, we have many businesses, insurance, where there is no cost of risk at all or almost. So, those elements have to be taken into consideration and hence the fact that we have last said that we have built a relatively complex model and system which and these of this mean looked at by the SSN by the way.

And in order to answer them to be able to provide our supervisors with figures on this stress test. And that we are using for all our forward looking exercises being with the budget or it's IFRS 9 or any kind of projections in the future. Tarik

El Mejjad: Thank you, very much. I'll just try my luck for a follow-up on the cost of risk. I mean because it's very important element in terms of your guidance overall for the next profits.

Would you be willing to give a range in terms of basis points or in absolute numbers?
Jean-

Laurent Bonnafé: No, the range has been given on the net, I think. Tarik

El Mejjad: Yes. Jean-

Laurent Bonnafé: Because there are a lot of moving I'm sorry but there are a lot of moving parts. There are some uncertainties on the revenues as well to which extent are we going to lose fees that are based on volumes or based on values and to which extend are we going to make more net interest income due to the volumes we are going to generate. So, there are moving parts in the top line because we are going to increase our savings but to which extent are we going to be able to do it within one year there is also some uncertainty there.

There are uncertainties to a certain extent in the cost of risk as well. So, at the end rather than putting a lot of figures, we have preferred to give you kind of range on the net/net which we think is already relatively I would say maybe it grudges bred maybe even given the circumstances. There are not that many banks having said that and we prefer to stick to that guidance which is at the end the bottom line. So, the most important one. Tarik

El Mejjad: Thank you, very much.

Operator: Thank you, sir. Next question is from Mr. Matthew Clark from Mediobanca. Sir, please go ahead.

Matthew Clark: Hi, so two questions for you.

Firstly on your CET1 outlook. Can you just talk in a bit more detail about the risk of rating migrations providing headwind by something that's only at competitors, that flags. But doesn't seem to be something that's implicitly concerning you given the flattish CET1 outlook. So, and maybe you could explain why that's not a concern for you if that's the case. And then secondly on the cost of risk, you are flagging an increase this year.

Could you give some kind of commentary on what you expect next year so that be normalized by next year as the IFRS 9 effects were off or would you expect it to still be elevated at a similar levels in 2021 as you are expecting in 2020, if not you are in talks with that as well as. Thank you. Jean-

Laurent Bonnafé: For equity Q1, I mean say one of this element is the impact of its market related activity. Maybe the difference in the evolution compared to some peers is 30 bips coming from it. But if you compare the opposed option in terms of bips, the decrease is very much the same.

So, I don't believe we have something that is that different.

Matthew Clark: It's more about going forward rather than the first quarter. So, as the year progresses, presumably you have to update your modals and they will show a deterioration in the fundamental prospects of the businesses whether you allow me to. Jean-

Laurent Bonnafé: Sure. So, Philippe will tell.

Philippe Bordenave: Now as you -- now, you're right that we are also taking into account some rating migrations. One lastly enumerated the positive and negatives maybe forgot this one but yes indeed there is this one as well. But all-in-all, we well we still consider that each the positive element should help absorbing the negative ones. Indeed at the end of the first quarter, we had a range of negative impacts that are all coming all at once and that are due to the largely due to with what happened in March and at the end of March. And that normally should come back progressively.

The 10 bips on the value added trades for example like Jean said typically it's due to the extreme volatility in March and by decision. And as you know the way it's calculated, it's going to be progressively withdrawn of first less-and-less weighted in the calculation and it's going to disappear after one year completely. Assuming of course that there is no another, there is no other crisis in the mid time. And of course this is a prerequisite of course. As the same for counterparty risk, which the counterparty risk increase which is another 10 bips, is due to the fact that because of the big changes in the values in March and beginning of April, the derivatives have moved a lot in value and hence the counterparties had increased.

Because of the net present value of the derivative. But with time elapsing, these net present value are going to be progressively going to zero. And given the average maturity of our OTC derivatives it's within one year it would also be quite negligible and the present value should come to zero as well. Here it's for regulatory reasons and also because it's linked to the volatility at the moment of the closing. And then, hold the impact from the OCI are also partly probably going to come back or at least to be somewhat mitigated.

So, we have several plus the software adjustment to the regulation which is underway, which has been voted with level one techs. So, now it's just a question of put to being that being put into force and it is announced for mid-June, if I am right. Because it has been while it's going to be anticipated rather relatively early this year. So, all this creates several positive impact from the common equity Tier 1 and we view the negative ones that are going to come, including rating migrations as well relatively well not overwhelming the positive ones at least. The migrations, I would like to stress that we are of course according to the regulation by the way, we are our ratings are through the cycle.

So, they are suppose then it's supposed to change each time, there is a hiccup in the macroeconomic situation. Of course, there will be rating migrations nevertheless because this is a shock we'll necessarily have some consequences on certain companies. But again, our analysis of our loan portfolio is such that we don't see that as being a big movement in the next months.

Matthew Clark: Thank you.

Operator: Thank you sir.

Next question is from Kiri Vijayarajah --.

Philippe Bordenave: Just to come back on the question on cost of risk, into 2021. Jean-

Laurent Bonnafé: Well, yes. Normally, if you assume that 2022 kind of back to normal. '21, we stay at a kind of a high level.

Too early to say if this level will be just the same compared to '20. Of course, looking at the new accounting norms, normally '20 is a kind of maximum and '21 should be slightly below. But this will very much depend on the real scenario we'll be in. But if the 2022 is the back to normal year, '21 as a consequence we will see still a kind of high level cost of risk compared to we'd say that through the cycle normalized cost of risk for the company.

Matthew Clark: Very clear, many thanks.

Operator: Thank you, sir. Next question is from Mr. Kiri Vijayarajah from HSBC. Sir, go ahead.

Kiri Vijayarajah: Yes, good afternoon everyone.

A couple of questions on capital, if I may. So firstly, on the XMT provisions that you're taking, just what are your thoughts on taking advantage of the IFRS 9 transitional rules. Holding back some of those provisions from actually hitting your regulatory capital, giving yourself a little bit more flexibility to be more aggressive on some of those provisioning going into this cycle. And then secondly, just a really clarification on your Slide 16 on capital. And the -20 bits you show from supporting the economy just some color on what's driving that -20 bips and through risk weight asset inflation.

And importantly, is it there more of that in the pipeline as you presumably as you support the economy further? Thank you.

Philippe Bordenave: Yes. Kiri, first on the IFRS 9. So, what if you look at the evolution of our common equity Tier 1, we've given the main drivers and then we basically said that all the other effects basically cancel each other out? So, what we've done is that as there are some new kind of rules when it comes to securitization which are phasing in and which are increasing a bit the risk weighted assets we've also phased IFRS 9 to basically iron out all those regulatory investments. So, yes we have phased IFRS9 but the impact on all of these elements coming into play are basically zero.

Jean-

Laurent Bonnafé: And Slide 16, the 20 basis points, they are the risk weighted assets associated with new credit that we extended towards the end of March in order to support our clients. We had a lot of underwriting of new syndicated lines and the underwriting of bonds and so on and this created risk weighted assets at the end of March. Part of that indeed has been distributed beginning of April. The pace of new and the writings has slowed down somewhat and probably will slow down further. So, part of this will be somewhat eroded I would say in June but another part is going to stay because we have also some final take.

And this fact and -- the support to the smaller companies is going to get into force during the second quarter. It has already started quite rapidly. Of course it's guaranteed by the government to the tune of 90% or 85% depending on the countries. But still, there is a path which is going to remain how at our risk and so that's going to feed some additional risk weighted assets. And so this is why we consider that this part of the risk weighted assets should rather go up probably in the limited way but still the trend is somewhat up probably during the course of the year.

Kiri Vijayarajah: Alright, thank you, thanks, guys.

Operator: Thank you, sir. Next question is from Madam Azzurra Guelfi from Citi Group. Madam, please go ahead.

Azzurra Guelfi: Hi, good afternoon.

I have a question on the government guarantee scheme and how the profitability of this new lending will compare with the profitability of the existing lending. And then the second one is way more general but I can see how the resilience of being your balance sheet; your capital; and the high level of provision profit. But then you think that the lack of transparency that you are providing in terms of the moving parts of 2020 would put you in a disadvantaged position versus banks that maybe are weaker the new in terms of ownership and by provision profit but that has been more transparent? Thank you. Jean-

Laurent Bonnafé: I am not aware of banks that have given such a clear way, a guidance for the end of 2020 year. So, if you find one, tell me before they work.

Azzurra Guelfi: Now, I'm talking about -- sorry I am talking about the details. Jean-

Laurent Bonnafé: Just the part of cost of risk.

Azzurra Guelfi: Yes, on cost of risk. Jean-

Laurent Bonnafé: We gave all the details within guidance, if I may you are not giving anything. So, we are among those who may be the only one that have given clear and full guidance in 2020 if I may again.

On guarantee schemes, it's very simple. The part that is guaranteed is risk free in terms of risk weight. So, it's away from the balance sheet in terms of quality equity Tier 1 and capital conception. And the liquidity that is behind to finance that part, most of it is coming from the central banks. So, it's a kind of spot the bank but to some extent it's away from the bank because it's a kind of free equity portfolio and second liquidity necessary to finance that portfolio is coming; we say most of it from the central bank.

So, it doesn't have any effect on the profitability of the bank nor in a positive way nor in a negative way. It has obviously a strong positive impact on the underlying economies because it ring-fence those companies and most probably ultimately it reduces the cost of risk of banks that are operating locally in those economies. So, if you look at the pure P&L net banking income, no impact; if you look at the cost of risk on that portfolio, no impact; if you look at the equity side, no impact; but globally it improves the quality of the global portfolio and most banks that are operating under those scheme. So, ultimately to some extent its limits the impact of the crisis in terms of the crisis in terms of cost of it in those local economies. And clearly those things are very efficient in Germany, France, Italy, Luxembourg and this will help obviously keep cost of risk at a very acceptable level in terms of it.

Its globally would say part of the game. And so, impact cannot we do internal P&L of profitability, the regular way for the portfolio in the bank but it's an indirect impact on the quality of the franchise and the economy you're operating in locally in any country. That is a benefit from that type of a scheme. And you can say just the same in California, for Bank of the West and the federal scheme. And you have the same in Poland, to some extent we've also seen that is equivalent in 30.

Philippe Bordenave: And to fully understand what Jean-Laurent says, I would like to add that you have to bear in mind that of course Deutsche Bank in those schemes each bank is supposed to bring its own clients. And also we are going to. So, each design in order to help normal company that would be affected by the economic environments temporarily and that’s all I have to be helped to bridge the bad period and to go through the crisis and resume the activities in a normal way. And we are going to bring our own existing clients. And again, we feel that the client franchise is very healthy that we have in our different country.

And so, it's going to help really keeping the cost of risk at a low level as Jean-Laurent said.

Operator: Thank you, madam. Next question is from Mr. Jean-Pierre Lambert from KBW. Please go ahead.

Jean-

Laurent Bonnafé: Okay, Jean-Pierre. You've left this?
Jean-

Pierre Lambert: I'm mute, and there can you hear me, sorry?
Jean-

Laurent Bonnafé: Yes. Jean-

Pierre Lambert: Okay, apologies for that. I have questions related to the guarantee schemes, two questions. So, first one.

How are the guarantee schemes integrated in your expectations for loan loss charges. Is it in the probability of the scenarios, is it in the loss given default or is it in the higher GDP or higher recover if you want of the economies. Just how you do use this from a methodological point-of-view. The second question is on your tactics for the use of the guarantee. If you look at the cursor of internal rating, which bank you target for the guarantee, does it make sense to get the guarantees well highly rated customers or the mid of the range which could fall into stage 2 or stage 3.

How you see the tactical allocation. Thank you. Jean-

Laurent Bonnafé: There is no tactical allocation there. Our rules depending on the different companies and in Europe the strict control of the European commission which means you do not grown that loans to companies that where we'd say fragilize before the crisis they are seen through. So, the tactical I would say process part of the game basically through those schemes you are helping companies that were very much sound before the crisis.

Then you have a few exemption for maybe larger I would say companies in any country. But this is more like kind of restructuring and to help restructure certain situation. So, there is nothing that can be considered tactical. Looking at the impact, for the time being but considering I'm not computing those schemes in our scenarios because it's too early to say. They be what we can say is that to some extent it's -- those schemes protect those underlying economies and instead of having case scenarios I'm seeing that is really bad.

We have something that is slightly more acceptable. But looking at I would say our guidance, those schemes are not say computed in or factored. We know that they are existing. They are processes, they will help I would say ring-fence these underlying economy most probably to make it short. It give confidence to the fact that in '22 which can be back to let's say 19 in terms of absolute terms.

I mean it’s a kind of a ring-fencing of the economy and most probably based on this the local economies would be less fragilized by the crisis and the ability to rebound in '21 will come sooner and down as such the rebound can be completed in 2022. Jean-

Pierre Lambert: Right. Thank you, very much for that. Jean-

Laurent Bonnafé: The very short increase do you see the probability of seeing '22 a kind of normalize the economy compared to '19. Jean-

Pierre Lambert: Perfect.

Thank you, very much.

Operator: Thank you, sir. Next question is from Mr. Omar Fall from Barclays. Sir, please go ahead.

Omar Fall: Hi, good afternoon. Just a couple of questions. So firstly, specifically on personal finance. Could you give us a sense of how much state support could apply to this business line in its various forms, I mean assuming very much compared to the network. Is that fair? And how much have you put in place in terms of moratorium programs in this business so far if any.

And do you plan to do so. And then second question, sorry a bit boring but last quarter you very helpfully gave us guidance on potential exceptional as is see from real-estate sales and adaptation and IT costs. It seems the real-estate gains you've done a big chunk of that and maybe you're running that all slightly lower run rate for the cause. Could you just confirm that within your full-year profit target the 15-to-20 you have those initial numbers, the €500 million of gains and the restructuring costs as had before or you've made some changes because maybe you've seen some more gains that you could do? Thank you. Jean-

Laurent Bonnafé: For that second part of your question I mean gains looking at disposal of buildings are going to be exactly at forecasting at the beginning of that threshold.

We can only come from that one and then we're seeing that restructuring cost we can only confirm should get them. But anything that is that which are on we call exceptional items, which are not that exceptional compared to the current crisis but those items we were. We are accustomed to describe as exceptional, are going to be very much in line or exactly on line in line with the initial guidance. For personal finance, Lars will give you maybe some more details. But we have to understand that it’s a multi-domestic business, the approach in that domain depends very much on the local I would say jurisdiction, moratoria or especially BancWest even on the local approach.

And the underlying business can be slightly different in different countries because the business model is just exactly the same in the country. So, maybe Lars can show more details.

Lars Machenil: Yes. Jean-

Laurent Bonnafé: But it's more difficult to explain personal finance on average at that moment of the cycle.

Lars Machenil: Yes, indeed.

And so, let's say the largescale moratoria, like that what we've seen in France or what we see in Italy which is applied to the corporate and SMEs, is not something which at large let's say it's available in that activity. So, it is more something that the bank is looking at how to handle. Then again, that depends on a country-by-country basis and depends also on the kind of product the collateral the guarantee that is in place. And so, that is why the overall impact if you look at the cost of risk of what we've taken up into looking forward is in personal finance a material part of the cost of risk outlook whereas for our domestic markets it is a minor part.

Omar Fall: And just as a follow-up to that, thanks for that.

I mean, I guess you're very busy looking at all the parts of the portfolio. You have concerns everywhere but specifically personal finance, the short duration at the bank. Is this scenario that you think that's very much in the forefront of your mind in terms of stress? And then how would you look at things like the used-car market which luckily it has an impact on this business as well?

Lars Machenil: Yes, there's two things. So, when you look at it, indeed if you look at the efforts that are being done to reclose to the customer. It will see how we can evolve that is and particularly the most intense when you look at personal finance compared to the other domestic market given the turn over given the duration.

So, that is clearly the case. And so, that's why as I said its it is a big part of the forward-looking cost of risk. So, I'll leave it to that, Omar.

Omar Fall: Thanks so much, Lars.

Operator: Thank you, sir.

Next question is from Madam Giulia Miotto from Morgan Stanley. Madam, please go ahead.

Giulia Miotto: Thank you. Hi, good afternoon. Two questions from me.

One on cost of risk and one on capital, please. So, on cost of risk, could you please quantify what percentage of your loan book is at the moment affected by payment moratoria? And whether you're already provisioning for some of these or you are taking approach that you think these all depends on COVID and hence wants the kinds of these all where you will get this payment. So, you just doing awkward that ever news in the wait. And till the end of the moratoria? So, then the first question. And then the second question.

So, we have this cast potential negative movements to capital but I would like to ask you, could you please quantify the positive impacts that could come from the European commission wide ranging sort of mergers recently announced. So, the intangible what you're referring to, it has any an infrastructure supporting factors for example so that we could have an idea of the money to dock these as well. Thank you.

Lars Machenil: Okay, yes. And maybe when we look at the impact of the moratoria, it is if you look at the picture of our balance sheet at the end of the first quarter, it's it that too early to basically see those movements.

It depends also a bit country-by-country. So, if you take for example Belgium where there has been a big flux when it comes to mortgages which fall at the same time, which have been done. There is a high number of that being applied. So, but it's a bit just at that too early to give that number. But you're right, when it comes to how we see the moratoria and how to evolve, it is of course we're looking at the period thereafter.

So, that is why we and when we look at the cost of risk, we look at the sectors in which they're active. Some sectors will probably rebound post COVID, stronger. There are orders that will rebound slower and that our elements that of course we take into account provisioning of the cost of risk as really as I said earlier it's just not mechanical, we look at all of these aspect. When I go through your second question on the potential positive impacts of what Europe is doing and what it means for us. So, if you look at what we have guided depending on what the exacts, the final shape and form will be when it comes to aligning Europe when it comes to software on the U.S., so no longer deducing that from the capital.

For us, that will be something like the equivalent of 20 basis points. When we look at the SME supporting factor, that would be in the range 5 basis points to 10 basis points, and then there I also I think called the IPC, they revoke all payment, which could be up to 10 basis points. So, that is a bit the effect that these kind of measures would have

on BNP:PAR.

Giulia Miotto: Thank you, very much.

Operator: Thank you, madam.

Next question is from Madam Anke Reingen from Bank of Canada. Madam, go ahead.

Anke Reingen: Yes, thank you very much for my question. I'm just following up on the capital question. Just to come from the 12% thus, then not include any assumption of a term hit.

And should we basically assume the 12% is the target and you basically adjust your payout with respect to financially a 2020 and potentially '19 dividend regarding where you land well up to the 12%. And then just lastly, I guess on the capital by far you could helpfully the slides on the different levels to MDA and obviously its business in thus

a 2:1 ratio. That's the constraint but on the Tier 1 and total capital ratio. Am I missing something or you're considering closing the gap so that the CT1 becomes the binding constraint. And then maybe just lastly, do you have any thoughts about the recent announced TLTRO and if you would be interested in picking any more orders rolling over them? Thank you.

Jean-

Laurent Bonnafé: Just to start just briefly. TRIM up to now has not considered that much. We have gone through a process. TRIM is a multi-tier process, who is inspections going on the different types of models. So, we have already gone through set number of TRIM visits.

And up to now, the impact has been in total relatively limited. And so we have never been you remember we're not really afraid by the TRIM consequences and up to now we've been right. And in any case, TRIM visits have been stopped by the ACD in that moment which will prove probably also for operational reasons because it's scientifically to have the TRIM inspection without being onsite. And so, and we don’t expect that to resume really in a significant way before the end of the year. For the TRIM question, anywhere would be a result question for '21 I believe.

And then, I would like to provide something on the payout ratio. We stick to 50% payout ratio. The only thing is that the SSN doesn’t agree with that. They have stopped us. And so, at this stage we are there.

We say that we would like to distribute 50% of our results and our '19 results and then our '20 results and we wait for their decision in October. Because I understand that they have said that potentially in October they will review their recommendation. And so, we are we cannot give you we don’t know more than and we exactly everything. We want to pay a 50% payout ratio for the 2020 plan. And the only think is that we have been prevent from paying it this time.

We're basically being prevented. And so, we postponed on the 2019 but as you have seen in our presentation on the first quarter results of 2020, we set aside 50% of the earnings for dividends. So, that is to confirm that we remain on that trajectory. When it comes to your question on the MDA, so the MDA is the distance into. So, in Euro's that if you would drop that amount of capital, you would be prevented from paying coupons and the like.

And so, that MDA has to be calculated on common equity on Tier 1 and on total capital. And so, indeed in the past it was measured on the common equity Tier 1. What you see now is that with Europe advancing the rule of part of the P2R which used to be fully in common equity Tier 1 as that have now removed into the Tier 1 and the total capital. But the calculation of the binding concern on the MDA is now on total capital and that is the €15 billion distance that we have. So, we are very comfortable on that.

Anke Reingen: On TLTRO, please. Thank you. Jean-

Laurent Bonnafé: Yes. Well, TLTRO was till through -- we well each type of such I would say window, new windows, is carefully looked at. As you know it is not bank loan, it has to be collateralized with certain type of collateral.

We try and factor the best of each type of windows that kind. So, we don’t exclude to indeed to use a new TLTRO of additional TLTRO that has been opened. And yes, trust plans, we don’t seem to use the TLTRO which is less survival.

Anke Reingen: Thank you.

Operator: Thank you, madam.

Next question is from Madam Lorraine Quoirez from UBS. Madam, please go ahead.

Lorraine Quoirez: Hi, hello good afternoon. Thank you, for taking my questions. Just a few things from me.

The first one is as you said it's quite remarkable and a pretty move to provide us with the guidance for this year net income. And given there is so much uncertainty and it's also not so easy to cut cost in such a period of time. I would, wondering what else you could do to reduce and the P&L if needs be. You already announced some real-estate disposal you share and I was wondering if there were already some of the options you could have identified, again if needs be. Also, with regard to the equity performance.

I was wondering whether these could lead you to review your project offering. In equity there is achieved. And finally, on the leverage ratio, just wondering how low are you going, are you ready to go to sweep out the economy. Thank you.

Lars Machenil: We could? Can I sit here?
Jean-

Laurent Bonnafé: Thank you for your comment on the quality of the guidance.

Lars?

Lars Machenil: Yes. If we look at if I start from the leverage. So, let's not forget, leverage today the regulation says that we have to be at 3%. We typically hover around 4% during the first quarters of the year given the additional production that we have done this first quarter, we are at 3.9%. So and don’t get me wrong.

But so, the leverage is not the metric by which we stay at the bank, we do it on common equity Tier 1. And we are structured in such a way that the leverage remains where we did. So, that is basically that point. And when on that brave guidance of 2020, as we said the main thing that give us a bit of comfort is that in the moving parts you have the cost of risk. On the one hand a bit on the other hand you have the cost.

And the cost it is not a magical bullet that we fire. It is something that we have been doing, it is part of the plan or the plan ending in 2020. So, that is the kind of levers that we are putting in place and that we are strengthening. So, that's basically that. When it comes to equity.

What you know is we are in the process of equity and prime services of diversifying further that activity. So, that activity that we have is fine, we're strengthening this with bringing on board the activities that we have acquired from other players. So Lorraine that would be the three answers.

Operator: Thank you, madam. Next question is from Jean-François Neuez from Goldman Sachs.

Sir, please go ahead. Jean-

François Neuez: Hi, good afternoon. I have just one question and you see it relates again to your outlook. In a sense if I take a step back and I look at what the market thinks of your share. In a sense, this is trading at less than 40% of tangible book.

Going into the results, we are probably compenses expectation are for much higher provision than what these guidance seems like. And it's not taking much notice on the new elements of measured cost of risk increase. And of a potential redemption of dividend in particular following the suspension but were decided earlier due to the COVID crisis. So, obviously you have a unique perspective of your own business and of the quality of your book. And I just wanted to know what you think you can share that could have break on side, essentially these.

These two extreme views one of which essentially your cost of risk or your profitability implies something which we know were close to what's bedded in 2008. While the market is taking a completely different view. Or maybe in converse what that make you think if you have to think a second time about but we all through can take into account what the market implies for BNP. Thanks. Jean-

Laurent Bonnafé: But you are very much to look at Page 12.

We got numbers on that. And right in guidance of long-term observation. So, it's we believe that was a group of breaking in so many businesses that roughly is moving for use in a very disciplined way and then you believe this is real. And it seems that so really should look Slide page 12 or you believe that we are very much on that which you should have -- should believe that we're very much on average. It seems that you are not looking at BNP Paribas.

That's in poll of that, there is no other point that there is no other point. This is the basis of the difference and it seems that any bank a certain region, and talking of now is considered the risk side basically on average. I mean, everybody as long as I can look to read, understand comments coming from experts, analysts, and so on and so on. They are all looking at the situation on average. In fact, there is no difference made but in between platforms just to so we're commanded with those.

So, you consider that is a certain discipline that is derived from a very decertified model which puts the group in a situation which allows everyday to balance one loan against another one coming from different geographies and business in terms of quality. So, and so you've been lived this discipline that really exist at group level and in our businesses or you believe this just as doesn't exist. So, if you considered the group on average, which you get an average I would say results, this is basically the difference. And if I made a very much say the there's 12 that you can measure a certain difference. And I am not saying that this will stay forever, plus I'm just telling you that this discipline within place of group level for a number of years and we never lost that discipline.

So, most probably again in that crisis, we should make a difference. So, this difference will explain a certain I would say a positive impact in our favor compared to average looking at cost of risk. And is familiar, been aware for a certain fund in Singapore that is costing at the range of $2 billion to potential banks where we are not part of it. We are not part of it because back in ‘12 we exited that counterpart because we are just lucky. So, and there are so many situations while giving up revenues nice margins because we tend to grow a kind of low risk approach to our different businesses.

Of course, this is a new crisis, this is a crisis of new light. It's kind of and it’s precedented situation. So, you never know. But this is discipline ultimately will be represented in the cost of risk. Jean-

François Neuez: Okay excellent, well done.

Jean-

Laurent Bonnafé: Maybe another way to look at it Jean-Francois, is that when we last said that already but I will tell it another way. When we say that the guidance for this year now is minus 15% to 20% and it doesn’t mean that the impact of the crisis is 15% to 20%, because it's rather 25% to 30%. Because we were supposed to improve in that last year of the 2020 plan and given what we have said about our target. We are supposed to improve from ‘19 to ‘20 before the crisis to improve by 10% roughly the net. And so, instead increasing the net by 10%, we are seeing that we are going -- is going to go down by 15% to 20%.

So, the gap is bigger than it seems if you just compare ‘19 and ‘20. Jean-

François Neuez: Okay, excellent. Thanks, that's a good classic answer. Jean-

Laurent Bonnafé: Element of reconciliation, maybe. Jean-

François Neuez: Thanks.

Operator: Thanks. Thank you, sir. We have one last question from Mr. Pierre Chedeville from CIC. Sir, please go ahead.

Pierre Chedeville: Yes, good afternoon. Can you hear me?
Jean-

Laurent Bonnafé: Yes.

Pierre Chedeville: One question regarding insurance, as you are a creditor insurance leader. I would like to ask you whether you see the combined ratio evolving on this specific line of product. And also, what is your if you give it I don’t know, your solvency ratio in insurance but generally you don’t give it, but regarding the second stance maybe you will make an expectation? And my second question relates to the cost of risk and more generally to this specific situation where you have more than 130,000 people working remotely, do you think that you will have a come back to a normal situation after the crisis.

Are you engaged in – I would say a longer term reflection regarding the way you manage your organization and in terms of working organization [indiscernible] to understand and that could result in a additional economies? Thank you.

Lars Machenil: Shall I start on insurance, so you are absolutely right, when it comes to non-Life combined ratio, it’s a very important metric and what we are living today there will be an impact of course. And when it comes to Solvency, as you know, Solvency as insurance as part of the group, there is a total aspect and so in particularly the Solvency indeed on [indiscernible] is not a metric in particular, but as you can imagine it is well positioned as you know, and so we are well above where we have to be at minimum. So that is being the key – the two points on insurance. On remote working?

Philippe Bordenave: On remote working, we believe that, while first we have surprised by the – our capacity to extend the work from home as fast as we did and as successfully as we did.

And not only our sense, I mean it was I think most probably the industry as has always done the same, which shows that well – we probably we could do more in normal times. We had introduced work from home to the tune of maximum two days per week before the crisis and in practice it was rather on average one day per week that was chosen by our team members. And then in the progressive freeing up that we are going to leave, we intend to put back people at work in the office only very progressively, very gradually and probably we will not come to the back to the previous situation. At the end we should very slightly that we will find the balance with more work from home and even in normal time, for me not five days a week like today but probably more than one day a week like before probably some seen in between, I don’t know exactly whether it would be the right balance we see probably the difference from one business to another, it has to be tested I would say in a very decentralized way, but eventually I agree with you, we will end up with probably more work from home than in the past which will entail certainly new savings especially in terms of buildings and premises. Jean-

Laurent Bonnafé: To give you one example today we are gathered in the Board room of the bank, so we are four in between us there are let’s say two to three meters distance usually we are 12.

So we have a good potential in terms of cost cutting. Not a joke, I mean it’s just a fact that, in the digital universe we can deliver a number of services that are much more fluid as long as the counterpart like you, I would say can accept that kind of an interface and clearly this happened, I mean this was basically at a very center of the next term plan how we can push – how far we can push the digital model, the online approach and get rid of the formal, I would physical face-to-face type of interaction that is useful from time to time but cannot be anymore the bulk of the relations we progress. And provision is that trades, payments, everything, day-to-day banking is delivered on nights through automats, through --. So, where -- we have to take the measure of that the full measure of that situation and businesses-by-businesses, processes-by-processes, we have to deliver. In three weeks, throughout Europe; from U.K.

to Nordic's; through Poland to Southern Italy. We delivered 50% of all the underwritings for large companies; 50%. And we were the lead bank for in 70% for bond origination. Well, it means that we've been extremely efficient. As always it I would say doesn’t comply with the regular way of delivering the bank.

So, we've experienced a very unique situation and we have to draw the lessons, of course this situation cannot be I would say the model. Because clearly it can be a system to some extent in a limited for a certain limited period of time. But I would tend to say that most probably half of it even to show the week could be I would say mid-term. In the mid-term meaning the two three years to come. And this clearly will have an effect impact on the efficiency of the bank.

To be reinvested most probably in as of value at that type of services or products. And clearly, because that was so true that, that moment we have measured. I would say the satisfaction of our colleagues working from home. We have developed I would say to stress to keep track the satisfaction at home. The results were getting much better that to one we're good thing usually.

So, we think also something is that, that way of moving and delivering the bank is also to some extent more efficient also for our staff and our colleagues. And from that you can also deliver additional level of efficiency, that satisfaction, quality and so on and so on. So, nothing can be I would say built in just two months such, this parenthesis gives us my opinion a unique view. Unique observation; unique experience of what we could stabilize for the years to come in that new universe of banking and online services knowing that of course face-to-face relationship instead very heart of the design. Because there are number of as a service is a situation, you can only I would say deliver or consider that kind of face-to-face approach.

So, well this is the to some extent this is also a unique opportunity of this industry for banking, insurance, financial services. And it will push us the direction with an extremely strong momentum. And transforming -- because we have seen that situation every day. So, the question is not to be convinced, the question is not to believe yes or no we can deliver, yes of course we can deliver clearly. We will have to adapt some systems, some processes to make it happen on a regular basis.

But what we've seen recently and what we currently see for us and I guess for a lot of other banking platforms is full of potential. I'm not saying this is going to be easy but the potential is there and now we'll have to deliver it in a more say a recurrent way. And again, I'm not saying it's simple but the day you can see the potential I would say a better stance to deliver.

Pierre Chedeville: Thank you, very much.

Philippe Bordenave: It’s a good question anyway.

A Very good question, anyway. Jean-

Laurent Bonnafé: A good question to wrap it up. And there are no further questions?

Operator: We have no further questions. Jean-

Laurent Bonnafé: So, thank you. We'll close the call.

And thank you for having there with us. This is a remote time. And well, we hope to have an opportunity to see you in person soon. And take care of yourself in this period. All the best.

Lars Machenil: So much, take care. Stay safe, bye-bye.

Operator: Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.