BNP Paribas : Deep Dive Corporate and Retail Payments

DEEP DIVE

CORPORATE AND RETAIL PAYMENTS

26 JUNE 2024

BNP PARIBAS SPEAKERS

Yann GERARDIN

Chief Operating Officer

Head of Corporate & Institutional Banking

Yannick JUNG

Head of Global Banking Corporate & Institutional Banking

Thierry LABORDE	Lars MACHENIL
Chief Operating Officer,	Group Chief Financial Officer
Head of Commercial, Personal Banking
& Services

Aurelia NORMAND	Pierre FERSZTAND
Head of Global Transaction Banking	Global Head of Cash Management
Corporate & Institutional Banking	Payments, Trade Solutions
	& Factoring

Deep Dive Corporate & Retail Payments - 26 June 2024| 2

PAYMENTS & FLOWS | A strategic initiative leveraging on our leadership positions

⎯ A full range of solutions			⎯ Supporting all client franchises
	Trade Finance &		Guarantees, Documentary Business, Supply		Corporates
	Factoring		Chain Financing and Factoring
			Corporate & Institutional Cash Management
	Cash Management			Institutionals
		Payments & Collections, Liquidity Management,
			Transactional FX, Short-Term Investments
	Merchant services		Cards issuing & Card acquiring		Individuals and Small &
	& retail payments			Medium Businesses (SMBs)

⎯ Across all geographies

52 countries

with local Transaction Banking capabilities

25 European countries

with card issuing and/or acquiring capabilities

Strong market positions and continued market share gains

Large Corporates Revenues1

• #1 Transaction Banking - EMEA (joint)
• #4 Transaction Banking Globally (joint)

Large Corporates Market Penetration2

• #1 Cash Management & Trade - Europe
• #1 Cash Management & Trade - France, Belgium and
  Luxemburg
• #3 Cash Management & Trade - Italy

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PAYMENTS & FLOWS | Upgrading our GTS plan revenue target

2025 GTS plan target (+€600m) achieved by the end of 2023, ahead of schedule

New target of +€800m (FY25 vs FY21)
⎯ Payments and Flows initiative
		New 2025 ambition
		+ €200m
	+ €600m
Cash Management1 (Fees & FX)
Retail issuing2 & acquiring / PSP
Trade Finance & Supply
Chain Financing
Factoring
2021	2023	2025

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PAYMENTS | A value creation engine at the core of our integrated model

• A Value creation engine

• The cornerstone of the banking relationship with our clients
• • Building intimacy with our clients, deepening client knowledge, improving risk management
  • Developing value-added and innovative services
• Recurring fee revenues
• • Average duration of Cash Management mandate: 8 years
  • Strong granularity of our fee base (Cash Management fees generated by 70k+ corporate & institutional clients)
• Source of stable funding for our Corporate platform through granular deposit collection, and significant Net Interest Margin
• • 35K+ active current accounts in CIB EMEA
• A Capital-light business, with limited RWA consumption

⎯ At the core of our integrated model

• Leveraging on our Group client franchise
• • Cash Management relationship with 80% of our
    European CIB Corporate franchise1
• Building on our Global network
• • Close to 60% of Cash Management2 clients active in at least 2 countries
• Supported by Global payment platforms
• • Mutualized payment engines for the Group
• Generating cross-selling across products and regions
• • >90% of CIB Cash Management clients are also active with at least one other Group business line
  • Multinational cross-regional CIB Cash Management revenues : c.+30% CAGR 2019-2023

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CASH MANAGEMENT | Confirming our leadership positions over the years

• Providing comprehensive and integrated solutions for corporate and institutional clients

From Daily Banking to Treasury services, including payments & collections, liquidity management and short- term investments

⎯ #1 Cash Management Market Penetration in Europe1
							51%
								Greenwich
							Peer 1	Quality leader1 in
							Peer 2	FR, BEL/LUX
28%							Peer 3
							Peer 4
							Peer 5
2009	2011	2013	2015	2017	2019	2021	2023

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CASH MANAGEMENT | Leveraging on our industrial platforms to grow at marginal cost

• Mutualized and industrial platforms serving our large account-to-account volumes

Processing > 4bn1

SCT2 / SCT Instant / SDD3 / International

payments transactions in 2023

• Feeding our Flow Data Hub

Covering 7.3bn4 events on payments

in 2023 and allowing 24/7 flow

monitoring

• A secure and future proof infrastructure

• High Security standards with cybersecurity and fraud detection solutions
• Instant payment engine running on the BNP Paribas cloud
• At the forefront of collaborative industry initiatives
• Pilot new use cases with SWIFT5 to reach seamless traceability and control on corporate payments

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CASH MANAGEMENT | Differentiating factors beyond the industrial platforms

• A tailor-made solution design

• Adapting our industrial capacity to clients' needs through co-creation

Example

Provided tailor-made Virtual Account solution for a large shipping company

• An integrated offer

• An integrated offer leveraging the full range of Group solutions

Example

Volume of cross-currency payments: +12%

CAGR 21-231

• A multilocal model

• A local presence, with on-the-ground teams, providing access to local clearing and offering a full range of means of payments in Europe

Example

Mandated by the Belgian Government as payment provider; supporting 2k+ accounts, +/- 50m payments of various types

• A lean Digital Journey

• A customer-centric digital journey, leveraging the latest technologies

Example

Number of Cash Management customer sessions in Centric +23% (2022-20242)

Digital on-boarding tool Welcome deployed in 23 countries

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MERCHANT SERVICES & RETAIL PAYMENTS

A unique positioning across the payment value chain

	ISSUER'S	CLEARING		MERCHANTS'
	BANK				BANK
CLIENT					MERCHANT
ISSUING	ISSUING	CLEARING & SETTLEMENT	ACQUIRING		ACCEPTANCE
PLATFORMS
PROCESSOR
OFFER	PROCESSOR
PAYMENT	INDUSTRIAL	STAKEHOLDER	A FULL-FLEDGED OFFER
MEANS	PLATFORMS	IN MAIN EUROPEAN	FOR MERCHANTS
	SDD1 /	CLEARING AND DOMESTIC
Cards	SCHEMES
SCT2 / SCT
Account-to-	Instant /	EBA clearing, STET3,
International	Bancontact, Carte Bancaire,
Account
payments
EPI4/WERO, SWIFT5…
		Card acquiring processor
Wallets	Card issuing
processor
		Unified portal

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MERCHANT SERVICES & RETAIL PAYMENTS

Announcing a major step forward for our card processing platform

• Strategic partnership with Groupe BPCE to build a common card payments processor

With a single unique platform (for execution, back-office and development)

Using the highest technological standards in payments

Embracing payment evolutions, notably digitalisation (mobile payments, e-commerce expansion, instant payments demand)

Integrating domestic and international schemes innovations (Carte Bancaire, Visa, Mastercard, EPI/Wero2,...)

Accessible to other banks in a second stage

• With the ambition of

treating c.17bn1

transactions

(all BPCE and BNPP transactions in Europe)

becoming #1

in France

reaching Top 3

in Europe

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