AFD - 2019 Universal registration document

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS

Notes to the consolidated financial statements

Foreign exchange risk can be measured by analysing sensitivity: if foreign currencies appreciate against the euro by 10%, this has an estimated impact on income of +€8.5M (-€8.5M for a 10% decrease), the sensitivity to exchange rates mainly originating from the dollar. For information, the AFD Group applies an internal limit approved by the Board of Directors on 11 Ǿ July Ǿ 2019: individual currency exposure may not exceed 1.5% of the three-month average of regulatory capital, while aggregated exposure must remain below 3%. This internal policy keeps foreign exchange risk to a minimum (excluding ownership interests, provisions and arrears). 6.2.5.5 Compliance with regulatory ratios The Group was in compliance with all of the regulatory ratios at 31 Ǿ December Ǿ 2019.

therefore, a function of the outstanding principal not past due in resources with ordinary conditions. As it is allocated to a set of loans (resources with ordinary conditions) and not singly, this transaction is qualified as “macro-hedging”. 6.2.5.4 Foreign exchange risk The foreign exchange risk is the risk of losses on financial instruments and margins due to adverse changes in exchange rates. AFD’s general policy is to systematically hedge foreign currency loans through cross-currency swaps, which exchange future foreign currency cash flows for future euro cash flows. Financing transactions carried out in currencies other than the euro are also hedged using cross-currency swaps. Because AFD does not hold speculative positions, market risk is limited to foreign exchange risk, which is below the threshold set by the French Banking and Financial Regulations Committee (CRBF) Regulation No. Ǿ 95-02 on capital adequacy with regard to the market.

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UNIVERSAL REGISTRATION DOCUMENT 2019