BPCE - 2018 Registration document

REGISTRATION DOCUMENT AND FULL-YEAR FINANCIAL REPORT

2018

Contents

1 PRESENTATION OF GROUPE BPCE 3 Groupe BPCE: committed to serving 1.1 its customers and the economy 4 History 1.2 5 Organization of Groupe BPCE 1.3 6 TEC 2020: a strategic plan focused on digital 1.4 transformation, commitment and growth 9 Performance of Groupe BPCE – Key figures 2018 1.5 11 Groupe BPCE’s business lines 1.6 14 Calendar 1.7 31 Contacts 1.8 31 2 NON-FINANCIAL PERFORMANCE REPORT 33 Sustainable development built on our cooperative 2.1 identity 35 A CSR strategy aimed at incorporating 2.2 sustainable development in our business lines and decision-making processes 44 A range of services to meet the challenges facing 2.3 our customers 56 Sustainable and responsible value creation 2.4 81 Responsible internal practices 2.5 97 CSR reporting methodology 2.6 118 Report by one of the Statutory Auditors, 2.7 appointed as independent third-party, on the consolidated non-financial statement published in the Group management report 122 3 REPORT ON CORPORATE GOVERNANCE 125 Introduction 3.1 126 Corporate Governance Code 3.2 126 Management and Supervisory Bodies 3.3 128 Role and operating rules of governing bodies 3.4 179 Rules and principles governing the determination 3.5 of pay and benefits 190 Potential conflicts of interest 3.6 218 4 ACTIVITIES AND FINANCIAL INFORMATION 2018 221 Foreword 4.1 222 Significant events of 2018 4.2 222 Groupe BPCE financial data 4.3 226 BPCE SA group financial data 4.4 239 Investments 4.5 241 Post-balance sheet events 4.6 241 Outlook for Groupe BPCE 4.7 242

5 FINANCIAL REPORT

245

IFRS Consolidated Financial Statements 5.1 of Groupe BPCE as at December 31, 2018 Statutory Auditors’ report on the consolidated 5.2 financial statements IFRS Consolidated Financial Statements 5.3 of BPCE SA group as at December 31, 2018 Statutory Auditors’ report on the consolidated 5.4 financial statements BPCE parent company annual financial 5.6 statements Statutory Auditors’ report on the financial 5.7 statements Controls of accounting and financial reporting 5.8 quality Persons responsible for auditing the financial 5.9 statements BPCE management report 5.5

248

397

407

532 542

549

585

589

595

6 RISK REPORT Summary of risks 6.1

597

599

General structure of Groupe BPCE’S internal 6.2 control system Capital management and capital adequacy 6.3 Risk governance and management system 6.4

613 616 628 637 658 661

Credit risk 6.5

Counterparty risk 6.6

Securitization transactions 6.7

Market risks 6.8 666 Liquidity, interest rate and foreign exchange risks 6.9 672 Legal risks 6.10 679 Non-compliance, security and operational risks 6.11 682 Climate risks 6.12 698

7 LEGAL INFORMATION

701

Memorandum and articles of association 7.1

702 705

Share capital 7.2

Ownership structure and distribution of voting 7.3 rights

708 710

Material contracts 7.4 Material changes 7.5

710 Statutory Auditors’ special report on related-party 7.6 agreements and commitments 711

8 STATEMENT BY THE PERSON RESPONSIBLE

727

Statement by the person responsible for the 8.1

registration document and for the annual financial report

728

9 ADDITIONAL INFORMATION Documents on display 9.1

729

730

Cross-reference table for the registration 9.2 document Cross-reference table for the annual financial 9.3 report and the management report Cross-reference table of the main social, 9.4 environmental and societal information

731

733

735 736

Glossary 9.5

Items contained in the Annual Financial Report are flagged in the Table of Contents with the following icon

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LABEL BRONZE

2018 Registration Document and Annual Financial Report

The English version of this report is a free translation from the original which was prepared in French. All possible care hasbeen taken to ensure that the translation is an accurate presentation of the original. However, in matters of interpretation, views or opinion expressed in the original language version of the document in French take precedence over the translation.

Only the French version of the registration document has been submitted to the AMF. It is therefore the only version that is binding in law. The original document was filed with the Autorité des Marchés Financiers (AMF – French Securities Regulator) on April 2, 2019, in accordance with Article 212-13 of the AMF’s General Regulations. It may be used in support of a financial transaction only if supplemented by a Transaction Note that has received approval from the AMF. This document was prepared by the issuer and its signatories are responsible for its contents. This document includes all elements of the annual financial report specified by Section I of Article L. 451-1-2 of the Code monétaire et financier and Article 222-3 of the AMF’s General Regulations. A table allowing cross-referencing between the documents specified in Article 222-3 of the AMF’s General Regulations and the corresponding sections of this document is provided on pages 731 and 732. Copies of this registration document may be obtained free of charge from BPCE, 50, avenue Pierre Mendès-France 75013 Paris.

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Registration document 2018

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE

GROUPE BPCE: COMMITTED TO SERVING 1.1 ITS CUSTOMERS AND THE ECONOMY

PERFORMANCE OF GROUPE BPCE – KEY 1.5 FIGURES 2018

4

11

Recurring, diversified revenue base

11 12 13

High level of solvency

HISTORY 1.2

5

BPCE SA group indicators

Sustainable development central to the Group’s activities

13

ORGANIZATION OF GROUPE BPCE 1.3

6

Overview

6 7 8

GROUPE BPCE’S BUSINESS LINES 1.6

Three-pillar structure Balanced governance

14

1.6.1 1.6.2

Retail Banking and Insurance

15 24

Natixis

TEC 2020: A STRATEGIC PLAN FOCUSED 1.4 ON DIGITAL TRANSFORMATION, COMMITMENT AND GROWTH

CALENDAR 1.7

31

9

CONTACTS 1.8

31

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE

Groupe BPCE: committed to serving its customers and the economy

Groupe BPCE: committed to serving 1.1 its customers and the economy

Groupe BPCE conducts all banking and insurance businesses through its two main cooperative networks – the Banque Populaire banks and the Caisses d’Epargne – and their subsidiaries.

Natixis’ Asset & Wealth Management division develops investment solutions tailored to different customer bases, drawing on global asset management expertise. Its activities meet the savings, investment, risk management and advisory needs of retail and institutional clients. The Corporate & Investment Banking division advises and serves corporates, institutional investors, insurance companies, banks and public sector entities. It offers them a diversified range of solutions, both on the capital markets and in terms of financing and transaction banking services. The Corporate & Investment Banking division operates in all major financial centers via three international platforms: North & South America, Asia-Pacific and EMEA (Europe, Middle East, Africa).

Groupe BPCE, the second largest banking group in France (1) with its two leading brands, Banque Populaire and Caisse d’Epargne, has established extensive regional roots. Its 105,000 employees serve 30 million customers, including 9 million cooperative shareholders. The Group’s companies adapt their banking and insurance business as closely as possible to the needs of individuals and local areas. Groupe BPCE offers its customers a full range of products and services, including deposits and savings, placement, payment, financing, insurance and investment solutions. In keeping with its cooperative structure, the Group builds long-term relationships with its customers and helps them achieve their goals, and as such finances more than 20% (2) of the French economy. Groupe BPCE’s product and service offer is expanded by its subsidiaries, both in France and internationally.

KEY FIGURES - GROUPE BPCE ➡

9

30

105,000 >20%

million cooperative shareholders

million customers

employees

of loans to the French economy (2)

Market share: 21.5% of on-balance sheet customer deposits & savings and 21.1% of customer loans (source: Banque de France Q3 2018 – all non-financial customers combined). (1) 21.1% market share in loan outstandings, all non-financial sector customers combined (source: Banque de France Q3 2018). (2)

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1 PRESENTATION OF GROUPE BPCE History

History 1.2

2024 2018

Groupe BPCE is the first premium partner of the Paris 2024 Olympic and Paralympic Games

Several restructuring operations initiated:

2017

• Plans to incorporate Crédit Foncier’s activities and teas into the Group;

Groupe BPCE launches “TEC 2020”, the strategic plan for 2018-2020: a combination of Digital Transformation in order to seize opportunities created by the ongoing technological revolution, Engagement toward the Group’s customers, employees and cooperative shareholders, and Growth in all its core businesses.

• Plan for Natixis to sell its Factoring, Sureties & Financial Guarantees, Leasing, Consumer Finance and Securities Services business lines to BPCE, scheduled to take place by the end of Q1 2019. 2018 also saw the completion of the merger between Caisse d’Epargne d’Alsace and Caisse d’Epargne Lorraine Champagne- Ardenne, giving rise to Caisse d’Epargne Grand Est Europe.

Ongoing mergers between regional banks:

• Caisse d’Epargne Hauts de France established from the merger of Caisse d’Epargne Picardie and Caisse d’Epargne Nord France Europe;

• Banque Populaire Grand Ouest established from the merger of Banque Populaire Atlantique and Banque Populaire de l’Ouest.

2016

Two regional bank mergers completed:

2015

• Banque Populaire Méditerranée established by the merger of Banque Populaire Côte d’Azur, Banque Populaire Provençale et Corse and Banque Chaix; • Banque Populaire Auvergne Rhône Alpes established from the merger of Banque Populaire des Alpes, Banque Populaire Loire et Lyonnais and Banque Populaire du Massif Central.

Groupe BPCE calls on Natixis Assurances to design and manage all savings and pension funds distributed by the Caisse d’Epargne network as of January 1, 2016.

2014 2013

Groupe BPCE and CNP Assurances sign a memorandum of understanding laying down the terms of implementation of the renewed partnership as from January 1, 2016.

The strategic plan for 2014-2017, “Another way to grow”, focuses on development and transformation, centered on the goal of constantly striving to better meet the expectations and needs of customers, while affirming Groupe BPCE’s difference as a cooperative banking structure.

2010

The first strategic plan for 2010-2013, “Together”, mobilizes all our entities to become the preferred bank of the French people and their businesses.

2009 : Groupe BPCE established from the combination of Groupe Banque Populaire and Groupe Caisse d’Epargne.

2006

Groupe Banque Populaire and Groupe Caisse d’Epargne take the first step towards a business combination, with the creation of their jointly-owned subsidiary, Natixis.

2004

By purchasing Ixis, the Group branches out into investment banking.

1999

The Caisses d’Epargne become cooperative banks.

1998

1983

The acquisition of Natexis provides Groupe Banque Populaire with a publicly listed vehicle.

The Caisses d’Epargne qualify as non-profit credit institutions.

1962

1895

The Banque Populaire banks open their services to individual customers.

The Caisses d’Epargne conduct operations of general public interest.

1917

The Banque Populaire banks rapidly become major players in their regional economies, serving craftsmen, small retailers and SMEs.

1835

The Caisses d’Epargne are recognized as “private institutions of public utility”.

1878

1818

The first Banque Populaire bank is established in Angers, by and for entrepreneurs, the goal being to pool funds to fund their own development plans.

The first Caisse d’Epargne is founded in Paris to promote, collect and manage general public savings.

BANQUE POPULAIRE

CAISSE D’EPARGNE

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1 PRESENTATION OF GROUPE BPCE Organization of Groupe BPCE

Organization of Groupe BPCE 1.3

Overview The Banque Populaire banks and the Caisses d’Epargne are owned by 9 million cooperative shareholders. This highly stable shareholding structure is imbued with a strong cooperative spirit. BPCE SA group, the central institution of Groupe BPCE, is wholly-owned by the 14 Banque Populaire banks and 15 Caisses d’Epargne. It defines the policies and strategic objectives of the Group and coordinates the sales policies of each network. The Banque Populaire banks and Caisses d’Epargne are banks in their own right. They collect deposits and savings, distribute loans and define their priorities.

Important members of their regional economies sit on the Boards of Directors of the Banque Populaire banks and on the Steering and Supervisory Boards of the Caisses d’Epargne. Their resources are first and foremost allocated to meet the needs of local areas and regional customers. Drawing on their cooperative shareholding structure, the regional banks are able to develop their own regional corporate strategies and define joint strategies at Group level.

GROUPE BPCE ORGANIZATION CHART AT DECEMBER 31, 2018 (1) (2) (3) (4) (5) ➡

9 MILLION COOPERATIVE SHAREHOLDERS

100%

100% (3)

FNBP (1)

FNCE (2)

14 BANQUE

15 CAISSES

50%

50%

POPULAIRE BANKS

D’EPARGNE

BPCE

100%

71% (5)

SUBSIDIARIES (4)

NATIXIS

Fédération Nationale des Banques Populaires (1) Fédération Nationale des Caisses d’Epargne (2) Indirectly through Local Savings Companies (3) Banque Palatine, Crédit Foncier, BPCE International (4) Free float: 29% (5)

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1 PRESENTATION OF GROUPE BPCE Organization of Groupe BPCE

Three-pillar structure

TWO BPCE SA GROUP COOPERATIVE SHAREHOLDER NETWORKS

Under the cooperative banking model, cooperative shareholding customers are the focal point of the Group’s governance. The Banque Populaire banks and Caisses d’Epargne are credit institutions wholly-owned by their cooperative shareholders ( via LSCs – Local Savings Companies – for the Caisses d’Epargne). Cooperative shareholding customers – both individuals and legal entities – play an active part in the life, ambitions and development of their bank. Being a cooperative shareholder means owning a cooperative share (not quoted on the stock exchange), representing a portion of the share capital in a Banque Populaire bank or an LSC for the Caisses d’Epargne, and playing a role in the bank’s operation by taking part in Annual General Shareholders’ Meetings and voting to approve the financial statements and resolutions, validating management decisions and electing Directors. Voting rights are exercised in accordance with the cooperative principle of “1 person = 1 vote”, no matter how many cooperative shares are held. Each institution is governed by a Board of Directors for the Banque Populaire banks, or a Steering and Supervisory Board and a Management Board for the Caisses d’Epargne.

See Chapter 3 – Corporate governance.

BPCE SA GROUP: THE CENTRAL INSTITUTION DEDICATED TO ACHIEVING THE GROUP’S AMBITIONS

BPCE SA group is responsible for the Group’s strategy, coordination and organization. The main duties of the central institution, as defined by the act of June 18, 2009, are: coordinating business policies; ● representing the Group and its networks, and negotiating national/international agreements on their behalf; ● representing the Group and its networks as an employer; ● taking all necessary measures to ensure the Group’s liquidity and solvency, risk management and internal control. ● All credit institutions affiliated with the central institution are covered by a guarantee and solidarity mechanism. The scope of affiliated entities is mainly comprised of the Banque Populaire and Caisse d’Epargne networks and Natixis.

See Chapter 7 – Legal information.

SPECIALIZED SUBSIDIARIES

Natixis boasts several areas of expertise, which are organized into four main business divisions: Asset & Wealth Management, Corporate & Investment Banking, Insurance and Specialized Financial Services. It serves its own customer base of corporates, financial institutions and institutional investors, as well as the individual, professional and SME customers of both Groupe BPCE networks and its subsidiaries, covering 38 countries. As a bank for corporate and wealth management customers, Banque Palatine helps its customers achieve their personal and professional ambitions alike. Currently 10% of French corporations generating revenue of more than € 30 million are Banque Palatine customers.

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1 PRESENTATION OF GROUPE BPCE Organization of Groupe BPCE

Balanced governance The company directors of the Banque Populaire banks, Chairmen of the Boards of Directors and Chief Executive Officers of the Caisses d’Epargne, Chairmen of the Supervisory Board and the Management Board, all actively take part in the governance and development of Groupe BPCE. Through their contributions to the various decision-making bodies, they are able to harmonize their actions and participate in the major decisions and strategic objectives that bind all entities of the Group. The BPCE SA group Supervisory Board has 19 members: 7 members of the Banque Populaire banks, 7 members of the Caisses d'Epargne, 3 independent members and 2 employee representatives. The Supervisory Board includes six Non-Voting Directors. The BPCE SA group Management Board has 5 members, appointed by the Supervisory Board.

The Supervisory Board’s role is to continuously oversee the management decisions taken by the Management Board. It exercises its authority over both the opportunity and legality of Management Board initiatives. Cooperative shareholders are represented by the Chairmen of the Boards of Directors for the Banque Populaire banks and by the Chairmen of the Steering and Supervisory Boards for the Caisses d'Epargne. Five specialized committees lay the groundwork for the deliberations and decisions of the Supervisory Board (Audit Committee, Risk Committee, Appointment Committee, Compensation Committee, Cooperative and CSR Committee). They are equally comprised of companies directors of the Banque Populaire and Caisse d'Epargne networks.

APPOINTMENT OF A NEW MANAGEMENT BOARD

The Supervisory Board appointed Laurent Mignon as Chairman of the Management Board of BPCE, replacing François Pérol as from June 1, 2018. The new Management Board, appointed by the Supervisory Board on October 4, 2018, consists of: Laurent Mignon, Chairman of the Management Board; ●

Christine Fabresse, member of the Management Board, Head of Retail Banking and Insurance; ● Catherine Halberstadt, member of the Management Board, Head of Human Resources; ● Nicolas Namias, member of the Management Board, Chief Financial Officer; ● François Riahi, member of the Management Board, Chief Executive Officer of Natixis. ●

See Chapter 3 – Corporate governance.

KEY FIGURES – GOVERNANCE ➡

91.9% Overall participation rate

12 Supervisory Board meetings in 2018

41%

Gender parity on the Supervisory Board

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1 PRESENTATION OF GROUPE BPCE

TEC 2020: a strategic plan focused on digital transformation, commitment and growth

TEC 2020: a strategic plan focused on 1.4 digital transformation, commitment and growth

TEC 2020, the strategic plan for the 2018-2020 period, focuses on a combination of DIGITAL TRANSFORMATION aimed at seizing opportunities created by the ongoing technological revolution, COMMITMENT to the Group’s customers, employees and cooperative shareholders, and GROWTH in all core businesses.

ACCELERATING OUR DIGITAL TRANSFORMATION

The Group plans to ramp up its digital transformation within the organizational structure established in early 2017. The goal is to attain the highest customer satisfaction scores by raising the Group’s digital NPS on par with pure players by 2020. This will be achieved by: developing our joint brand interfaces in a bid to provide customers with an experience of the highest standard; ● investing massively in data analytics, in order to customize our offers, measure certain risks more precisely, enhance our CRM tools and ● build artificial intelligence tools; improving the agility of our information system by tapping into Cloud resources; ● further optimizing our operating model through function-based operations, shared platforms (loan management, Group middle offices, ● etc.), digitization and robotization; Digital transformation investments will be increased to € 600 million per year by 2020.

STRONG COMMITMENTS TO OUR CUSTOMERS, STAFF AND COOPERATIVE SHAREHOLDERS

More expertise and solutions for our customers: in retail banking, a commitment of availability, advice and excellence, with 50% more specialized advisors, ● implementation of broader solutions in response to new customer expectations and preferences, and a continuous focus on customer satisfaction; in Asset Management, a range of innovative, bespoke and active investment strategies and solutions, a ● dedicated sales force, digital tools and an expanded presence in the Asia-Pacific region; in Corporate & Investment Banking, unrivaled expertise in four key sectors (Energy and Natural Resources, ● Infrastructure, Aviation, Real Estate and Hospitality) and more extensive customer relations. A strong employer promise: to improve employability through training and internal mobility, and by providing all employees with digital ● tools;

Customers

to develop the Group’s image as an employer in order to attract and retain top talent; ● to continue our efforts to promote diversity among executives and company directors. ●

Employees

A responsible group, productively engaged in society: contributing to the regions and local ecosystems; ● committed to green growth and CSR; ● providing products and services to vulnerable customers. ●

Cooperative shareholders

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1 PRESENTATION OF GROUPE BPCE

TEC 2020: a strategic plan focused on digital transformation, commitment and growth

AMBITIOUS GROWTH TARGETS IN ALL BUSINESS LINES

Retail Banking and Insurance For the Banque Populaire banks, developing the civil service market, consolidating our position as the leading bank for SMEs and ● maintaining a presence alongside company directors. For the Caisses d’Epargne, consolidating our position as the preferred bank for individual customers, and particularly those with the ● potential to become wealth management clients, and continuing our efforts to gain new professional and corporate customers, while maintaining leadership on the institutional market. Crédit Foncier: further integrating the bank’s activities within the Group. ● Banque Palatine: providing an offering of high-end services focusing on dual banking relationships with company directors. ● Digitizing specialized financial services, boosting synergies with the banking networks and becoming a pure player in payments (Natixis). ● Consolidating our position as a top tier insurer in France (notably as one of the Top 5 in personal insurance) and integrating the entire ● non-life insurance value chain. Asset Management Confirming our position as a world leader in active investment strategies in terms of size, profitability and capacity for innovation. ● Developing alternative strategies and solutions. ● Expanding global distribution capacities. ● Corporate & Investment Banking Being recognized as a bank for innovative solutions and strengthening our Originate-to-Distribute model, primarily by expanding our ● client base of insurers and investment funds. Becoming the go-to bank in four key sectors: Energy and Natural Resources, Infrastructure, Aviation, Real Estate & Hospitality. ● This growth will be achieved in strict compliance with the Group’s financial fundamentals, i.e. keeping the CET1 ratio above 15.5% and the TLAC ratio above 21.5% (excluding senior preferred debt) as from early 2019 by issuing € 4 billion to € 5 billion in senior non preferred debt per year, while keeping cost of risk on outstandings between 20 bp and 30 bp. Groupe BPCE has set an NBI target of more than € 25 billion by the end of 2020. The target cost/income ratio is approximately 64% for Retail Banking and Insurance, 68% for Asset & Wealth Management, and 60% for Corporate & Investment Banking. To reach these targets, the Group will rely on additional revenue synergies between Natixis, the Banque Populaire banks and the Caisse d’Epargne (over € 750 million) and a cost-cutting program set to unlock € 1 billion in savings on a full-year basis by 2020. In retail banking: redeployment of Crédit Foncier activities and expertise across the Group; ● incorporation of Natixis specialized financial services in BPCE SA group; ● partnership with Auchan Holding, with BPCE planning to purchase a 50.1% stake in Oney Bank, a leading European player in consumer ● finance and payment activities. In Asset Management: expanded expertise in the private debt market, with the acquisition of MV Credit by Natixis Investment Managers. ● In Corporate & Investment Banking: ongoing development of the multi-boutique model in M&A Advisory, with investments in Fenchurch Advisory Partners (United Kingdom), ● Vermilion Partners (China) and Clipperton (France). ADDITIONAL STRATEGIC OPERATIONS FOR THE DEVELOPMENT OF THE BUSINESS LINES

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1 PRESENTATION OF GROUPE BPCE

Performance of Groupe BPCE – Key figures 2018

Performance of Groupe BPCE – Key 1.5 figures 2018

Recurring, diversified revenue base GROUPE BPCE – SUMMARY INCOME STATEMENT ➡

2018

2017

2016

in millions of euros

Net banking income

24,001 6,314 73.7% 1,299 5,297 3,026

23,720 6,621 72.1% 1,384 5,516 3,024

24,158 7,485 69.0% 1,423 6,370 3,988

Gross operating income

Cost/income ratio

Cost of risk

Income before tax

NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

BUSINESS LINE CONTRIBUTION TO GROUPE BPCE NBI (1) ➡ IN 2018 (AS A %)

BUSINESS LINE CONTRIBUTION TO GROUPE BPCE ➡ INCOME BEFORE TAX (1) IN 2018 (AS A %)

Retail Banking & Insurance: 65% o/w

Retail Banking & Insurance: 71% o/w

Specialized Financial Services: 7%

Networks: 52%

Specialized Financial Services: 6%

Networks: 62%

Insurance: 6%

Insurance: 3%

15%

14%

Corporate & Investment Banking

Corporate & Investment Banking

15%

20%

Natixis Business lines: 38%

Natixis Business lines: 48%

Asset & Wealth Management

Asset & Wealth Management

Excluding the Corporate center. (1)

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Performance of Groupe BPCE – Key figures 2018

GROUPE BPCE – ACTIVITY ➡

12/31/2018

12/31/2017

12/31/2016

in billions of euros

Balance sheet total

1,273.9 671.9 (1)

1,259.9

1,235.2

704.9

679.2

Customer loans (gross loan outstandings)

(1)

IFRS 9 in effect since January 1, 2018.

High level of solvency GROUPE BPCE – FINANCIAL STRUCTURE AND LIQUIDITY ➡ RESERVES

GROUPE BPCE – CAPITAL RATIOS ➡

12/31/2018

in billions of euros

12/31/2017 12/31/2016

19.6%

Equity attributable to equity holders of the parent Common Equity Tier 1 capital

19.2%

66.2 62.2 62.5 76.9 204

64.0 59.0 59.5 74.0 214

61.5 55.3 56.6 72.3 230

18.5%

Tier 1 capital

Total regulatory capital

15.9%

15.4%

14.5%

Liquidity reserve

Under Basel III, taking into account CRR/CRD IV phase-in measures.

Common Equity Tier 1 ratio Tier 1 ratio Total capital ratio

15.8%

14.1%

15.3%

CREDIT RATINGS AT DECEMBER 31, 2018 ➡ The following ratings concern BPCE and also apply to Groupe BPCE.

12/31/2016 12/31/2017 12/31/2018

Under Basel III, taking into account CRR/CRD IV phase-in measures.

Fitch Ratings Moody’s

Standard & Poor’s

R&I

Long-term rating Short-term rating

A+ F1

A1

A

A+

P-1

A-1

Outlook

Stable Stable Positive Stable

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Performance of Groupe BPCE – Key figures 2018

BPCE SA group indicators SUMMARY INCOME STATEMENT ➡

2018

2017

2016

in millions of euros

Net banking income Gross operating income

10,800

10,499

10,781

2,005 1,856

2,358 2,126

3,076 2,823 1,664

Income before tax

NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

685

845

FINANCIAL STRUCTURE ➡

12/31/2018

12/31/2017

12/31/2016

in billions of euros

Equity attributable to equity holders of the parent

19.6 19.0

18.9 18.5

20.2 19.4

Tier 1 capital

Tier 1 ratio

10.9% 19.1%

10.3% 18.4%

10.2% 18.4%

Total capital ratio

Under Basel III, taking into account CRR/CRD IV phase-in measures.

Sustainable development central to the Group’s activities (1) (2) A LEADING BANK IN GREEN, RESPONSIBLE GROWTH ➡

N°1

in energy transition loans (1) €8.7bn

in responsible deposits and savings (2) €72.5bn

in personal and professional microloans in France 14,700 microloans issued totaling €112m

A RESPONSIBLE EMPLOYER ➡

No.14 in the top 100 most attractive French companies

42.9% of Group managers are women

Renewable energy outstandings + building energy renovation loans and environmentally friendly equipment loans for professional customers and SMEs + green car loans. (1) €69.1 billion in SRI deposits and savings + €3.4 billion in CODEVAIR on-balance sheet deposits and savings (CODEVair is Crédit Coopératif’s regional passbook savings account and SRI (2) passbook savings account).

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1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

Groupe BPCE’s business lines 1.6

The economic and regulatory environment in which Groupe BPCE conducts its business is described in Chapters 2, 4 and 6 of the registration document. BUSINESS DIVISIONS OF GROUPE BPCE AT 12/31/2018

RETAIL BANKING & INSURANCE

CORPORATE & INVESTEMENT BANKING

ASSET & WEALTH MANAGEMENT

Specialized financial services Insurance

Asset management Wealth management

Global markets Global finance Investment banking

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1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

1.6.1

Retail Banking and Insurance

KEY FIGURES (1) (2) (3) (4) (5) ➡

bank for SMEs No.1

bank for individual customers No.2 (2)

bank for professional customers and individual entrepreneurs No.2 (3)

(1)

home loan market share 26.3%

in loan outstandings €564bn

in deposits and savings €705bn

(4)

(5)

51% (No. 1) in terms of total penetration rate (source: 2017 Kantar-TNS survey) (1) Market share: 22.6% in household deposits/savings and 26.3% in home loans (Banque de France, Q3-2018). Total penetration rate of 30.1% (No. 2) among individual customers (SOFIA (2) TNS-SOFRES survey, April 2018) 41% (No. 2) penetration rate among professional customers and individual entrepreneurs (2017-2018 Pépites CSA survey) (3) Banque de France, Q3-2018 – Quarterly SURFI report – Home loan outstandings (4) On- and off-balance sheet deposits and savings (5)

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

Banque Populaire banks Cooperative banks founded in 1878 by and for entrepreneurs, the Banque Populaire banks serve enterprising customers on the path to success. As the No. 4 banking network (1) in France with 12 regional Banque Populaire banks and two national affiliated banks (CASDEN Banque Populaire and Crédit Coopératif), together they hold the leading position among small and medium-sized enterprises (2) and are No. 2 among craftsmen and small retailers (3) . In 2018 The Banque Populaire banks consolidated their sales momentum, ● furthered their digital transformation and built up even closer relations with their customers. With their new brand territory and new tagline (“success is in ● you”), now more than ever they are positioned as partners for Individual customers 93,300 new customers chose Banque Populaire as their primary bank in 2018, a year-on-year increase of +2.5%. In 2018, the Banque Populaire banks launched the Pack Famille (Family Pack), the first banking products and services package in France targeting families interested in effectively managing their daily budget, and rolled out a comprehensive mobile payment offer with Samsung Pay , Paylib and Apple Pay . In partnership with PEPITE France, the No. 1 national network for student entrepreneurs, they created Pépite Factory, a non-profit that provides legal and financial assistance to students creating start-ups. The new secure identification solution, Sécur’Pass, launched on the Banque Populaire mobile app, helps customers save time and complete their transactions independently anywhere, anytime. In yet another digital step forward, customers can take out consumer loans and home loans online. New lending activity also CASDEN Banque Populaire A cooperative bank serving all public-sector workers, CASDEN Banque Populaire has the ambition of becoming the primary bank of one in four civil servants. To reach this goal, it has adopted a unique model – the Points system – and is relying on the loyalty-driven strategy that secured its success with the personnel in the National Education system. In 2018, the bank rolled out a new brand territory highlighting the value of civil service personnel and their commitment to serving the community, entered into several partnerships with public-sector organizations, set up over 2,200 public-sector meetings at public-sector institutions and launched a new, highly attractive sponsorship offer (“Reco CADSEN”). Together, these

14 Banque Populaire banks €265.7bn in deposits and savings 4.4 million cooperative shareholders €209bn in loan outstandings 9.3 million customers 30,807 employees €6.4bn in net banking income

enterprising customers on the path to personal or professional success.

Loan outstandings rose 6% and deposits and savings 2%. ●

remained strong in 2018, with loan outstandings up +8.1% for both categories. Provident and health insurance policies also enjoyed robust momentum, climbing +2%. The Entretien Epargne Conseil service has proved to be a widespread success. All advisors have been trained in this new approach to financial savings, aimed at providing customers with optimal allocation proposals suited to their investor profile and objectives. € 27.5bn in new loans € 159.1bn in deposits and savings, +3.5% 175,000 new provident and health insurance policies

€ 130.4bn in loan outstandings, +8.1% 327,000 new non-life insurance policies

initiatives earned CASDEN Banque Populaire 117,000 new cooperative shareholders. In October 2018, CASDEN simplified the Points system: there is now just one type of point awarded – the CASDEN Point – giving cooperative shareholders access to the lowest rates. Home loans can now be obtained online, and new services were added to the CASDEN mobile app. In terms of Group synergies, CASDEN, the Banque Populaire banks and Natixis Financement joined forces to ramp up origination of CASDEN consumer loans (set to begin in late 2019). 1.8 million cooperative shareholders at December 31, 2018

Internal analysis based on 2017 data (1) 2017 Kantar TNS survey (2) 2017-2018 CSA Pépites survey (3)

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

Private Banking Private Banking enjoyed robust momentum in 2018, increasing the number of clients by 5.7% (i.e. over 21,500) and assets under management by +4.9%. Wealthy clients, shareholding company directors and discretionary portfolio management made the biggest contribution to this improvement. Drawing on solid expertise in financial engineering and wealth management for CEOs and shareholding company directors, Private Banking provides a tailored offer for this client base. A multimedia campaign, also aimed at establishing the Banque Populaire Private Banking brand, promoted this offer for the first time. Professional customers Over 1 million professionals are customers of the Banque Populaire banks, which have developed a business partner approach combining financing, services, digital solutions, insurance and employee savings plans with the aim of providing daily support for all their business endeavors. A partnership was entered into with the APCMA (Permanent Assembly for the national network of Chambers of Trade and Small Businesses) in 2018, resulting in a new small business support mechanism called the Pacte Artisan, with a budget of € 1 billion for medium and long-term loans. The Banque Populaire banks also set up a partnership with IFEC, the leading trade union for accountants, with the goal of synergizing their expertise and developing a program to exchange best practices in order to better meet the needs of farmers. Named Best Bank (1 st Place) by Le Monde du Chiffre for the second year in a row, Banque Populaire is still the No. 1 bank recommended by franchisors according to the 15 th annual franchising survey conducted with the French Franchising Under the European Commission’s “COSME–FEIS” program, the Banque Populaire banks and SOCOMAs (1) were backed by the European Investment Fund (EIF) to the tune of € 1 billion for 2017-2018. As a result, they were able to finance the creation, development and acquisition of businesses with loans either calling for no provision of personal collateral at all or for reduced collateral. Thanks to the EIF’s counter-guarantee programs, the Banque Populaire banks and SOCOMAs have already issued loans totaling some € 5 billion to over 129,000 French VSEs. Federation. Financing ●

A new investment advisory service was launched for wealthy clients with high structuring requirements due to the complexity of their wealth and tax situation. Financial savings deposits by Private Banking clients of the Banque Populaire banks totaled nearly € 77 billion. Gross life insurance inflows amounted to € 2.4 billion, with nearly 36% consisting of unit-linked assets.

398,000 clients, +5.7% € 77bn in AuM, +4.9%

New medium and long-term loans were up 1.6% to € 8.2 billion, driven by the success of the Pro digital loan, a single-rate loan requiring neither collateral nor supporting documents that can be taken out very easily online by eligible pre-approved customers. New services ● New innovative offers included Fid Pro, designed to help professional customers expand their business by turning their debit card into a loyalty card. This turnkey digital solution is a tool for rewarding loyalty and conducting targeted marketing campaigns by sending out offers tailored to the customer’s profile by e-mail or text. Banque Populaire also launched a new website, instaletliberal.fr, providing advisory and other services to help self-employed professionals get started. Insurance ● Banque Populaire hit the 130,000 professional customers mark with its retirement and provident insurance solutions, designed with Natixis Assurancess to protect professional customers as well as their employees and families.

1.1 million professional customers 495,000 craftsmen and small retailers 155,300 self-employed professionals 65,300 farmers € 49.4bn in loan outstandings, +5.2%

Crédit Maritime Crédit Maritime has been a leading creditor in the fishing and fish farming industries since 1906. Now part of the Banque Populaire banks located along the coast, Crédit Maritime serves all the “blue” segments of the maritime economy.

SOCOMA (Sociétés de caution mutuelle artisanales) are Mutual Guarantee Companies for the small business sector, having Banque Populaire as an exclusive partner. (1)

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

Corporate and institutional customers The Banque Populaire network is the leading bank for SMEs (1) . It further consolidated its positions in the SME segment this year through robust sales initiatives, with the number of active corporate customers up 3.9%. By acting locally, Banque Populaire has become one of the leading providers of equipment loans, with outstandings up 9.3% to € 22.4 billion in 2018. Every day, the Banque Populaire network offers solutions designed to assist CEOs, particularly in terms of cash flow and payment management. Innovation ● A third counter-guarantee agreement was signed with the European Investment Fund under the European InnovFin program to fund plans aimed at improving the innovation and competitiveness of SMEs. The budget earmarked for the Banque Populaire banks, EIF’s leading partner for such guarantee programs, is € 500 million. Thanks to the EIF, the Innov&Plus medium-term loan serves to finance innovation at below-market rates, with amounts ranging from € 25,000 to € 7.5 million over terms of two to ten years, including a possible two-year deferral. Start-ups and innovative companies can also count on Next Innov, a top pro-innovation banking network with more than 70 certified business centers, over 100 specially trained advisors and multiple regional partnerships. 2018 initiatives included: a partnership with Bpifrance to pool their expertise in favor of innovative companies; a partnership with Estimeo, which specializes in rating start-ups; the creation of 1,000 m 2 of collaborative workspace for innovative entrepreneurs at the heart of the Saclay plateau called “Terrasse Discovery +X”, with Crédit Coopératif Crédit Coopératif, the leading bank for the social & solidarity-based economy and engaged citizens, firmly believes in a different way of banking. Its new media campaign, “Le pouvoir de nous”, speaks to the power of banks and customers working together for a more humanitarian economy. In 2018, Crédit Coopératif migrated to Caisse d’Epargne’s information system, which allowed it to launch new services and applications. It teamed up with Natixis Financement to develop consumer loans and launched an attractive financing offer for clean cars to be used in company car fleets. It set up a fund with Caisse des Dépôts and Ircantec (3) to invest in citizen-sponsored renewable energy projects. As the leader in solidarity-based savings and financial products, led by the Agir range, Crédit Coopératif distributed total donations of € 2.6 million to associations in 2018. It entered into partnerships with Doctors Without Borders, which was issued the Agir card, and with Groupe Action Logement, a leading player in social and intermediate housing, to help it expand in the home loan market.

a one-stop-shop for business support and guidance; and the first Banque Populaire start-up award (“Next Step” award). Internationalization ● The highly comprehensive Next International program provides daily support to businesses through a team of around 60 business managers specializing in international trade and Connector, an alliance of 15 banks covering 45 countries. Next International also facilitates the establishment and development of businesses abroad, in partnership with Pramex International, the leading French consultant to SMEs and ISEs looking to establish international operations and deals, and the top manager of SME foreign subsidiaries. Financial engineering ● No. 3 in capital transactions and M&A advisory services for VSEs, SMEs and ISEs (2) , the Banque Populaire banks have built up a nationwide financial engineering organization. Eighty employees advise companies and provide them with business disposal-transmission, structured financing and private equity solutions. The Banque Populaire Financial Engineering brand expanded its presence among CEOs and expert clients with a separate financial engineering website, a highly consulted opportunity base, communication campaigns and targeted partnerships.

126,500 corporate customers 246,800 associations and institutional customers No. 1 bank for SMEs, 41% are customers (1) € 22.4bn in MLT loans, +9.3%

The Ecofi Enjeux Futurs fund, managed by its subsidiary Ecofi Investissements, was twice honored this year: ranked second by Gestion de Fortune in the Global SRI Equities category and receiving the Performance Award from Pyramides de la Gestion de patrimoine in the International Equities category. Crédit Coopératif launched the first Request for Projects at the end of the year for Envolée, an incubator for grassroots social inclusion, established in Saint-Denis (Ile-de-France). The call went out to entrepreneurs interested in serving the greater good through innovation.

101,200 cooperative shareholders 444,000 customers € 2.6m in donations, raised from solidarity-based products, distributed to 53 associations

2017 Kantar TNS survey (1) 2017 Fusacq ranking published in February 2018 (2) Institution in charge of supplementary pensions for non-permanent staff working for State local authorities (3)

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Registration document 2018

1 PRESENTATION OF GROUPE BPCE Groupe BPCE’s business lines

Caisses d’Epargne The Caisses d’Epargne have been innovating since they were founded in 1818, always with the goal of serving all customers equally, while reconciling individual interests and the greater good. The 15 Caisses d’Epargne are cooperative banks, forming the No. 2 banking network in France. They support their customers in all their endeavors and are a major partner to public and private-sector players in regional economic and social development: corporates, local authorities, social and solidarity-based economy, social housing and the hospital sector. In 2018 A major regional bank was established from the merger of Caisse ● d’Epargne d’Alsace and Caisse d’Epargne Lorraine Champagne-Ardenne: Caisse d’Epargne Grand Est Europe, serving 1.7 million customers, including 436,000 cooperative shareholders. Individual customers More than 60,000 individual customers chose Caisse d’Epargne as their primary bank in 2018, thanks in part to its ever-expanding digital offer. Ranked in the Top 3 preferred mobile banking apps by internet users (1) , Caisse d’Epargne launched Enjoy in 2018, a full-mobile digital banking offer including an account and debit card for € 2 a month, plus access to financing, savings and insurance solutions under the guidance of an Enjoy advisor. Now more user-friendly and complete, the mobile app allows customers to manage their debit card by activating features such as online/remote payment and card blocking. Samsung Pay was also added to the Paylib and Apple Pay mobile wallet services. The Sécur’Pass secure identification service simplifies wire transfers and instantly authorizes SEPA credit transfers. Additional digital advances in 2018 included the launch of the dynamic-encryption card (which automatically changes the 3-digit Private Banking Caisse d’Epargne Private Banking has developed a range of products and solutions tailored to the diverse profiles and objectives of private banking clients. It offers access to a broad and diversified range of investments, notably through Natixis Investment Managers, providing Caisse d’Epargne customers with access to the expertise of 26 asset management companies all around the world. Caisse d’Epargne welcomed over 9,500 new wealth management clients in 2018 while further expanding its specialized teams: 1,800 in-branch wealth management advisors, 800 private banking CRMs, 100 private bankers working exclusively with the wealthiest clients, 50 wealth management engineers and around 20 portfolio managers handing portfolio management mandates. A new service was rolled out, Entretien Épargne Personnalisé, including an in-depth wealth management review with an expert advisor, and Caisse d’Epargne offered smart advisor MoneyPitch to

15 Caisses d’Epargne

€418.4bn in deposits and savings

4.6 million cooperative shareholders

€270.3bn in loan outstandings

19.2 million customers 35,001 employees

€7bn in net banking income

Caisse d’Epargne stepped up its digital transformation efforts ● and celebrated its 200-year anniversary with a series of local initiatives promoting its commitment to serving its customers (“Vous être utile”). Loan outstandings rose 6.2% and deposits and savings 1.4%. ●

card verification code every 45 minutes for greater security), a new consumer loan simulator, online car leasing with “lease-to-own” option, and online applications for home loans and payment protection insurance. Caisse d’Epargne also conducted an awareness-raising campaign, including a TV commercial reminding the public that it grants the same lending conditions to everyone, including students and apprentices. It also launched a new, highly flexible motorcycle/scooter insurance offer designed to fit the budgets of young adults.

€ 157.2 bn in loan outstandings, +6.9% € 338.7bn in deposits and savings, +2% € 11.1bn in life insurance inflows A portfolio of 5 million non-life insurance policies

all private banking clients. MoneyPitch aggregates all of a client’s financial data (savings and deposits, loans, investments, pensions, provident insurance, transmission of wealth, taxes, etc.) and provides tailored investment advice. Its publisher, Harvest, was named Best Software Publisher by Gestion de Fortune for the eighth year running in 2018. Caisse d’Epargne also stepped up its communication initiatives, holding webconferences on current events in wealth management and taxes. During its bicentennial celebrations, the bank published a special edition of Vision Patrimoine magazine exploring what the future holds for the wealth management industry. No. 2 in France (2) 1.2 million wealth management clients, +1.9% 440,000 private banking clients, +2.3% € 122bn in assets under management, +2.5%

Net Observer survey, Harris interactive, spring 2018 (1) Xerfi/Precepta survey, June 2017 (2)

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Registration document 2018

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