BPCE - 2018 Registration document

4 ACTIVITIES AND FINANCIAL INFORMATION 2018 Groupe BPCE financial data

Groupe BPCE financial data 4.3

4.3.1

Groupe BPCE results

Groupe BPCE generated stable net reported income in 2018 of € 3 billion, including material non-recurring items associated with the Group transformation plan.

Groupe BPCE

Chg. 2018/2017

2018

2017

€m

%

in millions of euros

Net banking income Operating expenses

24,001 (17,687) 6,314 73.7% (1,299)

23,720 (17,099) 6,621 72.1% (1,384)

281

1.2% 3.4%

(588) (308)

Gross operating income

(4.6%) 1.6 pt (6.1%) (82.8%) (80.7%) (4.0%) (18.4%) 16.5% 2.7%

Cost/income ratio

-

Cost of risk

85

Share in income of equity-accounted associates

284

276

7

Gains or losses on other assets Change in the value of goodwill

15

88

(73)

(16)

(85)

68

Income before tax

5,297 (1,477) (793) 3,026

5,516 (1,811) (681) 3,024

(220)

Income tax

334

Non-controlling interests (minority interests)

(112)

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

2

0.1%

NET BANKING INCOME At December 31, 2018, Groupe BPCE’s net banking income amounted to € 24.0 billion, up 1.2% compared to 2017, on the back of resilient performances by the retail banking networks, coupled with robust growth in the Insurance, Specialized Financial Services and Payments business lines. It also reflected persistently strong momentum in the Corporate & Investment Banking division’s Asset Management, Global Finance and M&A business lines. Retail Banking and Insurance posted a 0.7% rise in net banking income, driven by higher fees and income from other activities. Retail banking (excluding Natixis) recorded loan outstandings of € 564 billion at December 31, 2018, up 4.8% year-on-year. Home loans increased 5.5% year-on-year, equipment loans 7.5% and consumer loans 7.3%. Retail banking continued to contribute actively to the funding of the economy, boasting a high volume of new loans in all segments. Retail banking deposits and savings came to € 705 billion at December 31, 2018, up 1.5% since December 31, 2017. On-balance sheet deposits and savings were driven by ordinary savings accounts (+8.8%). Net banking income in the Asset & Wealth Management division picked up 9.8% (+12.6% at constant exchange rates) to € 3,419 million in 2018, thanks in large part to solid margin rates (excluding incentive fees): 31 bp overall, including 26 bp in Europe and 40 bp in North America. Incentive fees totaled € 426 million in 2018 ( i.e. roughly 13% of annual Asset Management revenues). Meanwhile, wealth management revenues grew 2% year-on-year.

The diversification of the business lines and geographic coverage of the Corporate & Investment Banking division were key contributors to this resilient performance. The solid performances of the Global Finance business lines (led by Real Assets) and the M&A activities partially offset the decline in Global Markets revenues. In 2018, Corporate & Investment Banking generated net banking income of € 3,237 million, down 9.6% year-on-year (-8.0% at constant exchange rates). Excluding the impact on equity derivatives in Asia, net banking income was down 2.5% compared with 2017 at constant exchange rates. OPERATING EXPENSES Operating expenses totaled - € 17.7 billion in 2018 (up 3.4% compared to 2017), including the transformation costs associated with the Group’s key strategic deals aimed at simplifying its structure and generating synergies. These costs primarily related to Crédit Foncier, mergers of Group institutions and IT platform migrations. Operating expenses for the Retail Banking and Insurance arm, excluding transformation costs, decreased slightly by 0.2%. The rise operating expenses can be predominantly attributable to the development of activities in the Asset & Wealth Management division and the Corporate center. The Group’s headcount dipped 1.0% year-on-year to 105,448 at December 31, 2018. Gross operating income came out at € 6.3 billion in 2018, down 4.6% compared to 2017. Restated for transformation costs, the cost/income ratio stood at 70.8% in 2018.

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Registration document 2018