BPCE - 2018 Registration document

ACTIVITIES AND FINANCIAL INFORMATION 2018 Groupe BPCE financial data

4.3.4

Retail Banking and Insurance (1)

Specialized Financial Services

Banque Populaire banks

Caisses d’Epargne

Retail Banking and Insurance

Insurance Other networks

Change

2017 pf

2018

2018

2018

2018

2018

2018 2017 pf

2017

2017

2017

2017

€m %

in millions of euros

Net banking income Operating expenses

6,371 6,294 6,952 7,086 1,472 1,382 790 734 1,211 1,187 16,795 16,683 112 0.7% (4,350) (4,422) (4,715) (4,788) (1,004) (939) (448) (439) (1,256) (907) (11,772) (11,494) (278) 2.4%

Gross operating income

2,021 1,873 2,237 2,298 468 443 342 295 (45)

280 5,023 5,189 (166) (3.2%)

Cost/income ratio

68.3% 70.2% 67.8% 67.6% 68.2% 67.9% 56.7% 59.8% ns 76.4% 70.1% 68.9% 1.2 pt

Cost of risk

(479)

(448)

(395)

(365)

(23)

(73)

0

- (175) (220) (1,072) (1105)

33 (3.0%)

Share in income of equity-accounted associates Gains or losses on other assets

29 35 (0)

0

0

-

15 13

1 1 44 49 (5) (9.4%)

(0)

(9)

2 (4)

1 (0)

0

-

(42)

(17)

(40)

(29)

(11) 36.0%

Income before tax

1,570 1,451 1,844 1,930 445 371 356 308 (260)

44 3,956 4,104 (149) (3.6%)

4

The Retail Banking and Insurance division’s income before tax fell 3.6% compared to 2017, with the rise in fees and commissions failing to offset the decline in net interest income amid persistently low interest rates. Operating expenses (excluding transformation costs) were down 0.2% compared to 2017. Cost of risk shed 3.0% year-on-year, averaging 18 bp in 2018. The Banque Populaire and Caisse d’Epargne networks accounted for 86% of the Retail Banking and Insurance division’s income before tax in 2018. BANQUE POPULAIRE BANKS The Banque Populaire network maintained robust sales activity in a challenging economic environment, drawing on the expansion and continued sales of products and services to its customer base. The Banque Populaire banks posted +2.5% growth in its individual customer base (o/w +3.4% in customers using banking products and services), +3.9% in its corporate customer base and +0.6% in its professional customer base. On-balance sheet deposits and savings driven by strong sales momentum in a persistently competitive environment: +4.1% (excluding centralized savings) The Banque Populaire banks recorded relatively robust inflows in what remained a highly competitive economic environment. On-balance

sheet deposits and savings (excluding centralized savings) climbed +4.1% to € 184.4 billion. Off-balance sheet deposits and savings totaled € 70.0 billion at end-2018 (-4.9%), hurt by a - € 4.2 billion decline in UCITS (-24.9%) that was not offset by the very slight improvement in life insurance AuM (+ € 0.8 billion, i.e. +1.6%). Business was strong on the individual customer market, which posted a +3.5% rise in deposits, but proved sluggish on the professional, corporate and institutional customer segments (-0.2%). Risk aversion steered individual customer investments more towards on-balance sheet deposits and savings. Growth was driven primarily by demand deposits (+9.4% to € 28.1 billion at end-2018) and home savings (+3.0% to € 20.9 billion). Passbook savings accounts posted global growth of +5.3%, i.e. + € 2.6 billion year-on-year, thanks in large part to ordinary passbook savings account deposits, up +5.6% to € 24.7 billion in 2018, and Livret A and LDD passbook savings account deposits, up +10.0% and +3.3%, respectively, to € 12.5 billion and € 8.9 billion at end-2018. Meanwhile, term deposits fell -14.5% to € 2.0 billion. Professional, corporate and institutional customers also made a significant contribution to the increase in on-balance sheet deposits and savings, primarily in terms of demand deposits (+7.6%, i.e. + € 4.3 billion to € 60.6 billion at end-2018), while term deposits held steady (+ € 200 million to € 24.1 billion, i.e. +0.8%).

2017 segment information for Groupe BPCE is stated pro forma of the transfer of Ouest Croissance from the Corporate center to the Banque Populaire network (Retail Banking and Insurance (1) division).

229

Registration document 2018