BPCE - 2018 Registration document

4 ACTIVITIES AND FINANCIAL INFORMATION 2018 Groupe BPCE financial data

CUSTOMER DEPOSITS AND SAVINGS ➡ (IN BILLIONS OF EUROS)

Financial results The Banque Populaire network’s net banking income totaled € 6.4 billion in 2018, a slight pro forma increase compared to 2017 (+1.0% excluding the change in the home savings provision). Net interest income (1) dipped slightly to € 3.6 billion, i.e. - € 15 million year-on-year. Positive volume effects were not strong enough to offset the erosion in the intermediation margin, with the interest rate on loans (particularly home and equipment loans) declining more than the rate on savings. Fees and commissions picked up slightly (+ € 18 million, +0.7% compared to 2017 pro forma), driven by all categories. Account management fees posted a small increase (+ € 4.0 million, +0.4%), as did fees on payment instruments (+ € 5.7 million, +1.5%), reflecting dynamic banking penetration, the rapid development of contactless payments and a higher number of contracts with small retailers. Fees on off-balance sheet deposits and savings rose considerably (+ € 34.8 million, +9.0%), thanks in large part to higher life insurance fees (+ € 36.0 million, +12.1%). Fees on loans were on the decline (- € 37.8 million, -7.3%) due to the sharp downturn in prepayment penalty fees (- € 61.9 million, -42.8%). Restated for prepayment penalty fees, fees on loans improved much more significantly (+24.1 million, +6.5%), on the back of higher payment protection insurance fees (+ € 29.5 million, +13.2%) and a 2017 comparison base effect. Income and expenses from other activities posted an increase of € 69 million, attributable in 2018 to capital gains on investment property (+ € 16 million) and a 2017 comparison base effect (check imaging fine of - € 37.9 million and provision reversals of + € 6 million). Net income from insurance activities rose +4.5% to € 120 million links to the development of Prépar Vie (BRED life insurance business). Operating expenses came down -1.6% (+ € 72 million) to - € 4.4 billion, reflecting strong OPEX discipline by the institutions. Restated for transformation costs, they dipped -0.8% year-on-year to - € 4.3 billion. Transformation costs were mainly associated with the migration of Crédit Coopératif to the IT-CE platform, the merger-absorption of Banque Populaire Aquitaine Centre Atlantique and Crédit Maritime du Sud-Ouest, and the establishment of Banque Populaire Grand Ouest from the merger of Banque Populaire Atlantique, Banque Populaire Ouest and their subsidiaries. Gross operating income gained +7.9% to € 2.0 billion and the cost/income ratio improved 1.9 point to 68.3% in fiscal year 2018. Cost of risk climbed +7.0% year-on-year to - € 0.5 billion. Divided by loan outstandings, it stood at 23 bp in 2018, on par with 2017. The Banque Populaire banks contributed € 1.6 billion to the Retail Banking and Insurance division’s income before tax, up +8.2% relative to 2017 (pro forma).

2.0%

265.7

260.6

70.0

73.6

195.7

187.0

Off-balance sheet deposits & savings On-balance sheet deposits & savings (including centralized savings)

9.1 %

12/31/2017

12/31/2018

Loan outstandings up +6.0% amid low interest rates The Banque Populaire banks consolidated their active role in financing the economy, with an annual increase of +6.0% in loan outstandings to € 209.0 billion at end-2018. Loan outstandings in the individual customer market (+8.1% to € 130.4 billion) were buoyed by robust growth in home loan outstandings (+8.1% to € 119.7 billion), amid low interest rates which triggered demand, but also as a result of renegotiations of existing loans and purchases of loans from competitors. Consumer loans also contributed to the rise in total outstandings, with consumer loan outstandings up +9.1% to € 10.2 billion at end-2018. Loan outstandings in the professional, corporate and institutional customer segments (including leases) posted a more modest improvement than outstandings in the individual customer segment (+2.7%), climbing to almost € 78.7 billion by end-2018, fueled by renewed momentum in short-term credit facilities (+5.7%) and equipment loans (including leases), which rose +8.6% to € 64.0 billion in 2018.

LOAN OUTSTANDINGS (IN BILLIONS OF EUROS) ➡

6.0%

209.0

197.2

25.3

27.5

64.0

59.0

119.7

110.7

9.1 %

Home loans Equipment loans Other

12/31/2017

12/31/2018

Fees and commissions on centralized savings products have been restated for the interest margin and included in fee and commission income. (1)

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Registration document 2018