BPCE - 2018 Registration document

4 ACTIVITIES AND FINANCIAL INFORMATION 2018 Groupe BPCE financial data

BREAKDOWN OF 2018 SFS NBI BY BUSINESS LINE ➡

Operating expenses slid -1.5% to - € 4.7 billion. Restated for transformation costs, they were down -1.3% compared with 2017 to - € 4.6 billion. Transformation costs were associated with the establishment of Caisse d’Epargne Hauts de France from the merger of Caisse d’Epargne Nord-France-Europe and Caisse d’Epargne Picardie, the merger Caisse d’Epargne Lorraine Champagne-Ardenne and Caisse d’Epargne Alsace and, to a lesser extent included the residual costs associated with the consolidation of oversees banks in Caisse d’Epargne Provence-Alpes, and the preliminary costs for Caisse d’Epargne d’Ile-de-France to absorb certain BPCE I banks. As a result, gross operating income came to € 2.2 billion in 2018, down -2.6% compared to 2017, while the cost/income ratio increased slightly by +0.2 pt to 67.8%. Cost of risk for the Caisses d’Epargne was up +8.3% to - € 0.4 billion. Divided by loan outstandings, it stood at 15 bp in December 2018, on par with December 2017. The Caisses d’Epargne contributed € 1.8 billion to the Retail Banking and Insurance division’s income before tax in 2018, down -4.5% compared to 2017. SPECIALIZED FINANCIAL SERVICES (SFS) Specialized Financing posted solid overall momentum in 2018. With factoring revenues of € 60.8 billion in France, up 11%, Factoring boasted market share of around 19% for Natixis Factor at end-2018. Leasing developed its business with the Banque Populaire and Caisse d’Epargne networks. New business (half of which in equipment leasing) was up 12% year-on-year. Consumer Finance achieved record sales with over € 12 billion in financing, up 7% over the year, 11% of which for revolving loans and 6% for personal loans. After three outstanding years, Sureties and Guarantees maintained strong business volumes on the loan guarantee market for individual customers despite a decrease in refinancing volumes. The Financial Services business remained strong. At € 27.6 billion, Employee Savings assets under management continued to increase with annual growth of 6%. Securities Services continued to expand its range of services for the networks.

Securities 6%

Factoring 11%

Sureties & Financial Guarantees 14%

Payments 27%

Consumer Financing 18% Lease financing 16%

Employee savings plans 6%

Coficiné 2%

Net banking income totaled € 1,472 million in 2018, up 6%. Specialized Financing revenues rose 4%, with gains of 10% in Leasing and respectively 3% and 1% year-on-year in Sureties & Guarantees and Factoring. Lastly, Film and Audiovisual Financing also improved over the period with the recognition of an exceptional dividend. Revenues from Financial Services excluding Payments were up 2%, with net banking income on Employee Savings up 4%. Payments revenues increased by 16% year-on-year. This growth was driven by the performance of historical businesses (Flows, Electronic Banking and Service Vouchers) and by acquisitions carried out over the last two fiscal years which accelerated business expansion. Accordingly, Merchant Solutions profited from the surge in business volumes generated from the recent acquisitions of Natixis Payment Solutions (Dalenys and PayPlug). Amounting to € 1,004 million at end-2018, SFS expenses were up 7% compared with 2017, a result largely owed to scope changes for the Payments business lines. Overall, gross operating income rose 6% to € 468 million. Cost of risk was down significantly to € 23 million thanks to effective overall risk management and better-quality data impacting IFRS 9 provisions. Income before tax ended the year at € 445 million, up 20%. INSURANCE In terms of business, sales of provident and non-life insurance were particularly buoyant in 2018, and life insurance maintained a strong position. With € 9.6 billion in gross direct business inflows, life insurance inflows increased 1% compared with 2017, keeping the business in a strong position despite a persistently low interest rate environment, higher inflation and the volatility of the financial markets at year-end. The business saw 60% growth in two years with the deployment of the Caisse d’Epargne offer. Premiums on unit-linked assets totaled € 3.2 billion (-4%) and made up 33% of total gross inflows, down 2 points year-on-year but outperforming the market by 5 points at end-December. Inflows invested in the euro fund totaled € 6.4 billion, up 3%.

232

Registration document 2018