BPCE - 2018 Registration document

4 ACTIVITIES AND FINANCIAL INFORMATION 2018 Groupe BPCE financial data

At € 1,411 million, Financing revenues including TTS (Trade & Treasury Solutions, the new name for Global Transaction Banking) gained 8.9% compared with 2017 at constant exchange rates. Real Assets posted total revenues of € 294 million, up 26.7% compared with 2017, driven by strong performances in its strategic sectors: Real Estate Finance in the US, with a high volume of securitizations in the first half of the year, and Infrastructure, also very buoyant following a number of major deals. Commodities Trade Finance (Energy & Natural Resources) revenues climbed 8.3% at constant exchange rates to € 250 million on a stronger average oil price per barrel than last year, boosting the Trade Finance business. At € 699 million in 2018, revenues from the DPM financing portfolio contracted by 1.0% at constant exchange rates due to margin pressure.

Revenues from Investment Banking, including M&A activities, were up 3.9% year-on-year at constant exchange rates to € 372 million. In 2018, Corporate & Investment Banking expenses ( € 2,193 million) were stable at current exchange rates, up only slightly by 1.0% compared with 2017 at constant exchange rates. Gross operating income totaled € 1,045 million, down 22.4% compared with 2017 at constant exchange rates. The cost/income ratio deteriorated to 67.7% in 2018, up 6.5 points versus 2017. At € 175 million, cost of risk was up 52.0% compared with 2017, including a € 71 million impact for the Madoff fraud, reclassified as a non-recurring item in the Q3 2018 earnings release. Excluding this item, the provision for credit losses was € 104 million in 2018, down 9.9% compared with 2017.

4.3.7

Corporate center (1)

Corporate center

Chg. 2018/2017 pf

2018

2017 pf

€m

%

in millions of euros

Net banking income Operating expenses

550

342

208

60.8% 18.3% 1.9% (69.0%)

(1,458)

(1,233)

(225)

Gross operating income

(908)

(891) (164)

(17) 113

Cost of risk

(51) 226

Share in income of equity-accounted associates

216

10

4.6%

Gains or losses on other assets

9

86

(77)

(89.2%) (11.5%)

Income before tax

(742)

(838)

96

the contribution of € 220 million by CNP Assurances, up 6.3% ● year-on-year (+ € 13 million); the contribution to the Single Resolution Fund, i.e. - € 340 million in ● operating expenses, an increase of - € 80 million compared with 2017; the impact of asset impairments totaling - € 16 million; ● finally, the division included the contributions of the Group’s ● central institution, BPCE SA group, and Natixis’ Corporate center, income from private equity activities and from various other investment companies, central resource or support companies, and property management companies.

The Corporate center generated income before tax of - € 742 million in 2018 versus - € 838 million in 2017. This figure included the following activities and items in 2018: Natixis’ equity interests, primarily including Coface, whose revenues ● were up 2% compared with 2017 to € 1.4 billion at current exchange rates (+5% at constant exchange rates). Credit insurance, accounting for 95% of revenues, was up 3% while factoring was down 7%. The loss ratio net of reinsurance was 45.1% versus 51.4% in 2017, i.e. an improvement of 6.2 points thanks to the efficiency of claims expense management plans and an improved economic climate in first-half 2018. It should also be noted that Natixis Private Equity continued its withdrawal strategy in 2018;

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).

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Registration document 2018