BPCE - 2018 Registration document

5 FINANCIAL REPORT

IFRS Consolidated Financial Statements of BPCE SA group as at December 31, 2018

Income and expenses from insurance businesses are presented in Note 9.

Figures for 2017 under IAS 39

Fiscal year 2017

Income 10,802

Expense (10,928)

Net

in millions of euros

Income and expenses from insurance activities Income and expenses from leasing transactions Income and expenses from investment property

(126)

285 123

(275)

10 75 16

(48) (82)

Share of joint ventures

98 12

Transfers of expenses and income Other operating income and expenses

(6)

6

731

(277)

454

Net additions to/reversals from provisions to other operating income and expenses

52

52

Other banking income and expenses

841

(313)

528 487

TOTAL INCOME AND EXPENSES FROM OTHER ACTIVITIES

12,051

(11,564)

4.7

OPERATING EXPENSES

Accounting principles Operating expenses include mainly payroll costs (wages and salaries net of rebilled amounts), social security charges, and employee benefit expenses such as pension costs. Operating expenses also include the full amount of administrative expenses and external service costs. Contributions to banking resolution mechanisms The procedure for financing the deposit and resolution guarantee fund was changed by a Ministerial Order dated October 27, 2015. For the Deposit Guarantee Fund, the cumulative amount of contributions made to the fund by the Group for deposit, collateral and securities guarantee mechanisms is € 21 million. Contributions (which are non-refundable in the event of a voluntary withdrawal of approval to operate) represent € 3 million. Contributions paid in the form of partner or association certificates and cash security deposits recognized as assets on the balance sheet total € 18 million. Directive 2014/59/EU (BRRD – Bank Recovery and Resolution Directive), which establishes the framework for the recovery and resolution of banks and investment firms, and European Regulation 806/2014 (SRM Regulation) established the introduction of a resolution fund as of 2015. In 2016, this fund became a Single Resolution Fund (SRF) between the Member States participating in the Single Supervisory Mechanism (SSM). The SRF is a resolution financing mechanism available to the resolution authority (Single Resolution Board), which may use this fund when implementing resolution procedures. In accordance with Delegated Regulation 2015/63 and Implementing Regulation 2015/81 supplementing BRRD on ex-ante contributions to bank resolution financing mechanisms, the Single Resolution Board set the level of contributions to the Single Resolution Fund for 2018. The amount of contributions paid by the Group for the fiscal year totaled € 278 million, of which € 236 million recognized as an expense and € 42 million in cash security deposits recognized as assets on the balance sheet (15% of funds in cash security deposits). The cumulative amount of contributions recognized as assets on the balance sheet totaled € 134 million at December 31, 2018.

Fiscal year 2018

Fiscal year 2017

in millions of euros Payroll costs

(5,221)

(4,864)

Taxes other than on income*

(469)

(470)

External services and other operating expenses

(2,720) (3,189) (8,410)

(2,468) (2,938)

Other administrative costs TOTAL OPERATING EXPENSES

(7,802) Taxes other than on income included, in particular, the contribution to the SRF (Single Resolution Fund) for an annual amount of €238 million (versus €200 million in 2017) and the systemic risk tax * for an annual amount of €25 million (versus €39 million in 2017).

The breakdown of payroll costs is provided in Note 8.1.

444

Registration document 2018