BPCE - 2018 Registration document

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

The ineffective portion of the hedge is recorded in the income statement under “Net gains or losses on financial instruments at fair value through profit or loss”, see Note 4.3. The “Cash flow hedges” reserve corresponds to the effective portion of hedges not due and the balance of hedges that are due and

remaining to be recognized, before tax, including the portion attributable to non-controlling interests. Recycling from “Cash flow hedges” to income is included either in net interest income or in income on derecognition of the hedged item in the same way as the line impacted by the hedged item.

Cash flow hedges – Details of other items recognized in other comprehensive income

Reclassification of the effective portion in income

Hedged item partially or fully extinguished 12/31/2018

Change in the effective portion

01/01/2018

in millions of euros

Amount of equity for cash flow hedging

(477) (477)

6 6

51 51

6 6

(414) (414)

TOTAL

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 5.4

Accounting principles Financial assets at fair value through other comprehensive income are initially recognized at fair value, plus any transaction costs. Debt instruments measured at fair value through other comprehensive income recyclable to income On the balance sheet date, these instruments are carried at their fair value and changes in fair value (excluding accrued interest) are recorded under ”Gains and losses recognized directly in other comprehensive income recyclable to income” (as the foreign currency assets are monetary assets, changes in the fair value of the foreign currency component affect income). The principles used to determine fair value are described in Note 10. These instruments are subject to IFRS 9 impairment requirements. Information about credit risk is provided in Note 7.1. If they are sold, these changes in fair value are taken to income. Interest income accrued or received on debt instruments is recorded under “Interest and similar income” based on the Effective Interest Method. This method is described in Note 5.5 – Assets at amortized cost. Equity instruments measured at fair value through other comprehensive income not recyclable to income On the balance sheet date, these instruments are carried at their fair value and changes in fair value are recorded under “Gains and losses recognized directly in other comprehensive income not recyclable to income” (as the foreign currency assets are not monetary assets, changes in the fair value of the foreign currency component do not affect income). The principles used to determine fair value are described in Note 10. The designation at fair value through other comprehensive income not recyclable to income is an irrevocable option that is applied on an instrument-by-instrument basis only to equity instruments not held for trading purposes. Realized and unrealized losses continue to be recorded in other comprehensive income with no impact on income. These financial assets are not impaired. In the event of disposal, changes in fair value are not transferred to income but are taken directly to retained earnings. Only dividends affect income when they correspond to a return on investment. They are recorded in “Net gains or losses on financial instruments at fair value through other comprehensive income”.

5

12/31/2018

01/01/2018

in millions of euros

Loans and receivables

24

25

Debt securities

14,638

14,727

Shares and other equity securities (1)

1,071

1,177

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

15,733

15,929

o/w impairment for expected credit losses (2)

(1)

(12) (35)

o/w gains and losses recognized directly in other comprehensive income (before tax) (3)

(167)

Debt instruments - Equity instruments -

(8)

78

(159) (113) Equities and other equity securities include strategic equity interests and certain long-term private equity securities. As these securities are not held for sale, their classification as equity instruments (1) designated at fair value through other comprehensive income is appropriate. Details are provided in Note 7.1.1. (2) Including the portion attributable to non-controlling interests (+€10 million at December 31, 2018, compared with +€11 million at January 1, 2018). (3)

455

Registration document 2018