BPCE - 2018 Registration document

5 FINANCIAL REPORT

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

OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES 5.18

Accounting principles Financial assets and liabilities were offset on the balance sheet in accordance with IAS 32. Under this standard, a financial asset and financial liability are offset and a net balance is recorded in the balance sheet if and only if: the Group has the legally enforceable right to offset the recorded ● amounts; and it has the intention either to settle the net amount or to ● simultaneously realize the asset and settle the liability. Within Groupe BPCE, most offset amounts are the result of repurchase agreements and derivatives transactions largely carried out by Natixis with clearing houses, which fulfilled the requirements of IAS 32: for OTC derivatives, this involves the effects of the currency ● offset between asset valuations and liability valuations of the derivatives; for asset switch transactions that have similar nominal amounts ● and identical maturities and currencies, the Group presents them as a single financial asset or liability; for listed derivatives, the positions recorded under the respective ● asset and liability items for: index options and futures options are offset by maturity and by - currency, equity options are offset by ISIN code and maturity date; - for repurchase agreements, the amount recorded in the balance ● sheet corresponds to the net value of repurchase and reverse repurchase agreements that: are entered into with the same clearing house, -

have the same maturity date, - involve the same custodian, - are denominated in the same currency. -

Financial assets and liabilities “Under netting agreements not offset in the balance sheet” comprise transactions under netting agreements or similar agreements, but that do not meet the restrictive netting criteria set by IAS 32. This is particularly the case for derivatives or OTC repurchase agreements subject to master agreements under which the net settlement criteria or realization of a simultaneous settlement of the asset and liability cannot be demonstrated or for which the offsetting right can only be exercised in the event of default, insolvency or bankruptcy by one of the parties to the agreement. For these instruments, the “Related financial assets and financial instruments received as collateral” and “Related financial liabilities and financial instruments pledged as collateral” columns include in particular: for repurchase agreements: ● loans or borrowings resulting from reverse repurchase - agreements with the same counterparty, and securities pledged or received as collateral (for the fair value of said securities), margin calls in the form of securities (for the fair value of said - securities); for derivatives, the fair values of the reverse transactions with ● the same counterparty, as well as the margin calls in the form of securities. Margin calls received or paid in cash are shown in “Margin calls received (cash collateral)” and “Margin calls paid (cash collateral)”.

Financial assets 5.18.1 Financial assets under netting agreements offset in the balance sheet

12/31/2018

01/01/2018

Gross amount of financial liabilities offset in the balance sheet

Gross amount of financial liabilities offset in the balance sheet

Net amount of financial assets recognized in the balance sheet

Net amount of financial assets recognized in the balance sheet

Gross amount of financial assets

Gross amount of financial assets

in millions of euros

Derivatives (trading and hedging)

76,982 94,592

20,981

56,001 84,638

77,224 44,551

17,426

59,798 36,098

Repurchase agreements

9,954

8,465

Financial assets at fair value through profit or loss Repurchase agreements (loans and receivables portfolio)

171,574

30,935

140,639

121,775

25,891

95,884

10,295 181,869

700

9,595

62,972 184,747

6,459

56,513 152,397

TOTAL

31,635

150,234

32,350

468

Registration document 2018