BPCE - 2018 Registration document

FINANCIAL REPORT BPCE management report

Company situation and activity in 2018 CHANGES IN THE BPCE BALANCE SHEET ➡

Change 2018/2017

12/31/2018

12/31/2017

€bn

%

in billions of euros

Amounts due from banks Amounts due from customers

213.2

226.7

(13.5)

(6%) +5% +1% (1%) +0% (4%) (8%) +9% (2%) +1% +1% (4%)

0.4

0.4

+0.0 +0.4 (0.2) +0.0

Securities trading

79.3 23.6

78.8 23.8

Associates, Equity interests and long-term investments

Other assets

3.8

3.8

TOTAL ASSETS

320.3 131.5

333.6 143.4

(13.3) (11.9)

Amounts due to banks Customer resources

2.1

1.9

+0.2 (2.3) +0.5 +0.2

Debt securities and subordinated debt

94.5 75.8 16.4

96.8 75.3 16.2

Other liabilities

Shareholders’ equity and fund for general banking risks

TOTAL LIABILITIES

320.3

333.6

(13.3)

Total 2018 assets under French GAAP amounted to € 320.3 billion, a decrease of € 13.3 billion compared with December 31, 2017. Under assets, the € 13.5 billion decrease in “Amounts due from banks” is mainly due to a decrease in term loans under intra-group receivables. “Associates, equity interests and long-term investments” recorded the following major changes: the sale of Caisse d’Epargne Capital which represented ● - € 87 million; additional provisions of € 121 million related to BPCE International, ● € 128 million related to 3F Holding GmbH, € 52 million related to Banque Palatine, € 27 million related to i-BP, and a provision reversal of € 14 million related to Crédit Foncier; the € 70 million capital increase by BPCE International; ● the capital increase and growth in capital reserve of 3F Holding ● GmbH of € 108 million;

the acquisition of Ecufoncier through a total transfer of assets and ● liabilities for - € 30 million; the early redemption of a Crédit Foncier deeply subordinated note ● for - € 280 million; the issuance of two new perpetual deeply subordinated notes for ● € 100 million each with Banque Palatine and BPCE International. Under liabilities, the € 11.9 billion decrease in “Amounts due to banks” is mainly attributable to a decrease in term loans, mainly under intra-group borrowings. The “Debt securities and subordinated debt” item decreased by € 2.3 billion mainly as a result of a decrease in bonds. The increase in shareholders’ equity can be attributed to 2018 income of € 391 million, less an interim dividend of € 202 million paid in December 2018. A stock dividend of € 202 million was also paid to shareholders on June 27, 2018.

5

BPCE INCOME STATEMENT ➡

Change 2018/2017

2018

2017 384 (140)

€m

%

in millions of euros Net banking income Operating expenses

494

+110

+29% +43% +21% +83% (234%) (112%) +102%

(200)

(60) +50

Gross operating income

294

244

Cost of risk

(2)

(1)

(1)

Net gains or losses on long-term investments

(352)

262 505 224

(614) (565)

Income before tax

(60) 451

Income tax

227

Charges/reversals to fund for general banking risks and regulated provisions NET INCOME

391

729

(338)

(46%)

2018 net income amounted to € 391 million, a decrease compared income of € 294 million, cost of risk of - € 2 million, gains on with 2017 due mainly to the impact of changes in the valuation of long-term investments of - € 352 million and tax income of investments in consolidated companies. It includes gross operating € 451 million.

543

Registration document 2018