BPCE - 2018 Registration document

5 FINANCIAL REPORT

BPCE parent company annual financial statements

SIGNIFICANT EVENTS 1.3 The Groupe BPCE Supervisory Board, chaired by Michel Grass, approved the appointment of Laurent Mignon as Chairman of the Management Board after François Pérol stepped down. A new Management Board was appointed for a four-year term, along with several new members of the Executive Management Committee. Against this backdrop, Groupe BPCE continued implementing its TEC 2020 strategic plan and launched major organizational projects aimed at strengthening its operating model and improving efficiency: Groupe BPCE launched a plan to integrate the activities and teams ● of Crédit Foncier with the goal of consolidating its leading position in the real estate finance market, thanks in large part to the contribution of Crédit Foncier’s skills, expertise and talent, and to the strength of the Banque Populaire and Caisse d’Epargne networks in the regions, with a view to increasing banking penetration among customers. The plan, approved by the employee representative bodies of CFF on October 26, 2018, will be implemented in the first half of 2019 subject to two requirements: first, the Group aims to extend and increase its presence among - all customers, particularly among low-income, first-time home buyers, second, Crédit Foncier employees will be integrated within other - Groupe BPCE companies in a socially responsible manner, in accordance with their respective traditions; on September 12, 2018, Natixis and BPCE announced Natixis’ plan ● to sell its Factoring, Sureties & Financial Guarantees, Leasing, Consumer Finance and Securities Services business lines to BPCE SA for € 2.7 billion. This transaction, if completed, will contribute significantly to the achievement of Natixis and BPCE’s strategic plans. It will notably help Natixis to speed up the development of its asset-light model and BPCE to strengthen its universal banking model. The sale is scheduled to take place by the end of Q1 2019, subject to the conditions precedent being lifted; in particular, BPCE must complete a capital increase subscribed by the Banque Populaire banks and the Caisses d’Epargne, and the necessary regulatory approvals must be obtained. During the fourth quarter of 2018, the operational implementation of the project was prepared and the various stages leading to the completion of the transaction initiated;

the Group also launched initiatives to develop its presence in ● international retail banking. It began exclusive negotiations with Moroccan banking group Banque Centrale Populaire with a view to selling BPCE International’s equity investments in Africa (1) . This follows on from the sale of Banque des Mascareignes to Banque Centrale Populaire, which was finalized in October 2018. Moreover, as the holding company, BPCE received dividends amounting to € 857.5 million, of which € 824.1 million related to Natixis. In Financial Management buiness line, as part of a goal to strengthen the regulatory ratios, several specific measures were taken in 2018 around capital allocation and solvency management. First, BPCE subscribed for perpetual deeply subordinated notes eligible as additional Tier 1 regulatory capital instruments under Basel III issued by Banque Palatine in March and by BPCE International in December for € 100 million each. In November, BPCE issued notes for an amount of € 700 million which were subscribed for by the networks. Second, in December BPCE granted a redeemable subordinated loan to Natixis of € 300 million. BPCE issued € 7.3 billion in non-preferred senior bonds with maturities ranging from 5 to 15 years, including 3.9 billion in euros, 1.8 billion in dollars and 1.5 billion in yen. These issues help to strengthen Groupe BPCE’s balance sheet due to their TLAC-eligibility. Last, on September 26, 2018 BPCE launched its first local economic development bond, in the form of a preferred senior note for € 1.25 billion. This follows human development bonds issued in 2017 and 2018. 1.4 BPCE SA plans (2) to purchase a majority stake of 50.1% from Auchan Holding On February 12, 2019, Groupe BPCE announced that it was in exclusive talks with Auchan Holding to purchase a 50.1% stake in Oney Bank SA. The employee representative bodies will be informed and consulted on this project. After the consultation, the parties may sign their partnership agreement. The transaction may not be closed until the necessary approvals are obtained from the competent French and European authorities; as such, it is expected to be closed in the second half of 2019. The deal is expected to have an estimated impact of under 15bp on the Group’s CET1 ratio. POST-BALANCE SHEET EVENTS

In Cameron (68.5% in Banque Internationale du Cameroun pour l'Epargne et le Crédit), Madagascar (71% in Banque Malgache de l'Océan Indien), Republic of the Congo (100% in Banque (1) Commerciale Internationale) and Tunisia (60% in Banque Tuniso-Koweitienne). Subject to the lifting of the conditions precedent and procurement of the necessary regulatory approvals (2)

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Registration document 2018