BPCE - 2018 Registration document

FINANCIAL REPORT BPCE parent company annual financial statements

Reclassification of assets 3.3.3 Reclassification owing to a change in intention (provisions of CRB 90-01 prior to CRC 2008-17, replaced by ANC Regulation No. 2014-07) BPCE has not reclassified any assets during the past two fiscal years. During fiscal year 2018, the sale and amortization of held-to-maturity securities reclassified in 2015 as available-for-sale securities represented a nominal amount of € 521 million.

EQUITY INTERESTS, AFFILIATES AND OTHER LONG-TERM INVESTMENTS 3.4 Changes in equity interests, affiliates and other long-term investments 3.4.1

Other changes

12/31/2018

12/31/2017

Increase

Decrease

Conversion

in millions of euros

Equity interests and other long-term investments

3,996

237 180

(295) (175)

61

0

3,999

Investments in affiliates

24,768

0

(30)

24,743

o/w current account advances & perpetual subordinated notes

2,835

204 417 (29)

(291) (470)

52 61

0

2,800

Gross amount

28,764

(30)

28,742

Equity interests and other long-term investments

(390)

8

0 0

0 0

(411)

Investments in affiliates

(4,558)

(328)

73

(4,813)

o/w current account advances & perpetual subordinated notes

0

0

0

0 0

0 0

0

Impairment

(4,948) 23,816

(357)

81

(5,224) 23,518

TOTAL

60

(389)

61

(30)

5

Banque Palatine ( € 52 million); ● Informatique BP ( € 27 million); ● GCE Asap ( € 11 million); ● IXION ( € 7 million). ● The principal increases in perpetual deeply subordinated notes executed in 2018 were: BPCE International ( € 100 million); ● Banque Palatine ( € 100 million). ● The principal decreases in perpetual deeply subordinated notes executed in 2018 were: Crédit Foncier ( € 280 million). ● BPCE’s major subsidiaries are valued based on multi-annual forecasts discounted according to expected dividend flows (Dividend Discount Model). The expected dividend flow forecasts are based on business plans from the strategic plans of relevant entities and on reasonable technical parameters. The prudential constraints applicable to relevant activities are taken into account during valuation. Valuations carried out during the closing of accounts for 2018 included: recognition of an additional € 121 million impairment on BPCE ● International shares, taking the carrying amount to € 167 million at December 31, 2018; recognition of a € 14 million provision reversal on Crédit Foncier ● shares, taking the gross carrying amount to € 995 million at December 31, 2018; recognition of an impairment of € 128 million on 3F Holding shares, ● taking the carrying amount to € 212 million at December 31, 2018; recognition of an additional € 52 million impairment on Banque ● Palatine shares, taking the carrying amount to € 748 million at December 31, 2018. These impairments are recognized under net gains or losses on other long-term investments.

Real estate company shares are non-material. Other long-term investments include partner and association certificates for the Deposit Guarantee Fund for € 0.02 million. The principal investments in associates acquired in 2018 included: subscription for the 3F Holding capital increase ( € 108 million); ● subscription for the BPCE International capital increase ● ( € 70 million); acquisition of GCE Asap shares ( € 11 million); ● subscription for the IXION capital increase ( € 7 million); ● acquisition of Ecufoncier shares ( € 2 million). ● The principal reductions in investments in associates executed in 2018 were: sale of Caisse d’Epargne Capital shares ( € 87 million); ● sale of BPCE Immobilier Exploitation shares ( € 62 million); ● decrease in value of Société d’Exploitation MAB shares ● ( € 20 million); sale of VIGEO shares ( € 6 million). ● Other changes mainly included: reduction in investments in associates through the total transfer of ● the assets and liabilities of Ecufoncier ( € 30 million). The main reversals of provisions for impairment in investments in associates were as follows: BPCE Immobilier Exploitation ( € 59 million); ● Crédit Foncier ( € 14 million); ● VIGEO ( € 6 million). ● The main provisions for impairment in investments in associates included: 3F Holding ( € 128 million); ● BPCE International ( € 121 million); ●

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Registration document 2018