BPCE - 2018 Registration document

RISK REPORT Legal risks

Legal risks 6.10

Outstanding legal risks at December 31, 2018 likely to have a negative influence on the Group’s assets, were subject to provisions in line with the Group’s best estimate based on available information.

To date, there are no other governmental, legal or arbitration procedures of which the Group is aware that are likely to have, or have had during the past twelve months, any significant effect on the financial position or profitability of either the company or the Group.

10.1

Legal and arbitration proceedings – BPCE

CHECK IMAGING EXCHANGE ( ÉCHANGE IMAGE CHÈQUES ) COMMISSIONS Marketplace antitrust case initially involving Banques Populaires Participations (BP Participations) and Caisses d’Epargne Participations (CE Participations) and BPCE since it merged with and absorbed BP Participations and CE Participations. On March 18, 2008, BFBP and CNCE received, as was the case for other banks on the marketplace, a notice of grievance from the French anti-trust authority. The banks are accused of having established and mutually agreed on the amount of the check imaging exchange commission, as well as related check commissions. The anti-trust authority delivered its decision on September 20, 2010 to fine the banks found guilty ( € 90.9 million for BPCE). These banks (except for the Banque de France) lodged an appeal. On February 23, 2012, the Paris Court of Appeals overruled the anti-trust authority’s decision and the € 90.9 million fine paid by BPCE was refunded. On March 23, 2012, the anti-trust authority launched an appeal of the Court of Appeals’ ruling. On the referral of the anti-trust authority, on April 14, 2015, the Court of Cassation overturned the Court of Appeals’ 2012 ruling due to breach of procedure. The banks were once again required to pay the fine. Like many banking groups, Natixis and its consolidated subsidiaries are involved in litigation before the courts and may be investigated by regulatory authorities. As assessed at December 31, 2018, the financial consequences of litigation deemed likely to have, or which have in the recent past had, a material impact on the financial situation of Natixis and/or Natixis and its consolidated subsidiaries as a whole, or on their profitability or their business, have been included in Natixis’ consolidated financial statements. The most significant disputes are described below. Their inclusion in the list does not indicate that they will necessarily have an impact on Natixis and/or its consolidated subsidiaries. The other disputes are deemed unlikely to have a material impact on Natixis’ financial situation or profitability and/or that of Natixis and its consolidated subsidiaries as a whole, or have not reached a stage where it can be determined whether they will have such an impact.

BPCE, along with the other accused banks, referred this ruling to the Paris Court of Appeals requesting that it purge this breach of procedure and uphold its 2012 decision, ensuring that BPCE will ultimately be reimbursed. The Second Court of Appeals ruled on December 21, 2017 and confirmed the 2010 analysis of the anti-trust authority, thus contradicting the initial decision by the Paris Court of Appeals in 2012. The Court considered that the introduction of the EIC commission and CSCs constitute anti-competitive practice in its nature and upheld the conviction to pay the fine set by the ADLC. However, the Court reduced the amount of the Caisse d’Epargne’s fine by € 4.07 million, by canceling the 10% increase to the fine imposed by ADLC on certain banks for their key roles in negotiations. BPCE, standing in for CE Participations, should retrieve this amount of € 4.07 million from the Treasury. On January 22, 2018, the banks filed an appeal with the Court of Cassation. Proceedings are currently underway before the Court of Cassation.

6

Legal and arbitration proceedings – Natixis 6.10.2

MADOFF FRAUD Outstanding Madoff assets were estimated at € 543.4 million at December 31, 2018, and were fully provisioned at this date. The actual impact of this exposure will depend on both the extent of recovery of assets invested in Natixis’ name and the outcome of the (primarily legal) measures taken by the bank. Furthermore, in 2011 a dispute emerged over the application of the Insurance policy for professional liability in this case, which had been taken out with successive insurers for a total amount of € 123 million. In November 2016, the Paris Court of Appeal confirmed (like the Commercial Court before it) the liability of the first-line insurers, in the amounts of the policies taken out, for the losses incurred by Natixis as a result of the Madoff fraud; however on September 19, 2018, the Court of Cassation reversed the contested ruling and returned the case to the Paris Court of Appeal to be heard by a different panel.

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Registration document 2018