BPCE - 2018 Risk report / Pillar III

CREDIT RISK Credit risk mitigation techniques

Valuation and management of collateral comprising real guarantees

Groupe BPCE has an automatic valuation tool for real guarantees available to all its networks. Across the Banque Populaire network, in addition to real guarantees, the valuation tool also takes into account pledges of vehicles, equipmentand tools, pleasure craft, and business assets. The Caisse d’Epargne network uses the appraisal tool in all risk segments. At Groupe BPCE, guarantees from Mutual Guarantee Companies recognized as providers of sureties considered equivalent to mortgages by the supervisory body are subject to a credit Insurance valuation.

An enhanced Group valuation process wasestablished to measure real guarantees above certain amounts. Crédit Foncier Expertise, a subsidiary of CFF, is certified to issue such guarantees, generating more synergies for the Group. Guarantees other than those referred to above are assessed and validated on the basis of a systematic valuation, either marked-to-marketwhere the guaranteesare quotedon liquidmarkets ( e.g. exchange-traded securities), or based on expert opinion demonstratingthe value of the guaranteeused to hedge risks ( e.g. the value of recent deals involving aircraft or ships, depending on their features, the value of commodity holdings, the value of a pledge given on merchandise, or the value of a business based on its location, etc.).

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Risk Report Pillar III 2018