BPCE - 2019 RISK REPORT Pillar III

LIQUIDITY, INTEREST RATE AND FOREIGN EXCHANGE RISKS

QUANTITATIVE DISCLOSURES

Funding strategy and conditions in 2019

One of the Group’s priorities in terms of medium- and long-term funding in the financial markets is to ensure that sources of funding are properly diversified, in terms of types of investors, types of debt instruments, geographic regions and currencies. Another priority is extending the average maturity of its liabilities to help strengthen Groupe BPCE’s financial structure. Under the 2019 wholesale MLT funding plan, Groupe BPCE raised a total of €25.9 billion, o/w €19.4 billion excluding structured private placements and ABS; public issues made up 63% of this amount and private placements 37%.

originated by the Banque Populaire and Caisse d’Epargne networks). The unsecured bond segment (senior preferred + senior non-preferred) accounted for 60% of the funding raised and the covered bond segment 40% (34% covered bonds and 6% RMBS). The breakdown by currency of unsecured issues is a good indicator of the diversification of the Group’s medium- and long-term funding sources. In all, 40% were issued in currencies other than the euro; the four largest currencies were JPY (17%), USD (15%), AUD (4%) and GBP (2%). The breakdown of these 2019 bond issues by currency is as follows:

UNSECURED BOND SEGMENT: €15.6BN

DIVERSIFICATION OF INVESTOR BASE

Senior preferred debt - public issues € 3.5 bn

Senior non-preferred € 5.4 bn

2 %

4 %

● EUR ● JPY ● USD ● AUD ● GBP ● CNH ● CHF ● ZAR

40 % in currencies other than the euro

15 %

Senior preferred debt - plain vanilla private placements € 1.8 bn

60 %

17 %

Senior preferred debt - structured private placements € 4.8 bn

The average maturity at issuance for Groupe BPCE as a whole was 7.4 years in 2019 compared with an average maturity of 7.4 years in 2018. The vast majority of medium- and long-term funding raised in 2019 was fixed-rate. In general, fixed rate is swapped for floating rate in accordance with the Group’s interest rate risk management policy NEW SOLUTIONS TO MEET NEW INVESTOR PRIORITIES: “SUSTAINABLE DEVELOPMENT” BONDS Groupe BPCE issued two social/green bonds in 2019 totaling €0.9 billion: one 5-year Local Economic Development public social • bond issue in JPY (Samurai) in January 2019 for an equivalent of €400 million; one 5-year Renewable Energy public green bond issue • in EUR in November 2019 for €500 million.

COVERED BOND SEGMENT: €10.3BN

9

Compagnie de Financement Foncier € 3 bn

BPCE SFH € 5.5 bn

Natixis Pfandbriefbank € 0.25 bn

ABS € 1.6 bn

In 2019, funding raised in the unsecured bond segment stood at €15.6 billion, of which €5.4 billion in senior non-preferred debt and €10.2 billion in senior preferred debt. Funding raised in the covered bond segment amounted to €8.7 billion and ABS to €1.6 billion (mostly RMBS backed by residential mortgages

At end-December 2019, the Group’s social/green bond outstandings totaled €4 billion.

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RISK REPORT PILLAR III 2019 | GROUPE BPCE

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