BPCE - 2019 RISK REPORT Pillar III

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CREDIT RISKS

CREDIT RISK MITIGATION TECHNIQUES

BY BUSINESS SECTOR: Groupe BPCE has established sector-specific mechanisms to guide the guarantee policy based on the business sector in question. Appropriate recommendations are issued to the institutions.

BY GEOGRAPHIC AREA: Groupe BPCE is mainly exposed to France and, via Natixis, to other countries to a lesser extent. As a result, most guarantees are located in France.

Valuation and management of collateral comprising real guarantees

Groupe BPCE has an automatic valuation tool for real-estate 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, equipment and 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 was established to measure real estate guarantees above certain amounts. The certification obtained by Crédit Foncier Expertise, a subsidiary of BPCE since the decision was made to place CFF under run-off management, strengthens the Group’s synergies. Guarantees other than those referred to above are assessed and validated on the basis of a systematic valuation, either according to market value where the guarantees are quoted on liquid markets ( e.g. listed securities), or based on expert opinion demonstrating the value of the guarantee used to hedge risks ( e.g. the value of recent transactions on aircraft or ships according to their characteristics, 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 2019 | GROUPE BPCE

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