BPCE - 2019 Universal Registration Document

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF GROUPE BPCE AS AT DECEMBER 31, 2019

CHANGES IN SUBORDINATED DEBT AND SIMILAR DURING THE YEAR

Other changes (3)

12/31/2018

Issuance (1)

Redemption (2)

12/31/2019

in millions of euros

Subordinated debt designated at fair value through profit or loss SUBORDINATED DEBT AT FAIR VALUE THROUGH PROFIT OR LOSS

100

100

100

100

Term subordinated debt Perpetual subordinated debt Mutual guarantee deposits

16,244

(546)

161

15,859

298 192

(30)

35

303 130

(62) 135 135

16,734 16,834

(576) (576)

16,292 16,392

SUBORDINATED DEBT AT AMORTIZED COST (4)

SUBORDINATED DEBT AND SIMILAR

No issues were carried out in fiscal year 2019. (1) Redemptions of subordinated loans and notes were due to the maturing of such borrowings. (2) Other changes mainly included the revaluation of debts subject to hedging, foreign exchange fluctuations and variations in intra-group securities held by Natixis Funding for the (3) purposes of debt market-making on the secondary market. Excluding accrued interest and revaluation of the hedged component. (4)

Deeply subordinated notes qualifying as equity instruments are presented in Note 5.15.2.

5.15

ORDINARY SHARES AND EQUITY INSTRUMENTS ISSUED

Accounting principles Financial instruments issued by the Group qualify as debt or equity instruments depending on whether or not the issuer has a contractual obligation to deliver cash or another financial asset to the holder of the instrument, or to exchange the instrument under conditions that are potentially unfavorable to the Group. This obligation must arise from specific contractual terms and conditions, not merely economic constraints. In addition, when an instrument qualifies as equity: its remuneration impacts equity. However, in accordance • with the amendment to IAS 12 of December 2017, which applies from January 1, 2019, the tax consequences of dividend payments can be recognized in retained earnings, gains and losses recognized directly in other comprehensive income, or in income, depending on the source of the amounts paid. Accordingly, when the payment corresponds to the notion of a dividend within the meaning of IFRS 9, the tax consequence is taken to Accounting principles IFRIC 2 “Members’ Shares in Co-operative Entities and Similar Instruments” clarifies the provisions of IAS 32. In particular, it stipulates that the contractual right of the holder of cooperative shares in cooperative entities to request redemption does not, in itself, automatically give rise to an obligation for the issuer. Rather, the entity must consider all of the terms and conditions of the financial instrument in determining its classification as a debt or equity. Based on this interpretation, cooperative shares are classified as equity if the entity has an unconditional right to refuse redemption of the cooperative shares or if local laws, COOPERATIVE SHARES

income. This rule applies to interest on perpetual deeply subordinated notes, which is treated as a dividend for accounting purposes; it cannot be an underlying instrument eligible for hedge • accounting; if the issue is in a foreign currency, the instrument is fixed • at its historical value resulting from its conversion to euros at its initial date of transfer to equity. Finally, when these instruments are issued by a subsidiary, they are included in “Non-controlling interests”. When their remuneration is of a cumulative nature, it is charged to “Income attributable to equity holders of the parent” and increases the income of “Non-controlling interests”. However, when their remuneration is not of a cumulative nature, it is drawn from retained earnings attributable to equity holders of the parent.

5

5.15.1

regulations or the entity’s articles of association unconditionally prohibit or curtail the redemption of cooperative shares. Based on the existing provisions of the Group’s articles of association relating to minimum capital requirements, cooperative shares issued by the Group are classified as equity. As the local savings companies (LSCs) are considered to be fully consolidated structured entities, their consolidation impacts retained earnings.

€12,404 million in cooperative shares fully subscribed for by • the cooperative shareholders of the Caisses d’Epargne (compared to €9,916 million at January 1, 2010).

At December 31, 2019, share capital is broken down as follows: €10,502 million in cooperative shares fully subscribed for by • the cooperative shareholders of the Banques Populaires (compared to €9,763 million at January 1, 2019);

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE