BPCE - 2019 Universal Registration Document

5

FINANCIAL REPORT

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

9.1.1.5

Held-to-maturity financial assets

Accounting principles Held-to-maturity (HTM) financial assets are securities with fixed or determinable payments and fixed maturity dates that the Group has the intention and ability to hold until maturity. IAS 39 does not permit the sale or transfer of these securities before maturity except in certain specific circumstances. In the event that the securities are sold before maturity, all held-to-maturity assets must be reclassified and the held-to-maturity category cannot be used during the current year or the following two years. Exceptions to the rule apply in the following cases: a material deterioration in the issuer’s credit quality; • a change in tax regulations canceling or significantly • reducing the tax exemption on interest earned on investments held-to-maturity; a major business combination or significant withdrawal of • activity (sale of a sector, for example) requiring the sale or transfer of held-to-maturity investments in order to maintain the entity’s existing situation in terms of interest rate risk or its credit risk policy; a change in legal or regulatory provisions significantly • modifying either the definition of an eligible investment or

the maximum amount of certain types of investment, requiring that the entity dispose of a held-to-maturity asset; a significant increase in capital requirements forcing the • entity to restructure by selling held-to-maturity assets; and a significant increase in the risk weighting of • held-to-maturity assets in terms of prudential capital regulations. In the exceptional cases described above, the income from the disposal is recorded under “Net income from insurance businesses”. The hedging of these securities against interest rate risk is not permitted. However, hedges against exchange rate risk or the inflation component of certain held-to-maturity financial assets are allowed. Held-to-maturity financial assets are recognized at fair value at inception, plus any transaction costs directly attributable to their acquisition. They are subsequently measured at amortized cost using the effective interest method, including any premiums, discounts and acquisition fees, where material.

12/31/2019

12/31/2018

in millions of euros

Treasury bills and equivalent

636 283 919

1,002

Bonds and other fixed income securities

290

Gross amount of held-to-maturity investments

1,292

Impairment

(1)

(1)

TOTAL HELD-TO-MATURITY FINANCIAL ASSETS

918

1,291

446

UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE

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