BPCE - 2019 Universal Registration Document

BPCE MANAGEMENT REPORT FINANCIAL REPORT

BPCE INCOME STATEMENT

Change 2019/2018

2019

2018

(in millions of euros)

(in %)

in millions of euros

Net banking income Operating expenses

930

494

+436 (156) +280

+88% +78% +95%

(356)

(200)

Gross operating income

574

294

Cost of risk

(2)

(2)

(0)

+9% (3%)

Net gains or losses on long-term investments

(341)

(352)

+11

Income before tax

231 146

(60) 451

+291 (305)

(484%)

Income tax

(68%)

Funding/reversal of fund for general banking risks and regulated provisions

65

0

+65 +51

N/A

NET INCOME

442

391

+13%

Net income for 2019 came to €442 million, up €51 million from 2018. Gross operating income came out at €574 million, cost of risk -€2 million, gains on long-term investments -€341 million, tax income €146 million, and the reversal of the fund for general banking risks €65 million.

NET BANKING INCOME

Change 2019/2018

2019

2018

(in millions of euros)

(in %)

in millions of euros

Financial Management

(40) 210 760 930

(254)

214 210 +12

(84) N/A +2%

Financial Solutions and Expertise

0

Holding company

748 494

NET BANKING INCOME

+436

+88%

In 2019, BPCE’s net banking income totaled €930 million, up €436 million compared with 2018. BPCE is responsible for ensuring the Group’s liquidity and capital adequacy by guaranteeing that the regulatory ratios are met. These activities are part of the Financial Management business line, which delivered net banking income of -€40 million in 2019, an increase of +€214 million compared with 2019. This increase was due to the winding-up of the Natixis CIB exposures run-off activity (formerly GAPC), which produced income of €345 million for BPCE, mostly related to the recognition in income of an option premium that was not recognized before maturity, in accordance with French GAAP.

Conversely, the increase in senior non-preferred bond issues generated an additional expense of €74 million. Net banking income from the Financial Solutions and Expertise business line came to €210 million, including dividends received from subsidiaries BPCE Factor, BPCE Lease and BPCE Financement, and net banking income from the custody business. These activities have been conducted within BPCE since the end of March 2019. Net banking income from the holding company totaled €760 million, up €12 million over the period.

5

OPERATING EXPENSES

Change 2019/2018

2019

2018

(in millions of euros)

(in %)

in millions of euros

Payroll costs

(351) (293) (644) (125) (231) (356) 519

(265) (299) (564)

(86)

+33%

Other expenses

+6

(2%)

Gross operating expenses

(80)

+14%

Rebilled expenses

524 (40)

(5)

(1%)

Net operating expenses

(85) (71)

+210%

Charges from exceptional projects

(160) (200)

+45% +78%

OPERATING EXPENSES

(156)

COST OF RISK Cost of risk stood at -€2 million for 2019.

Operating expenses came to -€356 million in 2019, an increase of €156 million on 2018, mostly due to the rise in the headcount following BPCE’s consolidation of the Financial Solutions and Expertise division and ongoing Groupe BPCE transformation projects.

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE