BPCE - 2019 Universal Registration Document

RISK REPORT

OPERATIONAL RISKS

BREAKDOWN OF LOSSES BREAKDOWN OF LOSSES BY BASEL BUSINESS LINE

BREAKDOWN OF LOSSES BY BASEL LOSS EVENT CATEGORY

Internal Fraud 2 %

Trading and Sales (TS) 3 %

Retail Brokerage (RBR) 1 %

Corporate Finance (CF) 0 %

Commercial Banking (CB) 7 %

Execution, Delivery and Process Management 34 %

External Fraud 36 %

Corporate Items (CI) 18 %

Retail Banking (RB) 24 %

Agency services (AS) 0 % Asset Management (AM) 12 %

Business Disruption and System Failures 1 %

Damage to Physical Assets 3 %

Employment Practices and Workplace Safety 9 %

Clients, Products and Business Practices 15 %

Payment and Settlement (PS) 35 %

OPERATIONAL RISK MITIGATION TECHNIQUES In terms of Insurance, the networks and subsidiaries benefit from coverage of their insurable operational risks under group Insurance policies contracted from leading Insurance companies. In addition, the Group has set up its own captive insurance company. COVERAGE OF INSURABLE RISKS At January 1, 2019, BPCE SA had taken out (for itself): and for its subsidiaries, with the exception of Natixis • concerning the insurance coverage described in point A.a) below, with Natixis also holding its own similar coverage with a maximum payout of €15 million per year; and for the Banque Populaire and Caisse d’Epargne networks, • except for Caisse d’Epargne Rhône Alpes, covering: the “Fraud” component of the Insurance coverage – described in point A.a) below, the “Global Banking” Insurance coverage described in point – A.b) below, the “Global Banking” component of the Insurance coverage – described in point A.d) below, and the Insurance coverage for “Property Damage” to – “Registered Offices & Similar” and to their contents (including IT equipment) and the consecutive losses in banking activities described in point E below; The following main Insurance policies to cover its insurable operational risks and protect its balance sheet and income statement: A combined “Global Banking (Damages to Valuables and A/ Fraud) ” & “Professional Civil Liability” policy with a total maximum payout of €178 million per year of insurance, of which: €30 million per year, combined “Fraud/Professional Civil a) Liability” insurance available, subordinate to the amounts guaranteed set out in b) and/or c) and/or d) below (with Natixis also holding its own similar coverage with a maximum payout of €15 million per year),

€38 million per claim and per year, solely reserved for b) “Global Banking” risk, €25 million per claim and per year, solely reserved for c) “Professional Civil Liability” risk, €70 million per claim and per year, combined “Global d) Banking/Professional Civil Liability” insurance available in addition to or after use of the amounts guaranteed set out in b) and/or c) above. The maximum amount that can be paid out for any one claim under this arrangement is €109.75 million under “Professional Civil Liability” coverage and €109.75 million under “Fraud” coverage in excess of the applicable deductibles. “Regulated Intermediation Liability” (in three areas: Financial B/ Intermediation, Insurance Intermediation, Real Estate Transactions/Management) with a total maximum payout of €10 million per claim and per year; “Operating Civil Liability” covering €100 million per claim, as C/ well as a “Subsidiary Owner Civil Liability”/”Post Delivery-Reception Civil Liability” coverage extension for up to €35 million per claim and per year of insurance; “Company Directors Civil Liability” for up to €200 million per D/ claim and per year of insurance; “Property Damage” to “Registered Offices & Similar” and to E/ their content (including IT equipment) and the consecutive “losses in banking activities”, for up to €400 million per claim; “Protection of Digital Assets against Cyber-Risks” & the F/ consecutive “losses in banking activities”, for up to €140 million per claim and per year of insurance. This coverage extends worldwide for initial risk or umbrella risk, subject to certain exceptions, mainly in terms of “Professional Civil Liability” where the policy does not cover permanent institutions based in the United States (where coverage is obtained locally by Natixis’ US operations). All the insurance policies mentioned above were taken out with reputable, creditworthy insurance companies and in excess of the deductibles and Groupe BPCE’s risk-retention capacity.

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UNIVERSAL REGISTRATION DOCUMENT 2019 | GROUPE BPCE