BPCE - 2020 Universal Registration Document

ACTIVITIES AND FINANCIAL INFORMATIONS 2020

GROUPE BPCE FINANCIAL DATA

Revenues in joint venture activities ( i.e. whose results are also shared between Global Markets and Investment Banking to ensure the alignment of teams) experienced good performance in 2020. Strategic and Acquisition Financing posted revenue up by 4.7% to €157 million, driven by strong demand for loans, notably through State-guaranteed loans from Corporate customers, which offset the slowdown in the primary market, particularly in the United States. Bond market syndication recorded revenues of €135 million, up 17.9% compared to 2019 in an extremely dynamic primary bond market over the year and across customer segments. ​ At €1,300 million, Financing revenues including TTS (Trade & Treasury Solutions) and the cinema financing activities (Coficiné) decreased by 6.5% at constant exchange rates in relation to 2019. Origination and syndication activities had €189 million in revenues, down 28.2% compared to 2019, impacted by the sharp slowdown in activity in the various sectors: commodities, with an average price per barrel of oil remaining lower than in 2019; Aviation, amid the health crisis; and the real estate financing securitization market in the United States, which remained closed for much of 2020. At €752 million in 2020, revenues from the financing portfolio were almost stable at constant exchange rates. The decline in the interest margin on structured financing portfolio oustandings in a context of reduced origination was mitigated by the increased margin on the Corporate portfolio, supported by a level of drawdown on liquidity lines which increased sharply in the first half and remained high in the second half, and by new loans granted.

Revenues from the ENR (Energy & Natural Resources) Trade Finance activity fell by 13.9% at constant exchange rates to €133 million,hurt by a lower average oil price per barrel than last year, as well as the strategic refocusing done on this activity by choosing to reduce the number of customers. Revenues from Investment Banking, including M&A activities, were up 8.3% year-on-year at constant exchange rates to €424 million. M&A activity remained dynamic in 2020, particularly in the second half of the year, with annual revenues of €208 million, up 7.5% at constant exchange rates. In 2020, Corporate & Investment Banking’s expenses totaled €2,099 million, down 5.4% at constant exchange rates compared to 2019 (-6.1% at current exchange rates) in line with the decline in variable expenses and increased cost discipline. Gross operating income totaled €704 million, down 35.6% compared with 2019 at constant exchange rates and 36.1% at current exchange rates. The cost/income ratio stood at 74.9% in 2020, a deterioration of 7.9 points compared to 2019 (67.0%). At €819 million, the cost of risk was up sharply compared to 2019, including a deterioration in risk on several accounts in the aviation sector and large French corporate customers, as well as the impact of fraud and IFRS 9 provisioning. Income before tax was negative at €105 million, compared to a positive result of €786 million in 2019 at current exchange rates, which included a capital loss on the disposal of the subsidiary in Brazil for -€14.5 million, recognized in the first quarter of 2019 as an exceptional item in the line item Gains and losses on other assets.

4

Corporate center 4.3.7

Corporate center

Chg. 2020/2019 pf

2020

2019 pf

€m

%

in millions of euros

Net banking income Operating expenses

55

447

(392)

(87.8%) (17.3%)

(1,345) (1,290)

(1,626) (1,179)

281

Gross operating income

(111)

9.4%

Cost of risk

(110)

(18) 209

(92)

N/S

Share in income of equity-accounted associates

212 109

4

1.7%

Gains or losses on other assets

(6)

(103) (213)

N/S

Income before tax

(1,296)

(1,083)

19.7%

The Corporate center generated income before tax of -€1,296 million in 2020 versus -€1,083 million in 2019 (pro forma). In 2020, the Corporate Center included the following activities and items: the contribution of the Crédit Foncier Group, which was up by • +€17 million. The decrease in net banking income due to the discontinuation of activities was partially offset by a lower expense related to the ineffectiveness of portfolio hedges than in 2019. Operating expenses decreased in line with the cessation of activities, but the cost of risk increased in the health context;

the contribution of BPCE International, which was down by • -€22 million year-on-year, reflecting the slowdown in activity and a base effect in 2019 following the disposal of investments. The cost of risk is impacted by a guarantee provision; a decrease in the valuation of assets in investment activities • (-€238 million in NBI compared to 2019); the contribution of €217 million by CNP Assurances, down • €10 million (-4.4%);

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE