BPCE - 2020 Universal Registration Document

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF GROUPE BPCE AS AT DECEMBER 31, 2020

ACCRUED EXPENSES AND OTHER LIABILITIES

5.12

12/31/2020

12/31/2019

in millions of euros

Collection accounts Prepaid income Accounts payable

1,621 1,504 2,606 6,612 1,882 6,719 1,719 12,343 10,320 22,662

2,534 1,556 2,663 5,878

Other accruals

Accrued expenses - liabilities

12,631

Settlement accounts in credit on securities transactions

601

Other accounts payable (1)

7,709 1,848

Lease liabilities Other liabilities

10,158

TOTAL ACCRUED EXPENSES AND OTHER LIABILITIES 22,789 Amounts restated compared to the financial statements publishedin 2019, following a change in the presentation of the premiumosn options to be paid or received (see Note 5.2.3) (1)

5.13

PROVISIONS

Accounting principles Provisions other than those relating to employee benefit commitments and similar, regulated home savings products, off-balancesheet commitments,and insurancepoliciesmainly consist of provisions for restructuring, claims and litigation, fines and penalties, and tax risks (excluding income tax). Provisions are liabilities for which the timing or amount is uncertain, but can be reliably estimated. They correspond to current obligations (legal or implicit), resulting from a past event, and for which an outflow of funds will probably be necessary to settle them. The amount recognized in provisions is the best estimate of the expense required to extinguish the present commitment at the balance sheet date. Provisions are discountedwhen the impact of discounting is material. Changes in provisionsare recognizedin the incomestatement on the lines corresponding to the nature of the future expenditure. Provisions on regulated home savings products Regulated home savings accounts (Comptes d’Épargne Logement – CEL) and regulated home savings plans (Plans d’Épargne Logement – PEL) are retail products marketed in France governedby the 1965 law on home savingsplans and accounts, and subsequent implementing decrees. Regulated home savings products generate two types of commitments for establishments selling them: a commitment to provide a loan to the customer in the • future at a rate set on inception of the contract (for PEL products) or at a rate contingent upon the savings phase (for CEL products);

a commitment to pay interest on the savings in the future • at a rate set on inception of the contract for an indefinite period (for PEL products) or at a rate set on a half-yearly basis according to an indexing formula regulated by law (for CEL products). Commitmentswith potentially unfavorableconsequencesare measured for each generation of regulated home savings plans and for all regulated home savings accounts. A provision is recognized for the associated risks by discounting future potential earnings from at-risk outstandings: at-risk saving deposit outstandings correspond to the • uncertain future level of savings for plans in existence at the date the provision is calculated. This is estimated on a statistical basis for each future period taking account of historical investor behavior patterns, and corresponds to the difference between the probable outstandings and the minimum expected outstandings; at-risk loans correspond to the loan outstandings granted • but not yet due at the calculation date plus statistically probable loan outstandings based on historical customer behavior patterns as well as earned and future rights relating to regulated home savings accounts and plans. The commitments are estimated using the Monte Carlo method in order to reflect the uncertainty of future interest rate trends and their impact on customerbehaviormodelsand at-riskoutstandings.On this basis, a provisionis recordedfor a given generationof contracts in the event of a situation liable to be detrimental for the Group, with no netting between generations. The provision is recognized under liabilities in the balance sheet and changes are recorded in net interest income and expenses.

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE