BPCE - 2020 Universal Registration Document

5

FINANCIAL REPORT

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

ORDINARY SHARES AND EQUITY INSTRUMENTS ISSUED

5.15

Accounting principles Financial instruments issued by the Group qualify as debt or equity instruments depending on whether or not the issuer has a contractualobligationto deliver cash or another financial asset to the holder of the instrument, or to exchange the instrument under conditionsthat are potentiallyunfavorableto the Group. This obligationmust arise from specific contractual terms and conditions, not merely economic constraints. In addition, when an instrument qualifies as equity: its remuneration impacts equity. However, in accordance • with the amendment to IAS 12 of December 2017, which applies from January 1, 2019, the tax consequences of dividend payments can be recognized in retained earnings, gains and losses recognized directly in other comprehensive income, or in income, depending on the source of the amounts paid. Accordingly, when the payment corresponds to the notion of a dividendwithin the meaning of IFRS 9, the tax consequence is taken to Accounting principles IFRIC 2 “Members’Shares in Co-operativeEntitiesand Similar Instruments” clarifies the provisionsof IAS 32. In particular, it stipulates that the contractual right of the holder of cooperative shares in cooperative entities to request redemption does not, in itself, automatically give rise to an obligationfor the issuer. Rather, the entitymust considerall of the terms and conditions of the financial instrument in determining its classification. Based on this interpretation,cooperativeshares are classified as equity if the entity has an unconditional right to refuse redemption of the cooperative shares or if local laws, COOPERATIVE SHARES At December 31, 2020, the share capital is broken down as follows: €11,245 million in cooperative shares fully subscribed for by • the cooperative shareholders of the Banques Populaires (compared to €10,502 million at December 31, 2019), o/w +€82 million in interest distribution on cooperative shares; €12,404 million in cooperative shares fully subscribed for by • the cooperative shareholders of the Caisses d’Epargne (compared to €12,404 million at December 31, 2019). Since January 1, 2020, the Banques Populaires have carried out capital increases of €743 million (€3,227 million in 2019 by the Banques Populaires and the Caisses d’Epargne), resulting in an increase in the item “Share capital”. The shareholders’ equity of the local savings companies is also included in “Retained earnings” after the elimination of the Caisses d’Epargne cooperative shares held. The emissions of cooperative shares by the local savings companies since January 1, 2020 resulted in an increase in retained earnings of +€448 million, o/w +€148 million in interest distributions on cooperative shares. 5.15.1

income. This rule applies to interest on perpetual deeply subordinated notes, which is treated as a dividend for accounting purposes; it cannot be an underlying instrument eligible for hedge • accounting; if the issue is in a foreign currency, the instrument is fixed • at its historical value resulting from its conversion to euros at its initial date of transfer to equity. Finally, when these instruments are issued by a subsidiary, they are included in “Non-controlling interests”. When their remuneration is of a cumulative nature, it is charged to “Income attributable to equity holders of the parent” and increases the incomeof “Non-controllinginterests”.However, when their remuneration is not of a cumulative nature, it is drawn from retained earnings attributableto equity holders of the parent. regulations or the entity’s articles of association unconditionally prohibit or curtail the redemption of cooperative shares. Based on the existing provisions of the Group’s articles of association relating to minimum capital requirements, cooperative shares issued by the Group are classified as equity. As the local savings companies (LSCs) are considered to be fully consolidated structured entities, their consolidation impacts retained earnings. At December 31, 2020, additional paid-in capital is broken down as follows: €947 million linked to cooperativeshares subscribed for by the • cooperative shareholders of the Banques Populaires; €2,885 million linked to cooperative shares subscribed for by • the cooperative shareholders of the Caisses d’Epargne. PERPETUAL DEEPLY SUBORDINATED NOTES 5.15.2 CLASSIFIED AS EQUITY At December 31, 2020, Groupe BPCE had no more deeply subordinated notes classified in other comprehensive income.

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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