BPCE - 2020 Universal Registration Document

FINANCIAL REPORT

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

For French “3/6/9” commercial leases, the term used is usually nine years. The reasonable certainty of whether the options relating to the lease term will be exercised is assessed by considering Group entities’ real estate management strategy. At the end of the lease, the contract is no longer enforceable and the lessee and the lessor each has the right to terminate the lease without permission from the other party with no more than an insignificant penalty. The term of leases that are not extended or canceled at the end of the term (leaseswith automaticrenewal) is determined

by expert appraisaland, in the absenceof specific information, assigned a reasonable term of three years. For leases recognized in the balance sheet, the expense relating to the lease liability is reportedas an interest expense under net banking income while the depreciationexpense on the right-of-useasset is recognizedas a depreciationexpense under gross operating income. Lease contracts not recognized in the balance sheet and variable paymentsnot included in lease liabilities are recorded as an expense for the period under operating expenses.

Impact of lease contracts on the income statement – lessee

12/31/2020

12/31/2019

in millions of euros

EXPENSES FROM LEASES

(553)

(524)

Interest expenses on lease liabilities Depreciation of right-of-use assets (2)

(17)

(25)

(470)

(395)

Variable lease expenses not included in measurement of lease liabilities

(34) (26)

(35) (62)

Expenses on short-term leases (1)(2)

Expenses on underlying assets of low value (1)

(6) 30

(6) 14

INCOME FROM SUB-LEASING/OPERATING LEASES

Related to leases not recognized in the balance sheet. (1) The application of the IFRS IC decision in 2019 would have resulted in the recognition of an amount of -€54m on the line "Depreciation and amortization for right-of-use assets" (2) instead of "Expenses on short-term leases".

When the Group sub-lets all or part of an asset it leases, the sub-letting contract is analyzed, in substance, using the same approach as that applied by lessors, separating operating leases from finance leases.

Income on these contracts is presented using the same approach as lessors: as income from other activities for operating leases and as interest income for finance leases.

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Schedule of lease liabilities

12/31/2020

12/31/2019

in millions of euros

Amounts of non-discounted future payments

1,711

1,845

< 1 year 1-5 years > 5 years

411 862 438

396 997 452

Commitments on leases not yet recognized in the balance sheet In accordance with IFRS 16, future minimum payments relating to leases to which the Group is committed but whose underlying assets have not yet been made available are not recognized on the balance sheet prior to their commencement date. The following table shows the minimum payments expected on these contracts.

12/31/2020

12/31/2019

in millions of euros

Amounts of non-discounted future payments

362

382

< 1 year 1-5 years > 5 years

0

3

105 257

65

314

353

UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE