BPCE - 2020 Universal Registration Document

FINANCIAL REPORT

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

CONDITIONS FOR DESIGNATING INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

12/31/2020

12/31/2019

Financial assets

Financial assets

Accounting mismatches

Fair value measurement

Embedded derivatives

designated at fair value

Accounting mismatches

Fair value measurement

Embedded derivatives

designated at fair value

in millions of euros

Bonds

553 499

1,131

1,684

645 507

1,381

2,026

Equities

499

507 277

UCITS

3,512

3,512

277

Investments backed by unit-linked policies

15,922 20,486

573

16,495 22,190

17,762 18,915

390

18,152 20,962

TOTAL

1,704

2,048

9.1.1.3

Available-for-sale financial assets

Accounting principles Available-for-sale financial assets are allsecurities not classified in the previous three categories. Available-for-sale financial assetsare initially recognized at fair value, plus any transactioncosts.

On the balance sheet date, they are carried at their fair value and changes in fair value are recorded under “Gains and losses recognized directly in other comprehensive income” (except for foreign currency monetary assets, for which changes in the fair value of the foreign currency component affect income). If they are sold, these changes in fair value are taken to income. Interest income accrued or received on fixed income securities is recorded under “Net income from insurance businesses”. Income from variable-income securities is recorded under “Neint come from insurance businesses”.

5

12/31/2020

12/31/2019

in millions of euros

Bonds

45,425

44,592

Equities

2,671 7,003

2,889 6,476

UCITS

Available-for-sale financial assets, gross

55,099

53,957

Impairment of debt instruments Impairment of equity instruments (1)

(57)

(49)

(184)

(168)

TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (2) 53,740 In 2020, permanent impairment of variable-income securities came to €171 million (€63 million at December 31,2019). This expense was 87% offset by the profit sharing (1) mechanism (89% in 2019). The 2020 expense can be broken down into an additional impairment loss on previously impaired securities for €144 million (€16 million in 2019) and an allowance for newly impaired securities for €27 million (€47 million in 2019). Coface contributed €2,911 million to Available-for-sale financial assets at December 31, 2019. (2) 54,858

9.1.1.4

Loans and receivables

Accounting principles The portfolio of loans and receivables included in “Insurance business investments” comprises non-derivative financial assets with fixed or determinable payments and which are not quoted in an active market. In addition, these assets must not be exposed to a risk of material losses unrelatedto a deterioration in their credit quality. Some securities not quoted in an active market may be classified in this portfolio. These are initially recognized at fair value, plus any transaction costs and less any transaction income. Securities classified in this category comply with the rules for recognition, measurement and impairment applicable to loans and receivables. When a financial asset recorded under loans and receivables is sold before its maturity, the income from the disposal is recorded under “Net income from insurance businesses”.

473

UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE