BPCE - 2020 Universal Registration Document

5

FINANCIAL REPORT

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

the confrontation with the strategic plan of the Group – approved by the governing bodies (supervisory or administrative) of the entities, the assessment of the consistencyand reliability of the main – assumptions used to prepare the plans, particularly regarding the financial trajectories developed during past financial years and actually carried out, the analysis of the sensitivity to different valuation inputs – (equity, discount rate…); verification of the consistency of the disclosures published on • the results of these impairment tests. Review of the assumptions underlying the purchase price allocation of external growth operations of the period and review of related accounted schemes. Regarding the purchase price allocation of external growth operations made in 2020, we reviewed the related underlying assumptions. We used our experts, the actuaries, to assist us in performing our audit procedures on these items. The main audit procedures implemented include, depending on the nature of the risks provisioned to: obtain an understanding of the general conditions relating to • insurance contracts marketed by the group; evaluate the methods and assumptions used to calculate the • reserves, specifically their compliance with applicable regulations, market practices and the economic and financial context; test, on the basis of accounting reconciliations, recurrence • tests, or surveys, the reliability of information relating to insurance contracts recorded in the managementsystems and used for the valuation of technical reserves; carry out an independent recalculation of specific reserves, • when necessary on the basis of a sampling of contracts; assess the methods of calculation and the result of the • adequacy of liabilities test, as required by IFRS 4. We also examined the disclosures published in the notes to Groupe BPCE SA’s consolidated financial statements relating to insurance liabilities and took note of the conclusions of CNP Assurances’ statutory auditors, consolidated by Groupe BPCE using the equity method. Our response

Our response

We have examined the main business combination operations of the fiscal year and their impact on the value of goodwill (including business combinations mentioned in the significant events in the notes to the consolidated financial statements). With the help of our experts, we evaluated the procedure implemented by the Group to identify signs of potential impairment loss and carried out a critical review of the method used for implementing impairment tests. In particular, our work includes: comparison of assumptions and inputs with external sources; • review of the reasonableness of the medium-term plans • retained for each concerned CGU involving, in particular in the economic context of the health crisis:

Insurance Technical Reserves

Risk identified and main judgements

Within the scope of its insurance activities, Groupe BPCE SA records technical reserves related to the commitments toward insured persons. We deemed that the valuation of reserves to be a key audit matter as it represents a significant amount in the consolidated financial statements and that some of these reserves requires the exercise of judgment in the determination of underlying assumptions (actual mortality rates and behavior) or the use of calculation models, in particular in the context of public health crisis linked to the Covid-19 pandemic. The technical reserves of the insurance contracts amount to €96 billion at December 31, 2020. PleaseseeNote9.1.2to theconsolidatedfinancialstatements for further details.

520

UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

www.groupebpce.com