BPCE - 2020 Universal Registration Document

5

FINANCIAL REPORT

BPCE PARENT COMPANY ANNUAL FINANCIAL STATEMENTS

STATE-GUARANTEED LOANS (SGL) 1.5.2 The State-guaranteed loan (SGL) is a support scheme set up under Article 6 of the amended French Finance Act for 2020 (Act No. 2020-289 of March 23, 2020) and the ministerial order issued by the Minister of the Economy and Finance on March 23, 2020 establishing a state guarantee for credit institutions and financing companies from March 16, 2020, to meet the cash flow requirementsof companies impacted by the Covid-19 health crisis. The State-guaranteed loan is subject to common eligibility criteria applicable by all institutions issuing the loan, as set out by law. It is a one-year loan with capital repayments deferred for this period. At the end of the first year, companies that take out such a loan can decide to repay it over a period of between one or five years. BPCE SA funded the Group companies that granted these SGLs to companies affected by the financial crisis. This resulted in an increase in the “Loans and advances due from banks” item. THE PAYMENT OF DIVIDENDS As part of the health crisis and the recommendationsof the ECB (suspension of cash dividends), the amount of dividends received in 2020 by BPCE and presented in “Income from variable-income securities” has been significantly reduced (€720 million in 2020 compared to €1,118 million in 2019). As a holding company, BPCE received dividends in the amount of €557 million, including €317 million from Holassure and €223 million from subsidiaries of the Financial Solutions & Expertise division. 1.5.4 The health crisis also led to a decrease in the value in use of certain BPCE investments, resulting in additional net impairments recognized in “Gains or losses on long-term investments”, as mentioned in Note 3.9. ECB RECOMMENDATIONS REGARDING 1.5.3 IMPAIRMENT OF INVESTMENTS On the other hand, BPCE applies regulation No. 2020-10 of December 22, 2020 amending ANC Regulation No. 2014-07 of November 26,2014 relating to the accounts of companies in the banking sector, which modifies the presentation of securities borrowings. Assets are presented as a deduction from liabilities in Notes 4.3.1, 4.7, 5.3 and in the balance sheet. Unless otherwise stated, BPCE did not elect to apply in advance the texts adopted by the ANC for which application is optional. AND VALUATION METHODS The financial statements for the fiscal year are presented in identical format to those for the previous fiscal year. Generally accepted accounting principles have been applied in compliance with the principle of prudence based onthe following principles: the going-concern principle; • consistency of accounting methods from one period to the • next; independence of fiscal years; • and observance of the general rules governing the preparation and presentation of annual financial statements. ACCOUNTING POLICIES 2.3

BPCE’s equity investments are measured at value in use. The value in use takes into account the specific situation of BPCE, the fact that these investments belong to Groupe BPCE and their integration within the solidarity mechanism, their strategic interest for BPCE and the fact that they are held with a long-term objective. They are based in particular on technical parameters based on a vision of long-term ownership and Group affiliation and not on valuation parameters. IMPACT OF THE PUBLIC HEALTH CRISIS ON THE FINANCIAL STATEMENTS The effects of the health crisis on BPCE’s financial statements are described in the following paragraphs. 1.5.1 The rapid spread of the Covid-19 pandemic caused a slump in the global economy, affecting many business sectors. On March 15, 2020, before the announcement of the lockdown in France, the French Banking Federation (FBF), confirmed that French banks were fully committed to supporting customers – in particular retailers, self-employed professionals, and SMEs – facing difficulties due to the spread of the Covid-19 epidemic, which could impact their business. Accordingly, Groupe BPCE helped its professional and business customers who were facing cash flow problems by actively implementing the economic support measures set up by the government: granting moratoria on loan repayments for businesses, • without penalties or additional fees; issuing State-guaranteed loans (see below). • 1.5 ECONOMIC SUPPORT MEASURES

Note 2

Accounting policies

2.1

VALUATION METHODS, PRESENTATION OF INDIVIDUAL FINANCIAL STATEMENTS AND REPORTING DATE

The format of the summary statements used complies with the format proposed by regulation No. 2014-07 of the French Accounting Standards Authority. The parent company annual financial statements for the fiscal year ended on December 31, 2020 were approved by the ManagementBoard on February 9, 2021. They will be presented to the General Shareholders’ Meeting on May 27, 2021. The amounts presented in the financial statements and in the notes are shown in millions of euros, unless otherwise indicated. Rounding may lead to differences between the amounts shown in the financial statements and those referred to in the notes. 2.2 The texts adopted by the ANC that had mandatory application in 2020 did not have a significant impact on the parent company financial statements. CHANGES IN ACCOUNTING METHODS

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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