BPCE - 2020 Universal Registration Document

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FINANCIAL REPORT

CONTROLS OF ACCOUNTING AND FINANCIAL REPORTING QUALITY

a single consolidated IT system that guarantees consistent • treatment and analysis; a comprehensive body of documents respecting regulatory • requirements; a standardized control mechanism, the structure of which is • described in Section 5.8.3 below. Groupe BPCE institutions publishing financial statements on a consolidated basis under IFRS are all of the Banques Populaires and Caisses d’Epargne and the Group’s main subsidiaries, essentially Natixis, Crédit Foncier, Banque Palatine and Oney Bank. BODY OF STANDARDS Within the central institution, the Finance and Strategy division has designed and deployed a set of standards to all Group entities to ensure the reliability of the production of accounting and financial information in compliance with accounting and prudential rules or requirements defined by intra-or supra-national regulations for the publication of regulatory reports. This body is mainly based on: the definition and dissemination of accounting policies for the • Group, both for French GAAP and international (IFRS) accounting standards; the deployment of a consolidation framework intended to • ensure the reliability of the process of preparing consolidated data, whether accounting, tax or prudential. This standard also includes the analysis and interpretation of new texts issued during a given period. The policies are regularly circulated via: Group instructions for affiliated institutions that set out the • common rules relating to the production of accounting and tax information or regulatory reports, in particular those relating to capital adequacy and liquidity (change in the scope of consolidation, schedule of the various works to meet deadlines, any changes in information systems, reminder of regulatory changes, etc. ); presentations at national days on accounting, taxation, capital • adequacy and liquidity (Accounting and Tax Days, Asset/Liability management Days, etc. ) with a focus on regulatory changes; a training and facilitation system aimed in particular at the • accounting and financial information production teams within the consolidated entities. A SINGLE CONSOLIDATED INFORMATION SYSTEM To ensure the production of its accounting and financial information, the Group uses market software packages or develops internal solutions in compliance with the rules defined by its IT Master Plan (in particular in terms of security, sustainability, quality, etc. ). As part of this IT Master Plan, the Group has developed an architecture to organize a data model shared between the Risk and Finance divisions, both locally and centrally: the Standardized Exchange Zone (ZEN). This is one of the main sources of information for the central risk and finance information systems, thus ensuring the consistency of the common data used in the main central reporting systems as well as between local and central reporting (scope, date, production, etc. ) To ensure the consolidation of accounting and prudential information and to produce the reports intended for the effective management, the supervisory body, the supervisory

and control authorities or intended for publication, the consolidation is carried out on a quarterly basis on the basis of the financial statements of each Group entity. Data from the entities are entered into a central database where consolidation procedures are then carried out and which is based on a mixed solution in the Group’s business lines: for the majority of Group entities and in particular the Caisses • d’Epargne and Banques Populaires, information is communicated on an individual basis to ensure a more detailed view of each entity’s contribution to the Group's financial statements and ratios. The system, managed by the central institution, is based on a single central consolidation tool used by all entities for the consolidation of the Group and the sub-consolidationsthat need to be produced. This ensures internal consistency as regards scopes, accounting treatment and analysis; for some entities, and in particular the Natixis sub-group, the • consolidation is carried out by their own consolidation tool and then communicated to the central institution on the basis of a consolidation package representative of their financial statements and their ratios to ensure consistency, production of the Group’s financial statements and ratios. Natixis is equipped with a consolidation tool enabling the production of its consolidated financial statements and ratios, guaranteeing the consistency of the data and providing a transparent overview of its subsidiaries. These consolidation tools have archiving and security procedures including the daily back-up of the consolidation database. System restoration tests are regularly carried out. BODY OF DOCUMENTS To ensure the reliability of the production processes for accounting and financial information, the central institution has drawn up and deployed a comprehensivebody of documents in line with requirements set out in Articles 3 e), 11 e), 255 and 256 of the Ministerial Order of November 3, 2014 on Internal Control. In accordance with the requirements defined by the Group, this documentary database comprises three levels of information: level 1: a mapping (or inventory) listing the reports containing • information intended for “[…] the effective management or the supervisory body, sent to the supervisory and control authorities” or appearing “in the documents intended to be published”, within the meaning of Article 11c) of the Order of November 3, 2014 on internal control; level 2: operating methods or procedures that formalize the • sequencing of operations to implement the production, publication or control processes; level 3: a description of the main stages of production, control • and publication of reports presenting, for the most complex processes, the end-to-end activities by identifying the players and tools. CHANGES IN 2020 In 2020, the Group continued its efforts to standardize its processes and streamline working methods for the production of consolidated accounting and financial data, while adapting them to internal and regulatory changes, in particular by: the adaptation of FINREP and COREP reports to comply with • the DPM 2.9 taxonomy, which aims to strengthen the information to be provided, in particular on non-performing exposures, which are one of the regulator’s priorities;

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE

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