BPCE_PILLAR_III_2017

3 CAPITAL MANAGEMENT AND CAPITAL ADEQUACY Composition of regulatory capital

Additional Tier 1(AT1) capital

Additional Tier1 capital includes: subordinatedinstrumentsissued in compliancewith the restrictive ● eligibility criteria set forth by Article52 of the CRR; additional paid-in capital related to these instruments. ●

The following deductions are made: equity interests in eligible banking, financial and insurance ● institutions,accordingto the rules on allowancesfor these holdings and the phase-inperiod. AdditionalTier 1 capital predominantlyconsists of non-innovativeor innovative capital instruments, with progressive dividend yields on innovativecapital instruments.

TABLE 5 – CHANGES IN AT1 CAPITAL ➡

AT1 capital

in millionsof euros 12/31/2016 Redemptions

1,304 (1,063)

Issues

-

Foreign exchange effect Phase-inadjustments

43

164 448

12/31/2017

Tier 2Capital

Tier 2 capitalconsistsof: subordinatedinstrumentsissued in compliancewith the restrictive ●

the amount arising from provisionsin excess of expected losses (in ● this calculation performing loans are clearly separated from loans in default). The following deductions are made: equity interests in eligible banking, financial and insurance ● institutions,accordingto the rules on allowancesfor these holdings and the phase-inperiod.

eligibility criteria set forth by Article63 of the CRR; additional paid-in capital related to Tier 2 items; ●

TABLE 6 – CHANGES IN TIER 2 CAPITAL ➡

Tier 2 capital

in millionsof euros

12/31/2016

15,693

Redemptionof subordinatednotes

(29)

Prudential haircut

(335)

New subordinated note issues

0

Phase-indeductions and adjustments

161

Foreign exchange effect

(933)

12/31/2017

14,557

36

Risk Report Pillar III 2017