BPCE_PILLAR_III_2017

3 CAPITAL MANAGEMENT AND CAPITAL ADEQUACY Management of capital adequacy

Pillar II MREL Requirement According to a reference formula, the Pillar II MREL Requirement should be 2x (Pillar I + Pillar IIR capital requirement) + capital buffers, bearing in mind that this formula is subject to change by the Single ResolutionBoard. A broader range of liabilitiesmay be eligible for the numerator (compared to the Pillar I MREL), which may also include senior preferred debt with a residual maturity of more than one year. Pillar II MREL Guidance The Single Resolution Board is expected to define an additional tranche of liabilities referred to as Pillar II MREL Guidance, in accordance with a maximum limit set as the sum of the capital buffers and the Pillar IIG capital requirement. Institutions would be encouragedto build up this tranche over and above the Pillar II MREL Requirement, butnot doingso would notbe considered asa breach of regulatory requirements.

The Single Resolution Board publicly stated on November 21, 2017 that an MREL requirement, eligible for a TLAC of 12% of risk-weighted assets + capital buffers, would be set for O-SIIs and that the requirementset for G-SIIs would be 13.5% of risk-weighted assets. The Group has already launched a program to issue this new senior non-preferred debt. Excluding the CRR/CRDIV phase-in measures, Groupe BPCE’s TLAC ratio cameto 20.8%at December 31, 2017.

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Risk Report Pillar III 2017