BPCE_REGISTRATION_DOCUMENT_2017

3 RISK REPORT Legal risks

Legal risks 3.10

Outstanding legal risks at December 31, 2017 likely to have a negativeinfluenceon the Group’sassets, were subjectto provisionsin line with the Group’s best estimatebased onavailable information.

To date, there are no other governmental, legal or arbitration procedures of which the Group is aware that are likely to have, or have had during the past twelve months,any significanteffect on the financial position or profitability of eitherthe companyor theGroup.

Legal and arbitration proceedings – BPCE 3.10.1

CHECK IMAGING EXCHANGE (ÉCHANGE IMAGE CHÈQUES) COMMISSIONS Marketplace antitrust case initially involving Banques Populaires Participations (BP Participations) and Caisses d’Epargne Participations (CE Participations) and BPCE since it merged with and absorbedBP Participationsand CE Participations On March 18, 2008, BFBP and CNCE received, as was the case for other banks on the marketplace, a notice of grievance from the French anti-trust authority. The banks are accused of having establishedand mutuallyagreed on the amount of the check imaging exchange commission, as well as relatedcheck commissions. The anti-trustauthoritydeliveredits decision on September 20, 2010 to fine the banks found guilty ( € 90.9 million for BPCE). These banks (except for the Banque de France) lodged an appeal. On February 23, 2012, the Paris Court of Appeals overruled the anti-trust authority’s decision and the € 90.9 million fine paid by BPCE wasrefunded. On March 23, 2012, the anti-trust authority launched an appeal of the Court of Appeals’ ruling. 14, 2015, the Court of Cassation overturnedthe Court of Appeals’ 2012 ruling due On the referral of the anti-trust authority, on April Like many banking groups, Natixis and its consolidated subsidiaries are involvedin litigationbefore the courts and may be investigatedby regulatory authorities. As assessed at December 31, 2017, the financial consequences of litigationdeemedlikely to have, or which have in the recent past had, a material impact on the financial situation of Natixis and/or Natixis and its consolidatedsubsidiaries as a whole, or on their profitability or their business,have been includedin Natixis’consolidatedfinancial statements. The most significant disputes are described below. Their inclusion in the list does not indicatethat they will necessarilyhave an impact on Natixis and/or its consolidated subsidiaries. The other disputes are deemed unlikely to have a material impact on Natixis’ financial situation or profitability and/or that of Natixis and its consolidated subsidiariesas a whole, or have not reached a stage where it can be determinedwhetherthey willhave suchan impact.

to breach of procedure. The banks were once again required to pay the fine. BPCE, along with the other incriminatedbanks, referred this ruling to the Paris Court of Appeals requesting that it purge this breach of procedure and uphold its 2012 decision, ensuring that BPCE will ultimately be reimbursed. The Second Court of Appeals ruled on December 21, 2017 and confirmed the 2010 analysis of the anti-trust authority, thus contradicting the initial decision by the Paris Court of Appeals in 2012. The Court consideredthat the introductionof the EIC commissionand CSCs constituteanti-competitivepractice in its nature and confirmed the conviction to pay the fine set by the ADLC. However, the Court reduced the amount of the Caisse d’Epargne’s fine by € 4.07 million, by cancelling the 10% increase to the fine imposed by ADLC on certain banks for their key roles in negotiations.BPCE, taking over the rights of CE Participations, should retrieve this amount of € 4.07 million from the Treasury. On January 22, 2018, the banks filed an appeal with the Court of Cassation. MADOFF FRAUD Outstanding Madoff assets, net of insurance, were estimated at € 388.8 million at December 31, 2017, and were fully provisioned at this date. The effective impact of this exposure will depend on both the extent of recovery of assets invested in Natixis’ name and the outcome of the (primarily legal) measures taken by the bank. With this in mind, Natixis has appointed law firms to assist it in these recovery efforts. Furthermore, in 2011 a dispute emerged over the application of the insurance policy for professional liability in this case, which had been taken out with successive insurers for a total amount of € 123 million.In November 2016, the Paris Court of Appeal confirmed (like the Commercial Court before it) the liability of the first-line insurers, in the amounts of the policies taken out, for the losses incurred by Natixis as a result of the Madoff fraud. The implementation of this ruling by all of the insurers is ongoing. In January and February 2017, both of the first-line insurers submitted an appeal to the Court of Cassation. The hearing was held on January 31, 2018.

Legal and arbitration proceedings – Natixis 3.10.2

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Registration document 2017