BPCE_REGISTRATION_DOCUMENT_2017

2017 ACTIVITIES AND FINANCIAL INFORMATION Groupe BPCE financial data

Financial results The Caissed’Epargne network generated net banking income of € 7.1 billion in2017, down -1.8% compared to 2016.

Change

2017

2016

€m

%

in millionsof euros

Net interest income

4,052 3,088

4,200 2,990

(148)

(3.5%)

Fees and commissions

98

3.3%

Other incomeand expenses NET BANKING INCOME

(54)

26

(80)

ns

7,086

7,216

(130)

(1.8%)

SPECIALIZED FINANCIAL SERVICES (SFS) Specialized Financing posted solid momentum overall in2017. With € 54.9 billion in factoring revenues in France, up 17%, the Factoring business line boasted market share of 18.5% at September30, 2017. Leasing developed its business with the Banque Populaire and Caisse d’Epargne networks. New business, half of which is in equipment leasing, wasup 4% year-on-year. ConsumerFinanceachievedrecord sales, up 9% over the year, 10%of which for personal loansand virtually stable for revolving loans. After two outstanding years, sureties and guarantees maintained strong businessvolumes,with a very active loan guaranteemarket for retail customers,especiallyin the first half, amidlow interest rates. The Paymentsbusiness was strong, particularlyin electronicpayment systems and service vouchers. Electronic payment systems continued to fare well, particularly in clearing transactions, which saw 10% growth. The Flows and Services business was more contrasted, with national check processing down and mass transaction processing on the rise. Service vouchers continued to do brisk business in 2017. Revenue in the Merchant Acquiring business increased a substantial 64% compared to 2016, on the back of the consolidationof Dalenys and PayPlug. The Financial Services business remained strong. Assets under management in Employee Benefits Planning continued to climb and posted annual growth of 11%. Securities Services recorded a 2% increase in transactionvolumes in 2017. The service offering to the networks continued to expand.

Net interest income (1) fell -3.5% due to the decline in the intermediationmargin, which was adverselyimpactedby low interest rates and high volumes of renegotiationsand loans purchased from competitorsover the course of 2017. The increasein savings and loan volumes was not enough to offset the drop in the intermediation margin. Fees and commissions were up +3.3% over the year, driven by positivemomentumin fees chargedon sales of new bankingproducts and services, mainly on payment instruments(+ € 41 million, +10.7%) and off-balance sheet deposits and savings (life insurance + € 11.4 million, +1.8%). Fees on loans increased by +63 million (+9.2%),largely owing to the combinedeffect of prepaymentpenalty fees (+ € 23.0 million, +12.3%)and paymentprotectioninsurancefees (+ € 26.6 million,+7.7%), buoyed by very robust lending activity. Operating expenses dipped slightly by -0.3%to - € 4.8 billion. Restated for transformationand restructuringcosts, they slid -1.1% on 2016 to € 4.7 billion. Transformation costs comprised set-up costs for creating Caisse d’EpargneHauts de France from the merger of Caisse d’Epargne Nord-France-Europeand Caisse d’Epargne Picardie, and to a lesser extent the costs of consolidating overseas banks by Caisse d’Epargne Provence-Alpesand the merger costs already recorded on the upcoming merger of Caisse d’Epargne Lorraine Champagne-Ardenne and Caisse d’Epargne Alsace. As a result, gross operating income (excluding non-recurring items) came to € 2.4 billion in 2017, down -1.2% on 2016. The cost/income ratio heldsteady at 65.8%. Cost of risk for the Caisses d’Epargne was down -13.0% to - € 0.4 billion, and divided by loan outstandingshit a low of 15 bp in 2017 (vs.18 bp in 2016). The Caisses d’Epargne contributed € 1.9 billion to the Retail Banking and Insurance division’s income before tax in 2017, down -3.1% compared to 2016.

4

Fees and commissions on centralized savings have been restated for net interest income and included in fees and commissions income. (1)

223

Registration document 2017