BPCE_REGISTRATION_DOCUMENT_2017

2017 ACTIVITIES AND FINANCIAL INFORMATION Outlook for Groupe BPCE

Loan outstandings, customer savings and deposits

DEFINITIONS AND CLARIFICATIONS ON METHODOLOGY

The following restatementswere carried out for the transition from accounting capital to loan outstandings and customer savings & deposits: customer savings and deposits: outstandings exclude debt ● securities (certificates of deposit and savingsbonds); loan outstandings: outstandings exclude equivalents of loans and ● receivables due from customers and other financial activity equivalents. Solvency Common Equity Tier 1 is determined in accordance with the applicable CRR/CRD 4 rules; non phased-in capital is presented without applying phase-in measures. AdditionalTier 1 capital includessubordinateddebt issues which have become ineligible for deferred tax assets, capped at the phase-out rate in force. The leverage ratio is calculated using the rules of the Delegated Act publishedby the EuropeanCommissionon October 10, 2014, without phase-in arrangements. Securities financing operations carried out with clearinghouses are offset on the basis of the criteria set forth in IAS 32, without consideration of maturity and currency criteria. Deposits centralized with Caisse des Dépôts et Consignations were included intotal leverage exposureas of Q1 2016. Total Loss Absorption Capacity The amount of liabilities eligible for the TLAC numerator is determined in accordance with our interpretation of the FSB term sheet published on November 9, 2015, “Principles on Loss-Absorbing and Recapalisation Capacity of G-SIBs in Resolution.” This amount comprises the following four items: Common Equity Tier 1 capital, in compliance with applicable ● CRR/CRD IV rules; AdditionalTier 1 capital, in compliancewith applicableCRR/CRDIV ● rules; Tier 2 capital, incompliancewith applicable CRR/CRD IV rules; ● subordinated debt not recognized in the above categories, with a ● residual maturity of more than 1 year, i.e . : the share of AT1 instruments not recognized in capital ( i.e. subject to phase-out); the share of the prudential discount on Tier 2 instrumentswith a residual maturity of more than 1 year; the nominal amount of senior non preferred debt with a maturity of more than 1 year; eligible amounts vary somewhatfrom the amounts included in the numerator of solvency ratios; these eligible amounts are determinedin accordancewith the principlesof the FSB term sheet of November9, 2015.

Pro forma 2016 segment reporting Segment reporting was modified in 2017, in accordance with the presentation of the business lines in the 2018-2020strategic plan. Retail Banking and Insurancenow includes the Banque Populaireand Caisse d’Epargne networks, Natixis’ Specialized Financial Services division and Insurance business line (life insurance, provident insurance,paymentprotectioninsuranceand non-life insurance),and Other networks (Crédit Foncier, Banque Palatine and BPCE International).Natixis’ Insurance business line was previously part of the Investment Solutions division. The SFS division includes Specialized Financing (factoring, sureties and financial guarantees, consumer finance) and Financial Services (payments, employee benefitsplanning,and securitiesservices),which serve and are central to the development of the Group networks. The Investment Solutions division is now the Asset & Wealth Management division. The non-controlling interest in CNP Assurances, consolidated using the equity method, previously belonged to the Commercial Banking and Insurancedivisionand wastransferredto the CorporateCenter. Net banking income Net interestincomeexcludinghome savingsis calculatedon the basis of interest earned on transactions with customers, excluding net interest on centralized deposits and savings (Livret A, LDD, LEL) and the change in the home savings provision.Net interest on centralized depositsand savingsis recorded under fees and commissions. Operating expenses Operating expenses are the aggregation of operating expenses as presentedin the registrationdocument(Note 6.6 to the Groupe BPCE consolidated financial statements) and “Depreciation, amortization and impairment of property, plant and equipment and intangible assets.” Cost of risk Cost of risk is expressedin basis points and measuresthe level of risk by businessdivision, as a percent of the volume of loan outstandings. It is calculated by dividing the net allowance for credit risk over the period by gross customer loan outstandings at the start of the period.

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ROE Groupe BPCE’sbook ROE is:

net income attributableto equity holders of the parent, restatedfor ● the interest expense on deeply subordinated notes booked to equity, and non-economic and non-recurring items;divided by equity attributable to equity holders of the parent, restated for ● deeply subordinated notes booked to equity, and unrealized gains and losses.

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Registration document 2017