BPCE_REGISTRATION_DOCUMENT_2017

4 2017 ACTIVITIES AND FINANCIAL INFORMATION Groupe BPCE financial data

4.3.4

Retail Banking and Insurance

Banque Populaire banks

Specialized Financial Services

Insurance (Natixis)

Other networks

Retail Banking and Insurance

Caisses d’Epargne

Change

in millions of euros 2016 €m % Net banking income 6,284 6,295 7,086 7,216 1,382 1,352 734 655 1,187 1,431 16,673 16,948 (274)(1.6%) Operating expenses (4,418) (4,363) (4,788) (4,800) (939) (885) (439) (378) (907) (933) (11,491) (11,360) (131) 1.2% Gross operating income 1,866 1,932 2,298 2,415 443 466 295 277 280 497 5,183 5,588 (405)(7.2%) Cost/incomeratio 70.3% 69.3% 67.6% 66.5% 67.9% 65.5% 59.8% 57.6% 76.4% 65.2% 68.9% 67.0% -- 1.9 pt Cost ofRisk (449) (508) (365) (419) (73) (57) 0 0 (220) (236) (1,106) (1,220) 114 (9.4%) 2017 2016 2017 2016 2017 2016 pf 2017 2016 pf 2017 2016 2017

Share in incomeof equity-accounted associates Gains or losseson other assets INCOMEBEFORE TAX

35 37

0

1

0

0

13

9

1

2

49

48 1 1.4%

(9)

36 (4)

(5)

0

31

0

0 (17)

6 (29)

68 (97)

ns

1,443 1,497 1,930 1,992 371 440 308 287

44 268 4,096 4,484 (387)(8.6%)

Income before tax generated by the Retail Banking and Insurance division rose 8.6% on 2016, with a decrease in net interest income amid unsupportiveinterest rates, partiallyoffset by a gain in fees and commissionsand a strong contributionfrom prepaymentpenalty fees in the first half of 2017. Operating expenses were under control excluding transformationand restructuringcosts, picking up slightly by 0.4% compared to 2016. Cost of risk came down 9.4% versus 2016, averaging 20 bp in 2017. The Banque Populaire and Caisse d’Epargne networks accounted for 82% of thedivision’s income before tax in 2017. BANQUE POPULAIRE BANKS The Banque Populaire network maintained robust sales activity as economicconditionsimprovedin 2017, drawingon the expansionand continued sales of products to its customer base. The Banque Populairebanks posted +2.7% growth in its individualcustomerbase (o/w +3.7% in customers using banking services) and a +1.1% increase inits professionalcustomerbase. On-balance sheet deposits and savings driven by strong sales momentum: +8.5% (excluding centralized savings) The Banque Populaire banks recorded substantial overall inflows in what remained a highly competitive market. On-balance sheet deposits and savings (excludingcentralizedsavings) climbed 8.5% to € 177.1 billion. Off-balance sheet deposits and savings amounted to € 70.6 billion at end-2017 (+3.3%), propelled by a strong showing from life insurance (+3.3% to € 47.6 billion inAuM). Businesswas strong across all marketsand major customersegments: deposit outstandings were up 5.0% in the individual customer segment and 9.3% in the professional, corporate and institutional customer segments.

Risk aversion steered individual customer investments into on-balance sheet deposits and savings. Growth was driven primarily by demanddeposits(+10.1%to € 25.7 billion at end-2017)and home savings (+5.9% to € 20.2 billion). Passbook savings accounts posted global growth of 7.5%, i.e. + € 3.4 billion year-on-year,led by ordinary passbook savingsaccountdeposits, up11.3%to € 23.4 billion in2017, and Livret A and LDD passbook savings account outstandings, up 10.5% and 3.4%, respectively, to € 11.4 billion and € 8.6 billion at end-2017.Meanwhile, term deposits fell 23.6% to € 2.4 billion. Professional, corporate and institutional customers also made a robust contributionto the increase in on-balancesheet deposits and savings, primarily in terms of demand deposits (+21.8%, i.e. + € 10.1 billion to € 56.3 billion at end-2017),while term deposits fell 10.6% ( i.e. - € 2.8 billion).

CUSTOMER DEPOSITS AND SAVINGS ➡ (IN BILLIONS OF EUROS)

7.0%

257.6

240.6

70.6

68.3

187.0

Off-balance sheet deposits & savings On-balance sheet deposits & savings (including centralized savings)

172.3

9.1 %

12/31/2016

12/31/2017

220

Registration document 2017