BPCE_REGISTRATION_DOCUMENT_2017

5 FINANCIAL REPORT

IFRS Consolidated Financial Statements of Groupe BPCE as at December 31, 2017

HEDGING DERIVATIVES 5.3 Derivatives may only be designated as hedges if they meet the criteria set out inIAS 39 at inceptionand throughoutthe term of the hedge. These criteria include formal documentationthat the hedging relation between the derivatives and the hedged items is both prospectively and retrospectively effective. Fair value hedges mainly consist of interest rate swaps that protect fixed-rate financial instruments against changes in fair value attributable to changes in market rates of interest. They transform fixed-rate assets or liabilities into floating-rate instruments and

include mostly hedges of fixed-rate loans, securities, deposits and subordinated debt. Fair value hedging is also used to manage their overall interest rate risk position. The cash flow hedges fix or control the variability of cash flows arising from floating-rate instruments. Cash flow hedging is also used to manage the overall interest rate risk position. The notional amounts of derivative instruments are merely an indication of the volume of the Group’s business in financial instruments,and do not reflect the market risks associatedwith such instruments.

12/31/2017

12/31/2016

Notional amount 39,360

Positive fair value

Negative fair value

Notional amount 33,576

Positive fair value

Negative fair value

in millions of euros

Interestrate derivatives Currency derivatives Equity derivatives Cash flowhedges Interestrate derivatives Currency derivatives Credit derivatives Fair valuehedges

180 320

671 593

241 859

965 579

7,489

3,336

197

225

1

47,046 655,634 11,888

500

1,264

37,137

1,100

1,545

8,534

11,300 849,916

11,864

14,906

775

2,161

16,092

1,878

3,336

128

33

667,650 714,696

9,309 9,809

13,461 866,041 14,725 903,178

13,742 14,842

18,242 19,787

TOTALHEDGINGINSTRUMENTS

AVAILABLE-FOR-SALE FINANCIAL ASSETS 5.4 These are non-derivativefinancialassets that could not be classifiedin any other category(“Financialassets at fair value”, “Financialassets held to maturity” or “Loansand receivables”).

12/31/2017

12/31/2016

in millionsof euros

Treasury billsand equivalent

44,530 45,312

42,929 43,690

Bondsand other fixed-income securities

Impaired securities

173

156

Fixed-income securities

90,015 15,848

86,775 14,683

Equitiesand othervariable-incomesecurities

Loans

34

33

Available-for-salefinancialassets, gross Impairment offixed-income securitiesand loans

105,897

101,491

(107)

(83)

Permanent impairment of equities and othervariable-incomesecurities

(1,121)

(1,251)

TOTALAVAILABLE-FOR-SALE FINANCIAL ASSETS

104,669

100,157

Gains andlosses recognized directly in equityon available-for-sale financial assets(before tax) (1) 5,945 Includingthe portionattributableto non-controllinginterests(€1,297 millionat December 31,2017,comparedwith €1,342 millionat December 31,2016). In the insurancesubsidiaries,this net (1) unrealizedcapitalgain gave rise to the symmetricalrecognitionof deferredprofit-sharingof €3,780 millionat December 31,2017,comparedwith €3,780 millionat December 31,2016 (see Note 5.18). 5,960

Available-for-salefinancial assets held by the insurance companies controlled by Groupe BPCE amounted to € 51,197 million at December31, 2017 and € 47,458million at December31, 2016. Impairment losses are recognized for available-for-sale financial assets whenever the Group considers that its investmentmay not be

recovered.For variable-incomesecurities quoted in an active market, a price decline in excess of 50% in relation to the historical cost or for more thana 36-month periodconstitutesevidence of impairment.

278

Registration document 2017