BPCE_REGISTRATION_DOCUMENT_2017

5 FINANCIAL REPORT

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

COST OF RISK 6.7 This item recordsnet impairmentchargesfor credit risks, regardlessof whether the impairment is calculated on an individual or collective basis for aportfolioof similarreceivables. Impairmentlosses are recognized for both loans and receivables and fixed-income securities when there is a known counterparty risk. Cost of risk for the period

Losses related to other types of instruments(derivativesor securities designatedat fair value through profit or loss) recordedas a result of default by credit institutions are also included under this item.

Fiscal year 2017

Fiscal year 2016

in millionsof euros

Net chargeto provisionsand provisions for impairment

(1,209)

(1,308)

Recoveries ofbad debtswrittenoff

66

80

Irrecoverableloans not coveredby provisionsfor impairment

(241)

(195)

TOTALCOST OF RISK

(1,384)

(1,423)

Cost of risk for the period by type of asset

Fiscal year 2017

Fiscal year 2016

in millions of euros

Interbanktransactions Customer transactions Other financialassets TOTALCOST OF RISK

(17)

5

(1,339)

(1,385)

(28)

(43)

(1,384)

(1,423)

GAINS OR LOSSES ON OTHER ASSETS 6.8 This item includes gains and losses on disposalsof property,plant and equipmentand intangibleassets, as well as gains and losses on disposals of consolidatedinvestmentsin associates.

Fiscal year 2017

Fiscal year 2016

in millionsof euros

Gains or losseson disposalsof property,plant and equipment and intangible assets used in operations

87

167

Gains or losseson disposalsof consolidated investments TOTALGAINS ORLOSSESON OTHERASSETS

1

36

88

203

In 2017, gains or losses on disposalsof property,plant and equipment and intangibleassets mainly included the € 84 million capital gain on the saleof the ParcAvenue building. Gains or losses on disposals of consolidated investments primarily concerned the disposal by Natixis of Ellisphère and IJCOF (+ € 22 million), the two Caspian private equity companies (+ € 10 million) and the liquidation of Nexgen Financial Holding (+ € 18 million). These gains were offset by the - € 37 million provision recorded ahead of the disposal of Banco Primus (see Note 5.11) and Banque des Mascareignes. The sale of Banque des Mascareignes should be completedin early 2018 (see Note1.4).

In 2016, gains or losses on disposalsof property,plant and equipment and intangible operating assets included gains on the sale of operating real estate by Natixis for € 127 million (including € 30 million generated by the Specialized Financial Services business line and € 97 million by the Corporate Center). Gains or losses on the disposalof consolidatedequity interestsmainly correspondto the sale by Natixis of the Capital GrowthManagement entities, in the amount of € 18 million, of Reich and Tang for € 5 million, and the disposals of the Corporate Data Solutions activities.

6.9

INCOME TAX

Fiscal year 2017

Fiscal year 2016

in millionsof euros

Current income taxexpense

(675)

(1,026)

Deferred tax assetsand liabilities (1)

(1,136) (1,811)

(856)

INCOMETAX (1,882) In 2017,deferredtax assetsand liabilitiesincludedthe effectof the change in the tax rate in the UnitedStates (+€105 million)and the impactof the gradualreductionin the corporatetax rate in (1) France,as recordedin the FrenchFinanceAct for 2018 (-€145 million),representingan expenseof -€40 million.

304

Registration document 2017