BPCE_REGISTRATION_DOCUMENT_2017

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

Reconciliation between the tax charge in the financial statements and the theoretical tax charge

Fiscal year 2017

Fiscal year 2016

in millions of euros

in millions of euros

Tax rate

Tax rate

Net income attributableto equity holders ofthe parent

3,024

3,988

Change in thevalue of goodwill

85

154 500

Non-controllinginterests

681

Share in netincomeof associates

(276) 1,811

(259) 1,882

Incometaxes

INCOMEBEFORE TAX AND CHANGES IN THE VALUE OF GOODWILL (A)

5,325

6,265

Standardincome tax rate in France (B)

34.43%

34.43%

Theoretical income taxexpense (income) at the tax rate applicable in France(AxB) Impact ofthe change in unrecognized deferred tax assetsand liabilities

(1,833)

(2,157)

(113) (169)

2.1% 3.2%

(67) 151

1.1%

Impact ofpermanent differences (1)

(2.4%) (0.1%) (0.2%) (9.7%)

Reduced rateof tax and tax-exempt activities Difference in taxrates on income taxed outsideFrance Tax on prior periods,tax credits and other tax (2)

25 76

(0.5%) (1.4%) (4.3%)

5

12

230 (27)

605

Other items (3)

0.5%

(431)

6.9%

TAX EXPENSE RECOGNIZED

(1,811)

(1,882)

EFFECTIVETAXRATE (INCOMETAX EXPENSE DIVIDED BY TAXABLE INCOME) 30.0% Permanentdifferencesinclude in particularthe impactsof the SRT (systemicrisk tax) and the contributionto the SRF (singleresolutionfund),consistingof non-deductibleexpenses(see Note 6.6). (1) Permanentdifferencesalso includegainson investmentsin associatestaxedunder the long-termscheme(notablythe capitalgain on the sale of Visa securitiesin 2016). Tax on priorperiods included,for €159 million,the effectsof the reimbursementof the 3% tax on dividendpayoutsand the impactof tax auditsand the resolutionof ongoingdisputes. (2) Other items includethe effectsof the extraordinaryadditionalcorporatetax charge introducedby the amendedFinanceAct for 2017,for -€85 million,and the impactof the reductionin the corporate (3) tax rate introducedby the FrenchFinanceAct for 2018,for -€41 million. 34.0%

5

Note 7

Exposure to risks

Information relating to capital management as well as regulatory ratios are presented in the Risk Management section. Information on financial assets with past due payments and remodeling due to financial difficulties is provided in the section on “Credit Risk”in Chapter 3 – “RiskManagement”. Informationon liquidityrisk (analysisof financialassets and liabilities and commitments by contractual maturity date) is provided in the section on “Liquidity, Interest Rate and Exchange Rate Risks” in Chapter3 – “RiskManagement”. 7.1 Certain disclosures relating to risk management required by IFRS 7 are also provided inthe risk management report. They include: the breakdownof the loan portfolio by category of gross exposure ● and approach; the breakdown of gross exposures by category and approach ● (separation of credit and counterparty risk); CREDIT RISK AND COUNTERPARTY RISK

the breakdown of gross exposure by geographicregion; ● concentration of credit risk by borrower; ● the breakdown of exposure by credit rating. ● This information forms an integral part of the financial statements certified by the Statutory Auditors. 7.1.1 Credit risk arises whenever a counterparty is unable to meet its paymentobligationsand may result from a reductionin credit quality or even default by thecounterparty. Commitmentsexposed to credit risk consist of existing or potential receivables and particularly loans, debt securities, equities, performance swaps, performance bonds, or confirmed or undrawn facilities. Credit risk management procedures and assessment methods, risk concentration, the quality of performing financial assets, and the analysis and breakdown of outstandings are described in the risk managementreport. Measurement and management of credit risk

305

Registration document 2017