BPCE_REGISTRATION_DOCUMENT_2017

5 FINANCIAL REPORT

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

In 2017, gains or losses on disposals of property, plant and equipment and intangible assets mainly included the € 84 million capital gain onthe 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 disposals of property, plant and equipmentand intangibleoperatingassets includedgains on the sale of operating real estate by Natixis for € 127 million (including € 30 million generatedby the SpecializedFinancial Services business line and € 97 million by the Corporate Center). Gains or losses on the disposal of consolidated equity interests mainly correspond to the sale by Natixis of the Capital Growth Management entities, in the amount of € 18 million, of Reich and Tang for € 5 million, and the disposals of the Corporate Data Solutionsactivities.

6.9

INCOME TAX

Fiscal year 2017

Fiscal year 2016

in millionsof euros

Current income taxexpense Deferred tax assetsand liabilities*

286

29

(897) (611)

(694)

INCOMETAX (665) 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 * France,as recordedin the FrenchFinanceAct for 2018 (-€90 million),representingincomeof €15 million.

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

845

1,664

Change in thevalue of goodwill

66

117 494

Non-controllinginterests

670

Share in netincomeof associates

(241)

(202)

Incometaxes

611

665

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

1,951

2,738

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

(672) (118) (142)

(943)

6.0% 7.3% 0.6%

(80) 136

2.9%

Effects ofpermanent differences (1)

(5.0%)

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

(12)

(1) 15

0.0%

75

(3.8%)

(0.5%)

203

(10.4%)

525

(19.2%) 11.7%

Other items (3)

55

(2.8%)

(317) (665)

INCOMETAX EXPENSE (INCOME)RECOGNIZED EFFECTIVETAXRATE (INCOMETAX EXPENSE DIVIDED BY TAXABLE INCOME)

(611)

31.3% 24.3% 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 €117 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 -€51 million,and the impactof the reductionin the corporate (3) tax rate introducedby the FrenchFinanceAct for 2018,for +€15 million.

422

Registration document 2017