BPCE_REGISTRATION_DOCUMENT_2017

FINANCIAL REPORT Controls of accounting and financial reporting quality

CHANGES IN THE MECHANISM IN 2017 In 2017, the Group continuedits effortson accountingstandardization and the streamlining of working methods for the production of consolidatedaccountingand financial data, while adapting them to internalandregulatorychanges,in particular: adapting information systems and Group processes in preparation ● for the implementation of IFRS 9 – Financial Instruments, applicable as of January 1, 2018. Financial instruments will be classified, measured and impaired in line with this standard. Moreover,the Group has decidedto continueto apply IAS 39 for its insurance activities until the implementation of IFRS 17 on insurance policies; participatingin work carried out for the multi-year(2016 to 2018) ● plan (EDGAR: Exactitude des Données Gouvernance – Analyse & Reporting ; Accuracyof GovernanceData – Analysis& Reporting)to adapt the group to the regulatory requirements published on January 9, 2013 by the Basel Committee on Banking Supervision (BCBS No. 239), i.e. Principles for effective risk data aggregation and risk reporting: implementationof a single data source from which all regulatory - reporting willbe produced, creation of aGroup data dictionary, - implementationof a data governance and quality function, - definition of a list of physical entities affected by BCBS 239 - requirement, identificationof key reporting and documentationof production - processes for these reports: development of a document library covering key reports published by the central institution. This library is accessible to a wide range of people (employees, managers, internal and external control, service providers, etc.) and includes mapping of key reports, an ID sheet for each report and documentationon processes for the production of some of these reports; the continuation of the migration of Crédit Coopératif’s ● informationsystemsto Caisses d’Epargne’sIT platform(ITCE) with a migrationdate setfor May 2018; the finalization of the establishment of a technical platform and ● service center for processing the financial transactions of Groupe BPCE companies (the Caisse d’Epargne and Banque Populaire networks, BPCE SA group, CASDEN, Crédit Coopératif and Crédit Foncier de France). The goal is to standardize the processing and quality of information on financial transactionswithin the Group, to improve controls on financial transactions and to provide a platform that addresses Groupe BPCE’s management and consolidationissues; the continuationof work on the BusinessLine View program,aimed ● at providingthe Finance Control departmentwith a system to steer and allocate scarce Groupe BPCE resources for each business segmentand for all entities accordingto liquidity,capital adequacy and profitability.Work carried out in 2017 focused on building the database which will feed the Anaplan tool, a shared management standard within the Group for the deployment of the forecasting process for all Group entities and for the preparation of the deployment of the December 31, 2017 reporting using the new tool. The new mechanismwill be interfacedwith local information systems and central calculators (solvency, liquidity, ALM, accounting).Based on an innovative technologicalplatform, it will be a powerful steeringtool for the FinanceControldepartment.

This standard also includes the analysis and interpretation of new texts issued during a given time scale. The policies are regularly circulated via : Group instructions to affiliate institutions that present common ● accounting, tax and prudential management rules (changes in scope of consolidation,a schedule of various work to help respect deadlines, any changes to the information systems, reminder of accounting and prudential regulatory changes, etc.); Group procedures and working methods aimed at the production ● processes forreporting statements; the presentationof Accountingand Tax Days which provide details, ● includingregulatorychanges,that impactthe accounting,prudential and fiscalworkof affiliateinstitutions and the Group; training and activities aimed in particular at the accountingteams ● of consolidatedentities. The uniformity of the IT system Data consolidation takes place quarterly based on the financial statements of each Group entity. Data from the entities are entered into a central database where consolidation adjustments are then carried out. The organizationof the consolidationsystem is based on a combined solution for the Group’s business lines: for the majority of Group entities and in particular Caisses ● d’Epargne and the Banque Populaire banks: information is communicated on an individual basis to ensure a more detailed view of each entity’s contribution to Groupe BPCE’s financial statementsand ratios. The systemis based on a single consolidation tool specific to these entities and to all sub-consolidationwork. This ensures internal consistency as regards scopes, accounting treatmentand analysis; for the Natixis sub-group: Natixis has a consolidation tool that ● produces its financial statements and ratios on a consolidated basis, ensuring the consistencyof data and provides a transparent overview of its subsidiaries. For the production of Group financial statements, Natixis submits a consolidation package that representsits financial statements and ratios. The central consolidationtool has archiving and security procedures including the daily back-up of the consolidation database. System restoration testsare regularlycarriedout. The body of documents To ensure the reliability of the production processes for accounting and financial information, the central institution has drawn up and deployed a comprehensive body of documents in line with requirements set out in Articles 3 e), 11 e), 255 and 256 of the Ministerial Orderof November 3, 2014 onInternal Control. This body of documentincludes: macro-processes and/or processes that describe activities from ● beginning to end,identifyingthe personsand tools involved; procedures which document process flows to implement processes; ● workingmethods used by the business lines in their daily activities ● and which provide details of transactionsunder their responsibility, self-checks, or level one operational controls (including hierarchical) thatmust be carried out.

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Registration document 2017