BPCE - 2018 Registration document

FINANCIAL REPORT IFRS Consolidated Financial Statements of Groupe BPCE as at December 31, 2018

ORDINARY SHARES AND EQUITY INSTRUMENTS ISSUED 5.15

Accounting principles Financial instruments issued by the Group qualify as debt or equity instruments depending on whether or not the issuer has a contractual obligation to deliver cash or another financial asset to the holder of the instrument, or to exchange the instrument under conditions that are potentially unfavorable to the Group. This obligation must arise from specific contractual terms and conditions, not merely economic constraints. In addition, when an instrument qualifies as equity: its remuneration is treated as a dividend and therefore impacts ● equity along with the tax relating to this remuneration; Accounting principles IFRIC 2 “Cooperative shares in cooperative entities and similar instruments” clarifies the provisions of IAS 32. In particular, the contractual right of the holder of a financial instrument (including cooperative shares in cooperative entities) to request redemption does not, in itself, automatically give rise to an obligation for the issuer. Rather, the entity must consider all of the terms and conditions of the financial instrument in determining its classification as a debt or equity. Based on this interpretation, cooperative shares are classified as equity if the entity has an unconditional right to refuse At December 31, 2018, share capital broke down as follows: € 9,763 million in cooperative shares fully subscribed for by the ● cooperative shareholders of the Banque Populaire banks (compared with € 9,223 million at January 1, 2018); € 9,916 million in cooperative shares fully subscribed for by the ● cooperative shareholders of the Caisses d’Epargne (compared with € 9,665 million at January 1, 2018). 5.15.1 Cooperative shares

it cannot be an underlying instrument eligible for hedge ● accounting; if the issue is in a foreign currency, the instrument is fixed at its ● historical value resulting from its conversion to euros at its initial date of transfer to equity. Finally, when these instruments are issued by a subsidiary, they are included in “Non-controlling interests”. When their remuneration is of a cumulative nature, it is charged to “Income attributable to equity holders of the parent” and increases the income of “Non-controlling interests”. However, when their remuneration is not of a cumulative nature, it is drawn from retained earnings attributable to equity holders of the parent. redemption of the cooperative shares or if local laws, regulations or the entity’s bylaws unconditionally prohibit or curtail the redemption of cooperative shares. Based on the existing provisions of the Group’s bylaws relating to minimum capital requirements, cooperative shares issued by the Group are classified as equity. As the Local Savings Companies (LSCs) are considered to be fully consolidated structured entities, their consolidation impacts retained earnings.

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At December 31, 2018, additional paid-in capital broke down as follows: € 949 million linked to cooperative shares subscribed for by the ● cooperative shareholders of the Banque Populaire banks; € 2,885 million linked to cooperative shares subscribed for by the ● cooperative shareholders of the Caisses d’Epargne.

5.15.2 Perpetual deeply subordinated notes classified as equity

Nominal (in millions of euros (1) )

Amount (in original currency)

Interest step-up date (2) September 30, 2019 September 30, 2019

12/31/2018

Issuing entity

Issue date Currency

Call date

Rate

01/01/2018

September 30, 2019 September 30, 2019

BPCE

August 6, 2009 EUR 374 million

12.50%

374

374

BPCE

August 6, 2009 USD 444 million

12.50%

309 683

309 683

TOTAL

Nominal amount translated into euros at the exchange rate in force at the date of classification as equity (1) Interest step-up date or date of transition from fixed to variable rate (2)

Issues of perpetual deeply subordinated notes are recognized in equity due to the discretionary nature of their remuneration.

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Registration document 2018