BPCE - 2018 Registration document

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

Conditions for designating investments at fair value through profit or loss

12/31/2018

Financial assets designated at fair value

Accounting mismatches

Fair value measurement

Embedded derivatives

in millions of euros

Bonds Equities

762 195

27

739

1,528

408

602 171

UCITS

171 600

Investments backed by unit-linked policies

14,720 15,677

1,149 1,584

16,469 18,770

TOTAL

1,510

9.1.1.3 Available-for-sale financial assets

Accounting principles Available-for-sale financial assets are all securities not classified in the previous three categories. Available-for-sale financial assets are initially recognized at fair value, plus any transaction costs.

On the balance sheet date, they are carried at their fair value and changes in fair value are recorded under “Gains and losses recognized directly in other comprehensive income” (except for foreign currency monetary assets, for which changes in the fair value of the foreign currency component affect income). If they are sold, these changes in fair value are taken to income. Interest income accrued or received on fixed-income securities is recorded under “Net income from insurance businesses.” Income from variable-income securities is recorded under “Net income from insurance businesses.”

5

12/31/2018

01/01/2018

in millions of euros

Bonds Equities

45,112

42,412

3,882 5,426

3,824 5,286

UCITS

Available-for-sale financial assets, gross

54,420

51,522

Impairment of debt instruments Impairment of equity instruments*

(38)

(15)

(256)

(236)

TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS 51,271 In 2018, the permanent impairment of variable-income securities stood at €38 million. This expense was 89% offset by the profit-sharing mechanism. The 2018 expense can be broken down into an * additional impairment loss on previously impaired securities for €13 million and an allowance for newly impaired securities for €25 million. 54,126

9.1.1.4 Loans and receivables

Accounting principles The portfolio of loans and receivables included in “Insurance business investments” comprises non-derivative financial assets with fixed or determinable payments and which are not quoted in an active market. In addition, these assets must not be exposed to a risk of material losses unrelated to a deterioration in their credit quality. Some securities not quoted in an active market may be classified in this portfolio. These are initially recognized at fair value, plus any transaction costs and less any transaction income. Securities classified in this category comply with the rules for recognition, measurement and impairment applicable to loans and receivables. When a financial asset recorded under loans and receivables is sold before its maturity, the income from the disposal is recorded under “Net income from insurance businesses”.

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Registration document 2018