AFD_REGISTRATION_DOCUMENT_2017

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RISK MANAGEMENT

BaselbIII pillarb3

4.2.2. Scope of application 4.2.2.1 Corporate purpose of the Group’s parent company to which this measure applies Agence Française de Développement (AFD) Detailed information about AFD Group’s corporate purpose is presented in Paragraphb1.1.2 ‘‘General information about AFD’s capital’’. 4.2.2.2 Consolidation scope and methods There is no difference with regard to consolidation principles between accounting data and prudential data. The consolidation scope and methods are defined in Paragraph 6.2.3 ‘‘Principles and methods applied to the financial statements at 31 December 2017’’; Notes 6.2.3.1 “Consolidation scope and methods”. Moreover, there are no restrictions on transferring funds or regulatory capital within the Group.

eurozone, although they are not the views of the majority. These movements could lead to the adoption of protectionist measures, whether trade, financial or migration-related, which could endanger the economic recovery; P risks related to non-economic factors, in particular geopolitical issues, and risks related to climate change and extreme weather phenomena. Although climate warming will have a negative impact on the majority of economies (with few exceptions involving countries situated at high latitudes), this impact will be more pronounced in the majority of developing countries.

4.2 BASELbIII PILLARb3 4.2.1 General principles

The objective of Pillarb3bof the BaselbIII framework is to improve financial transparency by publishing quantitative and qualitative disclosures of different types of risk, risk evaluation procedures and the capital adequacy of companies. This involves companies: P aligning data with the new international accounting standards (IFRS) on financial communication; P explaining their internal rating methodology and their risk assessment process to the market.

4.2.3 Capital 4.2.3.1 Capital structure

AFD Group’s capital at 31 December 2017bwas €6,339M, up €479M on 31 December 2016. CET1 capital stood at €5,619M compared to €5,300M at 31 December 2016, and total Tierb1bincreased from €5,860M to €6,339M.

CAPITAL STRUCTURE OF AFD GROUP AT 31 DECEMBER 2017

b

In millions of euros

CET1 capital before deductions

5,619

CET1 deductions

0

CET1 CAPITAL AFTER DEDUCTIONS

5,619 6,339

T1 capital before deductions

T1 deductions

0

T1 CAPITAL AFTER DEDUCTIONS

6,339

T2 capital before deductions

0 0 0

T2 deductions

T2 CAPITAL AFTER DEDUCTIONS

TOTAL CAPITAL

6,339

The breakdown of “regulatory” capital at 31 December 2017bwas as follows: P €5,619M categoryb1bbase capital, comprising hard, non- refundable capital (mainly provisions and reserves); P €720M additional categoryb1bcapital in the form of undated subordinated bonds subscribed by the French State. The securities commitments made by AFD (which are obligatory

under French law), in terms of principle and interest, are direct, unconditional, lowest rank subordinated commitments for an indefinite term without an AFD guarantee. Save for the occurrence of a regulatory event, as provided for in the agreement with the State (point of non viability, i.e . non- compliance with the minimum CET1 ratio as provided by law at a specific time), the securities will pay an annual interest of 0.25%.

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REGISTRATION DOCUMENT 2017

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