Bpce:Full-year 2023 and Q4-23 results
Paris, February 7, 2024
*Full-year 2023 and Q4-23 results *
*Strong sales momentum and high level of financial solidity*
*2023: net banking income of €22.2bn, -7% vs. 2022, decrease anticipated starting 2023 related to the trend of cost of liabilities on both regulated and unregulated savings; continued asset repricing thanks to new loan production; strict control of expenses, -2% vs. 2022; net income*^*2** of €2.8bn*
*Q4-23: net banking income of €5.5 bn, stable vs. Q3-23; costs down by 2% vs. Q4-22; net income*^*2** of €381m*
*Ongoing improvement of solvency, at the highest standard: CET1 ratio of 15.6%*^*3** at end-December 2023, +16bps QoQ and +53bps organic capital generation YoY*
*Retail Banking & Insurance: 925,000 new clients*^*4** in 2023 in the Banque Populaire and Caisse d'Epargne retail banking networks; continued commercial momentum with Insurance and Specialized Financing; net banking income down*
*8% vs. 2022 with the faster rise in the cost of liabilities than the return on assets*
· *Financing territories: 3% YoY increase in loan outstandings*, rising to *€719bn* at end-December 2023
· *Clients’ deposits*^*5 **up 3%* at end-December 2023 YoY, i.e. *+€21bn*, rising to €676bn
· *Insurance*: sustained gross in *life insurance inflows at €12.7bn* in 2023. *Premiums up 14%* vs. 2022.
*Client equipment rate*^*5** for P&C and personal protection insurance reached 34.1%* at the end of December 2023, *+0.9% YoY*
· *Financial Solutions & Expertise*: *net banking income up +11% vs. 2022*, driven by financing activities
· *Digital & Payment: leadership in payment technologies*, with the launch of *Tap to Pay* solution, the instant account-to-account payment transactions through *EPI solution* and the *ticketing payment system for the Olympic and Paralympic Games Paris 2024*
*Global Financial Services: 3% revenue growth in 2023 and Q4-23 YoY at constant exchange rates; strong performance for CIB and good resilience for AWM in a challenging environment for this industry in 2023*
· *Corporate & Investment Banking: net banking income of €4bn in 2023, up 9% in Q4-23 YoY at constant exchange rates; good performance of Global Markets in 2023; net banking income up 20% in Global Finance and 21% in Investment Banking and M&A vs. Q4-22*
· *Asset & Wealth Management: 8% increase YtD in Natixis IM assets under management, reaching €1,166bn* at end-December 2023; *net inflows of €12.9bn in 2023* (excluding life insurance and money market products); net banking income down by 3% in 2023 and in Q4-23 YoY at constant exchange rates
*Very tight management in expenses: down by 2% in 2023 and in Q4-23 YoY*
*Low cost of risk and continued prudent provisioning policy: -12% in 2023 to €1,731m, or 20bps*, including limited reversals of provisions and higher provisioning for occurred risk.
*Financial strength: CET1 ratio of 15.6%*^*3** at end-December 2023, +16bps vs. end-September 2023* notably thanks to earnings generation in Q4-23; liquidity reserves stood at €302bn at end-2023.
*Nicolas Namias, Chairman of the Management Board of BPCE*, said: “As anticipated, Groupe BPCE's financial performance was marked in 2023 by the transition period due to rapid rise in interest rates; this impact reflects the position we have in the financing of the French economy. With our model based on fixed rates financing, we are proud to have played our full role in protecting the purchasing power for clients of the Banques Populaires and Caisses d’Epargne. Thanks to particularly dynamic sales activity across all client segments, our two retail banking networks have continued to expand their client bases, enabling to pursue actively the rollout of our Insurance and Specialized Financing businesses. In our global business lines, Natixis CIB continued its sustained and carefully managed development and recorded annual revenues at an unprecedented level, while Asset Management achieved a robust performance with positive net inflows on long-term products* in a challenging context for the industry in 2023.
This quarter once again, our Group further consolidated its already high level of financial strength, leaving it well placed to prepare the future and pursue its growth strategy.
I would like to thank the 100,000 employees of Groupe BPCE both in France and in the international areas for their day-to-day commitment in favor of our clients. They are contributing to make our Group a central player in the economy, performing a key role in addressing the different environmental, technological and social challenges.”
* Excluding life insurance products and money market funds
^1 See the notes on methodology annexed to this press release ^2 Group share ^3 Estimated figures at end-December 2023 ^4 228,000 additional active clients over the past 12 months ^5 On-balance sheet deposits and savings within the scope of the Retail Banking & Insurance business unit ^6 Within the scope of individual clients banking with the BP and CE
The quarterly financial statements of Groupe BPCE for the period ended December 31, 2023, approved by the Management Board at a meeting convened on February 5, 2024, were verified, and reviewed by the Supervisory Board, chaired by Thierry Cahn, at a
meeting convened on February 7, 2024.
*In this document, 2022 figures have been restated on a pro-forma basis to account for the application to insurance of the new IFRS 17 and 9 reporting requirements* (see annex for the reconciliation of reported data to pro-forma data).
*Groupe BPCE*
€m^1 *Q4-23* *Q4-22* *% change*
*vs. Q4-22* *2023* *2022* *% change*
*vs. 2022*
*Net banking income* *5,462* *5,844* *(7)%* *22,198* *23,959* *(7)%*
Operating expenses (4,129) (4,233) (2)% (16,328) (16,638) (2)%
o/w operating expenses excluding contributions to the SRF (4,129) (4,219) (2)% (15,871) (16,028) (1)%
*Gross operating income* *1,332* *1,611* *(17)%* *5,870* *7,322* *(20)%*
Cost of risk (744) (766) (3)% (1,731) (1,964) (12)%
*Income before tax* *537* *863* *(38)%** *4,182* *5,473* *(24)%*
Income tax (159) (312) (49)% (1,340) (1,656) (19)%
Non-controlling interests 3 (16) ns (38) (71) (47)%
*Net income (Group share)* *381* *535* *(29)%* *2,804* *3,746* *(25)%*
Exceptional items (100) (51) 96% (122) (164) (26)%
*Underlying net income (Group share)*^*2* *481* *586* *(18)%* *2,925* *3,909* *(25)%*
Cost/income ratio^3
(underlying, excl. SRF) 74.6% 70.6% 3.9pp 70.8% 65.6% 5.2pp
^1 Reported figures as far as “Net income (Group share)”
^2 “Underlying” means exclusive of exceptional items
^3 The cost/income ratio of Groupe BPCE is calculated on the basis of net banking income and operating expenses excluding exceptional items, the latter being restated to account for the contribution to the Single Resolution Fund (SRF) booked in the Corporate center business unit. The calculations are detailed in the annex on pages 27 and 28.
* The positive impact of the disposal of Bimpli in Q4-22 partly explains Q4-23 negative trend for income before tax in Q4-23.
1. *Groupe BPCE*Unless specified to the contrary, the financial data and related comments refer to the reported results of the Group and business lines, changes express differences between Q4-23 and Q4-22 and between full-year 2023 and full-year 2022.
*Groupe BPCE's net banking income* declined by 7% in Q4-23 to 5,462 million euros, stable when compared with Q3-23 and down 7% in full-year 2023 to 22,198 million euros.
Revenues posted by the *Retail Banking & Insurance* (RB&I) business unit came to 3,557 million euros (-7%) in Q4-23 and to 14,824 million euros (-8%) in 2023. The Banques Populaires and Caisse d'Epargne reported strong sales performances. The continuous rise in the return on assets partly offset the rise in the cost of liabilities – regulated and non-regulated savings in particular; net banking income generated by the *retail banking networks *was down 12%. The *Financial Solutions & Expertise* business unit saw its revenues grow by 11% in 2023, buoyed up by the strength of leasing and factoring services. The *Insurance* business unit benefitted from strong momentum in life and non-life insurance, revenues are also reflecting the impact of a certain volatility inherent in the new IFRS 17 and 9 standards.
The *Global Financial Services* business unit reported revenues up 1% in Q4-23 and up 2% in full-year 2023, rising to 1,874 million euros and 7,230 million euros respectively. In 2023, the net banking income generated by the business unit was buoyed up by *Corporate & Investment Banking* (+7%), boosted by strong activities in the Global Markets, Global Trade, Investment Banking, and M&A businesses. The net banking income generated by *Asset & Wealth Management* was down 6% in Q4-23 and by 4% over the full-year period, chiefly due to lower performance fees and a decline in the average level of assets under management compared with 2022.
*Net interest income* reached a total of 7.3 billion euros in 2023, down 25% year-on-year. *Commissions* rose by 2% to 10.3 billion euros in 2023.
Against a backdrop of persistent inflation, *operating expenses* were kept under tight control in all the business lines. They fell overall by 2% in Q4-23 and in full-year 2023, to 4,129 million euros and 16,328 million euros respectively.
The *underlying cost/income ratio, excluding contributions to the SRF*^*1*, came to 74.6% in Q4-23, up 3.9pps, and 70.8% in full-year 2023, up 5.2pps.
*Gross operating income* fell by 17% in Q4-23 and by 20% in 2023, to 1,332 million euros and 5,870 million euros respectively.
Groupe BPCE's *cost of risk* fell by 3% in Q4-23 to 744 million euros, and by 12% in 2023 to 1,731 million euros.
Performing loans are rated ‘Stage 1’ or ‘Stage 2’, while outstandings with an occurred risk are rated ‘Stage 3.’
(1) Cost of risk expressed in annualized basis points on gross client outstandings at the beginning of the period or in € amounts
^1 The cost/income ratio of Groupe BPCE is calculated on the basis of net banking income and operating expenses excluding exceptional items, the latter being restated to account for the contribution to the Single Resolution Fund (SRF) booked in the Corporate center division. The calculations are detailed in the annex on pages 27 and 28.
For Groupe BPCE* in Q4-23*, the *amount of provisions for outstanding loans* came to 744 million euros, compared with 766 million euros in Q4-22. This total can be broken down as follows:
· for *performing loans*, provisions for a total of 330 million euros were booked in Q4-22, while 145 million euros were reversed in Q4-23,
· allocations to provisions on *loans with an occurred risk* rose from 436 million euros in Q4-22 to 598 million euros in Q4-23.
*In Q4-23, the cost of risk* stood at *35bps* in terms of gross client outstandings *for Groupe BPCE* (37bps in Q4-22). This figure includes a 7bps reversal of provisions on performing loans (vs. a 16bps allocation to provisions in Q4-22) and a 28bps allocation to provisions for loans with an occurred risk vs. a 21bps allocation in Q4-22.
The cost of risk came to *35bps* for the *Retail Banking & Insurance* business unit (37bps in Q4-22), including a 5bps allocation to provisions for performing loans (vs. a 14bps provisioning charge in Q4-22) and a 30bps allocation to provisions for loans with an occurred risk (vs. a 22bps provisioning charge in Q4-22).
The cost of risk for the *Corporate & Investment Banking* business unit stood at *37bps* (33bps in Q4-22), including a 16bps provisioning charge on performing loans (vs. a 23bps provisioning charge in Q4-22) and a 21bps allocation to provisions for loans with an occurred risk (vs. a 10bps provisioning charge in Q4-22).
*In 2023, the amount of provisions* came to 1,731 million euros versus 1,964 billion in 2022, and can be broken down as follows:
· For *performing loans*, provisions for a total of 852 million euros were booked in 2022 and 112 million euros were reversed in 2023,
· Allocations to provisions on *loans with an occurred risk* rose from 1,112 million euros in 2022 to 1,843 billion euros in 2023, notably explained by a limited number of specific files and a weakening of the economic environment.
*In 2023, the cost of risk* stood at *20bps* in terms of gross client outstandings *for Groupe BPCE* (24bps in 2022). This total includes a 1bp reversal of provisions on performing loans (vs. a 10bps allocation to provisions in 2022) and a 22bps allocation to provisions for loans with an occurred risk (vs. a 14bps provisioning charge in 2022).
The cost of risk was *21bps* for the *Retail Banking & Insurance* business unit (25bps in 2022), including a 2bps reversal of provisions on performing loans (vs. an 11bps allocation to provisions in 2022) and a 23bps allocation to provisions on loans with an occurred risk (vs. a 14bps allocation in 2022).
The cost of risk for *Corporate & Investment Banking* came to *24bps* (36bps in 2022), including a 4bps reversal of provisions for performing loans (vs. a 15bps allocation to provisions in 2022) and a 28bps allocation to provisions for loans with an occurred risk (vs. provisioning of 21bps in 2022).
The *ratio of non-performing loans* to gross loans outstandings stood at 2.4% at December 31, 2023, up 0.1pp compared with end-December 2022.
The positive impact of the disposal of Bimpli in Q4-22 partly explains the negative performance of *income before tax* in Q4-23.
*Reported net income (Group share)* in Q4-23 came to a total of 381 million euros, - 29% (535 million euros in Q4-22), and reached 2,804 million euros in 2023 vs. 3,746 million euros in 2022 (-25%).
*Underlying net income (Group share)*^*2* came to 481 million euros in Q4-23, down 18% vs. Q4-22 (586 million euros), and to 2,925 million euros in 2023 (-25%).
^2 “Underlying” means exclusive of exceptional items
2. *Strong growth in our client base*In Retail Banking & Insurance, the strong drive to win new clients led to a broadening of the client base across all business lines:
· 786,000 new individual clients since the beginning of the year,
· 122,000 new professional clients since the beginning of the year,
· 11.6 million principal active clients at end-December 2023,
· 141,000 new clients equipped with P&C policies, equal to 3.7 million clients at end-December 2023.
Specialized financing and Insurance recorded robust commercial results:
Several of the FSE division's businesses consolidated their market positions:
· No. 1 banking player in consumer credit^1 in France,
· growth in leasing market share in both equipment leasing^2 and real-estate leasing^3.
The sale of insurance policies rose by 14%^4 to 16.2 billion euros at end-2023.
The P&C and personal protection equipment rate stood at 34.1% at end-December 2023, up 0.9pp year-on-year.
In Non-life insurance, the Group has a portfolio of more than 7 million contracts.
At the end of 2023, 87% of our branches and business centers had a positive NPS.
In the Global Financial Services business unit, the global business lines have taken a further step towards strategic diversification.
In Corporate & Investment Banking, the United States is the 2^nd largest market, and other regions are under development. 66% of CIB revenues are generated outside France:
· 26% in Americas,
· 29% in EMEA excluding France,
· 11% in APAC.
87% of SBF 120 companies (France) are CIB clients.
In Global Markets, nearly 850 new entities were signed as clients in 2023, 35% of them via the Banque Populaire and Caisse d'Epargne retail banking networks.
In Asset & Wealth Management, aggregate net inflows on long-term products over 2021-2023 reached 33 billion euros^2 at end-December 2023. Private assets contributed 22% to the profitability of the Asset Management business at the end of December 2023.
3. *Groupe BPCE is mobilized in support of the major transformations*Within the framework of the Net Zero Banking Alliance, the Group has published new 2030 targets for 3 industrial sectors: automotive, steel and cement (within the scope of Natixis CIB).
41% of mortgage loans produced by the Retail Banking & Insurance business unit had the highest Energy Performance Diagnosis ratings of A, B and C in 2023.
The Banque Populaire and Caisses d'Epargne have enhanced their mobile banking application with a new "Advice and Sustainable Solutions” service platform, designed to help individual clients reduce their carbon footprint and realize their eco-responsible housing, mobility, and savings projects. At end-December 2023, the platform had received over 3 million unique visitors.
Mirova launched the Mirova Sustainable Land Fund 2, based on a sustainable land management strategy and aiming to raise 350 million euros from public and institutional investors.
By the end of 2023, the Caisse d'Epargne had exceeded 1.5 billion euros in financing dedicated to regional economies via this innovative solution. These impact loans have already made it possible to donate 500,000 euros to national and local associations over a period of three years.
With Papernest, the Banques Populaires and Caisses d'Epargne help their clients to improve their purchasing power through free, comprehensive assistance in optimizing their gas, electricity, Internet, and mobile phone subscriptions.
For the 7^th year running, the Group's global business lines were awarded “Top Employer” certification.
In 2023, Groupe BPCE issued 4 sustainable bonds aligned with investors' expectations for a total of 2.25 billion euros, exceeding the target of 3 issuances per year.
Groupe BPCE completed 4 social and green issues:
· 500 million euros in Tier 2 social bonds (local economic development),
· 500 million euros in Social Covered bonds (social housing and healthcare),
· 750 million euros in green covered bonds (green buildings),
· Groupe BPCE, a premium partner of the Olympic & Paralympic Games Paris 2024, is confirming its front-ranking position in the sports economy and has issued Senior Preferred social bonds (Sports Economy and Health) for a total of 500 million euros. This is the first social bond issue in France dedicated exclusively to the " Sports Economy and Health" theme, in line with the United Nations' Sustainable Development Goal No. 3.
^1 Athling study at the end of September 2023 ^2 14.8%, up 70bps over 9 months, source ASF September 2023 - BPCE Lease scope ^3 18.1%, up 3.5pp over a 6-month period, source ASF June 2023 - BPCE Lease scope^4 Excluding the reinsurance agreement with CNP Assurances ^5 Excluding Ostrum
4. *Capital, loss-absorbing capacity, liquidity, and funding*
1. *CET1 ratio*^*1 *
*Groupe BPCE's CET1 ratio*^*1** at the end of December 2023 reached an estimated level of 15.6%*^*1*, compared with 15.4% at the end of September 2023, i.e. +16bps during the quarter. This change can be explained by the following impacts:
· Retained earnings: +9bps,
· Change in risk-weighted assets: -1bp,
· Net issuance of cooperative shares: +1bp,
· Changes in Other Comprehensive Income (OCI): +4bps,
· Other items: +3bps.
Groupe BPCE generated organic capital equal to 53bps in the course of 2023.
*Groupe BPCE has an estimated buffer of 16.5 billion euros* above the threshold for triggering the maximum distributable amount *(MDA) *for equity capital at the end of December 2023, while taking account of the prudential requirements laid down by the ECB applicable at December 31, 2023.
*1.2 **TLAC ratio*^*1*The Total Loss-Absorbing Capacity (TLAC) estimated at the end of December 2023 stands at 116.2 billion euros^1. The TLAC ratio, expressed as a percentage of risk-weighted assets, stood at an estimated 25.4%^3 at end-December 2023 (without taking account of senior preferred debt for the calculation of this ratio), well above the Financial Stability Board's standard requirements of 22.39%^3 at January 2, 2024.
*1.3 **MREL ratio*^*1*Expressed as a percentage of risk-weighted assets at December 31, 2023, Groupe BPCE's subordinated MREL ratio^2 (without taking account of senior preferred debt for the calculation of this ratio) and total MREL ratio stood at 25.4%^1 and 33.4%^1 respectively, well above the minimum requirements laid down by the SRB on January 2, 2024, of 22.39%^3 and 27.03%^3 respectively.
*1.4 **Leverage ratio*^*1*At December 31, 2023, the estimated leverage ratio stood at 5.0%^1 , well above the leverage ratio requirement at December 31, 2023.
*1.5 **Liquidity reserves at a high level*The Liquidity Coverage Ratio (LCR) for Groupe BPCE is well above the regulatory requirement of 100%, standing at 143% based on the average of end-of-month LCRs in the 4^th quarter of 2023.
The volume of liquidity reserves came to 302 billion euros at the end of December 2023, representing a coverage ratio of 161% of short-term financial debts (including short-term maturities of medium-/long-term financial debt).
*1.6 **MLT funding plan: 34,4% of the 2024 plan already raised by January 31, 2024*For 2024, the size of the MLT funding plan, excluding structured private placements and ABS, has been set at 27.25 billion euros, broken down by type of debt as follows:
· 8.5 billion euros in TLAC funding: 2 billion euros in Tier 2 and 6.5 billion euros in senior non-preferred debt,
· 5.5 billion euros of senior preferred debt,
· 13.25 billion euros in covered bonds.
The target for ABS is 4 billion euros.
At January 31, 2024, Groupe BPCE had raised 9.35 billion euros, excluding structured private placements and ABS (34,4% of the 27.25 billion euro program):
· 3.7 billion euros in TLAC funding: 0.8 billion euros in Tier 2 (41% of requirements) and 2.9 billion euros in senior non-preferred debt (45% of requirements),
· 2.6 billion euros in senior preferred debt (47% of requirements),
· 3.0 billion euros in covered bonds (23% of requirements).
ABS issues amounted to 1 billion euros as at January 31, 2024, i.e. 25% of the target.
The outstanding amount of TLTRO III came to 15.7 billion euros at the end of December 2023, whose redemption at maturity is fully integrated in our wholesale MLT funding plans.
Solvency, Total loss-absorbing capacity – see notes on methodology
^1 Estimated at December 31, 2023
^2 Groupe BPCE has chosen to waive the possibility offered by Article 72c (3) of the Capital Requirements Regulation (CRR) to use senior preferred debt for compliance with its TLAC/subordinated MREL requirements
^3 Requirements as of January 2, 2024
5. *Results of the business lines*Unless specified to the contrary, the following financial data and related comments refer to the reported results of the business lines. Changes express differences between Q4-23 and Q4-22, and between full-year 2023 and full-year 2022.
1. *Retail Banking & Insurance*
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 3,557 (7)% 14,824 (8)%
Operating expenses (2,497) (5)% (9,811) (2)%
*Gross operating income* *1,059* *(12)%* *5,013* *(19)%*
Cost of risk (643) (1)% (1,505) (12)%
*Income before tax* *395* *(54)%** *3,525* *(27)%*
Exceptional items (113) ns (112) ns
*Underlying income before tax*^*2* *508* *(21)%* *3,637* *(23)%*
Underlying cost/income ratio^3 69.2% 2.4pp 65.8% 5.0pp
*The positive impact of the disposal of Bimpli in Q4-22 (+281 million euros) created a high base effect and partly explains the negative trend in income before tax in Q4-23.
*Loan outstandings* grew by 3% year-on-year to 719 billion euros at the end of December 2023, including a 3% increase in residential mortgages to 402 billion euros, a 4% increase in equipment loans to 193 billion euros, and a 6% increase in consumer loans to 40 billion euros.
At the end of December 2023, *on-balance sheet client deposits & savings* stood at 676 billion euros, up 21 billion euros year-on-year, with term accounts up 54% and both regulated and unregulated passbook savings accounts up 3%.
The *net banking income* generated by the Retail Banking & Insurance business unit fell by 7% to 3,557 million euros in Q4-23 and by 8% to 14,824 million euros in full-year 2023. These changes include a drop of 10% for the *Banque Populaire* retail banking network in Q4-23 and 11% in full-year 2023, and a drop of 9% for the *Caisse d'Épargne* retail banking network in Q4-23 and 14% in full-year 2023.
The *Financial Solutions & Expertise* business lines continued to enjoy very good sales momentum: revenues rose by 23% in Q4-23 and by 11% in full-year 2023. In the *Insurance* business, revenues fell by 14% in Q4-23 but rose by 55% in full-year 2023, driven by strong sales momentum in life and personal protection insurance. The *Digital & Payments* business unit reported a 7% drop in revenues in Q4-23 and a 2% decline in full-year 2023 on a like-for-like basis.
Against a backdrop of persistent inflation, *operating expenses* remain under tight management, falling by 5% in Q4-23 to 2,497 million euros, and by 2% in full-year 2023 to 9,811 million euros.
The *underlying cost/income ratio*^*3* rose by 2.4pps in Q4-23 to 69.2%, and by 5.0pps in full-year 2023 to 65.8%.
The business unit's *gross operating income* fell by 12% in Q4-23 to 1,059 million euros, and by 19% in 2023 to 5,013 million euros.
The *cost of risk* was down by 1% in Q4-23 and by 12% in full-year 2023, to 643 million euros and 1,505 million euros respectively.
For the business unit as a whole, *income before tax* came to 395 million euros in Q4-23, down 54%, and to 3,525 million euros in 2023, down 27%.
*Underlying income before tax*^*2* amounted to 508 million euros in Q4-23, down 21%, and to 3,637 million euros in 2023, down 23%.
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
*3.1.1 * *Banque Populaire retail banking network*
The Banque Populaire retail banking network is comprised of 14 cooperative banks (12 regional Banques Populaires along with CASDEN Banque Populaire and Crédit Coopératif) and their subsidiaries, Crédit Maritime Mutuel, and the Mutual Guarantee Companies.
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 1,379 (10)% 5,879 (11)%
Operating expenses (974) (4)% (3,969) 0%
*Gross operating income* *404* *(22)%* *1,910* *(27)%*
Cost of risk (282) 1% (651) (18)%
*Income before tax* *146* *(42)%* *1,325* *(29)%*
Exceptional items (10) (52)% (3) (95)%
*Underlying income before tax*^*2* *156* *(43)%* *1,328* *(31)%*
Underlying cost/income ratio^3 70.0% 4.9pp 67.2% 7.7pp
*Loan outstandings* increased by 1% year-on-year to reach a total of 301 billion euros at the end of December 2023.
*On-balance sheet client deposits & savings* increased by 9 billion euros year-on-year to 289 billion euros at the end of December 2023, with growth in term accounts (+65% year-on-year) and an increase in both regulated and non-regulated passbook savings accounts (+1% year-on-year).
*Net banking income* came to 1,379 million euros, down 10% year-on-year in Q4-23.
*In full-year 2023, net banking income* came to 5,879 million euros, down 11%. This total includes:
· A 23% decline in net interest income^4,5 year-on-year, impacted by the cost of liabilities but mitigated by the positive effect of an increased return on assets via new production,
· And a 5% rise in commissions^5 to 2.8 billion euros.
*Operating expenses*, which were kept under tight control, fell by 4% in Q4-23 to 974 million euros, and remained stable in full-year 2023, at 3,969 million euros.
This led to a 4.9pp rise in the *underlying cost/income ratio*^*3*, which stood at 70.0% in Q4-23, and a rise of 7.7pps to 67.2% in full-year 2023.
*Gross operating income *fell by 22% to 404 million euros in Q4-23 and by 27% to 1,910 million euros in full-year 2023.
The *cost of risk* stood at 282 million euros in Q4-23 (+1%) and 651 million euros in full-year 2023 (-18%).
*Income before tax* came to 146 million euros in Q4-23 (-42%) and 1,325 million euros in 2023 (-29%).
*Underlying income before tax*^*2* amounted to 156 million euros in Q4-23 (-43%) and 1,328 million euros in 2023 (-31%).
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
^4 Excluding changes in provisions for home-purchase savings schemes
^5 Income on regulated savings has been restated to account for the net interest margin and included under commissions
*3.1.2* *Caisse d’Epargne retail banking network*
The Caisse d’Epargne retail banking network comprises 15 individual Caisses d’Epargne along with their subsidiaries.
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 1,407 (9)% 5,837 (14)%
Operating expenses (1,080) (5)% (4,179) (3)%
*Gross operating income* *327* *(20)%* *1,658* *(34)%*
Cost of risk (218) (12)% (553) (14)%
*Income before tax* *110* *(34)%* *1,107* *(40)%*
Exceptional items (10) (43)% 13 ns
*Underlying income before tax*^*2* *120* *(34)%* *1,094* *(44)%*
Underlying cost/income ratio^3 76.0% 3.7pp 71.6% 9.2pp
*Loan outstandings* increased by 4% year-on-year to 372 billion euros at the end of December 2023.
*On-balance sheet client deposits & savings* increased by 12 billion euros year-on-year, or 4%, to reach a total of 374 billion euros at the end of December 2023, with growth in term accounts (+39% year-on-year) and both regulated and non-regulated passbook savings accounts (+3% year-on-year).
*In Q4-23, net banking income* came to 1,407 million euros, down 9%. *In full-year 2023, net banking income* fell by 14% to 5,837 million euros. This figure includes:
· A 32% year-on-year fall in net interest income^4,5, impacted by the cost of liabilities but mitigated by the positive effect of an increased return on assets via new production,
· A 4% rise in commissions^5 to 3.2 billion euros.
*Operating expenses*, kept under tight control, were reduced by 5% in Q4-23 and by 3% in full-year 2023, to 1,080 million euros and 4,179 million euros respectively.
*The underlying cost/income ratio*^*3* increased by 3.7pps to 76.0% in Q4-23 and by 9.2pps to 71.6% in full-year 2023.
*Gross operating income* fell by 20% to 327 million euros in Q4-23 and by 34% to 1,658 million euros in full-year 2023.
The *cost of risk* came to 218 million euros in Q4-23, down 12%, and to 553 million euros in full-year 2023, down 14%.
*Income before tax* amounted to 110 million euros in Q4-23 (-34%) and 1,107 million euros in full-year 2023 (-40%).
*Underlying income before tax*^*2* stood at 120 million euros in Q4-23 (-34%) and at 1,094 million euros in full-year 2023
(-43%).
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
^4 Excluding changes in provisions for home-purchase savings schemes
^5 Income on regulated savings has been restated to account for the net interest margin and included under commissions
*3.1.3* *Financial Solutions & Expertise*
*€m*^*1* *Q4-23* *% *
*variation* *2023* *% *
*variation*
Net banking income 335 23% 1,274 11%
Operating expenses (167) 1% (630) 4%
*Gross operating income* *168* *57%* *644* *20%*
Cost of risk (54) 37% (98) 14%
*Income before tax* *112* *67%* *545* *21%*
Exceptional items (1) (49)% (3) (52)%
*Underlying income before tax*^*2* *113* *64%* *549* *20%*
Underlying cost/income ratio^3 49.7% (10.4)pp 49.2% (3.3)pp
In *Consumer Credit*, loan outstandings (personal loans and revolving credit) grew by a strong 9% over 2023.
*Factoring* was buoyed up by a very good level of activity generated with the retail banking networks, with factored sales up 6% on a year-on-year basis.
In *Leasing*, new business rose sharply (+18% year-on-year), driven by strong growth in business with the local banking networks (+15%).
In *Sureties & Financial Guarantees*, gross premiums written were down 25% year-on-year, reflecting the marked slowdown in the residential real-estate market.
*Net banking income* in the Financial Solutions & Expertise business unit rose by 23% to 335 million euros in Q4-23, and by 11% to 1,274 million euros in 2023.
*Operating expenses* are well under control, growing by 1% to 167 million euros in Q4-23 and by 4% to 630 million euros in full-year 2023, in line with growth in revenues, resulting in a strong positive jaws effect.
The *underlying cost/income ratio*^*3* improved by 10.4pps in Q4-23 to 49.7% and by 3.3pps in full-year 2023 to 49.2%.
*Gross operating income* increased by 57% in Q4-23 to 168 million euros and by 20% in full-year 2023 to 644 million euros.
The *cost of risk* increased by 37% in Q4-23 to 54 million euros, and by 14% to 98 million euros in full-year 2023.
*Income before *tax rose by 67% to 112 million euros in Q4-23, and by 21% to 545 million euros in full-year 2023.
*Underlying income before tax*^*2* stood at 113 million euros in Q4-23, up 64%, and at 549 million euros in full-year 2023, up 20%.
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
*3.1.4* *Insurance*^*1*
The results presented below concern the Insurance business unit held directly by BPCE since March 1, 2022.
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 146 (14)% 633 55%
Operating expenses^3 (41) (21)% (163) (2)%
*Gross operating income* *105* *(11)%* *470* *95%*
*Income before tax* *107* *(10)%* *475* *x2*
Exceptional items (2) (55)% (6) (39)%
*Underlying income before tax*^*4* *109* *(12)%* *482* *97%*
Underlying cost/income ratio^5 26.6% (1.3)pp 24.8% (13.7)pp
*In Q4-23, premiums*^*6* rose by 13% to 4.3 billion euros, with growth of 15% for Life & Personal Protection insurance and an increase of 4% for Property & Casualty insurance and, in full-year 2023, an increase of 14% to 16.2 billion euros, with growth of 15% for Life & Personal Protection and 5% for P&C insurance.
Life insurance *assets under management*^*6* stood at 92 billion euros at the end of December 2023. Since end-December 2022, they have grown by 10%, with significant positive inflows in 2023. Gross inflows^6 amounted to 12.7 billion euros in full-year 2023. Unit-linked funds accounted for 34% of assets under management^6 at end-December 2023, up 5pps vs. end-December 2022, and 52% of gross inflows^6 in 2023, up 11pps vs. end-December 2022.
In P&C insurance and Personal Protection insurance, the client equipment rate for both retail banking networks reached 34.1%^7 at end-December 2023, up 0.9bps since end-December 2022.
The *P&C combined ratio* reached 102.2% in 2023 (+5.2pps year-on-year), owing to exceptionally severe weather events over the last three months of the year.
*Net banking income*, down 14% in Q4-23 and up 55% over 2023, came to 146 million euros and 633 million euros respectively.
*Operating expenses* fell by 21% in Q4-23 to 41 million euros and by 2% in full-year 2023 to 163 million euros.
*Gross operating income* stood at 105 million euros in Q4-23 (-11% year-on-year) and 470 million euros in full-year 2023 (+95% year-on-year).
*Income before tax* stood at 107 million euros in Q4-23, down 10%, and 475 million euros in full-year 2023 (multiplied by a factor of 2 in the space of one year).
*Underlying income before tax*^*4* stood at 109 million euros in Q4-23, down 12%, and 482 million euros in full-year 2023, up 97% year-on-year.
^1 BPCE Assurances
^2 Reported figures until ‘Income before tax”
^3 “Operating expenses” corresponds to “non-attributable expenses” under IFRS 17, i.e. all costs that are not directly attributable to insurance contracts
^4 “Underlying” means exclusive of exceptional items
^5 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
^6 Excluding the reinsurance treaty with CNP Assurances
^7 Scope: combined individual clients of the BP and CE networks
*3.1.5* * Digital & Payments*
The results presented below concern the Payments activity held directly by BPCE since March 1, 2022 and those of Oney Bank.
*€m*^*1* *Q4-23* *% change*
*on a like-for-like basis*^*2* *2023* *% change*
*on a like-for-like basis*^*2*
Net banking income 199 (7)% 816 (2)%
*o/w Payments* *116* *3%* *463* *6%*
Operating expenses (171) (11)% (652) (2)%
*o/w Payments* * * *(100)* *(7)%* *(382)* *1%*
*Gross operating income* *27* *(33)%* *164* *(4)%*
*o/w Payments* *16* *x2.7* *82* *44%*
Cost of risk (69) 46% (171) 31%
*Income before tax* *(89)* *ns* *(68)* *ns*
Exceptional items (91) *ns* (113) *ns*
*Underlying income before tax*^*3* *2* *(32)%* *45* *(40)%*
Underlying cost/income ratio^4 79.6% 4.8pp 76.0% 0.7pp
All developments are presented on a like-for-like basis^2.
*Payments*
Net banking income is up 6%, and operating expenses remain under very tight management.
In Payment Solutions, the number of card transactions increased by 8% vs. 2022. Growth in mobile and instant payments continues (1.8x vs. 2022). The rollout of Android POS terminals (x3.5) is gathering pace, and the “Tap 2 Pay” solution for iPhones has been launched.
Payplug recorded strong growth in its business volumes, for intermediate-sized enterprises and large corporations (+16% vs. 2022) as well as for small & medium-sized businesses (+27% vs. 2022).
*Oney Bank*
Net banking income was impacted by changes in the interest rate environment. "Buy Now Pay Later" production is up +3% vs. full-year 2022. Oney Bank remains No. 1 in terms of market share in France for this activity.
The transformation plan has been implemented successfully, with operating expenses down 6%. The underlying level of risk has stabilized compared with 2022, with a trend towards improvement.
Certain exceptional items linked to the restructuring of Oney had an impact on Q4-23 within the framework of the profitable repositioning of this business.
*Digital, Data and AI*
Groupe BPCE is the 1^st bank to carry out instant account-to-account payment transactions with the German Sparkasse Elbe-Elster bank using Wero, the solution developed by EPI.
At the end of December 2023, 11.3 million clients were active on mobile apps (+8% compared with end-December 2022).
The NPS on mobile devices reached +53 at the end of 2023, i.e. +3pps vs. 2022.
The ratings obtained by the Group's mobile applications are very high: 4.7 out of 5 on the App Store and 4.6 out of 5 on Google Play at the end of December 2023, +0.8pps since the beginning of 2023 for professionals on both store ratings.
*Net banking income for the Digital & Payments business unit* fell by 7% in Q4-23 and by 2% in full-year 2023, to 199 million euros and 816 million euros respectively.
The business unit’s *operating expenses* came to 171 million euros in Q4-23, down 11%, and to 652 million euros in full-year 2023, down 2%.
These results have led to a 4.8pp decline in the *underlying cost/income ratio*^*4* to 79.6% in Q4-23. The cost/income ratio increased by 0.7pps to 76% in full-year 2023.
*Gross operating income* fell by 33% in Q4-23 to 27 million euros, and by 3% to 164 million euros in full-year 2023.
The *cost of risk* increased by 46% in Q4-23 to 69 million euros, and by 31% in 2023 to 171 million euros.
*Income before tax* stood at -89 million euros in Q4-23 and -68 million euros in full-year 2023.
*Underlying income before tax*^*3* was 2 million euros in Q4-23, down 32%, and 45 million euros in full-year 2023, down 40%.
^1 Reported figures until ‘Income before tax”
^2 Excluding Bimpli, acquired by Swile in December 2022 (on a like-for-like basis).
^3 “Underlying” means exclusive of exceptional items
^4 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
*3.2. Global Financial Services*
The GFS business unit includes the Asset & Wealth Management activities and the Corporate & Investment Banking activities of Natixis.
*€m*^*1* *Q4-23* *% change* *% change Constant FX* *2023* *% change * *% change Constant FX*
Net banking income 1,874 1% 3% 7,230 2% 3%
o/w Asset & Wealth Management 877 (6)% (3)% 3,205 (4)% (3)%
o/w CIB 997 7% 9% 4,026 7% 8%
Operating expenses (1,389) 1% 3% (5,253) 2% 3%
o/w Asset & Wealth Management (687) (2)% 0% (2,594) (2)% 0%
o/w CIB (702) 5% 7% (2,659) 5% 6%
*Gross operating income* *485* *(1)%* *2%* *1,977* *2%* *3%*
Cost of risk (73) 23% (154) (38)%
*Income before tax* *391* *(10)%* *1,855* *8%*
Exceptional items (14) (1)% (31) x2
*Underlying income before tax*^*2* *405* *(10)%* *1,886* *8%*
Underlying cost/income ratio^3 73.4% 0.4pp 72.2% 0.0pp
*GFS revenues* increased by 1% in Q4-23 and by 2% in full-year 2023, to 1,874 million euros (+ 3% at constant exchange rates) and 7,230 million euros (+3% at constant exchange rates) respectively.
*Corporate & Investment Banking revenues* rose by 7% in 2023 to reach 4 billion euros, thanks to diversification and the strong performance of the following business lines: Global Markets, Global Trade (+15% year-on-year) and Investment Banking and M&A (+12% year-on-year).
*Asset & Wealth Management revenues* fell by 3% at constant exchange rates in full-year 2023, to 3,205 million euros, chiefly due to the year-on-year decline in performance fees and management fees.
*Operating expenses* rose by 1% in Q4-23 and by 2% in full-year 2023, to 1,389 million euros (+3% at constant exchange rates) and 5,253 million euros (+3% at constant exchange rates) respectively.
In 2023, the operating expenses incurred by the *Corporate & Investment Banking* business unit rose by 5%, reflecting the trend in revenues, with a positive jaws effect.
In 2023, despite the impact of inflation, the operating expenses of *Asset & Wealth Management* remained stable at constant exchange rates, thanks to the implementation of the cost-cutting plan.
The *underlying cost/income ratio*^*3* increased by 0.4pps to 73.4% in Q4-23, and remained stable at 72.2% in full-year 2023.
*Gross operating income* fell by 1% in Q4-23 to 485 million euros (+2% at constant exchange rates) and rose by 2% in 2023 to 1,977 million euros (+3% at constant exchange rates).
The *cost of risk* was up 23% to 73 million euros in Q4-23, and down 38% to 154 million euros in full-year 2023.
*Income before tax* fell by 10% to 391 million euros in Q4-23 and rose by 8% to 1,855 million euros in the course of 2023.
*Underlying income before tax*^*2* stood at 405 million euros in Q4-23, down 10%, and at 1,886 million euros in full-year 2023, up 8%.
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
*3.2.1* *Corporate & Investment Banking*
The Corporate & Investment Banking (CIB) business unit includes the Global markets, Global finance, Investment banking and M&A activities of Natixis.
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 997 7% 4,026 7%
Operating expenses (702) 5% (2,659) 5%
*Gross operating income* *296* *12%* *1,367* *11%*
Cost of risk (62) 1% (158) (37)%
*Income before tax* *220* *6%* *1,205* *22%*
Exceptional items (3) ns (5) ns
*Underlying income before tax*^*2* *224* *8%* *1,210* *22%*
Underlying cost/income ratio^3 70.0% (1.8)pp 65.9% (1.4)pp
*Global Markets revenues* were up 2% year-on-year at constant exchange rates. Revenues posted by the Equity business were up 1% year-on-year. FIC-T revenues reached 1,301 million euros in 2023, marginally down by 1%, thanks to the FI-Rates activities (+35%), which offset lower revenues from the FI-Currencies and Commodities businesses.
*Global finance* revenues are up 3% year-on-year, thanks to the strong performance of Global Trade (+15% year-on-year in 2023) and to higher syndication revenues from Real Assets activities (+13% year-on-year).
*Investment banking* activities posted revenues of 206 million euros, up 10% in full-year 2023, driven in particular by strong activity in the Acquisition & Strategic finance business.
The *M&A* business lines continued to outperform with revenues of 319 million euros, up 13% year-on-year in 2023, thanks to sustained activity by the M&A boutiques (notably Fenchurch, Azure capital and Solomon Partners).
The *net banking income* generated by the Corporate & Investment Banking unit rose by 7% both in Q4-23 and in 2023, to 997 million euros and 4,026 million euros respectively.
*Operating expenses* were up by 5% in Q4-23 and 2023, to 702 million euros and 2,659 million euros respectively, in line with revenue trends.
The *underlying cost/income ratio*^*3* improved by 1.8pps to 70.0% in Q4-23 and by 1.4pps to 65.9% in full-year 2023.
*Gross operating income*, buoyed up by positive jaws effects, rose by 12% in Q4-23 to 296 million euros and by 11% in full-year 2023 to 1,367 million euros.
The *cost of risk* came to 62 million euros, up 1% in Q4-23, and 158 million euros, down 37% in full-year 2023.
*Income before tax* rose by 6% to 220 million euros in Q4-23 and by 22% to 1,205 million euros in full-year 2023.
*Underlying income before tax*^*2* rose by 8% to 224 million euros in Q4-23 and by 22% to 1,210 million euros in full-year 2023.
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
*3.2.2* *Asset & Wealth Management*
The business unit includes the Asset & Wealth Management activities of Natixis.
*€m*^*1* *Q4-23* *% change* *2023* *% change*
Net banking income 877 (6)% 3,205 (4)%
Operating expenses (687) (2)% (2,594) (2)%
*Gross operating income* *189* *(16)%* *610* *(14)%*
*Income before tax* *171* *(25)%* *650* *(12)%*
Exceptional items (11) (26)% (26) 69%
*Underlying income before tax*^*2* *182* *(25)%* *676* *(10)%*
Underlying cost/income ratio^3 77.2% 3.0pp 80.1% 2.4pp
In Asset Management, *assets under management*^*4* stood at 1,166 billion euros at December 31, 2023, up 8% since the end of December 2022, with a significantly positive market effect.
*Net inflows* into Asset Management^4 in 2023 reached 12.9 billion euros (excluding life insurance products and money market funds), with a reallocation from equity products to fixed-income products (25 billion euros in net inflows).
At the end of December 2023, Asset Management recorded *solid investment performances*. At the end of December 2023, 77% of rated funds were ranked in the 1^st and 2^nd quartiles over a 5-year horizon, compared with 70% at the end of December 2022 (source: Morningstar).
In Asset Management^4 , the *total fee rate* (excluding performance fees) in 2023 came to 25.2bps (stable year-on-year), or 37.8bps overall if insurance-driven management is excluded (-1.4bps year-on-year).
*Net banking income* for the Asset & Wealth Management business unit fell by 6% in Q4-23 and by 4% in full-year 2023, to 877 million euros and 3,205 million euros respectively.
*Operating expenses* remained under tight control, falling by 2% in both Q4-23 and full-year 2023, to 687 million euros and 2,594 million euros respectively thanks, in particular, to the implementation of the cost-cutting plan.
The *underlying cost/income ratio*^*3* deteriorated by 3.0pps in Q4-23 and by 2.4pps in full-year 2023, to 77.2% and 80.1% respectively.
*Gross operating income* stood at 189 million euros in Q4-23, down 16%, and at 610 million euros in 2023, down 14%.
*Income before tax* came to 171 million euros (-25%) in Q4-23 and 650 million euros (-12%) in full-year 2023.
*Underlying income before tax*^*2* fell by 25% to 182 million euros in Q4-23 and by 10% to 676 million euros in full-year 2023.
^1 Reported figures until ‘Income before tax”
^2 “Underlying” means exclusive of exceptional items
^3 The business line cost/income ratios have been calculated on the basis of net banking income and underlying operating expenses
^4 Asset Management: Europe includes Dynamic Solutions and Vega IM; North America includes WCM IM; excluding Wealth Management
*ANNEXES*
*Notes on methodology*
*Presentation of the pro-forma quarterly results*
The main pro-forma restatement concerns the transition to IFRS 17. Data for 2022 has been recalculated under IFRS 17 to obtain a like-for-like basis of comparison.
New management standards adopted by Natixis (normative allocation of capital to the business lines) have led to a recalculation of the data for the 2022 quarterly series.
The tables showing the transition from reported 2022 to pro-forma 2022 are presented on annexes.
*IFRS 17/IFRS 9*
Groupe BPCE has applied the provisions of IFRS 17 pertaining to insurance contracts since January 1, 2023, as well as IFRS 9 for insurance entities.
IFRS 17 replaces IFRS 4 and is applicable retroactively, with the implementation of pro-forma financial statements for comparative data for the 2022 financial year (different profit recognition rates between the two standards).
IFRS 9 replaces IAS 39 by modifying the principles for the valuation of the financial assets of insurers using the same rules as those applied by banks since January 1, 2018. It applies in the same way considering the temporary exemption enjoyed by insurance entities. Groupe BPCE has elected to apply the provisions of IFRS 9 for the 2022 comparative data.
IFRS 17 provides for the estimation at inception of the Contractual Service Margin (CSM) of a group of insurance contracts recognized in the balance sheet and which is then amortized in the income statement (in Net Banking Income) as and when the service is rendered. This margin takes account, in particular, of the related overheads.
Insurance liabilities are recognized at present value.
Income and expenses relating to ceded insurance and reinsurance contracts are presented separately in Net Banking Income.
General expenses relating to insurance contracts are presented by destination as a deduction from Net Banking Income.
The cost of credit risk on financial investments in insurance activities is isolated on a separate line in the insurance aggregates in Net Banking Income.
*Creation of the Digital & Payments sub-segment*
The Payments and Oney business lines have been brought together within a single Digital & Payments sub-segment.
Segment information for previous quarters has been restated accordingly. These internal transactions have no impact on the Group's financial statements.
*Internal transfer*
Crédit Foncier's subsidiary, Banco Primus (Corporate center) was transferred to BPCE Financement (Financial Solutions & Expertise business unit within RB&I).
Segment information for previous quarters has been restated accordingly. These internal transactions have no impact on the Group's financial statements.
*Exceptional items*
Exceptional items and the reconciliation of the reported income statement to the underlying income statement of Groupe BPCE are detailed in the annexes.
*Net banking income*
Customer net interest income, excluding regulated home savings schemes, is computed on the basis of interest earned from transactions with customers, excluding net interest on centralized savings products (Livret A, Livret Développement Durable, Livret Épargne Logement passbook savings accounts) in addition to changes in provisions for regulated home purchase savings schemes. Net interest on centralized savings is assimilated to commissions.
*Operating expenses*
Operating expenses correspond to the aggregate total of the “Operating Expenses” (as presented in the Group’s 2022 universal registration document, note 4.7 appended to the consolidated financial statements of Groupe BPCE) and “Depreciation, amortization and impairment for property, plant and equipment and intangible assets.”
*Cost/income ratio*
Groupe BPCE's cost/income ratio is calculated on the basis of net banking income and operating expenses excluding exceptional items, the latter being restated to account for the contribution to the Single Resolution Fund (SRF) booked in the Corporate center division. The calculations are detailed in the annexes.
Business line cost/income ratios are calculated on the basis of underlying net banking income and operating expenses.
*Cost of risk*
The cost of risk is expressed in basis points and measures the level of risk per business line as a percentage of the volume of loan outstandings; it is calculated by comparing net provisions booked with respect to credit risks of the period to gross customer loan outstandings at the beginning of the period.
*Loan outstandings and deposits & savings*
Restatements regarding transitions from book outstandings
to outstandings under management are as follows:
· Loan outstandings: the scope of outstandings under management does not include securities classified as customer loans and receivables and other securities classified as financial operations,
· Deposits & savings: the scope of outstandings under management does not include debt securities (certificates of deposit and savings bonds).
*Capital adequacy*
*Common Equity Tier 1 *is determined in accordance with the applicable CRR II/CRD V rules, after deductions.
*Additional Tier-1 capital *takes account of subordinated debt issues that have become non-eligible and subject to ceilings at the phase-out rate in force.
*The leverage ratio *is calculated in accordance with the applicable CRR II/CRD V rules. Centralized outstandings of regulated savings are excluded from the leverage exposures as are Central Bank exposures for a limited period of time (pursuant to ECB decision 2021/27 of June 18, 2021).
*Total loss-absorbing capacity*
*The amount of liabilities eligible for inclusion in the numerator used to calculate the Total Loss-Absorbing Capacity (TLAC) ratio *is determined by article 92a of CRR. Please note that a quantum of Senior Preferred securities has not been included in our calculation of TLAC.
This amount is consequently comprised of the 4 following items:
· Common Equity Tier 1 in accordance with the applicable
CRR II/CRD IV rules,
· Additional Tier-1 capital in accordance with the applicable
CRR II/CRD IV rules,
· Tier-2 capital in accordance with the applicable CRR II/CRD IV rules,
· Subordinated liabilities not recognized in the capital mentioned above and whose residual maturity is greater than 1 year, namely:
· The share of additional Tier-1 capital instruments not recognized in common equity (i.e. included in the phase-out),
· The share of the prudential discount on Tier-2 capital instruments whose residual maturity is greater than 1 year,
· The nominal amount of Senior Non-Preferred securities maturing in more than 1 year.
*Liquidity*
Total liquidity reserves comprise the following:
· Central bank-eligible assets include: ECB-eligible securities not eligible for the LCR, taken for their ECB valuation (after ECB haircut), securities retained (securitization and covered bonds) that are available and ECB-eligible taken for their ECB valuation (after ECB haircut) and private receivables available and eligible for central bank funding (ECB and the Federal Reserve), net of central bank funding,
· LCR eligible assets comprising the Group’s LCR reserve taken for their LCR valuation,
· Liquid assets placed with central banks (ECB and the Federal Reserve), net of US Money Market Funds deposits and to which fiduciary money is added.
Short-term funding corresponds to funding with an initial maturity of less than, or equal to, 1 year and the short-term maturities of medium-/long-term debt correspond to debt with an initial maturity date of more than 1 year maturing within the next 12 months.
Customer deposits are subject to the following adjustments:
· Addition of security issues placed by the Banque Populaire and Caisse d’Epargne retail banking networks with their customers, and certain operations carried out with counterparties comparable to customer deposits
· Withdrawal of short-term deposits held by certain financial customers collected by Natixis in pursuit of its intermediation activities.
*Digital indicators*
*The number of active customers using mobile apps or websites *corresponds to the number of customers who have made at least one visit via one of the digital channels (mobile apps or website) over the last 12 months.
*The scores on the App Store or Google Play online stores *correspond to the average of the scores awarded by users at the end of the period in question.
*Reconciliation of 2022 data to pro forma data*
*Groupe BPCE* *Q1-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *6,575 * *(4,961)* *(424)* *17* *37* *1,244* *785*
IFRS 17 (426) 376 13 (1) (38) (29)
*Pro forma figures* *6,149* *(4,585)* *(411)* *16* *37* *1,206* *755*
*Retail banking *
*and Insurance* *Q1-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *4,627 * *(2,856)* *(343)* *12* *5* *1,444* *1,076*
IFRS 17 (422) 375 13 (2) (36) (27)
*Pro forma figures* *4,205* *(2,481)* *(330)* *10* *5* *1,409* *1,049*
*Global financial services* *Q1-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *1,782* *(1,275)* *(85)* *3* *15* *441* *313*
Guarantees (2) (2) (1)
New rules 2 2 1
*Pro forma figures* *1,782* *(1,275)* *(85)* *3* *15* *440* *313*
*Corporate center* *Q1-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *166* *(830)* *4* *2* *18* *(640)* *(604)*
Guarantees 2 2 1
New rules (2) (2) (1)
IFRS 17 (5) 1 1 (2) (2)
*Pro forma figures* *162* *(829)* *4* *3* *18* *(643)* *(606)*
*Groupe BPCE* *Q2-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* * 6,569 * *(4,250)* *(457)* *15* *10* *1,886* *1,329*
IFRS 17 (537) 345 12 (15) (194) (147)
*Pro forma figures* *6,032* *(3,904)* *(445)* ** *10* *1,693* *1,182*
*Retail banking *
*and Insurance* *Q2-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* * 4,630 * *(2,819)* *(392)* *8* *1* *1,430* *1,056*
IFRS 17 (530) 346 12 (14) (185) (141)
*Pro forma figures* *4,101* *(2,473)* *(379)* *(5)* *1* *1,245* *915*
*Global financial services* *Q2-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *1,767* *(1,252)* *(84)* *3* *434* *314*
New rules 2 2 1
*Pro forma figures* *1,771* *(1,252)* *(84)* *3* *437* *316*
*Corporate center* *Q2-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *171* *(179)* *18* *3* *8* *22* *(40)*
New rules (2) (2) (1)
IFRS 17 (7) (1) (9) (6)
*Pro forma figures* *161* *(179)* *18* *2* *8* *10* *(48)*
*Groupe BPCE* *Q3-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* * 6,309 * *(4,258)* *(347)* *15* *14* *1,732* *1,288*
IFRS 17 (374) 342 5 5 (22) (14)
*Pro forma figures* *5,934* *(3,916)* *(342)* *20* *14* *1,710* *1,273*
*Retail banking *
*and Insurance* *Q3-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* * 4,437 * *(2,756)* *(366)* *13* *4* *1,332* *955*
IFRS 17 (380) 343 5 5 (27) (17)
*Pro forma figures* *4,057* *(2,413)* *(361)* *19* *4* *1,305* *977*
*Global financial services* *Q3-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *1,692* *(1,265)* *(19)* *3* *411* *293*
New rules 2 2 1
*Pro forma figures* *1,694* *(1,265)* *(19)* *3* *413* *294*
*Corporate center* *Q3-22 *
In millions of euros *Net banking*
* income* *Operating *
*expenses* *Cost of *
*risk* *Share in net income of associates* *Gains or losses *
*on other assets* *Income *
*before tax* *Net income*
*- Group share*
*Reported figures* *179* *(236)* *38* *(1)* *10* *(11)* **
New rules (2) (2) (1)
IFRS 17 6 (1) 5 3
*Pro forma figures* *183* *(237)* *38* *(1)* *10* *(7)* *2*
*Grou