Full-year results 2016

4th Quarter and Full-Year 2016 Results (1) of Groupe BPCE

Published net income of €4bn in 2016
Robust generation of capital, chiefly through retained earnings

“Our Group has published good results for 2016 with net income attributable to equity holders of the parent of €4bn, thereby confirming the strength of our fundamentals and the relevance of our full-service universal banking model. The business lines of Natixis put up a fine performance with the notable contribution of the Corporate & Investment Banking division and the further development of our insurance activities. In our retail banking division, the commercial dynamism of our networks – with new loan production in excess of €100bn in 2016 – has enabled us to limit the unfavorable impact of the low interest-rate environment on our revenues. Groupe BPCE will be presenting its plan for the transformation of its retail banking activities on February 21, in anticipation of its future strategic plan for 2018 – 2020.”

 

François Pérol, Chairman of the Management Board of Groupe BPCE

Commercial activities remain buoyant

Strong momentum in retail banking

  • 3.7% year-on-year growth in loan outstandings and 1.7% in deposits & savings at Dec. 31, 2016  
  • New loan production in excess of €100bn in 2016

Development of Insurance activities (2)

  • Strong momentum in life insurance with gross inflows up 7% compared with 2015
  • Non-life insurance: 5.3 million contracts at end-2016 and 9% year-on-year portfolio growth

Notable contribution from Natixis’ Corporate & Investment Banking division

  • Excellent momentum enjoyed by Global markets, with high levels achieved by the Equity and Fixed income businesses

Strong fundamentals

Revenues (3) stand up well despite an interest rate environment highly unfavorable to retail banking activities: €23.4bn, down 1.1%

  • Natixis business line revenues in 2016 up by 2.9% (3) year-on-year, to €8.1bn
  • Retail banking revenues down by 2.2% , to €15bn

Decline in the cost of risk to 22 basis points in 2016, lower than the business cycle average (30 to 35bp)
Net income attributable to equity holders of the parent (3) of €3.4bn, up 7.6%
Published net income attributable to equity holders of the parent of €4bn, up 26.7%

Robust Generation of Capital

Substantial capital generation capacity making the Group well-placed to comply with future regulatory requirements
CET1 ratio of 14.3% (5)  at Dec. 31, 2016: +130bp in 2016 (including 73bp through retained earnings)
TLAC ratio of 19.4% (5) (including the January 2017 issue of senior non-preferred debt for a total of €1.6bn)

Preparation of Groupe BPCE's new strategic plan for 2018-2020

Merger of regional banks: creation of Banque Populaire Auvergne Rhône Alpes and Banque Populaire Méditerranée, reducing the number of Banque Populaire banks to 15 at end-2016 vs. 18 at end-2015
Plans for the transformation of retail banking: presentation on February 21, 2017

(1) 2015 and Q4-15 are presented pro forma (cf. the note on methodology at the end of this press release); unless specified to the contrary, all changes use the same reference base of December 31,2015
(2) Entities included: CNP Assurances, Natixis Assurances, Prépar vie (gross inflows from the Banque Populaire and Caisse d’Epargne retail banking networks)
(3)  Excluding non-economic and exceptional items
(4)  Excluding changes in provisions for home purchase savings schemes and after restating to account for €73m in capital gains on real estate asset disposal recognized in 2015  
(5)  Estimate at Dec. 31, 2016 - CRR/CRD IV without transitional measures (except for deferred tax assets on tax loss carryforwards and pro forma of the additional phase-in of the stock of DTA in accordance with regulation 2016/445); additional Tier-1 capital takes account of subordinated debt issues that have become ineligible and capped at the phase-out rate in force