Results for the 2nd quarter and 1st half of 2020

Financial strength, resilient business activities, tight cost control, and prudent forward-looking provisioning 

H1-20: net banking income €10.7bn, reported net income¹ €415m, underlying net income¹ €854m, down 52.5%

including a substantial rise in cost of risk due to prudent forward-looking provisioning

Retail Banking & Insurance: rebound in business activities in June 2020, 0.7% growth in net banking income and 2% increase in gross operating income in H1-20 thanks to tight cost control.

• Loan outstandings: dynamic new loan production in the retail networks with year-on-year growth of 12.6% for the Banques Populaires and 8.8% for the Caisses d’Epargne
• Active support for corporate and professional customers via State-guaranteed loans: €21bn disbursed by the two retail banking networks to more than 150,000 customers
• Financial Solutions & Expertise: 0.6% growth in net banking income in H1-20 thanks to the dynamism of activities with the retail banking networks. Strict cost control (expenses down -1.6%), producing a positive jaws effect
• Insurance: strong revenue growth of +8.9% in H1-20, validating the strategy focused on integrating the full range of expertise

Asset & Wealth Management: high level of net inflows in Q2-20 at €16bn, driven by both Europe and the US

• Assets under management of €906bn at end-June 2020 vs. €828bn end-March 2020
• Net banking income down 13.3% in H1, due notably to decrease in performance fees and seed money mark down

Corporate & Investment Banking: good performance achieved by the Global Finance, Fixed Income, and Investment Banking businesses altered by losses in Equity Derivatives, under strategic review; strict cost control

• Global markets: net banking income down 27% in H1 due to significant impact in the Equity derivatives business with the cancellation of dividends
• Global finance: +8% revenue growth in Q2-20 QoQ; Investment banking & M&A: revenues up 11% vs. Q2-19
• Strong discipline imposed on costs, down 8.4% in Q2-20 year-on-year and by 6.7% in H1-20 at constant exchange rates

Expenses¹: costs declined by -5.7% in Q2-20 and by -2.0% in H1-20, reflecting both tight control over expenses and cost variability

Cost of risk: sharp increase reflecting a prudent provisioning policy

• Low individual cost of risk in the retail networks but cautious provisioning policy in Q2-20 in anticipation of an increase in the cost of risk in the quarters to come
• Cost of risk for the Group stood at 55bps in Q2-20 and 42bps in H1-20, i.e. €1,484m of provisions booked in H1-20 (x2.4 vs H1-19) 

Capital adequacy and liquidity: positions substantially above the regulatory requirements and in line with the Group’s strategic objectives

• Capital position at June 30, 2020: CET1 ratio² of 15.6%, TLAC ratio² of 23.4% and MREL ratio² of 30.2%
• LCR³ of 156% and liquidity reserves of €319bn at end-June 2020
• 2020 MLT funding plan slightly revised downward to take account of the economic context; nearly 70% of the plan already completed

Continued development of the business lines and drive to streamline the Group

• Major step taken in the creation of an insurance AM leader in Europe
• Divestment of a 29.5% stake in Coface signed in Q1-20
• After successfully implementing the Digital inside strategy, disposal of Fidor engaged with the signature of the divestment project⁴

Laurent Mignon, Chairman of the Management Board of Groupe BPCE, made the following statement: “Despite the degraded economic environment resulting, in particular, from the strict lockdown measures imposed on the population in France, the commercial activities of our businesses remained resilient and have enjoyed a return to more normal, even very dynamic, levels since June, with all our customers given active support during this period as illustrated by the disbursement of €24bn in state-guaranteed loans. At the same time, we have taken a major step in the expansion of our business lines with the creation of a European leader in insurance asset management. Groupe BPCE's financial performance in the first half of 2020 demonstrates the relevance of our universal banking model, with good results posted by our Retail Banking & Insurance businesses, allowing to offset the decline in the results generated by our activities more closely linked to developments in the financial markets, notably our Corporate & Investment Banking arm. The financial strength of our Group, with very high level of capital and extremely robust liquidity positions in line with our strategic objectives, the power of our decentralized cooperative business model, and the commitment of all our employees will enable to absorb the effects of this major economic crisis, to define a new strategic roadmap to be presented at the end of June 2021, and to continue financing our customers’ projects in all our territories.”

¹ See note on methodology, and after restating to account for the impact of IFRIC 21
² Estimate at end-June 2020 – pro forma taking into account the full activation of the State guarantee (activated with a 2-month time lag required by the Government) relative to the State-Guaranteed loans granted by the Group to its customers, representing a reduction in RWAs of € 6.8bn (around + 25bps)
³ End-of-month average of the Liquidity Coverage Ratio at end-June for the 2^nd quarter of 2020 – see note on methodology 
⁴ Subject to the information-consultation procedure with the employees’ representative bodies and subject to obtaining the necessary approvals from the competent regulatory authorities. 

Find more information on : https://groupebpce.com/en/investors/results-and-publications/results-presentations