INVESTOR PRESENTATION - 2018RESULTS-April 2019 - 2018 RESULTS-April 2019
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I N V E S T O R P R E S E N TAT I O N
2 0 1 8 R E S U LT S - A p r i l 2 0 1 9
DISCLAIMER
This document has been prepared by La Banque Postale and La Banque Postale Home Loan SFH solely for use in investor meetings. This document is confidential and is not to be reproduced by any person, nor be distributed to
any person other than its original recipient. La Banque Postale and La Banque Postale Home Loan SFH take no responsibility for the use of these materials by any person.
This presentation does not constitute a prospectus or other offering document in whole or in part. Recipients should not subscribe for any securities issued pursuant to the Offering except on the basis of information in the
prospectus in final form (including the documents incorporated by reference therein) to be issued by the Company in connection with the Offering.
Information contained in this presentation is a summary only, and is qualified in its entirety by reference to the prospectus. The prospectus will include a description of risk factors relevant to an investment in the securities to be
issued by the Company and any recipients should review in particular the risk factors before making a decision to invest.
This presentation does not constitute or form part of any offer or invitation to sell or issue or any solicitation of any offer to buy or subscribe for any security nor shall it (or any part of it) form the basis of (or be relied on in connection
with) any contract or investment decision in relation thereto. Recipients should conduct their own investigation, evaluation and analysis of the information set out in this document and should rely solely on their own judgment,
investigation, evaluation and analysis in evaluating the Company, its business and affairs.
No representation or warranty, express or implied, is given by or on behalf of the Company, the Joint Lead Managers, or any of their respective directors, officers, employees, advisers, agents, affiliates or any other person as to (a)
the accuracy, fairness or completeness of the information or (b) the opinions contained in this document, and, save in the case of fraud, no liability whatsoever is accepted for any such information or opinions.
The information and opinions contained in this presentation are provided as at the date of this document and are subject to change without notice although neither the Company nor any other person assumes any responsibility
or obligation to provide the recipients with access to any additional information or update or revise any such statements, regardless of whether those statements are affected by the results of new information, future events or
otherwise. All liability (including, without limitation, liability for indirect, economic or consequential loss) is hereby excluded to the fullest extent permissible by law.
Certain statements included in this presentation are “forward-looking”. Such forward-looking statements speak only at the date of this document, involve substantial uncertainties and actual results and developments may differ
materially from future results expressed or implied by such forward-looking statements. Neither the Company nor any other person undertakes any obligation to update or revise any forward-looking statements.
All written, oral and electronic forward-looking statements attributable to the Company, or the Joint Lead Managers, or persons acting on their behalf are expressly qualified in their entirety by this cautionary statement.
This document and the investment activity to which it relates may only be communicated to, and are only directed at (i) persons in the United Kingdom having professional experience in matters relating to investments, being
investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the FPO); (ii) qualified investors (investisseurs qualifiés) as defined in Articles
L411-2 of the French Monetary and Financial Code and (iii) persons to whom the communication may otherwise lawfully be made (together Relevant Persons). Any investment or investment activity to which this document relates
is available only to Relevant Persons and will be engaged in only with Relevant Persons. This document must not be acted or relied on by any persons who are not Relevant Persons.
NOT FOR PUBLICATION OR DISTRIBUTION IN THE UNITED STATES - Nothing in this presentation shall constitute an offer of securities for sale in the United States. The securities referred to in this presentation (if any) have not been
registered under the U.S. Securities Act of 1933, as amended (the Securities Act) or under the securities laws of any state of the United States , and may not be offered or sold in the United States absent registration or an exemption
from registration under the Securities Act and applicable state securities laws.
This document may contain a number of forecasts and comments relating to the targets and strategies of the La Banque Postale Group. These forecasts are based on a series of assumptions, both general and specific, notably –
unless specified otherwise - the application of accounting principles and methods in accordance with IFRS (International Financial Reporting Standards) as adopted in the European Union, as well as the application of existing
prudential regulations. This information was developed from scenarios based on a number of economic assumptions for a given competitive and regulatory environment.
The Group may be unable:
to anticipate all the risks, uncertainties or other factors likely to affect its business and to appraise their potential consequences;
to evaluate precisely the extent to which the occurrence of a risk or a combination of risks could cause actual results to differ materially from those provided in this presentation.
There is a risk that these projections will not be met. Investors are advised to take into account factors of uncertainty and risk likely to impact the operations of the Group when basing their investment decisions on information
provided in this document. Unless otherwise specified, the sources for the rankings are internal.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 2
Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet …....18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 3OVERVIEW AND BUSINESS MODEL
La Banque Postale: a strategic subsidiary of La Poste Group
La Banque Postale, a subsidiary of La Poste The backbone of La Banque Postale
La Banque Postale is fully-owned by La Poste, the French Postal Service
La Poste is structured around 4 business units and fulfill 4 public missions: (1)
73.68%
Universal postal service
Contribution to regional planning
Press distribution
26.32%
Banking accessibility
La Banque Postale is a strategic subsidiary of La Poste: 100% 40.87%
La Poste is hold by law a majority stake in La Banque Postale (Law of
postal activities regulation, 2005)
La Banque Postale is a key contributor to La Poste income
La Banque Postale uses the distribution network La Poste 20.15%(2)
(1) Caisse des Dépôts and its subsidiaries constitute a State-owned group at the service of the public interest and of the
country’s economic development. The said group fulfils public interest functions in support of the policies pursued by the
State and local authorities, and may engage in competitive activities. (Article L. 518-2 of the French Monetary Financial Code)
(2) 18.14% with Sopassure and 2.01% in call option
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 4OVERVIEW AND BUSINESS MODEL
La Poste: a major French services Group
Multi-business model(1)(2) Growing 2018 revenues
La Banque Postale
La Banque 2018 Net Banking Income: +0.7%(3)
Postale Balance sheet: €245.2 billion
22.1% Service-Mail- 22% of La Poste revenues and 49% of operating income in 2018(4)
Parcels
Service-Mail-Parcels
45.9% 2018 Revenues: +1.3%
2018 Revenues 2018 Parcels volume: 335 million
€24.7bn
(+2.4% vs 2017)
Geopost / DPD
2018 Revenues: +8.2%
2018 Parcels volume: 1,310 million
Geopost / DPD
29.2%
Digital Services
Digital Services 2018 Revenues: +6.6%
2.8% Number of Digiposte+ customers: 3 million
(1) Breakdown of 2018 La Poste revenues excluding Network, other sectors and intercompany (3) Restating 2017 from the General Interest Mission compensation paid in 2017 in respect of 2016 excluding
home savings provision
(2) La Banque Postale’s revenue corresponds to its net banking income (4) Breakdown of 2018 La Poste revenues and operating income excluding Network, other sectors and intercompany
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 5OVERVIEW AND BUSINESS MODEL
La Banque Postale: a sustainable business model
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 6OVERVIEW AND BUSINESS MODEL
La Banque Postale : a bank with a full range of services
Since 2006, LBP has gradually expand its range of services through partnerships and acquisitions.
CIB Banking License for
creation Ma French Bank
Acquisition of
La Banque EasyBourse, an online Ecole de la Banque KissKissBankBank Goodeed
Postale brokerage platform et du Réseau acquisition acquisition
Tocqueville
2006 2008 Finance BPE 2014 2017 2018
acquisition acquisition
2007 2009 2010 2011 2012 2013 2015
30 August 2018
La Banque Consumer Property Corporate Public Partnerships Announcement of a
Housing
Postale loan and lending Sector with Aegon AM and merger project
loan
Prévoyance casualty financing Malakoff-Médéric between La Banque
insurance Postale and
Development of insurance activities CNP Assurances
Development of lending activities
Before 2006, La Poste’s financial services business was mainly focused on savings. Since then, LBP has developed its product range to become a bank with a full range of services :
With diversified lending activities, enhancing LBP’s role in financing the French economy.
Committed to serve all clients, all over the country.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 7OVERVIEW AND BUSINESS MODEL
La Banque Postale : growth through efficient partnerships
Retail Banking Insurance Asset Management
Retail banking
Private banking / discretionary portfolio Life insurance
management Asset management for individuals
P&C Asset management for companies
Consumer finance
Health insurance
Real estate
Public sector lending
Contingency insurance
Non-profit organizations & Corporate banking
Partnership in Partnership in
Consumer finance Life Insurance P&C Partnerships in Asset Management
FINANCEMENT ASSURANCES IARD
ASSET MANAGEMENT
35% 65%
100% 20.15% 25% 5%
Partnership in Public sector lending Partnership in
Health Insurance 70%
75% 5%
20%
ASSURANCE SANTE
100% 60% 40%
35% 14%
51%
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 8Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient earnings and a solid balance sheet ...18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 9STRONG CREDIT AND EXTRA-FINANCIAL RATINGS
Credit ratings aligned with market standards
S&P Global Ratings Fitch Ratings
LBP: LT / ST: A / A-1, outlook: Positive LT / ST: A- / F1, outlook: Stable
LBP Home Loan SFH: AAA, outlook: Stable
Last rating action on 2018/10/30: Last rating action on 2019/02/06:
LT/ST ratings affirmed LT/ST ratings affirmed
Outlook upgraded to Positive Stable outlook unchanged
Rating by debt: Rating by debt:
Senior Preferred: A Senior Preferred: A-
Senior Non Preferred: BBB Senior Non Preferred: A-
Tier 2: BBB-
Rating comments: Rating comments:
« The positive outlook on LBP mirrors that on La Poste. We expect the La Poste « LBP’s ratings reflect its established franchise in deposit collection and housing loans
group will maintain a strong, lasting interest in LBP in the next two years. LBP is part in France, fairly conservative risk appetite, good asset quality, modest profitability and
of the group’s overall strategy, and we see it as strongly integrated within the group. sound capitalisation, taking into account potential ordinary support from its parent La
Because we equalize the ratings on LBP with those on La Poste, an upgrade of La Poste (A+/Stable), France’s state-owned post office. »
Poste would trigger an upgrade of LBP. »
S&P Global Ratings methodology: Fitch Ratings methodology:
LBP’s rating is equalized to the rating of its parent company, La Poste LBP has a Support Rating Floor (SRF) rated ‘A-’.
Group.
LT credit ratings for French peers: LT credit ratings for French peers:
A A+ A A A+ A A- A+ A+ A A+ A+
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 10STRONG CREDIT AND EXTRA-FINANCIAL RATINGS
A strong and stable shareholding structure
S&P Global Ratings Fitch Ratings
LT / ST: AA / A-1+, outlook: Stable LT / ST: AA / F1+, outlook: Stable
France Last rating action on 2018/10/05: Last rating action on 2018/07/20:
LT/ST ratings affirmed LT/ST ratings affirmed
Stable outlook unchanged Stable outlook unchanged
LT / ST: AA / A-1+, outlook: Stable LT / ST: AA / F1+, outlook: Stable
Caisse des Dépôts
Last rating action on 2018/04/16: Last rating action on 2018/11/30:
et Consignations LT/ST ratings affirmed LT/ST ratings affirmed
Stable outlook unchanged Stable outlook unchanged
LT / ST: A / A-1, outlook: Positive LT / ST: A+ / F1, outlook: Stable
La Poste Last rating action on 2018/10/30: Last rating action on 2018/09/11:
LT/ST ratings affirmed LT/ST ratings affirmed
Outlook upgraded to Positive Stable outlook unchanged
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 11STRONG CREDIT AND EXTRA-FINANCIAL RATINGS
Outstanding extra-financial ratings
May 2018 May 2017
1st bank in France 1st bank among 231 international banks
2nd bank among 339 international banks Rating: 67/100 (+ 4pts)
Second international bank to obtain the B- rating
“Prime” Status(1)
June 2017 2017
First active rating for La Banque Postale in 2017 Rating: AA
Rating: 73/100 (+ 14pts)
(1) Awarded to companies that meet specific minimum requirements in Corporate Ratings and achieve the best ESG
scores among their sector peers
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 12Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet …...18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 13A CHALLENGING ECONOMIC ENVIRONMENT
Low interest rates and adverse market conditions
Eonia – Annual average level, %
0,50
0,25
0,00
EONIA still negative,
-0,25 -0.35% -0.36%
around -0.4% per year
-0,50
2013 2014 2015 2016 2017 2018
Low interest rates Source : IHS, LBP
10-year OAT – Annual average level, %
2,5
2,0
1,5 10-year OAT still at
0.82%
1,0 0.75% a very low level
0,5
0,0
2013 2014 2015 2016 2017 2018
Source : IHS, LBP
CAC 40 – Year-end level
5500 5313
5250
5000 4731 Declining European
Adverse market 4750
4500 stock indexes, among
4250
conditions 4000
3750
which CAC-40
3500
2013 2014 2015 2016 2017 2018
Source : IHS, LBP
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 14A CHALLENGING ECONOMIC ENVIRONMENT
The French housing market: encouraging trends
The French housing market is well positioned in Europe A resilient French housing market
A comparatively low home ownership rate (64%(1)) In 2018, production of home loans has increased by 5%(4) compared to
Prudent credit market underwriting practices with a cautious loan 2017 and reached €168bn(4). This growth reflects a good dynamic in
approval policy based on borrowers’ solvability analysis rather than on a very low-rate environment.
the value of underlying assets. In 2018, the share of credit renegotiation has reached 17%(4)
Stability of revenues and debt ratio are key issues : In France, the compared to 41%(4) in 2017. At December 2018, the share reached
affordability ratio is stable at 30%(2) in 2018. 14.6%, the lowest level since 2014. The market is now normalized.
Average maturity at inception: 18 years(3) at December 2017
(almost stable compared to December 2016) France : home loans production (in €bn)
273
European Home Ownership % (2017) 252
213 203
Germany 51% 160 168
121 137
France 64%
UK 65%
Eurozone 66%
Netherlands 69%
Italy 72%
2015 2016 2017 2018
Spain 77%
Total production Production out of renegotiations
Source : Eurostat data
Source : Banque de France data (December 2018), LBP internal results
(1) Eurostat data (4) Internal figures based on Banque de France data (December 2018)
(2) CA Economic – Real Estate (February 2019)
(3) EMF – Hypostat 2018 (September 2018)
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 15A CHALLENGING ECONOMIC ENVIRONMENT
2018 loan growth driven by corporate and public sector financing
2018 loan
Home loans : €10.3bn
New consumer loans: €2.5bn (+6.4%)
Corporate loans and public sector financing: €26.3bn (+27%)
Credit portfolio
Home loans (1) (in €bn) Consumer loans (in €bn)
+3.4% 2018 outstanding loans
€93bn (+9.5%) +1.9%
55.8 58.4 60.4
53.4 54.1 4.8 4.9
4.5 4.7
4.0
65%
2014 2015 2016 2017 2018
5%
2014 2015 2016 2017 2018
(1) excluding Dutch home loan portfolio
Public sector financing (in €bn)
Corporate loans (in €bn)
+40.5%
+7.2%
18.5
4.5
7.1 8.1 8.7
20% 7.8
13.2
3.6 5.3
2.9
2014 2015 2016 2017 2018
10% 2014 2015 2016 2017 2018
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 16Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet …...18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 172018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
Resilient 2018 results
CONSOLIDATED RESULTS 2017 %
(in € millions)
2017 2018
proforma(1) proforma(1)
Net Banking Income 5,687 5,557 5,570 + 0.2 % NBI up 0.7% despite challenging environment
Net Banking Income excluding the PEL/CEL effect 5,619 5,489 5,528 + 0.7 %
(low interest rates) +0.7%
Operating expenses (4,619) (4,619) (4,615) - 0.1 % Operating expenses slightly down 0.1% yoy
-0.1%
Gross Operating Income 1,068 938 955 +1.8 %
Cost of risk(2) (192) (192) (133) - 30.6 % Cost of risk down 30.6% in Retail Banking
14 bps(2)
Cost of the ACPR penalty 0 - (50) -
Operating Income 876 746 772 + 3.4 %
Share of profits of equity associates 263 263 268 + 1.9 %
Pre-tax Income 1,138 1,008 1,039 + 3.1 %
Income tax (340) (283) (274) - 3.3 %
Non-controlling interests (34) (34) (40) + 16.0 %
Net Income, Group Share 764 691 726 + 5.1 %
Cost-Income ratio 81.8 % 83.7 % 83.4 % - 0.3 point Cost-income ratio slightly down -0.3 point
(1) Restating 2017 from the General Interest Mission compensation paid in 2017 in respect of 2016
(2) Annualized cost of risk after application of IFRS 9 as from 1 January 2018
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 182018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
Resilient revenues across all businesses
Performance trends across businesses (NBI excl. PEL/CEL effect) Retail Banking NBI (excl. PEL/CEL effect)
in € millions in € millions
% of 46%
5,528 Commissions 45%
5,461 5,489 +0.7% and others 43%
+0.5%
153 +5.2%
Asset 145 NBI 5,100 5,122 5,114
163 +0.4% -0.1%
Management
Commissions
and others
2,213 2,309 2,366
222 261 +17.6%
Insurance 198
NIM
Retail Banking 5,100 5,122 5,114 -0.1% (Net Interest 2,887 2,813 2,748
Margin)
2016 proforma 2017(1) 2018 2016 proforma 2017(1) 2018
(1) Restating 2017 from the General Interest Mission compensation paid in 2017 in respect of 2016 (1) Restating 2017 from the General Interest Mission compensation paid in 2017 in respect of 2016
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 192018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
Efficient cost control and a lower cost-income ratio
Breakdown of operating expenses(1) Cost-Income Ratio
in € millions in percent (%)
4,587 + 0.7% 4,619 - 0.1% 4,615
488 522
83.7
Employee benefit expenses 566 + 1.3 pt 83.4
Taxes and duties 11 60 104 - 0.3 pt
82.4
External services and other expenses(2) 3,913 3,857 3,749
Amortisation and provision 176 181 197
2016 2017 2018 2016 proforma 2017(3) 2018
(1) General operating expenses + net depreciation, amortisation and impairments of tangible and (3) Restating 2017 from the General Interest Mission compensation paid in 2017 in respect of 2016
intangible assets
(2) Customer advisors & salesforce, Back office & IT, Counter & ATM transaction and operating costs
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 202018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
2018 Strong results
Operating income Pre-tax income
in € millions in € millions
834(2) 1,023 1,008 + 3.1 % 1,039
Asset
70 746 772 - 1.4 %
Management + 3.4 %
Insurance 92 - 10.5 % 60
59 59
113 132
113
2016 Proforma 2017(1) 2018
Net income, Group share
Retail Banking 672 574 579 in € millions
726
694 691
574 + 5.1 %
- 0.5 %
2016 Proforma 2017(1) 2018
2016 Proforma 2017(1) 2018
(1) Restating 2017 from the General Interest Mission
(2) Scope effect linked to Ciloger cession in 2016 (€15.8 million impact on operating income)
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 212018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
Retail Banking : continuous growth in loan outstandings
Resilient financial performances Loan production
Consolidated results 2017 % in € billions
2017 2018
(in € millions) proforma(1) proforma(1)
Net Banking Income 5,320 5,190 5,156 -0.7% 39.1
36.7 +6.5 %
+27.0 %
10.3
Operating expenses (4,424) (4,424) (4,395) -0.7% 28.9
13.5
2.5
Gross Operating Income 896 766 762 -0.7% Home loans 11.2 2.4
Cost of risk (192) (192) (133) -30.6%
Consumer loans 2.4
26.3
Loans to 20.8
Cost of the ACPR penalty 0 0 (50) - corporations 15.3
and public sector
Operating Income 704 574 579 +0.9% 2016 2017 2018
(1) Restating 2017 from the General Interest Mission
2018 Financial results Saving outstandings(2)
NBI excluding non-recurring items is near stable at €5,114 million, or -0.15% compared to 2017. The restated in € billions
Net Interest Margin (NIM) fell by 2% at €2,748.1 million while commissions were up slightly by 0.6% over the 315 315
period thanks to increased sales.
310 -0.1 %
+1.5 %
Demand deposits 59 63 66
Balance sheet
Retail bank operating expenses remained under control, down slightly by 0.7% over the period at €4,395
savings
million.
Ordinary savings 80 81 82
The cost of risk decreased significantly by 30.6% at €133 million. This is 14 basis points in terms of loan
outstandings. Housing savings 32 32 32
Retail Banking operating income was €579 million. It was up by 0.9% over the period compared to the 2017
proforma.
Financial
savings
Life insurance 126 126 124
The decision of the ACPR published on 24 December 2018 regarding La Banque Postale’s AML/CFT system
was recorded in operating income in the amount of €50 million. Restated for the ACPR penalty and the UCITS 12 12 10
General Interest Mission, operating income increased by 9.5%. 2016 2017 2018
(2) End-of-period
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 222018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
A strong contribution from the Insurance business
Strong financial results Insurance : a 17.6% increase in NBI
Consolidated results
2017 2018 %
(in € millions)
4,613
Net Banking Income 222 261 +17.6%
Insurance contracts 4,568
(in thousands)
Operating expenses (109) (128) +17.7%
4,452
261
Gross Operating Income 113 133 +17.6%
+ 17.6 % 14
Cost of risk 0 (1) ns 222
NBI 49
(in € millions) 198 + 12.1 % 11
Operating Income 113 132 +17.1%
Health 10
47
2018 Financial results Insurance
50 64
Advisory
The non-life insurance business continued to grow with the portfolio now at nearly 4.6 million contracts
(+1%). In particular: 52
The portfolio of Property and Casualty insurance contracts (37.3% of total volume) increased by P&C 46
3.6% over the period to reach 1.7 million contracts, boosted by a solid sales dynamic;
La Banque Postale Prévoyance provident savings portfolio (58.6% of the total portfolio) was virtually
stable over the period at about 2.7 million contracts;
The Health care insurance contract portfolio (4.1% of the portfolio by volume) decreased by 3.8% at 135
0.2 million contracts. 110
The Insurance unit's NBI increased by 17.6% to €261 million over the period, driven by the strong Providence 91
performance of Prévoyance (51.7% of the insurance unit's NBI, +22.7%) and Property and Casualty (24.5% of
the insurance unit's NBI, +23.1%).
The operating expenses of the insurance subsidiaries reached €128 million (+17.7%) due to development
costs. 2016 2017 2018
Lastly, the insurance unit's operating income came in at €132 million for the period, up significantly by 17.1%.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 232018 RESULTS : RESILIENT RESULTS AND A SOLID BALANCE SHEET
Growth in Asset Management Business
Increasing financial results Asset Management : a 5.2% increase in NBI
Consolidated results
2017 2018 %
(in € millions)
Net Banking Income 145 153 +5.2% Assets
under management 222 218
Operating expenses (86) (93) +7.1% (in € billions)
181
Gross Operating Income 59 60 +2.5%
NBI
Cost of risk 0 0 - (in € millions)
163 - 10.6 %
+ 5.2 % 153
Operating Income 59 60 +2.5% Ciloger(1) 26 145
18
Tocqueville 17
15
Finance SA
2018 Financial results
Assets under management of La Banque Postale Asset Management group amount to €218 billion, down by 2%
over the period. LBP 128 135
The total assets of La Banque Postale Asset Management decreased by 1.9% over the period to €216.3 billion Asset Management 122
due to adverse stock markets. However, distribution remained positive thanks to the retail network.
The Asset Management NBI rose by 5.2% over the period to €153 million.
LBPAM continues investing to support its development and increasing therefore the operating expenses by 7.1%
to €93 million.
Operating income increased by 2.5% compared to 2017 to reach €60 million.
2016 2017 2018
(1) In equity associate since 2017
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 24Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet ......18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 252019 OUTLOOK
2019 Outlook
A stronger balance sheet A merger project with CNP Assurances
In order to support the growth of La Banque A key year for the project
Postale and subjected to the approval of its
governance, La Poste Group plans in the first half of
2019 a capital increase by converting €800 million
of AT1 into equity(1).
A boost in Digital A reinforced citizen commitment
Launch of Ma French Bank this summer
in 2,000 post offices Caps on incident fees (€25 monthly) for its
1.6 million financially vulnerable customers
Development of Platform58 startup
Incubator (1 February 2019) Freeze on bank fees for all of its customers
(1) In accordance with Article 26 of (EU) no. 575/2013, the recognition in capital of the securities issued for this
transaction is subject to the approval of the European Central Bank.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 26Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet ......18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 27SOUND RISK MANAGEMENT
A lower cost of risk reflecting prudent risk policies
Retail banking cost of risk (in € millions) NPL and coverage ratios
-30.6%
Coverage ratio 39.3%(2) 76% 54% 75% 85%
181 181 192 NPL ratio 3.6%
133 2.6% 2.8%
2.4%
0.9%
La Banque BNP Paribas Société Générale BPCE Crédit Agricole
2015 2016 2017 2018 Postale Group
(2) Depreciations (Bucket 3) at 31/12/18, divided by impaired outstandings (Bucket 3) Source: 2018 Investor Presentations
Retail banking cost of risk (in bps(1)) Retail banking cost of risk – French market (in bps(1))
yoy
-8 bps -5 bps -4 bps stable stable -3 bps -1 bp
-8 bps evolution
26 23
23 23 22
16 17
14 15
14
10
La Banque BNP Société Banque Caisse Caisses LCL
2015 2016 2017 2018 Postale Paribas Générale Populaire d’Epargne Régionales CA
(1) Annualized cost of risk (1) Annualized cost of risk Source: 2018 Investor Presentations
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 28SOUND RISK MANAGEMENT
A strong asset quality
High quality of assets at 2018 High quality of retail lending portfolios
A conservative RWA calculation approach following standard method
Balance sheet at 31 December 2018: €245bn, +€14bn vs 01.01.2018 A progressive and controlled diversification of lending businesses
o/w €93bn loan outstandings A conservative financing approach, focusing on stringent management
Credit risk still accounting for most of total RWAs High quality securities portfolios (HTC and HTCS YE 2018)
(in € billions) Breakdown by sector Breakdown by country Breakdown by rating
65.2
69.9 9% 6 2% 7%
52.7 54.2
59.6 2.0
1.1
18% Credit %
institutions Europe
Outside 25% A
2.1 Businesses Europe Other
Market RWA 1.3 1.2
43.8 48.2 53.9 59.4
Credit RWA 42.5
Operational RWA 8.9 9.2 9.3 9.3 9.4
2014 2015 2016 2017 2018
Basel 3 / CRR 73 % 92% 68%
Sovereign France AAA and AA
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 29Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet ......18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 30LIQUIDITY AND FUNDING
Balance sheet breakdown
Key points LBP balance sheet at 31 December 2018 (€bn)
245 245
Balance sheet at 31 December 2018: €245bn, +€14bn vs 01.01.2018
Large customers’ deposits base : €182bn
Centralised regulated savings 69 76 Regulated savings
LBP “centralises” at the CDC most of all the funds deposited on Livret A,
LDDS and LEP regulated savings accounts and since H1 2016, only half of LEP
regulated savings accounts
Customer
Remaining part of the deposit base (not centralised to CDC) amounting to deposits/
Retail
€112bn: 63 savings
home loans(1)
€182bn
is used to fund customer lending and mainly home loan activity.
Corporations Customer deposits/savings
106
Assets out of home loans 7 excluding regulated savings
is invested in a portfolio mostly classified in Amortised Costs regulated
savings
Other loans
25
(dating back to before LBP was created and mainly consisting in centralised to customer
HQLA bonds) and a credit spread portfolio. at CDC
Amortised costs
€176bn
portfolio 24
Since January 2018, LBP is no longer allowed to overcentralise its Livret A FVOCI portfolio 14 22 Debt securities
deposits, but will benefit from a 10-year phase-in period to absorb the liquidity
it will receive back. Short term assets 19 Repo
and central bank
30
9 Other Liabilities and Provisions
Others 13 14 Own funds and hybrids
Assets Liabilities
(1) Including Dutch mortgage loan portfolio (€2.7bn)
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 31LIQUIDITY AND FUNDING
A strong and stable liquidity position
Loan to Deposit ratio Group’s LCR ratio and HQLA liquidity buffer
in percent (%) LCR ratio HQLA
in percent (%) in € billions
76%
24.6
Level 2 1.6
1,3
86.4%
81.3% 157.4% 145.3%
74.4% Level 1
21.8 23.0
2016 2017 2018 2017 2018 2018
Sound financing structure with a loan to deposit ratio at 86.4% LCR ratio: 145.3% at 31 December 2018
at 31 December 2018 (+5.1 pts vs 2017)
A strong liquidity buffer with 94% of level 1 assets
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 32LIQUIDITY AND FUNDING
2018 Funding mix
Liability breakdown at 31 December 2018
€245bn
In addition to a large customers deposit base, LBP has diversified wholesale
Provisions and other liabilities(1)
funding sources: Bond borrowings
Short-term debts
Short Term: 4% 4%
Interbank funding: €20bn Neu CP programme 5%
Repo: Large valuable portfolio of high quality securities Own funds and hybrids
5%
ECP program of €20bn
Repo 8% 43% Customer deposits
Medium to Long Term:
Covered bond programme through LBP Home Loan SFH
EMTN and Neu MTN programme
Agreement with SFIL/CAFFIL to refinance French local
authorities loan production
Access to EIB (European Investment bank) long term funding
Long term Repo 31%
Regulated savings
(1) Accruals (2.1%), Provisions (1.2%), Revaluation differences (0.3%), Derivatives (0.1%) and Tax liabilities (0.1%)
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 33LIQUIDITY AND FUNDING
Diversifying funding instruments to support lending growth
2019 Funding plan Wholesale funding sources at 31 December 2018
in percent (%)
Refinance its growing loan portfolio and further diversify its investor base trough:
Covered bonds: besides €1bn already issues in Q1 in primary
€12.37bn
markets, further benchmark and private placements would be
considered
Senior Non-Preferred: further issuance with at least one
6% 6%
benchmark transaction and private placement Senior Preferred
Repo LT
Senior Preferred: although issuance will be driven by private
placements issuance in Euros and Dollars, La Banque Postale could
consider to issue a benchmark transaction for the first time
10%
A green and social Bond Framework
54% Senior Non
Covered Bonds Preferred
24%
Tier 2
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 34LIQUIDITY AND FUNDING
Debt maturity schedule
Debt maturity schedule (benchmarks)
in € millions
1200
1000
800
600
400
200
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Tier 2 SNP Covered
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 35Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet ......18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 36CAPITAL AND MREL REQUIREMENTS
CET1 Evolution in 2018
CET1 Evolution
in € millions
-4.3%
327
726 140
8,522
626
8,155
CET1 31/12/2017 Profit Dividend FTA IFRS9 Others CET1 31/12/2018
La Banque Postale’s fully loaded CET1 ratio is 11.7%, down 1.7 point compared to the end of December 2017.
The decrease in La Banque Postale’s common Equity Tier 1 capital is mainly due to:
the impact of the IFRS 9 standard first application (€140 million),
unrealised capital losses generated by the volatility of markets conditions, which have a full impact on La Banque Postale’s own funds since 1 January 2018(1).
(1) In application of Articles 467 and 468 of regulation (EU) no. 575/2013, the deductibility of unrealised gains and losses on regulatory capital could be handled via temporary measures until 31/12/2017.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 37CAPITAL AND MREL REQUIREMENTS
2019 Supervisory Review and Evalution Process (SREP)
CET1 Ratio
Margin
Following the Supervisory Review and Evaluation Process (SREP) carried out by the ECB, the 9.0% +2.7 pts
latter notified La Banque Postale of its consolidated CET1 own funds requirements(1) applicable O-SIIs 0.25%
CCB 2.50%
as of 1 March 2019. It was 9.0% and included:
4.50% of CET1 P2R 1.75%
11.7%
a 1.75% requirements in additional own funds for Pillar 2 (Pillar 2 Requirements)
Pillar 1 4.50%
2.50% for a capital conservation buffer (CCB)
and 0.25% for a buffer for Other Systemically Important Institutions (O-SIIs). Minimum requirement of CET1 ratio as at 31/12/18
CET1 Ratio (fully loaded) (fully loaded)
Total Capital Ratio
12.5% Margin
+3.7 pts
Following the Supervisory Review and Evaluation Process (SREP) carried out by the ECB, the O-SIIs 0.25%
latter notified La Banque Postale of its consolidated Total Capital own funds requirements(1) CCB 2.50%
P2R 1.75%
applicable as of 1 March 2019. It was 12.5% and included:
16.2%
9.00% of CET1 SREP requirements applicable as of 1 March 2019
Pillar 1 8.00%
1.50% of Additional Tier 1 (ATI)
2.00% of Tier 2 (Tier 2)
Minimum requirement of Total Total Capital ratio as at
Capital Ratio (fully loaded) 31/12/18 (fully loaded)
(1) These requirements do not take into account the countercyclical buffer, applicable as of 1 July 2019, which is 0.25% for exposures in France.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 38CAPITAL AND MREL REQUIREMENTS
Regulatory capital and MREL eligible ressources
MREL eligible ressources at 31/12/18
in € millions in % of RWAs
14,012 20.0%
TLAC and MREL considerations 724 1.0% Other instruments(1)
As an “O-SIB” and as of today, La Banque Postale is not subject to 718 1.0% Other senior debt
1,250 1.8% SNP debt
TLAC such as defined by the FSB
On 15/02/19, the European Council and European Parliament agreed 2,365 3.4% T2
on a legislative package which introduces TLAC in European law and
800 1.1% AT1
amends MREL
This package should be adopted by European Parliament in April 2019
MREL eligible ressources at 31/12/18 8,155 11.7% CET1
A total amount of €14,012m
Including a Total Capital amount of €11,320m at 31/12/18
Representing 20.0% of RWAs
31/12/18
(1) Mainly representing the part of 2010 Tier 2 issuance not qualified as Tier 2 anymore
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 39CAPITAL AND MREL REQUIREMENTS
An ability to generate capital to support future growth
Capital management philosophy
LBP and Group LP are committed to manage adequate solvency levels to LBP Tier 1 ratios and La Poste Group support
support LBP’s strategy as evidenced by several capital actions.
First capital Capital increase of AT1
increase €228m and AT1 Capital increase Core Tier 1
issue of €800m of €633m
Maintening a prudent approach on capital… of €860m
15.5% 15.7%
14.6%
Consistently above 10% CET1 ratio since LBP creation 12.7% 13.2% 12.8%
11.4% 14.0% 14.3% 113.4% 11.7%
… under conservative solvency calculations
Assessing Pillar 1 risk under standard approach
2011 2013 2014 2016 2017 2018
… AT1 conversion on H1 2019 Basel 2 / 2.5 Basel 3 / CRR
La Poste Group plans in the first half of 2019 a capital increase by converting
€800 million of AT1 into equity(1) (1) In accordance with Article 26 of (EU) no. 575/2013, the recognition in capital of the securities issued for this
transaction is subject to the approval of the European Central Bank.
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 40CAPITAL AND MREL REQUIREMENTS
Balance sheet - Regulatory indicators
Regulatory indicators well above requirements
CAPITAL LEVERAGE LIQUIDITY
CET 1 Total Capital Leverage ratio LCR NSFR
2018 requirements (1) 8.3% 11.8% N.A. >100% >100%
End-2018 ratios 11.7% 16.2% 4.6% (2) 145% >100%
2019 requirements (1) 9.0% (3) 12.5% N.A. >100% >100%
(1)
(2)
Excl. P2G
3.4% at 31/12/2018 including centralized savings
p p p p p
(3) 9.25% from 01/07/2019, including a contra cyclical buffer at 0.25%
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 41Table of contents 1 Overview and business model …………………………….........4
2 Strong credit and extra-financial ratings ………….…….........10
3 A challenging economic environment ……….………….........14
4 2018 Results : resilient results and a solid balance sheet ......18
5 2019 Outlook ………………………………….………………......26
6 Sound risk management ………….……………………………..28
7 Liquidity and Funding .…………..……………..………………...31
8 Capital and MREL requirements ………..…………………......37
9 LBP Home Loan SFH ………………………………………........43
10 Appendix ………………..……………………………………........51
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 42LBP HOME LOAN SFH
La Banque Postale Home Loan strategy
La Banque Postale home loan business Split by guarantee (2018 production)
In percent (%)
Low risk profile customers : 3% 4%
Owner occupied home (84%) Others Other credit
institutions
Tenor at inception (19.9 years)
36% 57%
Fixed rate loans (99.6%) Collateral security
(mortgage) Crédit Logement
55% of loans were guaranteed by Crédit Logement on 31 December 2018
Source LBP
Loan purpose (2018 production) Doubtful home loans
In percent (%)
In percent (%)
7% 1,8
1,6
8% Other 1,4
1,2
French market
LBP(1)
Repurchase 1
0,8
17% 0,6 Crédit Logement
New Home 68% 0,4
0,2
Existing home 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source LBP Source: Banque de France, ACPR, LBP, Crédit Logement ; (1) LBP out of BPE and Sofiap
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 43LBP HOME LOAN SFH
La Banque Postale Home Loan SFH : legal framework
A strong legal framework and advantageous treatment for Investors
Investor informations : a dedicated website
La Banque Postale Home Loan SFH is a French credit institution, 100% owned by LBP, licensed
by the French financial regulator (Autorité de Contrôle Prudentiel et de Résolution – ACPR).
Minimum contractual over-collateralization (OC) of 8.1% over the 5% legally required, using
the same weightings
Under CRD IV / CRR (article 129) and LCR delegated act, AA- or better rated covered bonds
with minimum size of €500m are eligible to level 1B for LCR and benefit from a 10% RW
treatment
Segregation of cover pool assets and legal preferential claim for covered bonds investors
Absolute seniority of payments over all creditors, no early redemption or acceleration
Regulated covered bonds are exempted from bail-in (BRRD)
https://www.labanquepostale.com/en/investors/debt.hlsfh.html#
ECBC Label to ensure full
transparency on the cover pool
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 44LBP HOME LOAN SFH
La Banque Postale Home Loan SFH : legal framework
Structure overview Namens-schuldverschreibungen Documentation
La Banque Postale
(Borrower)
Cover Pool
(French Home Loans)
In June 2014, La Banque Postale has established a program for the issuance
Collateral Collateralized Principal and of German registered covered bonds, named as :
Security Loans Interest
Namensschuldverschreibungen or “N-bonds”.
La Banque Postale Home Loan SFH
(Covered Bonds Issuer) Investors in the N-bonds benefit from a strong protection with absolute
seniority over the SFH's assets (including the coverpool), by law. They are
Collateralized loans Public Issuances
ranked pari passu with the other SFH's bondholders.
Private Issuances
The N-bonds are registered covered bonds governed by German law.
Covered Bonds Covered Bonds
(OH) Proceeds
Investors
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 45LBP HOME LOAN SFH
La Banque Postale Home Loan SFH : a resilient and granular cover pool
Program Terms
Program size € 20bn
Rating AAA by S&P
Currency €
Listing Euronext Paris
Governing law French Law, Ability to issue German law governed Namens-schuldverschreibungen
Amount issued €9,236 bn (14/03/2019)
Maturity type Hard/Soft bullet
Registrar and paying agent for NSV LBBW
Cover Pool (ECBC template : reporting date 02/25/2019 – cut-off date 01/31/2019)
Total outstandings € 12,850 bn
Number of loans 192,589
Average loan balance € 66,723
Seasoning 55.9 months
WA LTV 67.6%
Indexed WA LTV 65.9%
Owner occupancy 87.2%
Interest rates 100% fixed rates
2018 RESULTS – April 2019 INVESTOR PRESENTATION La Banque Postale - 46You can also read
