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Transcript of La Banque Postale Group · 2020-05-19 · LA BANQUE POSTALE . La Banque Postale (LBP) : from La...

  • La Banque Postale Group

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    Disclaimer

    2 May 2017 INVESTOR PRESENTATION

    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.

  • LA BANQUE POSTALE

    Table of contents

    3

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    A solid and stable shareholding structure and a core subsidiary for Le Groupe La Poste

    4

    LBP is wholly-owned by La Poste, the French Postal Service

    La Poste is itself 73.7% held by the French government and 26.3% by La Caisse des Dépôts (100% held by the French State) and is structured around 5 business units :

    Services-Mail-Parcels (mail and parcels, logistics solutions and local services),

    GeoPost (domestic and international express services),

    La Banque Postale (financial services),

    La Poste Network (servicing its business units) and

    Digital Services (solutions and services in the area of digital transformation, digital marketing and digital trust).

    LBP is considered as a core strategic subsidiary of La Poste:

    La Poste is legally bound to keep a majority stake in LBP (Law of regulation of postal activities, 2005)

    LBP is an essential contributor to La Poste income LBP is, by law, enabled to use La Poste’s staff for its

    activities

    73.7%

    100%

    100%

    26.3%

    May 2017 INVESTOR PRESENTATION

    The backbone of La Banque Postale

  • LA BANQUE POSTALE

    La Banque Postale (LBP) : from La Poste’s Financial Services… into a fully fledged bank

    5

    1817 2000

    Creation of Efiposte

    (manages sight deposits

    collected by La Poste)

    Creation of the first postal service

    mandate named ‘Reconnaissance’

    31/12/2005

    Efiposte becomes

    La Banque Postale

    2007

    Consumer Finance

    2009 2011

    Corporate lending

    La Banque Postale Crédit

    Entreprises

    La Banque Postale

    Assurances IARD

    A long history of La Poste’s financial services But still a short history as a fully-fledged bank

    2012

    Lending to French local authorities

    La Banque Postale

    Collectivités Locales

    La Banque Postale

    Financement

    P&C Insurance

    SFH BPE

    La Banque Postale

    Home Loan SFH

    2013 2014

    Sofiap

    2015

    Partnership with Aegon

    AM Merger BPE /

    LBPGP

    Wealth Management

    Unit

    Since 2006, LBP has gradually acquired tools and built up a network of partnerships to accelerate its development and achieve its full potential

    Before 2006, La Poste’s financial services business was mainly focused on savings

    Since 2006, LBP developed its product range and became a fully-fledged retail bank

    • Diversification of LBP lending activities has enhanced LBP role in financing the French real economy

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    La Banque Postale (LBP): A business model based on core business development and successful partnerships

    6

    A very active partnership policy with major players in order to accelerate new businesses launches, relying on safe and efficient operational process

    Retail banking Private banking / discretionary portfolio

    management Consumer finance Public sector lending Non-profit organizations & Corporate

    banking

    Life assurance P&C Health Insurance Contingency insurance

    Insurance

    Asset management for individuals Asset management for companies Real estate

    Asset Management

    Partnership in Consumer finance

    FINANCEMENT

    65% owned by LBP

    COLLECTIVITES LOCALES

    65% owned by LBP

    Partnership in Public sector lending

    Partnership in Life assurance

    20.15% consolidated by LBP

    Partnership in P&C

    ASSURANCES IARD

    65% owned by LBP

    Partnership in Health Insurance

    ASSURANCES SANTE

    51% owned by LBP

    ASSET MANAGEMENT

    25% of

    Partnerships in Asset Management

    5% of

    Retail Banking

    70% owned by LBP

    35% of

    14% of

    May 2017 INVESTOR PRESENTATION

    40% consolidated by LBP

    60% of

    http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCKXaq5jB_MgCFcNXGgodVP8MlQ&url=http://www.ue-finance.com/en/index.html&psig=AFQjCNEtkxcSYay_YGSCvxuawNLB0_s-6A&ust=1446923759527336

  • LA BANQUE POSTALE

    La Banque Postale (LBP): a core focus on Retail banking and a leading position on the French banking system

    7

    Retail Banking

    Retail banking Private banking /

    discretionary management

    Consumer finance Public Sector lending Non-profit

    organizations & Corporate banking

    One of the rare pure player in French retail

    banking

    Insurance

    Life assurance Contingency P&C Health Insurance

    Partnership with CNP Assurances

    (20.15% consolidated)

    Asset management for individuals

    Asset management for companies

    Real estate

    LBPAM is the 4th largest asset management

    company in France* (€179.2bn AUM)

    Asset Management

    Contribution to net income before tax YE 2016

    Insurance

    27%

    Asset Management 7%

    Retail Banking 66%

    * Source: AFG: the French Asset Management Association (2015)

    10.7 million active retail customers

    13.5% market share on ordinary savings (all savings accounts except CEL) and 23,1% market share on the Livret A

    5.6% market share on home loans outstandings**

    Key figures of retail banking activity at YE 2016

    Retail banking in France NBI 2016 ***(€bn)

    ** Including BPE and Sofiap *** Press releases reports, excluding home savings provisions, YE 2016 **** Sofia Study, March 2016 ***** Retail banking France, Registration Document or press releases, YE 2016

    LBP in the French banking environment

    LCL 3.1

    Crédit Agricole 13.8

    Caisses d’Epargne 7.2

    Banques Populaires 6.3

    Société Générale 8.3

    BNP Paribas 6.4

    LBP 5.1

    22.1

    Caisses d’Epargne 13.2

    Banques Populaires 7.3

    LCL 6.2

    Crédit Agricole

    Société Générale 6.7

    BNP Paribas 6.4

    LBP 17.6

    Penetration rates on main current account March 2016 (%)****

    Number of branches YE 2016 (m)*****

    LCL 1.9

    Caisses d’Epargne

    Crédit Agricole 7.0

    Banques Populaires

    3.0

    4.2

    BNP Paribas

    3.3

    Société Générale

    2.0

    LBP 8.8

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    A solid and stable shareholding structure, reflected in strong credit ratings

    8

    Latest rating update 2016 2016

    France AA / Stable (October 2016) AA / Stable (December 2016)

    Caisse des Dépôts et Consignations AA / Stable (October 2016) AA / Stable (December 2016)

    Le Groupe La Poste A / Stable (December 2016) A+ / Stable (Dec 2016)

    Latest rating update November 2016 April 2017

    Long term debt A / Stable A- / Stable

    Short-term debt A-1 F1

    Tier 2 BBB-

    La Banque Postale Home Loan SFH AAA / Stable (May 2017)

    La Banque Postale’s credit ratings

    LT debt ratings of La Banque Postale’s stakeholders

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    Table of contents

    9 May 2017 INVESTOR PRESENTATION

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

  • LA BANQUE POSTALE

    A growing loan portfolio with the development of new businesses

    10

    New home loans production : €11.2bn versus €12.8bn in 2015 and €9bn in 2014* (+24.2%)

    New consumer loans production : €2.4bn versus €2.3bn in 2015 and €2.1bn in 2014 (+13%)

    Loans granted to corporates and local public sector : €15.3bn versus €12.1bn in 2015 and €9bn in 2014 (+69.5%)

    A dynamic loan production …

    Outstanding loans to corporates and local public sector** (in €bn)

    Home Loans

    Consumer Loans

    Loans to corporates and local

    public sector

    Home loans outstandings (in €bn)

    Consumer loans outstandings (in €bn)

    5654535045

    3,2%

    2016 2015 2014 2013 2012

    +8.4%

    2016

    4.9

    2015

    4.5

    2014

    4.0

    2013

    3.4

    2012

    2.6

    +48.2%

    2016

    6.5

    2013

    4.0

    2012

    0.7

    14.4

    2015

    9.7

    2014

    May 2017 INVESTOR PRESENTATION

    … and a growing loan portfolio

    *Including BPE and Sofiap ** Businesses and local authorities

  • LA BANQUE POSTALE 11

    Dynamism of Insurance and Asset Management businesses

    2016

    180.6

    2015

    178.3

    2014

    157.6

    +1.3%

    Asset management : AUM (in billions of euros)*

    LBPAM: €179.2 billion in assets under management, up by 1.2% on a like-for-like basis

    Tocqueville Finance: €1.4 billion** in assets under management, up by 12.8%

    assets under management

    *Assets at end of period, including LBPGP assets in 2014 and Fédéris assets in 2015 **Excluding LBPAM delegation

    An overall portfolio of policies at almost 4,452,000, up by 5.5%

    P&C insurance (IARD): 520,000 new policies (portfolio +14%)

    Health insurance: over 110,000 new policies (portfolio up by 50%): success of ACDS (Assurance Coups Durs Santé, or hard times health insurance) and "Oui Santé" ("Yes to Health" - Aide à la Complémentaire Santé, or supplementary health insurance assistance)

    Contingency insurance: over 280,000 new individual policies (portfolio

    stable)

    Insurance: trend in policy portfolios (in thousands)

    4,220

    2,758

    1,353

    109

    2014

    3,964

    2,750

    1,134

    80

    +5.5%

    Contingency

    P&C

    Health

    2016

    4,452

    2,751

    1,539

    163

    2015*

    * Proforma 2015 in Health Stock

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    2016: resilient results

    12 May 2017 INVESTOR PRESENTATION

    Net Banking Income affected by the low interest rate environment: -2.5%

    Operating expenses under control: -2.3%

    Cost-income ratio increase contained: +0.3 points

    Cost of risk stable at €181 million, down 22 bps compared to outstandings***

    Consolidated income statement (€ millions)

    Main items in the income statement 2016 2015 %

    Net Banking Income

    Excluding the effect of the home savings provision on a like-for-like basis

    5,602

    5,745

    -2.5%

    - 6.3 %*

    Operating expenses

    On a like-for-like basis

    (4,587)

    (4,693)

    -2.3 %

    -2.5%**

    Gross operating income 1,015 1,052 -3.5%

    Cost of risk (181) (181) +0.2 %

    Operating income 834 871 -4.3%

    Share of income from equity associates 191 207 -7.6 %

    Pre-tax income 1,023 1,094 -6.5%

    Net income, Group share 694 707 -1.8%

    Cost-income ratio 82.4% 82.1% +0.3 points

    * Reversal of provision of €142 million in 2016 against a provision allowance of €63 million in 2015; Consolidation effect (Ciloger, Fédéris) * Consolidation effect (Ciloger, Fédéris) * Cost of commercial banking credit risk

  • LA BANQUE POSTALE

    Group net banking income impacted by the persistently low interest rate environment

    13

    -2.5% +1.3%

    2016 published

    2,578

    3,024

    2015 published

    2,559

    3,187

    2014 published

    2,295

    3,378 Commissions and other

    NIM

    • Including effects of home loan savings, scope and Visa

    Net Banking Income down -2.5% and -6.3% excluding effects of home loan savings provision and on a like-for-like basis in 2016

    Revenue diversification improving* retail banking revenue -3.2%; insurance subsidiary revenue +6.3%; revenue from asset management subsidiaries +12.7%, supported by

    the scope effect linked to Ciloger and Fédéris (-0.9% on a like-for-like basis).

    Commissions accounting for a growing portion of revenue

    revenue from commissions and other +0.7% in 2016; commissions and other accounting for 46% of revenue.

    Low interest rates weighing on the net interest margin: -5.1 %

    -2.5% +1.3%

    2016

    5,602

    2015

    5,745

    2014

    5,673

    (+0.7 %)

    (-5.1 %)

    (+11.5 %)

    (-5.7 %)

    -2.5%

    2016 published

    5,602

    asset management

    18

    insurance

    12

    retail banking

    -173

    2015 published

    5,745

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    An ongoing effort to improve efficiency

    14

    Operating expenses’ breakdown (%)

    Focus on external services and other expenses (%)

    May 2017 INVESTOR PRESENTATION

    €4,587m (-2.3% yoy) reflect efforts to contain expenses despite a continued development and the gradual implementation of major transformation programs :

    Decrease in Retail banking operating expenses (-2.9% at €4,389m), including: - -3% for LBP SA - +6% for Retail banking subsidiaries, in support to their development

    A dedicated plan focused on quality of service and based on an investment programme and a comprehensive overhaul of major processes €1bn in investments over the period 2014-2020 A programme to boost operational and commercial efficiency (reorganising salesforces ; comprehensive review of main front-to-back processes)

    488469

    -2.3%

    Amortisation and provision

    External services and other expenses

    Taxes and duties

    Employee benefit expenses

    2016

    4,587

    176

    3,913

    11

    2015

    4,693

    226

    3,926

    72

    Other operating costs

    22%

    Back office and IT 22%

    Customer advisors / salesforce

    30%

    Counter and ATM transactions

    26%

    *

    *

    *

    * Service sharing agreements signed with La Poste represent around 80% of « external services and other expenses » and two thirds of total expenses.

  • LA BANQUE POSTALE

    A cost of risk under control

    15

    LBP Group cost of risk (€m)

    Group cost of risk / group gross operating income

    Credit activities cost of risk (bps)*

    Crédit Mutuel-

    CM11 Group

    Crédit Agricole Group

    35%

    BPCE Group

    19%

    Société Générale

    25%

    BNPParibas

    23%

    LBP

    18% 16%

    Source: 2016 Registration Documents, consolidated financial statements

    -1

    2016

    22

    2015

    23

    2014

    23

    2013

    25

    * Cost of risk on loans in bp, based on average outstanding at the start of the period

    Low risk appetite and stringent controls in place

    Total cost of risk nearly stable (+0.2%), and commercial credit activities cost of risk low at 22 bps, despite growth in outstanding loans and reinforcement in risk coverage

    181181163154

    2014 2013

    +0,2%

    2016 2015

    * Loans: customers and corporates

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    Table of contents

    16 May 2017 INVESTOR PRESENTATION

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

  • LA BANQUE POSTALE

    Balance sheet breakdown

    17

    Balance sheet at YE 2016: €229,6 bn, +€10bn vs YE15

    Large customers’ deposits base : €173bn

    LBP “centralises” all funds deposited on Livret A and LDD

    regulated savings accounts and since H1 2016, only half of

    LEP regulated savings accounts, with no interest rate or

    liquidity risk (it is a pure pass-through): €71bn

    Remaining part of the deposit base (not centralised to

    CDC*) amounting to €102bn:

    is used to fund customer lending and mainly home

    loan activity

    is invested in a “SSA bond” portfolio mostly

    classified in HTM** (dating back to before LBP was

    created and mainly consisting in HQLA bonds) and

    a credit spread portfolio

    *CDC: Caisse des Dépôts et Consignations **Held to Maturity

    LBP balance sheet at YE 2016 (€bn)

    Customer deposits/

    savings €173bn

    13

    27

    19

    22

    76

    71

    Others

    Reverse Repo

    Short term assets and Central Bank

    AFS Portfolio

    HTM Portfolio

    Loans to customers

    Regulated savings centralised at CDC

    Assets

    230

    2 14

    7

    18

    15

    98

    75

    3 Own funds and hybrids

    Provisions

    Other Liabilities

    Repo

    Debt securities

    Customer deposits/savings excluding regulated savings

    Regulated savings

    Liabilities

    230

    Assets out of regulated

    savings centralised

    at CDC €159bn

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    Strong assets’ quality

    18

    High quality of retail lending portfolios

    81% of the total portfolio is individual customers’ based

    A progressive and controlled diversification of lending businesses

    A conservative financing approach, focusing on stringent management Impaired loans : 1,6%

    Desensitisation to peripheral SSA** (in €bn, YE 2016) HTM and AFS portfolio breakdown and ratings (YE 2016)

    0.9

    0.3

    0.6

    2014

    2.0

    0.0

    0.8

    1.2

    2013

    2.5

    -62%

    Ireland

    Spain

    Italy

    2016

    0.9

    0.0

    0.9

    2015

    0.0

    1.2

    1.3

    High quality of investment portfolios

    ** Sovereigns, Supras and Agencies, direct exposures, net carrying amount ‘including impairment) of exposure on the Bank’s own account

    May 2017 INVESTOR PRESENTATION

    Corporate

    5% Bank

    25%

    Sovereign 69% Other

    28%

    AAA and AA

    72%

  • LA BANQUE POSTALE

    Diversifying funding sources to support lending diversification

    19

    Diversified long term wholesale funding sources (at YE 2016)

    Outstanding LBP Tier 2 Benchmark bonds

    In June 2016, LBP priced a €500mn, 3.00% 12-year Bullet Tier 2 transaction

    In Nov 2015, LBP priced a €750mm 2.750% 12NC7 Tier 2 transaction

    In April 2014, LBP priced a €750mm 2.750% 12NC7 Tier 2 transaction

    In November 2010, LBP priced a €750mm 4.375% 10-year Bullet Tier 2 transaction

    May 2017 INVESTOR PRESENTATION

    In addition to a large customer deposit base, LBP has

    diversified wholesale funding sources:

    - Interbank funding: €20bn French CD programme - Large portfolio of high quality securities,

    consisting mainly of rapidly accessible

    Government bonds, eligible to Repos

    - Access to EIB (European Investment bank) long term funding

    - Agreement with SFIL/CAFFIL to refinance French local authorities loan production

    - Senior unsecured EMTN programme - Covered bond programme through LBP Home

    Loan SFH

    In order to develop its lending activity, LBP is gradually

    rebalancing its funding sources by increasing its long term

    wholesale funding

    Tier 2 and Senior 38%

    18%

    44%

    Covered bonds

    LT Repo €8.1bn

  • LA BANQUE POSTALE

    A strong and stable liquidity position

    20

    Loan to deposit ratio (€bn)

    102

    Centralised regulated deposits

    Customers’deposits

    71

    76

    Customers’loans

    Ratio L/D : 74%

    Low reliance on wholesale funding

    Sound financing structure with a loan to deposit ratio

    of 74%* at YE 2016

    * Loan to deposit ratio, excluding Livret A and LEP and LDD deposits centralised at the Caisse des Dépôts et Consignations

    Group’s LCR and liquidity buffer (€bn)

    LCR: 260% at YE 2016 (estimated)

    - A strong liquidity buffer with 95% of level 1 assets

    2016

    260%

    2015

    218%

    Level 1

    Level 2

    2016

    13.9

    13.2

    0.7

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    Table of contents

    21 May 2017 INVESTOR PRESENTATION

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

  • LA BANQUE POSTALE

    LBP strong capital position (1/2)

    22

    2016 prudential ratios – building capital buffers CET1 phased-in (€m)

    Leverage ratio

    *Change in 2016 methodology by a decsision of the ECB of 24 August 2016, La Banque Postale is authorised to integrate gradually and linearly ip to 2022 its CDC exposure.: **Estimated, taking into account the delegated act published by the EC on Oct 2014.

    2016

    5.2% 4.6%

    2015

    5.2%

    3.5% Including delegated act**

    Without delegated act*

    634

    694

    +14%

    CET1 30.12.2016

    8 171

    Others Dividend project

    -312

    Profit

    CET1 31.12.2015

    7 155

    +0.7

    +0.4 +0.5

    Total

    19.4% 18.7% 17.0%

    Tier1

    15.1% 14.7% 14.2%

    CET1

    13.7% 13.2% 12.7% 2016

    2015

    2014

    CET1

    AT1

    T2

    2016

    19.4%

    13.7%

    1.4%

    4.3%

    CRDIV :

    Fully loaded CET1 of 14,3% at YE 2016 : LBP displays a higher fully loaded ratio than its phased-in CET1 ratio because of significant stock of unrealised gains

    EBA’s 2016 stress tests results prove LBP’s solid resilience and ability to face an adverse context : The adverse imposed scenario would lead La

    Banque Postale to reach a phased-in CET 1 ratio of 9.7% at YE 2018.

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    LBP strong capital position (2/2)

    23

    Ability to generate capital to support future growth

    Capital management philosophy

    LBP and Group LP are committed to manage adequate solvency levels to support LBP’s strategy as evidenced by several capital actions

    Maintaining a prudent approach on capital…

    Consistently above 10% CET1 since LBP creation

    Basel 2 / 2.5 Basel 3 / CRR

    11.4%* 10.1%** 13,7%

    12,7% 12,1% 13,2% 11,5% 14,2% 14,7% 15,1%

    2011 2012 2013 2013 2014 2015 2016

    AT1Core Tier 1

    12.7%

    First capital increase of €860m

    Capital increase of €228m and AT1 issue of €800m

    Capital increase of €633m

    … under conservative risk regulatory measure

    Assessing Pillar 1 risk under standard approach Managing with conservative regulatory hypothesis

    LBP Tier 1 ratios historical data

    LBP RWAs historical data (€m)

    13.2%

    Basel 2 / 2.5 Basel 3 / CRR

    May 2017 INVESTOR PRESENTATION

    30,086

    8,268 Operational RWA 8,160

    35,505

    25,654

    1,691

    2013 2012

    Market RWA

    2014 2011

    Credit RWA

    39,141 787

    45,238

    8,500

    35,913

    825

    2015 2016

    8,875

    42,516 43,815

    2,068

    48,186

    1,271 52,662 54,209

    1,215

    9,179

    59,534

    9,280

  • LA BANQUE POSTALE

    MREL and TLAC considerations

    24

    Total Loss Absorbing Capacity considerations

    As an “O-SIB” and as of today, La Banque Postale is not subject to TLAC such as defined by the FSB

    La Banque Postale is subject to the MREL defined in the BRRD (Minimum Requirement for own funds and Eligible Liabilities)

    On November 23rd 2016 the European Commission proposed amendments on BRRD. This proposed reform package introduces TLAC in European law and amends MREL

    Single Resolution Board has not formally communicated yet any MREL target to La Banque Postale

    In this still uncertain context, La Banque Postale monitors regulatory developments pertaining to resolution

    La Banque Postale also continues to build up loss absorbing instruments and considers starting issuing Senior Non Preferred debt in 2017

    11,0% 12,7% 12,1% 11,4% 12,7%

    13,2% 13,70%

    1,8% 1,5% 1,5% 1,40% 2,8%

    4,0% 4,30%

    13,2%

    17,0%

    19,4%

    2010 2011 2012 2013 2014 2015 S1 2016

    18,7%

    MREL As of 23/11/16 reform package

    TLAC As of FSB 2015 termsheet

    Covered Entities All EU credit institutions

    International G-SIBs All EU credit institutions

    Denominator Total liabilities and own funds

    RWAs / Leverage ratio exposure

    RWAs / Leverage ratio exposure

    Minimum Ratio Bank specific level, no legal floor

    16% initially then 18% RWAs+ Capital Buffers / 6% then 6.75% Leverage ratio

    Bank specific level, capped at Max [2x(P1+P2R) ; 2 x Leverage requirement], with guidance on top

    Floor for G-SIBs (TLAC level)

    Eligible Liabilities

    Wider definition than TLAC (senior preferred debt is eligible without limitation)

    Subordinated instruments

    Possibility for pari passu instruments to excluded liabilities limited to 3.5%

    Closer to TLAC 3.5% limitation applies to the

    G-SIBs floor Resolution authority may

    require partial or full subordination for bank specific requirement

    Date Starting Jan’16; phase-in period

    Jan’19 No specification on phase-in period

    May 2017 INVESTOR PRESENTATION

    Building capital buffers

    MREL As of BRRD1

    TLAC vs. MREL 2016

    T2

    AT1

    CET1

  • LA BANQUE POSTALE

    Table of contents

    25 May 2017 INVESTOR PRESENTATION

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

  • LA BANQUE POSTALE 26 May 2017 INVESTOR PRESENTATION

    The French housing market

    Low home ownership rate (65%)

    Prudent maturity at inception: 18 years (compared to 18.6 years in 2014)

    Conservative credit market underwriting practices with a cautious loan approval policy based on borrowers’ solvability analysis rather than on the value of assets financed. Stability of revenues and debt ratio are key issues :

    In 2015 in France, the average debt ratio is 29.4%.

    A resilient French housing market and with favorable structural factors

    Source : ACPR, enquête annuelle sur le financement de l’habitat July 2015

    96.7% of home loans production have a fixed rate to maturity at YE 2015

    This proportion has been increasing over the year (92.3% in 2014)

    Proportion of flexible loans which increased in 2014 (3.4%) decreased in 2015 (1.4%).

    Home loans secured by a guarantee provided either by a licensed credit institution or a licensed insurance company represent the majority of the French home loan market and increased over the year from 53% to 56%.

    Germany* 53%

    France* 65%

    UK* 65%

    Netherlands 68%

    Euro zone* 67%

    Italy* 73%

    Spain 78%

    Source : EMF, Hypostat 2016 : 2015 figures, except * : 2014

    Source : Eurostat

    Mortgage Interest Rate %

    European home ownership % (2014/2015)

    House-price index (base 100=2010) Source : European Mortgage Federation, Q4 2016 quarterly review

    70

    80

    90

    100

    110

    120

    130

    140

    Euro zone

    Germany

    Spain

    France

    Italy

    Netherlands

    United Kingdom

    1

    1,5

    2

    2,5

    3

    3,5

    4

    2013-3 2013-4 2014-1 2014-2 2014-3 2014-4 2015-1 2015-2 2015-3 2015-4 2016-1 2016-2 2016-3 2016-4

    Germany

    Spain

    France

    Italy

    Netherlands

    United Kingdom

  • LA BANQUE POSTALE 27 May 2017 INVESTOR PRESENTATION

    The French housing market : encouraging trends and long-term favorable potential

    The new home market : building permits and housing starts up +14% and +13% at the end of February 2017 on 12 month cumulative basis

    Home loans 2016 production (excluding internal renegotiations) : continued dynamism within a very low-rate context

    Share of renegotiations in production decreased to 22% after the peak reached in 2015 (35%)

    France : home loans production (in €bn excluding internal renegociations)

    (source Coe-Rexecode, april 2016)

    (source ACPR, LBP)

    (source Ministère du Logement, LBP)

    124 109

    141

    122

    193 180

    112 106 114

    104

    125 140

    Total production Production out of renegotiations

    fev. - 17 : 387 000

    fev. - 17 : 463 400

    300

    350

    400

    450

    500

    550

    600

    650

    déc.

    -00

    déc.

    -01

    déc.

    -02

    déc.

    -03

    déc.

    -04

    déc.

    -05

    déc.

    -06

    déc.

    -07

    déc.

    -08

    déc.

    -09

    déc.

    -10

    déc.

    -11

    déc.

    -12

    déc.

    -13

    déc.

    -14

    déc.

    -15

    déc.

    -16

    '000

    s

    Housing starts Building permits

    France : Building permits and housing starts

  • LA BANQUE POSTALE 28 May 2017 INVESTOR PRESENTATION

    La Banque Postale Home Loan strategy

    La Banque Postale home loan business

    Low risk profile customers * : - Owner occupied home (86%) - Maturity at inception (18.6 years) - Fixed rate loans (99.9%) - 53.8% of loans are guaranteed by Credit Logement at December 2016

    Loan purpose (2016 production*)

    Home loans (2016 production*)

    Others

    2%

    Collateral security (mortgage, LPRF*)

    33% Crédit Logement 53%

    12%

    Guaranteed by other institutions

    Other

    2% Repurchase

    17%

    New home 15%

    Existing home 66%

    Doubtful home loans (%)

    Source :Banque de France, ACPR, LBP, Crédit Logement * LBP out of BPE and Sofiap

    *lender’s priority right to funds

    0,0

    0,2

    0,4

    0,6

    0,8

    1,0

    1,2

    1,4

    1,6

    2008 2009 2010 2011 2012 2013 2014 2015

    Crédit Logement

    LBP *

    French market

    * Source Dataware, LBP

  • LA BANQUE POSTALE 29 May 2017 INVESTOR PRESENTATION

    LBP Home Loan SFH : legal framework

    La Banque Postale Home Loan SFH is a French credit institution, 100% owned by LBP, licensed by the French financial supervisor (Autorité de Contrôle Prudentiel et de Résolution – ACPR).

    Minimum contractual over-collateralization (referred to as “Asset cover test”) of 8.1% required by rating agency / Minimum legal over-collateralization of 5%

    Under CRDIV / 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)

    A strong legal framework and advantageous treatment for Investors Investor informations : a dedicated website

    https://www.labanquepostale.com/corporate_eng/investors/Debt/LBP_Home-Loan-SFH/LBP_Home-Loan-SFH.html

    ECBC Label to ensure full transparency on the cover pool

  • LA BANQUE POSTALE 30 May 2017 INVESTOR PRESENTATION

    LBP Home Loan SFH : legal framework

    Namens-schuldverschreibungen Documentation

    In June 2014, La Banque Postale has established a Programme for the issuance of German registered covered bonds (Namensschuldverschreibungen or “N-bonds”).

    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 ranked pari passu with the other SFH's bondholders.

    The N-bonds are registered covered bonds governed by German law.

    Structure overview

    La Banque Postale (Borrower)

    Cover Pool (French Home Loans)

    Investors

    La Banque Postale Home Loan SFH (Covered Bonds Issuer)

    Collateralized loans Public Issuances Private Issuances

    Covered Bonds Proceeds

    Covered Bonds (OH)

    Collateral Security

    Collateralized Loans

    Principal and Interest

  • LA BANQUE POSTALE 31 May 2017 INVESTOR PRESENTATION

    LBP Home loan SFH : a resilient and granular cover pool

    Programme Terms

    Cover Pool (ECBC template : reporting date 03/27/2017 – cut-off date 02/28/2017)

    Programme size € 10bn

    Rating AAA by S&P

    Currency €

    Listing Euronext Paris

    Governing law French Law, Ability to issue German law governed Namens-schuldverschreibungen

    Amount issued €4,135bn (Feb. 2017)

    Maturity type Hard/Soft bullet

    Registrar and paying agent for NSV LBBW

    Total outstandings € 7,000bn

    Number of loans 120,520

    Average loan balance € 58,082

    Seasoning 53.58 months

    WA LTV 67.13%

    Indexed WA LTV 65.54%

    Owner occupancy 84.37%

    Interest rates 100% fixed rates

  • LA BANQUE POSTALE 32 May 2017 INVESTOR PRESENTATION

    LBP Home loan SFH : a resilient and granular cover pool

    Other non working

    2%

    Retired

    3%

    Self employed

    5%

    Civil Servants

    25%

    Employees

    66%

    Loan purpose

    Buy to let

    13% Second home

    2%

    Owner occupied 84%

    Employment type

    1st lien mortgages

    25%

    Guarantees (CreLog)

    75%

    Mortgages and guarantees of the cover pool

    Others regions

    49%

    Rhones Alpes

    11% Provence-Alpes-Côte d’Azur

    9%

    Aquitaine 6%

    Ile-de-France (Paris included) 25%

    Geographical distribution

    Source : LBP HL SFH, ECBC Template, reporting date 03/27/2017

  • LA BANQUE POSTALE

    Covered bonds : funding issues

    Public issuances

    Funding plans

    2017: €585mn have already been issued, including €500mn of public issuance

    Funding plan for the rest of 2017 in covered bonds aims at maintaining activity in long term private placement. Depending on home loans production, a small benchmark transaction could be considered in the second half of the year.

    33

    13 september 2013 (inaugural)

    9 january 2014 14 april 2015 7 january 2016 16 january 2017

    Amount issued

    1bn€ 750 mn€ 500mn€ 500mn€ 500mn€

    Period 7 years 10 years 7 years 7 Years 8 Years

    Yield 1.962%, ms+16 bp 2.436%, ms+28 bp 0.249%, ms-12 bp 0.616%, ms+5 0.4625%, ms-2

    Rating AAA AAA AAA AAA AAA

    Investors

    120 investors (asset managers, insurance

    companies, banks and central banks, and

    pension funds) Germany and Austria (32%), France (24%), Benelux (12%), the

    Nordic countries (10%), and the United Kingdom and Ireland

    (9%).

    91 investors, with a good balance

    between banks, AM and insurance 34%

    France, 30% German/Austria, 11% Benelux,11% Asia and others

    14%

    German and Austrian accounts took the majority

    with 49%, followed by France with 25%, Asia with 10% and

    BeNeLux with 9%.

    France 40%, Germany 39%, Asia 10%, Nordics 5%, Swiss 2%, Others

    4%.

    Germany 45%, France 32%, Middle

    East 9%, Nordics 5%, Benelux 3%,

    Asia 2%.

    1/11/15 1/9/15

    -12

    -18

    -16

    -14

    -10

    -8

    -6

    -4

    -2

    0

    2

    4

    6

    8

    10

    1/5/17 1/7/16 1/9/16 1/11/16 1/1/17 1/3/17 1/5/16 1/3/16 1/1/16

    LBPSFH 2024

    LBP SFH 2020

    LBPSFH 2022

    LBPSFH 2023

    LBPSFH 2025

    Mid z-spreads of public issuances LBPHL SFH

  • LA BANQUE POSTALE 34 May 2017 INVESTOR PRESENTATION

    Crédit Logement / Mutual Guarantee Fund (MGF)

    Crédit Logement share capital, YE 2015

    “[…] Crédit Logement enjoyed an exceptionally good year with more than €114 billion in guarantees issued, of which 44% relating to loan refinancing.”

    Crédit Logement 2015 Annual report :

    Crédit Logement is the market leader on the French residential property market, guaranteeing approximately one out of three property loans in 2015 (out of renegotiations).

    It guarantees residential property loans for individuals, in the form of a joint and several guarantee which aims at covering the bank against default borrowers.

    More than 7 million borrowers have already benefited from a Crédit Logement guarantee, thus allowing them to finance their property purchases without mortgages

    Crédit Logement YE 2015:

    Outstanding guarantee €280.34 billion and 3,169, 005 loans

    Long Term rating (Aa3/stable by Moody’s and AA/low by DBRS)

    Ultimate support by the French banking system

    Mutual Guarantee Fund (MGF) :

    The Crédit Logement financial guarantee is based on the principle of pooling risk, with each borrower contributing to a Mutual Guarantee Fund (MGF) :

    The MGF allows repaying the bank in case the borrower fails

    MGF : €4.57 billion at YE 2015

    3%

    HSBC France

    0%

    Others Individuals

    0%

    17%

    BNP Paribas

    16% Crédit Agricole

    16%

    BPCE

    LCL

    CM-CIC

    7%

    SF2 - Groupe La Banque Postale

    Crédit Foncier

    9%

    17%

    9%

    Société Générale / Crédit du Nord

    6%

  • LA BANQUE POSTALE

    Table of contents

    35 May 2017 INVESTOR PRESENTATION

    Overview

    Business model and results

    Funding and Liquidity

    Capital

    LBP Home Loan SFH

    Wrap-up

  • LA BANQUE POSTALE

    La Banque Postale at a glance

    36

    2016 Key financial figures

    Strong capital and high liquidity at YE 2016

    Consolidated results (in €m) YE 2016 YE 2015

    Net banking income* Excluding home savings provision

    5,602 5,461

    5,745 5,809

    Operating income 834 871

    Net Income, Group Share 694 707

    Cost to income ratio 82.4% 82.1%

    CET1 phased-in ratio: 13.7% **

    Tier 1 ratio: 15.1%

    Total Capital ratio: 19.4%

    Estimated leverage ratio: 4.6% ***

    Estimated LCR liquidity ratio: 260%

    Company profile

    Created in 2006 but a long track record in financial services

    Wholly-owned by La Poste, the French Postal Service A resilient business model

    Retail Banking: 94% of NBI (YE 2016) Recurrent revenues Conservative risk policy

    Sound ratings: A (stable outlook) by S&P A- (stable outlook) by Fitch

    Key facts 2016

    94%

    3% 3%

    Retail BankingAsset ManagementInsurance

    Customer deposits €173bn

    Retail active Customers

    Post offices (YE 2016)

    NBI Split by Business

    ˜10.7m

    ˜8,900

    *scope effect €20m (Ciloger and Federis) **Fully loaded ratio of 14.3% ***Change in 2016 methodology : by a decsision of the ECB of 24 August 2016, La Banque Postale is authorised to integrate gradually and linearly up to 2022 its CDC exposure. Estimated ratio of 5% taking into account the delegated act published by the European Commission on Oct 2014.

    May 2017 INVESTOR PRESENTATION

  • LA BANQUE POSTALE

    La Poste Network : a multi-business network with a banking activity

    37 May 2017 INVESTOR PRESENTATION

    17,159 retail outlets in France o.w. 51.6% post offices (8,835) and 48.4% partnerships (versus 46% in 2015)

    436 millions of visits 96.7% of the French population lives less than 5 km away from a

    retail outlet 83% of the French population stated they had visited their post

    office at least once to carry out postal or banking transactions in 2016

    53,700 employees, with more than 80% working in post offices

    An exceptional granularity*

    17% of Mail revenue

    80% of La Poste Mobile sales

    25% of Parcels revenue

    100% of net collection for individuals

    80% of property loans1

    67% of consumer loans

    of Chronopost revenue 7%

    Commercial activity of La Poste Network*

    • Le Groupe La Poste 2016 Registration Document 1) Excluding social housing loans

    1,175 million transactions completed at its counters and automated postal machines, i.e :

    622 million bank transactions and 7 million banking advice appointments completed by banking advisers located in the Network, i.e :

  • LA BANQUE POSTALE

    Alternative Performance Measures

    38 May 2017 INVESTOR PRESENTATION

    Alternative Performance Measures Definition and method of calculation NBI excluding the effect of the home savings provision NBI restated for provisions or reversal of provisions on liabilities related to home savings

    accounts (PEL and CEL)

    Operating expenses Sum of operating expenses and net depreciation and amortisation and impairment of property, plant and equipment and intangible assets

    Cost-income ratio Operating expenses divided by NBI corrected for doubtful interest

    Cost of risk in basis points Average commercial banking credit risk costs for the quarter divided by outstandings at the beginning of each quarter

    Article 223-1 of the AMF regulations

  • LA BANQUE POSTALE

    Contact details

    39

    Stéphane Magnan [email protected]

    Head of Financial Markets

    Frédérique Delavaud [email protected]

    Head of Financial communication

    Dominique Heckel [email protected]

    Head of Long Term Funding

    May 2017 INVESTOR PRESENTATION

    mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

  • LA BANQUE POSTALE

    La Banque Postale

    La Banque Postale

    115 rue de Sèvres

    75275 Paris Cedex 06

    www.labanquepostale.com