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La Banque Postale Group
October 2017
INVESTOR PRESENTATION
LA BANQUE POSTALE
Disclaimer
2 October 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
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
Senior Non Preferred inaugural transaction
4
7-year Senior Non Preferred notes
Nominal amount: €500M no grow
Expected rating: BBB (S&P)
Issuance expected to be fully MREL eligible
INVESTOR PRESENTATION
Rationale
Offering
Contributing to fulfill anticipated MREL requirements
Further optimising the eligible liabilities structure with Non-Preferred Senior
Diversifying funding sources and investor base
La Banque Postale foresees limited amount of debt to issue in the future to
reach MREL targets, meaning one Benchmark per year over the medium
term, potentially combined with private placement opportunities
Strong and supportive shareholding structure
Strong capital base with a total capital at 18,9% as of H1 2017 (phased-in)
Key investments highlights
October 2017
LA BANQUE POSTALE
Inaugural Senior Non Preferred – Key structural features
5 INVESTOR PRESENTATION
Issuer La Banque Postale
Issuer ratings A stable (S&P): A- stable (Fitch)
Expected Rating BBB (S&P)
Maturity October 2024 (7 year)
Notional Amount €500,000,000
Structure Fixed coupon, bullet
Status Non-Preferred Senior
Ranking of the notes Direct, unconditional, unsecured and senior obligations of the Issuer ranking at all times: (i) pari passu among themselves and with other Senior Non Preferred Obligations (ii) senior to Eligible, Ordinarily Subordinated Obligations and any other present or future claims otherwise ranking junior to Senior Non Preferred Obligations (iii) junior to present and future claims benefiting from preferred exceptions including Senior Preferred Obligations
Denomination EUR 100,000 + EUR 100,000
Early Redemption Event MREL Disqualification Event and Tax Event
Bail-in The Notes are subject to bail-in in accordance with the EU Bank Recovery and Resolution Directive as transposed into French Law
Substitution or variation No
Documentation EMTN prospectus dated 11 September 2017
Listing/ Applicable Law Euronext Paris / French law
October 2017
LA BANQUE POSTALE
Table of contents
6
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
A solid and stable shareholding structure and a core subsidiary for Le Groupe La Poste
7
La Banque Postale is wholly-owned by La Poste, the French
Postal Service
La Poste is structured around 5 business units, dedicated to
fulfill 4 public service missions assigned by the French State:
Universal postal services
Contribution to regional planning
Press transport and delivery
Banking accessibility
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%
INVESTOR PRESENTATION
The backbone of La Banque Postale
* Caisse des dépôts et consignations 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)
October 2017
LA BANQUE POSTALE
La Poste : a major multi-business services group
8 INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
La Banque Postale (LBP) : from La Poste’s Financial Services… into a fully fledged bank
9
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, LBP developed its
product range and became a fully-fledged retail bank
• With diversified lending activities, enhancing LBP’s role in financing the French economy
• Committed to serve all clients, all over the French territory
• With strong social responsibility involvement: in 2017, LBP is ranked No. 3 worldwide and No. 1 in France by
the extra financial rating agency Oekom for its performance in terms of Corporate Social Responsibility
INVESTOR PRESENTATION
2016
LBP
Prévoyance
Merger
Federis/
LBPAM
2017
KissKiss
BankBank
Asset
management Crowdfunding
October 2017
LA BANQUE POSTALE
La Banque Postale (LBP): A business model based on core business development
and successful partnerships
10
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 insurance
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
Partnership in Public sector lending
Partnership in
Life insurance
20.15% owned 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
INVESTOR PRESENTATION
40% owned
by LBP
60% of
20% 75% 5%
100%
October 2017
LA BANQUE POSTALE
La Banque Postale (LBP): a core focus on Retail banking and a leading position on the
French banking system
11
Contribution to net income before tax H1 2017
Insurance (including share of profits
from CNP) 27%
Asset Management
7%
Retail Banking 66%
10.6 million active retail customers
13.4% market share on ordinary savings (all savings accounts
except CEL) and 23.2 % market share on the Livret A
5.8% market share on home loans outstandings**
Key figures of retail banking activity at H1 2017
Retail banking in France NBI H1 2017 ***(€bn)
** Including BPE and Sofiap
*** Press releases reports, H1 2017
**** Sofia Study, March 2016
***** Retail banking France, Registration Document or press releases, YE 2016
LBP in the French banking environment
2,9
3,2
4,1
3,2
3,6
1,8 LCL
Crédit Agricole 6,6
Caisses d’Epargne
Banques Populaires
Société Générale
BNP Paribas
LBP
6,2
7,3
6,4
6,7
22,1
Caisses d’Epargne 13,2
Banques Populaires
Société Générale
BNP Paribas
LBP 17,6
LCL
Crédit Agricole
Penetration rates on main current account March 2016 (%)****
Number of branches YE 2016 (m)*****
8,8
2,0
3,0
3,3
4,2
7,0
1,9
Caisses d’Epargne
LCL
Crédit Agricole
Banques Populaires
Société Générale
BNP Paribas
LBP
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
A solid and stable shareholding structure, reflected in strong credit ratings
12
France AA / Stable (April 2017) AA / Stable (July 2017)
Caisse des Dépôts et Consignations AA / Stable (May 2017) 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 2016)
La Banque Postale’s credit ratings
LT debt ratings of La Banque Postale’s stakeholders
INVESTOR PRESENTATION
Fitch affirms La Banque Postale at « A- », stable outlook (04/25/2017) : « LBP’s ratings reflect it established franchise in
deposit collection and housing loans in France, low risk appetite, good asset quality and sound capitalisation, taking into account
potential ordinary support from its parent La Poste (A+/Stable), France’s state-owned post office ».
S&P affirms La Banque Postale at « A », stable outlook (11/29/2016) : « S&P Global Rating’s stable outlook on La Banque
Postale (LBP) mirrors the stable outlook ont its parent, La Poste, over the next two years. We expect LBP to remain a core
subsidiary of La Poste… in addition, we could upgrade LBP if we raise the long-terme rating on La Poste ».
October 2017
LA BANQUE POSTALE
Table of contents
13
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
La Banque Postale at a glance
14
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 fully loaded: 14.3% **
Total Capital ratio (phased-in): 19.4%
Leverage ratio: 4.6% ***
LCR liquidity ratio: 179%
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) **Phased-in ratio at 13,7% ***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.
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
A quick sum up on H1 2017 results
15 INVESTOR PRESENTATION
Consolidated income statement (€ millions)
Main items in the income statement
H1 2017 H1 2016 %
Net Banking Income
excluding disposal of Visa shares, effects of home loan savings
provision and on a like-for-like basis
2,808
2,974
-5.6%
+ 1.6 %
Operating expenses
On a like-for-like basis
(2,331)
(2,388)
-2.4 %
-2.2%*
Gross operating income 477 586 -18.6%
Cost of risk -71 -84 -15.2 %
Operating income 406 502 +52.9%
Share of income from equity associates 133 87 -7.6 %
Pre-tax income 538 588 -8.5%
Net income, Group share 367 360 +1.7%
Cost-income ratio 83.6% 80.7% +290bp
Capital and liquidity H1 2017
CET1 fully loaded ratio: 13.8% *
Total Capital ratio (phased-in): 18.9%
Leverage ratio: 4.5% **
LCR liquidity ratio: 174%
Business activities H1 2017 vs H1 2016
*Phased-in ratio at 13.6% **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.
Home loans outstandings : +5,7%
Consumer loans outstandings : +6,3%
Corporates and local public sector loans outstandings : +34%
Ordinary savings outstandings: +1.1%
Life insurance outstandings :+0,8%
*Ciloger for €6M
October 2017
LA BANQUE POSTALE
A growing loan portfolio with the development of new businesses
16
New home loans production during H1 2017: €8.2bn versus €4.bn in H1 2016 (+77.6%)
New consumer loans production : €1.2bn versus €1.2bn in H1 2016 (+2.8%)
Loans granted to corporates and local public sector : €7.3bn versus €5.3bn in H1 2016 (+34%)
A dynamic loan production …
Outstanding loans to corporates (in €bn)
Home loans outstandings* (in €bn) Consumer loans outstandings (in €bn)
50 53 54 55 56 58
5,7%
H1 2017 2016 2015 2014 2013
3,4 4,0
4,5 4,7 4,9 5,0
+6,3%
2016 2015 2014 2013
1,8 2,9
5,3 6,6
8,8 10,6
+61,8%
2016 2015 2014 2013
INVESTOR PRESENTATION
… and a growing loan portfolio
*Including BPE and Sofiap
Outstanding loans to local public sector (in €bn)
2,2 3,6
4,5 4,2 5,7 5,3
+27%
2016 H1 2016 2015 2014 2013
H1 2016
H1 2017
H1 2016 H1 2017
H1 2016 H1 2017
74%
6%
13% 7%
October 2017
LA BANQUE POSTALE 17
Dynamism of Insurance and Asset Management businesses
2016
180.6
2015
178.3
+6.9%
Asset management : AUM (in billions of euros)*
LBPAM: €191.3 billion in assets under management, up by 6.9% on a
like-for-like basis
A €23bn management mandate with CNP has been signed in July 2017
and will bring AUM to over €210bn in H2 2017
Tocqueville Finance: €1.7 billion** in assets under management, up by
12.8%
*Assets at end of period, including Fédéris assets in 2015 **Excluding LBPAM delegation
An overall portfolio of policies at almost 4,516,000, up by 3.2%
P&C insurance (IARD): portfolio +9.4%
Health insurance: over 177,000 policies (portfolio up by 25.7%): 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 2,730,000 individual policies (portfolio stable)
Life insurance : almost 5,115,000 policies, totalling €125bn
Insurance: trend in policy portfolios (in thousands)
4,220
2,758
109
H1 2016
+3.2%
Contingency
P&C
Health
2016
4,374
2,763
1,470
141
2015*
* Proforma 2015 in Health Stock
INVESTOR PRESENTATION
2,758
1,353 1,539
2,751 2,730
1,608
163 177
H1 2017
178.9 191.3
H1 2016 H1 2017
4,453 4,515
2015 2016
October 2017
LA BANQUE POSTALE
Group net banking income dynamics
18
2016 published
2,578
(+0.7%)
3,024
(-5.1%)
2015 published
1,335
1,639
2,559
3,187 Commissions and other
NIM
• Including effects of home loan savings, scope and Visa
Net Banking Income down -5.6%
Positive change in NBI (+1.6%) excluding home loan savings
provision, disposal of Visa shares and on a like-for-like basis
Strong rise in the insurance division linked to the overall
increase in premiums, an improved loss ratio and good financial
results
INVESTOR PRESENTATION
1,434
(-12,5%)
1,374
(+2,9%)
H1 2016 published
H1 2017 published
44.5%
44.9% 46.0%
48.9%
Growing portion of commissions in NBI
Commissions accounting for a growing portion of revenue
revenue from commissions and other +2.9% in H1 2017;
commissions and other accounting for 45% of revenue.
Low interest rates weighing on the net interest margin: -12.5%
H1 2016 Visa retail banking insurance assetmanagement
H1 2017
2,974
2,808
-5.6%
-107
-73 23
-9
NBI evolution during H1 2017 driven by:
Scope effect coming from the disposal of Visa shares in H1 2016
Low interest rates
Growing portion of commissions and fees
October 2017
LA BANQUE POSTALE
An ongoing effort to improve efficiency
19
Operating expenses’ breakdown (%)
Focus on external services and other expenses (%)
INVESTOR PRESENTATION
€2,331m (-2.4% yoy) reflect efforts to contain expenses despite
significantly increased charges for subsidiaries to support their
development :
Decrease in Retail banking operating expenses (-2.4% at
€2,236m), including:
- -2.7% for LBP SA
- +5% for Retail banking subsidiaries, in support to their
development
A dedicated plan (“Excellence 2020”) 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)
… to generate 10% in annual savings in operating expenses
from the year 2020
240 238
-2.4%
Amortisation and provision
External services and other expenses
Taxes and duties
Employee benefit expenses
H1 2017
2,331
88
1,971
33
H1 2016
2,388
89
2,004
56
Other operating costs
23%
Back office and IT* 22%
Customer advisors / salesforce* 30%
Counter and ATM transactions*
24%
* Service sharing agreements signed with La Poste represent around
80% of « external services and other expenses » and two thirds of
total expenses.
October 2017
LA BANQUE POSTALE
Table of contents
20
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
A cost of risk reflecting a conservative risk management
21
LBP Group cost of risk (€m)
NPL and coverage ratio – Retail banking in France
LBP Group cost of risk (bps)*
16
21
30
22
14
18
LCL Caisse d’Epargne
Banque Populaire
Société Générale
BNPParibas LBP
Source: H1 2017 reports, consolidated financial statements
-3bp
2016
22
2015
23
2014
* 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 decreased significantly (-15.2%), and commercial
credit activities cost of risk low at 16 bps, despite growth in
outstanding loans and reinforcement in risk coverage
163
181
84
181
71
2015 2014
-15.2%
2016
INVESTOR PRESENTATION
H1 2016
H1 2017
23 19
16
H1 2016 H1 2017
1.8%
3.4%
4.6%
3.4%
1.7%
LCL BPCE Société Générale
BNPParibas LBP
Source: H1 2017 reports, consolidated financial statements
Cost of risk – Retail banking in France (bps)
34.8% 62.0% 89.0% 82.7% 75.1%
October 2017
LA BANQUE POSTALE
Strong asset quality
22
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
High quality of investment portfolios (HTM and AFS YE 2016)
INVESTOR PRESENTATION
Corporate
5%
Bank
25%
Sovereign 69%
Other
28%
AAA and AA
72%
84%
6% 10%
France
Outside Euro zone
Euro zone
Credit risk still accounting for most of total RWAs (€bn)*
Basel 2 / 2.5 Basel 3 / CRR
30.0
8.3 Operational RWA
2013 2012
Market RWA
2014
Credit RWA
39.1
0.8
45.2
8.5
35.9
0.8
2015 2016
8.9
42.5 43.8
2.1
48.2
1.3
52.7 54.2
1.2
9.2
59.5
9.3
2.6
51.0
62.9
9.3
H1 2017
* RWA computed following the standard method
October 2017
LA BANQUE POSTALE
Table of contents
23
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
Balance sheet breakdown
24
Balance sheet at 30 June 2017 2016: €233bn, +€3bn vs YE 16
Large customers’ deposits base : €176bn
LBP “centralises” at CDC* 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 €101bn:
is used to fund customer lending and mainly home loan
activity
is invested in a “SSA bond” portfolio mostly classified in
Held To Maturity (dating back to before LBP was created
and mainly consisting in HQLA bonds) and a credit
spread portfolio
*CDC: Caisse des Dépôts et Consignations
LBP balance sheet at 30 June 2017(€bn)
Customer deposits/
savings €176bn
13
19
21
21
58
71
Others
Short term assets and Central Bank
AFS Portfolio
HTM Portfolio
Home loans
Centralised regulated savings
Assets
233
14
20
13
101
75
10
Own funds and hybrids
Other Liabilities and Provisions
Repo
Debt securities
Customer deposits/savings excluding regulated savings
Regulated savings
Liabilities
233
Assets out of regulated
savings centralised
at CDC €162bn
INVESTOR PRESENTATION
30
Other loans to customers
October 2017
LA BANQUE POSTALE
Diversifying funding sources to support lending growth
25
Diversified long term wholesale funding sources (at YE 2016)
INVESTOR PRESENTATION
In addition to a large customer deposit base, LBP has
diversified wholesale funding sources:
Short Term:
- Interbank funding: €20bn Neu CP programme
- Repo: Large valuable portfolio of high quality
securities
Medium to Long Term:
- Access to EIB (European Investment bank) long
term funding
- Agreement with SFIL/CAFFIL to refinance French
local authorities loan production
- Senior unsecured EMTN programme
- Neu MTN programme (in progress)
- 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
Total: €8,1bn
October 2017
LA BANQUE POSTALE
A strong and stable liquidity position
26
Loan to deposit ratio
Well diversified euro wholesale funding investor
base with gradual development towards dollar
investors
Sound financing structure with a loan to deposit ratio
at 75,6%* at 30 June 2017
* 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: 174% at 30 June 2017
- A strong liquidity buffer with 96% of level 1 assets
H1 2017
174.3% 179.5%
Level 1
Level 2
H1 2017
22.7
21.8
0.7
INVESTOR PRESENTATION
2016
59% 67% 75% 75% 74%
2012 2013 2014 2015 2016 H1 2017
L/D ratio
76%
The liquidity coverage ratio (LCR) calculation underwent a revision at 31 March 2017 due to a change in the treatment of the European Central Bank’s marginal facility deposit. The variation displayed corresponds to the relative variation between the LCR at 30 June 2017 and the LCR at 31 December 2016 recalculated according to the new method (i.e. 179.5%). The published LCR for 31 December calculated according to the old method was 260%.
HQLA
October 2017
LA BANQUE POSTALE
Table of contents
27
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
LBP strong capital position (1/2)
28
Prudential ratios – building capital buffers (phased-in) 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*
367 154
+4.4%
CET1 30.06.2017
8,527
Others Dividend project
-165
Profit
CET1 31.12.2016
8,171
Total
19.4% 18.7%
Tier1
15.1% 14.7%
CET1
13.7% 13.2% H1 2017
2016
2015
CET1
AT1
T2
H1 2017
18.9%
13.6%
1.2%
4.1%
CRDIV :
Fully loaded CET1 of 13.8% at H1 2017: 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.
INVESTOR PRESENTATION
5,3% 4,5%
H1 2017
13.6% 14.8%
18.9% SREP
requirements
7.625% CET 1 including P2R
11.125% Total Capital
October 2017
LA BANQUE POSTALE
LBP strong capital position (2/2)
29
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
… under conservative solvency calculations
Assessing Pillar 1 risk under standard approach
INVESTOR PRESENTATION
Basel 2 / 2.5 Basel 3 / CRR
11.4%
12,7% 13,2% 14,2%
15,1% 14,8%
2011 2013 2014 2016 H1 2017
AT1
Core Tier 1
12.7%
First capital
increase
of €860m
Capital increase of
€228m and AT1
issue of €800m
Capital increase
of €633m
LBP Tier 1 ratios and La Poste Group support
13.7% 13.6%
October 2017
LA BANQUE POSTALE
MREL and TLAC considerations
30
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
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
INVESTOR PRESENTATION
Building capital buffers (phased-in ratios)
MREL As of BRRD1
TLAC vs. MREL
12,7% 13,2% 13,7% 13,6%
1,5% 1,5% 1,4% 1,2% 2,8%
4,0% 4,3% 4,1%
2014 2015 2016 H1 2017
Tier 2
AT1
CET 1
17,0% 18,7%
19,4% 18,9%
October 2017
LA BANQUE POSTALE
Table of contents
31
Senior Non Preferred inaugural transaction
Overview and business model
Key figures and results
Risk management
Funding and Liquidity
Capital
Wrap-up
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
La Poste Network : a multi-business network with a banking activity
32 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 loans**
67% of consumer loans
of Chronopost revenue 7%
Commercial activity of La Poste Network*
* Le Groupe La Poste 2016 Registration Document
** 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 :
October 2017
LA BANQUE POSTALE
Alternative Performance Measures
33 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
October 2017
LA BANQUE POSTALE
Contact details
34
Stéphane Magnan [email protected]
Head of Financial Markets
Dominique Heckel [email protected]
Head of Long Term Funding
Denys Médée [email protected]
Head of Balance Sheet Management and Relations with Supervisory Authorities
INVESTOR PRESENTATION October 2017
LA BANQUE POSTALE
La Banque Postale
La Banque Postale
115 rue de Sèvres
75275 Paris Cedex 06
www.labanquepostale.com
