Bpce: Results for the 3rd quarter and first 9 months of 2022 - GlobeNewswire

Paris, November 9, 2022

Results for the 3^rd quarter and first 9 months of 2022

9M-22: Revenue growth of 3.8% to €19.5bn, driven by positive commercial momentum
                 Net income up 6.9% vs. 9M-21, to a total of €3.4bn

    Q3-22: Revenues up 0.2% to €6.3bn in a contrasting business environment
                 Net income of €1.3bn, -3% vs. Q3-21, including a €184m provision for future risks

Cost/income ratio¹ of 65.1% in 9M-22 thanks to good cost control

Retail Banking & Insurance: year-on-year growth in the customer base of both retail banking networks; continued rise in interest rates since January 2022 to reflect increased cost of funding, especially Livret A; net banking income up 4.3%² in 9M-22

• Local and regional financing: very strong 8.4% growth in loan outstandings YoY
• Insurance: net inflows of €4.1bn in life insurance over 9 months, 8% growth in non-life insurance premiums
• Financial Solutions & Expertise: very buoyant growth in business activities, net banking income up +8%² vs. 9M-21
• Digital Inside: 10.1m active clients on mobile devices, +18% vs. September 2021. 49 million visits per week on average

Global Financial Services: revenue growth of 0.3%² vs. 9M-21 in what remains a challenging market environment
Successful diversification strategies in AWM and CIB

• Asset & Wealth Management: revenue resilience thanks to the diversified expertise model, -3.7%² vs. 9M-21; growth in the overall fee rate in Q3-22 to 25.9bps; €1,095bn of assets under management at end-September 2022 for Natixis IM;
• Corporate & Investment Banking: Net Banking Income up 3.9%² in 9M-22 and 3.8%² in Q3-22 thanks to the strategy pursued to diversify expertise and expand the client base. Global Markets revenues up 25%² YoY in Q3-22; slight growth in the net banking income generated by Global Finance in 9M-22 in a more adverse business environment

Strict cost control: cost/income ratio of 65.1%¹ in 9M-22 (excluding SRF), -0.4pp vs. 9M-21, despite the impact of inflation and with an investment policy to support business line development

Resolutely prudent provisioning policy and cost of proven risk (Stage 3) remaining at a low level:

• Cost of risk for the Group: €1,228m in 9M-22, or 20bps, and €347m in Q3-22 including respectively €522m in 9M-22 and €184m of additional provisions for future risks (Stage 1/Stage 2)
• Group cost of proven risk (Stage 3) of €706m in 9M-22, or 12bps vs. 18bps in 9M-21

Capital adequacy at a very high level: CET1³ ratio of 15.1% at end-September 2022, +19bps vs. end-June 2022

Strategic initiative in the health sector with the proposed acquisition⁴ by BPCE Lease of 100% of the capital of Eurolocatique and its subsidiary Médidan, the leading French player in the financing of healthcare equipment through financial leasing

¹ Underlying figures and excluding SRF contributions - See note on methodology ² Underlying ³ Estimate at end-September 2022 ⁴ This project is the subject of an information-consultation procedure with BPCE Lease employee representative bodies; the project can only be finalized after obtaining the agreement of the competent competition authorities

Laurent Mignon, Chairman of the Management Board of BPCE, said: "Groupe BPCE recorded a solid quarter in a more difficult economic and financial environment, marked by high inflation, intense market volatility, and rapidly rising interest rates. We continued to play our role to the full alongside our clients with all our companies, and the commercial activities of our different business lines remained strong both in our two BP and CE retail banking networks as well as in our Corporate & Investment Banking business unit that performed well thanks to the positive impact of its diversification strategy.
We are also keeping a close eye on the economic environment and pursuing a prudent provisioning policy, as we have for several past quarters.

Groupe BPCE's customers can rely on its talented teams and financial strength to weather the current uncertain environment.

On December 3, at the end of an exemplary succession process in terms of both speed and the quality of the in-house candidates, Nicolas Namias will be succeeding me as Chairman of the Management Board of BPCE. This is a great opportunity for our Group and I have every faith in the qualities of Nicolas, who has been by my side for 8 years and who, along with all the senior managers of the Group, will pursue the ambitions and the ongoing development of each of our business lines. I would also like to extend my thanks to all the people working for our Group, the Banques Populaires, the Caisses d'Epargne, Natixis CIB, Natixis IM and the "Communauté BPCE" whose commitment, outstanding skills and sense of customer service make Groupe BPCE a recognized model in our industry fully prepared for the challenges facing our society."

The half-yearly financial statements of Groupe BPCE for the period ended September 30, 2022, approved by the Management Board at
a meeting convened on November 7, 2022, were verified and reviewed by the Supervisory Board, chaired by Thierry Cahn, at a
meeting convened on November 8, 2022

Groupe BPCE

€m	 	Q3-22	Q3-21	% change vs. Q3-21	9M-22	9M-21	% change vs. 9M-21
Net banking income	 	6,309	6,295	0.2%	19,453	18,749	3.8%
Operating expenses	 	(4,258)	(4,119)	3.4%	(13,469)	(12,924)	4.2%
o/w expenses excluding SFR	 	 	 	 	(12,873)	(12,503)	3.0%
Gross operating income	 	2,051	2,176	(5.8)%	5,984	5,825	2.7%
Cost of risk	 	(347)	(342)	1.4%	(1,228)	(1,163)	5.5%
Income before tax	 	1,732	1,898	(8.7)%	4,863	4,871	(0.2)%
Income tax	 	(431)	(537)	(19.8)%	(1,407)	(1,457)	(3.5)%
Non-controlling interests	 	(14)	(34)	(58.9)%	(55)	(230)	(76.3)%
Net income – Group share	 	1,288	1,327	(3.0)%	3,402	3,183	6.9%
Exceptional items	 	(63)	(53)	18.2%	(113)	(194)	(42.0)%
Underlying net income – Group share	 	1,351	1,381	(2.2)%	3,514	3,377	4.0%
Cost/income ratio (underlying, excluding SRF)	 	66.0%	64.3%	+1.7pp	65.1%	65.5%	(0.4)pp

¹ See note on methodology and pages 25 and 26
1.     Groupe BPCE

Unless specified to the contrary, the following financial data and related comments refer to the Group's reported results and the
underlying results of the business lines, i.e. restated to account for exceptional items as presented in the annexes on pages 23 to 24;
changes express differences between Q3-22 and Q3-21 and between 9M-22 and 9M-21.

Groupe BPCE posted 0.2% growth in net banking income to 6,309 million euros in Q3-22, thanks to the robust performance of commercial activities across all its business lines, with the exception of Insurance that experienced an increased number of claims owing to exceptionally severe climate events, and Asset & Wealth Management, whose activities were depressed by an unfavorable market environment.

In Q3-22, the Retail Banking & Insurance business unit posted 0.9% growth in revenues to 4,437 million euros.
The Global Financial Services business unit, which includes the Asset & Wealth Management and Corporate & Investment Banking business units, posted revenues of 1,692 million euros in Q3-22, down 3.7%.

Q3-22 operating expenses were up 3.4% to 4,258 million euros.

As a result of this negative jaws effect, the cost/income ratio excluding exceptional items and the contribution to the SRF¹ was 66.0% in Q3-22, up 1.7pp.

Gross operating income fell in Q3-22 to 2,051 million euros, or by -5.8%.

Groupe BPCE's cost of risk edged up by 1.4% in Q3-22 to 347 million euros. The provisioning policy remains prudent.

For Groupe BPCE as a whole, the amount of provisions for performing loans rated 'Stage 1' or 'Stage 2' came to 184 million euros in Q3-22 vs. 26 million euros in Q3-21. Provisions for loans with proven risk rated 'Stage 3' stood at 163 million euros in Q3-22 vs. 316 million euros in Q3-21; this is the lowest level of quarterly cost of risk rated 'Stage 3' since early 2020.

In Q3-22, the cost of risk was 17bps for gross customer loans for Groupe BPCE (18bps in Q3-21), including a provisioning on performing loans of 9bps in Q3-22 (1bp in Q3-21) rated 'Stage 1' or 'Stage 2' and a provision on loans with proven risk of 8bps in Q3-22 (16bps in Q3-21) rated 'Stage 3'.

The cost of risk stood at 21bps for the Retail Banking & Insurance business unit in Q3-22 (21bps in Q3-21), including 11bps for the provisioning of performing loans (4bps in Q3-21) rated 'Stage 1' or 'Stage 2' and 10bps for the provisioning of loans with proven risk (17bps in Q3-21) rated 'Stage 3'.

The cost of risk stood at 13bps for the Corporate & Investment Banking business unit in Q3-22 (11bps in Q3-21), including 6bps for the provisioning of performing loans (-18bps in Q3-21) rated 'Stage 1' or 'Stage 2' and 7bps for the provisioning of loans where the risk is proven (29bps in Q3-21) rated 'Stage 3'.

Reported net income (Group share) in Q3-22 amounted to 1,288 million euros vs. 1,327 million euros in Q3-21 (-3.0%).

Exceptional items had a negative impact of only 63 million euros on net income (Group share) in Q3-22, up 18.2% compared to Q3-21.

Underlying net income (Group share) came to1,351 million euros in Q3-22 (-2.2%).

¹ See note on methodology

In 9M-22, Groupe BPCE's net banking income rose by 3.8% to reach a total of 19,453 million euros.

The Retail Banking & Insurance business unit posted a 4.3% increase in revenues in 9M-22 to 13,694 million euros, reflecting in particular the commercial dynamism of the two Banque Populaire and Caisse d'Epargne retail banking networks as well as that of the Financial Solutions & Expertise and Payments & Oney business units.
The Global Financial Services business unit recorded revenues of 5,242 million euros in 9M-22, up 0.3%.

Operating expenses rose by 4.2% in 9M-22 to 13,469 million euros. If the contribution to the SRF is excluded (up 41.4%), expenses increased by only 3.0% in 9M-22 to 12,873 million euros.

Thanks to a positive jaws effect, the cost/income ratio (excluding exceptional items and the contribution to SRF¹) improved to 65.1% in 9M-22, down 0.4pp.

Gross operating income rose to 5,984 million euros in 9M-22, up 2.7%.

The cost of risk for Groupe BPCE increased by 5.5% in 9M-22 to 1,228 million euros. The provisioning policy pursued by the Group remains prudent.

For Groupe BPCE, the amount of provisions for performing loans rated 'Stage 1' or 'Stage 2' amounted to 522 million euros in 9M-22 vs. 104 million euros in 9M-21. Provisions for loans with proven risk rated 'Stage 3' amounted to 706 million euros in 9M-22 compared to 1,060 million euros in 9M-21.

In 9M-22, the cost of risk stood at 20bps of gross customer loans for Groupe BPCE (20bps in 9M-21), including a provision on performing loans of 9bps in 9M-22 (2bps in 9M-21) rated 'Stage 1' or 'Stage 2' and a provision on loans with proven risk of 12bps in 9M-22 (18 bp in 9M-21) rated 'Stage 3'.

The cost of risk stood at 22bps for the Retail Banking & Insurance business unit in 9M-22 (21bps in 9M-21), including 10bps for the provisioning of performing loans (3bps in 9M-21) rated 'Stage 1' or 'Stage 2' and 12bps for the provisioning of loans with proven risk (18bps in 9M-21) rated 'Stage 3'.

The cost of risk amounted to 37bps for Corporate & Investment Banking business unit in 9M-22 (27bps in 9M-21), including 12bp for the provisioning of performing loans (-1bp in 9M-21) rated 'Stage 1' or 'Stage 2' and 25bps for the provisioning of loans with proven risk (28bps in 9M-21) rated 'Stage 3'.

Outstanding provisions on loans rated 'Stage 1' or 'Stage 2', which reflect the Group's prudent provisioning policy, increased by 0.5 billion euros from end-December 2021 to end-September 2022. Since the end of 2019, just before the outbreak of the Covid-19 pandemic, these outstanding provisions have even increased by 2.1 billion euros, forming a major buffer in the event of any future deterioration in the claims experience.

The ratio of non-performing loans to gross loan outstandings was 2.3% at September 30, 2022, down 0.1pp compared with the end of 2021.

Reported net income (Group share) for 9M-22 reached 3,402 million euros vs. 3,183 million euros for 9M-21 (+6.9%).

Exceptional items had a negative impact of only 113 million euros on net income (Group share) in 9M-22, down 42.0% compared to 9M-21.

Underlying net income (Group share) amounted to 3,514 million euros in 9M-22 (+4.0%).

¹ See note on methodology

2.     Digital et data

The Group's customers and customer advisers are continuing to make ever-greater use of the digital and data solutions available
to them. As of September 30, 2022, 12.6 million customers had used the Group's websites and mobile applications in the previous 12-month period, including 10.1 million for mobile applications alone (+18% year-on-year). The Group's mobile applications and websites received an average of 49 million visits per week in 9M-22 (+22% vs. 9M-21). The scores obtained by the Group's mobile applications are also high: 4.7 out of 5 on the App Store and 4.6 out of 5 on Google Play at the end of September 2022.

3.     Fight against climate change/ESG

The Group is implementing innovative solutions to help its clients complete their environmental transition:

• In the Group's retail banking networks: for the Banque Populaire, development of the impact loan offer aimed at encouraging company directors to adopt the CSR approach and, for the Caisse d'Epargne, new offers dedicated to companies and players in the Social & Solidarity Economy,
• In the Banque Populaire network, expansion of the range of green loans to meet the specific needs of SMEs and intermediate-sized enterprises,
• Rollout nationwide of the partnership with Cozynergy, offering our individual customers a comprehensive solution for their energy renovation projects, from financing to implementing the improvement work,
• For Natixis CIB clients, new products to support their sustainable finance strategy: a green convertible bond, a fiducie (trust) solution indexed to CSR objectives, and a green employee shareholding operation.

The Group strengthened its commitment by signing up its insurance activities to the Net-Zero Asset Owners Alliance in October 2022 and contributed to the work of the French Banking Federation to develop a common method for French banks to implement the commitment made in the framework of the Net-Zero Banking Alliance.

This concrete commitment and these achievements are reflected in the ratings given by the non-financial rating agencies:

• CDP: A-,
• ISS-ESG: C+ Prime,
• MSCI: AA,
• Sustainalytics: 15.8 (low risk),
• Moody's ESG Solutions: 62/100.

4.     Capital, loss-absorbing capacity, liquidity and funding

4.1   CET1 ratio¹

Groupe BPCE's CET1 ratio¹ at the end of June 2022 reached an estimated level of 15.1%, compared with 14.9% at the end of June 2022. Changes for the quarter can be broken down into:

• Q3-2022 results: +24bps
• Change in risk-weighted assets: - 5bps, i.e., organic capital creation of 19bps during the quarter if these first two items are combined,
• Net inflows from the issuance of cooperative shares: +5bps,
• Regulatory effects: -2bps (chiefly due to the 'prudential backstop'),
• Changes in 'Other Comprehensive Income' (OCI) due in particular to the rise in interest rates: -2bps,
• Other items: -5bps.

At the end of September 2022, Groupe BPCE held a buffer of 406bps above the threshold for triggering the maximum distributable amount (MDA) for equity capital, while taking account of the prudential requirements laid down by the ECB that became applicable as of March 1, 2022.

¹ See note on methodology

1. TLAC ratio²

Total loss-absorbing capacity (TLAC) estimated at the end of September 2022 stands at 111.8 billion euros. The TLAC ratio, expressed as a percentage of risk-weighted assets, stood at an estimated 24.3% at the end of September 2022 (without taking account of preferred senior debt for the calculation of this ratio), well above the Financial Stability Board requirements of 21.52% as of January 1, 2022.

1. MREL ratio²

Expressed as a percentage of risk-weighted assets at September 30, 2022, Groupe BPCE's subordinated MREL ratio and total MREL ratio were 24.3% and 30.8% respectively, well above the minimum requirements laid down by the SRB in 2022 of 21.52% and 25.03% respectively.

1. Leverage ratio

At September 30, 2022, the estimated leverage ratio¹ was 4.9%. The leverage ratio requirement is currently set at 3.0%.

1. Liquidity reserves at a high level

The Liquidity Coverage Ratio (LCR) for Groupe BPCE is well above the regulatory requirements of 100%, standing at 136%
based on the average of end-of-month LCRs in the 3^rd quarter of 2022.
The volume of liquidity reserves reached 323 billion euros at the end of September 2022, representing an extremely high coverage ratio of 158% of short-term financial debts (including short-term maturities of medium-/long-term financial debt).

1. MLT funding plan: 99% of the 2022 plan already raised as at October 31, 2022, leaving the Group well-positioned for 2023 prefunding

For 2022, the size of the MLT refinancing program was set at 24 billion euros and the breakdown per type of debt security is as
follows:

• 6.3 billion euros in TLAC funding: 2.5 billion euros in Tier 2 and 3.8 billion euros in senior non-preferred debt,
• 6.2 billion euros in senior preferred debt,
• 11.5 billion euros in covered bonds.

The target for ABS is 1.7 billion euros.

As of October 31, 2022, Groupe BPCE had raised 23.9 billion euros (excluding structured private placements and ABS), equal to 99% of the total funding plan:

• 6.5 billion euros in TLAC funding, i.e. 103% of requirements: 2.4 billion euros of Tier 2 (96% of requirements) and 4.1
• billion euros in senior non-preferred debt (108% of requirements),
• 5.6 billion euros in senior preferred debt (90% of requirements),
• 11.8 billion euros in covered bonds (102% of requirements).

The amount raised in ABS is 1.0 billion euros (59% of the target).

¹ See note on methodology ² Le Groupe BPCE has chosen to waive the possibility offered by Article 72b (3) of the Capital Requirements Regulation to use senior preferred debt for compliance with its TLAC/subordinated MREL requirements

5.     RESULTS OF THE BUSINESS LINES

Unless specified to the contrary, the following financial data and related comments refer to the underlying results, i.e. results restated to
exclude exceptional items, as presented in the annexes on pages 23 to 24. Changes express differences between Q3-22 and Q3-21, and
between 9M-22 and 9M-21.

5.1   Retail Banking & Insurance 

Underlying figures €m	 	Q3-22	% change	9M-22	% change
Net banking income	 	4,437	0.9%	13,694	4.3%
Operating expenses	 	(2,718)	3.2%	(8,338)	3.7%
Gross operating income	 	1,719	(2.6)%	5,356	5.3%
Cost of risk	 	(366)	6.6%	(1,101)	8.5%
Income before tax	 	1,370	(4.6)%	4,299	4.4%
Cost/income ratio	 	62.0%	1.4pp	60.7%	(0.4)pp

Loan outstandings enjoyed year-on-year growth of 8.4%, reaching a total of 691 billion euros at the end of September 2022, including an 8.5% increase in residential mortgages to 386 billion euros, 8.3% in equipment loans to 182 billion euros and 6.7% in consumer loans to 38 billion euros.
At the end of September 2022, customer deposits & savings (excluding regulated savings centralized at the Caisse des Dépôts et Consignations) amounted to 573 billion euros (+2.1% year-on-year), of which sight deposits increased by 1.7%.

In Q3-22, net banking income generated by the Retail Banking & Insurance business unit rose by 0.9% to 4,437 million euros.

Operating expenses amounted to 2,718 million euros in Q3-22 (+3.2%) against a background of high inflation.

The cost/income ratio increased to 62.0% (+1.4pp) in Q3-22.

Owing to a negative jaws effect, the gross operating income generated by the business unit showed a limited decline of 2.6% in Q3-22 to 1,719 million euros.

The cost of risk stood at 366 million euros in Q3-22, up 6.6%.

Income before tax for the business unit amounted to 1,370 million euros in Q3-22, down 4.6%.

In 9M-22, net banking income for the Retail Banking & Insurance business unit rose by 4.3% to 13,694 million euros, including a 5.5% increase for the Banque Populaire network and a 2.6% increase for the Caisse d'Épargne network. The Financial Solutions & Expertise and Payments & Oney business lines also continued to enjoy very positive commercial momentum: revenues rose by 8.0% and 7.9% respectively in 9M-22. In Insurance, revenues experienced a marginal decline of 0.5% owing to the claims experience related to the exceptional weather events in Q2-22 and Q3-22.

Operating expenses stood at 8,338 million euros in 9M-22 (+3.7%).

The cost/income ratio decreased in 9M-22 to 60.7% (-0.4pp).

Thanks to the positive jaws effect, the gross operating income generated by the business unit increased by 5.3% in 9M-22 to 5,356 million euros, reflecting the good performance of the business lines and good cost control despite the impact of high inflation.

The cost of risk stood at 1,101 million euros in 9M-22, up 8.5%.

For the business unit as a whole, income before tax amounted to 4,299 million euros in 9M-22, up 4.4%.

1. Banque Populaire retail banking network

The Banque Populaire network is comprised of 14 cooperative banks (12 regional Banques Populaires along with CASDEN Banque
Populaire and Crédit Coopératif) and their subsidiaries, Crédit Maritime Mutuel, and the Mutual Guarantee Companies.

Underlying figures €m	 	Q3-22	% change	9M-22	% change
Net banking income	 	1,771	2.0%	5,427	5.5%
Operating expenses	 	(1,103)	2.8%	(3,302)	3.5%
Gross operating income	 	669	0.8%	2,125	8.9%
Cost of risk	 	(166)	(10.3) %	(519)	14.9%
Income before tax	 	517	(1.4)%	1,648	7.2%
Cost/income ratio	 	62.2%	0.5pp	60.8%	(1.2)pp

Loan outstandings increased by 8.6% year-on-year to 295 billion euros at the end of September 2022. Customer deposits & savings increased by 3.7% year-on-year to 368 billion euros at end-September 2022 (+2.2% for on-balance sheet savings & deposits (excluding regulated savings centralized with the Caisse des Dépôts et Consignations).

In Q3-22, net banking income amounted to 1,771 million euros, up 2.0%.

Operating expenses rose by 2.8% in Q3-22 to 1,103 million euros.

This led to a slight deterioration in the cost/income ratio of 0.5pp, which stood at 62.2% in Q3-22.

Gross operating income rose by 0.8% to 669 million euros in Q3-22.

The cost of risk stood at 166 million euros in Q3-22 (-10.3%).

Income before tax was slightly down at 517 million euros in Q3-22 (-1.4%).

In 9M-22, net banking income came to a total of 5,427 million euros, up 5.5%, including:

• a slight decrease of 0.3% in the net interest margin excluding provisions for home-purchase savings schemes to 3,059 million euros driven by volumes and despite cost of funding rising faster than the asset repricing due in particular to regulated savings,
• and a 13.5% increase in commissions to 2,338 million euros.

Operating expenses reached 3,302 million euros in 9M-22, + 3,5%, well below the pace of growth in revenues.

This led to a 1.2pp improvement in the cost/income ratio, which stood at 60.8% in 9M-22.

Gross operating income increased by 8.9% to 2,125 million euros in 9M-22.

The cost of risk amounted to 519 million euros in 9M-22 (+14.9%).

Income before tax increased to 1,648 million euros in 9M-22 (+7.2%).

1. Caisse d'Epargne network

The Caisse d'Epargne network comprises 15 cooperative Caisses d'Epargne along with their subsidiaries.

Underlying figures €m	 	Q3-22	% change	9M-22	% change
Net banking income	 	1,812	(0.2)%	5,578	2.6%
Operating expenses	 	(1,103)	2.9%	(3,454)	3.0%
Gross operating income	 	709	(4.7)%	2,124	2.0%
Cost of risk	 	(152)	6.6%	(398)	10.0%
Income before tax	 	558	(7.3)%	1,726	0.2%
Cost/income ratio	 	60.8%	1.8pp	61.9%	(0.2)pp

Loan outstandings rose by 7.6% year-on-year to 355 billion euros at the end of September 2022 while customer deposits & savings increased by 1.3% year-on-year to 501 billion euros (+2.1% for on-balance sheet savings & deposits (excluding regulated savings centralized with the Caisse des Dépôts et Consignations).

In Q3-21, net banking income experienced a very marginal 0.2% decline to 1,812 million euros.

Operating expenses rose by 2.9% in Q3-22.

This led to a 1.8pp increase in the cost/income ratio to 60.8% for Q3-22.

Owing to a negative jaws effect, gross operating income went down by 4.7% in Q3-22 to 709 million euros.

The cost of risk stood at 152 million euros in Q3-22 (+6.6%).

Income before tax declined to 558 million euros in Q3-22 (-7.3%).

In 9M-22, net banking income rose by 2.6% to 5,578 million euros, including:

• a slight decrease of 0.6% in the net interest margin excluding provisions for home-purchase savings schemes to
  3,055 million euros, driven by volumes and despite cost of funding rising faster than asset repricing due in particular to regulated savings, recalling the large market share of the Caisse d'Epargne network as the historical distributor of Livret A,
• and a 6.9% increase in commissions to 2,640 million euros.

Operating expenses rose by 3.0% in 9M-22 to 3,454 million euros.

As a result, the cost/income ratio improved by 0.2pp to 61.9% in 9M-22.

Gross operating income increased by 2.0% to 2,124 million euros in 9M-22.

The cost of risk stood at 398 million euros in 9M-22 (+10.0%).

Income before tax increased slightly to 1,726 million euros in 9M-22 (+0.2%).

1. Financial Solutions & Expertise

Underlying figures €m	 	Q3-22	% change	9M-22	% change
Net banking income	 	321	4.2%	989	8.0%
Operating expenses	 	(161)	5.0%	(486)	4.1%
Gross operating income	 	160	3.4%	502	12.1%
Cost of risk	 	(23)	(1.8)%	(77)	(9.8)%
Income before tax	 	136	4.3%	425	17.1%
Cost/income ratio	 	50.3%	0.4pp	49.2%	(1.8)pp

In the Consumer Credit segment, loan outstandings (personal loans and revolving credit) had increased by 9% at end-September 2022 vs. end-September 2021.
In the Sureties & Financial Guarantees business, gross premiums written rose by 7% in 9M-22.
The activities of the Retail Securities Services business lost momentum in 2022 after an exceptional year in 2021.
Leasing continued to enjoy sustained levels of activity with a 21% increase in new business in 9M-22, driven by 22% growth in business with our two retail banking networks.
In Factoring, business activities remained strong in all market segments with 9M-22 factored sales up 26%.

In Q3-22, net banking income generated by the Financial Solutions & Expertise business unit was up 4.2% to 321 million euros, buoyed up by the good performance of the business lines.

Operating expenses increased by 5.0% in Q3-22 to 161 million euros.

This led to a limited 0.4pp increase in the cost/income ratio in Q3-22 to 50.3%.

Gross operating income rose by 3.4% in Q3-22 to 160 million euros.

The cost of risk declined by 1.8% in Q3-22 to 23 million euros thanks to good risk management.

Income before tax came to 136 million euros in Q3-22, up 4.3%.

In 9M-22, net banking income generated by the Financial Solutions & Expertise business unit rose by 8.0% to 989 million euros, driven by the good performance of its different business lines.

Operating expenses were kept under tight control, rising by 4.1% in 9M-22 to 486 million euros, the result of an extremely positive jaws effect.

As a result of this, the cost/income ratio fell by 1.8pp in 9M-22 to 49.2%.

Gross operating income rose by 12.1% in 9M-22 to stand at 502 million euros.

The cost of risk fell by 9.8% in 9M-22 to 77 million euros thanks to good risk management.

Income before tax amounted to 425 million euros in 9M-22, up by 17.1%.

1. Insurance

The results presented below concern the Insurance business unit held directly by BPCE since March 1, 2022.

Underlying figures €m	 	Q3-22	% change	9M-22	% change
Net banking income	 	207	(10.4)%	723	(0.5)%
Operating expenses	 	(121)	4.8%	(392)	5.2%
Gross operating income	 	86	(25.6)%	331	(6.6)%
Income before tax	 	86	(27.7)%	330	(8.6)%
Cost/income ratio	 	58.5%	8.5pp	54.2%	3.0pp

In Q3-22, premiums¹ remained stable at 2.8 billion euros, with a 1% decline in Life Insurance and Personal Protection insurance and 8% growth in Property & Casualty (P&C) insurance.
In 9M-22, premiums¹ declined slightly to 10.5 billion euros (-3.0%), with a 4% decrease in Life Insurance and Personal Protection Insurance and 8% growth for P&C insurance.

Life Insurance assets under management¹ reached 81.9 billion euros at end-September 2022. Since the end of 2021, they have increased by 0.8%, with total net inflows of 4.1 billion euros.
Unit-linked funds accounted for 27% of assets under management at end-September 2022 (-1pp vs. end-September 2021) and 39% of gross inflows in 9M-22 (+1pp).

In P&C insurance, the customer equipment rate of the Banque Populaire retail banking network reached 32.3% at end-September 2022 (+1.1pp vs. end-December 2021) while that of the Caisse d'Epargne network stood at 34.0% at end-September 2022 (+1.2pp vs. end-December 2021).

The P&C combined ratio stood at 105.1% in Q3-22 (+11pp) and 98.7% in 9M-22 (+5pp) owing to much higher claims related to severe climate events, especially in Q3-22.

In Q3-22, net banking income declined by 10.4% to 207 million euros, with P&C net banking income negatively impacted by claims triggered by severe climate events.

Operating expenses increased by 4.8% in Q3-22 to 121 million euros, with a negative jaws effect.

The cost/income ratio increased by 8.5pp in Q3-22 to 58.5%.

Gross operating income declined by 25.6% in Q3-22 to 86 million eur...