Investor Presentaiton
Methodology: Application of IFRS 17
GENERAL PRINCIPLES
IFRS 17 - Insurance Contracts is applicable retrospectively in accordance with IAS 8; it replaces IFRS 4 for annual reporting periods beginning on or after 1 January 2023. Comparative
figures for the first half of 2022 and the year ended 31 December 2022 have therefore been presented on a pro forma basis in the consolidated financial statements of
La Banque Postale Group. The transition impacts are recognised in equity using the three methods provided for in the standard:
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The Full Retrospective Approach (FRA), used for La Banque Postale Assurances IARD and for certain cohorts of CNP Assurances contracts;
The Fair Value Approach (FVA), whereby insurance contracts are measured at fair value at the transition date and in line with the approach adopted on creating the major state-
owned financial group announced on 4 March 2020. This approach is used for the majority of insurance contracts written by CNP Assurances, particularly savings and pensions
contracts;
The Modified Retrospective Approach (MRA), a simplified version of the FRA used for La Banque Postale Prévoyance.
Effective from the IFRS 17 transition date on 1 January 2022, a new balance sheet indicator was created - "Insurance contract liabilities" - comprising the following three components:
the Best Estimate (BE), based on the discounted present value of future cash flows arising from insurance contracts; the Contractual Service Margin (CSM), which represents profits not
yet recognised in the income statement; and the Risk Adjustment (RA).
PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS UNDER IFRS 17
The presentation of the financial statements has been adjusted in line with the new presentation of insurance activities required under IFRS 17.
The main restatements applicable to the presentation of La Banque Postale Group's consolidated balance sheet are as follows:
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Cancellation of intangible insurance assets such as portfolios of insurance contracts and financial contracts with a discretionary participation feature previously recognised
separately in the financial statements. These items are now included in the projected future cash flows from insurance contracts;
Discontinuation of shadow accounting for deferred participation assets on the assets side and net deferred participation liabilities on the liabilities side;
Discontinuation of the overlay approach permitted by IFRS 4 and chosen upon first-time application of IFRS 9. The effects of IFRS 9 now apply in full to the financial asset and
liability portfolios of insurance entities;
Measurement of equity instruments available for sale at fair value through other comprehensive income not reclassifiable to profit or loss;
Value of investment property measured at fair value through profit or loss, in accordance with the option offered by IAS 40, as amended following the publication of IFRS 17, for
hedges of savings and pensions contracts only.
The main restatements and reclassifications applicable to the presentation of La Banque Postale Group's income statement are as follows:
Income and expenses relating to ceded insurance and reinsurance contracts are presented separately under net banking income (NBI);
Expenses relating to the insurance contracts of insurance entities and those incurred by the Bank for insurance product distribution are presented by category as a deduction
from NBI;
The internal margin related to fees and commissions received by the Bank and expenses incurred by the Bank is reclassified to the "Corporate Centre" to give a clearer picture
of the business lines within segment information;
The cost of credit risk on financial investments of insurance activities is presented on a separate line as an insurance item in NBI.
INVESTOR PRESENTATION - SEPTEMBER 2023
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