THE LEADING FRENCH AGENCY SUPPORTING LOCAL INVESTMENT AND EXPORT Investor Presentation June 2020 Most Impressive Best social Best ESG Social or Bond 2019 Issue 2019 Sustainability Issuer
Disclaimer This document does not constitute or form part of any offer or solicitation to purchase or subscribe for securities and should not be considered as a recommendation by SFIL and/or CAFFIL that any recipient of this document should subscribe for or purchase any securities. The distribution of this document may be restricted by law or regulation in certain countries. Accordingly, persons who come into possession of this document should inform themselves of and observe these restrictions. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. This document is not for distribution, directly or indirectly, in or into the United States of America or to any "US Person" as defined in the U.S. Securities Act of 1933, as amended (the "Securities Act"). In addition, this document is being distributed to and is directed only at persons in member states of the European Economic Area ("EEA") who are "qualified investors" within the meaning of article 2(1)(e) of the Prospectus Directive (directive 2003/71/EC), as amended, to the extent implemented in the relevant member state ("Qualified Investors"). Any person in the EEA who receives this document will be deemed to have represented and agreed that it is a Qualified Investor. Any such recipient will also be deemed to have represented and agreed that it has not received this document on behalf of persons in the EEA other than Qualified Investors. SFIL and/or CAFFIL will rely upon the truth and accuracy of the foregoing representations and agreements. Some information or opinions contained in this document (i) have been compiled or arrived at by SFIL and CAFFIL from sources believed to be reliable, but SFIL and CAFFIL do not make any representation as to their accuracy or completeness and (ii) are given at the date mentioned in the presentation and are subject to change without notice. This document is not to be relied upon as such or used in substitution for the exercise of any independent judgment and each recipient must make its own investigation as to the opportunity of any investment in SFIL and/or CAFFIL. 2
INFORMATION CONCERNING THE COVID-19 PANDEMIC SFIL Group is following the recommendations of the World Health Organization and the French government and has implemented the measures necessary to maintain operational continuity in all its business activities. SFIL Group's teams have been very closely monitoring the disruptions to the financial markets since the crisis began. The impact on current and planned future operations for SFIL and CAFFIL, and on their counterparties (customers, banks, partners) are being reassessed regularly. On the date of the publication of the 2019 Annual Financial Report, no impact was identified that may have significant consequences on the group's financial situation and its capacity to honor its commitments. Time lags in the collection of income from some of its assets (consisting entirely of exposures to public sector borrowers) may be considered, as well as the postponement of certain bond issues in the event of unfavorable market conditions. Nevertheless, the liquidity risk is limited by the good matching of the maturity profiles of assets and liabilities and the ability to benefit from the financing proposed by the European Central Bank through high-quality assets in the portfolio. Moreover, the quality of SFIL's shareholding structure , its status as a public development bank , the quality of CAFFIL's and SFIL's standings, the very rigorous risk management and the solid solvency ratio are all advantages within the current context. 3
AGENDA 1. A PUBLIC SET UP WITH TWO PUBLIC POLICY MISSIONS FIRST LENDER TO THE FRENCH LOCAL PUBLIC SECTOR LEADING LIQUIDITY PROVIDER FOR EXPORT LOANS 2. GROUP FUNDING STRATEGY CAFFIL - LEADING PUBLIC SECTOR COVERED BOND ISSUER SFIL – REGULAR BENCHMARK ISSUER IN EUR AND USD ESG BOND ISSUANCE 4
A PUBLIC SET UP WITH TWO PUBLIC MISSIONS LOCAL PUBLIC SECTOR AND EXPORT FINANCING AGENCY Leading lender to the French local public Leading liquidity provider with a market sector - market share close to 30% share above 40%, EUR 8.1 billion of loans refinanced since June 2016 Local public sector lending loans are Pure refinancing platform in partnership provided in partnership with La Banque with commercial banks, no direct Postale to be extended until 2026 origination activity with 25 banking Close to EUR 30 billion new local partners public sector loans have been provided Activity limited to export loans fully since 2013 with maturities between 10 guaranteed by the French Republic – no and 30 years refinancing of private sector exposures 5
A PUBLIC SET UP WITH TWO PUBLIC MISSIONS PUBLIC OWNERSHIP AND CLOSE LINKS TO THE STATE 100% publicly owned, fully regulated financial institution supervised by the ECB and 7 th French credit institution by assets Debt issued by SFIL classified as LCR Level 1 under Article 10.1.(e)(i) of the LCR delegated act 20% 75% 5% Reference shareholder “ The issuer is … incorporated or established by the central government of a Member State … [that is] under the legal obligation to protect [its] … economic basis and maintain its financial viability throughout its life- time… ” Bonds issued by SFIL are eligible for asset purchases under PSPP, CAFFIL covered bonds are eligible for CBPP3 purchases and 100% CAFFIL benchmark issuance is classified as LCR level 1 Announcement of plans in 2018 to create a large public financial group around CDC and of the initiation of talks to transfer control of SFIL to CDC followed by an agreement in principle announced October 9 th 2019 and a binding agreement between the shareholders published on March 4 th 2020 6
A PUBLIC SET UP WITH TWO PUBLIC MISSIONS PUBLIC OWNERSHIP AND CLOSE LINKS TO THE STATE CV Agreement in principle announced on October 9 th 2019: CDC will become the reference shareholder of SFIL with 99.99% of its capital Under the supervision and the and materialize its commitment by a letter of guarantee of the French support to SFIL Parliament The State will retain one ordinary share, One ordinary appoint a censor to SFIL’s board of directors, share* and provide a letter of support to SFIL, maintaining its public development bank status Censor will have an evocative power to 99.99%* 66%* 50%** ensure that SFIL’s activity is coherent with public policies, but not have voting rights SFIL will continue to be wholly-owned by public sector institutions : shareholders will Bpifrance S.A. ensure that its financial strength is preserved and its economic base protected, while continuing to provide the necessary support in accordance with applicable regulations Completion of the transaction is expected around the end of the first half of 2020 * Pending final agreement and approval under the binding agreement between the ** The State indirectly holds a 50% stake in BPIfrance SA via shareholders published on March 4 th 2020 EPIC BPIfrance and will retain a stake up to 34% in La Poste 7
A PUBLIC SET UP WITH TWO PUBLIC POLICY MISSIONS STRONG CREDIT RATINGS 100% public ownership and commitment by its shareholders to ensure that the economic basis of SFIL is protected and the financial strength preserved SFIL is rated on the same level as the French Republic by S&P and one notch below by Moody’s and DBRS Strategic importance based on the central role for the financing of two key segments of the French economy There is an additional rating pick-up for covered bonds issued by CAFFIL based on the over- collateralization and the covered bond legal framework Issuer Ratings Moody’s S&P DBRS French Republic Aa2 AA AAA Issuer Ratings Moody’s S&P DBRS SFIL – Long Term Aa3 AA AA (high) SFIL – Short Term P-1 A-1+ R-1 (high) CAFFIL – Long Term Aaa AA+ AAA 8
A PUBLIC SET UP WITH TWO PUBLIC POLICY MISSIONS SIMPLE AND STRAIGHTFORWARD BALANCE SHEET Simple balance sheet with total assets of EUR 74.8 billion , activity limited to the refinancing of public sector assets SFIL capital levels very significantly above SREP requirements of CET1 ratio of 7.99%, Tier 1 Capital Ratio of 9.49% and Total Capital Ratio of 11.49% Lowest capital requirement level for the Pillar 2 (P2R) out of 108 banks following the SREP 2019 at 0.75% of RWA, reflecting the low risk business model and excellent risk management Long term refinancing mainly via issuance of covered bonds, additional liquidity is raised via issuance by SFIL and via credit facilities provided by shareholders Moderate profitability (2019 ROE of 3.1%) in line with role as public development bank Consolidated main balance sheet items (including CAFFIL) December 31 st 2019 - (EUR billion, notional amounts) Loans and securities 57.0 Covered bonds 49.7 Cash assets 1.2 SFIL bond issuance 7.1 Cash collateral paid 2.3 Shareholder refinancing 0.4 Commercial paper 0.6 Cash collateral received 1.6 Equity 1.6 CET1 ratio: 24.4% 9
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