Investor Presentation January 2016 www.caffil.fr Agenda 1. A - PowerPoint PPT Presentation

CAFFIL – the leading public sector covered bond issuer Investor Presentation – January 2016 www.caffil.fr

Agenda 1. A development Bank with two public policy missions CAFFIL’s balance sheet: high quality assets and prudent 2. management 3. CAFFIL’s issuing strategy 2

A public set up with two public policy missions Public sphere Two public policy missions Provide funding for French Local  authority and hospital investments Provide funding for large export  20% 75% 5% contracts as new mission from 2015 Reference shareholder onwards Public ownership and covered bonds as funding tool  CAFFIL – issuance of covered bonds 100%  SFIL - holding and operating company  100% publicly owned  7 th French bank in terms of balance sheet size, total assets of EUR 88 billion (31.12.2014)  directly supervised by the ECB with strong results under AQR and stress test 3

Strong credit ratings SFIL reached high quality ratings on the basis of:  Strategic importance of public policy missions conferred to SFIL  Close links to the French State, also its reference shareholder, with specific responsibilities in terms of financial support without time limitation Moody’s S&P Fitch SFIL Aa3 AA AA- French State Aa2 AA AA CAFFIL obtained highest possible ratings on the basis of: Legal status, high quality and prudent management of its cover pool  The high credit standing of its mother company  According to current rating methodologies, public sector covered bond ratings of CAFFIL are capped  one notch above SFIL (and the sovereign) for S&P and at the same level as the sovereign in the case of Fitch Moody’s S&P Fitch CAFFIL Aaa AA+ AA Negative outlook by S&P on the ratings of SFIL and CAFFIL 4

First public mission: refinance loans to the French local public sector Situation: Decision: Shortage of long term funding for French local Creation of a new development bank as service authorities - necessity for a public set up to provide a provider and refinancing entity for public sector stable access to long dated funding for public loans originated by La Banque Postale investments, confirmed by the European Commission decision dated December 28th 2012 February 2013 Set up established as market leader in French Creation of SFIL as the new bank for Local Public Sector lending the French Local Public Sector  2013 and 2014: Second lender to the  Creation of SFIL at the center of a new French local public sector with respectively public set up to finance the French Local EUR 3.3 billion and EUR 4.2 billion in Public Sector in February 2013 new lending  La Banque Postale as loan originator  2015: First lender to the local public v  SFIL takes full ownership of DEXMA, now sector with over EUR 5 billion in new CAFFIL, to refinance local authority and loans, market share for loans to smaller public hospital loans via issuance of local authorities above 50% covered bonds 5

First public mission: refinance loans to the French local public sector CAFFIL refinances loans to Local Authorities originated through the large network of La Banque Postale  Scope of lending business is limited to French local public sector  Pricing at the going market rate, no subsidization  Full control of credit risk by CAFFIL during the origination process and again prior to transfer  Cost efficient and well integrated partnership: loan origination by La Banque Postale, servicing of the loans by SFIL, who also acts as servicer of CAFFIL  New set-up firmly established in French local public sector lending with EUR 4.2 billion in loans originated in 2014 to over 1500 local authorities and around 100 public hospitals - second player behind the savings banks  First lender to the French local public sector in 2015 with a volume of EUR 5 billion in new loans and a market share of around 25% Origination of French Refinancing via issuance of local public sector loans covered bonds Service provider French Local Covered bond Public Sector investors Transfer True Sale 6

Second public mission: provide financing for large export credits Decision: Situation: Create an French Export Refinancing scheme on French exporters face difficulties to complete the the same model as in Nordic countries (Sweden, financing of their exports contracts and suffer from Finland), which : competitive disadvantage vis-à-vis foreign avoids creating additional risk for public  exporters relying on export loans provided or sector and refinanced by public entities at competitive rates allows deconsolidation for banks.  (More than 15 public schemes within OECD countries ) “We have decided to create an export bank in France at the service of large international contracts. ” François Hollande, President of France, 6 th of February 2015 February 2015 Q2 2015 Q3-Q4 2015 French State announces a The new scheme is new public export credit Operational launch and ready to support banks scheme based on SFIL and first bids and French exporters CAFFIL capabilities  Goal : support French  European Commission  Framework agreement exports through Approval received on May 5th signed with 12 banks among improvement of the 2015 the most active in the French financial offer in terms of export credit market  Build-up of the internal volume, maturity and workforce and processes  First deals to be closed in cost . 2016 7

Second public mission: main features of the set-up A refinancing tool dedicated to Coface loans  Available for all credits insured by Coface with a minimum size of 70 MEUR  No restriction in terms of country or sector  Target activity p.a : 1.5-2.5 Bn € A platform open to all banks working with French exporters and their customers 1. The export bank i) does the fronting with the borrower and ii) keeps the uninsured part of the export credit (at least 5%) 2. SFIL buys the insured part of the export credit (up to 95%) 3. CAFFIL grants a back-to back refinancing loan to SFIL which benefits from an irrevocable and unconditional 100% guarantee by the French Republic via Coface (enhanced guarantee mechanism law n ° 2012-1510) 3 Coface acting on behalf of the French State Irrevocable and unconditional guarantee by Export credit insurance provided by the French Republic granted via Coface Coface, covering 95% of the loan 2 SFIL takes 95% of the 1 export credit (100% Refinancing Refinancing via issuance insured) loan of covered bonds Export Client – Foreign country Export Bank – Export bank will keep an exposure of acting as agent of 5% of the credit (uninsured) the loan 8

Agenda 1. A development Bank with two public policy missions CAFFIL’s balance sheet: high quality assets and prudent 2. management 3. CAFFIL’s issuing strategy 9

Obligations Foncières - protection via strong legal framework • Sole activity is to acquire • 5% permanent and manage mortgage mandatory over- 1- A Bank with and/or public sector assets 2-Strict collateralization business • Dedicated legal and balance • Interest rate risk and limited to low regulatory framework, in maturity matching to be sheet 3-Access to liquidity risk activities contrast to common law management actively managed independently from • Controlled and certified by • No currency risk sponsor bank auditors and a “ Contrôleur Spécifique ” under SCF law • Balance sheet distinct from • Seniority of payments sponsor bank to OF holders 4-Strong • Bankruptcy remote from 3-Bankruptcy • No early redemption or investor sponsor bank/servicer remote from the acceleration of payment protection • Access to interbank and sponsor • Derivative counterparties ECB repo facilities rank pari passu with OF maintained investors • Operational continuity • OF excluded from bail-in ensured by the process of sponsor bank replacement of the servicer 10

Main balance sheet items of CAFFIL EUR 7 billion Main balance sheet items equity and September 30 th , 2015 - (in EUR billion) OC of 13.2%, unsecured EUR 6.9 billion financing Equity 1.5 Over-collateral Total privileged Senior unsecured credit 5.5 debt of facilities EUR 52.1 billion comprises EUR Cover pool of 50.7 billion 52.8 59.0 billion covered bonds 2.5 Covered bonds 50.7 Cover pool 59.0 …and EUR 1.4 billion cash collateral Cash collateral 1.4 received from derivative counterparties Solvency ratio (Basel III phased -in) 24.1% 11