Correction: Correction: RCI Banque: ‘’2023 Annual Report’’

FINANCIAL POLICY

The tightening of the monetary policies of the main central banks (a direct consequence of the increase in inflation following the outbreak of military operations in Ukraine) and the decline in activity in China  due to its zero‑Covid policy have led to a slowdown in global economic activity.

In the United States, after the contraction in activity in the fi rst half of the year, growth is expected to remain subdued over the coming quarters. The labor market is still robust with an unemployment rate that stays low (3.5% at the end of

December). Inflation continues to be very high but is starting to show the fi rst signs of slowing down (6.5% in December compared to 7.1% in November, 7.8% in October, 8.3% in August).

The persistence of a tight labor market and high inflation led the Fed to begin its monetary tightening cycle in March. The Fed Funds rate target  was thus raised by 425 bps to reach 4.25 ‑4.50% at the end of December.

The ECB increased its key rate by 250 bps during 2022, raising the marginal deposit rate from -0.50% to 2.00%. It plans to raise interest  rates further to ensure a rapid return of inflation to its medium‑term target of 2%. The ECB also specifi ed that it will begin to reduce its balance sheet from the beginning of March 2023 (the asset purchase program “APP” portfolio will be reduced by an average of €15 billion per month until the end of the second quarter of 2023, and its subsequent pace will be determined over time).

The Bank of England (BoE), one of the fi rst central banks to have started the monetary tightening cycle, has raised its key rate several times, bringing it to 3.50% from 0.25% at the end of 2021.

Fears of stagflation led to high volatility in the fi nancial markets.  In Europe, bond yields rose in the path of US rates. The ten‑year German sovereign bond rate rose above the 2% mark to 2.57%, compared to a level of -0.19% at the end of 2021.

Following the slowdown in inflation in the United States and Europe, equities and corporate bonds, which had suff ered in the second and third quarters, began to recover at the end of the year. After hitting a -25% decline at the end of September, the Euro Stoxx 50 ended the year at 3,793, down -11.74%. Credit spreads experienced a similar trend: after peaking at

138 bps in J uly, the IBOX X Corporate Bond Euro index stood at 99 bps at the end of December compared to 61 bps at the end of December 2021.

In this volatile market context, the group issued the equivalent of €2.8 billion in 2022 and launched its fi rst green bond for €500 million. Proceeds are being used to fi nance electric vehicles and charging infrastructures. This transaction demonstrates the group’s willingness to support the transition to electric mobility and its commitment to tackling climate change. The group also returned to the Swiss market, with the  placement of a CHF110 million bond with a three‑year maturity, and extended the maturity of its debt with a €650 million transaction with a  six‑year maturity. Two issues of €750 million at 3.5 and three years respectively were also carried out.

In the securitization market, the group placed approximately €700 million in notes backed by auto loans granted by its French subsidiary. The Spanish branch also carried out its fi rst securitization,  issuing €1.1 billion in self‑subscribed Senior notes, which reinforced the liquidity reserve.

The retail savings activity proved to be particularly dynamic and competitive in terms of funding cost. Deposits allowed to reduce the impact of the increase in the cost of market funding, thus              demonstrating          the           relevance of             the           fi nancing diversifi cation strategy initiated 10 years ago. Savings deposits received increased by €3.4 billion since the beginning of the year to stand at €24.4 billion.

/ GEOGRAPHICAL BREAKDOWN OF NEW RESOURCES

WITH A MATURITY OF ONE Y EAR OR MORE (EX CLUDING

DEPOSITS AND TLTRO)

(as at 12/31/2023)

0.41% 6.61%                 6.87% 2.42%

                                                 1.21%       Argentina

Other

                                        Nordics                                          ^Brazil

                            8.10%                                              _Korea

Benelux

20.86%

France

13.63%

Germany

5.40%       2.79% 8.81% UK                                  4.23% 4.20%

                    Southern Europe                                                                                                                            ^Morocco

                               14.44%                                          Colombia

Central Swiss and Eastern Europe

/ STRUCTURE OF TOTAL DEBT

(as at 12/31/2023)

0.91% 6321.15 ^M€%                     24.12,275 % M€

2,375 M€

4.30%

                     15,077 M€                                                  13.28,808 % M€

27.33%

18,255 M€

                     4,324 _M€                                                              33.09%

7.84%

9,921 M€

17.98%

● Banques & Schuldschein 4.12%    ● Securitization 7.84%

● Central banks 4.30% ● Bonds, EMTN

● Negotiable debt securities 3.28%                        & Subordinated debt 27.33%

● Sight deposits 33.09%                    ● Groupe Renault 1.15%

● Term deposits 17.98%                    ● Others 0.91%

The Bank of England (BoE), one of the fi rst Central Banks to initiate the monetary tightening cycle, raised its key rate by 175bps between January and August 2023, taking it to 5.25%, for a total increase of 515bps since the start of the tightening cycle in December 2021. Inflation, high since the beginning of the year, has improved signifi cantly at the end of the year (3.9% in November, 8.9% in September versus 13.4% in January). The UK economy remained fragile (GDP at -0.1% in Q3, -0.4% private consumption). At the end of December, the markets were expecting current rates to remain at current level until H2 2024 and then fall by 150 bps over one year.

After experiencing a widening of short‑term rates in the fi rst half of the year, sovereign rates moved sharply apart on long maturities in October and then returned to their early September levels at the end of the year. Y ields on German 2 ‑year bonds increased by 51bps in H1 and decreased by -28bps since the beginning of the year (2.39% at the end of 2023 against 2.67% at the beginning of 2023). In the same time, yield on German 10 ‑year government bonds stood at 2.02% at the end of December 2023 after peaking at 3% in mid‑October (2.39% at the end of J une and 2.44% at the beginning of 2023). U.S bonds yields rose by 53bps on the 2 ‑year and 14bps on the 10 ‑year since the beginning of 2023, reaching 4.25% and 3.88%, respectively, at the end of December 2023 (compared with 4.38% and 3.7% at the beginning of 2023).

Despite some periods of sharp corrections (March and October 2023), equity markets continued the recovery initiated in the fourth quarter of 2022. The Eurostoxx 50 and the S&P 500 rose by +19% and +24.2% respectively since the beginning of the year. After an episode of volatility in the middle of the half year during which the IBOX X Corporate Bond Euro index peaked at 115.6 bp, the index stood at 91bps at the end of December 2023, very close to level seen at the end of 2022.

In this context, the group issued the equivalent of 3.9 billion euros on the bond market in 2023 and has seen its credit rating upgraded by Moody's during the month of August. In particular, it launched its second green bond issuance for 750 million euros. The success achieved in this operation demonstrates that the Group's ESG strategy is well‑received by the market and confi rms Mobilize FS's commitment to fi ght against climate change. The group also issued 200 million 5 ‑year Swiss francs and fi ve tranches of 750 million euros each, with respective maturities of 3, 3.5, 4, 5, and 6 years.

FINANCIAL POLICY

In the securitisation market, the group sold two public transactions in 2023. A 719 million euros transaction backed by car loans granted by RCI's German branch has been placed during the fi rst half 2023. The second transaction was issued for 737 million euros (including 100 million euros senior retained notes) backed by auto leases (LOA) granted by RCI's French subsidiary. Private securitisations of auto loans in the UK, auto leases in Germany and residual value component of auto lease contracts in France had their revolving period extended for an additional year. Their amount was increased to £600 million in the UK, €400 million in Germany and €400 million in France.

The retail saving activity proved to be very dynamic and competitive in terms of funding cost. Deposits helped mitigate the impact of the rising cost of market fi nancing, demonstrating the relevance of the fi nancing diversifi cation strategy initiated over 10 years ago. The outstanding of collected savings increased by 3.8 billion euros since the beginning of the year, reaching a total of 28.2 billion euros.

These resources, together with €4.4 billion of undrawn committed bank lines in the Europe scope, €5.4 billion of collateral eligible for Central Bank monetary policy operations and €4.6 billion of highly liquid assets (HQLA), enable the Mobilize Financial Services Group to maintain the fi nancing granted to its customers for over 12 months without access to external liquidity. On 31 December 2023, the liquidity reserve of the Mobilize Financial Services Group (European scope) stands at €14.6 billion.

RCI Banque's overall sensitivity to interest rate risk remained below group's limit of € 70 million.

On 31 December 2023, a parallel rate increase ⁽¹⁾ would have an impact on the Group’s net interest margin (NIM) of -€4.5 million, with the following contribution per currency:

/ - €5.4 million in EUR;               / -€1.3 million in GBP; / +€0.2 million in CHF;               / -€0.6 million in PLN;

/ +€0.7 million in MAD;                      / +€0.2 million in COP;

The sum of the absolute values of the sensitivities to a parallel interest rate shock ⁽¹⁾ in each currency amounts to €10.9 million.

The groupe RCI Banque’s consolidated transactional foreign exchange position ⁽²⁾ amounted to €17.9 million.

1)    Since 2021 and in accordance with the EBA guidelines (IRRBB Guidelines), the magnitude of interest rate shocks depends on the currency. As of 31 December 2023, the interest rate shocks applied for each currency were: +100 bps for EUR, CHF, DKK and MAD; +150 bps for SEK and GBP; +200 bps for CZ K; +250 bps for HUF; +300 bps for RON, COP and PLN; +350 bps for the BRL; +500 bps for ARS and RUB.

2)    Foreign exchange position excluding equity investments in subsidiaries.

THE 2023 EXTRA FINANCIAL REPORT

Social issues

2.4        Social issues

Our goals

As an employer, we place great importance on building a healthy work environment conducive to operational effi ciency, talent retention and business growth.

Thus, we are solidly committed to achieving gender equality within our organization: 0% pay gap in 2025 and 40% women in top management by 2024. We believe in a fair and inclusive work environment, where everyone has equal opportunities for growth and success.

At the same time, the well‑being of our employees is at the heart of our concerns. We act through initiatives aimed at creating an environment conducive to the physical and mental health of our teams. Thus, we are aiming for the GPTW (Great Place to Work) certifi cation of our main countries and want access to a wide range of training for all our employees. These goals are key to the development of our employees, and essential to the success of our company, which is based above all on the overall well‑being of our human capital.

Finally, as a major player in the captive fi nance company sector, customer satisfaction remains a constant priority; achieving an NPS score of over +56 was a key goal. We are pleased to have exceeded it with a score of +58, thus confi rming the importance given by all our subsidiaries to customer satisfaction. In addition, we pay particular attention to equal opportunities for all our customers through Caremakers fi nancing. In addition to the target of 3,000 Caremakers loans, our desire is to understand specifi c needs, personalize our services and guarantee an exceptional customer experience.

Our monitoring indicators and level of progress

                          Wage gap                                                                                                  NPS score

                           -1.62%                                                                      +58

               -5.15% in 2022 (+3.53%)                                           +56 in 2022 (+2 points)

        Percentage of women in management                                                     Number of Caremakers loans

                            37.1%                                                                      923

                  37% in 2022 (+0.1%)                                                   455 in 2022 (+468 fi nancings)

GPTW‑certifi ed countries

7*

4 in 2022 (+3 countries)

   (*)            Brazil, Italy, France, United Kingdom, Spain,

               Argentina, Colombia.

Resources deployed

To demonstrate our commitment to gender equality, we have earmarked budgets for diversity initiatives, track our gender performance indicators on a quarterly basis, use monitoring tools to assess pay equity and gender representation, and have adopted an inclusive recruitment policy. Career committees have also been set up to ensure equity in professional opportunities, guaranteeing women equal access to training, advancement and leadership. In addition, the

Women@Mobilize group, which was initially set up to take action on the role of women in the company, has evolved and, this year in particular, was behind a number of conferences aimed at the well‑being of all employees, such as the one on mental health.

In order to promote the well‑being of our employees, we implement action plans developed in response to the results of the Group’s GPTW and Global Employee Survey. We prioritize actions specifi cally focused on well‑being, implementing targeted initiatives based on employee feedback. In addition, to strengthen professional and personal development, we launched an e‑learning portal with career paths appropriate to each profession, off ering learning flexibility. In addition, we have partnered with a content aggregator, expanding access to a variety of resources to promote the overall well‑being of our employees. We also feature the proactivity of our employees, rewarding the development of their projects at our annual Awards. In addition to the Executive Committee prize, three prizes are awarded based on the votes of all employees.

Finally, we have implemented a set of initiatives focused on the continuous improvement of our customers ’experience. We conduct biannual customer satisfaction surveys, collecting essential feedback to adjust our services. A dedicated survey also assesses satisfaction with our product off ering, enabling us to respond proactively to specifi c needs and expectations. Particular attention is also paid to the dealer network, guaranteeing a consistent quality of service. On an ongoing basis, we also measure the eff ort made by our customers to fi nd answers to their needs, so that we can constantly optimize our accessibility and the clarity of our communication.

RISKS – PILLAR III

Summary of risks

/ ROA (NET PROFIT DIVIDED BY THE TOTAL BALANCE SHEET - CRD IV, ARTICLE 90)

                                                                                                                                                                                                                 31/12/2023                        30/06/2023                            31/12/2022

Return on assets                                                                                                                           1.20%                       1.07%                        1.16%

ROA is slightly above that of 2022. The result for the year is negatively impacted by the change in value of rate swaps covering demand deposits for €84 million. The 2022 fi nancial year was marked by the depreciation of equity accounted entities in the Russian J V RN Bank for €119 million, partially off set by a positive impact of €101 million linked to the valuation of swaps.

3.1.2          Context

In the fi rst part of 2023, the conflict in Ukraine, persistent inflation and monetary tightening by the major Central Banks impacted global economic activity and led the markets to revise growth expectations downwards. Then, as inflation eased, interest rates began to fall. 2023 also saw a return to volatility on fi nancial markets and periods of risk aversion, notably following the diffi culties encountered by certain US regional banks. In addition, the end of the semi‑driver shortage led to a normalization of vehicle inventories at dealerships. These factors had an impact on Mobilize F.S. group’s fi nancial performance (average earning assets, interest income, cost of risk). However, no new risks have been identifi ed in the light of these factors.

3.1.3          Risk factors

3.1.3.1        Typology of risks

The identifi cation and monitoring of risks is an integral part of the Mobilize F.S. group’s approach to risk management. This approach may be observed through risk‑weighted asset levels, but also through other indicators, work and analyses conducted by the group’s steering and risks functions. The various types of risks presented above are those identifi ed to date as being signifi cant and specifi c to Mobilize F.S. group, the materialization of which could have a major unfavorable impact on its business, fi nancial situation and/or results. This is not an exhaustive list of all the risks taken by the group in the context of its activity or to which it is exposed because of its environment.

In light of the diversity of the group’s business, the management of risks is built around the following major risk types.

●  interest rate risks and foreign exchange risks: risk of a drop‑in interest rate margin or in the value of the banking portfolio owing to a change in interest rates or foreign exchange rates;

●  liquidity and funding cost risk: liquidity risk occurs when Mobilize F.S. group is unable to honor its commitments or cannot finance the development of its business in line with its commercial objectives. Funding cost risk corresponds to the risk of RCI Banque not being in a position to finance its activities at a cost that is competitive;

●  credit risk (Retail customers and Dealer networks): the risk of loss incurred in the event of default by a counterparty or counterparties considered as a single group of related customers;

●  residual value risk: risk to which the group is exposed as a result of the depreciation in the net resale value of a vehicle at the end of the financing contract (value below initial estimate);

●  strategic risk: risk resulting from the group’s inability to implement its strategy and achieve its medium‑term plan;

●  concentration risk: risk resulting from a concentration in Mobilize F.S. group’s exposures (countries, sectors, debtors);

●  operational risks: risk of losses or sanctions resulting from ineffective or inadequate internal processes involving staff and/or IT systems, or external events (examples: cyber risks, pandemic, internal or external fraud, etc.) whether deliberate, accidental or natural (IT risks and Business interruption);

●  non‑compliance risks: risk of legal, administrative or disciplinary sanctions, of significant financial loss or reputational damage, arising due to non‑compliance with provisions specific to banking and financial activities (laws and regulations in force, ethics codes, national, European and international banking regulations). These risks include legal risks, conduct risks, tax risks, risks relating to money‑laundering and the financing of terrorism (AML‑CFT), risks associated with the protection of personal data, risks of non‑compliance with banking regulations, risks related to corruption and influence peddling, and ethical risks;

●  model risk: risk associated with a failure in the models used by the group in the course of its business. This notably relates to the use of inadequate price calculation, revaluation, hedging or risk management models. Failure of such models may be due to either the quality of the data used, the modeling technique or the implementation or use thereof;

●  climate and environmental risks: these are the risks related to extreme climate and environmental events (physical risks) and related to changes in technologies, regulations and market sentiment contributing to the transition to a low carbon economy (transition risks);

●  geopolitical risk: risk of nationalization, limitation of fund transfers, adoption of new regulations unfavorable to creditors, international sanctions impacting the business.

RISKS – PILLAR III

Summary of risks

3.1.3.2        Risk factors

The risk factors presented in this section are those that the group believes could have a material adverse eff ect on its business, fi nancial condition, and results of operations. However, this is not an exhaustive list of all the risks to which the group is exposed. The risks specifi c to the group’s business are presented below under fi ve main categories, in accordance with Article 16 of Regulation (EU) No. 2017/1129, known as “Prospectus 3” of 14 J une 2017:

●  business development risks;

●  Financial risks;

●  product‑related risks;

●  operational risks;

●  legal, regulatory, tax and conduct risks.

3.1.3.2.1 Business development risks (including strategic, concentration, climate and environmental risk)

The operating income and fi nancial position of the Mobilize F.S. group depend on the Renault Group’s corporate strategy and sales, as well as those of the Nissan and Mitsubishi brands.

As a 100% Renault fi nancial subsidiary serving the Renault Group brands, as well as the Nissan and Mitsubishi brands, the predominant activity of the Mobilize F.S. group is to fi nance sales of its brands, which accounts for a substantial majority of its net banking income.

Due to the strategic, commercial and fi nancial links of the Mobilize F.S. group with the Renault Group and the fact that the activity is concentrated on the Renault Group brands and the Nissan and Mitsubishi brands, any reduction or suspension of production or sales of vehicles of these brands due to a decrease in actual or perceived quality, safety or reliability of the vehicles, interruption of supply by third parties, signifi cant changes in marketing programs or strategies or to negative publicity, could have a signifi cant negative impact on the level of fi nancing volume of the Mobilize F.S. group and on its fi nancial situation and operating results.

In addition, demand for vehicles from fi nanced brands can be aff ected by the following factors:

●  the diversification and innovation of the vehicle fleet;

●  the competitiveness of vehicle sales prices;

●  levels of customer demand for the sale and lease of new and used vehicles, including the macroeconomic environment that may affect demand;

●  customer demand for financing of vehicle purchases;

●  vehicle production rates; and

●  inventory levels maintained by group, Nissan, and Mitsubishi dealers.

In addition, the success of Mobilize F.S. group’s strategic plan depends on several levers, such as the performance of its products and investments and its ability to maintain a high level of customer satisfaction, as well as on appropriate governance of the strategic plan to ensure the support of Mobilize F.S. group employees.

What’s more, the Renault Group’s business strategy and sales mix, as well as that of the Nissan and Mitsubishi brands, may lead to a concentration of the Mobilize F.S. group’s exposures. An unfavorable event impacting a geographic area or a category of customers representing a signifi cant portion of the group’s assets could have negative consequences on its fi nancial health.

Risk related to geopolitical instability

Mobilize F.S. group operates in various countries and as such is exposed to geopolitical risk, the main components of which are:

●  nationalization risk: the risk that the host country passes a law allowing it to buy back an asset located in its jurisdiction for less than the value of that asset;

●  non‑transfer risk: risk that the host country implements limitations on the transfer of funds out of the country;

●  legislative risk: risk that the host country passes a law that negatively impacts the value of assets located in its

jurisdiction;

●  risk related to the adoption of international sanctions against a country in which RCI operates.

In recent years, Mobilize F.S. has been forced to cease operations and withdraw from its J oint Venture in Russia due to the international sanctions imposed on this country following the invasion of Ukraine.

At the date of this publication, Mobilize F.S. operates activities in countries where an exchange control limit the free convertibility of currencies, such as Argentina, Brazil, Colombia, South Korea and Morocco. These countries account for 16% of net banking income at 31 December 2023, and 10% of pre‑tax income.

The development and profi tability of Mobilize F.S.’s activities in emerging countries depend on the economic health and political stability of these countries.

Climate and environmental risks could aff ect Mobilize F.S. group’s business, operating results, fi nancial condition and reputation.

Climate and environmental risks are linked to two families of risks:

●  physical risks: linked to the impacts of climate change and environmental degradation through extreme events (floods, heat waves… ) or long‑term developments (temperature variability, loss of biodiversity… );

●  transition risks: linked to technological developments, regulations or market sentiment associated with the transition to a low‑carbon economy.

They are seen as factors that can increase certain risks (credit risk, residual value risk, strategic risk, liquidity risk, operational and compliance risk, insurance risk).

The group could be exposed to physical climate risk on its direct activity through insurance products (CPI, GAP) or being impacted by its ability to maintain its services, as well as indirectly by the negative impact of extreme weather events on its clients’ business. In addition, the group could be exposed to transition risks through its credit portfolio, on certain sectors of activity or in its commercial activity due to introduction of regulations, for example in the automotive sector, to limit the use of vehicles or to encourage the transition to electric alternatives.

Finally, liability and reputation risks could also arise from these two categories of risk.

The impact on the strategic objectives is potentially signifi cant given the very high stakes involved for automakers, who must respond to rapidly changing regulations, in particular on vehicles emissions levels, while at the same time dealing with an infrastructure environment under construction and the entry of new players.

The impact on the credit risk is perceived as signifi cant in the medium and long term, even if it remains fairly limited in the short term given the breakdown of loans by business sector in the corporate fi nance portfolio. Mobilize F.S. group has little presence in sectors with a high transition risk and, as far as physical risk is concerned, the location of Mobilize F.S. group’s customer base is not overly concentrated geographically.

3.1.3.2.2        Financial Risks

A disruption of Mobilize F.S. group’s sources of funding and access to capital markets would have an adverse eff ect on its liquidity position.

Mobilize F.S. group diversifi es its sources of fi nancing by implementing a strategy that focuses on the category of counterparties (diff erent market players and diff erent types of fi nancing), currencies and countries where counterparties are located. The group fi nances its activities through long‑term debt issues, bank loans, negotiable debt securities, securitization of receivables and deposit taking activities and is therefore dependent on reliable access to fi nancial resources. Due to its fi nancing needs, the Mobilize F.S. group is exposed to liquidity risk in the event of a market closure or stress in the source of funding.

Liquidity risk is the risk that Mobilize F.S. group will not be able to honor its commitments or fi nance the development of its activities in accordance with its commercial objectives. Rating and refi nancing cost risk is the risk that Mobilize F.S. group will not be able to fi nance its activities at a competitive cost compared to its competitors.

Mobilize F.S. group’s liquidity could be materially aff ected by factors beyond the bank’s control, such as general market disruptions, market perception or speculative pressures in the debt market. If Mobilize F.S. group’s funding requirements increase or if Mobilize F.S. group is unable to access new sources of funds, insuffi cient liquidity would be particularly detrimental to its competitive position, results of operations and fi nancial condition.

The Mobilize F.S. group’s results of operations may be adversely aff ected by changes in market interest rates or rates off ered to customer deposits.

Interest rate risk in the banking book (IRRBB) refers to the actual or potential risk of a decline in the bank’s equity or income resulting from adverse movements in interest rates aff ecting its banking book positions. Mobilize F.S. group’s customer loans are, with some exception, issued at fi xed interest rates, for terms generally of up to 72 months, while dealer loans are fi nanced at fi xed rates for terms of less than 12 months. Mobilize F.S. group’s exposure to interest rates is assessed daily by measuring sensitivity for each currency,

RISKS – PILLAR III

Summary of risks

management entity and asset portfolio, and cash flow hedging is systematic, using swaps to convert floating‑rate liabilities into fi xed‑rate liabilities.

The management of overall interest‑rate risk, through these balance‑sheet and off ‑balance‑sheet operations, aims to limit the volatility of the net interest margin: volability resulting from a mismatch between duration and indexation.

Mobilize F.S. group calculates interest rate sensitivity by applying a hypothetical increase in interest rates, the magnitude of which depends on the entity’s currency. Although Mobilize F.S. group monitors its interest rate risk using a group‑wide methodology, the hedging of the risk is not always perfect, reflecting the diffi culty of adjusting the borrowing structure to match the structure of customer loans.

Changes in interest rates cannot always be predicted or hedged and, if not properly predicted or hedged, could have an adverse eff ect on the Mobilize F.S. group’s business, fi nancial condition, and results of operations. The overall sensitivity of the Mobilize F.S. group to interest rate risk remained below the limit of €70 million for a variation in rates corresponding to the shocks observed for each currency.

Risk of unfavorable changes in the refi nancing costs of the Mobilize F.S. group, following a deterioration in the rating of RCI Banque S.A. by the rating agencies or a global change in fi nancing conditions (market and deposits)

The Mobilize F.S. group’s access to the market may be aff ected by the credit ratings of its constituent entities and, to a certain extent, the Renault Group. RCI Banque S.A. is, at the date of this publication, rated Baa2 (stable outlook) by Moody’s France SAS and BBB- (stable outlook) by S&P Global Ratings Europe Limited.

The rating agencies S&P Global Ratings Europe Limited and Moody’s France SAS use ratings to classify the creditworthiness of RCI Banque S.A. to assess whether RCI Banque S.A. will be able to repay its obligations in the future.

A deterioration in RCI Banque S.A.’s liquidity position, capital management policies or a signifi cant weakening of profi tability could lead to a negative impact on its rating.

RCI Banque S.A. is a wholly owned subsidiary of Renault and its rating remains dependent on the economic development and rating of Renault. Any negative rating action with respect to Renault’s long‑term debt could result in similar action with respect to RCI Banque S.A.’s long‑term debt.

RCI Banque S.A.’s fi nancing comes mainly from customer deposits and the capital markets. Its ability to obtain bond fi nancing at competitive rates depends on overall fi nancial market conditions and its ability to obtain appropriate credit ratings. A decline in its credit ratings and those of its main shareholder Renault SA or any revision of the outlook for these same ratings would likely result in an increase in RCI Banque S.A. This could also reduce RCI Banque S.A.’s access to capital markets. Its ability to attract and retain customer deposits depends on the attractiveness of the savings products it off ers to its customers. The cost of deposits may therefore be aff ected by the commercial policies of its competitors.

RISKS – PILLAR III

Summary of risks

Foreign exchange risk

The Mobilize F.S. group is exposed to the risk of loss resulting from current or future exposure to current and/or refi nancing transactions in a currency other than the euro or from a potential decrease in the value of Mobilize F.S. group’s equity due to the depreciation of equity held in countries outside the euro zone.

Investments in currencies other than the euro (structural currency risk) may be hedged.

Transactional currency risk (currency exposure excluding equity investments) arises mainly from multi‑currency loans and foreign currency invoices.

3.1.3.2.3       Product risks

The Mobilize F.S. group may incur losses as a result of defaults by its retail and corporate customers, dealers or importers (i.e., inability to pay credit installments to Mobilize F.S. group under the credit agreement (late payment)).

The Mobilize F.S. group is exposed to the credit risk of its customers and dealers/importers if its risk management techniques are insuffi cient to protect it against payment defaults by its counterparties.

Credit risk is the risk of loss resulting from the failure of customers or dealers and/importers of Mobilize F.S. group to fulfi ll the obligations of any signed contract. Credit risk is highly dependent on economic factors, including unemployment, business failures, personal income growth, household disposable income, dealer profi tability, and used vehicle prices. The level of credit risk in Mobilize F.S. group’s dealer fi nancing portfolio is influenced by, among other factors, the fi nancial strength of the dealers and importers in Mobilize F.S. group’s portfolio, the quality of the collateral and processes in place to secure fi nancing, and the overall vehicle demand. The level of credit risk of Mobilize F.S. group’s customer portfolio is aff ected by general macroeconomic conditions that may aff ect the ability of some of its customers to make scheduled payments.

The Mobilize F.S. group uses advanced credit scoring systems and external database searches to evaluate personal and commercial loans, and an internal rating system to evaluate dealers and importers. Although Mobilize F.S. group constantly adjusts its acceptance policy to reflect market conditions, an increase in credit risk would result in higher cost of risk and provisions for credit losses.

The Mobilise F.S. group also implements detailed procedures to contact customers in default of payment, organize the recovery of unpaid vehicles and sell repossessed vehicles. However, the Mobilize F.S. group origination procedures, credit risk monitoring, payment service activities, customer account record keeping, or repossession policies may not be suffi cient to prevent an adverse eff ect. on its results of operations and fi nancial condition.

The increase in credit risk would increase the cost of risk and provisions for credit losses, which would have a direct impact on the fi nancial results of the Mobilize F.S. group and potentially on its internal capital.

A decrease in the resale price of leased vehicles could have a negative impact on the results of operations and the fi nancial condition of Mobilize F.S. group.

When leased vehicles are returned to Mobilize F.S. group at the end of the lease and Mobilize F.S. group does not have a third party buy‑back agreement (usually from a dealership or car manufacturer) and/or a customer does not exercise an option to purchase the vehicle at the end of the lease, the Mobilize F.S. group is exposed to the risk of loss in the situation where the sale proceeds realized upon the sale of the returned vehicle is not suffi cient to cover the residual value that was estimated at the start of the rental agreement.

To the extent that the actual residual value of the vehicle, as reflected in the sale proceeds, is less than the expected residual value for the vehicle at the start of the lease, Mobilize F.S. group incurs a loss upon disposal of the vehicle.

Among other factors, economic conditions, new vehicle prices and sales volumes, distribution channels, model life cycle, available used vehicle volumes, product specifi cities and competition strongly influence used vehicle prices and thus the actual residual value of leased vehicles. Diff erences between the actual residual values realized on leased vehicles and Mobilize F.S. group’s estimates of such values at the inception of the lease could adversely aff ect Mobilize F.S. group’s results of operations and fi nancial condition due to the recognition of higher‑than‑expected losses.

3.1.3.2.4        Operational risks

Among the operational risks, the most signifi cant are related to information and communication technology (ICT) risk and business interruption risk.

Information and communication technology risk can be broken down into risks relating to information systems governance, outsourcing, security, change management and operations (production), IT business continuity and data quality/integrity.

Information and communication technology (ICT) risks covers, among other things, the risk of disclosure of information (confi dentiality) or alteration of information (integrity) due to unauthorized access to ICT systems and data from within or outside the institution (e.g., cyber‑attacks), the risk of system disruption (availability) due to the inability to restore the institution’s services in a timely manner or to the failure of ICT hardware or software components, including the failure of the institution’s information systems to function properly. The risk of system disruption (availability) due to the inability to restore the institution’s services in a timely manner or to the failure of ICT hardware or software components, including the inability to detect and correct weaknesses in the management of ICT systems or the inability of the institution to manage changes to ICT systems in a timely and controlled manner.

The institution’s ICT risk is also extended to outsourced activities, as service providers hold, store, or process the institution’s ICT systems and information. A lack of control over these external parties to protect the institution’s systems and information (confi dentiality, integrity, availability) may have an impact on the institution’s ability to comply with regulatory requirements, and to ensure its activities are properly carried out.

For example, the risk of inability to maintain/operate the Mobilize F.S. group’s essential (important/critical) activities in the event of an external disruptive event (flood, contagion, IS destruction, cyber‑attack, suicide, terrorist attack, etc.) or the inability to keep information systems operational (referring to the Business Resumption Plan, and Business Continuity Plan respectively) may negatively aff ect the Mobilize F.S. group’s activities.

IT systems are an essential resource for the Mobilize F.S. group as they support the business processes in their daily operations.

After making loans or fi nancing lease plans to individuals and businesses and making loans available to dealers, Mobilize F.S. group manages fi nancial receivables. Any disruption in its servicing activity, due to the inability to access or accurately maintain accounts receivable records, or otherwise, could have a material adverse impact on its ability to collect these receivables and/or satisfy its customers.

Mobilize F.S. group relies on internal and external (both Mobilize F.S. group and third party) information and technology systems to manage its operations and is exposed to risk of loss resulting from security breaches, system or control failures, inadequate or failed processes, human error and business interruptions. In addition, Mobilize F.S. group has entered into framework agreements with Renault for the provision of certain IT systems and services.

3.1.3.2.5         Legal, regulatory and tax risks

Mobilize F.S. group is exposed to legal, regulatory, tax and conduct risks.

The Mobilize F.S. group’s profi tability and business could be aff ected by the regulatory, legal and tax environment, both in France and abroad, because Mobilize F. S group operates in several countries and is therefore subject to extensive supervisory and regulatory regimes and locally applicable rules and regulations, such as, but not limited to, banking regulations, consumer credit laws, securities laws and regulations, general competition regulations, real estate laws, employment regulations, anti‑money laundering and anti‑terrorist fi nancing regulations, data protection laws, corporate and tax laws and insurance laws and regulations.

Regulators pay particular attention to consumer protection and have tightened the rules governing business conduct. These rules may, for example, limit the interest rate a lender can charge (usury rate), restrict the bundling of products, or regulate the remuneration of intermediaries.

In the event of non‑compliance, customers may seek compensation if they feel they have suff ered a loss in the sale of a product, or if the general terms and conditions have been incorrectly applied. Changes in legal rulings and the positions taken by the competent authorities could lead to unfavorable outcomes in certain cases, which could damage the group’s reputation or have a negative impact on its results and fi nancial situation, due to penalties imposed or compensation awarded, as well as the costs of defense incurred.

The protean nature of the regulations makes it diffi cult to assess their future impact on the company. Any failure to comply could lead to fi nancial penalties, in addition to

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Summary of risks

damaging the group’s image, or to the imposed suspension of its activities, or even the withdrawal of the authorizations granted to carry out its activities (including its license), which could signifi cantly aff ect its business and operating income.

Among the regulations that have a signifi cant impact on the group are the banking prudential regulations applicable to credit institutions, and in particular the Basel III prudential rules on capital requirements.

The Mobilize F.S. group is primarily subject to the Capital Requirements Directive (CRD) package, comprising

Directive 2013/36/EU (as amended by Directive (EU) 2019/878 (CRD V)) and Capital Requirements

Regulation No. 575/2013 (“CRR”) (as amended, inter alia, by Regulation (EU) 2019/876 (CRR II), (including all implementing legislation in France, in particular Law No. 2013‑672 of 26 J uly 2013 on the separation and regulation of banking activities), the Bank Recovery and Resolution Directive 2014/59/EU (“BRRD”), as well as relevant technical standards and guidelines of EU regulators, e.g., the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), which provide, among other things, for capital requirements for credit institutions, recovery and resolution mechanisms.

In addition to the regulatory changes outlined above, the European Central Bank (the “ECB”) has taken important initiatives to ensure that the capital requirements of banks using internal models are calculated correctly, consistently, and comparably.

The Mobilize F.S. group uses its own internal models to calculate risk‑weighted assets and thus capital requirements. In previous years, The Mobilize F.S. group has received remarks and comments on some of the models audited by the ECB for which it has been requested to revise certain parameters or to introduce temporary additions to its calculations. The institution is responding to most of these recommendations and compliance with the new EBA guidance on PD estimation, LGD estimation and treatment of defaulted assets by submitting packages (new models and methodologies) to the supervisor (ECB) in 2021.

As a provider of fi nancing, insurance, banking (deposit) and other vehicle‑related services, the Mobilize F.S. group treats the requirements of banking and insurance laws and regulations, competition practices and customer protection rules, ethical issues, money laundering laws as well as on the fi ght against corruption (Sapin 2 law), data protection laws and information security policies very carefully. Any non‑compliance or failure to address these issues appropriately could result in additional legal risk and fi nancial losses, through regulatory fi nes or reprimands, litigation or reputational damage, and in extreme scenarios, suspension of operations or even withdrawal of authority to do business.

Additional regulations or changes in applicable laws could add signifi cant costs or operational constraints that could adversely aff ect the profi tability of Mobilize F.S. group’s business.

The Mobilize F.S. group’s future results may be adversely aff ected by any of these factors.

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Governance and organization principles of risk management

3.2.2            Organization of risk control

The overall risk monitoring process at Mobilize F.S. group is managed at three levels by distinct functions:

●  1 ^st level controls is done by:

●  the operational staff in charge of day‑to‑day risk management within their own area of responsibility. They decide on and are responsible for risk‑taking within the operations they conduct to achieve goals assigned to them. They exercise such responsibility in compliance with the risk management rules and limits set by the

“Corporate” risk steering functions,

●  the functional departments in charge of risk definition, rules, management methods, measurement and monitoring at the corporate level. Each department, in its area of expertise, manages and oversees the risk management system via guidelines and country objectives. Risk is monitored by periodic dedicated Committees in both the subsidiaries and centrally. These departments rely on local representatives for risk measurement and exposure monitoring and ensure that limits are respected at the group level; ● 2 ^nd level controls comprises:

●  the Internal Control department, who reports to the Chief Risk Officer, who is responsible for directing the general internal control and in particular the application of management rules throughout the group. In terms of internal control supervision in the Mobilize F.S. group subsidiaries, the Director of the Internal Control department is supported by Internal Controllers who are functionally attached to the Risk Control division hierarchically to the CEO of the subsidiaries. Similarly, the Director of the Internal Control department is supported by referents within the central functions to manage the internal control supervision system within the Mobilize F.S. group departments. Internal Controllers at Corporate level and in local entities verify the operations compliance level versus the procedures by checking the compliance with the group rules,

●  the Risk and Banking Regulation department, who reports to the Chief Risk Officer, ensures the deployment of the Risk Governance Policy within the group and ensures its consistency with the Risk Appetite Framework (RAF) defined by the Board of Directors; ensures the reliability of risk measurement indicators, the completeness of risk management systems for each risk and the effective exercise of such management; controls, more specifically, the effectiveness of the reporting and alert feedback channels from the subsidiaries to the corporate departments and prepares a summary report on the risks for the management bodies and the Risks Committee of the Board of Directors, as appropriate; verifies the adequacy of the corrective measures developed in the event of failures and their effective implementation by the management functions; plays a central role in monitoring the group’s compliance with applicable prudential

regulations,

●  the group Compliance division: is in charge of setting up, deployment and control of compliance program across RCIBS. Its scope covers in particular: ethics (codes of ethics and professional conduct, conflicts of interests management, gifts and invitations), financial crimes management including risk of corruption, money laundering and financing of terrorism, internal/external frauds (other than credit‑related frauds), sanctions and embargos, personal data protection, customer protection. Also, in its compliance control function, group Compliance division ensures global consistency and efficiency of compliance control system. group Compliance division relies on its local network of compliance correspondents, as well as on other functions and departments involved in risk management and control system, such as: group Risk Control division, internal audit, legal function, performance control and, more generally, all the other business‑lines;

●  3 ^rd level controls refers to the Internal Audit, which aims to provide RCI Banque S.A.’s Board of Directors and General Management with an overview of the effective level of business operations’ control and of the risk steering and management performed by the first two levels.

These three risk controlling lines report to the following Committees:

●  the Board of Directors and its specialist Committees, including the Risk Committee and the Audit and Accounting Committee,

●  the Executive Committee and the subsidiaries Management Board Committees, notably via the Internal Control, Operational Risk and Ethics & Compliance Commitee (at local and central level),

●  the operational Risk Management Committees within the company’s functions (at local and central level).

The content of the information reported to the Board of Directors’ Risk Committee is decided upon during meetings of the latter Committee on the basis of proposals submitted by the Executive Board member concerned and the Chief Risk Officer. Exposure to each risk is measured at a frequency appropriate (from daily for risks such as the interest rate risk and monitoring of customer deposits, to monthly in general cases). These measurements are made at the individual entity level and then consolidated. The Risk and Banking Regulation department centralizes the production of the quarterly dashboard delivered to the Board of Directors’ Risk Committee.

Senior management

Managerial systems

In accordance with the CRD IV application order and 3 November decree on internal control, the duties of the Chairman and Chief Executive Offi cer are separate.

As of 31 December 2023, the company’s Senior Management and de facto managers (within the meaning of

Article L.511‑13 of France’s Monetary and Financial Code) are assumed under the responsibility of Frédéric Schneider, Chief Executive Offi cer and VP Commercial and Strategy, J ean‑Marc Saugier, Deputy Chief Executive Offi cer and V.P. Finance and Treasury.

By a decision as of 19 December 2023, the Board of Directors appointed Martin Thomas and Frédéric Schneider as Chief Executive Offi cer and Deputy Chief Executive Offi cer respectively as from 22 January 2024.

The Chief Executive Offi cer holds the broadest powers to act under any circumstances on the company’s behalf, within the limits of the corporate object and conditional on those powers that the law expressly attributes to shareholders’ meetings and the Board of Directors. He is authorized to grant sub delegations or substitutions of powers for one or more specifi c transactions or categories of transaction.

The Deputies Chief Executive Offi cer hold, as regards third parties, the same powers as the Chief Executive Offi cer.

The Executive Committee

The Mobilize F.S. group’s Executive Committee contributes to the group’s direction of policy and strategy. It is the reference body which approve action plans when alert thresholds or limits are exceeded. It is also arbitration body when risk reduction actions aff ect the company’s other objectives. The Executive Committee oversees the activity and risks in accordance with the guidelines (“Risk Appetite Framework”) laid down by the Board of Directors via the Risk Committee.

In addition, Senior Management relies in particular on the following Committees to manage the group’s risk control:

●  the Financial Committee which reviews the following themes: economic analyses and forecasts, cost of the resource, liquidity risk, rate risk and counterparty risk on the group’s various perimeters and subsidiaries. Changes in Mobilize F.S. holding’s balance sheet and profit & loss account are also analyzed to make necessary adjustments to intra‑group transfer prices;

●  the Capital and Liquidity Committee which steers the funding plan and ensures that the group’s solvency level enables it to ensure its development while meeting the expectations of the various stakeholders (regulators, rating agencies, investors, shareholder) and maintaining good resilience to stress scenarios;

●  the group Commitments Committee which validates commitments beyond the authority of subsidiaries and to which the group Commitments Director reports on compliance with commitment standards and powers;

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Governance and organization principles of risk management

●  the group Credit Risk Committee assesses the credit quality of new retail customer production and subsidiaries’ performance as regards recovery and targets, and analyzes the cost of risk for the group and the main countries. On dealer network activity, it reviews changes in outstandings and stock rotation indicators as well as changes in the classification of dealerships and outstandings;

●  the Regulatory Committee which reviews major changes in regulations, prudential oversight and action plans, and validates internal rating models and the associated management system;

●  the Internal Control, Operational Risk and Ethics & Compliance Committee manages the whole of the group’s internal control system, checks its quality and related mechanisms and adapts resources, systems and procedures. It details, runs and monitors the principles of the operational risk management policy and the principles of the compliance monitoring system. It monitors the progress in action plans. An Internal Control, Operational Risks and Compliance Committee operates in the Mobilize F.S. group subsidiaries;

●  the New Product Committee which validates new products before they are put on the market, ensuring in particular that new products comply with the group’s commercial policy, the group’s budgetary requirements, legislation applicable locally, the protection of the client’s interest and the group’s risk governance;

●  the IT Committee, which validates the IT orientations and strategy by considering the associated risks, and which reviews the IT projects, the IT security and the IT/IS Budget;

●  the Legal and Tax Committee, which manages the legal, tax and conduct risks associated with the design and distribution of financing products and services;

●  the Residual Values Committee, which validates the residual values policy applied to all entities concerned, and monitors market trends, resale process performance and provisions;

●  the Climate and Environmental Risks Committee, which monitors the impact of physical and transition risks on existing risks (strategic, credit, financial, business continuity) monitors progress of action plans relating to climate and environmental risks, monitors compliance with risk indicators and ensures that climate and environmental risks are integrated into operating.

At local level, the dedicated Committees control the operational management of risks in line with the defi ned framework.

The Risk Appetite Statement is approved annually by the Board of Directors on the proposal of the Risk Committee. The group has established a Risk Appetite Framework and a Risk Appetite Statement, which are intended to formalize the Mobilize F.S. group’s tolerance of the risks to which it is exposed.

The risk profi le is determined in accordance with the group’s values and strategy taking into account the environment in which it operates. The risk profi le is determined based on all risks associated in the Mobilize F.S. group’s activities in Europe and worldwide. These are identifi ed in the group’s risk mapping and are periodically reassessed.

The risk profi le is determined in accordance with the group’s values and strategy and considering the environment in which it operates. It takes into account all the risks associated with the Mobilize F.S. group’s activities worldwide. These are identifi ed in the group’s risk map and periodically reassessed. The risk profi le or risk appetite is implemented within the group by the Executive Committee through the specialized Committees chaired by its members (Financial Committee, Capital and Liquidity Committee, Credit Risk Committee, Internal Control, Operational Risk and Ethics & Compliance Committee, etc.). These Committees are responsible for managing the main risks to which the group is exposed. In addition, the group’s strategic processes, such as capital and liquidity management, are developed in accordance with the Risk Appetite Statement; during the budgetary exercise, the forecasts for the key indicators of the Risk Appetite Framework are compared with the thresholds defi ned in the Risk Appetite Framework. The adequacy of the risk profi le and risk exposure is monitored by the Executive Committee and by the Board of Directors through its Risk Committee. The Board of Directors also carries out an annual review and validation of the Risk Appetite Framework.

The implementation of the group’s risk appetite is based on four components: (i) the defi nition of common reference frameworks, (ii) the existence of a set of limits in line with those defi ned by the regulations, (iii) the allocation of responsibilities and expertise between the central body and the entities, and (iv) the functioning of governance within the group and the various entities, which allows for the eff ective implementation of the system devoted to risk appetite.

The risk appetite framework may be adjusted at least annually and particularly during the strategic plan development process. Risk appetite is specifi ed through two types of thresholds:

●  a limit: the maximum level of risk that the bank is willing to assume in order to achieve its strategic objectives, in compliance with prudential and regulatory requirements, and having implemented adequate risk management and

control capabilities;

●  an alert threshold: the level of risk that triggers a notification to the Board of Directors when it concerns a regulatory ratio and to the Risk Committee for all risks monitored at its level, or a notification to the Executive Committee for all risks.

When a limit is crossed, an action plan is implemented to bring it back to the appropriate level, and the Board of Directors is notifi ed in the case of critical risks and the Executive Committee in the case of signifi cant risks.

The crossing of the alert threshold leads to the planning of a set of risk reduction measures applicable in order to prevent the limit being exceeded.

The risk profi le is monitored on a daily to quarterly basis to quarterly basis, depending on the indicators and risks involved. These indicators are the subject of a quarterly risk dashboard produced by the Risk and Banking Regulation department and presented to the Executive Committee and the Board of Directors’ Risk Committee. In particular, the following indicators are included in the Risk Appetite Framework and are listed in the Key Figures of the section of Part I – Summary of risk:

●  the CET1 ratio and the total capital ratio;

●  the leverage ratio;

●  the liquidity coverage ratio; ● the net stable funding ratio; ● the cost of risk.

The Mobilize F.S. group aims to support the business development of the Renault Group as well as for the Nissan and Mitsubishi brands ‘scar brands, in particular through its key role in fi nancing individual and corporate customers, dealership networks and in developing customer loyalty. This is reflected in:

●  maintaining high levels of profitability and adequate solvency, which is the guarantee of the reliability of this commitment vis-à-vis the shareholder;

●  a refinancing policy based on diversifying funding sources and on building up adequate liquidity reserves;

●  a financing and service offer that is constantly adapted to the needs of our clients and is distributed through physical and digital channels that facilitate access;

●  a particular attention to the conformity of the products and services marketed and to the quality of the information transmitted to customers, in particular by ensuring compliance with good practices related to sales and ethical issues, which may impact the group’s reputation;

●  an integration into the group’s strategy of issues related to environmental and social transitions and corporate social responsibility challenges.

A responsible and measured approach is in the center of a risk‑taking decision process at Mobilize F.S. group. The main risks are subject to a strict risk steering framework, in line with the risk appetite defi ned by the Board of Directors:

●    risks related to commercial deployment:

a)    concentration risk arises from a significant accumulation of exposures to certain categories, sectors or markets. The purpose of monitoring this risk is to determine the maximum level of concentration that the bank is prepared to take in the course of its business, in accordance with its strategic plan,

b)    strategic risk is assessed and monitored with the aim of enabling the company to achieve the results of its strategic plan. It is based in particular on the monitoring of external factors such as economic crises, pandemics, etc., as well as the performance of the company’s products and investments, and its ability to maintain a high level of profitability and customer satisfaction,

c)     geopolitical risk is analyzed by taking into account macroeconomic indicators, market indicators and external ratings. Cross‑border loans and capital investments are subject to a system of limits,

d)    climate and environmental risks are mapped via a survey of the expected impacts of physical and transition risks, and framed by limits in terms of CO₂ emission reductions, ESG ratings, the number of commercial offers encouraging the use of electric vehicles and the intervention rate (ratio between financing contracts and registrations) on electric vehicles;

●    the solvency risk is controlled with a view to maintaining:

a)    a necessary security margin regarding prudential requirements, reflecting Mobilize F.S.'s high profitability and capacity to adapt dividend paid to the single shareholder,

b)    and an “investment grade” rating level by credit rating agencies;

●    financial risks:

a)    the liquidity risk is assessed and controlled monthly. It is managed in such a way as to ensure the company’s continuity of business for a minimum period in various stress scenarios, including assumptions of financial market closure and mass withdrawals of deposits. A limit of six months’ business continuity has been set for centrally funded subsidiaries (three months for locally funded subsidiaries), with the associated alert thresholds set considerably over such levels,

b)    the interest‑rate risk is monitored daily. Since March 2021, it has been measured on the basis of scenarios of parallel increase or rotation of the rate curves, the amplitude of which depends on the currency, in accordance with EBA guidelines. Interest rate risk is limited by a sensitivity limit of €70 million,

c)     currency risk can be broken down into structural currency risk, which arises from the group’s long‑term investments in the equity of its foreign subsidiaries, and transactional currency risk, which arises from cash flows denominated in currencies other than the parent company currency. The position and compliance with these limits are presented monthly to the Finance Committee or the Capital and Liquidity Committee; ● product risks:

a) the credit risk:

●    the retail and corporate customer risk is monitored from both the portfolio and new business perspectives. Its management is based on tracking the cost of risk in relation to set targets, with strong monitoring of underwriting and collection particularly under stressed conditions,

●    the wholesale risk is controlled by monitoring the financial situation of dealers, thus contributing to the control of credit risk on outstandings, while ensuring the sustainability of dealer networks.

For both these risks, the target is to keep the overall cost of risk at a consolidated level below or equal to

1% of outstandings;

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Governance and organization principles of risk management

b) the residual value risk is assessed and controlled in order to minimize potential losses on end‑of‑contracts sales. It has recently been adjusted to support the company’s ambitions to develop its used vehicle and operational rental business. Specific monitoring and rules aim at mitigating the risk; ● operational risks:

a)    the non‑compliance risks (legal, conduct, tax, AML/CFT, BRRD regulation, fraud, reputation, business continuity, IT, personal data protection, corruption, unethical behaviour, etc.) are covered by a relevant risk mapping, specific procedures and controls, and are subject to monitoring by dedicated Committees. Reporting at Board of Directors’ Risk Committee and/or Executive Board level ensures compliance with alert thresholds and limits, set in order to minimize any risk of penalties or harm to the group’s image and reputation,

b)    IT and business continuity risks are subject to controls and regular tests, particularly in terms of IT security, to ensure that Mobilize F.S. group is able to maintain its activities, and to limit losses in the event of a serious disruption. The results and implementation of remediation plans are subject to limits and are monitored by a dedicated Committee.

External “interconnections” with third parties that provide signifi cant services to Mobilize F.S. group mainly concern: dealer networks, technical solution providers for the Mobilize F.S. group’s (retail) customer deposit systems, banking and insurance partners (through joint ventures or not), Renault for its IT infrastructure, etc. Essential outsourced services are based on strong contracts and partners, as well as the preparation of an alternative solution (supplier substitutability and/or service reversibility), which means that continuity of service would be maintained.

Internal “interconnections” concern two main areas:

●  financing: RCI Banque S.A. acts as a central refinancing unit, borrowing on the markets and then making available to some of its subsidiaries and branches the funds they need to finance their business. At the same time, group entities that collect savings or carry out securitizations, as well as insurance companies, deposit their surpluses with RCI Banque S.A.;

●  information systems: internal IT solutions are provided by certain countries to RCI entities, such as Mobilize F.S France for the networks business management system and the accounting system.

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Governance and organization principles of risk management

3.2.4          Stress tests

Stress tests or what‑if analyses are a favored measurement of the resilience of the group, its activities and portfolios, and form an integral part of its risk management. Stress tests are based on hypothetical, harsh yet plausible economic scenarios.

The stress tests process includes:

● an overall stress exercise as part of the ICAAP process (Internal Capital Adequacy Assessment Process) which is carried out as part of the regulatory exercise at the beginning of the year and on a quarterly basis for the rest of the year. It covers all of the group’s activities and in 2023 was based on several main scenarios: a central scenario based on the budget trajectory, a macro‑economic stress scenario, two idiosyncratic scenarios based in particular on transition risk (Climate scenario) and the risk of business interruption (Cyber‑resilience scenario), a combined scenario

3.2.5          Remuneration policy

EU REMA - Remuneration policy

The remuneration policy for individuals whose professional activities have a signifi cant impact on Mobilize F.S.’s risk profi le is presented to and approved by the Remuneration Committee and the Board of Directors.

The Remuneration Committee met six times in 2023. As of 31 December 2023, the members of the Remuneration Committee were G. de Ficchy, P. Buros et L. Poiron. The fi xed component of pay reflects the level of responsibility of the position held. The variable component of the pay is intended to reward the performance achieved. This variable component depends heavily on the consolidated fi nancial and commercial results achieved by the Mobilize F.S. group. In 2022, variable remuneration now includes Long Term Incentive payments. Variable remuneration is capped at a percentage of the fi xed salary. This percentage is systematically less than or equal to 100% except for one person for whom agreement from the general meeting has been given the limit of 200% of the fi xed part of the remuneration. The Mobilize F.S. group therefore complies with the regulations on variable remuneration.

The criteria used to measure the performance for the fi scal year 2023 are: the RORWA measured on a consolidated basis at the group, the commercial contribution divided by the number of immatriculations on a consolidated basis at the group and by country, the operating margin per country and on a consolidated basis at the group level, the amount of operating margin measured by country and in group consolidated terms, the diff erence in the penetration rate of fi nancing on registrations of between electric vehicles on the one hand and combustion and hybrid vehicles on the other (measured at group level); the operating expenses as a % of group Average Productive at the group level and by country, the NPS “Net Promoter Score” per country and on a consolidated basis at the group, the RCS “Risks/Compliance/ Security” KPI, which measures the completion of actions related to Risks, Compliance and Security per country and on a consolidated basis, under the control of Corporate Internal Control department; the individual contribution to the objectives of various departments assessed by the employee’s line manager.

that includes a combination of macroeconomic and idiosyncratic effects, and reverses stress test. Projections of potential losses in respect of the establishment’s risks are estimated over a three‑year period;

●  stress test framework includes liquidity stress test to ensure that the time horizon during which the group can continue to operate is respected in a stressed market environment;

●  stress tests capturing the group’s sensitivity to interest rate and foreign exchange risks. Interest rate risk is measured with the aid of yield curve translation and distortion scenarios;

●  stress tests designed by the EBA (European Banking Authority) or conducted within the supervisory framework of the ECB (European Central Bank) on the basis of a methodology common to the participating banks.

In the fi scal year 2023, 107 individuals had signifi cant impact on the risk profi le. Their fi xed remuneration in 2023 came to a total of €12,755,345. Their variable remuneration in 2023 totaled to €5,482,105, representing 43% of the total fi xed remuneration, or 30% of the total fi xed and variable remuneration. Mobilize F.S.’s activities relate exclusively to car fi nance and services. It is a fi eld of business in which sub‑fi elds of business have no signifi cant diff erences. In addition, remuneration policy is the same across the whole Mobilize F.S. perimeter. Consequently, it is not necessary to break down these amounts per fi eld of business. According to the type of position, these remunerations breaks down as follows:

●  Executive              Committee:              total         fixed         remuneration

= €2,189,100; total variable remuneration = €2,133,382;

●  control functions: total fixed remuneration = €1,265,115; total variable remuneration = €331,034;

●  corporate functions excluding Executive Committee and control: total fixed remuneration = €1,454,918; total variable remuneration = €548,786;

●  other positions: total fixed remuneration = €7,272,013; total variable remuneration = €2,271,903.

In 2023, the external directors of the Board of Directors received a remuneration for their duties of €316,000. In 2023, one employee received an annual remuneration exceeding €1,000,000 for the exercise of his duties.

Part of the variable remuneration awarded to the individuals whose professional activities have a signifi cant impact on the risk profi le of Mobilize F.S. is subject to a deferral, the duration of which has been updated starting the fi scal year 2021 from three to fi ve years beyond the fi rst payment, which itself is made at the end of the reference fi scal year. This policy of spreading the variable remuneration has been updated for the fi scal year 2021, in accordance with Directive (EU) 2019/878.

As a reminder, Mobilize F.S. introduced a policy of deferring variable remuneration as of the fi scal year 2016, with initial application in early 2017. The policy of deferring variable remuneration only applies to the benefi ciaries eligible for variable remuneration of more than €50,000; 40% of the variable remuneration is then deferred over a period of fi ve years as indicated above.

The deferred amount are acquired, provided that Mobilize F.S. has achieved a certain level of performance,

a)    expressed           as             a              percentage               of             average    performing outstanding:

From the fiscal year 2018 to 2020, the amount paid up over each of the three years of deferred is paid in full by the payment of funds into a Subordinate Term Account.

As from the fiscal year 2021, the amount released during each of the five years of deferral is paid in full by the payment of funds into a Subordinate Term Account;

b)    expressed as a percentage of the average RORWA level:

From the 2022 financial year, the amount released during each of the five years of deferral is paid in full by the payment of RCI instruments (cash indexed to the evolution of the accounting equity of RCI Banque) except for the 3rd year of deferral, paid in Renault shares if the beneficiary has been awarded Renault shares. The level of acquisition and payment of Renault LTIs depends on the achievement of performance conditions specified in the regulations of the Renault performance share allocation plan.

Any remuneration awarded in the form of RCI instruments is subject to a retention period of twelve months from its acquisition.

Exercises 2019 to 2021:

If a serious event aff ecting Mobilize F.S.’s solvency occurs, in accordance with current legislation and regulations, the beneficiary may see the value of the funds allocated to the Subordinated Term Account reduced to zero and the related remuneration defi nitively lost. In such an event therefore, withdrawal of funds at the end of the retention period is impossible, and no remuneration will be payable.

The Subordinated Term Account shall be fully cancelled, and its repayment value reduced to zero should any of the following events occur:

●  if the CET1 solvency ratio, defined according to the terms of Article 92 (1) (a) of the CRR, is less than 7%;

●  if the banking regulator starts resolution proceedings against Mobilize F.S.

L astly, if the beneficiary is the subject of an investigation and/ or disciplinary proceedings into a potential breach or action or misconduct that could have impacted directly or indirectly on Mobilize F.S.’s Pre‑Tax Income or Operating Margin, or that might indicate a lack of fi tness or propriety, allocation of the deferred amount shall be suspended until such time as the fi ndings of the investigation or disciplinary proceedings are known. If no breach or misconduct is identifi ed and no sanctions imposed, the benefi ciary’s eligibility for the deferred remuneration will be maintained. If a breach or misconduct is identifi ed and sanctions imposed, then the beneficiary will no longer be eligible for that deferred remuneration.

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Governance and organization principles of risk management

From 2022 exercises:

The shares not yet paid in the variable compensation will be reduced to zero in the event of the occurrence of one of the events below: the CET1 Solvency Ratio, defi ned in accordance with the terms of article 92 (1) (a) of the CRR, is lower than the threshold defi ned for entry into the Recovery Plan, i.e., the regulatory requirement increased by the “shortfall” in AT1 & T2 +5 bps when the banking regulator implements a Resolution Procedure against RCI Banque. A presence condition for the defi nitive acquisition of deferred shares has been introduced except in the event of retirement or death.

Thus, considering the internal organization of Mobilize F.S. group and its nature, scope, and low complexity of its activities, Mobilize F.S. has put in place since 2016 a remuneration policy that guarantees a principle of deferred and conditional payment for individuals whose professional activities have a signifi cant impact on the risk profi le. This principle will be re‑assessed on a regular basis if the exposure to risks changes.

As of fi scal year 2021, this policy for the spreading of variable compensation is updated to take into account the amendments made to Directive 2013/36/EU by Directive (EU) 2019/878, the transposition of which took eff ect on 29 December 2020.

At the end of 2023, with the application of the above provisions, the deferred remuneration situation is as follows:

●  for the fiscal year 2019, deferred amounts determined in 2020 represented a total of €510,549, spread over 2021, 2022 and 2023. Of that total, amounts that could be paid in 2023 conditional on confirmation were paid in full. There are no further amounts deferred beyond 2023 in respect of the fiscal year 2019;

●  for the fiscal year 2020, amounts determined in 2021 represented a total deferred of €205,422, spread over 2022, 2023 and 2024. Of this total, the amounts that can be paid in 2023 subject to confirmation have been confirmed and paid in full; they represent a subtotal of €68,474. Amounts still to be deferred in respect of the fiscal year 2020 over the year 2024 amount to €68,474;

●  for the fiscal year 2021, amounts determined in 2023 represented a total deferred of €611,848, spread over the years from 2023 to 2027. Of this total, the amounts that can be paid in 2023 subject to confirmation have been confirmed and paid in full; they represent a subtotal of €122,370. Amounts still to be deferred in respect of the fiscal year 2020 over the years 2024 to 2027 amount to €489,478;

●  for the fiscal year 2022, amounts determined in 2023 represented a total deferred of €1,821,125, spread over the years 2024 to 2029;

●  thus, at the end of 2023, there remains no deferred amount for the fiscal year 2019, and for all the fiscal years 2020, 2021 and 2022, the amounts deferred over the years 2023 to 2029 represent a total of €2,480,428.

€2,535,853 of severance payments were made to those whose professional activities have a signifi cant impact on the risk profi le of Mobilize F.S. in 2023.

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Credit risk

3.4.2               Credit risk management process

For both Wholesale and non‑Wholesale businesses, the credit risk prevention policy aims to ensure that the cost of risk target of each country and main segments is reached.

The Mobilize F.S. group uses advanced scoring systems, and external databases whenever the information is available, to assess the capacity of individual and business customers to meet their commitments. An internal rating system is also used to assess loans to Dealers. The Mobilize F.S. group constantly monitors its underwriting policy to consider the economic environment situation.

Credit risk management – retail customers

The environment has remained uncertain and contrasted since 2022. The Ukrainian and energy crises led to inflationary shocks in Europe. Economic activity has begun to weaken and inflation to slow under the influence of monetary policy, the gradual elimination of supply shocks and falling energy prices.

Quality of New Production

The year 2023 was marked by a precarious economic situation – slowing growth and high inflation – and by geopolitical tensions (war in Ukraine). As a result, the group’s acceptance policy for new fi nancing was cautious, resulting in stable credit risk on new fi nancing.

In addition, group Mobilize F.S. has strengthened its framework of rules and policies regarding loan origination & monitoring, in compliance with EBA loan origination & monitoring guidelines. Collection of unpaid debt

The stock of non‑performing loans rose to 2.1% in 2023, reaching €1,202 million at the end of 2023, compared with €1,030 million at the end of 2022. This increase is mainly due to the rise in non‑performing loans in Colombia (+€89 million) and France (+€53 million). In Colombia, high inflation has seriously damaged the ability of households to repay their debts. Thus, depreciation on loans to Colombian households has increased signifi cantly for the banking sector.

Collective depreciation excluding statistical models

In 2023, the Mobilize F.S. group has reviewed - in view of the economic context described above - the two types of collective impairment on its portfolio of performing retail receivables to prevent a probable increase in the likely credit risk relating to: ● a rise of consumer prices higher than the wages;

● the difficulty of some households to face their credit obligation towards MFS due to their financial fragility.

These two approaches were described in section 1. Exposure to credit risk. The adjustments also cover some portfolios identifi ed as fragile customers thanks to decision trees, scorecards or external data (like in UK, Spain and Italy). This approach was extended in 2023 to new countries such as Brazil and France.

In the particular context in this exercise, all additional adjustments (excluding models) represents a stock of €23.8 million at the end of 2023, excluding forward‑looking coverage.

At the level of the corporate customer portfolio, the Retail Credit & Scoring department monitors together with the local MFS entities the cost of risk, ensures that it is well understood and analyzed, and monitors the action plans to achieve the targets. The underwriting policies are subject to strict central rules, and the outstanding in collection is deeply monitored. The performances of the subsidiaries regarding the approval quality and effi ciency of collection are monitored in the framework of the monthly risk reporting and are presented to Corporate by the subsidiaries during Committee meetings, the frequency of these Committees is based accordingly to the level of risk and highlights in each entity.

A follow‑up and a summary are carried out during the monthly group Credit Committees, which is under MFS CEO supervision and leaded by Credit & Data Management division offi cer. These Committees also include Risk division offi cer, Accounting and Performance Control division offi cer, Commercial and Strategy division offi cer, Finance and Treasury division offi cer.

Credit risk management – network of dealers and importers

At the level of each subsidiary and centrally, Network and importers customers are periodically monitored using a set of risk indicators that make it possible to assess the quality of each counterparty’s credit risk in the short and medium term. A credit risk grading system classifi es counterparties into three statuses (incidental, pre‑alert and doubtful), which triggers appropriate treatment and remediation plans. These credit risk reduction actions are defi ned within a Committee at entity level; it brings together the local managers of the manufacturers and the Mobilize F.S. group in relation to the network.

Result at the end of December 2023 for retail business

The IFRS 9 provisioning standards have been applied since 1 January 2018 in the scope of all entities within the Mobilize F.S. group. Two distinct methodologies have been implemented depending on the size of the entity:

●  a method based on internal models such as behavior scorecards and loss given default (for France, Germany, Spain, Italy, United Kingdom, South Korea and Brazil), in which the Stage 1/Stage 2 exposures are staged according to the rating from behavior models, and its evolution since the origination. Restructured loans are classified in Stage 2, while Stage 3 corresponds to customers in default. The discounted provision is determined in accordance with point‑in‑time risk parameters that are subject to a forward‑looking adjustment;

●  for other entities using the standard method, provisions are calculated using transition matrices applied to the portfolio’s aged balances. In this context, the Stage 2 corresponds to the receivables with past due more than 30 days at the closing date, or that encountered a past due amount in the last 12 months, and also to restructured loans.

The cumulative Cost of Risk reaches 0.38% of average productive assets in 2023, compared to 0.55% in 2022.

It is mainly explained by:

●  net recovery write‑off at €127 million (vs. €100 million in 2022), or 0.31% of average outstandings;

●  an allocation to defaulted Bucket 3 outstandings of €67 million (vs. €27 million in 2022), strongly impacted by Colombia (severe inflation weighing on customer solvency);

●  a reversal of provision of €29 million on performing outstandings (vs. an allocation of €81 million in 2022) including:

●  an allocation due to increases in outstandings €38 million,

●  an allocation for the evolution of the bucket mix and risk parameters of €10 million,

●  a takeover of €21 million of expertise on risk parameters,

●  a reversal of €20 million under forward‑looking,

●  a reversal of €15 million of expertise concerning inflation risk,

●  a reversal of €6 million of expertise concerning fragile customers,

●  a reversal of €14 million of expertise from individual risks.

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Credit risk

Dealer and importer business results at end of December 2023

The Mobilize F.S. group maintained its policy of supporting manufacturers and their distribution networks by providing appropriate fi nancing solutions. In this respect, the management of inventories in conjunction with manufacturers and their adequacy with market situations remained a priority. After the Covid‑19 crisis in 2020 and the semiconductor crisis in 2021, invoicing the end of 2022 marked by the increase of manufacturer invoicing. In 2023, the outstanding returned to pre‑Covid‑19 levels.

In 2023, the Mobilize F.S. group stabilised its international presence and supported the development of the Renault Group as well as of the Nissan and Mitsubishi brands and their networks. In addition, in several countries, the group continues the development of fi nancing importers.

Outstanding network loans across the entire scope of intervention increased by €1.2 billion compared to December 2022 to reach €11.6 billion at December 2023.

The 2023 cost of risk of fi nancing networks and importers is an income of €8.98 million, or 0.09% of average earning assets, and is explained in particular by:

●  release of provisions on non‑performing outstanding following the improvement in the Bucket 3 portfolio mix, with less exposure on long‑maturity counterparties in default;

●  release of provisions on performing outstanding following the improved mix of outstandings by risk class, and the update of PD and LGD parameters. Non‑performing loans increased from €50 million at the end of December 2022 to €64 million at the end of December 2023, their share of total loans decreasing from 0.5% to 0.6% in one year.

In 2023, the amount of write‑off s net of recoveries is only €2.4 million (notably in France €1.3 million and Germany €0.8 million), which confi rms the good control of the risk on Network fi nancing.

Restructured loans outstanding amounted to only €2.4 million, a level decreasing slightly by €0.1 million versus last year.

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Credit risk

3.4.4           Risk‑weighted assets

The Mobilize F.S. group uses the advanced method to measure credit risk for customer outstandings in the following countries: France, Germany, Spain, Italy, South Korea and the United Kingdom. For all other exposures and risks, Mobilize F.S. group ses the

standardized method.

3.4.5           Advanced method

The Mobilize F.S. group has adopted the most advanced methods proposed by the reform known as Basel II/III to measure and monitor its credit risks, all parameters are therefore estimated internally. The values thus measured are applied to calculate exposure risks on the Retail, Corporate and Dealer customers. Six big countries (Germany, Spain, France, Italy, South Korea and United Kingdom⁽¹⁾) are treated using the advanced approach based on internal ratings.

For all of these scopes, the Mobilize F.S. group has obtained the following authorizations:

● for       France,     Germany,     Italy     and    Spain,      approved     in

J anuary 2008;

● for the United Kingdom, approved in J anuary 2010; ● for Korea, approved in J une 2011.

Following the agreement of the supervisor, the corporate portfolios (excluding the network) in Germany, Italy and Spain have been treated using the standard method since 2021.

The credit risk models applied within the group are subject to on‑site supervisor inspections, giving rise to obligations and/or recommendations and, where applicable, the establishment of temporary additional margins on the parameters estimated by the Bank.

3.4.5.1        Governance

The internal credit risk models are part of the Risk management Governance and are managed by a Governance procedure that sets out the roles and responsibilities of each stakeholder and involved in ensuring the independence of the various levels of control. This procedure is validated by the Risk Committee, which is the institution’s highest decision‑making body with regard to internal models.

The fi rst level of control is carried out by the teams of the Credit & Data Management division in charge of:

●  the quality of the data from the subsidiaries;

●  modelling methodologies;

●  the development and implementation of models;

●  operational insertion of models;

●  monitoring the performance and relevance of models through backtesting and recalibration exercises.

The second level of control is carried out by the Risk Control department of the Risk and Banking Regulations department of Risk Control division, which independently reviews the elements carried out by the Credit & Data Management division. These reviews are governed by a validation procedure and its conclusions are presented during a Validation Committee meeting and are summarized in a validation report.

During second‑level validation missions, the Credit & Data Management division teams are required to justify their assumptions and their methodological choices with arguments and audit trails.

Changes made to the models and recurring monitoring exercises are communicated to the Supervisor in line with an internal procedure that complies with the requirements of Delegated Regulation (EU) No. 529/2014 of 20 May 2014 for extensions and changes to the internal rating approach.

This procedure foresees, depending on the materiality of the change made, to communicate to the Supervisor: ● an application package for approval;

● a notification prior to the change (ex ante); ● a notification after the change (ex post).

Internal Governance provides prior to each communication with the Supervisor, a validation by the various decision‑making bodies, depending on its materiality.

In addition, the Governance provides recurrent reporting to the Management bodies where the risk levels, the conclusions of recurrent exercises as well as independent reviews, the follow‑up of internal and external recommendations, etc. are presented.

Finally, the Internal Audit department provides the third level of control and assesses, through periodic inspections, the effi ciency and compliance of the management and governance system for internal models.

1) For these six countries, some portfolios are in standard approach (examples: Corporates in the United Kingdom, Large Corporates outside France). Furthermore, RCI Korea is not concerned by the dealer financing activity.

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Interest‑rate risk for portfolio positions

Qualitative information - free format                                    Legal basis

A high‑level description of how the bank hedges its IRRBB, as well as the associated accounting treatment (if applicable)

A description of key modelling and parametric assumptions used for the IRRBB measures in template

EU IRRBB1 (if applicable) There is no proprietary trading within Mobilize F.S. group. All transactions in fi nancial instruments Article 448(1), carried out by RCI Banque S.A., acting as central treasury, or its locally funded subsidiaries aim at point (e) (iv) ; refi nancing its activity and investing temporary excess of cash while maintaining fi nancial risks Article 448(2) below internal limits in order to protect its commercial margin.

Sensitivity to interest rate fluctuations is managed with interest rate swaps.

Fixed rate receiving swaps are executed when the Bank issues fi xed rate debt and wants to reduce its exposure to interest rate going down.

Fixed rate paying swaps are executed from time to time to hedge the origination of fi xed rate assets.

Mobilize F.S. uses principles of IFRS 9 accounting to classify derivatives that hedge Interest Risk.

● Fair value hedge (FVH) hedging relationships intend to hedge changes in value of all or part of a recognized asset or liability, attributable to a particular risk (e.g. risk of rate on fixed rate debt). The hedged item and then the hedging derivative are valued at their fair value. Changes in the fair value of the derivative and the hedged item are recorded in the income statement. RCI swaps booked as fair value hedge are made of fixed receiver swaps hedging issuance of fixed rate liabilities. Valuations of the hedging instrument are calculated by discounting future cash flows. As hedging derivatives do not hedge the entire rate but only the risk‑free part, only the part of the debt relating to the risk‑free rate will have to be valued. Debt valuation excludes the effect of the credit spread (including the accrued interest portion of the “credit spread” effect). The variation in derivative fair value and the variation in hedged debt fair value are recorded in the Income Statement. The FVH test is realized on a monthly basis in order to measure the effectiveness of the micro‑hedging.

● Cash flow hedge (CFH) hedging relationship intends to hedge the changes in future cash flows associated with a recognized or future asset or liability and attributable to a particular risk (e.g. future interest payments on floating rate). RCI swaps booked as fair cash flow hedge are fixed paying swaps hedging floating rate liabilities or the floating rate leg of a swap booked in FVH. To be recognized as CFH, the floating rate of the hedging instrument should show high correlation with the floating rate of the hedged item. Changes in the fair value of the derivative are accounted in a special equity account (balance sheet/equity impact). Restatement in income is realized at the same frequency as the item covered through accrued interest.

This relation between variable‑rate debt/fair value hedged debts and cash flow hedge swaps is tracked at least quarterly via a macro‑hedging test. The test aims at ensuring that the nominal value of CFH swaps does not exceed the total amount of variable‑rate liabilities at any time. In practice, two tests are carried out separately: the fi rst one for floating rate debt, and the second one for fi xed rate debts that were initially hedged with a fi xed rate receiving swap booked in FVH.

● Fair Value portfolio: financial instruments that do not meet IFRS 9 hedge accounting criteria cannot be considered as hedges and despite their hedging intention are classified as fair value instruments. The change in the fair value of these instruments is recognized in the income statement. A portion of the fixed rate paying swaps intends to hedge non‑maturity deposits, that are modelled as floating rate liabilities repricing within three months. As correlation between customer deposit rate and market risk free rate is low, such hedges do not qualify as hedge accounting and are booked as trading instruments.

Key modelling assumptions used for IRRBB measured in template EU IRRBB1 are similar to internal Article 448(1), assumptions described above for prepayment and modelling of non‑maturity deposits. Parametric point (c) ; assumptions are derived from article 115 of the IRRBB Guidelines (cap on positive sensitivity Article 448(2) values, floor on IR curves… ) and appendices (Annex III) for IR shocks. Mobilize F.S. calculates EVE sensitivity to changes in interest rates on a perimeter including EUR and GBP (signifi cant currencies) as well as BRL and KRW. Altogether, assets in those currencies exceed the 90% of group total assets threshold set in article 115(l) of the IRRBB Guidelines.

Management principles and processes

Mobilize F.S. group carries out legal analyses of new products marketed and regularly monitors the regulations governing it to ensure it complies with them. The group has also implemented an internal control system designed in particular to ensure the compliance of transactions made by staff and agents.

Conduct risk

Risk factors

Any inappropriate behaviour on the part of employees or agents involved in the distribution of products and services which is detrimental to customers may aff ect the business of Mobilize F.S. group.

Management principles and systems

The Mobilize F.S. group carries out legal analyses on the new products it distributes, and regularly monitors the regulations to which it is subject in order to comply with them. The group also ensures that its products and commercial practices are not contrary to customer interests. Finally, the group has also set up an internal control system designed to ensure the compliance of transactions carried out by its employees and agents.

Tax risks

Risk factors

Through its international exposure, the Mobilize F.S. group is subject to numerous sets of national tax laws, all of which are liable to amendments and uncertainties in interpretation that might aff ect its operations, fi nancial position and earnings.

Management principles and processes

Mobilize F.S. group has put in place a monitoring system designed to list and address all tax issues aff ecting it.

Any tax disputes with which Mobilize F.S. group may be faced as a result of tax inspections are closely monitored and where appropriate, provisions are booked to cover the estimated risk.

Risks relating to money laundering and financing terrorism

Risk factors

In the course of its business, Mobilize F.S. group is exposed to risks associated with money laundering and the fi nancing of terrorism. In this respect, Mobilize F.S. group is subject to international, European and French regulations as regards combating money laundering and fi nancing terrorism. This regulation can expose to penalties, both criminal and disciplinary.

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Operational and non‑compliance risks

Management principles and systems

Mobilize F.S. has implemented a group policy set out in a general procedure and Corporate business procedures which are transposed in group entities. Indicators of the level of compliance with the AML/CFT risk management system are applied and monitored in all entities over which RCI Banque S.A. has eff ective control.

IT risks

Risk factors

The Mobilize F.S. group’s activity is partly dependent on the serviceability of its IT systems. The Mobilize F.S. group’s IT division, through their governance, security policy, technical architectures and processes, play a part in the fi ght against threats (cybercrime, frauds… ) in order to reduce IT‑related risks (security incident, systems shutdown, or loss or non quality of data, etc.).

Management principles and processes

Oversight of Mobilize F.S. IS risks takes into account good management of and control over main potential IS risks: governance, business continuity, IT security, change and operations management, data integrity and data processing.

These risks are managed and controlled by:

●  the integration of IT risk management into the overall Mobilize F.S. risk management system at all levels of the company, in accordance with best practices and the guidelines of the EBA (European Banking Authority) and the ACPR;

●  the degree of protection of the IT system across the group;

●  everyday control, oversight and management of the group’s “Information Management Policy”;

●  awareness‑raising initiatives and training in digital security and operational resilience for all staff (e‑learning, communications, etc.);

●  actions, support and checks performed by the RCI IT Risk, Standards, Compliance and Security department, which are based on a network of IT Security Officers in every DSI subsidiary, and also on a network of internal auditors;

●  a group IT security policy, incorporating the regulatory requirements (banking, GDPR/personal data, etc.), an overall management approach and ongoing adapting of

IT security;

●  a policy of the most demanding intrusion and surveillance tests, covering both external risks (examples: websites, mobile applications) and internal risks;

●  a Disaster Recovery Plan in place and regular tests of the plan, including the issue of cyber‑risks including cyber‑risks and crisis management (Emergency and Business Continuity

Plan);

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Operational and non‑compliance risks

●  a device and the animation and training on IS risks and processes of method correspondents, business lines and IT managers, rolled‑out throughout the group and

contributing to IT process efficiency controls;

●  a group process for managing and registering outsourced services, including the various dimensions related to this risk (governance, security, etc.);

●  a complete IS process control system covering all IS risks for the entire scope of RCI’s IS (internal and outsourced);

●  continuous reinforcement of IT processes and tools for security and operational resilience, taking into account new regulatory requirements (e.g., DORA – Digital Operational Resilience Act) and technological developments, thanks to a regulatory and technological watch. Focus on IT security

Mobilize F.S. implements the Renault Group IS Security policy, taking into account the specifi c requirements of its banking activity, and placing particular emphasis to the management of access to its applications, protection of personal and sensitive data and business continuity. A dedicated security organization (including a SOC – Security Operation Center… ) and many security tools are in place, ensuring continuous monitoring, and are being reinforced and strengthened as risks evolve (for network and application monitoring, avoiding data leaks, monitoring the cloud and the Internet, etc.) for example by developing CTI (Cyber‑Threat Intelligence).

As part of the Mobilize F.S. group’s emergency and business continuity plan, IS business resumption plans are operational for all of its applications. They are tested at least once a year. These plans are part of the Mobilize F.S. crisis management process, which ensures coordination with the various business lines (including IS), subsidiaries and branches, Mobilize F.S. partners and regulators (ACPR/ECB, CNIL, etc.).

Users of the information system are contractually bound to observe the rules of use of the IT tool. The group ensures it preserves the same level of protection when developing new lines of business (electric vehicles, deployment in new territories… ).

Hosting the best part of the IT operations of the group in the “C2” (main) data center and the “C3” (backup) data center enables to guarantee the highest level of protection and uptime for our systems and applications. The requirement for backup sites and compliance with rules are also applied to cloud hosting.

Security requirements and controls are managed on both internal and outsourced information systems, starting with calls for tenders and contracts for outsourced services (for all services and all subsidiaries/branches).

Personal data protection related risks

Risk factors

The EU General Data Protection Regulation (GDPR) which came into eff ect on 25 May 2018 applies to RCI Banque S.A. Since then, many countries have implemented similar regulations on the protection of personal data. Non‑compliance could have serious eff ects in its business and reputation of the group.

Management principles and systems

A Data Protection Offi cer (DPO), is responsible for ensuring the governance and implementation of all measures necessary to comply with these regulations, in order to ensure the protection of customer data, as well as that of employees throughout the group. Risks relating to personal data protection are managed in particular by the implementation of a personal data processing policy, monitoring all data processing as from the design stage, the implementation of appropriate organizational and technical resources and regularly making the company’s staff aware of the issue.

Reputational risks

Risk factors

The Mobilize Financial Services group is exposed to a risk of worsening perception by its customers, counterparties, investors or supervisors, which could adversely aff ect the group.

Management principles and processes

The Mobilize Financial Services group has put in place corporate governance ensuring effi cient management of compliance risks. Through the development and analysis of indicators, the monitoring of this risk enables the bank where appropriate to take corrective actions.

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ESG risks

The integration of ESG risks into Mobilize F.S. group strategy, governance and risk management is detailed in the tables below.

/ TABLE 1 – QUALITATIVE INFORMATION ON ENVIRONMENTAL RISK IN ACCORDANCE WITH 449A CRR

                       Business strategy and processes

(a)        Institution’s business strategy to integrate environmental factors and risks, taking into account the impact of environmental factors and risks on institution’s business environment, business model, strategy and fi nancial planning Mobilize F.S. group off ers fi nancing solutions on vehicles that meet increasingly stringent environmental criteria, the group does not fi nance projects of companies operating in sectors highly exposed to C&E risks. Thus, the strategy of Mobilize F.S. group is part of the ecosystem developed by Renault and Nissan groups around the electric vehicle. Mobilize F.S. group has thus developed a range of services facilitating the adoption of electric vehicles such as (i) the possibility for an Electric Vehicle customer to have a ICE vehicle for a few weeks per year, (ii) to access charging stations in France via a credit card and throughout Europe via a charging pass, (iii) to acquire a home charging station and to fi nance the installation or (iv) a

(b)        Objectives, targets and limits to assess and address environmental risk in short-, medium-, and long ‑term, and performance assessment against these objectives, targets and limits, including forward‑looking information in the design of business strategy and processes subscription service for the use of a vehicle, allowing the client to test an electric vehicle over a few months.

As part of its commitment to a new form of mobility, more concerned with its ecological footprint, the group supports electric mobility and thus places emphasis on the development of a robust and accessible charging infrastructure. The gradual development of fast charging stations along highways, in urban areas, and in public parking lots is a priority to facilitate the adoption of electric vehicles. In addition, the group is developing a complete range of services aimed at simplifying and improving the experience of electric vehicle users by integrating complementary services developed by the Mobilize Beyond Automotive entity, such as parking spaces reservation equipped with charging stations, optimized route planning based on vehicle autonomy, payment management, and up‑to‑date information on the state of infrastructure and their availability.

In a phase where the volumes of electric vehicles remain a minority in sales, the group is relying on generally more attractive pricing.

With regard to its refi nancing strategy, Mobilize F.S. group is diversifying its sources of liquidity with green bonds and green deposits backed by the fi nancing of electrifi ed vehicles, ensuring the transparency of information in order to attract new investors.

Mobilize F.S. group carries out a constant regulatory watch to inform itself and anticipate regulatory changes, both banking and related to public policies around transport or automotive and which may constitute a C&E risk of transition on its business model. Discussions take place with Renault Group teams during dedicated Committees in which Renault Group takes part which make it possible to better anticipate the impact of regulatory changes and to support them.

In this context, as vehicle acquisition and fi nancing are linked to regulatory restrictions on access to certain geographical areas (urban areas in particular), Mobilize F.S. group monitors and anticipates the development of L ow Emission Z ones in Europe in its main countries of activity. These regulatory changes represent a signifi cant strategic challenge on the group Mobilize F.S. activity.

In 2023, Mobilize F.S. group has set up a tool to calculate carbon emissions for our entire value chain. The results obtained on our own emissions (Scope 1, Scope 2 and Scope 3 upstream) will enable us to defi ne an action plan aimed at reducing our carbon footprint.

Mobilize F.S. group interviews its suppliers via its Supplier CSR Questionnaire and integrates their answers into the contracting decision. For more details on the content of the Supplier CSR Questionnaire, see Social response (a).

Finally, a Sustainable Procurement Charter was established and includes a section about climate and environment topics. By signing the charter, Mobilize F.S. group suppliers commit to complying with environnemental protection regulations, to proposing, where possible, eff ective solutions in favor of the environment, to applying the best environmental practices of their profession as well as optimize the consumption of resources and strive towards reducing the pollution generated by their activities.

The group follows its exposure to economic sectors and activities that are not in line with the bank’s ESG strategy and/or that could impact reputational risks and/or credit risk. To this end, Mobilize F.S. group carries out sectoral monitoring of exposures taking into account ESG factors. Given the current distribution of assets by business sectors, no limit or threshold on these indicators has been deemed necessary at this stage.

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ESG risks

                Risk Management                              

(n)     Implementation of tools for identifi cation, measurement and

management of environmental

risks

(A)                  In order to defi ne the impact of physical and transition climate risks on banking risks, Mobilize F.S. group carried out a materiality analysis with its various collaborators: the Risk Director, risk category managers, internal experts on specifi c topics and external analysis. Respondents described and assessed the transmission links between C&E risks and banking risks before and after mitigation actions, as well as the frequency and fi nancial intensity of these risks. The results were then calibrated, harmonized and nuanced by the Chief Risk Offi cer and the Climate Risk Offi cer. Gross and residual risks could thus be estimated and classifi ed by level of fi nancial impact. The results were then shared with Mobilize F.S. group risk managers.

(B)                  Mobilize F.S. group studied the possible correlation between the physical climatic risks of floods and the default rate between 2010 and 2016 of its individual clients, based on French data on natural disaster regimes (GASPAR database). It was fi rst necessary to reconcile the diff erent types of flooding and their frequency with the address of Mobilize F.S.’s private customers and then study the default rate of customers by geographical areas up to 12 months after the occurrence of physical events. The results are presented in question (o).

(B bis) The Think Hazard tool was used for Mobilize F.S. groups fi ve largest countries of activity to quantify physical C&E risks on the retail individuals portfolio. Think Hazard produces a physical C&E risk evaluation by region, evaluation translated into a score which was then linked to the portfolio via the clients’ zip code. This has then allowed classifi cation of credit exposures by level of C&E physical risks.

(C)                  Mobilize F.S. group also quantifi ed the impact of C&E factors on credit risk retail individuals portfolio using a second methodology. Mobilize F.S. group applied NGFS Network for Greening the Financial System scenarios to quantify the potential impacts of C&E risks on the evolution of the default rate. The study focused on Mobilize F.S. group’s top 5 countries of activity: France, Italy, Germany, Spain and the United Kingdom. The impact of C&E risks on Expected Losses (EL) was estimated by comparing the average default rate with a scenario of high physical and transition risks over 2023 ‑2030 compared to the historical evolution of the default rate since 2008.

(D)                  Mobilize F.S. group quantifi ed the impact of C&E risks on non‑fi nancial corporate portfolio credit risks, including SMEs. The evaluation of the exposure to physical and transition risks by sectors from an extra‑fi nancial rating agency were used to represent Mobilize F.S. group C&E risk exposures and thus calculate the C&E risk of concentration on the corporate portfolio. The scores obtained from the assessments by sector have been converted into a probability of default impact, calibrating these impacts based on the extreme results of the climate stress tests, ACPR 2020 and ECB 2022.

(E)                  Mobilize F.S. group also conducted a sensitivity analysis to quantify the additional losses for C&E motive when recovering collateral: the fi nanced car. An extreme scenario on a stress of Loss Given Default (LGD), was applied. An average based on a signifi cant drops in sales of on electric motors and on combustion engines was applied on all the car models

(F)                   On the market risks of the liquidity reserve: Mobilize F.S. group has implemented a bi‑annual stress test on sovereign and corporate issuers. The quantitative level of stress applied was set to a climate or environmental crisis.

(G)                  The group carried out a business strategy study on the impact of L ow Emission Z ones (LEZ ) on its fi ve main countries of activities in Europe according to three scenarios by 2030: (i) “Business as Usual” with implementation of LEZ s according to announced schedules; (ii) “1.5°C Sufficiency” with the implementation of more proactive LEZ schedules and a reduction in vehicle sales; (iii) Scenario of extremely rapid implementation of LEZ s (within one or two years). On each scenario, the annual sales of new cars, the share of electric vehicles among these sales, the use of the car and the schedules for the implementation of LEZ and their level of restriction were simulated. Finally, the annual evolution of the vehicle fleet (in size and composition) was modeled on the fi ve countries with several assumptions on the lifespan of a car in the Mobilize F.S. group portfolio, on the decrease in sales of diesel vehicles and on the increase in the weight of the electric vehicle.

(H)                  Mobilize F.S. group carried out a study to quantify physical C&E risks at site’s in the group’s 36 countries. The analysis quantifi ed the fi nancial impacts on sites considering the following event: (i) rising waters, (ii) overflow and submersion flooding, (iii) temperatures requiring air conditioning, (iv) heat wave (above 35°C rendering air conditioning ineff ective), (v) water stress and (vi) cyclones. The time horizon considered is 2050 for floods by submersion, 2030 for others. All events consider the RCP8.5 scenario.

(H bis) The Mobilize F.S. group carried out a flood risk study of the main sites of activity and fallback sites. The flood risk was chosen because it is the most signifi cant physical risk for Mobilize F.S. group. The study focused on (i) the distance between the primary site and the fallback site and their proximity to a river (or equivalent); (ii) identifi cation of sites within a flood

danger        zone       (source:       WRI       Aqueduc       flood       risk:         https://www.wri.org/data/

aqueduct‑floods‑hazard‑maps), using a pessimistic approach to a millennial flood in 2080; (iii) the measurement of the diff erence in altitude between the Mobilize F.S. group sites and the nearest river. The objective was to determine whether the primary sites are at risk of flooding and whether the fallback site would also be flooded during the same event.

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ESG risks

/ TABLE 2 – QUALITATIVE INFORMATION ON SOCIAL RISK IN ACCORDANCE WITH ARTICLE 449A CRR

                   Business strategy and processes           

(a)        Adjustment of the institution’s The integration of social risks into fi nancing and investment activities appears indirectly business strategy to integrate social through Mobilize F.S. group’s Third‑party Integrity Management TIM anti‑corruption process, factors and risks taking into account including knowledge of possible convictions of counterparties on social grounds, as well as the the impact of social risk on the study of the counterparty’s reputation, which may be impacted by media events on social institution’s business environment, topics. business model, strategy and In 2023, workshops were held on mapping social risk mapping with ESG risk mapping. This fi nancial planning work contributed to enriching the HR risk map. Indeed, on the elements relating to human capital, it was decided to broaden the risk of inadequacy of human resources to add the

(b)        Objectives, targets and limits to assess and address social risk in short‑term, medium‑term and long ‑term, and performance assessment against these objectives, targets and limits, including forward‑looking information in the design of business strategy and processes

(c)        Policies and procedures relating to direct and indirect engagement with new or existing counterparties on their strategies to mitigate and reduce socially harmful activities

human capital component.

This enrichment is to be set up in 2024 in the risk mapping. In terms of internal social practices, Mobilize F.S. group deploys two areas of intervention (Mobilize F.S. group’s resources are its own employees):

(1) Diversity & Inclusion: Gender equality has been particularly developed through several ongoing complementary programs:

● “Z ero discrimination”,

● “0% gender pay gap in 2025” with Renault Group,

● “40% or above women among managers and directors by 2024” including the monitoring of the male/female ratio in the Management Committees and Executive Committees of six countries of activity: France, Italy, Spain, United Kingdom, Germany, Brazil. Employee surveys in which Diversity & Inclusion topics are included are deployed, and the results are presented to the Mobilize F.S. group’s Executive Committee. The group Human Resources division also organizes awareness‑raising events and monitors these topics with each country HR Director.

The main focus of actions are on the “Gender Equality” for several years since 2023 we began to put a new focus on “Disability” topics.

We are integrated in the Renault Group Disability Global Policy launched in 2023. As a first action, implementation of internal disability declaration process has been taken, followed by deployment of dedicated indicators to track the progress of the policy and to track the data, in which Mobilize F.S. France is leading the way (Training of HRBPs, Appointment of Disability correspondents in each worksite, Awareness raising events, E ‑learnings, Strong internal communications);

(2) Safety & Care: Mobilize F.S. group pays strong attention to Quality of Life at Work topics. Based on employee surveys, action plans are launched in all countries of activities. Mobilize F.S. group obtained the “Great Place to Work” label in seven countries of activity: France, Brazil, United Kingdom, Spain, Italy, Argentina, Colombia.

The Mobilize F.S. group applies its duty of vigilance to its suppliers, by requesting, as part of the contracting process, several social verifi cations through an approved certifi er. The requested checks relate to the fi ght against illegal work and are imposed by the French Labor Code. They relate in particular to (i) social declarations and the payment of social security contributions and contributions, (ii) the registration of the supplier, (iii) the nominative list of foreign employees, assigned to the execution of the contract, employed by the contracting party and subject to the work permit.

In addition, Mobilize F.S. group asks its suppliers, when they are selected, to complete its CSR Supplier Questionnaire covering, among other things, (i) the certifi cations and labels obtained (ISO or equivalent, LUCIE, BCorp, etc.), (ii) the publication of a CSR report, (iii) the presence of performance indicators and the setting of objectives, (iv) the contribution to sustainable development and the themes of commitment. The answers are integrated into the decision to contract with suppliers.

In 2023, as part of the acceptance process for corporate counterparties, Mobilize F.S. group integrated an ESG assessment including an analysis of social risks via ESG ratings.

Regarding its internal social strategy, Mobilize F.S. group has set itself several objectives and monitors them with defi ned indicators:

i)       Diversity & Inclusion: Mobilize F.S. has set itself two long‑term objectives: “0% gender pay gap in 2025” and “40% or above women among managers and directors by 2024”. See answer (a) for details;

ii)      Safety & Care: Mobilize F.S. group obtained the “Great Place to Work” label in 2023 in seven countries of activity: France, Brazil, United Kingdom, Spain, Italy, Argentina and Colombia.

Mobilize F.S. as part of the anticorruption analysis process of the counterparties (Third Party Integrity Management – TIM), the analysts have information on possible convictions for social reasons.

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ESG risks

/ TABLE 3 – QUALITATIVE INFORMATION ON GOVERNANCE RISK IN ACCORDANCE WITH ARTICLE 449A CRR

                 Governance                                          

(a) Institution’s integration in their governance arrangements governance performance of the counterparty, including Committees of the highest governance body, Committees responsible for decision‑making on economic, environmental, and social topics

The integration of governance risks into fi nancing and investment activities is present indirectly through:

i)       the Know Y our Customer (KY C) process which feeds into AML ‑CFT Anti‑Money Laundering and Terrorist Financing analyses and sanctions for all clients‑natural and legal persons. The Mobilize F.S. group employees are trained in the AML ‑CFT; and

ii)      the Third‑party Integrity Management TIM anti‑corruption process required by the French law named “Sapin 2” in particular, which is carried out only on the most significant customers‑legal entities and dealers. This same type of analysis is carried out for suppliers, banks, insurance partners with slight differences according to the specificities of third parties. As part of this TIM analysis, a local or central function of Mobilize F.S. group may request External Due Diligence on a counterparty which will then always be initiated by the group Compliance department with Renault Group.

These two processes make it possible to determine a level of risk, leading to an appropriate decision‑making process and a level of vigilance to be brought to the counterparty. They are carried out at the beginning of the relationship with the counterparty and then during the business relationship according to a frequency defi ned in the procedures and according to the level of vigilance determined.

The responsibilities for verifying these elements of governance risks of counterparties, including retail and corporate clients, are distributed among the diff erent business lines concerned, both at group level and at local level. Depending on the level of vigilance, the opinion and/or validation of the local and/or central compliance function is required. The Chief Compliance Offi cer (CCO) has veto power over third parties at high risk of corruption.

Finally, the Mobilize F.S. group has internal processes to:

i)       manage professional whistleblowing (e.g., a crime, non‑compliance with regulations or a breach of code of conduct) and protect whistleblowers;

ii)      manage conflicts of interest between the Mobilize F.S. group employees and its counterparts, in several stages:

(i)identification potential conflicts of interest according to several criteria such as the frequency of relationship with the counterparty, the position of the employee in the hierarchy of Mobilize F.S. group, and his personal, professional or extra‑professional links with the counterparty,

(ii)declaration of the conflict of interest by the employee spontaneously or annually (for managers in particular), and commitment statement for new employees and employees in charge of loans,

(iii)processing: spontaneous and annual declarations are analyzed and remedial actions are put in place, for example limiting the employee’s participation in the business relationship process with the counterparty,

(iv)monitoring and recording of conflicts of interest detected.

The Committees:

Steering of the Compliance risks within Mobilize F.S. group is monitored by the following bodies:

The Ethics, Compliance and Internal Control Committee at the group level, attended by all members of the Executive Committee of RCIBS, defi nes and validates the group policy in Compliance matters, examines group projects relating to Compliance and supervises any observed shortfalls and the corresponding remedial plans. It is in particular responsible for supervising the risk of corruption and unethical conduct, risk of money laundering & the fi nancing of terrorism and the risk of internal/external fraud (other than credit‑related fraud).

The Risks Committee of the Board of Directors supervises critical non‑compliance risks of Mobilize F.S. group, such as the risk of money laundering and the fi nancing of terrorism, the personal data protection risk, the customer protection risk, and risks associated with prudential regulations in banking matters.

Third party Risk Committee that, through Procurement department and following TIM analysis, takes the decision to keep or stop a relationship with a third party rated “low risk” (“Green flag”) or in medium risk (“Orange flag”). In case of a risk rated “high” (“Red flag”), an opinion/arbitration from group Risk Director and/or from group Compliance Director is required.

The professional alert processing Committee is chaired by the group Compliance Director and has the main missions of processing and instructing professional alerts, establishing facts, evaluating damages suff ered and the responsibility of actors, recommending corrective actions (internally or externally), ensuring the implementation of any sanctions decided, acting in strict compliance with confi dentiality obligations in the processing of fi les and the protection of whistleblowers in line with applicable regulations, validating the closure of alerts in the system. This closure is formalized in the Committee’s report.

New Product/Product Committee analyzes compliance risks upstream of the launch of each new product, project, activity or process, in order to defi ne an adequate device in compliance with regulatory expectations. Members of the Executive Committee participate in the fi nal phase of the Committee.

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ESG risks

Methodology linked to financed emissions calculations

The Mobilize F.S. group almost exclusively fi nances vehicles (private vehicles and light commercial vehicles).

In this respect, the emissions fi nanced are evaluated according to the emissions of the vehicle(s) fi nanced from databases made available by the manufacturers or from external databases listing the technical information relating to vehicles registered in Europe (databases of the European Environment Agency). Emissions fi nanced are not indicated in proportion to the emissions recorded by the counterparties (disclosed or estimated). For this reason, 0% has been systematically indicated in the column GHG emissions (column i): gross carrying amount percentage of the portfolio derived from company‑specifi c reporting.

Financed emissions are reported using the PCAF methodology, section 5.6 Motor Vehicles Loans, as a reference. The emissions fi nanced consist of the greenhouse gas emissions of the vehicles fi nanced in the portfolio, based on an average annual mileage, focusing on the usage phase. All types of contracts (credit or leasing) are processed according to the same methodology.

The average mileage used is aligned with the Renault Group’s statistics on vehicle lifespans and the total mileage considered. These elements were modifi ed in 2023 in order to take into account a car average lifespan of 15 years and a total mileage of 200,000km on its lifespan.

The usage phase is made up of vehicles emissions “well to wheel”, which includes:

●  emissions related to the combustion of fuels during the movement of internal combustion engines and hybrid

vehicles (tailpipe – tank to wheel);

●  emissions related to the electricity consumption of electric and hybrid vehicles (well to socket);

●  emissions related to the production and delivery of fuels (well to tank).

Tailpipe emissions mainly come from gCO₂/km data communicated by Renault Group to Mobilize F.S. group or from the databases of the European Environment Agency (EEA).

The manufacturers’ databases make it possible in most cases to establish an exact match between a vehicle, through its identifi cation number, and the individual CO₂ data.

NACE sector codes

NACE sector codes are available in internal databases at the level of a letter and three digits, for example D.351. The line concerning sector D35.11 is therefore not fi lled in.

The EEA databases were used to establish average values by model, country, engine, year of sale.

Since 2023, a coeffi cient representing the emissions emitted in real conditions has been added to the exhaust approval data. These data are consistent with the data available to Renault Group

Emissions related to electricity consumption are calculated according to the same principles as tailpipe emissions, either directly from manufacturer databases or from averages established from EEA databases. Emission factors related to electricity generated by country (average CO₂ per kWh) are also taken into account. These data are aligned with the emission factors used by Renault Group.

Emissions linked to the production and transportation of fuels were considered according to the country and the fuels of the vehicles fi nanced. These detailed coeffi cients are aligned with Renault Group assumptions.

Emission data have been completed for approximately 75% of active contracts in the portfolio at the end of December 2023 of which about 85% for the seven main countries of activity. The remaining 25% could not be identifi ed in the absence of technical data related to the vehicles fi nanced (identifi cation numbers, brands and models in particular). The improvement of completeness of emissions calculations is part of action plans that should be seen in future Pillar III disclosures.

In 60% of the cases, the tailpipe data of gCO₂/km were obtained from the databases provided by the Renault Group. In 15% of cases, these same data were obtained from external EEA databases.

Greenhouse gas emissions related to vehicles constitute all the emissions fi nanced, and are, for the moment, classifi ed in scope 3.

The next Pillar III on ESG risks will reflect possible modifi cations to the classifi cation of scopes as well as possible methodological developments.

In particular, it is planned to enrich the calculation of fi nanced emissions by adding emissions related to the production and end of life of vehicles and batteries, in order to give a complete view of the emissions related to the life cycle of the vehicles fi nanced.

Segment G presented in this template includes fi nancing of Renault and Nissan dealership inventories (NACE code G45). This fi nancing is very short‑term, with an average residual maturity of less than six months.

Climate change adaptation

As part of “TCFD”, Renault Group has conducted an assessment of the climate risk and of the vulnerability in order to identify the sites that are susceptible to physical climate risks. The physical climate risks identifi ed were evaluated based on the useful life of the asset concerned and are essentially of three types (extreme heat, water stress and flooding) covered by appropriate action plans.

Mobilize F.S. group carried a review of its sites, including those of IT service providers, in terms of exposure to several extreme weather events (floods, heat waves, water stress, etc.). This assessment was carried out with the assistance of a specialized fi rm and demonstrated that Mobilize F.S. group sites are not concentrated in areas highly exposed to physical climate risks. For sites identifi ed as vulnerable, this should lead to consideration in business continuity plans.

Transition towards a circular economy

Renault Group eco‑design standards applied to the vehicules and batteries allow for frugal use of rare materials, integration of recycled materials, predisposition of the products for dismantling, and end‑of‑life recycling. Since 2007, 95% of the mass of vehicules Renault Group sold worldwide is recyclable or recoverable. The low emissions vehicules that Mobilize F.S. group rents or operates have been in circulation after that date.

At the end of the life of the electric vehicules sold by Renault Group, their batteries are collected and directed towards a second life or recycled after a diagnosis of their health status.

Regarding waste management, Renault Group and European factories producing low‑emission vehicules prioritize recycling while trying to minimize any landfi lling.

Prevention and pollution control

The low emission vehicules that Mobilize F.S. fi nances, rents or operates are all equipped with tyres in classes of external rolling noise and rolling resistance coeffi cient that comply with the European requirements set by Regulation EC 661/2009. The requirements of the Taxonomy going beyond regulatory compliance on this criterion, additional analysis was conducted and demonstrated that most of the tire references originally equipping a low‑emission vehicle meet this criterion. However, in spite of all the eff orts led, it has not been possible to verify this point for the entirety of the fi nanced vehicules because the information regarding their actual tire fi tment is not available.

RISKS – PILLAR III

ESG risks

To date, this criteria is considered non operable. This position will be reassessed in the future depending on the availability of the necessary data.

With a homologated noise level greatly lower tha 68dBA, electric vehicles of Renault brands have been respected since 2021 the limits of external noise levels that will be applicable from 2024, thus contributing to the reduction of ambient noise and to the quality of life in urban areas. All the commercialized Renault vehicules in Europe are, therefore, compliant with European regulation 540/2014/EC applicable to vehicles approved since J uly 2016, which require a maximum of 72dBA (cf. 2.2.2.3.3).

Verification of the minimum safaguards

As part of the animation of its Vigilance plan, Renault Group continuously ensures the proper completion of reasonable due diligence and remediation procedures necessary to confi rm alignment with the following texts:

●  United Nations Guiding Principles on Business and Human Rights;

●  Fundamental Conventions of the International Labour

Organization (ILO);

●  OECD Guidelines for Multinational Enterprises;

●  Fundamental rights at work and the International Bill of Human Rights.

The treatment of those points are monitored on a monthly basis in Steering Committee of Vigilance Plan.

Renault Group delegated Compliance division in close collaboration with the Legal division and under the Ethics and Compliance Committee supervision deploys a structured approach aimed at analyzing and ensuring the robustness of its regulatory compliance in a sustainable and anticipatory manner, over a scope of major regulated areas including in particular the themes of “competition” and “corruption”.

Renault Group Tax division ensures compliance, in all countries where it is established, with the tax rules applicable to its activity, in accordance with international conventions and local laws, thanks to an appropriate management system.

To the best of our knowledge, Renault Group was not convicted in 2023 for corruption, tax evasion, and human rights violations or, by a competition authority, for anti‑competitive practices.

REPORT ON CORPORATE GOVERNANCE

Governance bodies and players

4.3.1.2.4        Procedure for appointing directors

In accordance with the Company’s Articles of Association and the laws and regulations applicable to it, the Board of Directors is composed of at least three members and no more than eighteen.

The term of offi ce of directors is three years.

Directors may either be proposed by the Board of Directors on the recommendation of the Appointments Committee as part of an appointment by the Ordinary General Meeting or be co‑opted by the Board of Directors on the recommendation of the Appointments Committee and ratifi ed the Ordinary General Meeting.

They may be re‑elected and may be dismissed at any time by the Ordinary General Meeting.

4.3.1.2.5        Directors' onboarding process

On their fi rst appointment, each director benefi ts from an onboarding process that takes place over two days, and during which he or she meets each member of the Executive Committee. The director benefi ts from a presentation of the Group, its governance and its various activities.

Directors may also receive refresher training on specifi c subjects in accordance with the banking regulations in force.

4.3.1.2.6       Diversity policy

The company has implemented a diversity policy within its Board of Directors so that the Board is composed of directors with diff erent skills and professional experience but also of diff erent ages and genders.

To implement this diversity policy, the Board of Directors relies on the annual executive assessment report presented by the Appointments Committee and submitted for its approval in accordance with applicable banking legislation and regulations. This report makes it possible to identify the skills of each director and, where applicable, to identify any skills that are not represented on the Board.

Collectively, the members of the Board of Directors and the Executive Directors have the knowledge, expertise and experience needed to fully understand all of the company’s business activities, including the main risks to which to which it is exposed, of the sales fi nancing sector, of the Renault‑Nissan Alliance and of the automotive sector.

The purpose of this diversity policy is to better inform the Board of Directors' decision‑making by allowing the expression of diff erent points of view.

This policy has been implemented to appoint directors in recent years and has led to the appointment of directors who have had a professional background outside the RCI Group, as well as to the promotion of the appointment of women.

4.3.1.2.7        Notion of independent director

On the recommendation of the Appointments Committee, the Board of Directors has defi ned the notion of independent director as follows: "An RCI director is independent when he or she has no relationship of any kind whatsoever with the RCI Group or its management, or with the Groupe Renault, which might compromise the exercise of his or her freedom of judgment. Thus, an independent director does not only mean a non‑executive director, i.e. a director who does not hold management positions within the RCI Group or the Groupe Renault, but also one who has no ties of particular interest (signifi cant shareholder, employee, other) with them".

On this basis, it has identifi ed four directors as independent as recommended by the Appointments Committee dated 18 September 2023.

4.3.1.2.8       Conflict of interests

To the best of the company’s knowledge, there are no conflicts of interests between the private interests of the members of the Board of Directors and their duties towards the company. There are no family ties between the members of the Board of Directors.

During the last fi nancial year, no agreements or arrangements were entered into by any of the company’s Senior Managers or signifi cant shareholder with any subsidiary. In accordance with Order 2014‑863 of 31 J uly 2014, the Board of Directors hereby states that agreements entered into with the parent company or with company subsidiaries that are directly or indirectly fully owned are excluded from the scope of control of regulated agreements.

To the best of the company’s knowledge, none of the members of the Board of Directors and none of its Senior Managers has, in the past fi ve years:

●  been convicted in relation to fraudulent offences;

●  been associated with any bankruptcy, receivership or liquidation, in the capacity of Senior Manager;

●  been the subject of any official public incrimination and/or sanctions by statutory or regulatory authorities; or

●  been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer, or from acting in the management or conduct of the affairs of any issuer.

The management of conflicts of interests is governed by Article 4 of the Board of Directors’ internal regulations which state as follows:

Extract from the internal rules of the Board of Directors (Art. 4)

Article 4: Conduct and conflicts of interests

a)    4.1 In compliance with RCI Group procedure related to the management of conflicts of interests of staff, the directors shall maintain under all circumstances their independence in analyzing, assessing, deciding and acting in order to ensure sound and prudent management of RCI Banque.

They commit to not search for or accept any advantage that may compromise their independence.

b)    4.2 The directors shall inform the Chairman of the Board of any conflicts of interests, including potential, they might directly or indirectly be involved in.

The directors shall inform for example the Chairman of the Board of their intention to accept any new mandate in a listed company which is not part of Renault Group.

They shall also inform the Chairman of the Board of any sentence for fraud, and/or public sanction, and of any prohibition to manage or to operate, that may have been ordered against them, as well as any bankruptcy, confiscation or liquidation they may have been associated with.

c)     4.3 A conflict of interests involving a director is handled by the Chairman of the Board. Where appropriate, the latter assesses the importance of the conflict of interests and decides the relevant mitigation measures.

Where appropriate, the Appointments Committee is requested, and potentially the Board of Directors of RCI Banque. In this case, the relevant director in a situation of conflict of interests does not take part in voting on his case.

d)    4.4 A conflict of interests involving the Chairman of the Board is handled by the Appointments Committee, and potentially the whole Board of Directors.

e)    4.5 The members of the Board of Directors shall sign a declaration indicating the existence or absence of potential conflicts of interests annually.

REPORT ON CORPORATE GOVERNANCE

Governance bodies and players

4.3.1.3 Functioning and work of the Board of Directors

4.3.1.3.1         Functioning of the Board of Directors

The Board of Directors meets at least four times a year and as often as the interest of the company requires, upon notice duly served adequately in advance, by any means, by the secretary of the Board appointed by the Chairperson, in accordance with the provisions of the Articles of Association.

In accordance with Article L.823‑17 of the French Commercial Code (Code de Commerce), the statutory auditors are invited to all meetings of the Board of Directors examining or preparing the annual or interim fi nancial statements, and if relevant, to other meetings at the same time as the directors themselves.

All technical documents and information required for the directors to fulfi ll their responsibilities are sent to them in compliance with the applicable provisions of the law and the company’s Articles of Association.

The Chairman chairs the meetings of the Board of Directors. He/she sets the schedule and agenda. He/she organizes and oversees the work of the Board and reports thereon to the General Meeting. He/she chairs General Meetings.

The Chairman makes sure that the company’s bodies operate properly and that best governance practices are implemented. This applies in particular to the Committees set up within the Board of Directors, whose meetings the Chairperson may attend. He/she may submit questions to be examined by these Committees for their opinion.

The Chairman is provided with all information required to perform his/her duties and tasks. He/she is provided with regular updates by Senior Management on all signifi cant events relating to the life of RCI group. He/she may request communication of all appropriate documents and information needed to enlighten the Board of Directors. In this respect, he/ she may also interview the statutory auditors and, after informing the Chief Executive Offi cer thereof, any member of RCI Group’s Senior Management.

The Chairman ensures that the members of the Board of Directors are in a position to fulfi ll their duties and makes sure that they are properly informed.

The meetings of the Board of Directors were held at the company’s registered offi ce, and by means of videoconference, allowing the identifi cation and eff ective participation of the directors.

The minutes of each Board of Director’s meeting were drawn up by the secretary of the Board, approved at the following meeting, and transferred to a register held at the company’s registered offi ce and available for inspection by the directors.

REPORT ON CORPORATE GOVERNANCE

Governance bodies and players

4.3.1.3.2        Work of the Board of Directors

The Board of Directors met twelve times during the 2023 fi nancial year:

●  On J anuary 26, 2023, the Board of Directors appointed a new Chairman of the Board of Directors and a new director.

●  On February 10, 2023, based on the recommendation of the Accounts and Audit Committee, the Board reviewed the activity report, approved the financial statements as of December 31, 2022, and approved the 2023 budget. Based on the recommendation of the Nominations Committee, it proposed the renewal of the mandates of Ms. Nathalie Riez and Mr. Thierry Piéton as directors of the

Company. Based on the recommendation of the Remuneration Committee, the Board approved the RCI group variable share system for 2023, increased the maximum variable share ratio from 100% to 200%, modified the remuneration of risk takers by including 50% of LTI as a remuneration instrument, and approved the governance and allocation process for LTI. Based on the recommendation of the Risks Committee, it approved the update of Pillar 3 and the liquidity risk statements. Finally, it decided on the terms of payment of directors' remuneration for the second half of 2022, on delegation from the General Meeting.

●  On March 9, 2023, the Board met to approve the sale of the Russian subsidiary RN Bank.

●  On March 17, 2023, the Board approved the acquisition of the company Select Vehicle Group Holding in the United Kingdom, and the creation of a new subsidiary, Mobilize Lease&Co UK Ltd.

●  On March 31, 2023, the Board of Directors approved the Capital Adequacy Statement and the Liquidity Adequacy Statement (ICAAP/ILAAP), reviewed the directors' remuneration grid for the 2023 fiscal year. It also approved the amendment of the corporate purpose of the Colombian subsidiary RCI Servicios, and approved the planned relocation of the head office in 2026.

●  On April 24, 2023, the Board approved the skills matrix of the directors on the proposal of the Nominations Committee. It then approved the AML/CFT report, the credit risk strategy, and the credit approval framework on the recommendation of the Risks Committee. It approved the acquisition of the company Mobility Concept GmbH (MeinAuto). It also approved the increase in the share capital of the companies Heycar and Mobilize Insurance. Finally, it amended the delegation of authority of the CEO regarding the increase in share capital to a cumulative amount of 30 million euros.

●  On May 23, 2023, the Board met to review and approve the project to revoke Mr. J oao Leandro as CEO. It then approved the sale of the Russian subsidiary RNL Leasing. It rejected the proposed increase in the share capital of Mobilize Pay.

●  On J une 13, 2023, the Board of Directors terminated Mr. J oao Leandro's mandate as CEO of the Company and appointed Mr. Frédéric Schneider as interim CEO. It then reviewed the MRT remuneration scheme and approved the presented scheme.

●  On J uly 25, 2023, the Board of Directors reviewed the profiles of the candidates selected by the Nominations Committee for the position of CEO of RCI Banque and approved the candidacy of Mr. Martin Thomas and his remuneration. It also approved the appointment of Mr. Vincent Gellé as Director of Accounting and Performance Control, replacing Mr. Stéphane J ohan. Based on the recommendation of the Risks Committee, it approved the CSRBB governance and its limit of 10 million euros, as well as a governance point (delegation to the Risks Committee and introduction of a quorum). It reviewed and approved the semi‑annual financial statements as of J une 30, 2023. It studied and recommended the study of a partnership project with Santander as part of the Leaseco project. It decided to suspend the credit/debit card project and approved an increase in the share capital of the subsidiary Mobilize Pay in the amount of 1.8 million euros. The Fast Charge project (implementation of financing solutions) was presented for approval. Finally, it approved the remuneration of the directors for the first half of 2023, on delegation from the General Meeting of J une 30, 2023, and the increase in the share capital of the Spanish subsidiary BIPI Mobility SL.

●  On November 3, 2023, the Board of Directors held a

Strategic Day where various subjects were presented: MFS Results and Action Plans, Renatul: the automotive market and Renaulution, MFS Captive Today and Tomorrow, as well as 2 deep dives on the Mobilize Lease&Co strategy and the IT strategy. The results of the self‑evaluation of the Board of Directors were also presented to the directors. It also approved the liquidation of the Algerian subsidiary RCI Services Algérie and the establishment of a joint venture with partner Oyak in Turkey for the development of insurance activities.

●  On December 8, 2023, the Board of Directors reviewed the work on the 2024 budget. It authorized bond issues and securitization operations for 2024/2025 and renewed the powers of delegation for their implementation. It approved the update of the ILAAP governance. Based on the recommendation of the Nominations Committee, the Board appointed Ms. Céleste Thomasson by co‑optation to replace Ms. Fedra Ruibeiro. Based on the recommendation of the Risks Committee, the Board approved the global IRRBB strategy and its management framework, as well as the changes made to the Risk Appetite Framework. Based on the recommendation of the Accounts and Audit Committee, the Board approved the internal audit plan.

●  On December 19, 2023, the Board of Directors reviewed and approved the trajectory for carbon reduction and the associated levers. It confirmed the appointment of Mr. Martin Thomas as CEO of the Company as of J anuary 22, 2024, and appointed Mr. Frédéric Schneider as Deputy CEO as of the same date.

REPORT ON CORPORATE GOVERNANCE

Methods of shareholder participation in the General Meeting

4.4 Methods of shareholder participation in the General Meeting

The methods of participation in the General Meeting are defi ned in Articles 27 to 33 of the Company’s Articles of Association in

accordance with the legislation in force.

Extract of the Articles of Association (Articles 27 to 33)

Article 27 - Types of General Meetings

Each year, the shareholders convene in an Ordinary General Meeting, which must be held within fi ve months of the end of the fi nancial year.

In addition, the shareholders may hold Ordinary General Meetings that meet on an extraordinary basis, or Extraordinary General Meetings when their purpose is to amend the Articles of Association, except as otherwise provided for by law, may also be held.

The General Meeting, duly constituted, represents all shareholders. Its decisions, taken in accordance with law and the company’s Articles of Association, are binding on all shareholders, even those who are absent, incapable of attending or in disagreement.

Shares held in treasury by the company are not counted when calculating the quorum for the various meetings.

Two members of the works council, appointed by that council, one representing engineers and managerial staff and the other representing support staff , may attend General Meetings.

The Board of Directors may decide that shareholders will be able to take part in and vote at General Meetings by videoconference or any other means of telecommunication that permits them to be identifi ed as required by law.

Article 28 - Notices of meeting

The Board of Directors calls the shareholders to General Meetings by means of a notice indicating the date, time and place of meeting.

Failing this, General Meetings may also be convened by: a) the Statutory Auditors;

b)    a representative appointed by order of the presiding judge of a French commercial court ruling in summary proceedings at the petition either of any interested party, or of one or more shareholders who together own at least 5% of the share capital;

c)     the receivers.

Article 29 - Quorum - Majority

Ordinary and Extraordinary General Meetings are subject to the quorum and majority requirements prescribed by law and exercise the powers allocated to them by law.

Article 30 - Composition of General Meetings

All shareholders, regardless of the number of shares they own, may attend General Meetings, participate in the proceedings and vote.

Owners of registered shares who have requested that such shares be duly recorded in the company register at least fi ve days before the meeting are admitted upon presentation of identifi cation.

Shareholders may be represented by another shareholder, or by their spouse.

Proxies prepared in accordance with the law must be received at the registered offi ce at least fi ve days before the date of the meeting.

All shareholders, regardless of the number of shares they own, may attend Extraordinary General Meetings, take part in the proceedings and vote.

The right to vote in Ordinary General Meetings belongs to the benefi cial owner of the shares to which the right is attached; the right to vote in Extraordinary General Meetings belongs to the named legal owner.

When a General Meeting has been called, the company shall, at its own expense, deliver or send a mail ballot and attachments thereto, to any shareholder who so requests by registered mail (return receipt requested).

The company must honor any request received by its registered offi ce no later than six days before the date of the meeting. The mail ballot must include certain information as stipulated by Articles R.131‑2 and seq. of the Decree of 23 March 1967.

It must clearly notify the shareholder that abstention from voting or failure to indicate voting instructions on any item shown on the form will be treated as a vote against the proposed resolution. The form may be included in the same document as the proxy form, if applicable. In this event, the applicable provisions are those of Article R.131‑4 of the Decree of 23 March 1967.

The documents stipulated by Article R.131‑2 of the aforementioned decree must be attached to the mail ballot. A mail ballot sent to the company for a given General Meeting is also valid for any subsequent meetings convened to address the same agenda.

Mail ballots must be received by the company at least three days before the date of the meeting. If a proxy is returned with a mail ballot, the proxy is taken into consideration subject to the votes indicated in the mail ballot.

CONSOLIDATED FINANCIAL STATEMENTS

Statutory auditors’ report on the consolidated financial statements

Report on Other Legal and Regulatory Requirements

Format of presentation of the financial statements intended to be included in the Annual Financial Report

We have also verifi ed, in accordance with the professional standard applicable in France relating to the procedures performed by the statutory auditor relating to the annual and consolidated fi nancial statements presented in the European single electronic format, that the presentation of the consolidated fi nancial statements intended to be included in the annual fi nancial report mentioned in Article L.451 ‑1 ‑2, I of the French Monetary and Financial Code (code monétaire et fi nancier), prepared under the responsibility of the General Director, complies with the single electronic format defi ned in the European Delegated Regulation No 2019/815 of 17 December 2018. When it comes to the consolidated accounts, our procedures include verifying the compliance of tagging in the format defi ned by the aforementioned regulation.

Based on the work we have performed, we conclude that the presentation of the consolidated fi nancial statements intended to be included in the annual fi nancial report complies, in all material respects, with the European single electronic format.

Due to the technical limitations inherent in the macro‑tagging of consolidated accounts according to the European Single Electronic Format (ESEF), it is possible that the content of certain tags of the notes from the annual fi nancial report is not reproduced in an identical manner to the consolidated accounts and notes attached to this report.

We have no responsibility to verify that the consolidated fi nancial statements that will ultimately be included by your company in the annual fi nancial report fi led with the AMF are in agreement with those on which we have performed our work.

Appointment of the Statutory Auditors

We were appointed as statutory auditors of RCI Banque S.A by the annual general meeting held on 22 ^nd may 2014 for KPMG S.A and on 29 ^th April 2020 for Mazars.

As at 31 ^st December 2023, KPMG S.A. and Mazars were respectively in the 10 ^th year and 4 ^th year of total uninterrupted engagement.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated fi nancial statements in accordance with IFRS and for such internal control as management determines is necessary to enable the preparation of consolidated fi nancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated fi nancial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations.

The Audit Committee is responsible for monitoring the fi nancial reporting process and the eff ectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and fi nancial reporting procedures.

The consolidated fi nancial statements were approved bythe Board of Directors.

Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Objectives and audit approach

Our role is to issue a report on the consolidated fi nancial statements. Our objective is to obtain reasonable assurance about whether the consolidated fi nancial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these fi nancial statements.

As specifi ed in Article L.823 ‑10 ‑1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of management of the aff airs of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

5.3          Notes to the consolidated financial statements

RCI Banque S.A, the Group’s parent company, is a limited RCI Banque S.A.’s main business is to provide fi nancing for the company with a Board of Directors and fully paid‑up capital of Renault Group, Nissan et Mitsubishi brands.

€100,000,000, subject to all legal and regulatory provisions The consolidated fi nancial statements of the Mobilize Financial applicable to regulations governing credit institutions, and Services group as at 31 December relate to the company and registered with the Paris Registre du Commerce et des Sociétés its subsidiaries, and to the Group’s interests in associates and de Paris under SIREN N°. 306 523 358. jointly‑controlled entities.

The registered offi ce of RCI Banque S.A. is located at 15, rue The consolidated fi nancial statements are expressed in millions d’Uzès 75002 Paris, France. of euros unless otherwise indicated.

5.3.1             Approval of financial statements – Distributions

The consolidated fi nancial statements of the Mobilize Financial Services group at 31 December 2023, were approved by the Board of Directors’ meeting on 9 February 2024, and will be submitted for approval at the annual general meeting of 20 May 2024.

2022 dividend payout

The Mobilize Financial Services group’s consolidated fi nancial statements for the year 2022 were established by the Board of Directors on 10 February 2023 and approved at the combined general meeting on 19 May 2023. It was decided to pay shareholders a dividend of €600 million on the 2022 result, ie a dividend per share of €600

Dividends for 2023

On the Ordinary General Meeting on 9 February 2024, the Board of Directors called to approve the fi nancial statements for the year ended 31 December 2023 decided to pay a dividend of €600 million, ie a dividend per share of €600.

5.3.2          Key highlights

War in Ukraine

The conflict in Ukraine and the economic and trade sanctions progressively levied against Russia, as well as the counter‑sanctions levied by Russia impacted the Group’s business. The areas in question mainly include employee security, the risk of a shortage of fi nancing in Russia, the risk of cyberattacks, and information systems failure.

RCI Banque S.A.'s net investment in Ukraine is limited to the share of capital held in its local subsidiary for an amount of €0.3 million, which has been fully provisioned for in 2022.

In Russia, RN Bank was sold on 20 J une 2023 for 7 billion Russian rubles (€76.4 million). The Group held a 30% economic interest in this company through the holding company RN SF B.V., which is accounted for by the equity method. RN SF B.V. shares were fully written down in 2022. This sale changed the participations in associated companies of +€24.4 million, of which +€8.6 million were recognized in the income statement and +€15.8 million in foreign exchange reserves.

On 3 August 2023, Insight Investment Group LLC entered into an agreement to acquire 100% of RNL Leasing LLC (and its subsidiary RNL Finance LLC) from RCI Banque S.A.. RNL Leasing LLC and its subsidiary RNL Finance LLC were sold for 675 million Russian rubles after tax (6.6 million euros). The Group owned 100% of RNL Leasing, which was fully consolidated. In application of IFRS 5, the assets and liabilities of RNL Leasing LLC were reclassifi ed under "non‑current assets/liabilities held for sale" in the Mobilize Financial Services group's consolidated fi nancial statements at 31 December 2022. This sale of shares generated a loss of €11 million in the income statement, and represents the fi nal stage in the withdrawal of RCI Banque S.A. from the Russian Federation, in accordance with the decision taken by Renault Group in 2022.

New issued securitization funds issued

In March, Mobilize Financial Services placed a transaction for approximately €719 million backed by car loans granted by its German branch (including €700 million in senior securities and approximately €19 million in subordinated securities).

The French subsidiary set up a new securitization program of lease‑to‑purchase plan (LOA) outstandings originated by DIAC. As part of this program, a public off ering ("Cars Alliance Auto Lease France V 2023 ‑1" compartment) for around €737 million backed by lease receivables was issued (including €700 million in senior securities [€100 million self‑subscribed] and around €37 million in subordinated securities).

Scope entry

In 2023, fi ve new entities joined the full consolidation scope

Bipi Mobility Germany GmbH, Mobilize Lease&Co SAS, Mobilize Lease&Co UK Ltd and Mobilize Insurance SAS have been fully consolidated.

In addition, the Mobilize Financial Services group acquired 36.6% of Select Vehicle Group Holdings Ltd via the subsidiary RCI Bank UK Ltd, which is now consolidated by equity method.

Pursuant to European regulations, the Mobilize Financial Services group's consolidated fi nancial statements for the

2023 fi scal year were prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) at 31 December 2023, as adopted by the European Union at the reporting date.

5.3.3.1          Changes in accounting policies

The Mobilize Financial Services group applies the standards and amendments published in the Offi cial J ournal of the European Union, application of which has been mandatory since 1 January 2023.

New regulations that must be applied in 2023

IFRS 17 and       Insurance policies amendments

Amendment IAS 12          Deferred tax on assets and liabilities arising from the same transaction International tax reform (Pillar 2)

Amendments IAS 1                   Disclosure of material accounting policies

Amendments IAS 8              Defi nition of accounting estimates

The application of the IAS 12, IAS 1 and IAS 8 amendments from 1 January 2023 has no signifi cant eff ect on the Group’s fi nancial statements. The impacts of applying IFRS 17 are presented in the dedicated paragraph below.

New texts not applied in advance by the Group

New IFRS standards and amendments not Application date adopted early by the Group according to the

IASB

Amendments Lease liabilities under 1 January 2024 IFRS 16 sale‑leaseback agreements

Amendments               Classifi cation of liabilities as 1 January 2024

IAS 1                       current or non‑current

                              liabilities. Non‑current

liabilities with covenants

At this stage, the Group does not foresee any material impact on the consolidated fi nancial statements as a result of adopting these amendments.

Other standards and amendments not yet adopted by the European Union

In addition, the IASB has published new standards and amendments that are not yet adopted by the European Union.

New IFRS amendments and standards not           Application date yet adopted by the European Union   according to the IASB

Amendment            Supplier fi nancing                      1 January 2024

IAS 7                       agreements

Amendment             Eff ect of changes in foreign        1 January 2025

IAS 21                      exchange rates

(non‑convertibility)

The Group does not foresee any material impact on the consolidated fi nancial statements as a result of adopting these amendments.

5.3.3.2         Application of IFRS 17

IFRS 17 “Insurance contracts,” published on 18 May 2017 and amended by the amendments of 25 J une 2020, sets out the principles of recognition, measurement, presentation, and disclosures for insurance contracts. It replaces IFRS 4 "Insurance Contracts," and is applicable as of 1 January 2023. The Mobilize Financial Services group did not adopt the proposed exemption from applying IFRS 9 and had already been applying it since 1 January 2018. The introduction of IFRS 17 leads to the end of the overlay approach previously applied. In accordance with recommendation No. 2022 ‑01, the Group has chosen option 2 for presenting insurance fi nancial investments on the balance sheet, i.e. a breakdown of insurance fi nancial investments in the accounting categories for banking activities on the assets side of the balance sheet.

Methodology for calculating insurance liabilities and assets, and treatment of acquisition cash flows

IFRS 17 mainly applies within the Group to insurance contracts issued and reinsurance treaties issued and/or held by the Group's insurance companies.

Given the nature of our insurance and reinsurance portfolios — contracts with a term of over one year and a non‑linear risk profi le — their technical provisions are valued using the general model (known as the "building blocks approach"), comprising: (1) estimates of discounted future cash flows weighted by their probability of occurrence, (2) an adjustment for non‑fi nancial risk, and (3) the contractual service margin.

There are no participatory contracts in the portfolio justifying the application of the Variable Fee Approach (VFA) model. No contracts are valued using the Premium Allocation Approach (PAA).

The insurance business holds some proportional reinsurance coverage. The components of existing reinsurance contracts are valued separately, but their accounting date corresponds to the date of the underlying contracts hedged, as the reinsurance is related to the generations of contracts.

The contractual service margin will be recognized in the income statement according to the coverage units provided during the period. A hedging unit is used to reflect the allocation of the contractual service margin as services are rendered.

Contract aggregation level

In accordance with the standard, technical provisions are valued by homogeneous groups of contracts using the following aggregation rules:

●  By portfolios with similar risks and that are managed together,

●  By annual cohorts

●  By profitability groups, with a separate group for onerous contracts at the time of recognition.

Cash flow (BE – Best Estimate)

The BE of insurance and reinsurance portfolios corresponds to the projected future cash flows (in particular premiums, benefi ts, attributable expenses) of the contracts included in the contract boundary. These projections are based on models that reflect the way insurance and reinsurance contracts operate, and are carried out according to the levels of aggregation defi ned above. These projection models are based on the same foundations as those used for Solvency calculations. They were subject to an external review in 2023.

The contract boundary corresponds to the date on which the contract takes eff ect and the date on which it expires.

Acquisition costs

Acquisition costs correspond to distribution commissions paid to the network dealer. These costs are incurred on the eff ective date of the contract and are amortized according to the same profi le as the Contractual Service Margin (CSM).

Attributable/non‑attributable expenses

All overheads recognized in 2023 are entirely classifi ed as expenses attribuable to the insurance business and are therefore fully reflected in the projected expense flows.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Risk adjustment (RA) for non‑financial risk

The adjustment for non‑fi nancial risk is intended to compensate for the uncertainty inherent in the amounts and timing of projected cash flows. It is based on the observed distribution of the frequency of claims, representing the main risk factor of the insurance portfolio, and is calibrated with a confi dence threshold of 90%, consistent with that used in the risk appetite rules. The risk adjustment is amortized according to the claims cash flow profi le.

Contractual Service Margin (CSM)

The contractual service margin represents the portion of profi ts earned on underwritten insurance contracts that will be deferred and gradually brought into income over the estimated life of the insurance contracts. It is defi ned when the contracts subscription and evolves during the life of the contracts depending on experience and assumptions that diff er from the original expectations.

Hedging units

Hedging units are used to measure risk coverage periods for income recognition purposes (contractual service margin). These hedging units are based on the risk profi le of the annual cohorts of contracts, taking into account the profi le of the sums

at risk.

Discount rate

Discount rates are defi ned using the bottom‑up method, to which an illiquidity premium is added. The risk‑free yield curve is as defi ned by EIOPA / EIOPA RISK ‑FREE RATE AS AT 31 DECEMBER 2023:

                  EIOPA - RFR (FY 2023)                                     1                     2                     3                      4                     5                     6                     7                      8                     9                    10

Forward rates (yearly)                                    3.73%       2.68%       2.46%       2.51%       2.62%       2.72%       2.81%       2.88%       2.96%         3.05%

The illiquidity premium adjustment is derived from the market Financial assumptions are based on data supplied by the price curve using the Merton structural credit risk model and regulator and market data used by the Group. the CoC (Cost Of Captial) adjustment to remove the “expected”

Impacts of the transition probability of default and credit risk premiums for (un)expected

losses, adjusted according to the bond portfolio held.               Since IFRS 17 is being retrospectively applied as of 1 January OCI options              2022all the , the historical Group data considered that would that it be was required not possible to estimate to obtain the

The Mobilize Financial Services group decided to use the option contracts in the portfolio at the transition date using the full to allocate fi nancial income and expenses for the period retrospective approach without incurring excessive costs and between income statement and other comprehensive income. eff orts. Accordingly, the modifi ed retrospective approach was Treatment of internal margins adopted and applied to the entire scope concerned, in order to

account for the impact of the transition on the fi nancial The treatment of internal margins corresponds solely to the statements at 1 January 2022.

restatement of distribution fees paid by the Group’s insurance

companies to the Group’s subsidiaries. The impact of the transition generated a positive impact on equity of €167 million in the opening balance sheet at 1

Relevant accounting estimates                                                            January 2022.

All of the underlying technical assumptions used to calculate This positive eff ect on equity is due to a quicker recognition of future cash flows from insurance portfolios are defi ned on the profi ts under IFRS 17 linked to the profi le of hedging units that basis of statistical studies on portfolio data and represent the reflect the decline in sums at risk corresponding to the change best estimate of these elements at the calculation date. in the underlying fi nancial outstandings. Under IFRS 4,

●  Frequency of claims

●  Claims acceptance rate

●  Indemnity periods for hedging the monthly payments of the underlying financing

●  Early buyout contract rates

●  Unit costs

insurance premiums are earned on a straight‑line basis.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

As required by IFRS 17, the comparative fi nancial statements Technical provisions measuring the value of insurance contracts were restated to take into account the application of the are presented on a dedicated line “Liabilities on insurance standard as at 1 January 2022. The IFRS 17 technical contracts issued” in the statement of fi nancial position. They provisions at 31 December 2022 were defi ned by applying the represent an amount of €436 million at 31 December 2021, general model to the portfolio on the basis of the opening €132 million at 1 January 2022 after application of IFRS 17 balance sheet resulting from the transition at 1 January 2022. and €166 million at 31 December 2022.

                                                                                                        31/12/2021                                                                                       31/12/2022

In millions of euros 31/12/2021 Restated Adjustment 31/12/2022 restated Adjustment Active insurance and reinsurance contracts 105 59 (46) 63 36 (27)

Liabilities — insurance contracts issued                                (436)                 (132)                   304                 (425)                 (166)                     259

Current tax liabilities  (91)  (81) Net equity restatement  167  151

The transition on 1 January 2022 led to new accounting breakdowns within the balance sheet aggregate “Liabilities — insurance contracts issued by securitization vehicles set.” The liabilities of -€132 million at 31 December 2021 presented in the above table break down as follows: ● Best Estimate (BE) of future cash flows: €155 million

● contractual service margin (CSM): -€274 million

In millions of euros

Insurance result

NBI

Profi t or loss before tax

Net income

5.3.3.3        Consolidation principles

Scope and methods of consolidation

The consolidated fi nancial statements incorporate the accounts of companies over which the Group directly or indirectly (subsidiaries and branches) exercises control, within the meaning of IFRS 10 (Associate companies or joint control – joint ventures).

The securitized assets of Diac SA, RCI FS Ltd and the Italian, Spanish and German branches for which Mobilize Financial Services group has retained the majority of the risks and rewards remain on the asset side of the balance sheet. Under IFRS 10, the Group retains control of the securitization fund‑FCT vehicles that it creates as part of its securitization program because it retains the most risky shares. These are what determine who has power in the securitization fund‑FCT vehicle. Thus, because it has control, the Group can consolidate and eliminate reciprocal transactions while retaining the assigned receivables. The assigned receivables as well as the accrued interest and impaired allowances continue to appear on the asset side of the Group’s balance sheet. At the same time, the bonds issued by the Fund are included in the liabilities of the Group’s balance sheet and the related expenses in the profi t and loss statement.

Thus, during the securitization process, the Group does not derecognize the securitized receivables because the vehicle (securitization fund‑FCT), which manages the securitization, remains under the control of the Mobilize Financial Services group. The non‑recognition of receivables assigned under the securitization programs is supported by paragraph 3.2.4  IFRS 9.

● risk adjustment (RA): -€13 million

Net income from insurance activities is presented on a dedicated line in Mobilize Financial Services group's income statement. It representes an impact of €44 million in the income statement for the fi rst half of 2022 and €95 million over 2022.

31/12/2022

                                        31/12/2022                       restated                    Adjustment

                                                  314                   285                      (29)

                                                  314                   285                      (29)

                                                  310                   285                      (25)

                                                  202                   185                      (16)

It should be noted that under the “collection” business model, as part of the Group’s accounting and threshold policy, assignments of receivables via securitization are infrequent but signifi cant. These sales of receivables through securitization do not call into question the “collection” business model applied to these portfolios.

Associate companies and joint ventures are accounted for under the equity method (IFRS 11).

Signifi cant transactions between consolidated companies are eliminated.

For the most part, the companies included in the Mobilize Financial Services group scope of consolidation are the Renault, Nissan, Dacia, Samsung and Datsun vehicle sales fi nance companies and the associated service companies. Acquisition cost of shares and goodwill

Goodwills are measured at the acquisition date, as the diff erence of:

●  the total amount transferred, measured at fair value, and any participation amount which does not give controlling interest in the acquired company; and

●  the net carrying amounts of acquired identifiable assets and liabilities.

The costs related to the acquisition such as broker’s commissions, advisory fees, legal, accounting, valuation and other professional and consulting fees, are recorded as expenses for the periods when costs are incurred and services received.

Debt issuance or equity costs are accounted for under IAS 32 and IFRS 9.

If the business combination generates negative goodwill, the relevant amount is immediately recognized in profi t or loss.

An impairment test is performed at least annually and whenever there is an indication of a loss in value by comparing the book value of the assets with their recoverable amount, the latter being the highest value between the fair market value (after deducting the cost of disposal) and the going concern value. The value‑in‑use is based on a market approach and determined by using multiples for each group of cash‑generating units, which comprise legal entities or groups thereof in the same country. A single discounting value is used for all cash‑generating units thus tested, which is the risk‑free 10 ‑year forward rate augmented by the average risk premium for the sector in which they operate.

One‑year data projections about profi t or loss are used for most of the cash‑generating units except for BIPI which is 8. The discount rate used is the BIPI WACC.

Goodwill is therefore measured at its cost less any accrued impairment losses. If impairment is found, the impairment loss is recognized in the income statement.

Transactions with non‑controlling interests (purchases/sales) are booked as capital transactions. The diff erence between the amount received or paid and the book value of the non‑controlling interests sold or bought is recognized directly in equity.

Non‑controlling interests

The Group has granted buy‑out commitments on the interests held by minority shareholders in fully consolidated subsidiaries. For the Group, these buy‑out commitments represent contractual obligations arising from the sales of put options. The exercise price for these options is determined by estimating the price the Mobilize Financial Services group would have to pay out to the non‑controlling interests if the options were exercised, taking into account future returns on the fi nancing portfolio existing at the closing date and the provisions set out in the cooperation agreements concerning the subsidiaries.

In accordance with the provisions set out in IAS 32, the Group has recognized a liability arising from put options sold to non‑controlling interests of exclusively controlled entities in a total amount of €157 million at 31 December 2023, compared with €186 million at 31 December 2022. This liability is initially measured at the present value of the estimated exercise price of the put options.

The counterpart entries for this liability are booked as decreases in the non‑controlling interests underlying the options and, for the balance, a decrease in equity attributable to the owners of the parent company. The obligation to recognize a liability even though the put options have not been exercised means that, in order to be consistent, the Group has initially applied the same accounting treatment as that applied to increases in its interests in controlled entities.

If the options have not been exercised when this commitment expires, the previous entries are reversed. If the options are exercised and the buyout is made, the amount recognized as a liability is extinguished by the cash outlay associated with the buy‑out of the non‑controlling interests.

The detail of subsidiaries in which non‑controlling interests are signifi cant can be found in the note 1.3.8.2

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

5.3.3.4       Presentation of the financial statements

The summary statements are presented in the format recommended by the Autorité des Normes Comptables (French Accounting Standards Authority) in its Recommendation n° 2017 ‑02 of 14 J une 2017 on the format of consolidated fi nancial statements for banking sector institutions applying international accounting standards.

Operating income includes all income and expense directly associated with Group operations, whether these items are recurring or result from one‑off decisions or transactions, such as restructuring costs.

5.3.3.5         Estimates and judgments

To establish its fi nancial statements, Mobilize Financial Services group has to make estimates and assumptions that aff ect the book value of certain assets and liabilities, income and expense items, and the information disclosed in certain Notes. The Mobilize Financial Services group regularly reviews its estimates and assessments to take account of past experience and other factors deemed relevant in view of economic circumstances. If changes in these assumptions or circumstances are not as anticipated, the fi gures reported in future fi nancial statements could diff er from current estimates. The main items in the fi nancial statements that depend on estimates and assumptions are the recoverable value of loans and advances to customers and allowances for impairment and provisions.

These estimates are taken into account in each of the relevant Notes.

Significant assumptions for IFRS 9 expected loss calculations:

These are close to those used for the 2022 fi nancial year, to which is added the forecast adverse eff ect on the amount of provisions for the application of the new defi nition of default for the scope treated under the advanced method.

Forward‑looking

The forward‑looking provision is composed of a statistical provision and a sectoral expertise provision.

Sectoral approach

The forward‑looking provision includes an industry provision to hedge the risk of certain specifi c business industries (including companies operating in these industries and individuals working in these companies).

At the end of December 2023, the sectors identifi ed as risky, in particular due to rising commodity and energy prices and interest rates, were hotels, restaurants, textiles, clothing distribution and construction, added during the last review performed in October 2023.

The passenger transport sector is no longer considered a risky sector due to the post‑COVID return to normality and the recovery in tourism, in particular the reopening of China, as well as the impact of public policies, such as those implemented in Germany.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

The average provisioning rate for these segments was increased by applying the average of the B1 (bucket 1) provisioning rate and the B2 outstandings applied to B1 exposures. The methodology was revised because a study of the transitions from B1 to B2 showed that the payment behavior of companies and employees isn't adjusted anymore with previous provisioning rate.

The impact on 2023 amounted to €17 million, primarily attributable to a €24 million provision related to the inclusion of the construction sector. Additionally, there were reversals of €29 million due to the change in provisioning methodology, €8.5 million following the withdrawal of the transportation sector, and fi nally, €3 million for the expertise of the specifi c Individual and SME (small and medium entities) sectors in France.

The sectorial expertise provision amounts to €29.4 million at the end of December 2023, compared and €46.9 million at the end of December 2022. Statistical approach

The statistical provision is based on three scenarios:

●  “Stability”: Providing for the next three years of stability of the expected credit loss provision parameters (ECL: Expected Credit Losses), based on the latest available risk parameters;

●  “Baseline”: Use of stress parameters from internal models. The projections are based on macroeconomic data used as part of the institution’s ICAAP (Internal Capital Adequacy Assessment Process), dated September 2023. This enables the PD and LGD, and therefore the ECL, to be stressed on portfolios with models;

●  “Adverse”: Similar approach to the “Baseline” scenario but with the use of deteriorated macroeconomic data used in the ICAAP leading to higher ECLs.

The various scenarios are then weighted to take into account the latest OECD macroeconomic projections (change in GDP, unemployment rate and inflation) and their probability of occurrence, thus enabling the calculation of a statistical forward‑looking provision (amount of the provision obtained by comparison with the IFRS 9 accounting provisions of the Stability scenario).

At the end of September 2023, the ECB’s outlook for available income growth was positive at a time when overall inflation was lower than the previous year and when labor markets remained solid. Economic growth remained moderate until the end of 2023.

The global economy is expected to perform better in 2024, as inflation slows down and labor market strengthens, with a growth of interest rates impacting already GDP growth.

Growth could be higher than expected if the labor market remains resilient and if the increase in real incomes has a positive impact on consumer and business morale.

Given that internal models are employed in calculating forward‑looking statistical data, and considering the gradual normalization of the macroeconomic situation, the Baseline scenario aligns most closely with the OECD's macroeconomic projections (as at J une 2023). Consequently, it remains the scenario deemed most probable.

Given the high volatility observed in 2020 and 2022 (COVID‑19 crisis, lockdowns, war in Ukraine, semiconductor crisis) and the macroeconomic changes observed (accelerating inflation), the probability that the Stability scenario would occur was considered to be relatively low.

Given the gradual stabilization of the economic environment in 2023 and the announced end of monetary tightening cycles, the Stability scenario is now considered more likely. Its weighting was therefore revised upwards.

By contrast, the weighting of the Adverse scenario has been revised downward, reflecting a tendency toward macroeconomic stabilization and a convergence of OECD forecasts with those of the Baseline scenario.

As the new macroeconomic indicator projections between the OECD and the Adverse scenario are less correlated, the scenario is considered less likely than in December 2022.

FL Weight Scenario FL Weight Scenario – December 2022             December 2023          Variance

Customers                                            Stability                  Baseline                  Adverse                  Stability                  Baseline                  Adverse                  Stability                  Baseline                   Adverse

France                                                      0.10                       0.65                       0.25                       0.35                       0.55                       0.10                       0.25                    (0.10)                      (0.15)

Germany                                                 0.10                       0.60                       0.30                       0.35                       0.55                       0.10                       0.25                    (0.05)                      (0.20)

Italy                                                          0.10                       0.65                       0.25                       0.35                       0.45                       0.20                       0.25                    (0.20)                      (0.05)

UK                                                             0.10                       0.65                       0.25                       0.35                       0.50                       0.15                       0.25                    (0.15)                      (0.10)

Brazil                                                        0.55                       0.10                       0.35                       0.30                       0.45                       0.25                    (0.25)                        0.35                     (0.10)

Spain                                                        0.10                       0.65                       0.25                       0.35                       0.45                       0.20                       0.25                    (0.20)                      (0.05)

Korea                                                       0.10                       0.65                       0.25                       0.35                       0.50                       0.15                       0.25                    (0.15)                      (0.10)

Non‑G7 (ECLAT)                                    0.10                       0.65                       0.25                       0.35                       0.45                       0.20                       0.25                    (0.20)                      (0.05)

Inflation risk

On the Retail portfolios, an adjustment linked to a deterioration in the solvency of customers whose cost of living is impacted by inflation has been generalized at the end of 2022. The methodology used to calibrate this adjustment consists of estimating what proportion of the portfolio in Bucket 1 would be likely to switch to Bucket 2 by stressing cost‑of‑living factors and covering this part of the portfolio in Bucket 1 on the basis of the Bucket 2 provisioning rate. At end‑December 2023, the inflation expertise represented a provision of €27.3m, compared with €42.7m at end‑2022. This provision has been revised downwards due to the structural fall in inflation and energy costs during 2023.

Individual risk on corporate counterparties

For corporate counterparties with a downgraded risk rating and exposure above a minimum threshold, an individual review is carried out. The purpose of this review is to assess the credit risk and to adjust any impairment on the exposure of the counterparty under individual review, by recording an allowance. At end‑December 2023, total provisions for individual corporate counterparty risk amounted to €8.2m, compared with €14.6m at end‑December 2022.

Risk of non‑adequate statistical model

In certain circumstances and on an ad hoc basis , internal models based on a statistical approach incorrectly estimate expected losses. Consequently, to compensate this temporary weakness, provisions are recorded. In 2023, the main adjustment was made on the impairment of doubtful debts in the portfolio of the subsidiary Mobilize Financial Services Colombia. The amount of the expertise is a reduction of 30.4 million euros in Expected Credit Losses. At end‑December 2023, the amount of provisions is a negative allowance of 19.7 million euros compared with an allowance of 19.6 million euros at end‑December 2022.

Classification risk

In certain circumstances, the classifi cation of corporate loans in stage 3 (non‑performing loans) incorrectly reflects the level of expected losses. This issue arises mainly in the case of so‑called technical defaults.

5.3.3.6       Loans and advances to customers and finance lease contracts

Measurement (excluding impairment) and presentation of loans and advances to customers

Sales fi nancing receivables from end customers and dealer fi nancing receivables come under the category of “Loans and advances issued by the company.” As such, they are initially recorded at fair value and carried at amortized cost calculated according to the eff ective interest rate method.

The eff ective interest rate (EIR) is the internal rate of return to maturity or, for adjustable‑rate loans, to the nearest rate adjustment date. The discounted amount of amortization on any diff erence between the initial loan amount and the amount payable at maturity is calculated using the EIR.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

In addition to the contractual component of the receivable, the amortized cost of sales fi nancing receivables includes interest subsidies received from the car maker or dealer as part of promotional campaigns, handling fees paid by customers, and commissions paid for referral of business. These items, which are all factors in the return on the loan, are either deducted from or added to the amount receivable. They are recognized in the income statement as a pro‑rated portion discounted at the eff ective interest rate for the receivables to which they apply.

Finance lease contracts, as identifi ed by the rules described in section 1.3.3.7, "Operating leases," are in substance booked as sales fi nancing receivables.

It should be noted that when commissions are attached to a loan or fi nance lease, the commissions are valued on an actuarial basis according to the contract’s EIR. These commissions are spread over the life of the contract. Indeed, these fees are directly linked to the establishment of the contract and are therefore treated as incremental costs under IFRS 9.

When commissions are “stand‑alone,” they are not attached to a fi nancing contract. These fees are recognized in accordance with IFRS 15. They are recognized in the income statement when the performance obligation is fulfi lled, i.e. either at a specifi c point in time or on a percentage‑of‑completion basis (see Note 29).

Income from the resale of vehicles at the end of fi nance lease contracts is included under “Net income/(expense) of other activities.”

As a result, gains and losses on the resale of vehicles coming off performing lease agreements, amounts charged to or recovered from allowances for risks on residual values and gains or losses resulting from damage to vehicles less any corresponding insurance settlements are recorded under “Other income related to banking operations” and “Other expenses related to banking operations.” Significant deterioration in risk

(definition of bucketing)

Each loan or receivable, at the reporting date, is classifi ed in a risk category depending on whether or not it has suff ered signifi cant deterioration in credit risk since its initial recognition. This classifi cation depends on the level of the provision for expected impairment to be recognized for each instrument:

●  Bucket 1: no deterioration or insignificant deterioration in credit risk since origination;

●  Bucket 2: significant deterioration in credit risk since origination or non‑investment grade financial counterparty;

●  Bucket 3: counterparty default classification

This segmentation of outstandings by risk level, required under IFRS 9, is integrated into the credit risk monitoring and management processes of the Group’s entities and implemented in the operating systems.

The origination date is defi ned at the level of each loan or receivable and not at the level of the counterparty (e.g. date of entry into relationship).

The origination date is defi ned as follows:

●  for irrevocable financing commitments, the origination date is the date of signature of the commitment or, for Dealer network financing commitments, the date of the last review of the limits;

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

●  for outstandings on conventional loans, finance or operating leases, the date of origination is the date of the transition to management, i.e. the date on which the treatment of the financing commitment changes, and the receivable is recorded on the balance sheet.

●  for Dealer network “single account” loan outstandings, the origination date will correspond to the date of the last transfer to the debit balance;

●  for securities, the origination date corresponds to the purchase date.

Credit risk identification and analysis

The Mobilize Financial Services group currently uses a number of diff erent internal rating systems:

●  A Group‑wide rating for borrowers in the "Dealer" segment, which is used during the various phases of the relationship with the borrower (initial approval, risk monitoring, provisioning);

●  A Group‑wide rating for bank counterparties, which is established on the basis of external ratings and each counterparty’s level of capital;

●  For the “Customer” borrowers, different acceptance scoring systems are used; these vary by affiliate and by type of financing.

As a result, the signifi cant deterioration in credit risk is assessed at the transaction level, i.e. at the level of the fi nancing contract (Retail and Corporate customers fi nancing activity) or the fi nancing line (Dealer fi nancing activity). For portfolios with an IRB‑A rating, which are the largest majority in the Group, a downgrade from Bucket 1 to Bucket 2 is made depending on the downgrading of the transaction’s rating by in relation to origination.

Example: if the rating of a transaction is downgraded by x notches on the reporting date vs. the origination date, we downgrade the transaction from Bucket 1 to Bucket 2.

The number of notches “x” is determined depending on the portfolio in question.

The credit rating is not projected over the life of the transaction, nor over 12 months.

Restructured (forborne) contracts are either downgraded to Bucket 2 (performing, "viable forbearance measure") or Bucket 3 (non‑performing, "distressed forbearance measure").

For portfolios using the standard method (not rated), Bucket 1 is downgraded to Bucket 2 according to diff erent decision trees between the Retail and Dealer activities, taking into account, among other things, the presence of arrears and restructuring (forborne) contracts.

The portfolios are divided into four segments on which behavioral scores are developed: Retail, Business Customers, L arge Corporations (France only), Dealer.

The score variables are specifi c to each country and each segment:

●  Qualitative criteria: legal form of the company, age of the company, type of new vehicle/used vehicle, percentage of cash contribution, marital status, type of residence, occupation, etc.;

●  Quantitative criteria: duration of outstanding arrears, period elapsed since the last deferred payment, exposure, initial financing period, usual balance sheet ratios.

Forborne exposures

The Mobilize Financial Services group uses the defi nition given by the European Banking Authority (EBA) in its ITS (Implementing Technical Standards) 2013/03 rev1 of 24/07/2014 to identify its forborne exposures (restructured loans).

Forbearance (loan restructuring) consists of concessions towards a debtor facing or about to face diffi culties in meeting its fi nancial commitments. It thus refers to cases where there is:

●  a modification of the terms and conditions of a contract in order to give the customer in financial difficulties the chance to meet their commitments (such as a change to the number of repayments, extension of term, change to instalment amount, change to customer interest rate);

●  a total or partial refinancing of a troubled debt contract (instead of terminating it) which would not have been granted had the customer not been in financial difficulties.

The classifi cation of contracts as forborne exposures is separate from provisioning (for example, a contract that is forborne and returns to being considered as performing will not be provisioned and yet will be classifi ed as a forborne exposure throughout the probation period).

Receivables whose characteristics have been commercially renegotiated with counterparties not in fi nancial diffi culties are not identifi ed as forborne exposures.

The defi nition of forborne exposure is applied at the level of the individual contract (“facility”) that is forborne, and not at the level of the third party (no contagion principle). Financial diffi culties however, are assessed at the debtor level.

The forbearance classifi cation of a contract is discontinued when all of the following conditions are met:

●  The contract is considered as performing and analysis of the financial condition of the debtor shows that they have recovered their creditworthiness and debt service ability;

●  A minimum 2 ‑year probation period has passed from the date the forborne exposure returned to being considered as performing;

●  Regular and significant payments have been made by the debtor during at least half of the probation period;

●  None of the exposures to the debtor is more than 30 days past‑due at the end of the probation period.

If a contract currently considered as performing but previously classifi ed as forborne again benefi ts from forbearance measures (such as an extension of term) or if any of the exposures to the debtor is more than 30 days past‑due, it must be re‑classifi ed as a forborne exposure.

Impairment for credit risk

Under IFRS 9, it is no longer necessary for an operative event to occur to recognize depreciation as was the case under IAS 39 (“Incurred loss”). So any fi nancial instruments coming within the scope of the standard are allocated depreciation for expected losses from the outset (except for ones originating or acquired if there is an event of default):

●  originally, the instrument is allocated a loss in value representing the expected loss at 12 months (Bucket 1);

●  in the case of significant deterioration in credit risk from the outset, the instrument is then allocated a loss in value representing expected credit losses for the full term.

Definition of Expected Credit Loss

IFRS 9 defi nes the ECL as the expectation of updated credit loss (in principal and interest). The expectation will form the amount of the provision allocated to a facility or portfolio.

To calculate the ECL, the standard requires the use of relevant (verifi ed) and reasonably available internal and external information in order to make estimates of expected/ forward‑looking loses, including past events, current conditions and forecasts of future events and economic conditions.

Generic ECL formula:

On the basis of the above components, the ECL calculation formula used by the Mobilize Financial Services group can be given in generic form as follows:

With:

●  M = maturity

●  EAD_i = expected exposure at the time of the start of default for the year in question (taking into account any early repayments)

●  PD⁹_i  = probability of default during the year in question

●  ELBE ⁹₀  = best estimate of the loss in the event of default on the facility

●  t = discount rate

Each of the parameters is individually calibrated.

Credit losses anticipated for the next 12 months are a portion of the credit losses expected over the full term, and represent cash‑flow shortfalls for the full term that would occur in the event of a default in the 12 months following the date of the fi nancial year‑end (or a shorter period if the expected term of the fi nancial instrument is less than 12 months), weighted by the probability of a default. Consequently, the 12 ‑month ECL is deduced from the above formula restricted to measuring parameters over the next 12 months.

So it would appear that, for contracts with a maturity of under 12 months, the provision is the same whether the transaction of classifi ed as Bucket 1 or Bucket 2. For the Mobilize Financial Services group, it has in particular an impact on the Dealer scope as it mainly concerns short term fi nance.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Probability of default – PD:

The Mobilize Financial Services group capitalizes on the Basel provisions to calculate its IFRS 9 parameters. Best estimate of loss in the event of default – ELBE IFRS 9:

IFRS 9 does not include any specifi c mention of the period for monitoring and collecting historic data used for calculating LGD parameters. Consequently, it is possible, for the countries concerned, to use estimates of the LGD as determined in the prudential environment in the IRB approach as starting point (adjustments are made if necessary).

Update:

The standard states that expected losses must be updated on the date of the report at the actual interest rate (AIR) for the asset (or an approximate estimate of the rate determined at initial recognition).

Because of the option allowed by the standard and bearing in mind the generic structure of the Mobilize Financial Services group’s agreements, the AIR can be approximated as the rate for the agreement.

Forward‑looking perspective:

IFRS 9 introduces into the credit risk‑related expected loss (ECL) calculation the notion of forward looking. Through this notion, new requirements in terms of monitoring and measuring credit risk are introduced with the use of forward‑looking data, in particular of macroeconomic type.

The incorporation of forward‑looking data is not intended to determine a prudential margin on the amount of provisions. It mainly concerns taking account of the fact that past observations do not necessarily reflect future expectations and consequently adjustments are necessary to the amount of the provision determined on the basis of parameters calibrated exclusively on a historic basis. Such adjustments of the amount of the provision can be made either upwards or downwards and must be duly documented.

The Mobilize Financial Services group method is based on a multi‑scenario (three scenarios) approach. PDs and LGDs are determined for each scenario in order to calculate the expected losses for each of them.

Macroeconomic indicators (such as GDP and long ‑term rates) and sector‑based data are used to attach a probability of occurrence to each scenario and thus get the fi nal forward‑looking amount. Macroeconomic projections are used for all contracts in the portfolio, regardless of the product (lending, fi nance lease, operating lease).

In the Group, the forward‑looking provision covers two components:

●  The statistical provision, which takes into account macro‑economic scenarios and is applied to all Customer and Dealer Network outstandings;

●  The sectoral provision for Corporate Customers, whose purpose is to cover sectors identified as vulnerable (particularly the macroeconomic changes observed - accelerating inflation).

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Definition of default used at Mobilize Financial Services group

Criteria for defaulting in the retail sector:

●  Quantitative criterion: the absolute threshold and the relative threshold have been exceeded for more than 90 consecutive days; or

●  Qualitative criterion: Unlikeliness To Pay (UTP): signs of a probable lack of payment. Namely:

●  there is one or more arrears for at least three months (in accordance with the new definition of default rules for counting arrears);

●  or the deterioration in the counterparty’s financial circumstances translates into a risk of non‑collection. In particular in the event of over‑indebtedness/insolvency procedures, receivership, bankruptcy, compulsory liquidation, personal bankruptcy or liquidation of assets, or in the event of summons to appear before an international court;

●  or there are litigation proceedings between the establishment and its counterparty.

The quantitative criteria for default are: a) absolute materiality threshold (SA)

●  The value of the absolute threshold was set by the regulator at €500 for non‑retail arrears.

The value of the absolute threshold is to be compared with all non‑technical arrears of the customer (single obligor) on the day of the calculation.

The threshold is considered to be reached if ∑ (the customer’s non‑technical arrears on day D) > SA.

This calculation of all non‑technical customer arrears must be performed on a daily basis. Threshold value in non‑euro currencies:

For countries outside the Euro zone, the absolute threshold must correspond to the equivalent of €100 and €500 in national currency.

The exchange rates applied in the Mobilize Financial Services group are always those used by Renault.

b) The value of the relative threshold was set by the ECB at 1%.

The value of the relative threshold of 1% is to be compared with the ratio sum of all of the customer’s arrears on day D/Total value of the customer’s balance sheet outstandings (including arrears) on day D.

This calculation must be carried out on a daily basis for arrears as well as for balance sheet outstandings.

The threshold is considered to be met if:

(∑ (Arrears day D)/∑ (Balance sheet outstandings day D)) > SR

Customer Customer

The customer’s balance sheet outstandings will be calculated as follows:

OUTSTANDINGS =

+ Outstanding amounts due

– Credit balances

- Balance of security deposit

+ ICNE

+ Balance due recognized at invoicing (principal)

+ Balance due recognized at invoicing (collection costs)

+ Balance due recognized at invoicing (IR)

+ Balance not due (principal)

The defi nition of default for dealers is based on the presence of at least one of the following default criteria, common to the entire RCI scope:

Default:

(1)    Counting of late days

(2)    Inability to pay:

●  one abstention

●  legal and litigation proceedings

●  Inventory audit anomalies

●  fraud

●  other indications of improbability of payment (see details below)

●  contagion

●  end of financial contract

(3)    J udicial liquidation

(4)    Forfeiture of term

For the Customers and Dealer sectors, defaulted receivables are excluded:

●  disputed receivables: receivables where the customer refuses to make payment further to a dispute over interpretation of the clauses in the contract (if the customer’s financial situation does not seem to be compromised);

●  customers with negotiable payment terms if, and only if, there is no doubt that the debt will be collected;

●  receivables that are affected by a country risk only: a receivable should not be considered as doubtful just because a country risk exists.

Overnight loan transactions with the Central Bank are included in “Cash and balances at central banks”. Rules for writing off loans

The rules on write‑off s are detailed in IFRS 9 § 5.4.4: the gross book value of a fi nancial asset is reduced when there is no reasonable expectation of the outstanding amount being repaid. Mobilize Financial Services group subsidiaries must remove from the fi nancial statements the amount due from the counterparty on an account in loss and resume the associated depreciation when the unrecoverable nature of receivables is confi rmed and so at the latest when its rights as creditor are extinguished.

In particular, receivables become irrecoverable and thus removed from the accounts if they:

●  have     been        abandoned               through    negotiation               with         the customer in particular as part of an insolvency plan;

●  are time‑barred;

●  have been the subject of an unfavorable court ruling

(negative result of legal proceedings or litigation); ● concern a customer that has disappeared. Transfer of bucket (complementary information)

In addition to the information already provided in the

“Identifi cation and analysis of credit risk” section, the conditions under which transactions previously classifi ed in Bucket 2 are returned to Bucket 1 are as follows:

●  retail and wholesale portfolios rated in IRB‑A are returned to

Bucket 1 when the rating of the transaction has improved;

●  non‑rated Retail portfolios under the standardized approach are returned to Bucket 1 twelve months after the date of settlement of the last unpaid rent;

●  Wholesale portfolios under the standardized approach are returned to Bucket 1 when the risk status of the third party improves.

In addition, instruments classifi ed in Bucket 3 are returned to Bucket 2 when the customer has repaid all of its outstandings and no longer meets the default criterion.

For the Retail activity, transactions can return from Bucket 3 to Bucket 2 when the customer settles its arrears.

For the Wholesale activity, any fi nancing lines originated when the customer was in default (POCI) remain in Bucket 3. If there is a return to a healthy status, new exposures come into line with this status.

Impairment of residual values

The Mobilize Financial Services group regularly monitors the resale value of used vehicles across the board so as to optimize the pricing of its fi nancing products.

In most cases, tables of quoted prices showing typical residual values based on vehicle age and mileage are used to determine the residual value of vehicles at the end of the contract term.

However, for contracts under which the trade‑in value of the vehicle at the end of the contract term is not guaranteed by a third party outside the group, an impairment allowance is determined by comparing:

a)    the economic value of the contract, meaning the sum of future cash flows under the contract plus the re‑estimated residual value at market conditions on the measurement date, all discounted at the contract interest rate;

b)    the carrying value on the balance sheet at the time of the measurement.

The projected resale value is estimated by considering known recent trends on the used vehicle market, which may be influenced by external factors such as economic conditions and taxation, and internal factors such as changes in the model range or a decrease in the car maker’s prices. The impairment charge is not off set by any profi t on resale.

5.3.3.7 Operating leases (IFRS 16) as lessor

In accordance with IFRS 16, Mobilize Financial Services group makes a distinction between fi nance leases and operating leases as lessor.

The general principle that leads Mobilize Financial Services to classify its leases as "operating leases" is always that of "non‑transfer" of the risks and rewards inherent in ownership. Thus, leases under which the leased vehicle will be bought back by a Mobilize Financial Services group entity at the end of the lease are classifi ed as operating leases since most of the risks and rewards are not transferred to a third party outside the group. The classifi cation as operating leases of lease contracts that contain a buy‑back commitment from Mobilize Financial Services group also takes into account the estimated term of such leases. This lease term is far shorter than the economic life of the vehicles, which is put by the Renault Group at an estimated seven or eight years, depending on the type of vehicle. Consequently, all leases with this buy‑back clause are treated as operating leases.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

The classifi cation of battery leases for electric vehicles as operating leases is justifi ed by the fact that Mobilize Financial Services group retains the risks and rewards incidental to ownership throughout the automobile life of the batteries, which is put at between eight and ten years, and so is much longer than the lease agreements.

Operating leases are recognized as non‑current assets leased out and are carried on the balance sheet at the gross value of the assets less depreciation, plus lease payments receivable and transaction costs still to be staggered. Lease payments and impairment are recognized separately in the income statement in “Net income (expense) of other activities”. Depreciation does not take into account residual values and is taken into the income statement on a straight‑line basis, as are transaction costs. Classifi cation as an operating lease does not aff ect the assessments of counterparty risk and residual value risk.

Income from the resale of vehicles at the end of operating lease contracts is included in “Net income (or expense) of other activities”.

5.3.3.8 Operating leases (IFRS 16), lessee side

Pursuant to IFRS 16, all leases are recognized in the balance sheet through the recognition of an asset representing the right of use of the leased asset, in exchange for a lease liability, corresponding to the present value of the leased assets rents to be paid over the reasonably certain term of the lease. The lease term is the non‑cancellable period during which the lessee has the right to use the asset leased, to which are added the renewal options that the group is reasonably certain to exercise.

The right of use generates depreciation expenses while the existence of a debt generates fi nancial expenses.

The group has also opted for the exemption of low‑value, short‑term contracts. Indeed, the Mobilize Financial Services group applies IFRS 16 only to its leases deemed material. These contracts are mainly represented by material real estate leases in certain subsidiaries and vehicle leases held solely by its subsidiary Bipi.

In fact, in the course of 2021, the group acquired Bipi, a platform off ering car subscription packages; “Car subscription”. Bipi, through partnerships with long ‑term rental companies, chooses vehicles to put in its own window. This entity leases vehicles from these lessors for a minimum period of 24 months and a maximum of 36 months (Bipi therefore pays a monthly rent to the lessors, including services) without any residual value commitment and returns the vehicles to the lessors at the end of the contractual term.

Subsequently, Bipi sub‑leases these vehicles (through its platform) to end customers with a mark‑up that depends on the duration of the contract and therefore on the flexibility left to the customers (i.e. 3 month up to a maximum of 36 months) and takes care of the letting arrangements.

In view of this signifi cant new activity, the Mobilize Financial Services group has activated its movable property contracts under IFRS 16.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

5.3.3.9          Transactions between Mobilize

Financial Services and Renault

Group and the Nissan and

Mitsubishi brands

Transactions between related parties are conducted following terms equivalent to those prevailing in the case of transactions subject to conditions of normal competition if these terms can be substantiated.

The Mobilize Financial Services group helps to win customers and build loyalty to Renault Group brands, and Nissan and Mitsubishi brands, by off ering fi nancing and providing services as an integral part of their sales policy.

The main indicators and cash flows between the two entities are as follows:

Sales support

At 31 December 2023, the Mobilize Financial Services group had provided €21,187 million in new fi nancing (including cards) compared with €18,232 million at 31 December 2022. Relations with the dealer network

The Mobilize Financial Services group acts as a fi nancial partner to maintain and ensure the sound fi nancial health of the Groupe Renault, and Nissan and Mitsubishi brands distribution networks.

At 31 December 2023, dealer fi nancing net of impairment allowances amounted to €11,641 million, compared with €10,429 million at 31 December 2022.

At 31 December 2023, €276 million was fi nance directly granted to subsidiaries or branches of Renault Group compared with €489 million at 31 December 2022.

At 31 December 2023, the dealer network had received, as business introducers, remuneration of €804 million compared with €764 million at 31 December 2022. Relations with the car makers

The Mobilize Financial Services group pays the car maker for vehicles delivered to dealers for which it provides fi nancing. Conversely, at the end of the contract, the Renault Group pays the Mobilize Financial Services group for vehicles taken back under fi nancial guarantees made by the car maker. These transactions generate substantial cash flows between the two groups.

Under their trade policies and as part of promotional campaigns, the manufacturers help to subsidize fi nancings granted to customers by the Mobilize Financial Services group. At 31 December 2023, this contribution amounted to €747  million against €357  million at 31 December 2022.

5.3.3.10 Recognition and measurement

of the securities portfolio

RCI Banque S.A.’s portfolio of securities is classifi ed according to the fi nancial asset categories specifi ed in IFRS 9.

Securities measured at fair value through P&L (FV P&L)

UCITSs and FCPs (units in funds) are deemed non SPPI and so will be valued at fair value by result.

Shares in companies neither controlled nor under signifi cant influence also come into this category and are valued by result.

The fair value of fi nancial assets is determined as a priority by reference to the market price, or, which failing, on the basis of valuation methods not based on market data.

Securities measured at fair value through OCI (FV OCI)

This category includes securities that are managed under a collect‑and‑sell business model and pass the SPPI tests at Mobilize Financial Services group. It concerns debt instruments.

These securities are measured at fair value (including accrued interest). Changes in value (excluding accrued interest) are recognized in the revaluation reserve directly in equity. Depreciation on this type of share follows the models recommended by IFRS 9 according to the ECLs.

5.3.3.11 Fixed assets (IAS 16/IAS 36)

Non‑current assets are recognized and depreciated using the component approach. The components of an asset item, especially a complex asset, are treated as separate assets if their characteristics or useful lives are diff erent, or if they generate economic benefi ts at diff erent rates.

Property, plant and equipment is measured at historical acquisition cost less accumulated depreciation and impairment losses, if any.

Non‑current assets other than land are generally depreciated on a straight‑line basis over the following estimated useful lives:

Buildings                                                                         15 to 30 years

Other tangible non‑current assets                                          4 to 8 years

Intangible assets are mainly software, amortized on a straight‑line basis over three years.

5.3.3.12 Income taxes (IAS 12)

The restatements of the annual fi nancial statements of companies included in the scope of consolidation, made to bring them into line with IAS standards for fi nancial reporting purposes, and the tax deferrals allowed in the statutory statements fi led for tax purposes, give rise to timing diff erences in the recognition of income for tax and fi nancial reporting purposes. A timing diff erence is also recognized whenever the book value of an asset or liability diff ers from its value for tax purposes.

These diff erences give rise to the recognition of deferred taxes in the consolidated fi nancial statements. Under the liability method used by Mobilize Financial Services group, deferred tax expense is calculated by applying the last tax rate in eff ect at the closing date and applicable to the period in which the timing diff erences will be reversed. Within a given taxable entity (company, establishment, or tax consolidation group), deferred tax assets and liabilities are presented on a net basis whenever the entity is entitled to off set its tax receivables against its tax payables. Deferred tax assets are written down whenever their utilization is unlikely.

For fully consolidated companies, a deferred tax liability is recognized for taxes payable on advance dividend distributions by the group.

5.3.3.13 Pension and other post‑employment benefits

(IAS 19)

The plans give rise to the recognition of provisions and concern: France, Switzerland, the United Kingdom, South Korea, Italy and Austria.

Overview of plans

The Mobilize Financial Services group uses diff erent types of pension and post‑employment benefi t plans: Defined benefit plans:

Charges are booked to provisions for these plans to cover:

●  indemnities payable upon retirement (France);

●  supplementary pensions: the main countries using this type of plan are the United Kingdom and Switzerland;

●  mandated savings plans: this type of plan is used in Italy.

Defi ned‑benefi t plans are in some cases covered by funds. Such funds are subject to periodic actuarial valuation by independent actuaries. The value of such funds, if any, is deducted from the corresponding liability.

The Mobilize Financial Services group affi liates that use external pension funds are RCI Financial Services Ltd and RCI Finance SA.

Defined contribution plans:

In accordance with the laws and practices of each country, the group makes salary‑based contributions to national or private institutions responsible for pension plans and provident schemes.

Such plans and schemes release the group from any later obligations, as the national or private institution is responsible for paying employees the amounts owed to them. Payments by the group are booked as expenses for the period to which they refer.

Valuation of liabilities for defined benefit plans

With respect to defi ned‑benefi t plans, the costs of post‑employment benefi ts are estimated using the projected unit credit method. Under this method, benefi t rights are allocated to periods of service according to the plan’s vesting formula, taking into account a linearizing eff ect when rights are not vested uniformly over subsequent periods of service.

The amounts of future benefi ts payable to employees are measured on the basis of assumptions about salary increases, retirement age and mortality, and then discounted to their present value at a rate based on interest rates on the long ‑term bonds of top‑grade issuers and on the estimated average term of the plan measured.

Actuarial gains or losses resulting from revision of the assumptions used in the calculation and experience‑related adjustments are recognized as items of other comprehensive income.

The net expense of the period, corresponding to the sum of the cost of services rendered plus any past service costs, and to the cost of accretion of provisions less the return on plan assets is recognized in the income statement under personnel expenses.

Details by country are given in the notes to the balance sheet.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

5.3.3.14 Translation of financial statements of foreign companies

The presentation currency used by the group is the euro.

As a general rule, the functional currency used by foreign companies is their local currency. In cases where the majority of transactions are conducted in a currency other than the local currency, that currency is used.

The fi nancial statements of the group’s foreign companies are drawn up in their functional currency, and then translated into the group’s presentation currency as follows:

●  balance sheet items other than equity, which are held at the historic exchange rate, are translated at closing exchange rates;

●  income statement items are translated at the average rate for the period, said rate being used as an approximation applied to underlying transactions, except in the event of significant fluctuations;

●  translation adjustments are included as a separate component of consolidated equity and do not affect income.

Goodwill and measurement diff erences realized when combining with a foreign company are treated as assets and liabilities of the acquired entity.

When a foreign company is disposed of, the translation diff erences in its assets and liabilities, previously recognized in equity, are recognized in the income statement.

To determine whether a country is in hyperinflation, the group refers to the list published by the AICPA (American Institute of Certifi ed Public Accountants) International Task Force. Argentina and Turkey, where Mobilize Financial Services group has signifi cant business, are on the list. The IFRS, IAS 29 “Financial information in hyperinflationist economies”, requires revaluation of fi nancial assets for the fi nancial year in which hyperinflation appears. This requires restatements in individual accounts for the companies concerned so that uniform information is published. These individual restated fi nancial statements are then incorporated into the group’s consolidated accounts. As the currency is suff ering from hyperinflation, the conversion rate is devaluing; restatements made in local accounts partially neutralize, in the consolidated accounts, the impacts of such devaluation. For Argentine companies, a revaluation has been made in the profi t and loss account in accordance with the IPC indicator. The counterparty for revaluation restatement due to hyperinflation is given in the result as inflation exposure. The eff ect of the Turkish entity on the contribution to the fi nancial statements of the Mobilize Financial Services group is presented in the share in net income of associates and joint ventures.

5.3.3.15 Translation of foreign currency transactions

Transactions made by an entity in a currency other than its functional currency are translated and booked in the functional currency at the rate in eff ect on the date such transactions are made.

On the statement closing date, cash assets and liabilities in currencies other than the entity’s functional currency are translated at the exchange rate in eff ect on that date. Gains or losses from such foreign currency translation are recorded in the income statement.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

5.3.3.16 Financial liabilities

The Mobilize Financial Services group recognizes fi nancial liabilities consisting of bonds and similar obligations, negotiable debt securities, securities issued as part of securitization transactions, amounts owed to credit institutions and savings deposits from customers.

Any issuance costs and premiums on fi nancial liabilities are amortized on an actuarial basis over the term of the issue according to the eff ective interest rate method.

When fi rst recognized, fi nancial liabilities are measured at fair value net of transaction costs directly attributable to their issuance.

At each closing, fi nancial liabilities are measured at amortized cost using the eff ective interest rate method, except when specifi c hedge accounting procedures are applicable. The fi nancial expenses calculated in this way include issuance costs and issue or redemption premiums.

Financial liabilities covered by a fair value hedge are accounted for as described in: Derivatives and hedge accounting.

The group’s medium‑term and long ‑term issuance programs do not feature any clauses that might lead to acceleration of maturity of the debt.

5.3.3.17 Structured products and embedded derivatives

The group engages in a small number of structured transactions. These issues are hedged by derivatives so as to neutralize the embedded derivative and thereby obtain a synthetic adjustable‑rate liability.

The only embedded derivatives identifi ed within the Mobilize Financial Services group correspond to indexing clauses contained in structured bond issues. When embedded derivatives are not closely related to the host contract, they are measured and recognized separately at fair value. Changes in fair value are then recognized in the income statement. The structured issue with the embedded derivative extracted, i.e. the host contract, is measured and recognized at amortized cost.

Structured issues are associated with swaps of assets, whose characteristics are strictly identical to those of the embedded derivative, thereby providing an eff ective economic hedge. However, embedded derivatives that are separated from the host contract and swaps associated with structured issues are accounted for as if held for trading purposes.

5.3.3.18 Derivatives and hedge accounting

Risks

The Mobilize Financial Services group’s management of fi nancial risks (interest‑rate risk, currency risk, counterparty risk and liquidity risk) is described in the “Financial risks” appendix of this document.

The Mobilize Financial Services group enters derivative contracts as part of its currency and interest‑rate risk management policy. Whether or not these fi nancial instruments are then accounted for as hedging instruments depends on their eligibility for hedge accounting.

The fi nancial instruments used by the Mobilize Financial Services group can be classifi ed as fair value hedges or cash flow hedges. A fair value hedge protects against changes in the fair value of the assets and liabilities hedged. A cash flow hedge protects against changes in the value of cash flows associated with existing or future assets or liabilities. The Mobilize Financial Services group applies the IFRS 9 provisions to designate and monitor its hedging relationships.

Measurement

Derivatives are measured at fair value when fi rst recognized. Subsequently, fair value is re‑estimated at each closing date.

In accordance with IFRS 13 “Fair Value Measurement”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. At initial recognition in the accounts, the fair value of a fi nancial instrument is the price that would be received to sell an asset or paid to transfer a liability (exit price).

●  The fair value of forward currency agreements and currency swaps is determined by discounting cash flows at market interest rates and exchange rates at the closing date. It also incorporates the measurement of interest rate and currency swap “base” effects.

●  The fair value of interest‑rate derivatives represents what the group would receive (or would pay) to unwind the running contracts at the closing date, taking into account unrealized gains or losses as determined by current interest rates at the closing date.

Credit adjustment

An adjustment is booked on the valuation of OTC derivative portfolios, excluding those cleared by a CCP, for counterparty credit risk (or CVA, Credit Valuation Adjustment) and own credit risk (or DVA, Debt Valuation Adjustment).

Exposure (EAD – Exposure at Default) is approximated by the mark‑to‑market (MTM) plus or minus an add‑on, representing potential future risk and taking into account netting agreements with each counterparty. This potential future risk is estimated using the standard method recommended by French banking regulations (Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 J une 2013, Article 274 on capital adequacy requirements applicable to credit institutions and investment companies). Loss Given Default (LGD) is estimated by default at 60%.

Probability of default (PD) is the probability of default associated with each counterparty’s CDS (Credit Default Swaps). In certain countries, if this information is unavailable, the approximated probability of default is that of the counterparty’s country. Fair value hedge

The Mobilize Financial Services group has elected to apply fair value hedge accounting for hedging interest‑rate risk on fi xed rate liabilities using a receive fi xed/pay variable swap or cross currency swap.

Fair value hedge accounting is applied on the basis of documentation of the hedging relation at the date of implementation and of the results of fair value hedge eff ectiveness tests, which are performed at each balance sheet date.

Changes in the value of fair value hedging derivatives are recognized in the income statement.

For fi nancial liabilities covered by a fair value hedge, only the hedged component is measured and recognized at fair value. Changes in the value of the hedged component are recognized in the income statement. The unhedged component of these fi nancial liabilities is measured and recognized at amortized cost.

If the hedging relationship is terminated before the end of its term, the hedging derivative is classifi ed as an asset or liability measured at fair value through profi t or loss, and the hedged item is recognized at amortized cost in an amount equal to its last fair value measurement.

Cash flow hedge

The Mobilize Financial Services group has elected to apply cash flow hedge accounting in the following cases:

●  hedging interest‑rate risk on variable rate liabilities using a receive variable/pay fixed swap, enabling them to be backed by fixed rate assets;

●  hedging interest‑rate risk on fixed rate liabilities and pay variable/pay fixed swap by using a pay‑fixed/

receive‑variable swap;

●  hedging future or probable cash flows in foreign currency.

Cash flow hedge eff ectiveness tests are performed at each balance sheet date to ensure that the relevant transactions are eligible for hedge accounting. The group calculates a hedging ratio to ensure that the nominal amount of the hedges does not exceed the nominal amount hedged. For the second type of hedging, the test performed entails ascertaining that interest‑rate exposure on the cash flows from reinvestment of non‑derivative fi nancial assets is indeed reduced by the cash flows from the derivatives used for hedging.

Changes in the value of the eff ective part of cash flow hedging derivatives are recognized in equity, in a special revaluation reserve account.

Derivatives at fair value through profit or loss

This line item includes transactions not eligible for hedge accounting and currency hedging transactions to which the Mobilize Financial Services group has preferred not to apply hedge accounting.

Changes in the value of these derivatives are recognized in the income statement.

5.3.3.19 Operating segments (IFRS 8)

Segment reporting is presented in the annual fi nancial statements in accordance with IFRS 8 “Operating Segments”.

The Mobilize Financial Services group is tasked with off ering a comprehensive range of fi nancing products and services to its two core markets: end Customers (Retail and Corporate) and the Renault Group brands and Nissan and Mitsubishi brands Dealer network. These two segments have diff erent expectations, needs and demands, and so each require a

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

specifi c approach in terms of marketing, management processes, IT resources, sales methods and communication. The group’s organization has been fi ne‑tuned to perfectly match these two customer bases, to strengthen its steering and support role.

In accordance with IFRS 8, segmentation by market has therefore been adopted as the operating segmentation method. This is in line with the strategic focus developed by the company. The information presented is based on internal reports sent to the group Executive Committee, identifi ed as the “chief operating decision maker” under IFRS 8.

A breakdown by market is thus provided for the main income statement as well as for average performing loan outstandings in the corresponding periods.

Since 1 January 2009, as decided by the Executive Committee, the formerly separate Retail and Corporate segments have been consolidated into the single “Customer” segment. The breakdown of operating segments as required by IFRS 8 has followed the same segmentation.

The Dealer network covers fi nancing granted to the Renault Group and Nissan and Mitsubishi brand dealer networks. The Customer segment covers all fi nancing and related services for all customers other than Dealers. Results are presented separately for each of these two market segments. Refi nancing and holding activities are grouped together under “Other activities”.

Renault, Nissan, Dacia, Samsung and Datsun sales fi nancing activities have been combined.

Dealer

Business                                                                              Customers                          network

Lending                                                      √                             √

Finance Lease                                              √                          NA

Operating L ease                                          √                          NA

Services                                                      √                          NA

5.3.3.20 Insurance

Since 1 January 2023, the accounting policies and measurement rules specifi c to assets and liabilities generated by insurance contracts issued by consolidated insurance companies have been established in accordance with IRRBB1.

Other assets held and liabilities issued by insurance companies follow the rules common to all of the group’s assets and liabilities and are presented in the same balance sheet and consolidated income statement items.

Assets dedicated to insurance:

The primary objective of the group’s investment strategy is to protect and preserve its assets, with all investment decisions to be made in accordance with the “prudent person” principle, while seeking an adequate return to ensure that investments are made in the best interests of policyholders.

In this respect, the insurance business investment portfolio can be considered conservatively managed as it is largely composed of corporate, sovereign and supranational bonds, term loans as well as demand deposits. The group continued to diversify its holdings in investment‑grade corporate bonds, favoring issuers with an ESG rating meeting the Carbon Disclosure Project (CDP) criteria (see Note 4 Financial assets).

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

It should be noted that bonds and term loans are held to maturity in accordance with the group’s business model policy of “inflows”.

Technical liabilities on insurance contracts:

Please see section 1.3.3.2 regarding IFRS 17.

Income statement:

The income and expenses recognized for the insurance contracts issued by the group appear in the income statement in “Net income of other activities” and “Net expense of other activities”.

Risk management:

The group’s insurance risk appetite related to the insurance business is “Moderate”. Although insurance is not the core business of Mobilize Financial Services, it does make a signifi cant contribution to the group’s net income.

The group adopts a “prudent approach” to its management of the risks to which it could be exposed through its insurance activities. The main risks associated with this activity are as follows:

Underwriting risks (technical risks)

Technical risks include potential losses related to:

●  poor product design and definition of guarantees,

●  inadequate pricing,

●  non‑compliance with underwriting rules

●  an unfavorable policyholder risk profile (age structure, etc.),

●  a drift in the underlying claims frequency, ● an increase in contract cancellations and surrenders, ● inadequate reinsurance coverage.

The risks underwritten (death, disability/incapacity, unemployment, total loss of the fi nanced vehicle) exhibit low volatility and are insured for short periods aligning with the fi nancing terms. In addition, portfolio diversifi cation by geographic area reduces risk. The risk profi le is therefore moderate. Moreover, insurance products and their distribution are subject to periodic reviews in accordance with regulatory oversight and product governance requirements. Technical indicators are in place to monitor the structure of the insured portfolio, claims frequency and surrender rates, thereby identifying any potential deviations.

Liquidity risk

Insurance company don’t have fi nancial debt. The company’s main fi nancial liabilities are short‑term debt. Most exposure to liquidity risk comes from the need to settle future obligations relating to insurance technical provisions (these commitments to clients are more than one year) and other liabilities such as income tax and other amounts due. To fulfi ll these obligations, the group has established stringent criteria for analyzing its liquidity, relying on an asset‑liability analysis in a run‑off scenario of the insurance portfolios. This analysis is updated every quarter. In addition, the Group only invests in highly liquid assets, reinforcing its security profi le.

It has no exposure to illiquid assets such as equities, real estate, equity investments, unlisted assets, etc.

Counterparty risk

As stated above, the insurance company only invests in assets (bank deposits, sovereign bonds, supra or agencies or corporate bonds) of quality investment grade with low credit risk.

Interest rate risk

With the implementation of IFRS 17, the insurance companies' entire balance sheets are now subject to interest rate risk. Financial assets are assessed at "market value" (IFRS 9), while technical provisions for insurance liabilities are appraised at "fair value" (IFRS 17). Changes in the yield curve therefore lead to volatility in the fi nancial statements. However, this volatility is contained and has a limited economic impact. Indeed, the fi nancial assets are at fi xed rates and held to maturity, the insurance commitments in the portfolio of outstanding contracts have a short average maturity of around 24 months and the investment policy is based on assets‑liabilities. The insurance portfolios do not include contracts with policyholder bonuses.

In addition, the group does not rely on external refi nancing for insurance activities.

All these risks are monitored in detail in insurance companies' ORSA (Own Risk & Solvency Assessment) reports. This involves measuring their potential impact on insurance company solvency, as part of stress‑testing.

5.3.3.21 Cash flow statement

The cash flow statement is presented on the basis of the indirect method model. The operating activities are representative of the Mobilize Financial Services group’s income‑generating activities. Tax flows are presented with operating activities in full.

Investing activities represent cash flows for the acquisition and disposal of interests in consolidated and non‑consolidated companies, and non‑current tangible and intangible assets.

Financing activities result from changes related to transactions bearing on the fi nancial structure of equity and long ‑term borrowings.

Net cash includes cash, receivables and debts with central banks, as well as accounts (assets and liabilities) and sight loans with credit institutions.

In a mixed economic environment, the Mobilize Financial Services group continues to implement a prudent fi nancial policy and reinforces its liquidity management and control system.

Liquidity

The Mobilize Financial Services group pays great attention to diversifying its sources of access to liquidity. Since the start of the fi nancial crisis, the company has largely diversifi ed its sources of funding. In addition to its traditional bond investor base in euros, new investment areas have also been successfully worked.

By extending the maximum maturities of its issues in Euros to eight years, new investors looking for longer‑term assets have been reached. In addition, the group has access to the bond markets in multiple currencies, whether to fi nance European assets or to support its development outside Europe.

Recourse to funding through securitization transactions in private and public format also helps to expand the investor base.

L astly, the deposit collection activity, launched in February 2012, completes this diversifi cation and strengthens the long ‑term structural liquidity ratio (NSFR).

Oversight of the Mobilize Financial Services group’s liquidity risk takes into account EBA recommendations on the Internal Liquidity Adequacy Assessment Process (ILAAP) and is based on the following components:

Credit business risk

The economic environment in 2023 in the main countries where Mobilize Financial Services Group operates was stable, except for Colombia, where high inflation severely aff ected households' ability to repay their debts. As a result, write‑downs on loans to Colombian households have risen sharply for the banking sector. For Mobilize Financial Services Group, this situation explains the deterioration in 2023 in the ratio of non‑performing loans (outstanding loans in default), which stood at 2.52% at the end of December 2023, compared with 2.44% at the end of December 2022.

The MFS Group's appetite for credit risk remains moderate and is aimed at maintaining the quality of customer loans in line with the Group's profi tability.

Profitability

The Mobilize Financial Services group regularly reviews the costs of internal liquidity used to price customer transactions, thereby maintaining a margin on new lending in line with budget targets. Similarly, the pricing of fi nancing granted to dealers is indexed on an internal base rate reflecting the cost of borrowed resources and liquidity cushions needed for business continuity.

Governance

Liquidity indicators are the subject of particular scrutiny at each monthly Financial Committee meeting.

●  risk appetite: This component is determined by the Board of Directors’ Risk Committee;

●  refinancing: The funding plan is constructed with a view to diversifying access to liquidity by product, by currency and by maturity. Funding requirements are regularly reviewed and clarified so that the funding plan can be adjusted accordingly;

●  liquidity reserve: The company’s aim is to have available at all times a liquidity reserve consistent with its appetite for liquidity risk. The liquidity reserve consists of confirmed lines of credit, assets eligible as collateral in European Central Bank monetary policy transactions, High Quality Liquid Assets (HQLA), and financial assets. It is reviewed every month by the Finance Committee;

●  transfer prices: Refinancing for the group’s European entities is mainly delivered by the group Finance and Treasury division, which centralizes liquidity management and pools costs. Internal liquidity costs are reviewed at regular intervals by the Finance Committee and are used by sales subsidiaries to construct their pricing;

●  stress scenarios: Every month, the Finance Committee is informed of the length of time for which the company would be able to maintain its business activity using its liquidity reserve in various stress scenarios. The stress scenarios used include assumptions about runs on deposits, loss of access to new funding, partial unavailability of certain components of the liquidity reserve, and forecasts of new gross lending. Assumptions about runs on deposits under stress are very conservative and are regularly back‑tested;

●  emergency plan: An established emergency plan identifies the steps to be taken in the event of stress on the liquidity position.

The Country Management Committees also monitor risk and instant projected margin indicators more systematically, thereby supplementing the routine assessments of subsidiary profi tability.

Exposure to non‑commercial credit risk

Financial counterparty risk arises from the investment of cash surpluses, invested in the form of short‑term bank deposits with leading banks, investments in money market funds, the purchase of bonds issued by governments, supranational issuers, government agencies, and corporate bonds with an average duration of less than one year at 31 December 2023.

All these investments are made with counterparties of superior credit quality previously authorized by the Finance Committee. The Mobilize Financial Services group pays close attention to diversifying its counterparties.

Furthermore, to meet regulatory requirements resulting from implementation of the 30 ‑day liquidity coverage ratio (LCR), the Mobilize Financial Services group invests in liquid assets as defi ned in the European Commission’s Delegated Act. These liquid assets mainly consist of deposits with the European Central Bank and securities issued by governments or supranational issuers held directly. The average duration of the securities portfolio was less than one year.

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the consolidated financial statements

In addition, RCI Banque S.A. has also invested in a fund whose assets consist of debt securities issued by European agencies and sovereigns and by supranational issuers. Targeted average exposure to credit risk is six years with a limit at nine years. The fund is aiming for zero exposure to the interest rate risk with a maximum of two years.

In addition, interest rate or foreign exchange hedging transactions using derivatives may expose the company to counterparty risk. In Europe, where the group is subject to EMIR regulations, derivatives are subject to counterparty risk mitigation techniques through bilateral collateral exchange or registration in a clearing house. Outside Europe, the group pays close attention to the credit quality of the bank counterparties it uses for derivatives.

Macroeconomic environment

To combat inflation, Central Banks continued their monetary tightening policies in the fi rst half of 2023. This period was also characterized by a resurgence of volatility in fi nancial markets, featuring episodes of risk aversion, particularly in response to challenges faced by certain US regional banks and during budget discussions on US defi cits. In the second half of 2023, as inflation eased and economies demonstrated increased resilience, Central Banks ended the rate hike cycle. The movement was initiated by the FED when it maintained its key rates in J uly. Subsequently, the ECB became the last central bank to raise rates in September. The ECB’s objective is to reach a level deemed suffi ciently high to curb inflation, while preserving an economy showing signs of slowdown. By the end of 2023, the monetary policy cycle entered a new phase, characterized by a diminishing risk of recession alongside escalating geopolitical and fi scal risks.

In the United States, despite ongoing inflationary pressures and a resilient labor market, key rate hikes continued into J uly, after pausing in J une (+100 bps since December 2022, +525 bps since January 2022).

In the middle of the fi rst half‑year, fi nancial markets went through a phase of volatility and risk aversion. After a period of rising interest rates, some banks, possessing signifi cant bond portfolios with unrealized capital losses, had a weakened balance sheet. The US authorities have put in place rescue measures to protect the depositors of these institutions. At the end of May, the improvement in economic statistics (lower inflation and producer prices, less pressure on the job market) led the FED to hold its key rates steady at its J une meeting.

The second half of the year saw a notable acceleration in US economic expansion (GDP was up +4.9% in the third quarter and +2.9% year‑on‑year) and mounting awareness of the scale of government defi cits (new debt ceiling crisis and country rating downgrades). Between J uly and October, the increase in long‑term rates prompted the FED to keep its key rates unchanged, considering that they had an eff ect equivalent to a monetary tightening. The robustness of the US economy is confi rmed by year‑end data, allowing the FED to confi rm the suspension of rate hikes at its December meeting. Inflationary pressures are easing (3.1% in November), while the job market is normalizing. Unemployment rose to 3.9% in November, compared with 3.6% at the end of J une and the annual average. J ob creation fell signifi cantly to 150,000 in the third quarter compared to an average of 240,000 in 2023). Markets reacted strongly to this new monetary policy stance. At the end of December, they expected a reduction of 150  bps over the coming 12 months, with the fi rst cut in March 2024.

In Europe, the ECB raised its key rate at every Governing Council meeting from February to September 2023 (+200  bps between December 2022 and September 2023, +450  bps since the start of the tightening cycle initiated in J uly 2022) and started to reduce its balance sheet from early March 2023, as announced in December 2022. The “APP” asset purchase program portfolio was thus reduced by an average of €15  billion per month. As in the United States, European markets experienced signifi cant volatility in the middle of the half‑year.

Striking a balance between price stability and fi nancial stability has been the ECB’s priority in its monetary policy decisions. From September onwards, the ECB indicated its preference for keeping rates high for an extended period, aiming to combat inflation and mitigate economic risks. Economic indicators for the second half of the year were mixed. While inflation seems to be under control and is falling sharply (+2.4% in November, +5.5% in J une vs. +8.6% in January), the economy is exhibiting signs of weakness (GDP: +0.1% at the end of September vs. +1.8% at the end of 2022). At its fi nal meeting of the year, the ECB resolved to reduce PEPP reinvestments from the second half of 2024 (monthly average of -€7.5 billion) and to cease all reinvestments from 1 January 2025. At the end of December, the markets expected rates to remain at existing levels until Q2 2024 and a decrease of 160  bps by the end of 2024.

The Bank of England (BoE), one of the fi rst central banks to initiate the monetary tightening cycle, raised its key rate by 175  bps between January and August 2023, bringing it to 5.25%, i.e., a total increase of 515  bps since the start of the monetary tightening cycle in December 2021. Inflation, while still high, exhibited signifi cant improvement towards year‑end (3.9% in November, 8.9% in September, compared with 13.4% in January), and the UK economy remains delicate (GDP at -0.1% for the quarter, -0.4% in private consumption). At the end of December, the market expected the continuation of current rates until H2 2024 and a 150 ‑bp reduction within a year.

Following a divergence in short‑term rates during the fi rst half of the year, sovereign rates on long maturities exhibited a signifi cant spread in October, only to revert to their early‑September levels by year‑end. German 2 ‑year bond yields increased by 51  bps in H1 and decreased by -28  bps since the beginning of the year (2.39% at the end of 2023 compared with 2.67% at the beginning of 2023). In the meantime, German 10 ‑year government bond yields were at 2.02% at the end of December 2023, having peaked at 3% in mid‑October (2.39% at the end of J une, and 2.44% at the beginning of 2023). Y ields on US bonds have risen by 53  bps over the 2 year period and 14  bps over the 10 year period since the beginning of 2023, reaching 4.25% and 3.88% respectively at the end of December 2023 (compared with 4.38% and 3.7% at the beginning of 2023).

Despite a few periods of sharp decline (March and October 2023), equity markets continued their recovery that began in the fourth quarter of 2022. The Eurostoxx 50 and the S&P 500 are up +19% and +24.2% respectively year‑to‑date. After an episode of volatility in the middle of the half‑year, during which the IBOX X Corporate Bond Euro index reached a high of 115.6  bps, the index stood at 91  bps at the end of December 2023, a level very close to that observed at the end of 2022.

CONSOLIDATED FINANCIAL STATEMENTS

Appendix 2: Financial risks

5.5         Appendix 2: Financial risks

Refinancing and balance sheet management

The Finance and Cash department is responsible for a material risk by Mobilize Financial Services is generally done refi nancing those of the Group’s entities that are eligible for locally to limit any cross‑border risk. Group procedures do centralized refi nancing. It obtains the funds required to ensure however allow the central refi nancing offi ce to grant occasional continuity of business activity (issuance of bonds and other cross border funding to subsidiaries located in such countries if negotiable debt securities, securitization, money market the funding is for a limited amount only or if there is an borrowings… ), balances assets and liabilities, and adjusts the insurance policy covering the non‑convertibility and cash positions of the Group’s companies, while managing and non‑transfer risk.

minimizing exposure to fi nancial risks, through the use of Such subsidiaries are also subject to the same fi nancial risk interest rate swaps, currency swaps and spot and forward monitoring requirements as other Group subsidiaries. They foreign exchange transactions. must observe limits on interest rate risk and foreign exchange

The principles of the fi nancial policy extend to all consolidated risk, monitor their liquidity risk, contain their counterparty risk subsidiaries of the Mobilize Financial Services group and are and have in place specifi c monitoring of fi nancial risk by means adapted and applied in subsidiaries whose refi nancing is not of a dedicated Finance Committee and ad hoc reporting.

centralized. Transactions on fi nancial instruments carried out by the All refi nancing for subsidiaries in countries outside the Mobilize Financial Services holding are for the main part Eurozone whose transfer and convertibility risk is deemed to be related to its central refi nancing function for the Group.

5.5.1             Organization of market risk management

The specifi c market risk management system is part of the The Financial Risks Team, attached to the Risk and Banking Mobilize Financial Services group’s overall internal control Regulation department (Risk Management Division), issues a system and operates to standards approved by the Board of daily report and monitors the Group’s exposure to fi nancial Directors. The Mobilize Financial Services group’s Finance and risks.

Cash department is responsible for managing market risks Foreign exchange instruments, interest rate instruments and (interest rate, liquidity and foreign exchange risks) and for currencies approved for use in managing market risks are verifying compliance with allowable limits for the consolidated specifi ed on a list of authorized products validated by Mobilize Mobilize Financial Services group scope. The rules and ceilings Financial Services’s Chief Executive Offi cer.

are approved by the shareholder and are periodically updated.

5.5.2 Managing aggregate interest‑rate, foreign exchange, counterparty and liquidity risks

Interest rate risk

The overall interest rate risk represents the impact of fluctuating rates on the future gross fi nancial margin.

The Mobilize Financial Services group’s aim is to mitigate this risk as far as possible.

Two monitoring indicators are used internally for rate risk:

●  Discounted sensitivity (Economic Value – EV) consists of measuring at a given point in time (t) the impact of a change in interest rates on the market price of an entity’s balance sheet flows. The market price is determined by the discounting of future cash flows at the market rates at point t. This measurement is used to set the limits that apply to the Group’s management entities.

●  The net interest income which consists of measuring a gain or loss, according to an income statement vision. It is presented as the future interest income difference over a set time‑frame. The particular feature adopting an NII vision, compared with the actuarial vision of sensitivity, is the linearization of the impact of new operations.

In order to take account of the diffi culty of precisely adjusting the structure of borrowings to that of loans, limited flexibility is accepted in interest rate hedging by each subsidiary.

These swaps and the securities available for sale are measured at fair value by reserves in accordance with IFRS 9. These macro‑hedging transactions cover variable‑rate resources and/or fi xed‑rate resources that are variable through micro‑hedging of swaps. Monthly tests are carried out to ascertain:

●  the effectiveness of the hedging of fixed‑rate resources by the interest rate swaps assigned to micro‑hedge them;

5.5.4          Liquidity risk

Mobilize Financial Services pays great attention to diversifying its sources of access to liquidity. To that end, the Group imposes stringent internal standards on itself.

Mobilize Financial Services's oversight of liquidity risk is based on the following:

Static liquidity

This indicator measures the diff erence (gap) between existing liabilities and assets at a given date without any assumptions as to the renewal of liabilities or assets. It gives a point‑in‑time snapshot of the liquidity position, or static liquidity gap. The Group’s policy is to refi nance its assets by means of liabilities with a longer maturity, thus maintaining positive static liquidity gaps across all areas of the balance sheet.

Liquidity reserve

The liquidity reserve is a source of emergency liquidity that can be used by Mobilize Financial Services in the event of necessity. It consists of High Quality Liquid Assets (HQLA) as defi ned by

5.5.5           Foreign exchange risk

The foreign exchange position is decomposed into:

●  the structural foreign exchange position, resulting from the Group's long ‑term investments in the equity of foreign subsidiaries;

●  the transactional exchange position, which arises from the cash flow denominated in a currency other than the domestic currency.

Since 2022, Mobilize Financial Services has had a capital allocation covering its exposure to structural foreign exchange risk.

The Group benefi ts from an ECB exemption for the fi ve most signifi cant currencies (GBP, BRL, KRW, CHF and MAD), allowing it to take into account only the excess capital over the average Group CET1.

Structural foreign exchange risk is included in Mobilize Financial Services’ risk appetite framework. The Group’s position in all currencies is checked monthly during the Capital and Liquidity Committee and communicated quarterly to the Supervisor.

The transactional foreign exchange position is framed by limits.

CONSOLIDATED FINANCIAL STATEMENTS

Appendix 2: Financial risks

● the relevance of macro‑hedging transactions, by setting them against variable rate resources/ fixed variable rate resources.

These data are calculated on the basis of simplifi ed scenarios, working on the assumption that all positions run to maturity and that they are not readjusted to factor in new market conditions.

The sensitivity of reserves to a change in interest rates as presented above would in no way be representative of an impact on future results.

the Basel Committee for calculating the liquidity coverage ratio (LCR), fi nancial assets not recognized as HQLA by the Basel Committee, confi rmed bilateral lines of credit and assets eligible as collateral in European Central Bank (ECB) transactions not already counted as HQLA or fi nancial assets. Minimum and adequate liquidity reserve levels are determined every six months by the Finance Committee within the centralized refi nancing scope and for physical entities whose refi nancing is local.

Stress scenarios

Every month, the Finance Committee is informed of the length of time for which the company would be able to maintain its business activity using its liquidity reserve in various stress scenarios. The stress scenarios used include assumptions about runs on deposits, loss of access to new funding, partial unavailability of certain components of the liquidity reserve, and forecasts of new gross lending. Assumptions about runs on deposits under stress are very conservative and are regularly back‑tested.

Central refinancing

The forex position of RCI Banque S.A., the central refi nancing unit, which historically is very low, stayed under €13 million throughout the year.

No position is accepted within the framework of refi nancing management. In this respect, the trading room secures the systematic hedging of all flows concerned.

Residual and temporary positions in currencies, related to cash flow timing diff erences inherent in multi‑currency cash management, may, however, remain. Any such positions are monitored daily and are subject to the same hedging concern.

Any other forex transactions (in particular for the anticipated hedging of projected dividends) may only be initiated further at the decision of the head of the Finance and Cash department.

Sales financing subsidiaries

Sales fi nancing subsidiaries are required to refi nance themselves in their own currency and thus are not exposed.

CONSOLIDATED FINANCIAL STATEMENTS

Appendix 2: Financial risks

By way of exception, limits are allocated to subsidiaries whose sales fi nancing operations or refi nancing are multi‑currency, and to those that are authorized to invest some of their cash surpluses in a currency other than their domestic currency.

The overall limit for Mobilize Financial Services group granted by the Chairman of the Board of Directors on the advice of the Chairman of the Board’s Risk Committee has been set at €40 million, down €15 million compared with 2022.

At 31 December 2023, the Mobilize Financial Services group’s consolidated transactional foreign exchange position was €17.9 million.

This decrease is due to a change in the operational management of the importing activity. This activity generated a foreign exchange position due to the temporary delay between the issuance of the invoice (D + 0) and the conversion (D + 1). Following a change in tool, invoices and conversions

Mobilize Financial Services’s exposure to bank counterparty risk arises from various market transactions made by the Group’s entities as part of their everyday business (investment of cash surpluses, interest rate or forex hedging, investments in liquid assets, etc.).

Transactions are made with fi rst‑class banks and counterparty risk on market transactions is managed with a system of limits set by Mobilize Financial Services and then approved by Renault as part of the Group‑wide consolidation of counterparty risks.

Limits are set using an internal rating method based on capital adequacy, long ‑term ratings by credit agencies and a qualitative appraisal of the counterparty.

Compliance with these limits is monitored daily. All the results of controls are communicated monthly to the Mobilize Financial Services Finance Committee and integrated into the consolidated monitoring of Groupe Renault counterparty risk.

In addition to meet regulatory requirements resulting from implementation of the 30 ‑day liquidity coverage ratio (LCR), Mobilize Financial Services has a portfolio of investments in liquid assets. Limits on the amount and maturity of the latter are set for each issuer.

Mobilize Financial Services has also invested in money market funds, corporate bonds and a fund whose assets consist of debt securities issued by European agencies, sovereigns and by supranational issuers. Each of these investments is subject to a specifi c limit approved by the Finance Committee and reviewed at least once a year.

Occasional authorization is also granted to sales refi nancing subsidiaries so that they can invest in treasury bills or Central Bank notes in their home countries.

These limits are also monitored daily and are reported monthly to the Mobilize Financial Services Finance Committee.

In the case of fi nance entities, risk takes into account cash exposure (deposits and accrued interest) and exposure on derivatives calculated using the internal fi xed‑rate method presented hereafter when the system of risk mitigation by collateral exchange does not exist.

Fixed‑rate method

Mobilize Financial Services reviewed its market risk valuation method in March 2023.

The increasing use of the clearing house mechanism in the management of derivatives (clearing house or collateral exchange with the counterparty of bilateral base) has prompted Mobilize Financial Services to review its valuation method for market risk.

Mobilize Financial Services has made the distinction in its inventory between clearing house, bilateral and non‑cleared derivatives and allocated a risk coeffi cient to each situation. A risk equivalent coeffi cient is assigned to each type of transaction.

The coeffi cient applied depends on the length of time Mobilize Financial Services is exposed to potential adverse changes in the value of the derivatives that it holds.

These changes in value depend on changes in interest rates or exchange rates:

●  for clearing house derivatives, Mobilize Financial Services is in the one‑day position;

●  for non‑cleared derivatives with bilaterally cleared derivatives, Mobilize Financial Services is in the seven‑day position;

●  for non‑cleared derivatives without collateral exchange, Mobilize Financial Services holds a position until the transaction matures.

GENERAL INFORMATION

General information about the company

6.1.2             Special articles of association provisions

Statutory allocation of earnings

(Article 36 – distribution of dividends)

Net income consists of net revenues for the year, less overhead costs and other corporate expenses, and after depreciation, amortization and impairment allowances.

At least 5% of net income less any prior‑year losses is appropriated to fund the legal reserve. Once the amount of the legal reserve is equal to one‑tenth of the share capital, this appropriation is no longer mandatory. It is resumed in the event that the legal reserve falls below one tenth of the share capital for any reason.

Distributable income consists of the current year’s net income less any prior‑year losses, the aforementioned appropriation, and any other transfers required by applicable law, plus unallocated retained earnings brought forward from previous years.

From this income, the Ordinary General Meeting may decide to distribute dividends. Such dividends shall be appropriated fi rst from the distributable income generated in the current year.

From the available surplus, the Ordinary General Meeting may appropriate any amounts it deems appropriate, to be carried over to one or more general or special reserve accounts to be allocated or used as it sees fi t.

General meetings

(Articles 27 to 33 of the Articles of Association)

Types of General Meetings

Each year, the shareholders convene in an Ordinary General Meeting, which must be held within fi ve months of the end of the fi nancial year.

In addition, the shareholders may hold Ordinary General Meetings that meet on an extraordinary basis, or Extraordinary General Meetings when their purpose is to amend the Articles of Association, except as otherwise provided for by law, may also be held.

The General Meeting, duly constituted, represents all shareholders. Its decisions, taken in accordance with law and the company’s Articles of Association, are binding on all shareholders, even those who are absent, incapable of attending or in disagreement.

Shares held in treasury by the company are not counted when calculating the quorum for the various meetings.

Two members of the works council, appointed by that council, one representing engineers and managerial staff and the other representing support staff , may attend General Meetings.

The Board of Directors may decide that shareholders will be able to take part in and vote at General Meetings by videoconference or any other means of telecommunication that permits them to be identifi ed as required by law.

Notice of meetings

The Board of Directors calls the shareholders to General Meetings by means of a notice indicating the date, time and place of meeting. Failing this, General Meetings may also be convened by: ● the statutory auditors;

●  a representative appointed by order of the presiding judge of a French commercial court ruling in summary proceedings at the petition either of any interested party, or of one or more shareholders who together own at least 5% of the share capital;

●  the receivers.

Quorum – Majority

Ordinary and Extraordinary General Meetings are subject to the quorum and majority requirements prescribed by law and exercise the powers allocated to them by law.

Composition of General Meetings

All shareholders, regardless of the number of shares they own, may attend General Meetings, participate in the proceedings and vote. Owners of registered shares who have requested that such shares be duly recorded in the company register at least fi ve days before the meeting are admitted upon presentation of identifi cation. Shareholders may be represented by another shareholder, or by their spouse. Proxies prepared in accordance with the law must be received at the registered offi ce at least fi ve days before the date of the meeting.

All shareholders, regardless of the number of shares they own, may attend Extraordinary General Meetings, take part in the proceedings and vote. The right to vote in Ordinary General Meetings belongs to the benefi cial owner of the shares to which the right is attached; the right to vote in Extraordinary General Meetings belongs to the named legal owner. When a General Meeting has been called, the company shall, at its own expense, deliver or send a mail ballot and attachments thereto, to any shareholder who so requests by registered mail (return receipt requested).

The company must honor any request received by its registered offi ce no later than six days before the date of the meeting.

The mail ballot must include certain information as stipulated by Articles R.225‑76 et seq. of the Code de Commerce (French Commercial Code). It must clearly notify the shareholder that abstention from voting or failure to indicate voting instructions on any item shown on the form will be treated as a vote against the proposed resolution.

The form may be included in the same document as the proxy form, if applicable. In this event, the applicable provisions are those of Article R.225‑78 of the Code de Commerce (French Commercial Code). The documents stipulated by the aforementioned Article R.225‑76 must be attached to the mail ballot. A mail ballot sent to the company for a given General Meeting is also valid for any subsequent meetings convened to address the same agenda.

GENERAL INFORMATION

General information about the company

A mail ballot sent to the company for a given General Meeting is also valid for any subsequent meetings convened to address the same agenda. Mail ballots must be received by the company at least three days before the date of the meeting. If a proxy is returned with a mail ballot, the proxy is taken into consideration subject to the votes indicated in the mail ballot.

Meeting officers – Attendance sheet

The General Meeting is chaired by the Chairperson of the

Board of Directors or, in his or her absence, by the Vice‑Chairperson, if one has been named, or by a director appointed by the Board.

If the meeting has been convened by the statutory auditors, by a court‑appointed representative or by the receivers, one of their members chairs the meeting. The votes are counted by the two largest shareholders, either acting on their own behalf or as representatives, or, if they decline, by the next largest shareholders, and so on, until this responsibility is accepted.

These offi cers appoint the secretary of the meeting, who need not be a member of the meeting. An attendance sheet containing all information required by law and regulation is drawn up at shareholders’ meetings. The Meeting’s offi cers may attach to the attendance sheet all proxy or mail ballots showing the last name, usual fi rst name and address of each shareholder represented or casting a mail ballot, the number of shares that he or she owns, and the number of votes attached to those shares. In this case, the meeting’s offi cers shall indicate the number of proxies and mail ballots attached to the attendance sheet, together with the number of shares and voting rights associated with such proxies and mail ballots.

Proxies and mail ballots shall be submitted at the same time and under the same conditions as the attendance sheet. The accuracy of the attendance sheet, duly initialed by the shareholders in attendance and by shareholders’ representatives, is certifi ed by the meeting’s offi cers.

The responsibilities of the offi cers relate exclusively to the holding of the meeting and proper conduct thereof; their decisions are always provisional and remain subject to a vote by the meeting itself. Any interested party may initiate such a vote.

Agenda

The meeting’s agenda is established by the Board of Directors or by the person who convenes the General Meeting. However, under the conditions prescribed by law, one or more shareholders may request that certain draft resolutions not concerning the presentation of candidates for the Board of Directors be included on the agenda.

Minutes

The proceedings of General Meetings are recorded in minutes that are entered in a special numbered and initialed register and signed by the meeting’s offi cers. The minutes may be drawn up on sequentially numbered, initialed loose‑leaf sheets. Copies or extracts of the minutes to be provided for legal or other purposes are duly certifi ed either by the Chairperson of the Board of Directors or by a director serving as Chief Executive Offi cer or by the meeting’s secretary. Such copies or extracts are valid with respect to third parties provided that the signatures thereon are valid.

6.1.3.1         General presentation

Share capital

The share capital, which was initially FRF 2 million, was subsequently altered by capital increases and by conversion into euros. Following these changes, the share capital has stood at €100,000,000 since 22 November 2000. It is divided into 1,000,000 fully paid shares of €100 each.

6.1.3.2 Current breakdown of share capital ownership and voting rights

Shareholders

At 31 December 2023, all shares were held by Renault S.A.S. (excluding one share granted to a director). Changes in share capital ownership over the past three years

Following an amendment to the Articles of Association decided upon by the Extraordinary General Meeting of 30 September 2015, the number of shareholders was reduced to seven. Following the amendment to Article L.225‑1 of the Code de Commerce (French Commercial Code) by the Act of 10 May 2016, the number of shareholders was reduced to its minimum, i.e. to two shareholders.