1 The underlying principles of BPCE, the central institution of Groupe BPCE created by Law No. 2009-715 of June 18, 2009, were approved on June 24, 2009 by the BFBP Board of Directors and the CNCE Supervisory Board. The last step in the formation of Groupe BPCE was completed on July 31, 2009 with the votes at the General Shareholders’ Meetings of BFBP, CNCE and BPCE.
As of 2009, Natixis and Groupe BPCE initiated efforts to reduce risk-weighted assets and improve liquidity management. This led to the implementation at the beginning of 2011 of integrated liquidity management at BPCE. At the same time, CIB invested in high-performance systems, such as the debt platform and the Global Structured Credit & Solutions team, to step up the rotation and reduction of balance sheet assets. These measures met with the approval of external investors. Demand for structured products based on the bank’s own assets thus remained strong, even at the height of the European sovereign debt crisis.
1.4.1.3 Fixed Income, foreign exchange, credit, commodities, treasury and arbitrage markets (FIC&T)
Natixis also progressed in its areas of development: 1 the high yield market, coordinating the restructuring of Faurecia’s debt; 1 the emerging market, with the first mandate for International Petroleum Investment Company, voted “Emerging Market Corporate Deal of the Year” by Euroweek; 1 capital/liability management, with deals for Bilbao Bizkaia Kutxa in Spain and Caixa Geral de Depositos in Portugal; 1 USD-denominated issues, with the first mandate for Sanofi; 1 innovation, with the Tier 1 buyback deal for BPCE.
Commodities Finance continued to support the main producers and importers in each country, while Shipping Finance focused on offshore projects. Aviation Finance (China, Malaysia), Project Finance (Singapore, Australia), and Strategic and Acquisition Finance (Hong Kong) enhanced their positions as high-visibility arrangers.
In 2011, the EMEA region focused on structured fi nance, notably acquisition fi nancing, Equity-Linked Financing and project fi nancing. Capital markets operations were developed in emerging markets and proved resilient in an uncertain European context, particularly in debt business lines. In the second half, the EMEA platform implemented a portfolio optimisation programme aimed at refocusing on the bank’s priority clients, which was a necessary change given the fi nancial context.
Natixis ranks second in the French market for mortgage guarantees for individuals, with a 30% increase in guarantees issued in 2011, as well as for guarantees for property administrators and realtors under the Hoguet Law (nearly 5,000 guarantees issued in 2011. Moreover, Natixis shares the leading spot in the singlefamily home building sector (guaranteeing more than 20,000 houses in 2011) and also more than 40,000 guarantees issues for businesses (+40%) in order to help them comply with regulatory requirements (payment guarantees), tax requirements (excise taxes and customs duties) or contractual obligations.
After initially targeting a French client base, Natixis Cofi ciné has now expanded to other markets in the European Union (Germany, Belgium, Spain, Luxembourg, the UK) and Canada.
The Banque Populaire banks have made successful efforts to increase the number of products and services subscribed by their active customers and to acquire new individual customers.
The year was characterized by a global approach to bancassurance needs with the launch of two offers: Parents prudents for young families with children, and Rentrée sereine for active seniors and retirees, prompted in particular to anticipate fi nancial dependence.
A partnership agreement was signed with the Federation of Real Estate Developers (Fédération des promoteurs immobiliers) and the National Association of Planners-Developers (Syndicat national des aménageurs lotisseurs) to facilitate new relationships with real estate professionals.
In addition to the EBICS protocol, the Banque Populaire banks made Swiftnet and Planet Link available to their customers for their payments and data exchanges and offered the Click&Trust and Certeurope electronic signature solutions for secure transactions.
Caisse d’Epargne expanded the Bouquet Liberté à la carte package of services and launched new fl exibleproducts and services: Solution Etudiants offers students essential services for €1 per month; Solution Libre Retraite is a fl exible monthly savings contract for retirement planning starting at €50 for 6 to 16 years; and CA DO CARTE is a no-fee prepaid gift card ranging from €30 to €150, available in the branches.
Major players among real estate professionals in France’s regions, the Caisses d’Epargne fi nanced residential properties, assistedliving facilities, real estate services and commercial real estate activities for an amount of €2.3 billion in 2011. New loans to developers and real estate agents, underpinned by rental property investments, represented €1.7 billion. The Caisses d’Epargne fi nanced over 9,000 residential properties in 2011, i.e. a 9% market share. They are positioned as the reference bank among regional developers regardless of the project. Eight out of ten customers (1) trust them for their projects and believe that they know their specifi c needs.
The buyback value of Caisses d’Epargne CCIs will be calculated using the method of valuation used when they were transferred to Natixis and must take account of the proportion of the net assets to which the CCIs entitle the holder. If Natixis and BPCE or the Caisse d’Epargne concerned cannot reach an agreement, this buyback value will be determined by an expert.
In 2011, the impact of the Garantee on the Natixis fi nancial statements was +€17.5 million. Over this period, disposals represented a €2.286 billion nominal amount for assets covered by the fi nancial guarantee, and a €2.661 billion nominal amount for assets under the TRS, with a net impact on results before the Guarantee of €70 million.
This plant will generate 131,200 MWh of electricity per annum and will supply 55t/h of steam to two factories: Ajinomoto Foods Europe, which produces glutamate, and Syral Tereos, which produces starch. €59 million in funding was provided in part by Natixis Energéco (lead arranger), in association with a pool of banks including Caisse d’Epargne de Picardie.
(4) FIDEPPP, managed by Natixis Environnement & Infrastructures, owns 42.5% of the company ECOLYA, named in the partnership agreement. FIDEPPP is a shareholder of Ecolya alongside Caisse des Dépôts (42.5%) and GDF-Suez Énergies Services (15%). Caisse d’Epargne Alsace provides funding (over €30million) for Ecolya.
Social and environmental information for 2011 is based on the following standards: • reporting obligations set out in France’s NRE(1) law; • the social and environmental information set out in Article 225 of the Grenelle 2 law which governs reporting structure; • the GRI(2) framework.
Variable compensation of Natixis material risk takers whose activities have a signifi cant impact on Natixis’ risk profi le
Average gross annual compensation of staff under permanent employment contracts (excluding profi t sharing, employee incentives, and employer contributions to the company savings plan) (in thousands of euros) 79.2 69.4 66.3
Total employer contribution paid in respect of the company savings plan and the collective pension plan (PERCO) (in millions of euros) 22.7 - - * Consolidated data at February 20, 2012.
Furthermore, Natixis’ supplementary health insurance plan, which advocates intergenerational solidarity between current and retired employees, is administered by a joint Board of employer and employee representatives. The plan also has a solidarity fund to provide assistance to employees in critical situations.
2 SOCIAL AND ENVIRONMENTAL PERFORMANCE Labor information 2.3.5 OCCUPATIONAL HEALTH AND SAFETY
In 2011, the ‘‘Professional Behavior, Prevention of Harassment and Distress at Work’’ Commission continued to fulfi ll its role in analyzing special case situations.
The Stress Observatory is a questionnaire given to employees prior to their regular medical check-up, followed by a discussion of the results at the doctor’s offi ce. From a companywide standpoint, the observatory is used to maintain a statistical database for the measurement of stress levels, broken down by organizational and geographic criteria, the results of which are presented annually to the CHSCT.
In 2011, more than 230,000 training hours were logged by Natixis’ employees. New e-learning solutions, such as the ‘‘Behavior under stress’’ module, were also rolled out.
Natixis has continued and strengthened its corporate approach to managing diversity over the past few years.
Other examples include: Employee training and awareness-raising issues relating to environmental protection: regular communication on «green practices» aimed at helping employees reduce their impact on the environment. Employees responsible for managing operations and technical maintenance of the group’s premises receive more in-depth training in this fi eld.
Consumption in m3 per m2 of usable fl oor area 0.33 0.29 0.23
Natixis has a long-lasting commitment to its clients – corporates, fi nancial institutions and institutional investors – and its international businesses contribute to local development in the countries in which they are established. Some 8,759 employees work in our offi ces, branches and subsidiaries outside France. Virtually all of these employees are recruited locally. The group has a very limited number of expatriate employees. Only 149 employees from the “France” scope are currently working abroad as expatriates.
Chairman, Appointments and Compensation Committee First appointed: Board Meeting of 04.30.2009
❚ MEMBERS OF THE EXECUTIVE COMMITTEE (COMEX) AT MARCH 1, 2012
Strategy and Finance Control, in charge of implementing the Group’s cost-cutting plan (the “Challenge Plan”). In 1998, she became a member of Pechiney’s Executive Committee and headed up the Packaging division as from January 1, 1999. After Pechiney was absorbed by Alcan Group, on December 3, 2003 Ms. Bories was appointed Chairman and CEO
Mr. Jean Criton, aged 64, Chief Executive Offi cer of Banque Populaire Rives de Paris. After studying law and political science, Jean Criton, began his professional career in internal audit of the Banques Populaires Group.
Permanent representative for Banque Populaire Rives de Paris, member of the Board of: i-BP (Vice President), Chairman of: SAS Sociétariat Banque Populaire Rives de Paris
Chairman of the Board of Directors of: BRED Banque Populaire, Natixis Pramex
Member of the Supervisory Board of: Prépar-Vie Representative to BRED Banque Populaire to the Board of Directors of: BICEC, BCI (Banque Commerciale
Member of the Supervisory Board of: Natixis Chairman of the Board of Directors of: BRED Banque Populaire, BRED Gestion,
Permanent representative for CERA, member of the Supervisory Board of: la Société des Trois Vallées, GCE Business Services
Permanent representative for CERA, member of the Supervisory Board of: la Société des Trois Vallées,
Chairman of the Supervisory Board of: Rhône-Alpes PME Gestion (since 09.20.2010)
INTERNATIONAL Chairman of: Centaurus Capital Limited Member of the Board of: Centaurus Capital Holdings Limited, Centaurus Global Holding Limited, Centaurus Management Company Limited, Centaurus Capital International Limited
FRANCE Member of the Board of: Natixis (starting November 12, 2009)
Member of the Board of: Pays de la Loire Développement (permanent representative for CEBPL),
In May 2007, he was appointed Deputy Secretary General to the French President’s offi ce.
From March 2 to July 31, 2009, he chaired the Executive Board of la Caisse Nationale des Caisses d’Epargne and was
Member of the Management Board of: BPCE – Operations Member of the Board of: Natixis (since 05.27.2010)
Permanent representative for BPCE, member of the Supervisory Board of (chairman): GCE Business Services, GCE Technologies
Board’s work and the internal control procedures implemented by the Company.
The Senior Management Committee determined the Bank’s main strategic priorities, during specifi c work meetings where necessary. In particular, the Committee validated the change in the strategic priorities of Corporate and Investment Banking. This marks the stepping up of measures implemented within the New Deal strategic plan. It also examined new challenges facing the various business lines, in terms of fi nancing, markets and investment solutions management.
General Shareholders’ Meetings are convened by the Board of Directors or, failing this, under the conditions of Article L.225-103 of the French Commercial Code. Notices of meeting are prepared in accordance with the conditions laid out in the applicable regulations (Article 21 of the bylaws).
Shareholders’ meetings include all the shareholders whose shares have been fully paid up.
In respect of BPCE and its subsidiaries 2,400 2,400 1,200 1,200
Many external standards apply due to the diversity of business lines in which Natixis operates. The main standards are as follows: • as a credit institution, Natixis is governed by the provisions of the French Monetary and Financial Code (which encompasses the provisions of the French Banking Act of January 24, 1984 and the French Financial Activity Modernization Act of July 2, 1996) and more specifically, it is subject to the specific banking guidelines resulting from the CRBF rule relating to internal control; • as a provider of investment services, Natixis is subject to the provisions set out by the French Financial Markets Authority (AMF - Autorité des Marchés Financiers), and especially the code of good conduct concerning market intervention and customer relations; • Natixis complies with the terms of the best practices published by professional associations whenever the regulator recommends or enforces their application (for example, the code of ethics and compliance for Financial Analysts, made mandatory by the AMF); • Natixis applies anti-money laundering and terrorist financing regulations, under the control of the French Prudential Supervisory Authority (Autorité de contrôle prudentiel); • regarding its foreign branches and subsidiaries, Natixis applies the Group’s organization standards and also the regulations defined by the regulators in the markets in which Natixis has offices (in particular, the Financial Services Authority in the United Kingdom, the Bundesanstalt für Finanzdienstleistungsaufsicht/BAFIN in Germany, the Banca Centrale in Italy, the Financial Supervisory Authority in Japan, the Federal Reserve, the National Association of Securities Dealers and the Securities and Exchange Commission in the United States, the Hong Kong Monetary Authority in Hong Kong, the Commission de Surveillance du Secteur Financier in Luxembourg, the Irish Financial Services Regulatory Authority in Ireland), in cases where the operations exercised locally are subject to these regulations;
First-level controls are described in formal written procedures and their results are documented.
The Compliance Function Charter published in June 2010 details the network’s operating procedures.
The mission of the Financial Security Department (SECFIN), which reports to Compliance management, is to organize the mechanism to combat money laundering, terrorist fi nancing and fraud at Natixis and its subsidiaries. In addition to this standing supervisory mission, SECFIN may directly spearhead special efforts on behalf of some business lines.
The format of second-level control plans was reviewed in late 2011, with a direct link between planned controls and the assessment of compliance risks. This facilitated the setting of control priorities notably by making provision for the criticality of risk.
Natixis’ annual and multi-year audit plans are approved by its Chief Executive Offi cer and by BPCE’s General Inspection. The Annual Audit Plan is examined by the Audit Committee. In 2011, Group Audit conducted audit assignments on all risk classes to which Natixis’ activities are exposed. It devoted a fairly signifi cant share of its resources to assignments of a regulatory nature, as part of the Bank’s Basel 2 and Solvency 2 certifi cation process undertaken by Natixis, as well as assignments conducted in Natixis subsidiaries pursuant to audit agreements entered into with them in 2008.
Natixis uses VaR to calculate capital requirements for market risks over acceptable periods.
The mechanism is managed by Natixis’ Operational Risk Committee, a specialized body overseeing operational risks policy. It is the operational extension of the executive body and, as such, possesses its full decision-making power for issues relating to its fi eld of application. This Committee meets quarterly and is chaired by the Chief Executive Offi cer or his substitute the Chief Finance and Risk Offi cer, with the Head of the Operational Risk Department acting as secretary.
Firstly, as regards the scope of the Natixis entity, Accounting Controls are based on the following fundamental principles: • separation of the accounting entry and control functions; • standardization of control processes with the different business lines: methods, tools, reporting and schedules; • management centralized by the Finance Department and taken up by an independent Accounting Review team; • ensuring the size of the team is suited to the objectives defined.
The 2012 fi scal year will be mainly dedicated to: • a tighter timetable for publishing the financial statements; • continuing the roll-out of the accounting system across the US; • continuing the migration of funding operations to the new tool that Natixis has acquired.
3CORPORATE GOVERNANCE Statutory auditors’ report on the report prepared by the Chairman of the Board of Directors 3.7 Statutory a uditors’ report on the report prepared by the Chairman of the Board of Directors
There are fi ve main categories of risk (credit risk, market, liquidity and fi nancing risk, operational risk and insurance risk) inherent to Natixis’ operations, which are summarized below and described more fully in the “Risk Management” section, repeated in sections [4.2.5 to 4.3, and 4.6] and in the Chairman’s Report, repeated in section [3.6.4] “Chairman’s Report on Internal Control” (the “Chairman’s Report”), (concerning, notably, the scale and the impact that these risks could have on the results and assets of Natixis, as well as the organization and control of these risks). In addition, the growing number of new regulations established, in Natixis’ countries of operation, is a risk factor associated wth Natixis’ business.
OPERATIONAL RISKS (FOR FURTHER DETAILS PLEASE REFER TO SECTIONS [4.2.5.5] AND [3.6.4])
Future events may differ from those reflected in the assumptions used by management in the preparation of Natixis’ financial statements, which may cause unexpected losses in the future
Despite the risk management policies, procedures and methods in place, Natixis may be exposed to unidentified or unanticipated risks, likely to give rise to significant losses
– the Advanced IRB approach, under which banks use all of their internal estimates of the components of risk, i.e. probability of default, loss given default, exposure at default, maturity.
and deducted securitizations (+€0.1 billion), partly offset by the higher prudential fi lter on the valuation of own credit rise (€0.2 billion). The other prudential restatements and deductions did not vary signifi cantly.
Risk-weighted assets amounted to €145.6 billion after the fi nancial guarantee granted by BPCE (€8.4 billion , down by €0.9 billion compared to December 31, 2010), and fell by €2.3 billion over the year.
Natixis’ credit risk measurement and management procedures are based on: • a standardized risk-taking process, structured via a system of limit authorizations and decision-making Committees; • independent analyses carried out by the Risk Department as part of reviewing loan approvals; • rating tools and methodologies providing standardized and tailored assessments of counterparty risk, thereby making it possible to evaluate the probability of default within one year and loss given default;
Natixis’ internal VaR model was approved by the French Prudential Supervisory Authority (ACP) in January 2009. Natixis therefore uses VaR to calculate capital requirements in respect of market risks on the portfolios within its remit.
Specific stress tests are also calculated daily in the management tools for all portfolios and are governed by limits. They are defi ned using the same severity standard and are used to identify the main loss areas by portfolio.
The monitoring system is based on the following principles: • activities that are “authorized” to hold operational foreign exchange positions as part of their risk mandate are subject to a limit that is validated and monitored by the Risk Department; these activities mainly concern certain trading operations (including the foreign exchange desks); • activities that are “not authorized” to hold foreign exchange positions are not authorized to manage them; residual positions calculated by the Accounting Department are systematically hedged.
On August 5, 2011, the Commune of Sanary-sur-Mer in France fi led a complaint against Natixis and other defendants before the Administrative Tribunal of Toulon (Tribunal Administratif de Toulon) seeking the joint and several payment of €83 million particularly in light of the investment losses to be incurred by the Commune and the loss in future contributions to its budget following the abandonment of the planned construction of a local casino/hotel complex. Natixis intends to dispute the validity of the claims fi led against it. Furthermore, given that, within the framework of this construction project, Natixis had already committed to issuing a bank guarantee of completion in the amount of €20 million, it intends to strictly limit any liability with regard to both this project and this amount; it being specifi ed that, here again, Natixis believes the claim fi led against its unfounded.
The sensitivity of equity to variations in interest rates is mitigated by the classifi cation of approximately €4.2 billion in interest-bearing securities in the category of held-to-maturity securities.
In 2011, Natixis’ CIB business took advantage of the restructuring that occurred in 2010, in particular the expansion of the debt platform activities and the strengthening of the cross-business Coverage Department, resulting in more effi cient customer relationship management combining sector and geographic approaches.
In the Proprietary Private Equity business, following the sale in 2010 of a portion of its operations to Axa Private Equity, divestiture continued in 2011 with the sale of Brazil-based businesses during the fi rst half of 2011, the disposal of the LBO Europa fund in late September 2011 and the implementation of disposal agreements with Natixis’ partners.
(1) The impact on net revenues of the revaluation of Natixis own senior debt was +€239 million in 2011 compared to +€46 million in 2010. (2) Core businesses and fi nancial investments
Overall, consolidated expenses, including GAPC and restructuring costs, stood at €4,854 million, up 1.5% relative to 2010 (+1.8% at constant exchange rates).
Gross operating income amounted to €2,016 million in 2011, down 3.7% at constant exchange rates.
The Natixis Core Tier 1 ratio improved by 0.4% year-on-year, increasing from 7.9% to 8.3% at end-2011, driven by the decrease in RWA by €2.3 billion (optimization initiatives and business growth more than offsetting the impact of CRD3) and an increase in Core Tier 1 capital of €0.4 billion (impact on income of €0.9 billion offset in part by a negative change in OCI (other comprehensive income) of €0.7 billion, mainly in CCIs).
At December 31, 2011, risk-weighted assets (RWA) measured at the end of the year stood at €71.8 billion versus €72.7 billion at the end of 2010. Excluding the Basel 2.5 - CRD3 regulatory impact, which came to €4.6 billion at the end of 2011, RWA were down 8% relative to 2010. This change was due to optimization efforts, a relative decline in business due to the adverse economic climate and the impact of the asset disposal program.
5FINANCIAL DATA Management Report for the year ended December 31, 2011
In respect of other portfolios, the business continued its run-off of equity derivatives, setting up hedges on complex interest rate derivatives and liquidating structured funds.
5 FINANCIAL DATA Management Report for the year ended December 31, 2011 individual customers continued to grow via two main vehicles: term deposits (up 15.5%) and, reflecting the success of the network’s strategy to win new customers, Livret A deposits (up 42.9%). Professional and business customers are increasingly interested in term deposits (up 21.8%) and demand deposits (up 11.1%).
In these diffi cult market conditions, Natixis managed to secure €14.9 billion for its medium- and long-term refi nancing needs.
(in millions of euros or euro equivalents) EMTN BMTN USMTN Bond issues 5.1.6 POST CLOSING EVENTS
As required by European regulation 1606/2002 of July 19, 2002, Natixis has prepared its consolidated fi nancial statements for the year ended December 31, 2011, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union at that date (1).These standards include IAS 1 to 41, IFRS 1 to 8 and the related IFRIC interpretations adopted by the European Union as at December 31, 2011.
The new standards on consolidation, IFRS 10 “Consolidated Financial Statements,” IFRS 11 “Joint arrangements” and IFRS 12 “Disclosure of Interests in Other Entities” were published by the IASB in 2011, but not yet applicable as at January 1, 2011, and not yet adopted by the European Commission. They are currently being studied, though it is not possible to determine at this stage whether these standards will have an impact on Natixis’ consolidated fi nancial statements.
The consolidation methods applied by Natixis are described below: FULL CONSOLIDATION
Coface transferred non-core entities of business lines it held to direct subsidiaries of Natixis S.A. This restructuring, which was within Group scope, has no impact on fi nancial statements but has resulted in the creation of a new CGU comprising nonstrategic activities with a reassignment of goodwill to two CGUs: “Core” Coface (strategic activities) and “non-core” Coface (nonstrategic activities) depending on the entity for which goodwill was originally reported.
• Total transfer of 1818 Partenaires’ assets and liabilities to Sélection 1818 on May 31, 2011; • Total transfer of Natixis Private Banking’s assets and liabilities to Sélection 1818 on September 30, 2011.
• Deconsolidation of entities now under consolidation thresholds: – Aurora ASG Global Opportunities Fund, – ASG Laser Fund, – Loomis Sayles Global Opportunities Fund, – Loomis Sayles Multi-Asset Real Return Cayman Fund, – Loomis Sayles Multi-Asset Real Return Fund, – Absolute Asia Dynamic Equities Fund, – Gateway Hedged US Equities Fund, – Natixis Oakmark Global Fund, – Natixis Oakmark International Fund; • Following their liquidation, the following entities were also deconsolidated: – Loomis Sayles Absolute Strategies Fund (US), – Loomis Sayles Absolute Strategies Fund (Lux), – Natixis Investment Services Japan Ltd, – AlphaSimplex Managed Futures Fund, – Hansberger Focused International Equity Fund.
• Deconsolidation of Edval Investment Ltd and Worledge A Investments Ltd, which had become non-material.
• Natixis Immo Développement invests in real estate assets in partnership with other investors using two types of structures: – SEP-type structures. These entities are not consolidated inasmuch as each partner recognizes its share of the SEP’s assets, liabilities and results,
Loans outstanding with a theoretical syndication date expired as at December 31, 2011, were analyzed on a case-by-case basis in order to take into account the market discounts observed at the end of the reporting period. Changes in the discounts recognized for the period are shown in “Net gains or losses on available-forsale fi nancial assets” and are discussed in Note 7.4.
Non-monetary items denominated in foreign currencies and measured at fair value are translated at the exchange rate when fair value is estimated. Gains or losses on a non-monetary item (e.g., variable-income securities) denominated in foreign currency are recognized as income when the asset is classifi ed as “Financial assets at fair value through profi t and loss” and in equity when the asset is classifi ed as “available-for-sale fi nancial assets”, unless the fi nancial asset is designated as a hedged item in a fair value hedge, in which case foreign exchange gains and losses are recorded as income.
The section below describes the underlying principles used to value assets resulting from securitization transactions for which no market prices could be identifi ed and which were therefore measured using valuation models: US non-residential ABS CDOs: A scoring model was used defi ning the level of risk associated with each structure based on a series of criteria.
Provisions booked on the liabilities side of Natixis’ fi nancial statements as at December 31, 2011, are discussed in Note 6.15.2 “Contingency reserves” and the allocations are specifi ed in Note 7.6 “Provision for credit losses”.
• minus any past service cost not yet recognized in income; • plus or minus any unrecognized actuarial gains or losses arising from: – experience adjustments linked to demographic variables, – changes in actuarial assumptions, – differences between the actual return and expected return on plan assets; • minus the market value of plan assets.
The tax expense for the year comprises: • tax payable by French companies at the standard rate of 36.10%, and by foreign companies and branches at the local rate; The French rate of 36.10% includes the additional contribution of 5% stipulated in the amended finance law passed in December 2011, affecting the 2011 and 2012 fiscal years. In 2010, the applied tax rate was 34.43%; • deferred taxes arising from temporary differences between the carrying amount of assets and liabilities and their tax basis, which are calculated using the balance sheet liability method.
The French Finance Act for 2011 instigated an exceptional 10% tax on the capitalization reserve of insurance companies existing at January 1, 2010. This tax generated a tax expense of €18.3 million, recorded in the consolidated income statement at December 31, 2010.
There are no IFRS standards prescribing the accounting treatment of fi nancial guarantees received. In the absence of specifi c guidance, the accounting treatment applied must be determined by analogy with the accounting treatment prescribed by other standards in similar situations. Accordingly, guarantees received meeting the defi nition of a fi nancial guarantee for an issuer are accounted for in accordance with: • IAS 39, for guarantees received in respect of financial instruments; • IAS 37, for guarantees received in respect of liabilities falling within the scope of IAS 37.
Average number of shares used to calculate earnings/(loss) per share 2,993,705,086 2,903,899,660
6.1.1.1 Variable-income securities at fair value through profi t and loss
Amounts less than 90 days past due represent 59% of the total.
The amounts shown in the above tables include write-downs of assets held by the life insurance companies. They are shown without the impact of changes in insurance company technical reserves and do not include losses covered by provisions.
In a persistently uncertain market environment, Natixis set up a guarantee mechanism in the third quarter of 2009 with BPCE. This mechanism is designed to offer protection against future losses and earnings volatility resulting from GAPC portfolios. The mechanism took effect on July 1, 2009.
The reclassifi cation of consolidated accounting volumes as gross exposure and exposure at default with respect to prudential credit risk (explained in the Chapter [4] “Risk Management” S ection [ 4.2.5.3], «Credit Risk»), involves the following key operations: • exclusion of equity-accounted insurance companies in the prudential scope; • exclusion of exposure classified in the trading scope; • inclusion of netting agreements on market transactions; • restatement of factoring positions to take into account exposure to the risk of default and risk of dilution; • application of a credit-equivalent conversion factor on financing and guarantee commitments.
The disclosures on the management of market risk, overall interest rate risk, liquidity risk and structural foreign exchange risk required under IFRS 7 are presented in sections [4.2] and [4.3] of Chapter 4 , «Risk Management».
Natixis sets up securitization transactions on behalf of its customers and investors using specifi c conduits. Natixis extends liquidity lines to two ABCP conduits (Versailles and Magenta). At December 31, 2011, these lined totaled €4.8 billion.
Natixis simultaneously reimbursed BPCE with deeply subordinated notes for an amount of €2.3 billion.
Revaluation adjustments on portfolios hedged against interest rate risk 129 793
Revaluation adjustments on portfolios hedged against interest rate risk 49 248
SAHARA FINANCE EUR LTD (1) Securitization vehicle FC 100 100 100 100 Ireland
WTC OWNER LLC (1) (2) Real estate fi nance 0 0 100 100 United States
FEDERAL STREET MANAGEMENT, INC. Asset Management FC 100 100 100 100 United States
NATIXIS GLOBAL ASSOCIATES AUSTRALIA HOLDINGS, LLC Holding FC 100 100 100 100 Australia
NATIXIS INVESTMENT SERVICES JAPAN, LTD (3) Retail 0 0 100 100 Japan
LOOMIS SAYLES INVESTMENTS Ltd (UK) (23) Asset Management FC 100 100 0 0
REICH & TANG SERVICES, INC. Asset Management FC 100 100 100 100 United States
WESTPEAK ACTIVE BETA FUND (1) Asset Management FC 100 100 100 100 United States
NATIXIS FINANCEMENT** Consumer fi nance FC 67 67 67 67 France
COFACE CHILE S.A (28) Insurance FC 100 100 0 0 Chile
COFACE SERVICIOS ESPANA S.L. Receivables management and data FC 100 100 100 100 Spain
COFACERATING HOLDING Receivables management and data FC 100 100 100 100 Germany
KOMPASS LUXEMBOURG - SUCC (KOMPASS BELGIQUE) Data and advertising FC 100 100 100 100 Luxembourg
COFACE JAPAN - SUCC (COFACE S.A.) Insurance FC 100 100 100 100 Japan
GRAYDON HOLDING Receivables management and data EM 28 28 28 28 Netherlands
(6) Deconsolidation following asset disposal in Brazil. (7) Dilution of 34% following the contribution of its shares to Sélection 1818 in the fi rst quarter of 2011. (8) Acquisition of 66% of shares by Banque Privée 1818. (9) Total transfer of Partnenaires’ assets to Sélection 1818 on May 31, 2011. (10) Acquisition of GCE Car Lease by Natixis Lease on April 1, 2011. (11) Creation on June 1, 2011 following the transfer of the Tokyo branch activity. (12) Total transfer of assets to Natixis Asset Management. (13) Acquisition of 20% of minority shareholders.
14 Due to central banks 488 208 23 o/w institutional operations: 18 Provisions for risks and other expenses 3,049 3,596 3,208
This line item comprises debt attributable to securities held for sale issued by Natixis in France or in foreign countries, with the exception of subordinated instruments recognized as subordinated debt. This line item notably includes medium-term notes, interbank market instruments, negotiable debt securities and bonds and other fi xed-income securities.
These transactions are carried out for four purposes: • micro-hedging (hedging of specific transactions or positions); • macro-hedging (overall balance sheet management); • speculative position-taking; • specialized management of a trading portfolio.
Plans settled in shares are recognized in accordance with CRC Rule No. 2008-15, which provides for the recognition of a liability where there is the likelihood or the certainty that the obligation to grant shares generates an outfl ow in settlement without an offsetting provision: • if the granting is made by means of the issue of new shares, and outflow in settlement is not deemed to be likely and, as a result, no expense is recognized; • if the granting is made by redemption of shares or the granting of existing shares, the possibility of an outflow in settlement is deemed likely and without an offsetting provision. A provision is then set aside taking account of the entry cost of the shares or the share price on the balance sheet date if the shares have not yet been purchased and the probable number of shares granted to employees. The expense is recognized in stages over the vesting period.
NET NON-PERFORMING AND IRRECOVERABLE LOANS 1,794 85 1,852 115 2,439 84
Book value of investments Loans and receivables extended but not yet repaid
Net gains (losses) on forward fi nancial instruments 2,758 (2,329) 978
Natixis hereby reports, in accordance with the above-mentioned article, that at December 31, 2011, its subsidiary Coface owned 100% of “Coface Servicios Costa Rica S.A.”, a services company in Costa Rica with 2011 revenues of €79,000.
The Company recognizes impairment losses and provisions to cover the credit and counterparty risks inherent to its activities (Notes 1.1, 3, 4, 6, 18, and 32 to the company fi nancial statements). We reviewed the control procedures relating to credit and counterparty risk monitoring, the assessment of risks of non-recoverability, and the calculation of the corresponding individual and collective impairment and provisions.
From 1996 to 2004, IXIS CIB (previously called CDC Marchés, then CDC IXIS Capital Markets) entered into a number of letters of joint and several guarantees and commitments with its various successive shareholders, including Caisse des Dépôts (CDC), CDC Finance - CDC IXIS (CNCE acquired the latter’s rights following the merger-absorption of December 31, 2004) and CNCE.
General Shareholders’ Meeting convened to approve the fi nancial statements of the past fi scal year, held the year during which his term expires.
The Chairman’s duties end at the latest at the end of the Ordinary General Shareholders’ Meeting convened to approve the fi nancial statements of the past fi scal year during which the Chairman reached the age of sixty-fi ve.
11.2 In the event of an emergency as defined below (“Emergency”), the following accelerated procedure may be applied.
The shareholders’ decisions are made in General Shareholders’ Meetings, which are qualifi ed as ordinary or extraordinary.
6 LEGAL INFORMATION Natixis Bylaws and may vote using all means of telecommunications and remote transmission, including the Internet, in accordance with the applicable regulations at the time of their use. This decision is disclosed in the notice of meeting published in the BALO (Bulletin des Annonces Légales [Bulletin of Mandatory Legal Notices]). Those shareholders who use the electronic voting form offered on the website created by the meeting organizer, by the required deadline, are considered present or represented shareholders. The electronic form can be fi lled out and signed directly on that site by any process provided for by the Board of Directors that meets the conditions defi ned in the fi rst sentence of the second paragraph of Article 1316-4 of the French Civil Code [i.e. the use of a reliable identifi cation procedure guaranteeing that the signature is linked to the form], which may consist of a user name and password.
Report of the Board of Directors on the use of capital increase authorizations in 2011
In all in 2011, Natixis allocated 6,893,424 shares that will automatically increase the capital by a maximum amount of €11,029,478 (number of shares multiplied by nominal value of shares) at the end of the vesting period for the issue of allocated shares.
In order to increase the share capital by issuing shares or securities giving access to the
(a) Amount deducted from the ceiling decided in resolution no. 13 of the General Shareholders’ Meeting of April 30, 2009. (b) Amount deducted from the ceiling decided in resolution no. 13 of the General Shareholders’ Meeting of May 26, 2011.
6LEGAL INFORMATION Purpose and draft resolutions submitted to the General Shareholders’ Meeting of May 29, 2012
This authorization is granted for a period of eighteen (18) months from this meeting. It voids, from this day, as applicable, any unused part of any prior delegated power given to the Board of Directors for the purpose of trading in the Company’s shares, particularly that given by the shareholders in the Combined General Shareholders’ Meeting of May 26, 2011 in resolution Ten.
Any person wishing to obtain additional information about Natixis can request documents free of charge and without obligation: • by mail: Natixis Direction fi nancière Département Relations investisseurs Immeuble Arc-de-Seine 30, avenue Pierre Mendès France 75013 Paris
Documents published in the legal announcement publication “Les Petites Affi ches” and “le Journal Spécial des Sociétés”
Heading Registration document page number 14. Administrative, management, and supervisory bodies and Executive Management 14.2. Administrative, management, and supervisory bodies and Executive Management confl icts of interest 109 15. Compensation and benefi ts 15.1. Amount of compensation and benefi ts in kind 100 to 105 15.2. Total amounts paid accrued by the issuer to provide pension, retirement or similar benefi ts 309 to 313 16. Administrative and management bodies practices 16.1. Date of expiration of current terms of offi ce 67 to 89 16.2. Service contracts with members of the administrative bodies 109 16.3. Information about the issuer’s Audit Committee and Compensation Committee 94 to 97 16.4. Statement as whether or not the issuer complies with the corporate governance 17. Employees 17.1. Number of employees 52 to 53 17.2. Directors’ shareholdings and stock options 107; 404 to 405 17.3. Arrangements for involving employees in the issuer’s capital 240 18. Major shareholders 18.1. Shareholders owning more than 5% of the share capital or voting rights 407 18.2. Different voting rights of the aforementioned shareholders 407 18.3. Control of the issuer 408 18.4. Arrangements, known to the issuer, the operation of which may at a subsequent date result in a change in its control 409 19. Related-party transactions n/a 20. Financial information concerning the issuer’s assets and liabilities, fi nancial position and profi ts and losses 20.1. Historical fi nancial information 202 to 333; 336 to 384 20.2. Pro forma fi nancial information 8 to 9; 284 to 285 20.4. Auditing of historical annual fi nancial information 334 to 335; 381 to 386 20.5. Age of latest fi nancial information 334 to 335; 381 to 386 20.6. Interim fi nancial and other information n/a 20.8. Legal and arbitration procedures 170 to 173 20.9. Signifi cant changes in the issuer’s fi nancial or commercial situation 305 21. Additional information 21.2. Memorandum and by-laws 396 to 401; 409 23. Third party information and statement by experts and declarations of any interest n/a 24. Documents available to the public 421 25. Information on holdings 219 to 221
● Summary table of powers currently delegated by the Annual General Shareholders’
7 ADDITIONAL INFORMATION Cross-reference table of Social and Environmental information 7.6 Cross-reference table of Social and Environmental information
● Total workforce and employee distribution by gender and geographic region ● New hires and layoffs ● Compensation
Relationships with stakeholders ● Conditions of dialogue with interested parties ● Acts of support, partnership or sponsorship Art. 148–2
Lutte contre le blanchiment de capitaux et le fi nancement du terrorisme/Prevention of money laundering and terrorism fi nancing