● The items in the Annuel Financial Report are identified in the summary using the pictogram The Statement of Non-Financial Performance is identified in the summary using the pictogram ■
OVERVIEW OF THE FISCAL YEAR4 225 Significant events for 20204.1 226
This situation, which was urgently experienced within Natixis at the beginning of the year, gave rise to in- depth discussions within our company to define what we must permanently change in our working methods. Beyond that, we remain committed to meeting the major challenges of the environmental transition and technological transformation.
A majority shareholder that is stable and committed to the long term: BPCE.
BUSINESS MODEL Natixis: a diversified financial player aiming for a sustainable impact 9NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
V Creation of a European leader in rate and insurance management on behalf of large institutional clients, with the merger between Ostrum Asset Management and La Banque Postale Asset Management
V Reinforcement of the innovative “origination-distribution” model by extending it to a broader base of investors
�Launch of the Natixis Access Series platform� to�help�clients�better� understand�market� issues�(webinars,� podcasts�hosted�by� economists,�financial� market�experts�and� portfolio�managers).
In France, the Tous mobilés contre la COVID-19 platform enabled employees to donate their time or make financial donations to three charities: Samu Social de Paris, Action Against Hunger and Tous Unis contre le virus. To support this outpouring of solidarity, Natixis has implemented a matching scheme for all donations made around the world.
2020 also marked the development of the retirement savings offer for companies with more than 6,000 collective company retirement savings plans subscribed.
Firstly, to support the Corporate Coverage teams, ASF arranged numerous financing arrangements (credit facilities, GBLs in France) to strengthen the balance sheet on behalf of Natixis’ clients: for the PSA group automotive manufacturer, a Revolving Credit Facility (RCF) in the amount of €3 billion where Natixis served as Underwriter, MLA Bookrunner and Documentation Agent; For the Vivescia agricultural cooperative, €1 billion in funding and GBLs. For Air France airlines, an GBL of €4 billion (MLA bookrunner, facility agent and documentation agent). In addition, and broadly speaking, numerous funding transactions were structured in various formats: syndicated loans, private placements or bond issues. Natixis, as joint global coordinator and dealer manager, thereby arranged the US$333 million Eurobond issue of and the buyback of existing bonds by the Ukrainian steel and mining group Metinvest.
SET is a reference in equity engineering and the use of tailor-made derivatives, an activity that requires first-class customer focus and responsiveness, innovation, expertise and excellence in structuring and execution as well as total confidentiality, backed by strict intervention rules and a dedicated team that manages all aspects of the transaction.
This advisory business activity consists of analyzing financial structures and credit rating issues for Natixis’ corporate and financial institution clients. Its goal is to define the most appropriate equity and debt-based financing solutions for its clients. Given the internationalization and increasing disintermediation of Capital Markets, clients rely more on ratings, giving this business line increasing strategic importance. It applies its rating advisory expertise to analyze and optimize the impact of major events on clients’ ratings, and can even help clients obtain their first rating.
May 28, 2021 General Shareholders’ Meeting (to approve the 2020 financial statements)
Positions and functions held 2.1.4 by the corporate officers during the fiscal year 41
Given the Group’s structure and the presence of a majority shareholder, BPCE, the proportion of independent directors is equal to one-third, in strict compliance with Afep-Medef Code's recommendations set out in the internal regulations of the Board of Directors of Natixis.
Nicole Etchegoïnberry F 64 French 1,112 20/12/2018 2024 AGM 2 100% 0 ● ● ●
Born 25/03/1976 Nationality: French Natixis shares held: Address: 30 avenue Pierre Mendès France 75013 Paris
Permanent representative of Natixis, V Director of Natixis Coficiné (from 07/02/2018 to 08/11/2018);
First appointed: co-opted by the Board of Directors on 10/02/2016 and ratified at the AGM of 24/05/2016 Term expires: 2024 AGM (a)
Philippe Hourdain (since June 23, 2020) Chairman of the Board of Directors of Banque Populaire du Nord
Chairwoman of the Board of Directors of Banque Populaire Grand V Ouest (since 21/05/2019); Director of BPCE Factor (from 02/12/2016 to 03/12/2020).V
Vice-Chairman of Banque Populaire V Grand Ouest (since 07/12/2017). (until 21/05/2019)O
First appointed: co-opted by the Board of Directors on 20/12/2018 and ratified at the AGM of 28/05/2019 Term expires: 2023 AGM (a)
2023 AGM called to approve the financial statements for the year ended 31/12/2022. The GM of May 28, 2021, will be asked to reappoint Christophe Pinault (a) as a director, following his resignation to come at the end of the Board meeting preceding the GM (in order to avoid a group renewal of directors in 2023).
A graduate of Sciences Po Bordeaux and holding a post-graduate degree (DES) in public law, Nicolas de Tavernost began his career in 1975 with the cabinet of Norbert Ségard, Secretary of State for Foreign Trade, and then continued with French Postal Services and Telecommunications. In 1986, he took over as Head of Audiovisual Operations at Lyonnaise des Eaux, during which time he oversaw plans to create M6.
Chairman of the Groupe M6 Management Board (1) V (since May 2000); Chairman and Member of the Board of Société Nouvelle V de Distribution (since June 2019); Member of the Board of Groupe M6 Fondation d’Entreprise V (since 2018); Member of the Supervisory Board of Salto Gestion V (since 16/09/2019); Permanent Representative of M6 Publicité, Member of the Board V of Directors of Home Shopping Service S.A. (since 2013), M6 Diffusion S.A. (since 2013), M6 Editions S.A., M6 Événements S.A. (since 15/03/2012); Permanent Representative of Métropole Télévision, Member V of the Board of Extension TV SAS, C. Productions S.A. (since 21/10/2012), Société d’Exploitation Radio Chic – SERC S.A. (since 02/10/2017), Société de Développement de Radio diffusion – SODERA S.A. (since 02/10/2017), Médiamétrie (since 22/11/2017); Permanent representative of Métropole Télévision, Chairwoman V of: M6 Publicité S.A. (since 2001), Immobilière M6 SAS (since 2001), M6 Bordeaux SAS (from 2001 to 31/12/2020), M6 Interactions SAS (since 2001), M6 Foot SAS (since 2001), M6 Distribution Digitale SAS (since 2019); Permanent Representative of C. Productions S.A., Member V of the Board of M6 Films S.A. (since 01/01/2015); Permanent Representative of Métropole Télévision, Managing V Partner of SCI 107 avenue Charles de Gaulle (since 2001); Representative of RTL group, Member of the Supervisory Board V and Vice-Chairman of the Compensation Committee of Atresmedia 1 (since 29/10/2003).
A graduate of HEC Paris, Henri Proglio began his career in 1972 at Générale des Eaux group (now Veolia Environnement), where he held various positions in Senior Management. In 1990 he was appointed Chairman and CEO of CGEA, a subsidiary specializing in waste management and transport. In 2000 he became Chairman of Vivendi Environnement (Veolia Environnement), and in 2003 Chairman and Chief Executive Officer.
First appointed: co-opted by the Board Meeting of 01/08/2017 and ratified at the AGM of 23/05/2018 Date term of office expires: after the GM of 20/05/2020 Member – Compensation Committee
L. Mignon � � � � � � � � � � � � � � �
A. Condaminas � � � � � � � � � � � �
C. Leblanc � � � � � � � � � �
C. Pariset � � � � � � � � � � � �
N. de Tavernost � � � � � � � � � � � � � � �
Article 5: Confidentiality Members of the Board of Directors and of the Committees, as well as any individual attending the meetings of the Board and the Committees, are bound by a general confidentiality obligation on their deliberations.
their personal or professional relationships with holders of qualifyingV equity investments within Natixis; their personal or professional relationships with Natixis employees;V
Employment contract and/or services agreement It is specified that, pursuant to Article R.22-10-14(II)(5) of the French Commercial Code, no director is bound by an employment contract and/or a services agreement with the Company.
In particular, it sets out the procedure to be followed, from the notification of the Board of Directors to approval by the General Shareholders’ Meeting, in light of the Statutory Auditors’ special report.
Regulated agreements authorized and declassified in fiscal year 2020 During fiscal year 2020, the Board of Directors authorized two new regulated agreements: at its meeting of December 17, 2020, pursuant to Article L. 225-38V of the French Commercial Code, the outsourcing service agreement between Natixis (acting on its own behalf and that of the subsidiaries of Natixis) and BPCE IT/ALBIANT IT on the other hand. The purpose of this agreement is to combine the Infrastructure, Production and Security activities of Natixis (“IPS”) and BPCE IT in order to optimize and improve the quality of IT production services provided to Natixis. This agreement thus organizes the contractual aspects of the transfer of “IPS” activity (transfer of personnel, assumption of social security liabilities) and defines the terms and conditions of the supply by BPCE IT/ALBIANT IT to Natixis of outsourcing services necessary to the operation of the activity transferred. The services provided by BPCE IT and Albiant IT are provided under standard financial terms and are part of BPCE IT (GIE)’s usual invoicing system for its members (including Natixis). As Natixis, BPCE IT and ALBIAN IT have a common manager, Nicole Etchegoïnberry, this agreement constitutes a regulated agreement within the meaning of Article L.225-38 of the French Commercial Code;
The assessment for the fiscal year 2020 focused on the following themes: the makeup and size of the Board of Directors;V
Management and oversight of corporate governance 81NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Under the authority of the Natixis Board of Directors, the Risk Committee’s primary duties are in particular: advising the Board of Directors on the bank’s overall strategy andV risk appetite, both current and future; assisting the Board of Directors when it checks theV implementation of that strategy by the executive managers and by the Head of Risk Management; issuing an opinion on the procedures established by Natixis that areV used to ensure compliance with regulations as well as risk monitoring and control; to that end, it receives the reports of Natixis’ Risk Committees and those of its subsidiaries, as well as the reports on risks, specifically operational, market or counterparty risks, prepared at the behest of the Company’s Chief Executive Officer; monitoring the effectiveness of the internal control and riskV management systems; assisting the Board of Directors in determining guidelines andV verifying that the executive managers have properly implemented the supervisory mechanisms, especially in terms of the separation of duties and the prevention of conflicts of interest, that ensure the Company is effectively and prudently managed; reviewing, pursuant to its remit, whether the prices of products andV services proposed to clients are compatible with Natixis’ risk strategy. If these prices do not correctly reflect the risks, the Committee presents the Board of Directors with an action plan to remedy the situation; reviewing, without prejudice to the responsibilities of theV Compensation Committee, whether the incentives set out by Natixis’ compensation policy and practices are compatible with this latter’s situation with regard to the risks to which it is exposed, its capital, its liquidity and the probability and scheduling of the expected benefits; assisting the Board of Directors in reviewing the aforementionedV governance mechanism, assessing its effectiveness and ensuring that corrective measures have been taken to remedy any shortcomings; regularly examining the strategies and policies governing theV taking, management, monitoring and reduction of the risks to which Natixis is or could be exposed, including risks created by the economic environment. To that end, at least once a year the Risk Committee analyzes the documents used to define and monitor Natixis’ risk appetite, namely the Risk Appetite Statement and the Risk Appetite Framework. The Risk Committee studies all limit changes that took place between two annual reviews, including changes to industry-based limits; examining compliance risk monitoring-related items at least onceV a year, pursuant to Article 253 of the French Ministerial Order of November 3, 2014 on internal control of banking sector businesses, payment services, and investment services; giving its opinion on the appointment or dismissal of the Head ofV General Inspection at Natixis; ensuring that the findings of assignments carried out by theV General Inspection Department and by regulatory and supervisory authorities (specifically the Autorité de Contrôle Prudentiel et de Résolution, ACPR – French Prudential Supervisory Authority) are followed up on; to that end, a summary of General Inspection Department reports on Natixis and its subsidiaries is prepared for the Risk Committee, which also receives all reports from the regulatory and supervisory authorities (specifically the ACPR) on Natixis and its subsidiaries; addressing Natixis’ annual internal audit program, including auditsV of subsidiaries, with this program being presented to the Committee at least one week prior to its approval.
The Compensation Committee is responsible for submitting proposals to Natixis’ Board of Directors concerning: the amount and terms of compensation paid to the Chairman ofV the Board of Directors of Natixis, including benefits in kind, pension plans and collective personal protection insurance, as well as the allocation of stock options or share purchases; the amount and terms of compensation paid to the CEO and,V where applicable, one or more Deputy CEOs, including benefits in kind, pension plans and collective personal protection insurance, as well as the allocation of stock options or share purchases; rules for allocating compensation to Natixis directors and the totalV amount submitted to the shareholders at Natixis’ General Shareholders’ Meeting for a decision; the monitoring of the compensation of the Chief Risk Officer andV the Compliance Officer;
The Appointment Committee has six members. As of December 31, 2020, it was composed as follows: Diane de Saint Victor Chairman
to examine, in conjunction with the CompensationV Committee, the procedures for taking into account non-financial criteria in the compensation policy for executive corporate officers; to examine CSR risks in conjunction with the Risk CommitteeV and the impact of environmental and societal issues in terms of investment, economic performance and reputation; to monitor the reporting systems, the preparation ofV non-financial information and, in particular, the non-financial performance statement (DPEF) and, in general, any information required by current CSR legislation; to review Natixis’ extra-financial ratings annually.V
In accordance with Article L.22-10-10 2° of the French Commercial Code, 29% of women hold positions in the top ten % of positions of responsibility, which correspond to the top-ranking leadership circle, Global Leaders (equivalent to the top 100), including members of the Senior Management Committee and members of the Natixis Executive Committee.
Following the departure of François Riahi on August 3, 2020, the Board of Directors decided, following the favorable opinion of the Appointment Committee, to appoint Nicolas Namias as his replacement with immediate effect, for a period of four years ending with the adjournment of the Natixis General Shareholders’ Meeting convened in 2024 to approve the financial statements for the fiscal year ending December 31, 2023.
In the event of the absence of the executive corporate officer, the other executive officers will ensure business continuity until the Board of Directors appoints a new Chief Executive Officer based on a recommendation by the Appointment Committee.
In the non-business segment, in February 2020 came the announcement of the sale of 29.5% of Coface’s share capital to Arch Capital Group, leaving Natixis a residual stake of 12.2%.
The compensation policy strictly complies with regulations in Natixis’ countries and sectors of operation, including the CRD, the French law on the separation and regulation of banking activities, AIFMD, UCITS, MiFID, IDD and Solvency.
Board members receive a fixed portion of €8,000 per year for participating in Board Meetings as well as a variable portion of €2,000 per meeting, attributable according to their attendance, the number of global meetings paid over a full year being capped at seven; as a result, the maximum amount paid for meetings of the Board of Directors may not exceed €22,000 for any directorship.
Non-compete indemnities The non-compete agreement is limited to a period of six months and carries an indemnity equal to six months of fixed compensation, as in force on the date on which the CEO leaves office.
The fixed compensation paid to François Riahi during the 2020 fiscal year for his duties as Chief Executive Officer of Natixis represents 75% of the total compensation granted.
Breakdown of annual variable compensation for the 2020 fiscal year by vesting date
Nicolas Namias’ other compensation for his duties at BPCE €672,548 N/A
Laurent Mignon, Chairman of the Board of Directors Term of office began: June 1, 2018 Term of office ended: the May 2023 General Shareholders’ Meeting
François Riahi, Chief Executive Officer Term of office began: June 1, 2018 Term of office ended: August 3, 2020
Components of compensation due or granted for the fiscal year ended which are subject to approval or have been approved by the General Shareholders’ Meeting Amount Comments
The objectives defined for fiscal year 2020 were as follows 70% of quantitative objectives, 25% of which based on financial performance ofV Groupe BPCE (net revenues 4.2%, net income (Group share) 12.5% and cost/income ratio 8.3%) and 45% based on the financial performance of Natixis (net revenues 11.25%, net income (Group share) 11.25%, cost/income ratio 11.25% and ROTE – Return on Tangible Equity 11.25%); 30% of individual strategic objectives, including 10% relating to the preparation of theV new strategic plan and to enhancing distribution to the CE & BP networks; the four other strategic targets, each weighted at 5%, in relation to oversight in terms of supervision and control as provided for by regulations (including the implementation of the Risk Appetite Framework and the activation of the threshold breach remediation process), the progress of Natixis' Transformation & Corporate Culture initiatives, improving Natixis' position as a key player in CSR initiatives, and managerial performance assessed in consideration of the anticipation, decision-making and animation capacities implemented and executive management.
The increase in credit risk between S1 and S2 loans is measured against the following criteria: changes to counterparty ratings (for large corporates, banks and sovereigns loan books) since initial recognition; changes to probability of default within one year (for individual customer, professional customer, SME, public sector and social housing loan books) since initial recognition; placement on the watchlist; forborne status; the ratings of the country of the counterparty; and the existence of one or more contracts more than 30 days past due.
If Groupe BPCE’s credit ratings were lowered by the main rating agencies, Groupe BPCE’s liquidity – and thus Natixis’ liquidity – and the corresponding financing costs could be adversely affected or even trigger additional obligations in respect of its financial market contracts.
Natixis could encounter difficulties in identifying, implementing and integrating its policy in the context of acquisitions or joint ventures Natixis could consider opportunities for external growth or partnership. Although Natixis intends to conduct an in-depth analysis of the companies it will acquire or the joint ventures in which it will participate, it is generally not possible to conduct an exhaustive review. As a result, Natixis may have to bear commitments not initially foreseen. Likewise, the expected results of an acquired company or joint venture may prove to be disappointing and the expected synergies may not be achieved in whole or in part, or the transaction may result in higher costs than expected. Natixis may also encounter difficulties when integrating a new entity. The failure of an announced external growth operation or the failure to integrate a new entity or a joint venture is likely to significantly affect Natixis’ profitability. In particular, the recognition of goodwill during these external growth transactions could lead, in the event of a lasting deterioration in profitability, to a write-down in the financial statements (during periodic tests) or to recognize a loss in the event of disposal. At the end of December 2020, the amount of goodwill of Natixis represented €3.2 billion, distributed among the various divisions of Natixis but mainly concentrated within the Asset & Wealth Management division. Over the recent period, significant impairments of goodwill or losses on disposals have concerned Coface (in 2016 and 2020) and H2O (in 2020). In the case of joint ventures, Natixis is exposed to additional risks and uncertainties insofar as it may depend on systems, controls and persons beyond its control and may, as such, incur its liability, suffer losses or damage to its reputation. In addition, conflicts or disagreements between Natixis and its partners within the joint venture may have a negative impact on the benefits sought by the joint venture.
Accordingly, Natixis has committed to stop financing companies whose main activities include the exploration, production, transportation and storage of oil sands. Natixis has also committed to stop financing projects to explore and produce oil in the Arctic region and, since May 2020, projects and companies active in shale oil and gas production. Lastly, in 2015 Natixis committed to stop financing the exploration, production, transportation and storage of coal, and includes companies for which these activities represent 50% of their business. In 2019, this percentage was lowered to 25%. This policy was topped up with a timetable to withdraw fully from thermal coal production by 2030 for facilities in Europe and OECD countries, and by 2040 in the rest of the world.
For a more detailed description of Natixis’ CSR (Corporate social responsibility) policy and commitments, see Chapter 6 “Non-financial performance report” of this universal registration document, as well as section 6.4 for a description of the management of environmental, social and governance risks.
Adverse economic conditions in Natixis’ main markets could have the following negative impacts in particular:
The main actions of the Information Systems Security and Business Continuity Systems Department (SSI-BC) relate to the definition and monitoring of the regulatory framework in terms of technological risks. As such, this department defines policies and rules, carries out second-level control and oversees the assessment and management of associated risks. The second-level control plan is made up of a section that applies to Groupe BPCE as a whole supplemented by a section that is more specific to Natixis. It is the result of a risk-based approach. These controls are carried out on the basis of first-level controls reported by the contributors (Information Systems Department, logical security correspondent for authorizations, local manager of the business continuity plan) (for more details on technological risks, see section 3.2.8).
Credit risk is the risk of financial loss due to a debtor’s inability to honor its contractual obligations. Assessing the probability of default and, in such cases, how much we can expect to recover is a key component of measuring credit quality. Credit risk increases in periods of economic uncertainty, insofar as such conditions may lead to a higher rate of default.
The absence of liquidity may lead to reduced access to Capital Markets, unforeseen cash or capital requirements, or legal restrictions.
An opposite scenario, used for the reverse stress test, is constructed from the sensitivity observed on the various components of Natixis in order to achieve a predefined target for the CET1 ratio. The outcome of this scenario is a downgraded version of the first adverse scenario, with more serious effects on equity and credit spreads.
Exposure class 31/12/2020 o/w off-balance sheet 31/12/2020 o/w off-balance sheet 2020 average
Exposures to institutions and corporates with a short-term credit assessment 173 84 166 80 195
Natixis is involved in securitization transactions under different roles: as an investor via financing transactions for its clients, viaV derivative transactions and to a lesser extent via market-making activities on certain ABSs (in particular Asset-Backed Commercial Paper). Natixis mainly invests in senior assets with sound levels of collateral and spreads. Similarly, it applies a sector and geography-based diversification strategy for underlying assets; as a sponsor, i.e. on transactions for its clients to create andV manage ABS programs; as an originator, as part of its refinancing activities or throughV synthetic securitization (whose objective is to transfer part of the credit risk of a portfolio of receivables to investors).
the model’s stability and convergence of the numerical method inV a stress scenario; the assessment of implied risk factors and calibration, theV analysis of input, and the upstream identification of models; the measurement of model risk and validation of the relatedV reserves methodology.
The adjustment policy thus defines the principles for calculating adjustments for market risks to financial instruments measured at fair value.
The following table presents the key VaR figures – (99% VaR, 1 day): (in millions of euros)
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 148 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020
m er gi n g m a rk et c ri si s In fl u en ti a l I
Qualitative assessment of businesses and support functions risks by the risk owners
Following an investigation involving all relevant parties, the operational risk manager of the business line compiles a standardized full report, including a factual description of the event, the analysis of the initial cause, the description of the impact and the proposed corrective actions. At all levels of the Company, the business line Operational Risk Committees review their serious incidents. They decide on the implementation of corrective actions propose the associated deadlines and deliverables, and monitor progress. The entities and business lines can decide to apply these measures to their own threshold, which is lower than that of Natixis and consistent with its activity and level of risk.
Sensitivity of economic value and net interest income (IRRBB – Table B)
investigation system involving experts in fraud and IT security as well as the legal and HR functions where applicable.
Natixis IM International filed an appeal against this ruling with the French Council of State. In its decision of November 6, 2019, the French Council of State overturned the Enforcement Committee’s decision, reducing the fine to €20 million. It let the warning stand.
Income/(loss) for the year 101 101 - - - - 101
OPCI FRANCEUROPE IMMO Full consolidation Equity method Insurance investment mutual fund France
57 Total regulatory adjustments to Tier 2 (T2) capital (1,110) Sum of lines 52 to 56 58 Tier 2 (T2) capital 2,142 Line 51 plus line 57 59 Total capital (TC = T1 + T2) 16,337 Sum of lines 45 and 58 60 Total risk weighted assets 104,985
The change in prudential capital under Basel 3/CRR over the period is shown below: Changes in prudential capital after applying phase-in arrangements for the period
On-balance sheet items (excluding derivatives and SFTs, but including collateral) 241,972 250,582
(Netted amounts of cash payables and cash receivables of gross SFT assets) (7,909) (22,150)
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIBasel 3 Pillar III disclosures 188 NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020
Gross carrying value/nominal amount Accumulated impairments, accumulated negative fair value variations due to credit risk and provisions Partial disposal from consolidated
MOODY’S Long term 1 Aaa to Aa3 20 2 A1 to A3 3 Baa1 to Baa3 50
Exposures to institutions and corporates with a short-term credit assessment 90 5 86 1 51 58%
EAD by type and nature of exposure (excluding impact of thresholds) (NX24)
Own secured bonds and asset-backed securities issued and not yet given as collateral 0 0
Oversight of the short-term liquidity ratio Since June 2013, Natixis has implemented governance for the management of the LCR ratio, notably by setting an upper LCR limit. The management of the LCR ratio is part of a Groupe BPCE initiative under the aegis of the BPCE DFG. Natixis’ LCR hedging is organized in close cooperation with BPCE and is managed by the Joint Refinancing Pool, acting with the authorization of the Financial Management Department on the basis of its forecasts. In this context, at Natixis terminals, the LCR is managed on a daily basis, with a safety margin, via adjustments with BPCE, as the structural over-coverage of the Group’s LCR remains managed and supported by the central body BPCE.
Article 451 (BCBS March 2016) LR1 – Comparison of accounting exposures and leverage exposures 183
Art. 442 (c) NX03 – Exposures and EAD and by Basel exposure class 138
Article 453 (a) (e) (EBA) EU CRC – Qualitative disclosure requirements related to credit risk mitigation techniques 135
Art. 452 (j) NX16 – Average weighted PD and average weighted LGD by geography 202
Article 449 (k) NX33BIS – Banking book EAD by agency 213
Statements of credit risk exposure under the IRB approach (EU CR8) 202
In the first half, the Fed extended the range of securities eligible under its asset-purchase program to include corporate bonds with a view to support small and medium-sized businesses, buying up to 95% of eligible loans granted by banks (the Main Street Lending Program). For its part, the ECB also strengthened the Pandemic Emergency Purchase Program (PEPP), initially set up for a total amount of €750 billion, to which was added an additional €600 billion. In addition to the easing of the targeted longer-term refinancing operations (TLTRO III) conditions, as already decided on, the ECB added a new instrument – Pandemic Emergency Long-Term Refinancing Operations (PELTRO) – to avoid liquidity issues in the financial system. The purchase program eligibility conditions for market assets were also loosened.
Althelia Biodiversity Fund Brazil received first prize in theV Multi-asset category; InvestmentNews/Excellence in Diversity & Inclusion 2020: NatixisV Investment Managers was named Champion of diversity; United Principle for Responsible Investing/PRI Leaders’ groupV 2020: Mirova was honored as a signatory of the PRI Leaders group 2020, the first 36 PRI signatories at the forefront of this year’s theme: climate reporting; Pensions Age/Pensions Age Awards 2020: Mirova was namedV best sustainability service provider of the year; Mirova is ranked in the top ten leading asset managers in the fieldV of socially responsible investment (#7) according to Hirschel & Kramer (H&K)/Responsible Investment Brand Index 2020; Natixis Investment Managers was ranked among the top ten (#7)V in Peregrine Communications’ Global 100 ranking on the marketing effectiveness of Asset Management companies; Citywire Selector/Gender Diversity Awards 2020:V
Natixis Investment Managers – Asset Management company,V winner in the Regional Leader US category (50-100 managers),
“Infrastructure” and “Energy” held up well to the crisis, driven by the telecommunications infrastructure segment and the renewable energy sector. For example, Natixis arranged numerous solar parks in Chile (Sonnedix, CVE, Langa, Reden, Grenergy, Arroyo), which confirms Natixis’ dominant position in this segment.
Minority interests came to -€81 million versus -€295 million in 2019, in line with the decrease in H20 results.
Change in assets under management over the year (in billions of euros)
An additional provision following the announcement of the proposed sale of the subsidiary H2O was recorded in Q4 on the basis of the estimated capital loss, bringing the total annual impact recorded in losses on other assets to -€47.6 million.
Cost of risk amounted to -€5.2 million, a decrease of €3.2 million compared to 2019.
In 2020, Natixis Private Equity (run-off) pursued its disengagement strategy and decreased its engagements by 19%.
excluding this item, expenses totaled €294 million in 2020 versusV €371 million in 2019; they essentially comprised: expenses from the support functions net reallocations to theV Natixis business lines for €147 million in 2020, down €74 million compared to 2019 due to the savings in the crisis context; this expense balance of €109 million in 2020, was essentially rebilled to the entities of BPCE, as part of the services put in place following the sale of the retail banking business to BPCE S.A., cross-business expenses of €120 million, up €14 millionV compared to 2019, essentially related to tax items.
Asset management Disposal of the Axeltis fund distribution platform to MFEX, together with the signing of a long-term partnership to distribute funds on an open-architecture basis.
Revaluation of financial assets (debt) instruments at fair value through other comprehensive income 9 14
Property, plant and equipment, 5.7 intangible assets (excluding goodwill) and investment property
Financial assets and liabilities 7.1 at fair value through profit and loss
As required by Regulation (EC) No. 1606/2002 of July 19, 2002, Natixis has prepared its consolidated financial statements for the year ended December 31, 2020 in accordance with IAS/IFRS standards and IFRIC interpretations as adopted by the European Union and applicable on that date(1).
H2O1.2.2 In the fourth quarter of 2020, Natixis launched negotiations for the sale of its entire stake in the entity, i.e. 50.01% of the share capital. This sale consists for H2O Holding in the purchase of its own shares. The final memorandum of understanding was signed on January 29, 2021.
To meet the challenges it faces, Natixis will also continue to develop its operating model with a view to competitiveness by drawing on its solid and diversified expertise.
The economic recession has also led Natixis to alter the baseline scenario on the basis of which it determines the expected loss levels of its exposures (see Note 1.4.2 and 5.3), in order to best estimate, despite the high level of uncertainty, the repercussions of current events on the risk of default within one year or within the lifetime of its outstanding financial items.
The cost of risk thus increased during the financial year 2020. It amounted to -€851.3 million at December 31, 2020 compared to -€332 million at December 31, 2019.
It should be noted that awarding a GBL to a given counterparty does not in and of itself constitute a risk degradation threshold, as it must lead to that counterparty’s other outstanding items being changed to status 2 or 3.
Specific case of business combinations carried out under joint control Combinations of entities or operations under joint control are understood to be combinations in which several operations are combined and all of the interested parties (entities or operations) are ultimately controlled by the same party or parties for a relatively long period before and after the combination. Such combinations do not fall within the scope of IFRS 3R.
A risk premium calculated on the basis of a sample of companies representative of the CGU is then added to these rates, with an average over a depth of five years.
the main vector of sensitivity for life insurance is interest andV market rates, but various steps are being taken to reduce their impact (diversification of investments, reserves, equity hedging, etc.). Accordingly, the impact on the income statement is limited and would not significantly affect the CGU’s value, for non-life insurance, the main vector of sensitivity is the lossV ratio, which is notably measured via the combined ratio. Natixis’ New Dimension strategic plan sets the combined ratio at below 94%. A one-point deterioration in this ratio each year would lead to a limited fall of 3% in the CGU’s value, with no impact on impairment;
During the first quarter of 2020, the Trez Commercial FinancesV Limited Partnership was deconsolidated after falling below the thresholds.
During the second quarter of 2020, Loomis Sayles OperatingV Services LLC, intended for the operational support of Asset Management activities (service delivery, IT infrastructure) was created and consolidated.
The Seguro Brasileira CE entity was absorbed by Coface Do BrasilV Seguros De Credito in the third quarter of 2020.
external structured entities in which Natixis acts as a simpleV investor. These are: investments in external mutual funds not managed by Natixis,V with the exception of those in which Natixis owns virtually all of the units, interests held in external securitization vehicles for which NatixisV acts simply as a minority investor, a restricted scope of interests held in real estate funds andV external Private Equity funds for which Natixis acts simply as a non-controlling investor.
Securitization transactions4.1.4 Securitization vehicles Securitization transactions are generally constituted in the form of structured entities used to segregate assets or derivatives representative of credit risks.
The maximum risk exposure corresponds to the cumulative amount of interests recorded under balance sheet assets and commitments given, minus contingency reserves recorded under liabilities and guarantees received: the “Notional amount of derivatives” item corresponds to theV notional amount of option and CDS sales agreed to by Natixis with structured entities; guarantees received are guarantees granted by third parties toV Natixis to cover its exposure related to structured entities. They are only included on the “Guarantees received” line and are not deducted from the asset items.
Business model5.1.1 The business model represents the way in which Natixis manages its financial assets to produce cash flow and revenues. The entity must exercise judgment to determine the business model used.
Impairment of assets 5.3 at amortized cost and at fair value through other comprehensive income and provisions for financing and guarantee commitments
Natixis draws on existing concepts and mechanisms to define these inputs, and in particular on internal models developed to calculate regulatory capital requirements (capital adequacy ratios) and on projection models similar to those used in the stress test system. Certain adjustments are made to comply with the specifics of IFRS 9: IFRS 9 parameters therefore aim to provide an accurate estimateV of losses for accounting provision purposes, whereas prudential parameters are more cautious for regulatory framework purposes. Several safety buffers included in the prudential parameters are therefore restated, such as the PD and LGD downturn add-on, regulatory floors and internal costs; the IFRS 9 parameters used to calculate provisions on loansV classified as Stage 2 must enable lifetime expected credit losses to be calculated, whereas prudential parameters are defined for the purposes of defining 12-month default rates. 12-month parameters are thus projected over longer timescales; IFRS 9 parameters must be forward-looking and take into accountV the expected economic environment over the projection period, whereas prudential parameters correspond to the cycle’s average estimates (for PD) or bottom-of-the-cycle estimates (for LGD and the flows expected over the lifetime of the instrument). The PD and LGD prudential parameters are therefore also adjusted based on the expected economic environment.
presumed to be effective when, retrospectively, changes in the value of the hedging instrument offset changes in the value of the hedged item in a range of 80%-125%.
Hedging of fixed-rate loans and borrowings Natixis uses plain vanilla interest rate swaps lending at fixed rates to protect itself against the impact of unfavorable changes in interest rates on its fixed-rate borrowings and issues. Plain vanilla swaps borrowing at fixed rates are used to protect it from the impact of unfavorable changes in interest rates on its fixed-rate loans and securities.
Provisions for restructuring costs include only expenditures directly related to the restructuring.
The estimated amount of the expense related to cash-settled variable compensation, subject to the employee’s continued service in accordance with the Employee Retention and Performance Recognition plans, is recognized over the vesting period.
Fees and commissions that form an integral part of the effective yield on an instrument, such as fees for loan set-up, are recognized and amortized as an adjustment to the effective interest rate over the estimated term of the applicable loan. These fees and commissions are recognized as interest income rather than “Net fee and commission income”.
The procedure for setting up the deposit and resolution guarantee fund was changed by a French Ministerial Order dated October 27, 2015. Contributions made to the deposit and resolution guarantee fund may be paid in the form of partner or association certificates and cash security deposits (guarantee of irrevocable commitment) recognized as assets on the balance sheet and contributions (which are non-refundable in the event of a voluntary withdrawal of approval to operate) recorded in income as “Taxes and regulatory contributions” among other operating expenses (see Note 6.7).
The difference between net income (Group share) and net income/(loss) attributable to shareholders corresponds to the interest generated on deeply (a) subordinated notes and on preference shares, i.e. -€119.4 million at December 31, 2020 and -€138.1 million at December 31, 2019. This number of shares refers to the shares granted under the 2018, 2019 and 2020 Bonus Share Plans (PAGA), the 2017, 2018, 2019 and 2020 Long-Term (b) Incentive Plans (LTIP) and the 2018 Payment Business Line Plan (PMP).
Financial assets to be valued at fair value through profit or loss (a)
The information presented takes into account the impact of offsetting carried out in accordance with IAS 32 (see Note 7.3).(a) Amounts restated in relation to the financial statements published in 2019 (see Note 5.4).*
Financial liabilities under the fair value option for which credit risk is recognized in “shareholders’ equity”
This mainly includes securities listed on a stock exchange or traded continuously on other active markets, derivatives traded on organized markets (futures, options, etc.) whose liquidity can be demonstrated, and mutual fund units whose NAV is determined and reported on a daily basis.
Level 2: Fair value measurement b) using observable market models and parameters
Credit CDO The default rates are based on the market prices of the underlying PFI bonds and the recovery rates are based on historical ratings agency data
TOTAL FINANCIAL LIABILITIES RECOGNIZED AT FAIR VALUE 3,415 365 (264) 4,776 (3,727) (403) 5,573 2,297 44 12,075
Financial assets held for trading 906 74 485 12 289 119 6 116 o/w debt instruments in the form of securities 903 74 52 12 233 119 6 0 o/w equity instruments 3 2 o/w loans and receivables 433 116 o/w security deposits paid 0 54
Contracts fully repaid or sold during the period (11,210) 0 (47) 0 (3) 0 (11,259) 0
financial instruments (securities and receivables) deposited withV central banks and assignable as collateral to guarantee refinancing operations at any time.
The age of each amount in arrears is determined according to the age of the first missed payment on the balance in question. The breakdown for the period is prepared on the basis of the first missed payment.
Held-to-maturity financial assets 0 0 0 0 1 0 0 0 1
Financial investments in securities are classified in the balance sheet under the various categories of investments defined in IAS 39.
Assets measured at amortized cost and available-for-sale debt instruments A provision for impairment is set aside as soon as there is reason to believe the issuer may not be able to meet its commitments regarding the payment of principal and interest, such as a default on interest or principal payments. Securities in this category are determined on a case-by-case basis at each reporting date after the portfolios are reviewed.
Available-for-sale equity instruments The impairment criteria for non-amortizing securities categorized as available-for-sale assets are as follows: automatic impairment if there are unrealized losses of more thanV 50% at the reporting date; automatic impairment if there are unrealized losses for a period ofV more than 24 consecutive months; case-by-case analysis of securities presenting unrealized losses ofV more than 30% at the reporting date; case-by-case analysis of securities presenting unrealized lossesV for more than six consecutive months.
Loans and receivables due from credit institutions 303 303 0 303 682 682 3 679
Information required under IFRS 7 on financial liabilities at fair value through profit or loss is presented in Note 7.1.2.
Asset Management: Asset Management activities are combinedV within Natixis Investment Managers. They cover all asset categories and are carried out mainly in the US and France. These activities are performed by autonomous entities (specialized Asset Management companies and specialized distribution units) coordinated by a holding company that ensures the organization’s consistency by overseeing its strategic direction. These companies are thus able to focus on their core business and on achieving robust performance, while retaining the option of developing their own institutional clientele and drawing on the business line’s other support functions, based on appropriate economic models. A number of these asset managers have forged a strong reputation, such as Loomis Sayles, Harris Associates, AEW, DNCA and Ostrum Asset Management. As announced in the third quarter of 2020, Natixis IM announced its gradual withdrawal from H20 (see Note 1.2.2).
Loans and receivables due from banks and similar items at amortized cost 42,285 530 942 35 900 44,691
Debt instruments at fair value through equity 11,563 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 11,563
Loans and receivables due from credit institutions and similar items at amortized cost 47,542 17 2 0 0 0 0 48 3 0 0 0 0 0 0 48 47,558
The information on the management of market risks, overall interest rate risks, liquidity risks and structural foreign exchange risks required by IFRS 7 is presented in the section 3.2 of Chapter [3] “Risk factors, risk management and pillars III”.
Payroll costs totaled €3,505 million at December 31, 2020, versus €3,980 million at December 31, 2019.
Deferred compensation11.2.2 Share-based employee retention and performance recognition plans Every year since 2010, Natixis has granted share-based payment plans to certain categories of staff. The accounting treatment of these plans is described in Note 5.16.
These notably include long-service awards, deferred compensation payable in cash twelve months or more after the end of the period and, since 2020, the Working Time Account (CET).
Fair value of assets at end of period 423 105 528 422 104 526
Fair value of assets at start of period 32 28 60 147 27 174 o/w amounts paid out in respect of plan liquidation (0) 0 (0) 0 0 0
Discount rate (excluding Time Savings Account) 1.52% 0.08% 0.07% 1.96% 1.91% 0.35% 0.41% 2.07%
There were 4,014,663 treasury shares at December 31, 2020 (2,083,199 treasury shares as of December 31, 2019).
Note that the gross amount of exchange rate fluctuations in deeply subordinated notes in foreign currencies recorded in income at December 31, 2020 amounted to -€85.6 million, or -€58.2 million after tax, compared with +€19.0 million at December 31, 2019, or +€14.3 million after tax.
Pursuant to this contract, Natixis has 3,912,890 shares, representing €11 million as of December 31, 2020, compared to 1,981,426 shares, representing €7.9 million, at December 31, 2019.
Variations linked to changes in exchange rates 296 0 80 (1) 0 0 0 0 376 (1)
< 1 year >= 1 year and < 2 years >= 2 years and <3 years >= 3 years and < 4 years >= 4 years and < 5 years >5 years Total < 1 year >=1 year and
Loans and receivables due from banks and similar items at amortized cost 38,346 4,469 431 293 39,663 8,223 418 281
Net gains or losses on financial instruments at fair value through profit or loss (1,369) 100 (50) 723 (643) 142 208 1,042
Upon the departure of the Chief Executive Officer, the Board of Directors must make a decision regarding whether to enforce the non-compete clause. It is specified that the termination benefits and non-compete schemes will be submitted to the General Shareholders' Meeting of Natixis to be held in May 2021.
NATIXIS INVESTMENT MANAGERS SINGAPORE LIMITED (formerly OSTRUM AM ASIA LTD) Asset Management
DNCA Finance (h) Asset Management FC 100 85 92 79 France
Natixis TradEx Solutions (formerly Natixis Asset Management Finance)(*) (**) Holding company FC 100 100 100 100 France
NATIXIS FORMATION ÉPARGNE FINANCIÈRE Holding company FC 100 100 100 100 France
H2O AM Europe Asset Management FC 50 50 50 50 France
AEW ASIA LIMITED Asset Management FC 100 100 100 100 Hong Kong
Natixis Investment Managers Spanish Branch Distribution FC 100 100 100 100 Spain
BPCE Vie (formerly ABP VIE) Insurance FC 100 100 100 100 France
DALENYS INTERNATIONAL (formerly RENTABILIWEB INTERNATIONAL)* Holding company FC 100 100 100 100 Netherlands
COFACE NORTH AMERICA HOLDING COMPANY (a) Holding company EM 42 42 42 42 United States
COFACE CHILE -SUCC (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 Chile
COFACE AUSTRALIA – BRANCH (COFACE EUROPE) (a) Credit insurance and related services EM 42 42 42 42 Australia
SCI ALTAIR 2 Real estate operations FC 100 100 100 100 France
Please refer to Notes 1.2.1, 1.2.2, 2.6, 5.8 and 6.9 to the consolidated financial statements for more details.
In the case of complex financial instruments, particularly those in Level 3 and some in Level 2 of the fair value hierarchy, these approaches may include a significant amount of judgment given: the use of internal valuation models;V
We acquired information on how budgetary data is compiled to estimate future taxable profits and assessed the reliability of the process of drawing up the tax business plans that are the basis of our assessment of the probability of the Group recovering its deferred tax assets by: examining how the last business plan used as a basis of theV estimates was developed and approved; comparing projected results of previous years to the actual resultsV for those years; assessing the reasonableness of the forecast assumptions andV the inputs used by management to estimate future profits and the recoverability of recognized deferred tax assets, based on our experience and knowledge of the Group’s activities and strategy.
Statutory Auditors’ report on the consolidated financial statements 411NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Other verifications or information provided for by French law and regulations
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Natixis and Arch Capital Group Ltd. 3.3 announce the completion of the contract to sell 29.5% of the share capital of Coface
As of December 31, 2020, a moratorium was placed on 203 projects, representing a total gross amount of €2,242 million. Provisions related to these restructured loans amount to €21,4 million as of
Fair value of financial assets affected 1.2.4 by the health crisis
Parent company financial statements and notes 419NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Loans on the watch list, for which a Basel default has been identified, are impaired collectively by sector unless they are already subject to specific write-downs.
Internally-generated software is carried on the asset side of the balance sheet at its direct development cost, including outsourcing expenses and personnel costs directly attributable to its production and preparation where they meet the criteria for capitalization.
Depreciation/amortization periods must be reviewed annually and, where applicable, the impact of any change in estimate is recognized prospectively, in income, from the date of the change.
As of December 31, 2020, amounts due under the Time Savings Account are included in “other long-term benefits” for an amount of €69.8 million, whereas they were recorded as “short-term benefits” for an amount of €64.9 million at December 31, 2019.
For these categories of securities, the gross values shown in the “Securities held for sale” and “Securities held for investment” columns are redemption value.(a) Of which securities loaned for €29,902 million at December 31, 2020 versus €33,653 million at December 31, 2019.(b) Of which Bonds and other listed fixed-income securities for €9,327 million at December 31, 2020 versus €14,588 million at December 31, 2019.(c) Of which Shares and other listed variable-income securities for €38,659 million at December 31, 2020 versus €70,213 million at December 31, 2019.(d)
There were no transfers of securities between categories in 2019 or 2020.
NATIXIS PAYMENT HOLDING 30 AV PIERRE-MENDÈS-FRANCE 75013 Paris NC 230,141 EUR (7,662) EUR 100.00%
NATIXIS NORTH AMERICA LLC 1251 Avenue of the Americas New York, NY 10020 NC 2,468,579 USD (329,491) USD 100.00%
As at December 31, 2020, Natixis for the first time applied ANC regulation No. 2020-10 amending the presentation of securities on the balance sheet (see Note 2 and Note 2.16).
Provisions for impairment deducted from assets (1,427) (1,003) 489 43 2 (1,896)
Due to the existence of a loss-absorption clause, the nominal value of the securities may be reduced in the event of regulatory capital inadequacy to serve as a new basis for determining coupon amounts. The original nominal value may however be reconstituted under certain conditions.
Of which pension costs of €75 million at December 31, 2020 compared to €198 million at December 31, 2019 (including €114 million in respect of the IPA).(a) Including a provision for the Time Savings Account of €70 million in 2020 and a reversal of provision for the IPA of €114 million in 2019.(b) Including a contribution of €160 million to the Single Resolution Fund (SRF) at December 31, 2020, versus €166 million at December 31, 2019.(c)
In this regard, the processes for preparing the consolidated financial statements and regulatory reporting are operationally autonomous, but linked to BPCE’s processes.
Reporting frameworks 6.9 and methodology 535 Specific methodological information on audited data 535
Natixis organizes its ESR policy around three main areas: Our Social and Environmental Responsibility policy is focused on three key priorities
The ESR Department has also been strengthened with ten permanent employees responsible for overseeing and coordinating the integration of ESR into Natixis’ operations and activities, thus supporting the growing demand from clients, whether investors or corporate, of inclusion of ESR in their own development model. It is also responsible for regulatory and strategic reporting, and for relations with internal and external stakeholders who ask Natixis about its ESR policy (customers, employees, extra-financial rating agencies, NGOs, etc.).
Support from the Terre de Liens association to help farmers settle down and develop sustainable agriculture
AEW chairs the Circolab association and supports the circular economy in construction and real-estate
In addition, in conjunction with the Natixis Risk Management and Compliance Department, the list of Natixis ESR risks and their rating were reviewed in relation to the Risk Appetite System, Natixis’ own risk monitoring tool, as updated and validated for the fiscal year 2020 by the Natixis Board of Directors: conduct risk, certain non-compliance risks and cyber risk areV identified as material risks, which could have a significant impact on Natixis’ financial (liquidity, solvency and profitability), strategic or reputational trajectory with a probability of occurrence of more than three years (which explains the changes in the matrix compared to 2019); social and environmental risks related to financing activities haveV been included in the review of the Risk Appetite System since 2019. Environmental risks cover both physical and transition climate risks, which are considered material, and other environmental risks (impact on biodiversity, pollution, natural resources); in 2020 two points of attention were raised on the materiality ofV these risks: increased environmental and health risks,V
DNCA has implemented a measurement of exposures to the main UN sustainable development Goals across its entire Beyond fund range. These measures are based on the data published by the companies and consolidated with analyzes conducted by the managers of DNCA. The measure of exposure is presented both in terms of number of securities, but also in revenues.
All equity portfolios benefit from an SRI scoring and more restrictive management criteria are applied according to client guidelines.
Alliance Entreprendre, an expert in Private Equity for SMEs and mid-sized companies, takes into account ESG criteria throughout the investment cycle, depending on the materiality of the issues. The ESG assessment is presented to the Investment Committee and, when the situation allows, an ESG clause is included in the shareholders ‘agreements, including the commitment to send an annual assessment of the ESG indicators. Alliance Entreprendre’s responsible investment policy applies to all assets managed by the Asset Management company.
Natixis has been very active in the development of several emblematic types of financing to respond to this new type of crisis, but also to address the sustainable development Goals.
Portfolio exposure to renewable and non-renewable energies per year in billions of euros
The average carbon emissions for the managed portfolio of buildings equipped with remote reading meters for 2019 are, by type, as follows: logistics 5 kg eCO2/m2, offices 12 kg eCO2/m2, shops 15 kg eCO2/m2.
In 2021, AEW will develop and implement a resilience program that will align with TCFD recommendations and write its first TCFD report. The resilience program will include: the assessment of reduction targets and the determination of anV updated target that aligns with the SBTI (Science Based Targets Initiatives) with an annual reduction of at least 2.5% of identified GHG emissions; the reduction of energy, water and waste consumption to achieveV reduction targets by improving operational efficiency; the study of the impact of a commitment to Net Zero in one orV more portfolios; the strengthening of energy sources with low or zero emissions.V
Business line contributions to green and sustainable growth 497NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Natixis Biodiversity issues are already present in public sector policies, V and three new policies or policy updates taking biodiversity into account will be published in 2021.1 in 2020.V
This working group will have to address several issues: data accessibility: unlike climate data (mainly GHG emissions) heldV by companies, data related to natural capital requires access to larger databases (government, NGOs, universities, etc.); spatiality: risks related to nature are specific to their location, andV the locations of a company’s assets are generally not disclosed; materiality: nature is a public good and is currently used free ofV charge by companies. Risks related to nature are therefore rarely taken into account in financial decision-making. The working group will have to consider the possibilities of integrating this materiality through regulations, changes in terms of reporting or responsibility.
reason, Natixis works with its clients to plan, avoid, reduce and offset the impact of these activities at each stage in the investment process. For each transaction, the Energy & Natural Resources (ENR) team ensures that its clients observe the practices required in the sector (including the Equator Principles) and Natixis’ internal policies.
L’Oréal chooses Mirova to support it in the regeneration of nature As part of its global commitment to biodiversity strategy announced on June 24, 2020, L’Oréal will allocate €50 million to the financing of projects for the regeneration of marine and forest ecosystems, through the L’Oréal Fund for the Regeneration of Nature. By 2030, the Fund will have made it possible to restore one million hectares of damaged ecosystems, capture 15 to 20 million tons of CO2 emissions, and the creation of hundreds of jobs.
Several working groups have been created, including one to estimate the goodwill in buildings that are part of the circular economy, during their construction or renovation. Work has also been completed to share best practice for buildings in use and to factor reuse into Building Information Modeling (BIM). In 2020 a new think tank on the traceability of materials was launched. In addition, a partnership has been set up with the Geste D’Or association to include a circular economy profile in their annual Trophy, which celebrates exemplary achievements according to several criteria, notably heritage or technical.
Managing environmental, social and governance risks 507NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
These issues are already strictly governed by a number of regulations in France (representing nearly 70% of Natixis employees) including labor law, the personal and property safety policy, and the Professional Risk Assessment Document. A whole host of internal agreements have also been signed in France (relating to union law, collective bargaining, gender equality, the professional integration and retention of employees with disabilities, and quality of life at work).
Managing environmental, social and governance risks 509NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
This project seeks to co-design and co-produce tools, in conjunction with financial institutions, to facilitate the inclusion of physical climate change risks in decision-making processes. An initial simulation on a portfolio of real estate loans was performed at the end of 2019 and the final report will be made public in 2021 in order to enable as many people as possible to adopt them.
The Natixis Workplace Department, as manager of the Company’s buildings, oversees the implementation and monitoring of environmental certifications, the reduction of energy consumption and the energy supply of buildings, as well as their accessibility.
Lastly, with the support of a specialized operator, Natixis set up a shared fleet of 15 self-service electric bicycles in three stations, enabling its employees to cycle between the sites of Charenton-le-Pont and the 13th arrondissement. This pilot project is being tested over a twelve-month period, after which its continuation and possible extension will be studied.
These new vehicles meet an average CO2 emissions rate of 41.5 g/km. The average CO2 emissions rate for the Natixis vehicle fleet was 102 g/km in 2020.
Combining these measures with efforts to raise employee commitment via an “eco-gestures” guide, challenges and conferences has steadily reduced energy consumption in Natixis buildings since 2010, per workstation and per m2 of rented surface. In addition, Natixis offers a bonus to each of its employees if the energy consumption reduction target is collectively achieved.
Reuse and recycling of furniture As part of the Well working environment real estate program, which concerns the management of Natixis’ real estate portfolio, an initiative has been undertaken to reuse and recover unused furniture. In 2020, over 1,000 seats and 700 desks were reused as part of new developments at the Liberté 2 site in Charenton-le-Pont.
Natixis receives Top Employer 2021 certification Natixis was certified Top Employer France 2021 for the fifth consecutive year. This label reflects the quality of our Human Resources policy. It is obtained at the end of a complete audit process of our HR systems in France and shows our desire to continually challenge our practices.
In addition, since 2019, Natixis has published the index on equal pay between the men and women for its companies in France. In 2020, 100% of the indexes were above the minimum threshold.
In the context of the COVID-19 health crisis, Natixis has endeavored to ensure safety and protect the health of its employees. A Business Continuity Plan was launched in January for entities in Asia, then in early March for France. It scrupulously followed the government’s directives.
Natixis has implemented remote work for all employees whose activity does not require an on-site presence (around 97% in France).
A BPCE Agreement, applicable to Natixis, covering the careers of employee representatives, reflects the importance placed on employer-employee communications and the career path of employee representatives.
The compensation policy also incorporates the fundamental objectives pursued by Natixis in terms of equality in the workplace and non-discrimination. To this end, in its latest agreement on gender equality in the workplace, Natixis S.A. renewed its commitments to equal compensation between men and women by allocating a specific annual budget of 0.20% of fixed salaries in order to remove the fixed compensation gaps identified and not justified between men and women, and launched new measures to improve efforts to decrease the wage gap between men and women.
The implementation of these projects will begin on the 1 st quarter of 2021.
The following changes in scope took place in 2020: in the managed scope:V
absorption by Ostrum Asset Management of the activities ofV LBPAM (La Banque Postale Asset Management): 106 employees, creation of Vauban Infrastructure Partners (no increase inV staff); in the Natixis Worldwide scope:V
To assist us in our work, we called upon our sustainable development and corporate social responsibility experts. We conducted around 10 interviews with the people responsible for preparing the Report.
Selected qualitative information: Green Weighting Factor (proportion of financing with the greatest impact on the climate (rated brown); Review of processes and procedures, (1) Number of ESG risk reviews, Non-compliance risk control procedure/results of level 2 controls, Application of the management system.
28/05/2019 26 To reduce share capital by canceling treasury shares 10% of the shares constituting the Company’s share capital 26 months None None 28/05/2019 27 To increase share capital through the issue of shares and/or securities providing access to the capital of the Company or entitling holders to the allotment of debt securities, with preferential subscription rights maintained €1.5 billion (a) 26 months None None 28/05/2019 28 To increase share capital through the issue, by public offer, of shares and/or securities providing access to the capital of the Company or entitling holders to the allotment of debt securities, without preferential subscription rights €500 million (a) (c) 26 months None None 28/05/2019 29 To increase share capital through the issue, by an offer as set out in Article L.411-2(II) of the French Monetary and Financial Code, of shares and/or securities providing access to the capital of the Company or entitling holders to the allotment of debt securities, without preferential subscription rights €500 million (a) (d) 26 months None None 28/05/2019 30 To issue shares and/or securities providing access to the Company’s share capital or entitling holders to the allotment of debt securities as remuneration for contributions in kind involving capital stock or securities giving access to capital, without preferential subscription rights 10% of the share capital (d) 26 months None None 28/05/2019 31 To carry out a capital increase through the capitalization of reserves, retained earnings, share premiums or other items €1.5 billion (a) (c) 26 months None None 28/05/2019 32 To increase the number of securities to be issued in the event of capital increases with or without preferential subscription rights 15% of the initial issue (e) 26 months None None 28/05/2019 33 To increase share capital through the issue of shares or securities providing access to the capital of the Company, reserved for members of employee savings plans with waiving of preferential subscription rights in favor of said members €50 million (a) (c) 26 months None None
The following table does not detail the beneficiaries by employee category because, on the one hand, the allocation of shares carried out on April 10, 2020 corresponds to a portion of the deferred variable compensation indexed to the Natixis share in accordance with CRD Regulations (and does not depend on belonging to a professional category), and on the other, the allocation of shares made on May 20, 2020 was determined in a uniform manner for all beneficiaries (excluding corporate officer).
As of its authorization by the General Meeting of May 28, 2021, this program will be valid for one year for a maximum duration of 18 months i.e. until November 28, 2022.
the amount of dividends must not exceed 15% of cumulativeV profits (excluding exceptional or technical items) for the financial years 2019 and 2020 and the impact of the distribution must not represent more than 20 basis points of the CET 1 ratio as of December 31, 2020, the effect of which is the lower of the two; dividend payments must be approved in advance by theV supervisor.
The final quorum was 81.79%; the 19 resolutions were adopted with an approval rate of between 91.08% and 99.95%.
Resolutions requiring the approval of the Ordinary General Shareholders’ Meeting (resolutions one to nineteen)
In the thirteenth and fourteenth resolutions, shareholders are asked to ratify the co-option of the following persons as directors of your Company: Catherine Leblanc whose co-option took place at the Board ofV Directors meeting of June 23, 2020, to replace Bernard Dupouy, who resigned, for the remainder of his term of office, i.e. until the end of the General Shareholders’ Meeting called in 2023 to approve the financial statements for the year ended December 31, 2022; and
Subject to the approval of resolutions 16 to 18 and at the end of the General Shareholders’ Meeting of May 28, 2021, the staggering of the terms of office of the directors would be as follows: 2022 AGM Dominique Duband, Philippe Hourdain, Anne Lalou, Bernard Oppetit 2023 AGM Laurent Mignon, BPCE (represented by Catherine Halberstadt), Daniel de Beaurepaire, Catherine Pariset, and Henri Proglio (non-voting director)
The draft resolutions propose the renewal of the financial delegations previously authorized by the General Shareholders’ Meeting of May 28, 2019.
These capital increases may be carried out either by issuing shares or by issuing securities that give access to the share capital or debt securities.
Combined General Shareholders’ Meeting of May 28, 2021 565NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020www.natixis.com
Maximum V purchase price of €10 per share (adjustable particularly in the case of a reverse share split)
In accordance with legal provisions, the shareholders hereby note that for the three fiscal years prior to fiscal year 2020, the following dividends were distributed: Fiscal year Number of shares on which a dividend was paid
Fifth resolution: Approval of the information mentioned in Section I of Article L.22-10-9 of the French Commercial Code, pursuant to Article L.22-10-34 I of the French Commercial Code
Sixteenth resolution: Appointment of Christophe Pinault as a director, following his resignation to promote the staggering of the directors' terms of office
Twenty-second resolution: Delegation of authority to be given to the Board of Directors to decide to increase the share capital by issue, by public offers other than those referred to in Article L.411-2 of the French Monetary and Financial Code, shares and/or securities giving access to the share capital or giving entitlement to the allocation of debt securities, without preferential subscription rights
This authorization entails, for holders of securities which may be issued by the companies within the Company’s group, the waiver by shareholders of their preferential subscription right to subscribe any Company shares; Delegates to the Board of Directors, with the option of3) subdelegation under the conditions laid down by law, its authority to decide on the issuance (i) of securities giving access to equity securities to be issued by a company in which the Company owns, directly or indirectly, more than half of the share capital and/or (ii) of shares giving access to existing equity securities or giving entitlement to the allocation of debt securities of a third-party company; Decides to set the following limits for the amounts of capital4) increases authorized in the event of use by the Board of Directors of this delegation: the maximum nominal amount of capital increases that mayV be carried out immediately or in the future under this delegation is set at five hundred million (€500 million), in any event, the share issues carried out under thisV delegation will not exceed the limits provided for by the regulations applicable on the date of issue (to date, 20% share capital per year), it is specified that the maximum amount of capital increasesV carried out or likely to be carried out in the future under this delegation will be deducted from (i) the amount of the overall cap provided for in paragraph 3 of the 21st resolution submitted to this meeting or, where applicable, on the amount of the overall ceiling that may be provided for by a resolution of the same nature that may succeed said resolution during the period of validity of this delegation and (ii) on the ceiling provided for in the paragraph 4 of the 22nd resolution submitted to this meeting or, as the case may be, the amount of the ceiling that may be provided for by a resolution of the same nature that could succeed said resolution during the period of validity of this delegation, to these ceilings will be added, where applicable, the nominalV amount of shares to be issued, in the event of new financial transactions, in order to preserve the rights of holders of securities giving access to the share capital; Sets at twenty-six (26) months, as from the date of this5) meeting, the period of validity of the delegation of authority covered by this resolution; Resolves to cancel shareholders’ preferential subscription6) rights to the shares and securities covered by this resolution; Acknowledges that if subscriptions have not absorbed the7) entire issue, the Board may limit the amount of the transaction to the amount of subscriptions received provided that this amount reaches, at least, the maximum amount of the issue, three-quarters of the issue decided; shareholders of their preferential subscription rights to the shares to which these securities entitle them; Acknowledges that this delegation automatically entails, in8) favor of the holders of the securities issued giving access to the shares to be issued by the Company, the waiver by the
On December 17, 2020, the Board of Directors duly noted that following the termination of Natixis’ subscription to the insurance policy taken out by BPCE with Arial CNP Assurances on October 20, 2020, this agreement, authorized by the Board of Directors of August 1, 2017, therefore lapsed.
On June 25, 2014, the Board of Directors approved the draft agreement, authorized the signing of the underwriting agreement on this basis, and granted all powers to the Chief Executive Officer for the purpose of making any alterations to said draft that do not materially alter its content, and of signing the underwriting agreement in the name and on behalf of Natixis.
The term of the Company, created on November 20, 1919, was increased to ninety-nine years beginning on November 9, 1994, unless it is extended or dissolved early.
Article 12 – Powers of the Board of Directors The Board of Directors determines the orientations of the12.1 Company’s activity and sees to the implementation thereof, in accordance with its corporate interest, taking into account the social and environmental issues associated with its activity. Within the limits of the corporate purpose and the powers expressly granted by law or these bylaws to General Shareholders’ Meetings, the Board concerns itself with any matter relating to good business practice and governs the business of the Company through its deliberations. The Board of Directors performs the controls and checks it deems appropriate.
Article 17 – Liability of directors Directors are liable vis-à-vis the Company or third parties, either for breaches of the legal or regulatory provisions governing joint stock companies, or for breaches of these bylaws, or for misconduct in their management, under the conditions and subject to the penalties stipulated by the laws in force.
Article 22 – Admission to General Shareholders’ Meetings – Powers Shareholders’ Meetings include all the shareholders whose securities have no outstanding payments due.
Shareholders may vote by post or by proxy in accordance with the legal and regulatory provisions in force. In accordance with the decision of the Board of Directors, shareholders may participate in General Meetings by means of video-conferencing and may vote using all means of telecommunication and remote transmission, including the Internet, in accordance with the applicable regulations at the time of their use. This decision is communicated in the notice of meeting published in the BALO: Bulletin des Annonces Légales Obligatoires (Gazette 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 filled in and signed directly on the site by any means approved by the Board of Directors in accordance with the applicable legislative and regulatory provisions.
Bail-in A mechanism designed to limit the use of public funds by a failing institution still in operation or in the process of liquidation. The bail-in mechanism grants power to the supervisory authorities to require certain creditors of a credit institution on the brink of failure to convert their debt into shares of the institution and/or to take a loss on their holdings. Under the European accord of June 26, 2015, in the event of capital inadequacy (due to losses), creditors holding subordinated debt, then senior creditors, then unsecured deposits by large corporates, then those of SMEs and finally those of individuals exceeding €100,000 will be bailed-in. However, secured deposits, covered bonds, employee compensation, liabilities related to the institution’s vital activities and interbank liabilities with a maturity of less than 7 days should not be affected.
BCBS Basel Committee on Banking Supervision. Institution bringing together the governors of the central banks of the G20 countries in charge of strengthening the soundness of the global financial system as well as the effectiveness of prudential supervision and cooperation between banking regulators.
CDPC Credit Derivatives Products Company, i.e. a business specializing in the sale of coverage against credit default through credit derivatives.
LGD Loss Given Default, a Basel 2 credit risk indicator corresponding to the loss in the event of default. It is expressed as a percentage (loss rate).