At December 31, 2014, Natixis’ Wholesale Banking division employed 3,104 people (FTEs) in 28 countries around the world: 60% in France and 40% abroad. It operates in the major global marketplaces via three platforms: the Americas, Asia-Pacifi c and EMEA (Europe except France, Middle East and Africa). Wholesale Banking advises corporate clients, institutional investors, fi nancial sponsors and public sector entities. It offers them a wide range of fi nancing products, access to capital markets, and transaction banking services. Natixis draws on the technical expertise of its teams and a renowned research department to develop solutions adapted to the specifi c needs of each its customers.
In 2014, Natixis acted as financial and rating advisor and sole bookrunner for the first French and European project bond in the digital infrastructure sector for Axione Infrastructures.
(8) Spin-off transaction to separate a group’s activities into separate companies.
In its capital markets business lines, the Asia-Pacifi c Platform signifi cantly increased its earnings from sales by placing structured products with strategic NBFI (non-bank fi nancial institution) clients, especially for fi xed income products. Once again, Taiwan confi rmed its potential in terms of revenue contributions and South Korea emerged as a new engine for growth. The platform tripled its customer deposit infl ows and structured note issues compared to 2013. It quadrupled the distribution of BPCE issues among Asian investors (especially Samurai and Uridashi). These successes were the result of strengthening our sales teams, an initiative that began in 2013 and continued in 2014.
The new international distribution organization, structured on two segments, namely institutional investors (pension funds, sovereign funds, central banks, etc.) and distribution (fund of funds, private banking, platforms and IWMAs), was successfully implemented. The organization will continue to adapt in line with the Group’s growth ambitions and its customers’ requirements.
At end-2014, assets under management of the NGAM Private Equity Division reached €6.1 billion, of which close to 90% for third-party investors, and covers the private equity, mezzanine, infrastructure and private debt segments under the multi-affi liate model which gives access to the expertise of six independent, complementary and international asset management companies.
In line with Groupe BPCE’s “Together” project, the objective of further increasing synergies with the Banque Populaire and Caisse d’Epargne networks has also been included in the 2014-2017 “Growing Differently” plan. This is a key focus for Specialized Financial Services.
In electronic banking, Natixis Payment Solutions is also developing a full range of services for the bank distribution networks, ranging from product design to technical and marketing support solutions while incorporating the client’s goals and expectations. It supports the development of markets for companies, professionals and individuals and has an active policy of launching new products. Natixis Payment Solutions managed over 20 million cards and processed nearly 3.6 billion card transactions in 2014.
1 PRESENTATION OF NATIXISNatixis’ business lines The IPO’s success also led Natixis, as stabilization agent for and on behalf of the fi nancial institutions supporting Coface throughout the IPO process, to exercise its greenshoe option in full covering additional share issues just four days after trading was opened.
The Group also consolidated its global foothold. During the year, Coface obtained two new licenses to sell credit insurance policies with its own sales force in Columbia and Morocco. It obtained a similar license in Israel in January 2015. These licenses round out the indirect distribution model initiated several years ago in these countries through partnerships with local insurers. The Group furthered its geographic expansion by opening new representative offi ces in the Philippines and, more recently, in Kazakhstan, by launching a credit insurance range in Serbia via a new partnership, and by increasing the number of Coface distribution agents in the United States.
All in all, the 46 enhanced information centers in place at December 31, 2014 carried out nearly twice the number of tasks in 2014 compared to 2013, providing the Group’s underwriters with continuously improving information and specifi c fi nancial analyses.
The Guarantee, which was agreed in principle and announced in August 2009, was formally approved on November 12, 2009 by the corporate bodies of BPCE and of Natixis, with retroactive effect to July 1, 2009.
At the General Shareholders’ Meetings there is a dedicated “Shareholders’ Club” stand for Club members, prospective members and for all shareholders requiring information on Natixis.
To this end, and in line with previous years, a survey was run ahead of the General Shareholders’ Meeting in order to ascertain shareholders’ expectations as accurately as possible. The survey was posted on the website and e-mailed to the members of the Shareholders’ Club, and received 300 responses. The main themes, as identifi ed by 64% of respondents, were given special focus: strategy, appropriation of earnings, Natixis shares and management compensation.
Chairman of the Steering and Supervisory Board of Caisse d’Epargne Ile-de-France
V Member of the Board of Compagnie Française d’Assurance pour le Commerce Extérieur (until 10.15.2010) then Permanent Representative of Natixis on the Board of Directors
V Associate member of the Chamber of Commerce and Industry of Yonne
Catherine HALBERSTADT Chief Executive Offi cer of Banque Populaire du Massif Central
Key advisory skills: expertise in Human Resources issues; extensive knowledge of retail banking and business fi nancing.
Chairman of Sociétariat BPMC S.A.S. V Permanent Representative of Banque Populaire du Massif Central, Member of the Board of: Association des BP pour la Création d’Entreprise, i-BP V Permanent Representative of Banque Populaire Massif Central, Member of the Committee of Banques d’Auvergne
V Permanent Representative of BPMC, Member of the Committee of Banques d’Auvergne
V Permanent Representative of BPMC, Member of the Board of BICEC (since 09.01.2010)
Anne LALOU Dean and Managing Director of Web School Factory, Managing Director of the Innovation Factory
Committee attendance rate in 2014 Board of Directors: N/A Appointments and Compensation Committee: N/A Strategic Committee: N/A
V Chairman of the Management Board of Caisse d’Epargne Rhône-Alpes (CERA)
V Representative of CERA, member of the Supervisory Board of IT-CE (formerly GCE Technologies) (since 12.31.2011)
V Chairman of the Management Board of Caisse d’Epargne Ile-de-France (CEIDF)
V Permanent Representative of CEIDF, member of the Supervisory Board of IT-CE
Henri Proglio was Chairman and Chief Executive Offi cer of EDF from 2009.
Key advisory skills: A nationally and internationally renowned industrialist, with expertise in large corporations and strategic issues.
V Vice-Chairman of Association EURELECTRIC (Belgium) (until 11.25.2014) V Member of the Board of: FCC (a) Spain (until 09.22.2014), South Stream
V Member of the Board of EDF International S.A. (since 12.06.2010)
V Vice-Chairman of Conseil Général du Val d’Oise (b) (since March 2011)
Key advisory skills: expertise in strategic, management and business development issues.
V Permanent Representative of Métropole Télévision, Member of the Shareholders’ Committee of Multi 4 S.A.S.
V Member of the Board of: Nexans S.A.(a) (until 03.31.2014), GL Events SA (a)
V Permanent Representative of M6 Publicité, member of the Board of Directors of: Home Shopping Service S.A., M6 Diffusion S.A.
R SUMMARY TABLE ON COMPLIANCE WITH AFEP-MEDEF CODE RECOMMENDATIONS: IMPLEMENTATION OF THE “APPLY OR EXPLAIN” RULE
Is not a Board member representing a major shareholder of Natixis or BPCE OK OK OK OK OK
In accordance with the law, the number of directors who are over the age of 70 is limited to one-third of the number of directors in offi ce. No Natixis Director had reached the age of 70 at December 31, 2014.
Minutes of Board Meetings are prepared and sent to Natixis’ directors, and approved at every subsequent session by these latter.
With regard to Article L.225-102-1 of the French Commercial Code, which, in the management report, mentions the agreements entered into directly or through an intermediary, by, on the one hand, the CEO, one of the directors or one of the shareholders having a greater than 10% voting right in a company and, on the other hand, another company in which this latter directly or indirectly holds more than half the capital, no agreement meets these criteria for fi scal year 2014.
For the fi fth year in a row, Natixis assessed the work of its Board of Directors and specialized Committees, in accordance with recommendations set out in the AFEP-Medef Code regarding the correct governance of listed companies.
2.3.1.5 Board member training Natixis decided to initiate a training program for its Board members as of the 2012 fi scal year. This training is divided into two parts: V a training program aimed at new Board members joining the Company. This half-day training session is particularly aimed at presenting Natixis (its business lines, governance and organization), outlining the main items of the income statement and components of the risk management policy, and heightening Board members’ awareness of regulatory aspects and their responsibilities; V an ongoing training program for existing Board members that is composed of various modules, particularly on Natixis’ different business lines, the financial markets, the accounting and financial regulations for credit institutions, as well as on issues concerning compliance with internal audits and the responsibilities of Board members.
The Committee was chaired by independent member Mr. Oppetit throughout the period.
V Review of the call for tenders launched by BPCE involving the group’s Statutory Auditors V Reading of all correspondence from the ACPR as well as all correspondence and information from the Autorité des Marchés Financiers (AMF) and presentation of answers to said correspondence from Natixis 2.3.2.2 Risk Committee (since December 17, 2014)
V Reviewing the recommendations of the AFEP-Medef in terms of compensating corporate offi cers
In 2014, The Appointments and Compensation Committee dealt with all of the topics relating to the Appointments Committee; its division into two Committees did not occur until December 17, 2014.
In this context, the Senior Management Committee studied the opportunities for external growth in asset management and supervised various plans for the international deployment of Wholesale Banking, particularly the coverage of new geographic regions such as Latin America. It reviewed and approved various projects in Specialized Financial Services, specifi cally consumer fi nance and payments.
2 CORPORATE GOVERNANCE Natixis Compensation Policy Any individual or legal entity that owns, directly or indirectly, alone or jointly, a 1% share of the voting rights, or any multiple of this percentage, must notify the Company, by registered letter with acknowledgment of receipt, of the number of voting rights that they possess. This notice must be made within a period of 15 days following each acquisition or sale of this fraction.
The recommendations of the AFEP-Medef code on the compensation of executive managers of listed companies are taken into account in the bank’s corporate governance approach. As shown above, the AFEP-Medef code is the one that the Company refers to when preparing the report provided for by Article L.225-37 of the French Commercial Code.
R variable portion: €2,000 per meeting, capped at six meetings, i.e. €20,000 maximum in total; V Members of specialized Committees: R Audit Committee: Chairman: R fixed portion: €17,000 per year (prorated to the term of office),
R Members of the Audit Committee: R fixed portion: €5,000 per year (prorated to the term of office),
- €662,000 will be deferred over three years, 50% of which will be indexed to the Natixis share price, and will be paid in thirds in 2016, 2017 and 2018, provided that the employment and performance conditions are met.
V 12.5% net income, Group share V 8.3% cost/income ratio V 4.2% net revenues
(2) Part of which from directors’ fees due for fi scal year 2012.
Over 31,000 training and awareness-raising initiatives focused on compliance risk were provided to Natixis staff in 2014. Priority was given to the numerous regulatory developments (Dodd Frank Act, FATCA, EMIR, index regulations, etc.) and anti-money laundering and terrorist fi nancing provisions. In this area, Natixis considerably enhanced its training schemes in 2014 with the creation of a new e-learning solution on managing embargoes and international sanctions, which was rolled out in France and abroad.
Credit decisions are made either under limit authorizations granted jointly to business lines and certain members of the Risk Department (workfl ow process) or by the relevant Credit Committees, using counter-analysis. These mandates are set out formally and granted individually by the Chief Executive Offi cer or by any person whom he authorizes to that end. They are sized according to the counterparty’s category and internal credit rating, and the nature and duration of the commitment. Furthermore, these authorizations can be exercised only when the commitment of interest satisfi es the different criteria set out in the risk policy of each sector and activity.
Natixis uses a Monte Carlo simulation of VaR over a 1-day time period and using a confi dence interval of 99%.
Natixis’ ALM is based on the following organization: V the Financial Management division proposes ALM standards to the ALM Committee and executes the Committee’s decisions; V Natixis’ contribution to the BPCE/Natixis single treasury and central bank collateral management pool since 2011 is aimed at refinancing all business lines in accordance with the established rules and limits, and executing the decisions of the ALM Committee delegated by the Financial Management division; V Natixis’ Market Risk Department is in charge of monitoring ALM limits. It also performs second-level controls of ALM indicators generated by the Financial Management division and indicators established by the liquidity management team.
The reliability of these process is based on the following core principles: V definition and dissemination of the accounting and regulatory principles applicable to Natixis companies, including the analysis and interpretation of new standards published during the period; V documentation and oversight of the different stages in the preparation of these reports; V audit trails justifying all published accounting and management data, based on the individual contributions made by each entity and restatements made centrally; V formal, documented first- and second-level controls contributing to the management of risks relating to accounting and financial information (balance sheet, income statement, regulatory information); V data archiving and security procedures; V provision of support and appropriate training to the accounting and regulatory reporting teams of those consolidated entities that use the consolidation and data collection tools, thus allowing for best practices to be spread within the Company.
The 2015 fi scal year will be mainly dedicated to: V further tightening of the timetable for publishing regulatory reports and the financial statements; V continued progress in the project to streamline the information systems used for market transactions (front and back office systems); V targeted initiatives to enhance the automated production of certain data and reports; V continuing initiatives committed to strengthening second-level controls in the tax and regulatory areas; V upgrades to the accounting control system in line with changes to IFRS.
This chapter presents information regarding risks and capital adequacy in accordance with the following regulatory requirements: V requirements in respect of accounting standards (IFRS 7, IFRS 4, etc.); V requirements in respect of the European regulation of June 26, 2013 (CRR) and the European CRD4 Directive implementing the Basel 3 reforms in Europe.
Table 4 – EAD by business sector 442 § e 131
Table 14 – Average weighting by internal rating (S&P equivalent) for asset classes measured under the IRB approach 137
Description of the bank’s key risks by business line V Risk-weighted assets by business line 125
V Counterparty risk exposure and impact of risk-reduction techniques (tables 19, 20 and 21)
Governments (including the governments of countries where Natixis’ entities operate) have responded to the fi nancial crisis by adopting, or are currently in the process of submitting to Parliament, a number of regulatory measures implementing major changes to the existing framework (Basel 3 (CRD4), Solvency 2, Dodd-Frank Wall Street Reform and Consumer Protection Act, Foreign Account Tax Compliance Act, European Market Infrastructure Regulation (EMIR), MiFID 2, French banking reforms, European banking union, etc.).
It regularly reports on its work, submitting its analyses and fi ndings to Natixis’ executive managers, to Natixis’ supervisory body, and to Groupe BPCE. A risk consolidation team generates an overview through the use of scorecards that report on risks and risk management.
The principal legal proceedings in progress involving Natixis and its subsidiaries are described in section [3.9.2].
The procedures for monitoring and managing these risks are described in section [3.7].
The new regulatory framework aims to reinforce the fi nancial strength of banking institutions, and involves: V a stricter definition of the capital items eligible to meet capital requirements; V new own funds requirements, in particular for counterparty risk on derivatives; V higher ratios to comply with, specifically regarding CET1 capital, and capital buffers (capital conservation buffer, contra-cyclical buffer, systemic risk buffer).
29 If convertible, specify issuer of instrument convertible into N/A N/A
French French French State of New York (except regulatory status governed under French law)
At each coupon payment date (03.28, 06.28, 09.28 and 12.28 of each year)
M andatory M andatory M andatory M andatory M andatory M andatory M andatory M andatory 21 Existence of step up or other incentive to redeem N o N o N o N o N o N o N o N o 22 Noncumulative or cumulative Cumulative C umulative C umulative C umulative C umulative C umulative C umulative C umulative 23 Convertible or non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible Non-convertible 24 If convertible, conversion trigger(s) N/A N/A N/A N/A N/A N/A N/A N/A
Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Tier 2 Ineligible Ineligible Ineligible
Yes N/A N/A N/A N/A N/A N/A Yes (early refund) Yes (early refund) Yes (early refund)
The exercise date of the early redemption option for the full issue at par at 06.27.2021
Common Equity Tier 1 capital: instruments and reserves 1 Capital instruments and the related share premium accounts 9,152 26 (1), 27, 28, 29, EBA list 26 (3)
17 Holdings of the CET1 instruments of fi nancial sector entities where those entities have reciprocal cross holdings with the institution designed to infl ate artifi cially the own funds of the institution (negative amount)
Tier 2 (T2) capital: regulatory adjustments 52 Direct and indirect holdings by an institution of own T2 instruments and subordinated bans (negative amount) (5) 63 (b) (i), 66 (a), 67, 477 (2) 0 53 Holdings of the T2 instruments and subordinated bans of fi nancial sector entities where those entities have reciprocal cross holdings with the institution designed to infl ate artifi cially the own funds of the institution (negative amount)
The losses given default are calculated: V on a statistical basis for the Corporate asset class; V based on internal and external histories and an external benchmark for banks and sovereigns; V using stochastic models if there is a claim against an asset.
Exposures secured by mortgages on immovable property 2,698 310 2,543 155 650
■ TABLE 4: EAD BY BUSINESS SECTOR (Data certifi ed by the Statutory Auditors in accordance with IFRS 7)
3 RISKS AND CAPITAL ADEQUACYCredit and counterparty risks (including country risk) R TABLE 15: DIFFERENCE BETWEEN PROVISIONS AND EXPECTED LOSSES (EL)
R TABLE 17: GUARANTEED EXPOSURES BY TYPE AND INTERNAL RATING OF GUARANTOR (S&P EQUIVALENT) ■ INSTITUTIONS
AA+, AA, AA- * Excluding exposures on Groupe BPCE’ affi liates.
R TABLE 34: RE-SECURITIZATION EXPOSURES BEFORE AND AFTER SUBSTITUTION Re-securitization exposures are broken down by guarantor rating.
The regulator has authorized Natixis to use these new indicators in order to determine its capital requirement since December 31, 2011: 2. loss alerts by portfolio and aggregated by business line, which alert the management and Risk Department if losses reach a certain threshold over a given month or on a cumulative basis since the beginning of the year. These thresholds are set by the Market Risk Committee according to the characteristics of each portfolio, past performance and budgetary targets; 3. stress tests to measure potential losses on portfolios in extreme market conditions. Natixis’ mechanism is based on two categories of stress tests: overall stress tests and dedicated stress tests for each business.
■ IRC INDICATOR This indicator covers the regulatory scope. Natixis’ IRC level averaged €192 million. It peaked at €321 million on May 31, 2014 and stood at €193 million at December 26, 2014.
Overall interest rate, liquidity, structural foreign exchange risks 3.8 Overall interest rate, liquidity, structural foreign exchange risks
This sensitivity, which is very low considering the size of the banking book, nevertheless increased compared to December 31, 2013 (€17 million, resulting from currency netting). This increased sensitivity can largely be attributed to the funding policy – mainly via long-term structured issues carried out in 2014 (accreting issues, predominantly in USD).
Other fi nancial liabilities at fair value through profi t and loss 126 1 46 14 5 5 2 4 8 42
The department is equipped with a set of tools that cover all of the areas under its responsibility, including: V behavioral analysis tools, used in conjunction with KYC tools, aimed at detecting money laundering transactions and internal fraud, verifying compliance with embargoes and preventing terrorist financing; V tools for monitoring sensitive transactions, maintaining lists of insiders and managing conflicts of interest.
The whistleblowing policy provides for an internal procedure that makes it possible to report anomalies with respect to the implementation of banking compliance obligations.
Within Natixis, this is ensured at two levels of the organization: CNIL coordination (Compliance) and local CNIL representatives in every business line. In 2014, the following actions were taken: V the various websites’ cookie functions were brought in line with the CNIL recommendations of December 2013 through information and consent-obtaining measures; V the role of the local CNIL representatives was clarified. They perform the following duties within their scope of responsibility: R recording of operations and verifi cation of formalities with CNIL (declaration or authorization requests, control of transfers outside the European Union),
Regarding embargoes, in 2014 punitive measures were taken by the European Union and the United States against the Russian Federation in response to the diplomatic and military crisis in Ukraine. These mainly target companies predominantly owned by the Russian government in the banking, energy and military sectors.
Class action lawsuits in the United States relating to Municipal Guaranteed Investment Contract transactions
The defendants responded to the grievances fi led by the class action plaintiffs and the other plaintiffs. The parties have entered the discovery and class certifi cation phases of litigation.
Outstanding Madoff assets, net of insurance, were estimated at €415 million at December 31, 2014, and were fully provisioned at this date. The effective impact of this exposure will depend on both the extent of recovery of assets invested in Natixis’ name and the outcome of the measures taken by the bank, primarily legal. With this in mind, Natixis has appointed law fi rms to assist it in these recovery efforts. Moreover, in 2011, a dispute emerged over the application of the insurance policy for professional liability in this case; a ruling on the merits took place in early 2015 confi rming the application of the insurance policies, for the full amount covered, of the losses incurred by Natixis as a result of the Madoff fraud.
CEGC hedges its liability portfolio by implementing a reinsurance program tailored to its activities. Through this program, the Company is able not only to secure its underwriting income and solvency margin on the loan guarantee markets, but also to protect its equity in the event of high-severity claims on activities other than loan guarantees.
Fair value adjustment on own debt is recognized by the Corporate Center.
The share in income from associates, for the most part consisting of contributions from Investment Solutions and Financial Investments, recorded a solid year-on-year increase to €40 million.
Structured Financing revenues picked up 5.4% year-on-year. O2D scope business levels picked up substantially (35%), while limiting the growth of outstandings (3%). Service fee income accounted for 33% of revenues.
V Advisory income increased by 32% with the significant development of the Equity Capital markets business.
Investment Solutions posted a 15.2% increase in revenues yearon -year to €2,818.4 million (+15.0% at constant exchange rates).
NGAM continued to grow and earned a number of awards in 2014: In the United States: V In early 2014, Natixis Global Asset Management was ranked No. 1 in the US mutual fund category of the Barron’s/Lipper ranking based on an assessment of 2013 performances; V Two funds were added to Money magazine’s Top 50 selection: “Oakmark International” in the foreign fund category and “Loomis Sayles Bond” in the bond category.
The average rate of return on AuM was 27.2 bp versus 25.4 bp in 2013. Bonds and insurance products remained predominant in the product mix at the end of 2014 (29.3% and 25.9%, respectively).
Associates (ABP IARD in auto insurance & multi-risk home insurance in France, ADIR in Lebanon) maintained solid profi tability, with a share of income up 14.1% to €8.9 million.
Natixis Private Equity predominantly holds shares of funds and is currently comparable to a fund of funds. Relative to December 31, 2013, Natixis’ share of assets under management (or cash-at-risk) fell 33% in 2014 to €193 million and off-balance sheet commitments 35% to €58 million.
In September, the European Central Bank (ECB) made its second interest rate cut of the year, taking the Eonia fi xing and the short end of the interest rate curve into negative territory.
The provision for credit losses decreased €156 million on 2013 to -€201 million in 2014.
4 OVERVIEW OF THE FISCAL YEARInformation concerning Natixis S.A. Appendix to 4.1.3 – consolidated results
3.4.2 Summarized financial information pertaining to material joint ventures and associates
Gains or losses recorded directly in equity 19 * Data for EIG established at December 31, 2014 in accordance with IFRS as adopted by the European Union at that date and with the accounting principles and valuation methods applied to Natixis’ consolidated fi nancial statements as presented in Note 5.
The Group did not encounter signifi cant restrictions on interests held in associates and joint ventures.
Securities bought or sold are, respectively, recognized or derecognized on the settlement date, regardless of their accounting category.
The impairment loss is recorded against the line on which the asset was initially shown for its net amount. Impairment charges and reversals are recorded in the income statement under “Provision for credit losses”.
5 FINANCIAL DATAConsolidated fi nancial statements and notes Derivative financial instruments used for hedging purposes
IAS 39 recognizes three types of relationship between derivatives and hedged items to qualify as hedge accounting: cash fl ow hedges, fair value hedges and hedges of a net investment in a foreign operation.
Fair value hedging is intended to hedge the exposure to changes in fair value of a recognized asset or liability or an unrecognized fi rm commitment.
Retrospective hedge effectiveness tests are used to verify whether or not the hedge was effective at different reporting dates.
The fair value of an instrument (asset or liability) is the price that would be received to sell an asset or paid to transfer a liability in a standard arm’s length transaction between market participants at the measurement date.
These instruments are valued using generally accepted models (discounted cash fl ow method, Black & Scholes model, interpolation techniques), and on the basis of directly observable inputs.
The Pskew model is similar to the Tskew model. It is used in particular for simple ratchet equity products such as capped or fl oored ratchet products.
Average number of treasury shares issued and outstanding over the period 2,580,400 6,105,098
Some liabilities issued and recognized at fair value through profi t and loss are covered by a guarantee. The effect of this guarantee is incorporated into the fair value of the liabilities.
At December 31, 2014, there are no receivables for which ownership was transferred to BPCE or SFEF as security in connection with fi nancing indirectly received from SFEF, as these were fully repaid over the period.
5 FINANCIAL DATAConsolidated fi nancial statements and notes 6.9.1.2 Other liabilities
Deferred acquisition costs 309 242 6.9.3.2 Insurance accrual accounts – Liabilities
5 FINANCIAL DATAConsolidated fi nancial statements and notes 6.10.2 Investment property
Consolidated fi nancial statements and notes 6.15 Insurance companies’ technical reserves
Impairment losses taken on availablefor -sale fi nancial assets 937 69 (18) (183) 2 (1) 806 * o/w: A €104 million change in actuarial assumptions in 2014 for employee benefi ts recorded directly in non-recyclable equity.
(b) Loan repayments and securities redemptions comprised: V The early redemption of a dated subordinated note with a nominal amount of $300 million, issued in December 2006 and having an initial maturity of January 2019; V The redemption of a dated subordinated note with a nominal value of €500 million and having an initial maturity of May 2019; V The maturing of a security issued by Versailles for $4.5 million; V The maturing of securities subscribed for by BPCE (-€41 million) and of securities issued by Natixis Financement (-€8 million), and the repayment by ABP Vie of a subordinated loan (€2 million).
Other fi nancial liabilities held for trading 936 936 1,067 1,067
Items recorded defi nitively in other items of comprehensive income (104) 37 (67) 70 (26) 44
Coface, Corporate Data Solutions, Private Equity businesses (proprietary funds and share of sponsored funds), Natixis Algérie and the Ho Chi Minh branch are managed as fi nancial holdings due to their lower synergies with Natixis’ other businesses.
R Portfolio Management, which is tasked with optimizing the fi nancing portfolio. This department is an essential part of the Originate to Distribute model,
Available-for-sale fi nancial assets 1,828 33,004 1,686 1,744 2 50 2,364 40,678
The information on capital adequacy required under IAS 1 is presented in section 3.3 of Chapter [3], “Risk Management and Capital Adequacy”.
A fi nancing commitment given is a contingent liability, defi ned by IAS 37 as: V a potential obligation arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
For NGAM Europe, this transaction represents an expansion of expertise targeted at retail customers and higher margin generation.
(b) The amounts shown for 2013 and 2014 represent the total amount of compensation (fi xed, variable, benefi ts in kind, etc.) paid to the members of the Management Board in the 2013 and 2014 fi scal year. The change in compensation mainly refl ects the changes that took place in 2014 in the membership of the Natixis Management Board.
5 FINANCIAL DATAConsolidated fi nancial statements and notes 16.2 Net revenues, pre-tax profit, taxes and headcount by country
MSR TRUST (1) Real estate fi nance FC 100 100 100 100 United States
NATIXIS GLOBAL ASSET MANAGEMENT, LLC Holding company FC 100 100 100 100 United States
NATIXIS GLOBAL ASSET MANAGEMENT, LP Holding company FC 100 100 100 100 United States
NGAM INTERNATIONAL, LLC* Retail FC 100 100 100 100 United States
AEW Europe Sede Secondaria Retail FC 100 100 100 100 Italy
Credit insurance and related services FC 41 41 100 100 United States
COFACE IBERICA -SUCC (COFACE SA) Insurance FC 41 41 100 100 Spain
COFACE HUNGARY - SUCC (COFACE AUSTRIA) Insurance FC 41 41 100 100 Hungary
COFACE TAIWAN (SUCC-COFACE SA) Insurance FC 41 41 100 100 Taiwan
GROSS OPERATING INCOME 1,553 1,500 33 Provision for credit losses (201) (357)
The fi nancial statements are presented in accordance with CRC Regulation No. 2000-03 as amended for the individual summary fi nancial statements of companies coming under CRBF Regulation.
V Securities held for trading: securities that are originally bought or sold with the intention of reselling or repurchasing them in the short term, securities held as part of a market-making operation, and securities bought or sold for the purposes of the specialized management of a trading portfolio. When initially recognized, these securities must be traded on an active market with easily obtainable prices representing actual and regularly occurring market transactions on an arm’s length basis. On acquisition, securities held for trading are recognized at the price paid including any accrued interest. Transaction costs are recognized in expenses.
V Securities held for investment: dated fixed-income securities acquired with the stated intention of holding them to maturity. They are reported on the balance sheet at their purchase price, excluding acquisition costs. Any difference between the purchase price and the redemption price is recorded in income over the remaining life of the securities.
1.12 Guarantee mechanism for assets of the former GAPC hive-off vehicle
On November 12, 2009, an arrangement was made by BPCE to protect a portion of the portfolios of the former GAPC (1) hive-off vehicle with retroactive effect at July 1, 2009. With this guarantee mechanism, Natixis was able to free up a signifi cant portion of its equity allocated to ring-fenced assets and to protect itself against the risk of loss from these portfolios subsequent to June 30, 2009. This protective arrangement was based on two mechanisms: V a sub-participation in terms of risk which acted as a financial guarantee on 85% of the nominal value of assets recognized as “securities held for investment”, “securities held for trading”, “securities held for sale” and “receivables”. Under this guarantee, Natixis was protected from the very first euro in default up to 85% of the default amount; V two total return swaps (TRS), one in euros and another in dollars, which transferred to BPCE 85% of the profit or loss recognized as from July 1, 2009. The instruments hedged by these TRS were mostly represented by “securities held for trading” and to a lesser extent by “securities held for sale”. At the same time, Natixis bought an option from BPCE which, if exercised, would allow it to recover in 10 years’ time any net positive performance by the portfolio in exchange for payment of a premium.
CUBE 5, allée Scheffer L-2520 Luxembourg 961,281 EUR 0 EUR 15.00%
INTERBANK AND SIMILAR TRANSACTIONS 197,845 173,236 * o/w repurchased securities: 79,441 62,928 o/w accrued interest 9 8
Expected return on plan assets, gross (4) (1) (5) (4) (1) (5)
Natixis served as sole arranger, bookrunner and underwriter of the fi rst “project bond” in Italy aimed at refi nancing Antin Solar Investments, a portfolio of nine solar PV plants with a total capacity of 77 MW. The total amount of the bond was €164 million.
Natixis Energéco, a subsidiary of Natixis Lease, actively supports the renewable energy industry and is one of the leading contributors to the fi nancing of investments in this sector. In 2013, Natixis Energéco was ranked as the No. 1 French bank in terms of the number and amount of fi nancing projects (source: IJ Global).
2014 key events A leading arranger and servicer in energy and agriculture
6 SOCIAL AND ENVIRONMENTAL PERFORMANCEStrategic outlines and organization of the sustainable development policy In addition to fi nancing, asset management fi rm Mirova manages three funds dedicated to funding renewable energy projects and has helped build new wind and solar PV power projects amounting to a capacity of over 700 MW in France and Sweden over the last 12 years.
The main changes introduced by the amendment include the expansion of the scope of the Equator Principles to include the four types of fi nancing or services associated with a project: project fi nance, project fi nance advisory, project-related corporate loans, and related bridge loans.
Equator Principles Financial Institutions (EPFIs) are now required to annually report to the Equator Principles Association the names of project fi nance transactions that reached fi nancial close and were subject to review. The fi rst statement of project names, along with their sectors and host country, reported by EPFIs will be published on June 30, 2015 and will be available on the Association’s website (
Pursuant to its commitments as an EPFI, Natixis will report the data related to its activity.
Since 2009, Natixis’ management of these buildings has been ISO 9001 (1) and 14001 (2) certifi ed, which validates the quality and environmental management systems in place at all central buildings managed by the Real Estate and Logistics Department. In 2012, these certifi cations were renewed for three years and extended to the operating departments of Natixis’ data centers. They cover 13 managed buildings, totaling 223,767 m² (i.e. 82% of the surface area managed by the Real Estate and Logistics Department and 77% of the total surface area in France).
In 2015, efforts will be continued with the aim of further reducing energy consumption by 2% based on constant scope and weather conditions.
Broader objectives are also pursued through this policy: V promoting official environmental certifications and eco-designed products; V evaluating Natixis’ suppliers using social and environmental responsibility criteria related to their products, services or industries; V encouraging suppliers to be more transparent in describing the environmental characteristics of their products.
In 2011, Natixis made a fi ve-year commitment to the research foundation at Institut Gustave Roussy, the leading cancer center in Europe. Institut Gustave Roussy has always closely combined therapeutic care with basic and clinical research, giving it globally recognized expertise in innovative cancer treatments.
Natixis supports the Fondation Gustave Roussy’s “Cancer Revolution” campaign, a research program on personalized cancer treatment, and provides particular support for the work of three research teams focusing on cancer metastasis.
(1) GRI: the Global Reporting Initiative, a multi-stakeholder association that develops and disseminates an internationally recognized sustainable development reporting framework.
Natixis did not record any environmental provisions or guarantees in 2014.
(c) Coface, Corporate Data Solutions, Natixis Private Equity, Natixis Algérie, Vietnam branch.
6 SOCIAL AND ENVIRONMENTAL PERFORMANCELabor information ■ BREAKDOWN OF REASONS FOR ABSENTEEISM AS A %
About 100 employees at three different Natixis entities are working from home as part of a pilot program launched in May 2014 and continuing until June 2015. The goal of this pilot phase is to determine the terms and conditions for expanding the program across the consolidated Natixis France scope in 2015.
Labor information 2014 key event Campus 4 You: 40 training courses led by some 50 Wholesale Banking specialists
The new agreement negotiated and approved by Management in December 2013 for the 2014-2016 period will move forward with the development of initiatives to promote employees with disabilities.
Natixis participated in specialized recruitment forums and hired 38 employees with disabilities over the year, bringing the number of disabled employees to 325 at the end of 2014.
The raw material used the most at Natixis is paper (reams, envelopes, desktop publishing, internal and external printouts, etc.). Most of the paper used is sustainable forest management-certifi ed (FSC (1) and PEFC (2) certifi cations) and some is made from recycled fi bers.
Energy consumption: electricity, heating and cooling utilities in offi ce buildings - excluding data centers (in MWh) 56,122 73,200 78,902
Energy consumption per workstation (in MWh) excluding data centers 3.08 3.79 3.89
6 SOCIAL AND ENVIRONMENTAL PERFORMANCEEnvironmental information For the third year running, Natixis recorded a signifi cant drop in the energy consumption of its offi ce buildings, attributable in large part to the removal of Coface from the consolidation scope, but also to energy consumption reduction and optimization measures (see section [6.1.2.1]).
A company-wide travel plan has been in place since 2008, with a series of measures promoting the use of public and low-impact transportation, or carpooling: V employees are encouraged to use the public transport near sites, with a public transport pass reimbursement rate of 60%; V the bank jointly funds a public bus route that connects Paris to Charenton-le-Pont that serves five of its sites. When the Nouveau Bercy site was opened, the bus service’s frequency was increased with backing from the STIF and the Mairie de Charenton-le-Pont. A private shuttle also connects five sites in this town to public transport; V bike stands have been installed (214 bike stands at 13 sites at the end of 2014) and employees regularly use the Vélib’ bikes provided by the Mairie de Paris; V parking spaces with recharging sockets for electric vehicles have been gradually introduced (at the end of 2014, there were 35 spaces at 13 Natixis sites).
Total travel 40,432,273 36,311,849 6.4.3.3 Adapting to the impact of climate change
This requirement is covered by the supplier relationship charter as well as by specifi c clauses in contracts.
In Frankfurt, Natixis prioritizes hiring women whenever applicants for a position are equally qualifi ed. The Bank helps female employees fi nd spaces in daycare for their young children and thus return to work.
Natixis complies with the “US Americans with Disabilities Act” and examines all special-needs requests. Policies governing salary preservation in the event of temporary or permanent disability, combined with the “Family and Medical Leave Act protections,” provide coverage for disabled employees.
Paper consumption (in metric tons) 25 * Consumption of water for air conditioning. Other consumption is overseen by the building manager (quantities unknown)
Based on this work, and given the limits set out above, we hereby certify that the CSR Information required is included in the Management Report.
Quantitative societal indicators: Socially inclusive SRI assets under management (in € and as a %).
An emergency is defi ned as an exceptional situation (i) subject to short notice, imposed by a third party on pain of foreclosure, where non-compliance might incur damages for the Company or one of its main subsidiaries, or (ii) requiring a rapid response from the Company which is incompatible with the application of the usual notice periods for the Board of Directors.
The Combined General Shareholders’ Meeting of May 21, 2013 granted the Board of Directors fi nancial authorization for a 26-month period to carry out capital increases with retention or cancellation of preferential subscription rights (these authorizations replaced those granted by the Combined General Shareholders’ Meeting of May 26, 2011).
Resolutions requiring the approval of the extraordinary General Shareholders’ Meeting (resolutions twelve to twenty-four)
Resolution twelve asks the General Shareholders’ Meeting to renew the authorization granted to the Board of Directors, for a duration of 26 months, to cancel, through a reduction in the share capital, all or part of the treasury shares held by Natixis or of the shares acquired under the authorization granted by the Ordinary General Shareholders’ Meeting, within the limit of 10% of the capital per 24-month period. This authorization will nullify any prior authorization of the same nature for any amounts remaining unused (see below the summary table on the fi nancial resolutions submitted to the shareholders).
The overall par-value ceiling for these capital increases should not exceed one and a half billion euros (€1.5 billion), which breaks down into a par-value ceiling of €1.5 billion for capital increases with preferential subscription rights and a par-value ceiling of €499 million (i.e. approximately 10% of capital) for capital increases without preferential subscription rights. These capital increases may be carried out either through issuing shares or through issuing securities that give access to share capital, or that entitle the holder to debt securities.
It is provided that the Board of Directors may not, unless expressly authorized in advance by the General Shareholders’ Meeting, make use of any of these authorizations (with the exception of that set out in resolution nineteen) in the event a third party makes a public offer for the company’s shares, until the end of the offer period.
R SUMMARY TABLE ON THE FINANCIAL RESOLUTIONS SUBMITTED TO THE SHAREHOLDERS’ MEETING BY YOUR BOARD OF DIRECTORS
V Option to issue shares further to the issuance of securities providing access to your Company’s capital* by your Company’s Subsidiaries*
V 10% of capital adjusted in accordance with transactions affecting it after the date of this Shareholders’ Meeting
Reference Price Average of prices of the Company’s shares listed on the regulated Euronext Paris market during the 20 trading sessions preceding the decision by your Board of Directors setting the date for the opening of subscription by members of the employee savings plan, with a maximum discount of 20%.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby
At December 31, 2014, 259 employees were concerned by this provision. The scope of regulated employees will be defi ned according to the same criteria applied in 2014, and is subject to regulatory changes or adjustments relating to Natixis’ operations. The number of regulated employees should be similar to that of 2014, i.e. approximately 260 employees.
R freely award shares in accordance with the provisions of Articles L.225-197-1 et seq. of the French Commercial Code; or
R freely distribute all or part of the shares or, in the case of securities giving access to the Company’s capital, those securities that are to be issued but that have not been subscribed for,
I - AGREEMENTS AND COMMITMENTS SUBMITTED FOR THE APPROVAL OF THE GENERAL SHAREHOLDERS’ MEETING
On June 25, 2014, the Board of Directors authorized the sale of 79,989,067 Coface shares, with the option of increasing this number to a maximum of 91,987,426 shares sold if the green-shoe option was fully exercised, as part of a retail public offering in France and a global offering for institutional investors both in and outside France. The Board also set the defi nitive sale price for these shares.
The expenses recognized by Natixis in respect of this agreement amounted to €12,851,276.29 for the financial year ended December 31, 2014.
Persons concerned: V Mr. Patault, Member of the BPCE Supervisory Board, and Natixis Director; V Mr. Sueur, Vice-Chairman of the Steering and Supervisory Committee of Caisse d’Epargne et de Prévoyance Ile-de-France, and Natixis Director; This agreement had no fi nancial impact in 2014.
The expenses recognized by Natixis in respect of this agreement amounted to €30,000,000.00 for the financial year ended December 31, 2014.
7 LEGAL INFORMATIONStatutory Auditors’ special report on related-party agreements and commitments 2.1.12 Adoption of regulations for the closed collective pension scheme
The income recognized by Natixis in respect of this agreement amounted to €1,213,376.14 for the financial year ended December 31, 2014.
8.1 STATEMENT BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT 454 8.2 DOCUMENTS AVAILABLE TO THE PUBLIC 455 8.3 CROSS-REFERENCE TABLE OF REGISTRATION DOCUMENT 456 8.4 CROSS-REFERENCE TABLE FOR THE ANNUAL FINANCIAL REPORT 458 8.5 CROSS-REFERENCE TABLE FOR THE MANAGEMENT REPORT 459 8.6 CROSS-REFERENCE TABLE OF SOCIAL AND ENVIRONMENTAL INFORMATION 460
24. Documents available to the public 455 25. Information on holdings 206 to 211
8 ADDITIONAL INFORMATIONCross-reference table for the annual fi nancial report 8.4 Cross-reference table for the annual financial report
d) Health and safety V Health and safety standards V Agreements signed with unions or employee representatives in terms of health and safety at work
AFEP/Medef Association Française des Entreprises Privées – Mouvement des Entreprises de France (French Association of Private Sector Companies – French Business Confederation).
A reduction in banks’ use of leverage, achievable by various means but primarily by a reduction in the size of the balance sheet (by selling assets or slowing down new lending) and/or an increase in equity (through recapitalization or retaining earnings). This fi nancial adjustment process often has negative implications for the real economy, particularly due to the narrowing of the credit channel.
A bank stress test simulates the behavior of a bank (or group of banks) under extreme but realistic economic scenarios (i.e. worsened prospects for growth, unemployment and infl ation) to assess whether the bank’s (or banks’) capital reserves are suffi cient to absorb such a shock.