Its global distribution platform serves two major customer segments: institutional investors (public and private pension funds, insurers and banks, sovereign funds and central banks, etc.) and retail (distribution platform, wealth management advisors, funds of funds and private banks).
Natixis and ODDO BHF entered into a long-term partnership on the equity markets, which resulted in the transfer of Natixis’ French equity brokerage and research activities in France to ODDO BHF to create a leading player in continental Europe. The Natixis-ODDO BHF teams, counted as one, were ranked No. 1 broker in France (source: Extel 2018).
In the United States, activity was extremely buoyant nationwide and across all asset types, with high-profile transactions such as €1.9 billion in financing for the renovation of 20 Times Square, the first newly constructed Times Square property for 30 years, or the $310 million financing of a tower of 685 luxury units in Los Angeles.
The partnership entered into with ODDO-BHF in 2018 has allowed Natixis to strengthen its position on the equity capital markets and, in particular, to increase its capacity to deliver liquidity contracts to its clients (Natixis/ODDO-BHF is the leader in this activity on the Euronext Paris markets, with 99 liquidity contracts managed as at December 31, 2018—source: AMAFI).
The Insurance division consists of a holding company, Natixis Assurances, which owns various operating insurance subsidiaries that develop and manage a comprehensive range of insurance solutions for individuals and professionals. The division is structured around two large business lines and one activity common to all of Groupe BPCE: the Personal Insurance business, which focuses on thea development of portfolios for life insurance, investment and retirement savings, and a very wide range of personal protection coverage (death benefit, work cessation and dependency) and payment protection solutions; the Non-Life Insurance business, focused on developinga portfolios for motor and multi-risk home insurance, personal accident insurance, legal protection, healthcare, and property and casualty insurance; Insurance Solutions handles insurance segments fora Groupe BPCE that are not dealt with by its insurance subsidiaries, e.g. the Group’s insurance program.
BPCE Assurances, a non-life insurance company that offers aa full range of property and casualty insurance products (auto insurance, multi-risk home insurance, personal accident coverage, health insurance, legal protection and business and personal protection insurance for professionals);
Natixis Life, a Luxembourg-based life insurance company thata offers life insurance and investment solutions to high net-worth customers; BPCE Prévoyance, a non-life insurance company whosea operations include insurance coverage for accidents, sickness and different forms of financial loss; BPCE IARD, a non-life insurance company that offers a fulla range of property and casualty insurance products (auto insurance, multi-risk home insurance and legal and multi-risk coverage for professionals).
These businesses are dedicated to the development of the BPCE networks (the Banque Populaire and Caisse d’Epargne banks, among others), thus building strong synergies.
Natixis Lease is a key player in the French leasing market. It supports companies and other professionals in all of their equipment and real estate leasing investment projects and includes social economy and institutional players among its customers.
New loans totaled €12.1 billion (of which nearly €1.2 billion for revolving credit and more than €10.8 billion for personal repayment loans).
In 2018, a program was introduced to “reinvent Revolving Credit”, by offering a new customer experience from the application stage to the management of the loan across all channels. A number of new offers were also launched including a restructuring loan solution to “reprofile” customer debt in accordance with their circumstances and a Lease-to-Own solutions for individuals delivered in partnership with Natixis Lease.
Operating through the Natixis Coficiné subsidiary and holding market-leading positions in France and Europe, Natixis finances the full spectrum of audiovisual professions and cultural industries.
Similarly, Natixis Payments and the Casino group entered an agreement to jointly develop an e-wallet for Cdiscount and integrate Dalenys as one of Cdiscount's payment service provider partners. Starting in early 2019, Cdiscount customers will be able to use an e-wallet for a seamless, enhanced purchasing experience. They’ll be able to pay for purchases in just one click (no need to enter their bank card details), pay outright or in several installments, and get cash back on their purchases.
Reorganization of Group operations management and creation of a Transformation Office
She noted that the Board of Directors has five special Committees, all chaired by an independent director. Discussion with Committee members discussed the
The question and answer session began with written questions received from the Friends of the Earth association about Natixis’ funding of the oil and gas sectors. (All the responses are available on Natixis’ website). The discussions then moved on to, among other topics: the performance of the share price since its market launcha and its possible return to that level; Natixis' capacity to distribute dividends while investing;a the insurance business;a
Permanent Representative of BPCE, General Partner of SCAa ECUFONCIER (from 2011 to 24/04/2018)
On November 12, 2018, Alain Denizot became Chairman of the Management Board of Caisse d'Epargne Rhône Alpes.
Permanent Representative of a CENFE, Chairman of Savoirs pour Réussir en Nord Pas de Calais (since 29/06/2011) � (until 08/03/2016)
Permanent Representative of a CENFE, Chairman of Immobilière Nord France Europe (since 12/02/2015) � (until 19/09/2016)
Member of the Board of Crédit Commercial a du Sud-Ouest (since 2008) and Chairman of the Audit and Risk Committee (since 2011) � (until March 2015)
Chairwoman of the Management Board of Caisse d’Epargne Loirea Centre (CELC) (since 01/08/2009)
Chairwoman of the Ethics and Quality Committee of Korian Medica S.A.a (since 22/06/2017)
Born January 15, 1965 Nationality: French Natixis shares held: 1,000 Address: 455 promenade des Anglais BP 3297 06205 Nice Cedex 03
Key advisory skills: extensive knowledge of retail banking and business financing; bank audits
Member of the Board of Crédit a Foncier (since 26/04/2010) � (until 10/05/2016)
Catherine Pariset has a master's degree in Management Sciences from Université Paris-Dauphine and 35 years’ experience in auditing and advisory services. She was a partner at PricewaterhouseCoopers (PwC) from 1990 to 2015, as well as the partner responsible for the worldwide auditing of AXA, Sanofi, Crédit Agricole, Caisse des Dépôts, Compagnie des Alpes and Generali France. She also served as a member of the PwC Board for seven years and was partner in charge of the insurance and banking sectors.
From 2009 to November 22, 2014, Henri Proglio was Chairman and Chief Executive Officer of EDF. He has been Honorary Chairman of EDF since 2015.
Member of the Committee for a Atomic Energy (from 25/11/2009 to 22/11/2014)
Member of the Board of Agence a Foncière et Technique de la Région Parisienne (AFTRP)(1) (since 2007) � (until April 2015)
Member of the Board of Médiamétrie as a Permanent Representative ofa Immobilière Bayard d’Antin SA (since 22/11/2017)
Christophe Pinault 57 N/A French 20/12/2018 2019 AGM Expertise in internal control, risk, disputes, and in-depth knowledge of the banking business
From April 30, 2009 until June 1, 2018, the Board of Directors was chaired by François Pérol, Chairman of the BPCE Management Board. At its meeting on June 1, 2018, the Board of Directors acknowledged the resignation of François Pérol from his duties as Director and Chairman of the Board of Directors of Natixis and appointed Laurent Mignon as his replacement. Since June 1, 2018, Laurent Mignon has also been Chairman of the BPCE Management Board.
This reporting obligation also applies to closely associated persons as defined by the MAR Regulation.
Eighty five per cent of directors believes that the makeup of the Board and each of its Special Committees is entirely adequate and allows different viewpoints to be expressed. They also believe that the subjects covered by the Board and Committees encompass the full range of relevant issues.
– OrganizationA In 2018, the Audit Committee had five members: As of March 1, 2019, these members were: Catherine Pariset Chairwoman
Evaluation of the effectiveness of the internal control framework and the procedures in place (compliance a view)
See implementation of the “apply or explain” rule section 2.3 of this document(1)
Examination of the deferred pay policy (definition of the performance conditions for the regulated a staff for 2018)
At its February 8, 2019 meeting, the Compensation Committee reviewed the rules on allocating directors' fees to Board members.
In addition, on February 8, 2019, the Appointments Committee issued a favorable opinion on the Board's diversity policy.
François Riahi therefore became Executive Manager of Natixis (“dirigeant effectif”, as defined by Article L.511-13 and L. 532-2 of the French Monetary and Financial Code).
CSMs combine the two previous types of meetings (OGM and EGM) on the same date under the same notice of meeting.
Gil Berrous 8,480 March 1 2016 employee retention and performance plan
CORPORATE GOVERNANCE Policies and rules established for determining compensation and benefits of any kind for corporate officers 89Natixis Registration Document 2018
The overall annual budget for directors’ fees to be allocated to members of the Board of Directors is €650,000 (see the 36th resolution of the Combined General Shareholders’ Meeting of
Laurent Mignon's annual variable compensation for the 2018 performance year as Chief Executive Officer of Natixis from
The amount of severance pay is equal to: monthly reference compensation x (12 months +1 month per year of seniority).
Corresponding to the value of the shares on the allocation date, for a fair value of €55,372 for 2018.(d)
At its meeting of May 23, 2018, Natixis' Board of Directors also allocated 11,661 performance shares to Laurent Mignon, Chief Executive Officer (a) until June 1, 2018, prorated to reflect the length of the time served in office in 2018, valued at €80,000 on the allocation date and, at its May 23, 2017 meeting, it allocated 29,911 performance shares valued at €192,000 on the allocation date.
Compensation paid to Laurent Mignon in 2018 for his duties as Chief Executive Officer of Natixis comprised €400,818 in fixed compensation and fringe benefits and €1,263,517 in variable compensation, the breakdown of which is detailed below. The performance condition of the deferred portion of variable compensation granted to Laurent Mignon is that Natixis’ net operating income be strictly positive. As this condition was met for the 2018 fiscal year, the portion relating to the three previous periods was paid to the beneficiary. The difference between amounts granted and the amounts actually paid is correlated to the market capitalization at the Euribor rate for the cash portion, and to the change in the share price for the portion indexed to the Natixis share price.
Deferred securities or similar instruments portion of variable compensation for fiscal year 2014
Securities or similar instruments portion of variable compensation for fiscal year 2017 paid in October 2018 Total
Value of options according to the method adopted for the consolidated financial statements Date vested
Directors’ fees - In 2018, Laurent Mignon received no director’s fees in respect of the 2018 fiscal year as part of his responsibilities within Groupe BPCE.
The Chief Executive Officer receives a family allowance in accordance with the same rules as those applied to Natixis employees in France.
The components of the Chief Executive Officer’s social protection and complementary scheme are subject to related party agreements.
Natixis is exposed to emerging risks, in particular risks relating to cybercrime, which could have a material adverse impact on its business, financial position and reputation
Natixis’ reputation is one of the keys to its ability to conduct its business and in particular to meet the objectives set out in its New Dimension strategic plan.
These businesses are sensitive to changes in the financial markets and more generally to economic conditions in France, Europe and the rest of the world.
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk factors 114 Natixis Registration Document 2018
Legislative and regulatory measures in response to the global financial crisis may materially impact Natixis and the financial and economic environment in which it operates
Natixis is exposed to the risk relating to these legislative and regulatory changes, including: bans or limitations on certain types of financial products ora activities; more stringent internal control requirements;-more stringenta personal data protection and cybercrime requirements; more stringent regulation with regard to technologicala innovations in the payment services and fintech fields; and the strengthening of the role of trading platforms and centrala counterparties (clearing houses) in regulations on clearing mechanisms.
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 116 Natixis Registration Document 2018
risks arising from the relevant activities. It makes use of recurrent work in the area carried out by operational departments and permanent control teams. The audits lead to recommendations by order of priority to strengthen the comprehensiveness and robustness of the mechanisms for controlling or managing the risks audited.
It is based on two items: the Risk Appetite Statement (RAS), which sets out, in1. qualitative and quantitative terms, the risks that the Bank is prepared to take; the Risk Appetite Framework (RAF), which describes the2. interface between the organization’s key processes and the implementation of the governance that puts the RAS into action.
Risk appetite is reviewed annually by Senior Management and approved by the Board of Directors after consultation by the Risk Committee.
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 128 Natixis Registration Document 2018
The report is then submitted to the internal validation teams (Model Risk Management) for an opinion, then presented to the various Committees to inform the bank’s management.
This table provides a general summary of the system’s over an extended period and for a significant, representative performance but differs from the annual backtests carried out percentage of each exposure class. The results come from data within the Group, which are conducted on a model-by-model warehouses used for modeling. This is based on all performing basis and not overall by portfolio. However, this table allows a customers for default rates and PD, and on all customers in comparison of estimates and actual results for each internal input default for LGD.
Exposures to institutions and corporates with a short-term credit assessment 799 138 767 127 659
Natixis’ market risk management is based on a risk metrics model that measures the risks incurred by each entity of the bank.
Committee is tasked with supervising the risk model for all of Natixis’ activities by, on one hand, approving validation reports and the related remediation plans and, on the other hand, monitoring consolidated risk model indicators.
The VaR level for Natixis’ trading portfolios averaged €8.9 million. It peaked at €16.4 million on December 24, 2018 and amounted to €13.6 million at December 31, 2018.
The Bank's interest rate management system relies on the measurement of economic sensitivity within the bounds of an overall limit. It is also supplemented by two other measurements that are periodically reported to the Group as part of the overall interest rate risk monitoring consolidation process: interest rate gap measurements (fixed-rate assets-liabilities) and measurements of NII sensitivity to interest rate variations.
(Data certified by the Statutory Auditors in accordance with IFRS 7)
The Basel 2 normative shock (immediate +/-200 bp shift in the BPCE’s software, was positive and represented less than 1.5%
Natixis’ financial security was ramped up in numerous ways in 2018: its teams were expanded and a project team tasked witha managing key projects was created; initiatives aimed at safeguarding international financial sanctiona compliance systems were launched or maintained; the Financial Security Supervisory Committee (AMLSOC) fora France and abroad, the parent company, subsidiaries and branches continued to gain momentum.
In accordance with the requirements set out in Article 17 of the law of December 9, 2016 on transparency, the prevention of corruption and the modernization of the economy (“Sapin II”), Natixis has strengthened and added certain rules and procedures to its compliance framework to align them with the highest international standards in corruption prevention.
In 2018, this included the publication of a policy dedicated to the prevention and detection of corruption that was disseminated to all employees and the adding of rules on this theme to the Internal Rules. The various high-risk situations are also managed through dedicated procedures, such as the procedures on the prevention and management of conflict of interest situations, the conducting of anti-corruption due diligence when initiating business relationships with third parties and prior to forming partnerships or carrying out merger and acquisition transactions, and the supervision of recruitment. High-risk practices, including giving/accepting gifts or invitations, patronage initiatives, sponsoring, donations and third-party compensation, are also governed by specific procedures.
The ITSS-BC Department coordinates its activities based on risks. It employs a method which identifies, in terms of operational risk, the risk situations of concern to the business lines and their IT assets that may be vulnerable. Risk assessments may be conducted during the annual review or may result from the supporting of a project. In 2018, ITSS-BC monitored close to 200 business line projects, half of which resulted in the issuing of specific security requirements in order to better mitigate risks.
In light of these risks, the ITSS-BC Department implements an annual second-level permanent control plan covering all areas of IT system security. Every year, around 6,000 control operations are therefore carried out, with a special focus on access right controls and intrusion tests on IT assets exposed to the Internet.
Natixis now has a personal data register and procedures for key processes, such as the handling of data leaks and requests by individuals for the exercising of their rights.
Level 2 controls are set up to ensure that the Group’s credit risk standards are observed.
For loan guarantees, reinsurance is used as a tool for managing regulatory capital by protecting guarantee beneficiaries in the event of an economic recession leading to a loss of up to 2% of outstanding guaranteed loans.
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 164 Natixis Registration Document 2018
Gross exposure: gross carrying amount on the balance sheet at December 31, 2018 and December 31, 2017.(a)
RISK FACTORS, RISK MANAGEMENT AND PILLAR III Basel 3 Pillar III disclosures 167Natixis Registration Document 2018
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIBasel 3 Pillar III disclosures 168 Natixis Registration Document 2018
Coface Italy – Branch (Coface Europe) Full consolidation Equity method Credit insurance and related services Italy
Coface Chile – Branch (Coface Europe) Full consolidation Equity method Credit insurance and related services Chile
ABP Vie Mandat FPCI Full consolidation Equity method Risk Capital Fund France
5 Minority interests (amount allowed in consolidated CET1) 0 84, 479, 480 5a Independently reviewed interim profits net of any foreseeable charge or dividend 633 26 (2)
82 Current cap on AT1 instruments subject to phase-out arrangements 726 484 (4), 486 (3) et (5)
Changes in regulatory capital, regulatory own fund requirements 3.3.1.4 and ratios in 2018
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIBasel 3 Pillar III disclosures 178 Natixis Registration Document 2018
Other, including prudential adjustments and phase-in arrangements (166) 145 o/w impact of changes in phase-in rate (74) 0 o/w other impact of changes in base (92) 145
Adjustment for off-balance sheet items (i.e. conversion of off-balance sheet exposures to credit equivalent amounts) 39,614 36,079 8 LEVERAGE RATIO EXPOSURE* 372,964 396,276 * o/w exposure related to affiliates 38,808 47,251 * Excluding exposure related to affiliates 334,156 349,025
(Deductions of receivables assets for cash variation margin provided in derivatives transactions) (11,597) (11,259)
EU-19b (Exposures exempted in accordance with Article 429 (14) of regulation (EU) No. 575/2013 (on and off balance sheet))
EU-24 Amount of derecognized fiduciary items in accordance with Article 429 (11) of regulation (EU) No. 575/2013
Securitization exposures in the banking book (after the cap) 3,045 2,488 244 o/w IRB supervisory formula approach (SFA) 224 221 18 o/w internal assessment approach (IAA)
Equity exposures * o/w exposures related to affiliates 91% 100% 91% 100%
SA – EXPOSURES (EAD) BY ASSET CLASSES AND RISK WEIGHTS (CR5)R
Sub-total Central governments or central banks 371 371 0.0% 6 45% 1,425 191 51% 1
Exposures for trades at QCCPs (excluding initial margin and default fund contributions); of which: (i) OTC derivatives
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIBasel 3 Pillar III disclosures 206 Natixis Registration Document 2018
SECURITIZATION EXPOSURES IN THE BANKING BOOK AND ASSOCIATED CAPITAL REQUIREMENTS – BANK ACTING R AS INVESTOR (SEC4)
b Average of the risk number for the correlation trading portfolio over the preceding 12 weeks c 8% of the own funds requirement in the standardized approach on the most recent risk number for the correlation trading portfolio (Article 338 (4))
Liquid assets must meet a number of intrinsic requirements (issuer, rating, market liquidity, etc.) and operational
Article 438 last paragraph (EBA) EU CR10 – IRB – Specialized lending and equities 198
Article 439 (e) and (f) (EBA) EU CCR2 – Credit valuation adjustment (CVA) capital charge 205
Geographical distribution of credit exposures used in the countercyclical buffer (CCYB1) 177
Concentration of exposures by industry or counterparty type (EU CRB – D) 189
EAD by asset classes and risk weights under SA (CR5) 194
Measure of sensitivity to a +1 bp variation in interest rates, by maturity at December 31, 2018 152
Implementing this strategy involved the following initiatives: a communications campaign to raise the profile of the newa brand; the sale of Sélection 1818;a the acquisition of Masséna Partners (signed at this stage);a the first acquisition of a 40% stake in Véga-IM’s capital.a
Highlights for VEGA Investment Managers in 2018 included the creation of a range of thematic funds (VEGA Disruption, VEGA Durable and VEGA Millennials) and the VEGA Euro Rendement flagship surpassing its €1 billion AuM target thanks to the Caisse d’Epargne and Banque Populaire networks.
In 2018 the Insurance division completed the first step of its New Dimension strategic plan by launching key initiatives aimed at making the transformation of Natixis Assurances more visible.
Since the Bourquin amendment came into force on January 1, 2018, policyholders have been allowed to cancel their loan insurance each year. This prompted Natixis Assurances to adapt its offering by putting in place a retention scheme. The impact of this new regulation on the portfolio remained limited in 2018.
At €8,917 million, net revenues generated by the main business lines(1) were up 2.8% at constant exchange rates versus 2017. The various divisions posted an increase in revenues, with the exception of Corporate & Investment Banking whose net revenues were penalized by lower revenues in Asia due to the impact of equity derivatives (--€259 million). At constant exchange rates, net revenues were up 13% for Asset & Wealth Management, 8% for Insurance and 6.5% for SFS, while CIB revenues were down 8%. Excluding non-recurring items classified under Investor Relations(2) and excluding the impact of equity derivatives in Asia for CIB, Natixis’ net revenues would be up 4.4% at constant exchange rates compared with 2017, while net revenues would be up 5.1% for the business lines and down 2.5% for CIB.
The provision for credit losses was €215 million in 2018, down 16.9% compared with 2017. The provision for credit losses of the main business lines as a percentage of assets amounted to 16 basis points in 2018 versus 23 basis points in 2017.
Asset & Wealth Management revenues were up 9.8% for the period to €3,418.6 million (12.6% at constant exchange rates).
Assets under management at end-December 2018 stood at €802.1 billion, down 3% at current exchange rates (-6% at constant exchange rates) compared with December 31, 2017. This was due to a highly unfavorable market effect (-€44.5 billion) and, to a lesser extent, the scope effect (-€4.8 billion). These effects were partially offset by the favorable exchange rate (+€20.4 billion).
Leasing developed its business with the Banque Populaire and Caisse d’Epargne networks. New business, half of which was in equipment leasing, jumped 12% year-on-year.
At €1,004 million at end-2018, Specialized Financial Services expenses were up 7% compared with 2017, a result largely owed to scope changes for the Payments business lines.
2017 revenues were up 2% to €1.4 billion compared with 2017. Credit insurance, which accounts for 95% of revenues, was up 3% while factoring was down 7%. At constant exchange rates, global turnover was higher (+5%).
Corporate Center Disposal of Ellisphere, a financial data specialist in France and internationally to investment fund AnaCap. The transaction marks the end of Corporate Data Solutions’ business disposals.
OVERVIEW OF THE FISCAL YEAR Outlook for Natixis 237Natixis Registration Document 2018
Revaluation of equity instruments recognized at fair value through other comprehensive income (7)
Liabilities on non-current assets held for sale (b) 8.9 9,737 698 698
Corresponds to the SFS business lines recognized in non-current assets held for sale as at December 31, 2018 (also see Notes 3.6 and 6.9).(b)
Variable-income securities Financial assets at fair value through profit or loss (g)
Under the option available in IFRS 15, Natixis did not restate the data for previous fiscal years published as comparative information for its financial statements.
Full consolidation involves replacing the carrying amount of investments with the full value of all the subsidiary’s assets and liabilities.
Joint operations are partnerships in which the partiesa exercising joint control of the operation have rights over its assets, and obligations with regard to its liabilities. An investment in a joint operation is recorded by including all the interests held in the joint operation, i.e. the share in each of the assets, liabilities and other comprehensive income to which it is entitled. These interests are broken down by type across the various items in the consolidated balance sheet, consolidated income statement and statement of net income/(loss) and other comprehensive income.
The business lines involved are: Consumer Finance, Factoring, Sureties & Financial Guarantees, Leasing and EuroTitres. In legal terms, the entities are housed in separate legal entities (Natixis subsidiaries: Natixis Lease, Natixis Factor, Natixis
Types of partnerships and associates with 4.4.1 which Natixis has dealings
If auto-pilot mechanisms are not in place for these structures, it is generally the sponsor who oversees activities which are relevant and which generate returns. As previously, Natixis’ rights as lender are protective rights limited to the amount of its receivable. As such, Natixis does not have power over such entities’ relevant activities.
FINANCIAL DATA Consolidated financial statements and notes 273Natixis Registration Document 2018
FINANCIAL DATA Consolidated financial statements and notes 275Natixis Registration Document 2018
FINANCIAL DATA Consolidated financial statements and notes 279Natixis Registration Document 2018
Non-consolidated investments in associates for which the irrevocable option of measurement at fair value through non-recyclable other comprehensive income has not been adopted are also classified in this category (see Note 8.1.1).
For loan and financial guarantee commitments, provisions are recorded on the liability side of the balance sheet under “Provisions” (irrespective of whether the commitment is S1, S2, S3 or POCI). Changes in provisions are recognized in the income statement under “Provision for credit losses”.
This adjustment applies to valuations that do not account for the counterparty’s credit quality. It corresponds to the expected loss related to the risk of default by a counterparty and aims to account for the fact that Natixis cannot recover all the transactions’ market value.
It involves verifying that the model is consistent with and relevant to its intended function (price setting, valuation, coverage, measurement and control of risk) and the product to which it applies, based on: the theoretical approach: the financial and mathematicala foundations of the model; the application of the model: the pricing models used toa generate risk and earnings data; the stability of the model under parametric stress;a an assessment of the stability and consistency of thea numerical methods used; the independent re-implementation of the model as part ofa algorithm validation; the comparative analysis of the calibration of modela parameters; an assessment of the model risk, particularly the comparativea analysis of the model with other valuation models, in order to ensure the adequacy of the model and the payoff (the Formula of positive or negative flows attached to the product at maturity); the implementation of an adjustment in respect of model riska to account for potential deficiencies in the model or its calibration; integration of the model in information systems.a
Natixis has raised a valid expectation in those affected that ita will carry out the restructuring by starting to implement that plan or announcing its main features on the closing date.
Stock options offered to employees under the Employee Savings Plan, with a discount compared with the average market price for a given period (called the reference price), are encumbered with a lock-up period of five years. The advantage granted is measured as the difference between the fair value of the acquired share, taking into account the lock-up condition and the purchase price paid by the employee on the subscription date, multiplied by the number of shares subscribed.
Fees for services are analyzed to separately identify their various components (or performance obligations) and assign to each component the share of income due to it. Each component is then recognized in income, according to the type of services rendered and the method of accounting for the financial instruments to which the service rendered is attached: fees and commissions for ongoing services, such as guaranteea fees or management fees, are deferred over the period during which the service is provided; fees and commissions for one-off services, such as businessa provider fees, are recognized in income as soon as the service is provided.
The fair value of hybrid market instruments not traded on an active market is calculated using valuation techniques. Valuations produced using valuation models are adjusted, depending on the instruments in question and the associated risks, to take account of the bid and ask price for the net position, model risks, assumptions regarding the funding cost of future cash flows from uncollateralized or imperfectly collateralized derivatives, as well as counterparty and input risks. The fair values obtained from these methods may differ from the actual prices at which such transactions might be executed in the event of a sale on the market.
This number of shares refers to the shares granted under the 2016, 2017 and 2018 free performance share plans (PAGA), the 2016, 2017 and (b) 2018 Long-Term Incentive Plans (LTIP) and the 2018 Payment Business Line Plan (PMP).
- impairments taken against the fair value of CDS entered into with monoline insurers: a decrease of €39.39 million in cumulative impairments during fiscal year 2018, versus a decrease of €7 million (income) in cumulative impairments at December 31, 2017 (excluding the currency impact and the impact of the BPCE guarantee), bringing cumulative impairments to €23.3 million at December 31, 2018, versus €63.2 million at December 31, 2017; - at December 31, 2018, recognized own credit risk adjustments to derivatives (debit valuation adjustments or DVA) stood at €13.9 million (income), versus an expense of -€54.7 million at December 31, 2017.
At December 31, 2018, net gains or losses resulting from the derecognition of instruments at amortized cost include €1.7 million of gains recorded following the sale of financial assets at amortized cost and -€4 million of losses related to the sale of financial assets at amortized cost.
Conditions for classification of financial assets under 8.1.1.1 the fair value option
Carrying amount Accounting mismatch Managed on a fair value basis Embedded derivatives
Other financial liabilities under the fair value option 38,414 2,908 34,409 1,097
Simple instruments Most over-the-counter derivatives, swaps, credit derivatives, forward rate agreements, caps, floors and plain vanilla options are traded in active markets, i.e. liquid markets in which trades occur regularly.
FINANCIAL DATA Consolidated financial statements and notes 317Natixis Registration Document 2018
Financial assets designated under the fair value option 1,873 (1,850) 0 22 0 0 0 0 (23) 0 0 0 0 0 0 o/w debt instruments in the form of securities 350 (329) 0 21 0 0 0 0 (21) 0 0 0 0 0 0
Derivative instruments not eligible for hedge accounting (negative fair value) 1,945 (11) 0 1,934 471 (482) 0 454 (162) (176) 13 2 0 0 2,054
Gains and losses recognized in the period Transactions carried out in the period Reclassifications in the period
Other available-for-sale securities 3,081 6 (3) 208 280 (161) (157) 143 17 (0) (2) 3,410
The deferred margin covers only financial instruments eligible for Level 3 of the hierarchy. It is calculated after determining the valuation adjustments for uncertainty as described in Note 6.6. The outstanding non-amortized amount is recognized on the balance sheet under “Financial instruments marked to market on the income statement” less the market value of the related transactions.
Financial assets at fair value through equity 361 205 o/w equity instruments o/w debt instruments in the form of securities 361 205 o/w loans and receivables
Of which €131 million relating to structured derivatives indexed to shares traded in Asia (see key events) transferred to Level 3 of the fair value (a) hierarchy (see Note 8.5).
Derivative instruments not eligible for hedge accounting (negative fair value) 41 56 13 176 o/w interest rate derivatives 9 1 o/w currency derivatives 154 o/w credit derivatives 2
Financial liabilities designated under the fair value option 1 o/w other financial liabilities under the fair value option 1
Value adjustments for credit losses (125) (1,114) (1,239) (329) (1,594) (1,923)
The following table lists the financial assets (excluding assets held for trading) and financing commitments subject to amendments to original contract terms or refinancing constituting a concession granted due to the debtor’s financial situation (see Note 6.1.3).
FINANCIAL DATA Consolidated financial statements and notes 331Natixis Registration Document 2018
As for the federal deficit, the “State” and “City” portions may be activated over longer periods (limited to the legal time limit).(b)
At December 31, 2018, “Non-current assets held for sale” and “Liabilities associated with non-current assets held for sale” consisted of the assets and liabilities of the SFS business lines intended for transfer to BPCE (see Notes 3.6 and 6.9).
This heading corresponds to technical accounts, details of which are given below: Other assets 8.10.1
Gross value Impairment and amortization Net value Gross value Impairment and amortization Net value (b)
Of which €1,423 million for the insurance entities at December 31, 2018, versus €1,423 million at January 1, 2018.(a)
Insurance business investments Less than 1 month 1 to 3 months 3 months to 1 year 1 to 5 years Over 5 years Undated Total
Financial assets designated under the fair value option through profit or loss 17,501 14,789 1,473 1,238 o/w debt instruments in the form of securities 1,582 89 255 1,238 o/w loans and receivables o/w investments backed by unit-linked policies 15,553 14,617 936
- net revenues: €2,972 million; - expenses: -€2,034 million; - gross operating income: €938 million; - provision for credit losses: €0 million; - pre-tax profit: €949 million.
Loans and receivables due from banks 1,194 26,674 820 350 382 15,869 45,289
TOTAL EXPOSURE AND IMPACT OF GUARANTEES 16,380 33,818 50,198 13,284 39,896 53,180
Corresponds to the fair value of the plan assets, at December 31, 2018, covering the employee benefits of the SFS entities recognized in (a) non-current assets held for sale as at December 31, 2018 (see Notes 3.6 and 6.9).
Corresponds to the fair value of the separate assets associated with the employee benefits of the SFS entities recognized in non-current assets (a) held for sale as at December 31, 2018 (see Notes 3.6 and 6.9).
The discount rate is determined based on the yields of AA-rated corporate bonds of the same duration. This benchmark is obtained from the Bloomberg “EUR Composite (AA) Zero Coupon Yield” yield curve.
-1% change in rate of increase in salaries and income (incl. inflation) (9.38)% (9.93)% (6.79)% (9.57)% (10.49)% (6.96)%
The conversion of these debt instruments into equity instruments had generated a gain of €418 million recognized in income on June 30, 2009.
The following financing commitments fall within the scope of IFRS 9 commitments qualified as financial liabilities at fair valuea through profit or loss if the entity that grants them has a practice of reselling or securitizing loans immediately after they are issued; commitments which are settled net (i.e. sold);a commitments which result in a loan granted at below-marketa interest rates.
Net gains or losses on available-for-sale financial assets 0 0 2
I.e. for Laurent Mignon: Social Security contributions in tranche A(1);a mandatory ARRCO contributions in tranche A(1) (14.06%);a additional ARRCO contributions in tranche B(1) (5.63%);a
FINANCIAL DATA Consolidated financial statements and notes 383Natixis Registration Document 2018
NATIXIS BRASIL S.A. Financial institution FC 100 100 100 100 Brazil
NATIXIS CAPITAL PARTNERS SPAIN Mergers and acquisitions advisory services FC 75 75 75 75 Spain
Vermilion Partners Limited (i) Holding company FC 51 51 Hong Kong
Natixis Investment Managers Canada Limited Asset Management FC 100 100 100 100 Canada
HARRIS ASSOCIATES SECURITIES, LP Retail FC 100 100 100 100 United States
SEVENTURE PARTNERS (hh) Asset Management FC 59 59 70 70 France
AEW EUROPE INVESTMENT LTD (a) Asset Management FC 60 60 60 60 Great Britain
Natixis Investment Managers Switzerland Sarl Asset Management FC 100 100 100 100 Switzerland
ABP VIE MANDAT FPCI Private Equity fund FC 100 100 100 100 France
Midt factoring A/S (jj) Factoring FC 100 100 100 100 Denmark
COFACE BELGIUM SERVICES Business and solvency data FC 42 42 41 41 Belgium
COFACE TECHNOLOGIE – ROMANIA (c) Data services FC 42 42 Romania
We considered the impact of the first-time application of IFRS 9 as at January 1, 2018 to be a key audit matter due to the scope of this new standard, the complexity of its implementation and the significant role of judgment in the estimate of expected losses.
See Note No. Year ended December 31 2018 2017 3 Cash and balances with central banks 23,858 36,453 5 Government securities and equivalent 34,698 24,334 3 Advances to banks 84,302 98,612 5 Bonds and other fixed-income securities 18,973 22,789 5 Shares and other variable-income securities 48,514 45,057 6 Investments in associates and other long-term investments 172 156 6 Investments in subsidiaries and affiliates 15,136 13,971 10 Property, plant and equipment 152 137
Equity excluding fund for general banking risks 17,672 16,939 19 Regulated provisions and investment subsidies 2 2
Securities held for investment: Securities held fora investment are dated fixed-income securities acquired with the stated intention of holding them to maturity and for which Natixis has the ability to hold them through to maturity.
Investments in associates: investments in the form ofj securities the durable possession of which is deemed useful to Natixis’ business.
Directive 2014/59/EU (BRRD—Bank Recovery and Resolution Directive) which establishes the framework for the recovery and resolution of banks and investment firms and European regulation 806/2014 (SRM regulation) established the introduction of a resolution fund as of 2015. In 2016, this fund became a Single Resolution Fund (SRF) between the member States participating in the Single Supervisory Mechanism (SSM). The SRF is a resolution financing mechanism available to the resolution authority (Single Resolution Board). The latter may use this fund when implementing resolution procedures.
Of which Bonds and other listed fixed-income securities for €15,404 million at December 31, 2018 versus €18,856 million at December 31, 2017.(c)
FINANCIAL DATA Parent company financial statements and notes 427Natixis Registration Document 2018
Of which -€199 million in interest expense on subordinated debt at December 31, 2018 versus -€202 million at December 31, 2017.
These controls are conducted using several accounting systems, whose number is being reduced, however, due to the integration of a significant part of Natixis’ consolidated scope. For regulatory reporting, permanent and periodic controls apply to the completion and monitoring of: accuracy and veracity checks, such as thea management/financial account reconciliation processes, as management data can come from various sources; controls of the traceability and completeness of data,a throughout the various reporting preparation processes; compliance and presentation controls in respect of thea regulatory requirements specific to each reporting process; quality controls of the data (in accordance with the BCBS 239a program) needed to produce the reports and the quality of the attributes entered into the databases used, allowing the proper breakdown of accounting or management data; consistency checks between published reports, wherea possible and relevant.
In 2018, the highlights of the accounting and financial control environment included: preserving a strict schedule for preparing the various financiala reports; the continuation of large-scale projects to streamline thea information systems used for market and financing transactions (front- and back-office systems), and the migration of the associated software, which continued in 2018; increasingly automated production of liquidity reporting (LCR,a NSFR and AER), within the same application chain, reducing the number of manual entries and guaranteeing the auditability of data; the continuation of a project to streamline and pool data inputa by setting up shared data warehouses for all overview functions (Risk, Accounting and Ratios, Financial Oversight and Financial Management) and that already allows the production of the new reports required by the regulator (MREL, SHS and AnaCredit particularly); finalizing the introduction within the Asia-Pacific platform ofa specialized accounting and reconciliation tools that have been gradually used and phased in at Natixis since 2008; finalizing the overhaul of the Natixis Factor overview systems; a implementing the production process and the associateda control environment relative to IFRS 9, particularly through the introduction, as of January 1, 2018, of a shared tool for calculating provisions, linked to a database; the strengthening of prudential, fiscal and, more generally,a manual entry controls, and controls covering the new standards and new reporting requirements; the reinforcement of local control system monitoringa processes and support for the Review officers, particularly internationally, for all the European, US and Asian platforms.
NON-FINANCIAL PERFORMANCE REPORT Strategic outlines and organization of the ESR policy 453Natixis Registration Document 2018
It involves an assessment of the social and environmental risks run by Natixis’ business lines, while driving performance and development: ESR fuels the Company’s strategic dialog with clients and support their own transition to a more sustainable model, with the development of innovative offers.
ESR correspondents have also been active in Asset Management for several years (for example at Mirova, Ostrum Asset Management, and AEW Europe) as well as in the Insurance business lines (Natixis Assurances, BPCE Assurances), and in the Specialized Financial Services business lines (Natixis Lease, Natixis Interépargne).
Leader in solidarity asset management in favour of job creation or access to accommodation for needed people investment in the tobacco industry
NON-FINANCIAL PERFORMANCE REPORT Strategic outlines and organization of the ESR policy 459Natixis Registration Document 2018
The Committee met three times in 2018 to discuss individual cases, approve ESR procedures, and supervise the roll-out of the Code.
While the Code of Conduct, as well as relevant internal policies and procedures, provide clear guidelines for behavior, not every situation that arises in day-to-day activities can be directly covered by a rule. Making the right decision will require personal judgment, taking account of Natixis DNA and the spirit of the Code of Conduct principles.
Escalate to the relevant committee (ultimately to the Natixis Conduct committee)
Natixis uses the Sustainable Development Goals as a reference framework for all the initiatives stemming from its commitment to society besides the impact on climate change. The 17 Sustainable Development Goals for 2030 are now the benchmark for measuring progress achieved by governments and private sector companies, including financial institutions.
Seeyond applies active quantitative management seeking optimal rewards for the risk incurred. In equities, the investment team is drawing on Mirova’s ESG research expertise to adjust its business model to take ESG criteria into account. One of its equity funds, which applies a minimum volatility(2) strategy, already incorporates
Natixis Interépargne is fully committed to the sustainable development path, ranking No. 1 in terms of solidarity-based employee savings inflows in France, with over €1.5 billion in AUM (3), representing nearly 20% of the solidarity-based employee savings market. SRI assets under management by Natixis Interépargne amount to €4.9 billion, making a total of over €6 billion in certified investments in a market that totals over €20 billion.
The GWF methodology is open and scalable and it will incorporate the criteria included in the EU classification system on what can be considered an environmentally sustainable economic activity—the so-called taxonomy—as progress is made by the European Commission Technical Expert Group (TEG).
The GWF was implemented in some of Natixis’ information systems at the end of 2018. Its roll-out will continue throughout 2019 and it will gradually apply to new financing facilities granted by Natixis in all business sectors in Europe in 2019 and around the world in 2020.
AMOUNT ARRANGED BY NATIXIS FOR RENEWABLE ■ ENERGY PROJECTS PER YEAR
Financing for a floating photovoltaic solar power plant Natixis Energeco financed an innovative project for Akuo Energy—the first of its kind in France—for the installation of a floating photovoltaic power plant with 50,000 solar panels in Piolenc in the Vaucluse department. The plant’s capacity is 17 MWc, equivalent to the electricity consumption of over 5,000 homes. This new technology solves the problem of the lack of available land for new solar energy farms by making use of space not subject to rival demand.
TEEC certification Ostrum AM obtained TEEC (Energy and Ecological Transition for Climate) certification for its expertise in infrastructure debt for the energy transition in December 2018.
Natixis Assurances monitors and reports annually on the portion of its real estate investments that have environmental certification. At year-end 2018, 33% of real estate assets managed under investment mandates were certified (HQE, BREEAM, etc.). In 2019, its acquisition policy will systematically incorporate environmental criteria. An initial energy performance review was performed on all properties under investment mandates in 2018 with an assessment of carbon emissions. In 2019, Natixis Assurances will set action plans to reduce its buildings’ energy consumption in line with its climate commitments(1).
Natixis is also active in green bond investments through its Natixis Investment Managers affiliates. At year-end 2018, Ostrum AM managed green bond investments totaling €2.4 billion in 155 funds and investment mandates. Of the €1.8 billion in fixed income assets under management by Mirova, €1 billion is invested in green bonds. One of its flagship strategies, applied by the Mirova Global Green Bond Fund, invests solely in green bonds (€294 million).
The first Green Repack structured note for a French sovereign issue The French €9.7 billion green OAT 2039 is currently the biggest green sovereign bond ever issued in Europe. Proceeds will finance projects with a positive environmental, social and societal impact. In 2018, Natixis produced the first green structured note offering investors exposure to both the green OAT 2039 and to a bespoke coupon structure. The environmental qualities of the OAT 2019 Green Repack product were certified by Vigeo-Eiris.
As well as applying exclusion policies, several Natixis entities have also committed to aligning their investments with the goals of the Paris Agreement.
In 2015, Mirova and the climate data specialist Carbone4 co-developed a method for measuring the carbon footprint of issuers in different business sectors, named Carbon Impact Analytics (CIA). The CIA model focuses primarily on two indicators: See introduction on the Green Weighting Factor in Chapter 6.3.1.(1)
Combining data from these three sources produces results that are easy to interpret by providing an assessment in degrees Celsius corresponding to the climate scenario implied by a portfolio’s investments.
Natixis is already highly involved in protecting the climate and in July 2018 it decided to commit all its business lines to preserving biodiversity by joining the act4nature(3) initiative sponsored by the non-profit Entreprises pour l’Environnement (EpE).
Integrate biodiversity in its dialog with the public authorities7. in all countries in which it operates; Raise awareness and train employees in biodiversity;8. promote and encourage their initiatives to protect nature; Assign resources and establish appropriate partnerships to9. support concrete actions and monitor their progress; Publicly report on the implementation of its commitments.10.
Natixis will also no longer provide general-purpose corporate financing to companies for which coal-fired power plants or thermal coal mines account for over 50% of their activity.
The screening process will involve two levels of assessment: the first level, covering most of the bank’s clients, will involvea assessing 15 different types of E&S risks relating to the client's governance, social/societal and environmental issues and its supply chain. A dedicated client assessment grid will be applied to each of the 10 business sectors best representing the bank's commitments, taking into account the characteristics of the client's business activity and its office locations. The results of the first assessment will be cross-referenced with those of a systematic controversy check, as facilitated by an external data provider; the second level of assessment, focusing on clients identified asa being the most sensitive to risk, will involve an in-depth, qualitative analysis of the latter's E&S governance. This generally requires making direct contact with the client in order to specify the systems required for identifying and mitigating the main E&S risks.
The French law on the duty of vigilance requires Natixis to prepare, publish and implement a duty of vigilance action plan containing measures that can identify and prevent the risks of violating human rights and basic freedoms, harming the environment, and endangering occupational health and safety, associated with the activities conducted by Natixis as well as its subsidiaries, subcontractors and suppliers.
Broader objectives are also pursued through this policy: assessing Natixis suppliers using social and environmentala responsibility criteria related to their products, services or industries; promoting official environmental certifications anda eco-designed products; encouraging suppliers to be more transparent in describing thea environmental characteristics of their products.
The tool maps out risks by drawing on the expertise of the chosen supplier for each purchasing category, in addition to statistics on each country, in accordance with recognized standards.
The International Trade Union Confederation represents 340 affiliated organizations across 163 countries.(2)
NON-FINANCIAL PERFORMANCE REPORT Managing our direct environmental impact 485Natixis Registration Document 2018
Abroad, Natixis offices in Madrid and New York have been using recycled paper since 2018.
Natixis is developing a green service, for employees usinga a company car: 50 models of hybrid/electric car are now being offered as part of the Natixis car fleet (10% of total selection). The Natixis Company car fleet now includes 7 electric vehicles.
Natixis opens collaborative vegetable garden In June 2018, Natixis inaugurated the first collaborative vegetable garden run by its employees on a patio of one of its Parisian buildings. The vegetable garden was designed to take a circular, sustainable approach: using some of the biodegradable waste generated by the adjacent company canteen to make compost, as well as organic plantations and earth, and excluding agrochemicals. Gardening lessons were provided during workshops enabling apprentice gardeners to learn new skills so they can run the garden independently.
Breakdown by division France (b) International France (b) International France (b) International
The international offices also organized several initiatives, for example, wellness/health days or wellness weeks were organized throughout the EMEA region during the year.
Creation of an X-HEC research chair Natixis, École Polytechnique and HEC Paris created the Business Analytics for Future Banking international teaching and research chair in 2018 to develop data culture and use. The academic chair will allow students to study real-life examples and to discuss with Natixis’ experts. The research will further this science in the banking sector, and foster the development of new value-added services.
In all its international offices, Natixis establishes partnerships with general-interest associations and mobilizes employee support, beginning in the EMEA region: The Milan branch took part in a local marathon in support of the Italian cancer research charity, AIRC. It is also a partner of a food bank and of Dynamo Camp (a charity that helps disabled children), which members of staff can volunteer to support.
They may receive compensation, the amount of which is determined by the Board of Directors.
These capital increases will be applied against the amount of the overall ceiling described above. The Combined General Shareholders’ Meeting of May 24, 2016 (resolutions nineteen and twenty) authorized the Board of Directors, for a thirty-eight-month period, to carry out one or more free share awards to the employees and directors of Natixis and its affiliates under the following conditions: award of free shares in connection with the Long Terma Incentive Plan (LTIP): award limited to 0.2% of the Company’s share capital at the date of the Board of Directors’ decision to award the shares, with a sub-ceiling of 0.03% of the share capital for executive corporate officers. Permanent allocation is contingent on satisfying a performance requirement; award of free shares for the payment of a portion of annuala variable compensation: award limited to 2.5% of the Company’s share capital at the date of the Board of Directors’ decision to award the shares, with a sub-ceiling of 0.1% of the capital for executive corporate officers. Permanent allocation is contingent on satisfying one or more performance requirements for the persons referred to in Article L.511-71 of the French Monetary and Financial Code.
The Board of Directors of Natixis, at its meeting on February 18, 2015, by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 21, 2013, resolution seventeen, resolved to award 95,144 free performance shares to the members of the Senior Management Committee, of which 27,321 to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs until February 17, 2019, inclusive, provided that presence and performance conditions are met.
The Board of Directors of Natixis, at its meeting on May 23, 2017, by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, decided to award 79,369 free performance shares to the members of the Natixis Senior Management Committee, of which 29,911 to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs until May 22, 2021, inclusive, provided that presence and performance conditions are met.
The following ten resolutions (resolutions twenty-two toa thirty-one) concern extraordinary business (i) the renewal of all financial authorizations and delegations which provide your Company with the necessary financial resources to develop and to implement its strategy, (ii) the powers to complete formalities related to this Combined General Shareholders’ Meeting.
It should be noted that the distribution of the special dividend depends on Natixis' plan to sell its Factoring, Sureties & Financial Guarantees, Leasing, Consumer Finance and Securities Services business lines to BPCE, and that if this sale cannot be completed before the date of the General Shareholders' Meeting, the Board of Directors will amend the text of the third draft resolution to provide for (i) the payment on June 4, 2019, of the ordinary dividend in an amount equal to that proposed for the ordinary dividend above and (ii) the subsequent payment (at a date after the planned sale is completed) of the "special" dividend in an amount equal to that proposed for the special dividend above. If required, an addendum to this report will be issued.
Components of François Riahi’s compensation as of June 1, 2018, the date on which he was appointed Chief Executive Officer, comply with the principles for the compensation of the Chief Executive Officer applicable at June 1, 2018 and approved by the Board of Directors on May 2, 2018, on the advice of the Compensation Committee.
The compensation of the Chairman of the Natixis Board of Directors is determined by the Board of Directors in consideration of the Chairman's experience and by benchmarking against the market. Laurent Mignon's annual compensation for his duties as the Chairman of the Board of Directors is set at €300,000.
Methods for paying the Chief Executive Officer’s annual variable compensation comply with applicable regulations, especially regulatory provisions relating to control over compensation, as set out in European Directive CRD IV of June 26, 2013, and its enactment into French law in the French Monetary and Financial Code, by the Ordinance of February 20, 2014, and the Ministerial Decree and Order of November 3, 2014. In particular, the payment of a fraction of the variable compensation awarded is deferred over time and is conditional. This payment is staggered in thirds over at least the three fiscal years following the year in which the variable compensation is awarded.
In accordance with the provisions of Article L.511-73 of the French Monetary and Financial Code, the purpose of resolution eleven is to consult with shareholders at the General Shareholders’ Meeting about the overall budget for compensation paid to Natixis employees referred to in Article L.511-71 of the same Code during fiscal year 2018.
Thus, the Board of Directors would be authorized to set up a treasury share buyback program up to a limit of 10% of the total number of shares comprising the Company's share capital, or 5% of the total number of shares comprising the Company's share capital acquired with a view to being held and subsequently tendered in connection with a merger, spin-off or asset transfer. The Company cannot under any circumstance own at any given time more than 10% of the shares comprising its share capital. These share purchases would be for the purposes of: managing the liquidity contract;a allocating or transferring shares to employees in respect ofa their share of the Company profits, Employee Savings plans or share buyback programs and to freely allocate shares or any other form of share allocation to members of staff; canceling shares;a payment or exchange in connection with merger anda acquisition transactions.
The permanent allocation of all or part of the shares allocated to each beneficiary may be contingent on the achievement of one or several performance conditions, decided on by the Board of
The Board of a Directors ensures that buybacks are executed in accordance with prudential requirements, such as those established by regulation 22 Awarding free shares to employees and directors
May issue (i) a securities giving access to shares to be issued by a Subsidiary* and/or (ii) shares giving access to existing share capital or entitling holders to the allotment of the debt securities of a third party company
2. The procedure for selecting a new independent member of the Board of Directors to replace Henri Proglio, whose term of office ends upon the adjournment of the May 28, 2019 General Shareholders' Meeting, is currently underway. Once the timing of this procedure has been finalized, the Board of Directors will complete the draft resolutions for appointing and re-appointing members of the Board.
Resolution nine (Approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total compensation and benefits of any kind of the Chairman of the Board of Directors for the 2019 fiscal year, pursuant to Article L.225-37-2 of the French Commercial Code)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, consulted in accordance with Article L.511-73 of the French Monetary and Financial Code, hereby approves the overall budget for compensation of any kind in the amount of €181 million, paid during the fiscal year ended December 31, 2018, to employees referred to in Article L.511-71 of the same Code.
implement any Company stock option plan in accordancej with the provisions of Articles L.225-177 et seq. of the French Commercial Code or any similar plan, or award or transfer shares to employees in connection withj their share of Company profits or implement any Company or group employee savings plan (or similar plan) under the conditions provided for by law, in particular Articles L.3332-1 et seq. of the French Labor Code, or award free shares in accordance with the provisions ofj Articles L.225-197-1 et seq. of the French Commercial Code, or in general, honor obligations related to stock option programsj or other share awards to employees or corporate officers of the issuer or a related company based on the provisions of Articles L.225-180 and L.225-197-2 of the French Commercial Code, or remit shares in connection with the exercise of rightsj attached to securities convertible into the Company's shares, by way of redemption, ordinary conversion, exchange, presentation of a warrant or any other manner, or cancel all or a portion of the shares bought back accordingly,j or tender shares (for exchange, payment or another reason) inj connection with acquisitions, mergers, spin-offs or contributions, or promote Natixis shares in the secondary market or thej liquidity of Natixis shares.
This authorization comes into effect on January 1, 2019, from which date any unused part of any prior delegation with the same purpose shall be void. This authorization shall remain valid until June 30, 2022.
General Shareholders' Meeting called to approve the financial statements for the fiscal year ended December 31, 2018
On August 1, 2017, the Board of Directors authorized the signature of an enrollment rider to the group insurance policy under Article 82 of the French General Tax Code, taken out by BPCE with Arial CNP Assurances for executive officers of Groupe BPCE who do not benefit from the “Pension plan for Groupe BPCE company directors” or the “Natixis pension guarantee” plan. This rider was signed on October 17, 2017.
The income recognized by the Natixis New York branch in respect of this agreement amounted to USD 654,959.00 for the fiscal year ended December 31, 2018.
Registration document page number 1. Persons responsible 564 2. Statutory Auditors 380 3. Selected financial information
Analysis of financial positiona 108 to 115; 132 to 142; 147 to 154; Key financial and non-financial performance indicatorsa 8-9; 451 to 491
Information relative to the locations and activities in each country or territorya 381 to 394
Credit default swap (CDS) A bilateral financial contract whereby the protection buyer periodically pays a premium to the protection seller, who in turn promises to compensate for any losses on a reference asset (a bond issued by a government, financial institution or company) upon the occurrence of a credit event (bankruptcy, default, deferred payment or restructuring). It is a mechanism to protect against credit risk.
Tier 1 capital Core capital including the financial institution’s consolidated shareholders’ equity minus regulatory deductions.
Treasury stock The equity share held by the Company, especially through the share buyback program. Treasury stock does not bestow voting rights and is not included in the calculation of earnings per share, with the exception of securities held in association with a liquidity contract.
TSS Deeply subordinated notes (Titres Super Subordonnés), i.e. perpetual bonds with no contractual redemption commitment that pay interest in perpetuity. In the event of liquidation, they are repaid after other creditors (subordinated loans). These securities pay annual interest contingent on the payment of a dividend or the achievement of a specific result.