PRESENTATION OF NATIXIS 1 2012 Key fi gures 1.3.4 PRE- TAX PROFIT BY BUSINESS
After market close (subject to modifi cation) 2013 Third Quarter Results 1.3.7 CONTACTS
Natixis also progressed in its areas of development: V the SSA (sovereign, supranational and agency bond) market, with a considerable improvement in the League Tables: Natixis was ranked No. 4 for Agency issues in euros in 2012 versus No. 11 in 2011 (7 ) ; V the High Yield market, with overall coordination (Natixis -Active Bookrunner) of the Faurecia, Fiat, PSA Peugeot Citroën, Wendel and Renault deals; V the emerging market, with several bond mandates renewed for IPIC and a loan syndication for Rosneft (fourth largest deal by volume, according to Dealogic); (1 ) Reuters / MLA 2012 rankings by volume at January 17, 2013.
R Natixis Environnement & Infrastructures Luxembourg (€0.8 billion): fi nancing for existing (“brownfi eld”) infrastructure.
AEW Europe is owned in partnership with Caisse des Dépôts, which has a 40% stake. This subsidiary is a European leader in investment advisory services and third party real estate asset management. AEW Europe is present in nine European countries, notably in Paris and London, and managed €17.4 billion in real estate assets at end-2012. The partnership between AEW Capital Management – in the United States and Asia – and AEW Europe and its regulated subsidiaries constitutes a global platform occupying the 6th leading position in the world in terms of AuM. 2012 was a good year for AEW Europe in terms of the infl ow and transaction levels. A senior real estate loan fund set up and invested in partnership with Natixis Asset Management was successfully launched.
The personal protection insurance business posted strong growth in 2012, with premiums increasing by 16% to €531 million. Payment protection insurance accounted for 62% of personal protection insurance premiums in 2012.
Banque Privée 1818 combines all the expertise required to organize and manage both the private and professional assets of high net worth clients. By working together in order to promote synergies, its teams use three skills to address all aspects of wealth management: legal and tax engineering, fi nancial engineering (the bank’s experts therefore provide assistance in the key moments of a company’s development: disposals, transfers, capital increases, restructuring of capital ownership, LBO transactions, etc.), and asset management through the VEGA Investment Managers asset management company.
To meet the specifi c expectations of this demanding customer segment, they constantly seek to provide clients with innovative and customized solutions. In January 2012, Banque Privée 1818 launched a range of Family Offi ce products, a highend service aimed at Ultra High Net Worth clients. The products meet the need for comprehensive wealth management, organization and advisory services. They can also look after clients’ administrative, legal and tax needs, as well as the relationship between private and professional assets.
Underpinned by this strength and experience, Natixis decided in 2008 to restructure this business and focus on Private Equity structures capable of meeting the needs of external investors. Under Natixis’ Investment Solutions division, alongside Asset Management, Insurance and Private Banking, Private Equity is a long-term alternative investment solution that the bank offers to its clients.
In 2012, Naxicap Partners carried out two acquisitions with the purchase of a 100% stake in AtriA Capital Partenaires and of a 30% minority stake in IFE Mezzanine. As a result, Naxicap Partners is able to consolidate both its portfolio of potential investors and its expertise on the capital transfer and mezzanine segments. The company now manages almost €1.5 billion (excluding IFE Mezzanine’s assets).
This unique range of products currently draws on three asset management fi rms: Dahlia Partners: Dahlia Partners was created in 2006 and the fi rst primary fund of funds for €300 million was launched in partnership with the European Investment Fund (EIF). The company currently manages €650 million, with the majority invested on the primary market with a share on both the secondary and co-investment markets.
R New tools were rolled out to optimize the network’s effi ciency while improving employees’ work environment. Simpler and offering better access, the new Équinoxe workstation provides a single point of entry to all applications and digital archiving of customer fi les. Vision is an intelligent application for preparing sales interviews.
2012 signifi cant events R On-balance sheet savings rose by 8.1 % (2), loans outstanding rose by 8.4%.
Despite the challenging economic and regulatory climate, new consumer loans stood at € 5.3 billion. New real estate loans totaled € 18 billion, bringing total outstandings to € 105 billion, an increase of 9%.
In 2012, maintaining the 20% stake in the capital of each of the Banques Populaires represented an investment of €210,356,795.50 for Natixis.
V A toll-free number (numéro vert) (+33 800 41 41 41) available Monday to Friday from 9 a.m. to 6 p.m. (except weekends and public holidays) to answer questions about Natixis. This number provides access to an interactive voice response system that provides round-the-clock access to the share price.
V The website: www.natixis.com: R provides round-the-clock access to information about the Company; R features Natixis press releases, calendar and fi nancial news in the “Investor Relations” section; R includes all editorial content and documents for shareholders and, in particular, all issues of the Shareholder Newsletter in the “Individual Shareholders’ Corner”.
R TECHNOLOGICAL BREAKDOWN OF THE RENEWABLE ENERGY PORTFOLIO AS AT 12. 31. 2012
(2 ) Source: 2012 Finansol Survey. Solidarity investment: of which €55 million directly invested in solidarity-based structures.
Natixis also participates in the working Committees of national and European professional associations so that it can contribute to the debate on current regulatory issues and is able to anticipate the impact of regulatory changes in the fi nancial arena.
Natixis has introduced an internal procedure giving every employee the opportunity to fl ag any potential failure to meet banking and fi nancial obligations.
Regarding terrorist fi nancing, funds, fi nancial assets or economic resources identifi ed as likely to benefi t people or entities linked to terrorist acts are automatically frozen. Natixis must meet three fundamental obligations: V checking that its customers do not appear on the official lists of people or entities suspected of participating in terrorist financing; V introducing permanent control procedures to detect and freeze funds belonging to people or entities appearing o n these lists; V complying with sanctions against various countries.
The training was focused on E&S risks assessment in respect of the Equator Principles and the underlying International Financial Corporation (IFC) standards, as well as Natixis’ internal processes. The training program was completed at the end of the fi rst quarter of 2012 and will continue into 2013 through a second round of training addressing the EP III amendment, once approved by the EPFIs.
The “Green Works Charter” established in 2010 is now used for all major outfi tting and improvement works. The associated criteria are included in service provider specifi cations and are later audited by an external fi rm. In 2012, the contents of this charter were incorporated in the environmental charter currently being prepared with Groupe BPCE, to be used as guidelines for group entities for the conducting of works.
Through this multiple year project, Natixis’ partnership with the Institut Gustave Roussy will step up cancer research and probably save several years spent defi ning new treatments.
Specifi c methodology information on audited data: V headcount includes all employees who have an active employment contract with one of Natixis’ legal entities. Interns, apprentices and VIE employees are not considered. Expatriates are accounted for in their entity of origin; V hires include external recruitment and transfers from Groupe BPCE; V departures include resignations, terminations, retirements, dismissals, contract terminations due to death or incapacity and transfers to BPCE; V SRI and solidarity assets under management include openended, dedicated (to Natixis’ clients) and employee savings funds which take into account environmental, social and governance criteria and are managed by Natixis Asset Management; V purchases that include sustainable development criteria take into account contracts within which a sustainable development clause has been signed by the vendor; V the publication of greenhouse gas levels (see section [2.4.3.1]) covers energy consumption in 2011.
Employee representative bodies, created for the consolidated Natixis France scope, provide a forum for global industrial relations and guarantee that all staff are represented.
In addition to the global agreements, many agreements were entered into within each of Natixis’ French companies. A voluntary profi t-sharing agreement for 2012 to 2014 was notably signed by Natixis S.A. on June 8, 2012.
(a) The direct ratio is the ratio of disabled workers to all staff.
Waste-sorting, which was launched in 2006 and is managed by the Real Estate and Logistics Department, has now been extended to all of Natixis’ buildings. It consists of the following: V sorting of paper in offices; V recycling of paper; V collection and special disposal of used ink cartridges and batteries (for business and personal use); V recovery of WEEE (Waste Electrical and Electronic Equipment) and cell phones by recycling companies.
In 2012, the car fl eet team within the Real Estate and Logistics department (DIL) took over management of the Investment Solution division’s car fl eet (particularly Natixis Asset Management and GCE Car Lease). Its management scope at the end of 2012 covered 509 vehicles.
In 2012, in line with the operating effi ciency program (see section [2.1.2.2]), these rules were reconfi rmed and were specifi cally sent to the heads of entities and made available to all on the intranet.
2012 Key event In order to streamline the management of employee travel and its monitoring, a single travel agency was selected following an invitation to tender, instead of the twenty or so agencies used previously. As a result, the business travel policy can be applied across the whole of the France and international scope, with an online booking system that is more user-friendly for employees.
(1) Qualitative data: Social indicators: Actual headcount recorded at 12.31, Percentage of female executives in the headcount, Total recruitment, Total departures, Rate of employment of employees with disabilities.
Member, Audit Committee First appointed: Board Meeting of 04. 01. 2010 Term expires: 2015 AGM (b)
Vice-Chairman of the Supervisory Board of BPCE - Chairman, BRED Banque Populaire 18 quai de la Rapée 75604 Paris Cedex 12 * Independent director.
FRANCE Member of the Supervisory Board (until 04.30.2009) then member of the Board of Directors of: Natixis Chairman and Chief Executive Officer of: Bolloré, Bolloré Participations Chairman of the Board of Directors of: Financière de l’Odet, Havas, Havas Média France (until 04.07.009) Chairman of: Bolloré Production (until 06.22.2009), Véhicules Électriques Pininfarina-Bolloré (VEPB) Chief Executive Officer of: Omnium Bolloré, Financière V, Sofi bol Member of the Board of: Batscap, Bolloré, Bolloré Participations, Compagnie des Glénans (until 06.11.2009), Direct 8 (formerly Bolloré Média), Direct Soir, Financière Moncey, Financière de l’Odet, Financière V, Havas, Havas Média France, Matin Plus (formerly Compagnie de Bangor), Omnium Bolloré, Sofi bol, VEPB Permanent Representative of Bolloré Participations, member of the Board of Directors of: Compagnie des Tramways de Rouen, Société Anonyme Forestière et Agricole (SAFA ), Société des Chemins de Fer et Tramways du Var et du Gard, Société Industrielle et Financière de l’Artois, Société Bordelaise Africaine, IER Permanent Representative of Bolloré Participations, member of the Supervisory Board of: Compagnie du Cambodge (1)
INTERNATIONAL Chairman of: Nord Sumatra Investissements, Financière du Champ de Mars, Financière Nord Sumatra, Champ de Mars Investissements Vice-President of: Société des Caoutchoucs de Grand Bereby (SOGB) (1), Bereby Finances, Generali (1)
Permanent Representative of BP Occitane, member of the Investment Committee of: Multicroissance Permanent Representative of BP Occitane, Manager of: SNC Immocarso Manager of: SCI de l’Hers
Vice-Chairman of the Board of Directors of: Fondation d’Entreprise Banque Populaire (until 06.20.2012) Member of the Board of: Natixis (1) (until 05.29.2012), Natixis Private Equity (until 03.20.2012) Permanent Representative of BP Rives de Paris, Chairman of the Board of Directors of: SAS Sociétariat BP Rives de Paris (until 12.17.2012) Permanent Representative of Banque Populaire Rives de Paris, member of the Board of Directors of: i-BP (until 04.30.2012)
Chairman of: Sanofi 1 Chief Executive Officer of: Sanofi Aventis Europe, Sanofi Aventis Participations Member of the Board of: Sanofi Pasteur Holding Manager of: Sanofi 4, Sanofi Aventis North America
Chairman of the Board of Directors of BRED Banque Populaire Vice-Chairman of the Supervisory Board of: BPCE Chairman of the Board of Directors of: SPIG, Natixis Institutions Jour, Banque Internationale de Commerce-Bred, BRED Gestion, Cofi bred, NRJ Invest Member of the Board of: Natixis (1), Natixis Pramex International Milan, Natixis Algérie, BCI Mer Rouge, Thales (2), Bercy Gestion Finances +, Promepar Gestion, BRED Cofi lease, Prépar IARD , Veolia (2) (since 11.21.2012), Banca Carige (since 09.17.2012), BICEC (since 06.23.2012), BCI (Banque Commerciale Internationale) (since 2012) Member of the Supervisory Board of: Prépar-Vie
Member of the Supervisory Board of: BPCE Member of the Board of: Natixis Chief Executive Officer of: Banque Populaire Bourgogne Franche-Comté Member of the Board of: Natixis Assurances, (until 09.20.2010) Natixis Lease (until 09.22.2010), Natixis Paiements (until 10.06.2010), Banque de Savoie (until 02.25.2010), BP Participations (until 08.05.2010), IPMPE Permanent representative of Banque Populaire Bourgogne Franche-Comté on the Board of Directors of: i-BP, BPCE Domaine (since 06.18.2010), Association des Banques Populaires pour la Création d’Entreprise
Bernard Oppetit (born August 5, 1956) Chairman of Centaurus Capital, a hedge fund group he founded in London in 2000, Bernard Oppetit is also an Independent Member of the Board of Natixis. With a degree from the École Polytechnique, he forged his career with Paribas from 1979 to 2000, fi rst in Paris, then New York and fi nally London. As Deputy Director of the Financial Management Division (1980-1987), Bernard Oppetit joined Paribas North America fi rst as a Risk Arbitrage Trader (1987-1990) and then as Global Head of Risk Arbitrage (1990-1995). In 1995, still heading up Risk Arbitrage, he moved to London to become Global Head of Equity Derivatives (1995-2000). A well-known expert on fi nancial markets, Bernard Oppetit brings the Natixis Board of Directors his considerable expertise in complex fi nancial products and fi nancial management, as well as his entrepreneurial experience in Europe.
Chairman of the Management Board of: Caisse d’Epargne et de Prévoyance de Bretagne Pays de Loire (CEBPL) Member of the Supervisory Board of: BPCE Chairman and Chief Executive Officer of: SODERO Chairman of the Board of Directors of: SODERO Participations, S.A. des Marches de l’Ouest (SAMO ) Chairman of the Supervisory Board of: SODERO Gestion, BATIROC Bretagne – Pays de Loire Member of the Supervisory Board of: GCE Capital Member of the Board of: Natixis (1), Compagnie de Financement Foncier – SCF, Natixis Cofi ciné, Mancelle d’Habitation, CE Holding Promotion Permanent Representative of CEBPL, member of the Board of Directors of: Pays de la Loire Développement, SEMITAN , Nantes Atlantique Place Financière (NAPF), FNCE Permanent Representative of CEBPL, member of the Supervisory Board of: IT-CE
Amongst these Internal Rules, which were last amended on December 12, 2012, particular attention should be drawn to the following provisions: V circumstances requiring the Board of Directors’ prior authorization: R the extension of Natixis’ activities to a new core business not currently carried out by the Company,
R the appointment or dismissal of the CEO or, where applicable, one or more Deputy CEOs,
All director s must devote suffi cient time and attention to the performance of their duties and regularly attend the meetings of the Board and Committee(s) of which they are a member, as well as the General Shareholders’ Meeting. As such, they must ensure that with the number and commitment level of their director ships, they are available when required, especially if they also hold executive positions.
Minutes of each of the Appointments and Compensation Committee’s Meetings are prepared and sent to individual members. The Chairman of the Committee provides a report on the Committee’s work to the Board of Directors, thereby enabling the Board to be fully informed of its decisions. It is also specifi ed that when these reports are presented, the Board of Directors shall not decide upon compensation in the presence of corporate offi cers.
General Shareholders’ Meetings are convened by the Board of Directors or, failing this, under the conditions of Article L.225103 of the French Commercial Code. Notices of meeting are prepared in accordance with the conditions laid out in the applicable regulations (Article 21 of the bylaws).
The Chairman of the Board of Directors waived all fi xed and variable compensation with respect to the performance of his duties at Natixis in 2012, as in previous fi scal years.
In accordance with applicable “Professional standards concerning the governance and variable compensations of employees whose professional activities have a signifi cant impact on the company’s risk profi le” and with the provisions of Regulation 97-02 of February 21, 1997, concerning the internal control of credit institutions and investment fi rms, as amended by the Decree of December 13, 2010, the variable remuneration of Laurent Mignon will be paid as follows: V 41% of this variable compensation will be paid in 2013, 50% of which shall be index-linked to Natixis shares; V 59 % of this variable compensation will be deferred for three years, 50% of which shall take the form of Natixis shares.
R TABLE 2 Summary table of the compensation of each executive corporate officer
In the tables below: V the expression “amounts due” corresponds to compensation and benefits allocated to corporate officers within the context of their duties over the year, irrespective of the payment date; V the expression “amounts paid” corresponds to compensation and benefits actually paid to corporate officers within the context of their duties over the year irrespective of the date of allocation.
Member of the Natixis Appointments and Compensation Committee 5,000 6,000 7,000 7,000
(5 ) Variable compensation for fi scal year 2012 , of which €225,028 (40%) paid in cash in 2013 and the balance deferred (60%) over three years in equal shares of €112,514.
Cumulative number of outstanding subscription options at end of period 12,009,613 4,071,413
CORPORATE GOVERNANCE3 Chairman’s report on the internal control procedures R issue a written compliance opinion regarding all new activities, structures, processes, products and transactions, as well as signifi cant changes to existing products. This opinion is accompanied by the right of blockage or appeal, under the New Product Committees framework set up within Natixis’ business lines and its subsidiaries, or centrally for products common to several business lines; R intervene in an advisory role in order to support activities with a view to ensuring security and compliance with standards; R contribute to employee training in conjunction with the Human Resources Department; R manage IT systems projects dedicated to monitoring and managing compliance risks on a consolidated basis at Natixis group level; R centralize logging and reporting of malfunctions resulting in non-compliance at subsidiary or business-line level, with a view to their consolidation by Natixis; R centralize logging and reporting of possible malfunctions as set out in Article 11-2 of amended rule 97-02, at subsidiary or business-line level, with a view to their consolidation by the Natixis group and their communication to BPCE; and defi ne the conditions for operating the alert mechanism provided for by this article whilst respecting the confi dentiality of declaring parties; R prepare regular summary reports, notably for Natixis’ and BPCE’s Senior Management; R oversee the consistency and effectiveness of permanent controls for compliance risk.
Controls performed by the Compliance Department may take three forms: V controls based on indicators arising from first-level controls; V controls based on warnings issued by automated control systems, especially under the framework of anti-money laundering and market abuse detection plans; V controls through checks on accounting documents and, if appropriate, on-site checks, so as to ensure that automated controls are relevant. They can also be used to check the application of more qualitative rules (knowledge and classification of the customer, application of Chinese walls, management of conflicts of interest, etc.).
The ITSS-BC risk map and the vulnerability management database were updated in 2012. They are now automatically included in the annual cycle for setting security goals (security orientation plan) as closely as possible to business line and regulatory requirements. ITSS-BC initiatives are now part of a three-year blueprint.
Its role and methods of operation are set out in a charter. It deals with all issues relating to the organization and planning of control services, as well as highlighting areas of emerging or recurring risk within the scope of consolidation and reports any signifi cant dysfunctions observed to the executive body. It also supplies the executive body with updates on ongoing controls performed by internal or external control functions, or by regulators, and ensures that the conclusions from these undertakings are taken into account by the operational business lines.
The search for objective evidence of impairment is undertaken using analysis and close monitoring of business sectors and countries. When necessary, an expert opinion is sought to refi ne the results of this review.
The Natixis Market Risks Department is responsible for second-level monitoring of ALM indicators produced by the Financial Management Department (hedging ratios, liquidity stress tests, etc.) and third-level control of the indicators established by the liquidity management team (1- to 60-day static liquidity gaps). Second-level control falls under the remit of the Financial Management Department.
French original signed in Neuilly-sur-Seine and Paris-La-Défense, March 18, 2013, by
As indicated above, Natixis holds 20% of the share capital of Banques Populaires and Caisses d’Epargne, in the form of CCIs. These CCIs are non-voting securities, with different rights from those attached to cooperative shares issued by Banques Populaires and Caisses d’Epargne. Although Natixis is entitled to participate in meetings of the cooperative shareholders (“sociétaires”) of Banques Populaires and Caisses d’Epargne, it is not entitled to vote at these meetings and has no control over decisions requiring approval by the shareholders of Banques Populaires and Caisses d’Epargne.
OVERALL INTEREST RATE RISK, LIQUIDITY AND STRUCTURAL FOREIGN EXCHANGE RISK (FOR FURTHER DETAILS PLEASE REFER TO SECTIONS [4.3] AND [3.6.4]).
In addition, fraud or misappropriations committed by fi nancial sector participants may have a signifi cant adverse impact on fi nancial institutions as a result, notably, of interconnections between institutions operating in the fi nancial markets.
The main reason for the reduction in Tier 1 capital, other than the above factors, was the redemption of DSNs, costing €2.4 billion.
For each transaction, the risk-weighting is calculated not only on the basis of the counterparty’s internal rating (probability of default), but also depending on whether the exposure is senior or subordinated, on the type of assets received as collateral (percentage of loss given default), the type of off-balance sheet commitments (credit conversion factor), as well as LGD and maturity.
To this end, a statistical model has been constructed to track the combined behavior of market parameters affecting portfolio value. The calculation method is based on an econometric model whose standard deviations are calculated as being the maximum (risk factor by risk factor) standard deviations calculated over rolling 12-month and 3-month periods. This method makes VaR more responsive if the markets suddenly become more volatile.
The robustness of the VaR indicator is regularly backtested against the change in daily trading results. This exercise means actual outcomes can be compared with ex-post loss potential as provided ex-ante by VaR.
Prudential restatement of unrealized gains or losses on available-for-sale equity instruments as a percentage of upper Tier 2 capital 17
Insurance premiums for all these policies cost a total of €11.7 million over the whole of 2012.
Commune of Sanary-sur-Mer On August 5, 2011, the Commune of Sanary-sur-Mer in France fi led a complaint against Natixis and other defendants before the Administrative Tribunal of Toulon (Tribunal Administratif de Toulon) seeking the joint and several payment of €83 million particularly in light of the investment losses to be incurred by the Commune and the loss in future contributions to its budget following the abandonment of the planned construction of a local casino/hotel complex. Natixis intends to dispute the validity of the claims fi led against it. Furthermore, given that, within the framework of this construction project, Natixis had already committed to issuing a bank guarantee of completion in the amount of €20 million, it intends to strictly limit any liability with regard to both this project and this amount; it being specifi ed that, here again, Natixis believes the claim fi led against its unfounded.
Financial risk management is based on a rigorous body of standards and controls: V exchange rate risk: the vast majority of Coface’s investment instruments are in euros. Currency risk on assets representing liabilities in euros whose underlying is denominated in other currencies is hedged to avoid holding open positions; V counterparty risks: more than 79% of Coface’s bonds and Fixed Income products at December 31, 2012 were rated A- (or equivalent) or better, according to at least one internationally-recognized rating agency; V interest rate risk: this risk is limited, as the maximum sensitivity (1) to bonds has been deliberately capped at 4; V liquidity risk: a significant portion of Coface’s held-for-sale securities are invested in the money market (38% at end2012 ). The majority of Coface’s other equities and Fixed Income products are listed on OECD markets. Consequently, Coface considers that its securities portfolio is sufficiently liquid to meet its commitments; V sovereign debt exposure: Coface’s financial investment portfolio is only very marginally invested in euro zone peripheral country sovereign debt. Coface’s net exposure to sovereign bonds issued by Greece, Ireland, Portugal and Spain amounts to just €5 million, i.e. 0.5% of its total bond portfolio.
(1) The sensitivity of a bond measures the bond’s loss in value in the event of an interest rate hike. For example, bonds with a sensitivity of 4 will see a 4% reduction in their market value if interest rates increase by 1%.
Net revenues contributed by the Equities activities were down 14% year-on-year, with a considerable increase in equity derivatives (+29%).
Consumer Finance saw a sharp increase of 31% in personal loan commitments and more limited growth (+2%) in revolving credit.
Payments activity gained from the pick-up in electronic banking business, both in terms of cards in circulation (+4% to 17.8 million) and number of transactions (+6%). The number of cards manufactured dipped by 3%, however, due to the extension of card life from 2 to 3 years. The Transactions and Checks business was more contrasted: while check processing was down 13% due to the trend towards dematerialization, large transactions were stable and the number of mass transactions rose by 9 %.
Securitization outstandings, deducted from equity in accordance with regulations (expressed as risk-weighted assets), came out at €2.4 billion, down by €2.3 billion compared to 2011. This decrease can be primarily attributed to the impact of GAPC asset disposal plans.
V Expenses rose by 2.8%: in addition to several items specific to the Banque Populaire network, having a negative overall impact (merger costs, IT migration in 2012, VAT adjustment proceeds in the first quarter of 2011), the rise in certain taxes (doubling of the systemic bank tax, increased social security contributions, expanded salary tax base) were to blame for this adverse.
2012 was characterised by improved access l iquidity . While the situation was not completely uniform throughout Europe, French banks saw a gradual return to normal over the year. Access to liquidity was facilitated by the monetary policies of the leading central banks, particularly those of the ECB and the Fed. With its two VLTROs, the ECB offered refi nancing solutions for the banks and debt of EU countries. Meanwhile, the Fed’s non-conventional monetary easing program and persistently low interest rates provided signifi cant impetus to the liquidity markets. Though temporary, these measures helped re-open the short-, medium- and long-term issuance markets in 2012. In this supportive environment, Natixis was helped by this improvement and took the opportunity to secure its funding, particularly in the treasury and central bank collateral management pool established in partnership with BPCE.
To maintain the rate of return on their money market funds, most European asset managers were forced to extend the maturity of their investments. As such, i n terms of the treasury and central bank collateral management pool, there was a substantial increase in the average maturity of issues in the COD programs over the year.
Natixis’ fi nancial statements as of December 31, 2012 showed net income of €907,172,429.97 and, taking into account retained earnings of €523,181,556.29, distributable profi ts of €1,430,353,986.26.
R 1 - MANAGEMENT RESULTS RECLASSIFIED AS CONSOLIDATED RESULTS IN 2012
Natixis’ consolidated fi nancial statements include a balance sheet, income statement, statement of net income/(loss) and gains and losses recorded directly in equity, statement of changes in shareholders’ equity, cash fl ow statement and notes to the fi nancial statements.
A review of potential voting rights held by Natixis had no impact on the entries into scope in 2012.
In accordance with IFRS 3 (pre or post-revision), business combinations are recorded using the purchase method. Under the purchase method, the identifi able assets and liabilities of the acquired entity are measured at their fair value at the valuation date.
PRINCIPLES ADOPTED FOR MEASURING CONTRIBUTIONS BY GROUPE CAISSE D’EPARGNE TO NATIXIS IN 2006
A 20 bp increase in discount rates associated with a 50 bp reduction in perpetual growth rates would help to reduce the value in use of CGUs by: V -6.9% for the Investment Solutions CGU; V -4.3% for the Specialized Financial Services CGU; V -6.5% for the Coface CGU; V -7.1% for the Coface «non-core» CGU; and would not result in fi nding a depreciation of those CGUs except for the Coface “non-core” CGU for which an additional €9 million depreciation should then be recorded.
V Creation of Naxicap 2018 yield and creation of Codeis: this is the Private Equity fund used to refinance a portion of the BP Développement portfolio.
V Deconsolidation of NBP Preferred Capital II LLC after preferred shares were reimbursed at July 31, 2012; V Total transfer of VAL into Natixis S.A. on September 30, 2012.
V Decision-making powers: Natixis has decision-making and management powers enabling it to control or obtain control of the SPE or its assets, including certain decision-making powers arising after the formation of the SPE. Such decisionmaking powers may have been delegated by setting up an auto-pilot mechanism.
V SPEs may be used to transform a debt type instrument (on the asset side of their balance sheet) into a more equity type instrument (on the liability side of their balance sheet), through the issue of preference shares for example. Within the scope consolidated and controlled by Natixis, the following single material entity was consolidated at December 31, 2012: R Natexis Banque Populaire Preferred Capital 3.
Finance revenues corresponding to interest is recognized in the income statement under “Interest and similar income”.
Provisions booked on the liabilities side of Natixis’ fi nancial statements as at December 31, 2012, are discussed in Note 6.15.2 “Contingency reserves” and the allocations are specifi ed in Note 7.6 “General operating expenses” and Note 7.7 “Provision for credit losses”.
A provision is accrued for termination benefi ts when the employer is demonstrably committed to provide such benefi ts.
(c) At December 31, 2012, the information is presented in consideration of the effects of the currency offset between asset valuations and liability valuations of the derivatives treated with the «LCH Clearnet Ltd.» clearing house. This offset has had no net impact on the consolidated income statement. The offset amount of assets and liabilities on derivatives is €45.912 billion at December 31, 2012 and would have been €33.441 billion at December 31, 2011.
Provisions for impairment of non6. 4.2.3 Other loans and receivables due from customers
Financial liabilities at fair value through profi t and loss 1,215
(c) Other changes mainly pertained to the revaluation of debts subject to hedging and variations in intra-group securities held by Natixis Funding for the purposes of market making with respect to Natixis’ debt on the secondary market. DSN issues from June and July 2003, December 2006, and May 2007, and undated subordinated notes from November 1985.
Securities designated at fair value through profi t and loss 13,260 13,260 17,170 548 16,622
V Asset Management: Asset Management activities are grouped together within Natixis Global Asset Management. They cover all asset categories and are carried out mainly in the U.S. and France. These activities are performed by autonomous entities (specialized management companies and specialized distribution units) coordinated by a holding company that ensures the organization’s consistency by overseeing its strategic direction. These companies are thus able to focus on their core business of achieving high performance, while retaining the option of developing their own institutional clientele and drawing on the business line’s other support functions, based on appropriate economic models. A number of them have forged a strong reputation, such as Loomis Sayles, Harris Associates, AEW and Natixis Asset Management.
Financial assets at fair value through profi t and loss (excluding variable-income securities) 206,302 0 0 206,302 225,640
(a) Net book value (including provision for permanent impairment); (b) Without applying contractual rules governing shares of profi ts on life insurance activities.
Fair value of the indexed cash unit at the valuation date (in euros)
(in millions of euros) Grant date Initial number of shares granted Acquisition dates
Expected return on plan assets 3.00% 4.44% 7.01% 3.00% 5.20% 7.61%
Expected increase in salaries (including infl ation) 3.34% 2.73% 3.47% 3.90% 3.21% 4.05%
FINANCIAL DATA5 Consolidated fi nancial statements and notes c) Change in the fair value of assets held to fund post-employment benefi ts granted to employees
Natixis sets up securitization transactions on behalf of its customers and investors using specifi c conduits. Natixis extends liquidity lines to two ABCP conduits (Versailles and Magenta). At December 31, 2012, these lines totaled €4.9 billion.
Natixis also extended liquidity lines to several funds arranged by third parties for a total of €607 million.
Depreciation, amortization and impairment on property, plant and equipment and intangible assets (228) (237)
At the end of this commitment, it is expected that the Chief Executive Offi cer will not receive severance payments if he leaves the Company at his initiative to perform new duties or changes his position within Groupe BPCE. Furthermore, this payment will not be paid if the Company is experiencing serious economic diffi culties. Furthermore, in accordance with the provisions of the AFEP/Medef code of corporate governance, the right to compensation is subject to a certain number of criteria and performance conditions.
Liabilities 14 Due to central banks 14 Due to banks 157,853 140,790 24 o/w institutional operations: 18/19 Provisions for risks and other expenses 2,982 3,049
NOTE 8 INVENTORY – INVESTMENT PORTFOLIO AT DECEMBER 31, 2012 362
No change in accounting method had any impact on the fi nancial statements for the 2012 fi scal year.
There were no transfers of securities between categories in 2011 or 2012.
DISCLOSURES REGARDING SHAREHOLDINGS EXCEEDING THE INVESTMENT THRESHOLD IN FRENCH COMPANIES DURING THE YEAR
FINANCIAL DATA5 Parent company fi nancial statements and notes R BREAKDOWN OF NET OBLIGATION BY PLAN TYPE
Unrecognized actuarial gains and losses 37 15 7 59 23 4 5 32
Bonds and other fi xed-income securities 1,104 3,837 1,791 884 6,848 10,947 0 25,411
Monitoring of Natixis’ subsidiaries and branches in noncooperative countries forms an integral part of Natixis’ risk monitoring process overseen by the Risk function. This process involves: V local Risk Officers/functions that have a functional link to the central Risk Control Department; V specific reporting procedures that respect local constraints but also comply with overall risk requirements.
6.1 NATIXIS BYLAWS 404 6.2 GENERAL INFORMATION ON NATIXIS’ CAPITAL 410 6.2.1 Form and transfer of shares (Chapter II, Article 4 of the bylaws) 410 6.2.2 Share capital 410 6.2.3 Authorized but unissued capital – Capital increase authorizations 410 6.2.4 Securities not conferring rights over the share capital 412 6.2.5 Other securities giving access to capital 412 6.2.6 Changes in the capital over the last fi ve fi scal years 413 6.2.7 Other information on the capital 413 6.3 DISTRIBUTION OF SHARE CAPITAL AND VOTING RIGHTS 414 6.3.1 Distribution of share capital at December 31, 2012 414
Chapter I: Form Of The Company – Name – Registered Offi ce – Duration – Corporate Purpose
Any individual or legal entity owning directly or indirectly, alone or jointly, a fraction of 1 % of the voting rights (on the basis of all the voting rights attached to the shares, including those deprived of voting rights), or any multiple of this percentage, shall notify the Company by registered letter with acknowledgment of receipt of the number of votes they own. This notice must be made within a period of 15 days following each acquisition or sale of this fraction.
This same meeting resolved in particular that under certain circumstances, the Board of Directors may: V determine the issue price of the shares, within the limit of 10% of the share capital per year, as part of a capital increase with waiving of preferential subscription rights; V decide to increase capital with waiving of preferential subscription rights through an offer as set out in Article L.411-2(II) of the French Monetary and Financial Code (private placement); V decide to increase capital with waiving of preferential subscription rights with a view to remunerating contributions in kind granted to the Company, within the limit of 10% of the share capital at the time of the issue; V decide to increase capital via the incorporation of premiums, reserves, retained earnings or other items; V decide to increase the number of securities to be issued, within the legal limits, in the event of capital increases with or without preferential subscription rights; V decide to increase the share capital reserved for members of an employee savings plan, up to the par value limit of fortyeight (48) million euros .
Moreover, in its session on February 17 , 2013, the Board of Directors decided to use the delegation relating to the capital increase with waiving of preferential subscription rights reserved for members of employee savings plans granted by the Combined General Shareholders’ Meeting of May 26, 2011 (twentieth resolution), for the launch of the Mauve 2013 employee share ownership plan with an overall par value ceiling of €48,000,000, representing a maximum of 30,000,000 shares. Natixis will spread a press release specifying the term and conditions for the Mauve 2013 offer before the beginning of the period of reservation by the eligible employees.
LEGAL INFORMATION6 General information on Natixis’ capital 6.2.4 SECURITIES NOT CONFERRING
In 2007, the corporate offi cers were the members of the Natixis Management Board .
The ownership of shares by corporate offi cers is not material. Please see the preceding pages for details of stock options granted by the Company to certain employees and corporate offi cers.
Resolution Seven asks the General Shareholders’ Meeting to appoint XX , aged XX, XXXXX, as Director, to replace Vincent Bolloré, who resigned. It was agreed that his/her experience [describe] was needed for Natixis’ Board of Directors. In addition, XX will be an independent member* of the Board of Directors, pursuant to the recommendations of the AFEP- Medef code.
The Extraordinary Shareholders’ Meeting is thus asked to renew these fi nancial authorizations and delegations which are all aimed at entrusting the fi nancial management of your Company to your Board of Directors by allowing it, in particular, to carry out capital increases under the methods and for the reasons set out below and in the summary table that follows.
V May be used to issue shares or securities giving access to the Company’s capital* in consideration for shares in a company meeting the criteria laid down in Article L.225-148 of the French Commercial Code in connection with a public exchange offer initiated by your Company in France or abroad under local rules, in which case your Board of Directors would be free to set the exchange ratio, the pricing rules set out below would not apply 12 Setting of share issue price as part of a capital increase without PSRs*
V Price set by your Board of Directors, at least equal to the Legal Minimum Price*
LEGAL INFORMATION6 Purpose and draft resolutions submitted to the Combined Shareholders’ Meeting of May 21, 2013 6.5.2 AGENDA AND DRAFT
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, having reviewed the report of the Chairman of the Board of Directors on the structure of the Board, preparation and organization of the Board’s work and the internal control and risk-management procedures established by the Company, the report of the Board of Directors on the parent company fi nancial statements and the management report relating thereto, and the reports of the Statutory Auditors on the parent company fi nancial statements for fi scal year 2012, hereby approves the 2012 parent company fi nancial statements as presented, including the balance sheet, income statement and notes to the fi nancial statements, as well as the transactions refl ected in these fi nancial statements or summarized in these reports.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, having reviewed the report of the Chairman of the Board of Directors on the structure of the Board, preparation and organization of the Board’s work and the internal control and risk-management procedures established by the Company, the report of the Board of Directors on the consolidated fi nancial statements and the management report relating thereto, and the reports of the Statutory Auditors on the consolidated fi nancial statements for fi scal year 2012, hereby approves the 2012 consolidated fi nancial statements as presented, including the balance sheet, income statement and notes to the fi nancial statements, as well as the transactions refl ected in these fi nancial statements or summarized in these reports.
R recognizes and decides that this delegation of authority expressly waives, in favor of the beneficiaries of share allocations, the shareholders’ preferential subscription rights to ordinary shares that may be issued under this resolution and the corresponding waiver by shareholders in favor of the beneficiaries of said allocations of the part of the reserves, retained earnings, premiums or other items so incorporated, and, more generally, waives all the shareholders’ rights to free ordinary shares (new or existing) that may be allocated pursuant to this resolution; R grants all authority to the Board of Directors to implement this delegation of authority in particular to: (i) set the conditions and, where applicable, the criteria for allocating ordinary shares; (ii) determine (a) the identity of beneficiaries, the number of ordinary shares allocated to each of them and (b) the conditions for the allocation of said shares, in particular, set, within the limits established by this resolution, the vesting period and the holding period for the ordinary shares thus granted for free; (iii) decide to proceed, pursuant to the terms that it will determine, to make all adjustments as may be required as a result of transactions on the Company’s capital and, in particular, determine the conditions under which the number of ordinary shares allocated will be adjusted; and
Excerpt from the minutes of the Combined General Shareholders’ Meeting of May 27, 2010: Capital increase authorization 80453
Heading Registration document page number 1. Persons responsible 444 2. Statutory Auditors 332-333 3. Selected fi nancial information 3.1. Selected historical fi nancial information regarding the issuer for each fi scal year 8-9 3.2. Selected historical fi nancial information for interim periods n/a 4. Risk factors 143 to 148 5. Information about the issuer 5.1. History and development of the Company 4-7 6. Business overview 6.1. Main activities 10 to 36 6.2. Main markets 157 to 159; 299 to 305 6.3. Exceptional events n/a 6.4.
The report of the Board of Directors or the Executive Board presents, (…), the way in which the Company takes into account the social and environmental consequences of its activity, as well as its social commitments in terms of sustainable development 1.2 42