Report of the Chairman of the Board 2.5 management procedures of Directors on internal control and risk
Chairman of the Board of Directors Statutory Auditors’ report on the report of the 2.6 3 RISKS AND CAPITAL ADEQUACY 111 Introduction3.1 112 organization Governance and risk management 3.2
Securitization3.5 147 Market risks3.6 148 Operational risks3.7 155 foreign exchange risks Overall interest rate, liquidity, structural 3.8
Strategic outlines and organization of the 6.1 sustainable development policy 394 Reporting frameworks and methodology6.2 408 Labor information6.3 411 Environmental information6.4 419 Social information6.5 424 Social and environmental information 6.6 for international operations 427 Report of one of the Statutory Auditors, 6.7 appointed as independent third-party bodies, on the consolidated social, environmental and societal information provided in the management report 434 7 LEGAL INFORMATION 437 Natixis by-laws7.1 438 General information on Natixis’ capital7.2 444 Distribution of share capital and voting rights7.3 449 Information from Article L.2251003 7.4 of the French Commercial Code 452 Draft resolutions of the Combined General 7.5 Shareholders’ Meeting of May 23, 2017 453 Statutory Auditors’ special report on 7.6 related-party agreements and commitments 477 8 ADDITIONAL INFORMATION 483 Statement by the Person responsible for the 8.1 registration document 484 Documents available to the public8.2 485 Cross-reference table of registration document8.3 486 Cross-reference table for the annual financial 8.4 report 488 Cross-reference table 8.5 for the management report 489 statements, and the Pillar III report
Table Index8.7 493 EDTF recommendation cross-reference table8.8 495 Cross-reference table of Social 8.9 and Environmental information 496 Glossary8.10 498
1REGISTRATION DOCUMENT 2016 - Natixis and Annual Financial Report financial transaction only if accompanied by a transaction note approved by the French Financial Markets Authority. Article 212-13 of the general regulations of the French Financial Markets Authority. It may be used in connection with a This registration document was filed with the French Financial Markets Authority on March 21, 2017, in accordance with and Financial Code and Article 222-3 of the general regulations of the French Financial Markets Authority. A includes all components of the annual financial report mentioned in section I of Article L.451-1-2 of the French Monetary The document has been prepared by the issuer and its signatories incur liability in this regard. This registration document
Markets Authority and the corresponding sections of this registration document appear on page 486. cross-reference table showing documents referred to in Article 222-3 of the general regulations of the French Financial language version of the document in French prevails over the translation.
care has been taken to ensure that the translation is an accurate presentation of the original. However, the original The English language version of this report is a free translation from the original, which was prepared in French. All possible
Mergers & Acquisitions, with two acquisitions – Natixis Partners in We also developed new franchises at a steady pace, particularly in during the first half of 2016.
multi-affiliated business model that offers substantial margins. €832bn in assets under management and is built on a Management is one of the main asset managers worldwide with in keeping with our strategic targets. Natixis Global Asset In 2016 we also actively built on our Investment Solutions business 2016 also saw the bank successfully roll out the life insurance and network, in line with our Assurément#2016 program, thereby personal protection insurance ranges across the Caisse d’Epargne marking a major strategic achievement for the group.
requirements for 2017. We were again committed to actively December 31, 2016, which is well above the ECB’s own capital Our Core Tier 1 ratio under Basel 3 stood at 10.8% at
Shareholders' Meeting, to distribute €1.1bn, representing 85% of shareholders. As a result we will propose, at our General managing our capital throughout the year, creating value for our the net income i.e. a cash dividend of €0.35 per share.
with a stronger platform from which to attain our new and Business Efficiency program and is set to provide us is gaining pace with the execution of the Transformation
What are your ambitions for 2017 and your medium-term vision for Natixis?
Global distribution platform covering Europe, the US, Asia and the Middle East
Our client base comprises large corporations, financial institutions, investors and clients of Groupe BPCE’s networks. We innovate for them, we build industrial processes consistent with best market practices and we devise ingenious and customized fi nancial solutions. Our clients harness the expertise of our three core business.
Design and development of multiple market surety and fi nancial guarantee services
Natexis S.A., a holding company that was formed from Caisse Centrale des Banques Populaires, founded in 1921, to
Caisse d’Epargne into a major full-service banking group at the end of 2004.
stakes in Ixis CIB and Ixis AM that they had previously acquired from CNCE. In addition, CNCE and SNC Champion contributed changed to Natixis.
Natexis Banques Populaires, the name of which was then indirectly through SNC Champion) each had a 45.52% stake in As a result of these contributions, CNCE and BFBP (directly and
Banques Populaires, which has since become Natixis. CCIs representing 20% of their capital in favor of Natexis In addition to these contributions, each Banque Populaire issued
and outside France. Once the transaction was completed, CNCE investors and a Global Offering for institutional investors both in on the market via a Retail Public Offering in France for retail BFBP (through SNC Champion) sold some of their Natixis shares
On February 26, 2009, the BFBP Board of Directors and the creation of the number two banking group in France. the merger of their two central institutions, leading to the CNCE Supervisory Board approved the terms and conditions of
CNCE and BPCE. with the votes at the General Shareholders’ Meetings of BFBP, formation of Groupe BPCE was completed on July 31, 2009 Directors and the CNCE Supervisory Board. The last step in the were approved on June 24, 2009 by the BFBP Board of
CNCE and BFBP, becoming the majority shareholder of Natixis. With the formation of Groupe BPCE, BPCE took the place ofa and BFBP.
Groupe BPCE develops a broad range of banking and financial customers, of whom 9 million are cooperative shareholders. Groupe BPCE and its 108,000 employees serve 31.2 million two flagship brands: Banque Populaire and Caisse d’Epargne.
At December 31, 2016, BPCE held 71% of the share capital of Natixis (71.03% of voting rights) (see Section 1.2.2 Financial solidarity mechanism). The structure of Groupe BPCE at December 31, 2016 was as follows: Banques Populaires Caisses d’Epargne
12/31/201512/31/2014 12/31/2016 * After paying out the proposed dividend for the fi scal years in question. ** Proposal presented to the May 23, 2017 Shareholders’ Meeting.
(Europe, Middle East and Africa, 67.5% of net revenues(1)). revenues(1)), Asia-Pacific (3.5% of net revenues(1)) and EMEA
Assurances by Natixis, together with the new partnership Banking, and Insurance. In 2014, the purchase of BPCE making up two divisions: Asset Management and Private incorporates Asset Management, Insurance and Private Banking, The Natixis Investment Solutions & Insurance core business to operate as a fully-fledged bancassurance player. In 2016, creation of a single insurance division that allows Groupe BPCE initiated with Groupe BPCE and CNP Assurances, led to the with the New Frontier strategic plan objectives.
Natixis carried out restructuring for the business in accordance structures that are adapted to the specificities and regulations of recognized asset management expertise and distribution Groupe BPCE has global ambitions, boasting internationally on Natixis' expertise in asset management - an area in which The Asset Management and Private Banking division is centred
Natixis Global AM also has a global distribution platform of more United States, the world’s biggest asset management market. around 3,700 work outside France and chiefly in the development. Two-thirds of Natixis Global AM’s employees of multi-boutique, multi-affiliate model and further its international Natixis Global Asset Management continues to strengthen its of funds via asset management firms in Europe, the United the business in Europe, while Private Equity offers a global range where its approximately 100 employees are working to develop fund segment. Private Banking has a platform in Luxembourg, than 800 people, as well as a leading position in the US mutual
insurance, general insurance and insurance solutions. The Insurance division covers three major activities: personal
Equity) for all types of customers. bonds, equities, real estate, alternative, diversified and Private products and mandates across asset classes (money market, range of investment solutions in the form of funds, dedicated business, Natixis’ Asset Management business develops a wide
Natixis Global Asset Management’s business model is based on international client base. Drawing on its diverse range of portfolio management companies to meet the needs of a broad a global distribution platform serviced by multi-specialist asset the world based on assets under management in US dollars as of Asset Management, S.A. as the 16th largest asset manager in Quantitative Update: Global Markets 2016 ranked Natixis Global the Company was ranked 16th global asset manager (Cerulli as a major international asset management player. At end-2015, business model, Natixis Global AM has consolidated its position management skills, strong distribution network and flexible asset management company with nearly €20 billion in AuM at After acquisition of DNCA Finance in 2015, an acclaimed French end-2016, in 2016 Natixis Global Asset Management pursued its clients of Groupe BPCE’s retail networks, namely Caisses international distribution arm, a department dedicated to the was finalized at end-2016. Within Natixis Global AM’s in the French retail market for real estate asset management, Europe and Ciloger (La Banque Postale), creating the No. 3 player distribution platform. In Europe, the merger between AEW expansion of its investment expertise and bolster its global growth strategy and investment policy to ensure the steady d’Epargne and the Banque Populaire banks, was created through
Privée 1818 and Natixis Asset Management to further the the merger of the management and distribution teams of Banque completed, as was the closure of Aurora.
European financial indices in the second half of the year. both high market volatility and, especially, a decline in US and proved to be a year of contrasts for asset management, with Against a backdrop of sluggish global economic growth, 2016
+€0.6 billion, respectively. Europe and Asia remained positive at +€7.7 billion and net outflows were mostly from the US (-€20.5 billion), while (-€12.3 billion). The scope effect was negligible in 2016. Global
The platform already has a strong US market presence, and in 2016 furthered its development internationally in Asia, Europe and Canada. The distribution business performed well with major accounts and global consultants in Asia-Pacific, Japan and Australia, in the retail market in Europe and the United Kingdom, and in France and Spain. A strategy to extend coverage to several Latin American countries (Mexico, Uruguay and Colombia) is underway since 2014.
International distribution comprises two major segments: institutional investors (public and private pension funds, insurers and banks, sovereign funds and central banks, etc.) and distribution/retail (fund of funds, private banking, platforms and IWMAs). The support functions are based in Boston, London and Paris and provide coverage services via a “global key accounts”
Natixis Global Asset Management now has distribution operations in over 20 countries. For the last five years, the business has been using the “durable portfolio construction” approach, which factors in current market volatility and the new expectations of financial investors who want bespoke advisory services as part of a long-term customer relationship. This approach has a global reach and an array of solutions on an international scale. It also offers the opportunity to invest in the brand's visibility and recognition. The goal is to promote a single strategy, platform and message worldwide.
their positive momentum, posting net inflows of €7.7 billion. In 2016, European asset management companies maintained
European asset management companies at end-2016 (assets under management in billions of euros): structured products, global emerging and responsible investing; Natixis Asset Management (€337.1 billion): fixed income, European equities, investment and client solutions, volatility andj
AEW Europe (€26 billion): real estate asset management, real estate investment trusts (SCPI) and real estate mutual fundsj (OPCI); H2O Asset Management (€11.5 billion): global macro multi-strategy and international fixed income;j
Mirova (€6.4 billion): SRI equity and fixed income, infrastructure project financing;j
Structured into six specialized divisions (Fixed Income, European Equities, Investment and Client Solutions, Volatility and Structured Products, Global Emerging and Responsible Investment), Natixis Asset Management’s shift towards a European multi-boutique model has resulted in strong brands and renowned teams. Thus, in addition to NAM’s Fixed Income, European Equities and Investment and Client Solutions teams, Mirova is dedicated to infrastructure project financing and holds investment), while Seeyond specializes in structured and volatility products and launched an activity in the United States.
This diversification of business expertise has been accompanied by an expanded range of more comprehensive, specialized and increasingly recognized asset management solutions.
Since the end of 2016, AEW Europe, an asset management company specializing in real estate, is 60%-owned by Natixis Global AM (following its acquisition of Caisse des Dépôt’s 40% stake in the business) and 40%-owned by La Banque Postale in exchange for the transfer of Ciloger, an asset management company specializing in SCPIs. AEW Europe operates in nine European countries, with a particularly strong presence in Paris and London. After the merger with Ciloger, it managed €26 billion in real estate assets at end-2016, a substantial increase from 2015. The level of transactions (acquisitions and disposals) for real estate management reached a record high and fundraising was also very strong. The Company continued to pursue its strategic plan with auspicious business prospects based on development and international diversification opportunities amid considerable institutional and retail investor interest in real estate.
range of real estate investment products, including sector-specific funds, mandates and listed real estate securities, and uses a wide spectrum of investment strategies.
Together with its US and Asian partners, it forms the AEW platform dedicated to managing real estate assets, and a world leader in real estate investment advisory and asset management, with nearly €50 billion in AuM at end-2016. In total, AEW has over 600 employees, and offices in Boston, London, Paris and Hong Kong. AEW offers its clients a broad
Asset Management business in North America and Asia $438.4 billion at end-2015. In Asia, assets under management climbed to €8.1 billion versus €7 billion at end-2015.
Assets under management for the United States affiliates totaled $427.4 billion at end-2016, a slight decrease from
In the US, where investors are turning to passive strategies amid sharp volatility in the equity market and extremely low interest rates, the decrease in assets under management was mainly attributable to the substantial outflows experienced by Harris Associates - the largest of our US affiliates by amount of AuM, after Loomis and Sayles - and to a change in scope with the sales of CGM and Snyder, along with the Aurora closure. This decline is consistent with a general downturn that hit the US mutual fund market in 2016.
capabilities, and related services that can be tailored to different markets and distribution channels. This platform supplies both volume retailers and private investment advisors.
US and Asian asset management companies at end-2016 (assets under management in billions of dollars): Loomis Sayles ($240.2 billion): equities (growth, core, value) and fixed income (core to high yield);j
Since April 2014, the Group’s Private Equity business line reports to Natixis Global Asset Management under the name Private Equity Division and offers new alternative long-term investment solutions.
NGAM Private Equity division’s assets rose from €6.3 billion at end-2015 to €7 billion at end-2016, nearly 90% of which was on behalf of third-party investors. Assets have increased by a multiple of 3.5 since refocusing our strategy on third-party accounts.
Euro Private Equity (€1.9 billion): investment advisory in the international private assets segment, funds of funds andj co-investment; Caspian Private Equity (€1.8 billion): investment advisory in the US private assets segment, funds of funds andj co-investment; Seventure Partners (€0.7 billion): European venture capital focusing on life sciences and digital technologies, primarily inj Europe; Alliance Entreprendre (€0.2 billion): LBO and growth capital in France.j
The Natixis Private Banking business is dedicated to the financial planning of its private investors. It comprises Banque Privée 1818, geared towards the French market, and Natixis
Morningstar and assets in excess of €300 million, "VEGA Euro Rendement" was awarded the 2016 Globe d’Argent de la
Serving the Groupe BPCE networks Banque Privée 1818 serves the Banque Populaire, Caisse d’Epargne and BPCE International and Outre-mer networks. It offers them sophisticated products and services to satisfy the policies via a platform. Banque Privée 1818 is therefore Groupe BPCE’s open-architecture broker.
Wealth management management at end-2016). They work closely with Natixis’ Coverage teams to roll out innovative and customized wealth-management solutions to meet the specific needs of this demanding customer segment.
There is a solid bond between the wealth management teams of Coverage and Natixis Partner, lending to the execution of a large-scale private investment banking deal for a strategic client of the Lille regional division.
Pyramides de la Gestion de Patrimoine awards ceremony, held by Investissement Conseils magazine, and 3rd third place in the banking platform category of the Service Provider Awards
Caisse d’Epargne networks are rounded out by an offering geared towards professional customers.
Total revenue from direct sales climbed to €6.8 billion, a 2016 was marked by significant growth in life-insurance revenue, which totaled €6.0 billion, a +42% increase compared to the previous year. The new range of life-insurance and retirement products sold since January 1 in the Caisses d’Epargne network contributed 31% of revenue. Unit-linked 21.3% in keeping with the strategic plan’s goal to focus inflows on unit-linked vehicles.
17REGISTRATION DOCUMENT 2016 - Natixis protection insurance accounted for 79% of total personal protection insurance premiums in 2016.
Revenue from the personal protection insurance and payment protection insurance activities grew to €759 million in 2016, up 8% compared to the previous year. The new range of personal protection insurance products sold in the Caisse d’Epargne network resulted in the sale` of 91,000 policies. Payment d’Epargne network has been successfully rolled out. The new range of products and new features in the Caisse
Natixis Assurances continued to record strong business growth driven by Groupe BPCE’s ambitions under its “Growing Differently” strategic plan for 2014-2017. Overall, property and casualty insurance premium income totaled €1,287 million, representing a 9% increase.
Growth was driven by auto (+12%) and multi-risk home multi-risk home insurance) and the considerable efforts made by the networks. The policy portfolio grew by more than 7% in 2016, resulting in a total of 5.2 million policies.
The Insurance Solutions Department handles insurance segments for Groupe BPCE that are not dealt with by its insurance subsidiaries, e.g. the Group’s insurance program.
Corporate & Investment Banking advises corporate clients, institutional investors, financial sponsors and public sector entities. It offers them a wide range of financing, hedging and capital market investment solutions, vanilla and structured financing, M&A advisory services and Global Transaction
On March 15, 2016, Corporate & Investment Banking initiated a project to improve its organizational structure. This project is being implemented in France and internationally as of July 27, 2016. In line with the New Frontier strategic plan, this new organizational structure will enhance client support through strengthened strategic dialog, take its originate-to-distribute (O2D) model to the next stage, and further expand the growth of its business lines internationally.
Corporate & Investment Banking will now be structured as five business lines: Capital Markets (Global Markets): offering a wide range ofa diversified, standard and bespoke products on the fixed income, credit, forex, commodities and equities markets; Financing (Global Finance): combining origination,a syndication and management for the structured finance portfolio to strengthen the O2D model; solutions for corporates and financial institutions, and helping clients develop their business in France and internationally; Global Transaction Banking: a comprehensive range ofa trade finance, liquidity management, cash management
These business lines are adapted locally across the three international platforms: Mexico, Colombia, Brazil, Peru and Argentina); Americas (seven countries: the United States, Canada,a
Asia-Pacific (11 locations: Australia, China, South Korea,a Hong Kong, India, Indonesia, Japan, Malaysia, Singapore, Taiwan and Thailand); EMEA (Europe except France, the Middle East and Africa):a five branches (London, Frankfurt, Milan, Madrid and Dubai), two subsidiaries (Moscow and Frankfurt) and three representative offices (Almaty, Johannesburg and Istanbul).
In 2016, Corporate and Investment Banking expanded its international development efforts with the opening of a representative office in Colombia and the continued of its representative office in Montreal into a branch, the expansion of its offices in Houston, the granting of regulatory authorization to open a branch in Taipei in 2017 in support of Natixis’ business development in the Greater China region, and the opening of a representative office in Geneva.
Corporate & Investment Banking has a cross-business Coverage team dedicated to Natixis’ client coverage. The team sees clients through every stage of their development. It anticipates their needs and offers them targeted advice on the challenges they face by offering them tailored solutions that draw from Natixis’ full range of products and services. Organized by client type (financial institutions and the public sector, financial sponsors and corporates), the Coverage function works closely with the bank’s various business lines. It supports clients in France through a strong regional presence, and internationally with the support of all the Natixis teams working in 36 countries. This structure helps foster in-depth strategic dialog with clients, a high degree of responsiveness and long-term, personalized and close working relationships.
Present on French and international cash equity and equity derivative markets, Natixis offers its clients investment, financing and hedging products that range from the simplest to the most innovative solutions.
Europe-wide broker specializing in the French market, combining a full range of expertise including research, sales and value-added execution products. Three distribution platforms – in Paris, London and New York – are available for institutional investors, corporates and network clients. In 2016, the bank continued its international franchise development while maintaining its business with its core French clientele.
On the cash equity market, Natixis is positioned as a constraints of clients, it offers integrated services comprising equity investment solutions, equity finance, algorithmic indices, legal arrangements and regulatory solutions, fund solutions, hybrid products and alternative risk transfer activities.
StructuredRetailProducts, which gave Natixis the Best Insurance Deal (EMEA region) award as part of its 2016 European Structured Products Awards. The bank was also a market leader in securities lending/borrowing transactions. In 2016, for the fourth year in a row, the magazine Global Investor/ISF, in its 2016 Equity Lending Survey, named Natixis transactions processed. Group 1 is made up of the world’s 15 biggest lenders and 15 biggest borrowers (by volume only). The remaining counterparties not classified among Group 1 are in Group 2 (20 lenders and 20 borrowers)].
The fixed income, credit, forex and commodities markets teams and São Paulo). They offer clients financing, investment and hedging products on the fixed income, credit, forex and commodities markets in OECD and emerging countries.
In 2016, the Fixed Income business continued to implement the strategy adopted in 2015. The financial engineering teams
A new business line was formed in Fixed Income business in 2016, the Securities Financing Group (SFG) - a merger of the Fixed Income and Treasury businesses’ repo and collateral management activities. The aim of the new business line is to give an overview of these activities and pool the expertise of the teams – the SFG team now working with all the Fixed Income products – and to comply with the French law of July 26, 2013 on the separation and regulation of banking activities.
The Fixed Income business offers both investment and hedging solutions through cash products (government bonds) and derivatives.
On the commodities and energy markets, the Global Markets Commodities teams have, over the past two years, developed a unique range of flow products and solutions for the bank’s
model that is strongly client-focused and founded on the development of tailored and innovative solutions that meet clients’ risk management needs. This approach draws on the financial market volatility.
environment and evolving market context in view of recent political developments (Brexit, US elections), the pool continues to optimize liquidity and collateral management to navigate the impacts of new regulations and minimize the impacts of
In treasury activities, the BPCE/Natixis joint refinancing pool continued to collect the necessary resources to finance the development strategy of the group’s business lines on the global level (implementation of a diversification policy with regard to clientele and the product range). In an ever-changing
Cross-expertise research brings one of the market’s biggest research teams to the capital markets, with a focus on six areas of expertise: equity, credit, economies, investment strategies, commodities, rates and forex. It also has an experienced SRI (socially responsible investment) team dedicated to analysing ESG (environmental, social and governance) criteria. In 2016, the covered bonds, supranationals & agencies and utilities categories. It ranked in the top five of most categories (source: Euromoney Fixed Income Research Survey 2016). The Equity and targeted research. The Research Department received several awards in 2016, recognizing the expertise of its teams and their commitment to clients. For the first time, Natixis was named Commodities Research House of the Year as part of the 2016 Energy Risk Awards. On the credit research side, the team was recognized by Euromoney magazine for the fifth consecutive year, earning the Best Credit Research Award in
Research Department was also ranked second in France, and received nine awards (in Food & Beverages, Insurance, Retail & Consumer Products, Construction, Energy & Chemicals, Utilities), as part of the 2016 Thomson Reuters Analyst Awards.
The Quantitative Research Department supports the bank’s financial innovation process and ensures that it remains competitive in today’s fast-changing markets by developing pricing and risk management models, as well as quantitative asset allocation strategies.
Global Finance encompasses origination activities for aviation, export and infrastructure finance, energy and commodities finance and real estate finance. Syndication is a cross-business function and therefore makes full use of the distribution process and distribution channels.
To optimize the use of the bank’s resources in the interest of its clients, Natixis has integrated its credit portfolio optimization activities into its financing activities. The business line’s role is to manage the entire portfolio (i) from a credit perspective to pre-empt risk and (ii) from a resources' perspective (RWA and liquidity) via optimization measures. This new team is also tasked with developing a comprehensive vision of the portfolio (risks and resources) in line with the decision-making process for new operations. The establishment of this team is aimed at accelerating the O2D strategy by devising and implementing a portfolio strategy that will enable the bank to adapt to upcoming regulatory changes.
The reinforcement of the O2D model has helped accelerate balance-sheet rotation and improve capacity to serve clients, as reflected by the sharp increase in business levels, despite increased regulatory constraints and competition. By focusing the Americas platform acted as associate bookrunner for 89.5% of the structured financing and 37.5% of the high-yield financing that it granted in 2016.
Infrastructure financing saw sustained business activity across all international platforms. In the Asia Pacific region, for
The bank also reaffirmed its leading role on the global market for aircraft finance by arranging the financing of a fleet of 22 aircraft for aircraft leasing company Goshawk Aviation Limited, and of two aircraft for Etihad, and by assisting the launch of new French airline French Blue by financing its first aircraft.
In real estate finance, Natixis is a leading player in Europe and the United States and boasts a comprehensive financing offering: arrangement of corporate and specialized financing, securitization, German mortgage covered bonds (Natixis Pfandbriefbank AG), etc.
In 2016, business activity was strong in Europe (€300 million in mortgage refinancing for 11 office blocks in Paris for Foncière des Régions, €450 million in mortgage financing for the
Trade finance: Natixis contributes to the internationala development of its clients by offering them a comprehensive range of services for financing their activities while limiting their risk exposure.
Liquidity management: Natixis offers account keeping anda management solutions, and provides centralization tools for treasury management, as well as cash investment solutions.
Cash management for corporate clients: Natixis provides itsa clients with multi-channel and multi-format solutions to help
Natixis complements these solutions with security arrangements to protect against the risk of fraud.
GTB also has a cash management function aimed at financial institutions. The close relationships built with its numerous banking partners enable Natixis to ensure comprehensive coverage of their clients’ activities.
In 2016, GTB rounded out its international offering for its major corporate clients with a supply chain finance solution, adding to its standard trade finance solution. This solution helps buyers and suppliers optimize their working capital.
The Investment Banking business line was created in the context of CIB’s new organizational structure. Its objective is to teams report to both the Head of Investment Banking and to the Head of Global Markets. The Investment Banking business line also includes advisory services in financial structure and rating matters.
MLA/bookrunner for €12.7 billion in financing) and of German company KraussMaffei (the world leader in plastic material transformation equipment), with Natixis acting as MLA/bookrunner for €925 million in financing. It also carried out
Having participated in 2015 in the financing of the acquisition ($12 billion) of US-based Airgas by Air Liquide, in 2016 Natixis acted as associate bookrunner for the refinancing of this loan
Furthermore, Natixis participated in the acquisition of Darty by Fnac via the arrangement of a revolving credit facility and a bridge loan refinanced by a high-yield debt issue and a term loan.
€6 billion issue for the Kingdom of Belgium. It also arranged and swapped the first-ever covered bond issuance for a Turkish bank.
Natixis has a very strong presence in the EMEA region, particularly among its Italian, Spanish, Portuguese and Belgian clientele. While maintaining its lead in covered bonds in 2016 (source: Dealogic) in Spain, the bank arranged landmark transactions in Italy (reopening of the T2 market for UBI), the United Kingdom and Germany. Natixis was joint bookrunner in a
The Asia Pacific platform also played an important role in the financing of Groupe BPCE, particularly through issuances on the Japanese market, where it supported the Group with the issue of the first tier-two samurai bond for retail investors.
In 2016, it reaffirmed its commitment to its clients on the following segments: Covered bonds: Natixis led the inaugural bond issues ofa United Overseas Bank in Singapore (€500 million) and of Vakifbank in Turkey (€500 million), for which it received the Best Inaugural Covered Bond Award for 2016 by specialist publication The Covered Bond Report; Green bonds: Natixis was also active bookrunner in ana issuance for Foncière des Régions (€500 million); Issues in USD (RegS/144A): Natixis participated as activea bookrunner in an issuance by Oman, totaling $4 billion.
Equity capital markets acquisitions and disposals on the equity market, share buybacks and liquidity contracts.
The Strategic Equity Transaction team, which specializes in equity-linked finance, develops solutions to help clients manage their equity positions. These transactions use financing tools, derivatives and other financial instruments for Natixis’ large European and international clients.
Capital Investment and Rating Advisory for its clients. The internationalization and increasing disintermediation of the capital markets have increased clients’ reliance on ratings, giving this business line increasing strategic
The teams specializing in mergers and acquisitions help clients (large and medium-sized commercial and industrial corporations, institutional investors and investment funds) prepare and execute disposals and mergers, fundraising, restructuring and
The guarantee, which was agreed in principle and announced in August 2009, was formally approved on November 12, 2009 by the corporate bodies of BPCE and of Natixis, with retroactive effect to July 1, 2009.
The general mechanism behind the guarantee is based on the establishment of: Natixis purchased an option from BPCE (the “Option”) allowing it, should it be exercised, to recover, in 10 years’ time, the capitalized net performance of the portfolios covered by the TRS and to terminate the TRS; two Total Return Swap (TRS) agreements, one in US dollarsi. and the other in euros, covering 85% of the net value of the assets recognized in the trading portfolio and risks linked to counterparties not providing collateral. The purpose of these TRS is to transfer 85% of the gains or losses of the accounting units in which the assets are recognized at their fair value through profit or loss. On top of these two TRS, a financial guarantee covering 85% of the nominal value ofii. the assets recognized under IFRS as “loans and receivables” (L&R) and “available-for-sale assets” (AFS), as determined at the effective date of the guarantee (i.e. June 30, 2009), less any amortization expensed prior to in the currency in which the defaulting asset is denominated. The expiry date of the financial guarantee is the date from which Natixis is no longer required to pay over to BPCE the sums recovered on assets in the guaranteed portfolio having defaulted. It post-dates the expiry date of the guarantee by
Financial Services combines payment activities (credit transfers, direct debits, electronic payment transactions, etc.), securities account administration and financial market transactions (retail and Private Banking custody), and employee savings (profit-sharing and incentive plans, etc.) and pension schemes (individual and collective pension plans), service vouchers, and collective personal protection insurance.
In 2016, Natixis Factor posted annual factored turnover of nearly €45 billion, up 29%, and had a market share of over 16% (source: ASF at September 30, 2016).
FACTORED TURNOVER OVER THE PAST 5 YEARS ■ (in billions of euros)
The platform’s broad offering caters to individuals and banks, companies or professionals that use financial guarantees to ensure the reliability of credit transactions or to secure contracts, projects and transactions.
Bank loan sureties secure financing for the projects of individuals (mortgage guarantees), professionals (business start-ups/transfers, equipment, commercial property) and social economy and social housing operators (medium- and long-term loan sureties). The contractual, tax or regulated financial guarantees support companies in their development. Financial guarantees to real estate businesses protect consumers or secure transactions in accordance with regulations that are specific to certain trades: guarantees to single-family home
It is a leading player in the property administration, third-party management of retail and office space, and residential sector business market, owing in particular to its digital offering in market sureties management solutions, with more than 80,000 guarantees issued in 2016, up 17%.
Lease’s customers. Natixis Lease is a subsidiary of Natixis and develops and distributes one of the widest ranges of integrated solutions on the market in terms of equipment and real estate leasing, long-term vehicle leasing, renewable energy financing and IT operational leasing. It also arranges and syndicates
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. Social economy and institutional players are also among Natixis customer loans.
With over €270 million in new leases, Natixis Lease remained strong in renewable energy financing, performing well in the Banque Populaire network in particular.
Financement maintained solid commercial momentum in both revolving credit and repayment loans.
New loans totaled €10.4 billion (nearly €1.1 billion for revolving credit and nearly €9.3 billion for personal repayment loans).
After initially targeting a French client base, Natixis Coficiné is now expanding its activities in several countries in the European Union (Germany, Belgium, Spain, Luxembourg, the UK and Nordic countries) and Canada.
The employee savings offer tailored to SMEs and professionals, digital services and online tools (virtual advisor, simulation tools, smartphone and tablet applications enabling mobile transactions, etc.).
Drawing on the expertise of Natixis Payment Solutions, the leading player in France and in Europe in payment transactions and of Groupe BPCE in payment solutions, continued the preliminary work for the roll-out of the second generation of Apetiz® cards, following the launch of the first Apetiz® card (virtual meal voucher) in 2014.
Natixis Payment Solutions designs and develops payment platforms and services. A leading player in payment-related services in France and Europe, Natixis Payment Solutions acts, within Groupe BPCE’s networks and among its clients, as a provider of innovative and secure payment solutions, particularly with regards to e-payments.
d’Epargne, major French banking institutions and new payment market players, such as Payment services providers.
In electronic banking, Natixis Payment Solutions is also developing a full range of services for the bank distribution networks, ranging from product design to technical and marketing support solutions while incorporating the client’s goals and expectations. It supports the development of markets card transactions in 2016.
CHANGE IN NUMBER OF TRANSACTIONS PER PREPAID ■ CARD (CARDHOLDERS AND RETAILERS) (in billions of transactions)
Securities services1.4.3.8 retail and Private Banking and is the leader in custody services to retail outsourcing.
Natixis manages 3.4 million securities accounts for a diversified client base comprising Groupe BPCE’s banking networks, other banking institutions with or without retail networks, financial companies and Private Banking asset management firms.
Its service offer is modular and customizable: secure provision of information systems, all-inclusive back-office services (order routing, transaction accounting, client reporting, securities custody, etc.), dedicated middle-office services, network
Appointment of Xavier Durand as Chief Executive Officer of Coface under the Chairmanship of Laurent Mignon, the decision was made to appoint Xavier Durand to the position of Chief Executive Officer. This appointment became effective following the Board of Directors’ Meeting February 9, 2016. Jean-Marc Pillu continued in his role as Chief Executive Officer of Coface until that date.
implement differentiated growth strategies in the Group’s(c) markets of operation, giving preference to the principle of
Coface sold its export state guarantees management business to Bpifrance on December 31, 2016. The teams and information systems dedicated to the business were transferred from
Coface provided on behalf of the French government and represented 4% of Coface’s consolidated revenues in 2016.
Net income (group share) came to €41.5 million and includes €36.5 million of non-recurring items linked to the transfer of the export state guarantee management business and the deployment of the Fit to Win strategy (1).
the Company expects its loss ratio net of reinsurance to be In view of the first signs of improvement observed at this stage, below 61% in 2017.
€55.6 million before tax. review of employee benefits (of which €5.1 million related to actuarial rates and €14.1 million related to a reversal of a provision), or a total of €75.0 million in income related to the transfer of the export state guarantee management business in France, a €38.6 million gain related to the(1)
Stock market indexes CAC Next 20, SBF 80, SBF 120, CAC All-Tradable and Euronext 100
In 2016, Natixis’ share price decreased by 3% (from €5.22 at December 31, 2015 to €5.36 at December 31, 2016). Over the same period, the euro zone banking stocks index (DJ Euro Stoxx Bank) also decreased by 8%.
The average daily volume of Natixis shares traded on the market amounted to around 6 million in 2016 versus an average of around 4.6 million in 2015.
Shareholders’ Club members are regularly updated on Natixis news through: monthly newsletters focusing on Club highlights and companya financial news; an interactive multimedia version of the Shareholder Annuala Newsletter containing the minutes of the General Shareholders’ Meeting.
Club members can access the dedicated website (clubdesactionnaires.natixis.com) containing information about the Club and its program of activities (interactive Shareholder Annual Newsletters, meetings, conferences, video conferences, video chats, sponsorship events, etc.).
In 2016, the program of activities included four Natixis events and two themed events.
All four of these events gave individual investors a chance to ask Natixis’ representatives about the bank, its businesses, financial results and strategy.
The two themed presentations, which took the form of shareholders the opportunity to talk to the economists from our conferences/web conferences and video chats, gave our made available to our shareholders on our website and sent to Economic Research team. Recordings of these events were then our Shareholders’ Club members through our Newsletters.
In partnership with the École de la Bourse, four training modules allocation.
Recent economic events were discussed with Natixis’ Head of order to discuss Natixis’ financial results and strategic plans. In 2016, CCAN met with the Head of Investor Relations ina
Call for applications Every year, a third of the Committee is renewed.
invited to put forward their application. Throughout the year, interested shareholders are
On May 24, 2016, the General Shareholders’ Meeting called to 400 individual shareholders.
In preparation for this meeting Natixis launched a preliminary which subjects they wished to see discussed during the survey, as it does every year, so that shareholders could decide
Shareholders section under the heading “Shareholders’ available for one year on the Natixis website’s Investors &
2016 Awards – Two Trophées de Bronze from Le Revenu for 2016 Best Shareholder Relations.
These awards recognize the efforts made by Natixis’ Shareholder Relations team to serve its individual shareholders.
The core responsibility of the Investor Relations Department is to community on Natixis’ financial standing, strategy, economic maintain clear and transparent dialog with the financial accurately assessing Natixis’ situation.
From time to time, depending on current events, we also available on Natixis’ website in the Investor Relations section.
partners and colleagues a better understanding of the general organize specific, themed presentations to give our financial climate and Natixis’ specific challenges.
May 23, 2017 statements) General Shareholders’ Meeting (to approve the 2015 financial
NATIXIS 81 Decision-making process used to define the 2.4.1 compensation policy 81 professional activities have a material impact Compensation of employees whose 2.4.2.
Second-level permanent controls: IT 2.5.4 Systems Security and Business Continuity 101
John Hailer – Asset Management and Private Banking - Natixis Global Asset Management US and Asia
Christian Le Hir – Corporate Secretariat - Chief Legal Offi cer
Dominique Sabassier – Investment Solutions – Asset Management and Private Banking - Natixis Private Equity
Chairman of the Steering and Supervisory Board of Caisse d’Epargne Côte d’Azur
2CORPORATE GOVERNANCECorporate Governance at March 1, 2017 35REGISTRATION DOCUMENT 2016 - Natixis
Banque AGF, AGF Asset Management and AGF Immobilier in 2002. He to the Executive Committee in 1998, then became Deputy CEO in charge of 2006. From September 2007 to May 2009 he was associate manager at Oddo et Cie alongside Philippe Oddo.
Laurent Mignon has been Chief Executive Officer of Natixis since 2009 and corporate offices were renewed in February and November 2015 a member of BPCE’s Management Board since August 6, 2013. These respectively.
Member of the Board of: Arkema (1) (since 10.27.2009), Lazard Ltd (1) (froma l’Opéra) (since 12.10.2015) 07.28.2009 to 04.19.2016), AROP (Association pour le Rayonnement de
Non-voting member of BPCE a of Natixis) (since 08.01.2009) (Permanent Representative
Natixis, Member of the Board of Permanent Representative of a 12.19.2012) Directors (from 05.15.2012 to
(Chairman of the Board: Board Meeting of 04.30.2009) Term expires: 2019 AGM (b)
the President of the Republic from 2007 to 2009. 2005 to 2007. François Pérol was appointed Deputy Secretary General to
Paris, and alumnae of the École Nationale d’Administration. He held François Pérol is a graduate of HEC and the Institut d’Études Politiques de with the Treasury Department (1994-2002), and then on the Cabinets of various positions at the Ministry of the Economy and Finance, beginning administration to join Rothschild & Cie Banque as Managing Partner from Ministers Francis Mer and Nicolas Sarkozy (2002-2004). He then left the 2009.
(b) 2019 AGM called to approve the financial statements for the year ended 12.31.2018. (1) Listed company. (2) Company outside Groupe BPCE.
First appointed: co-opted by the Board of Directors on 08.25.2009 Director (until 05.01.2016)
and ratified at the CSM of 05.27.2010 Term expires: 2019 AGM (b)
First appointed: Board Meeting of 01.28.2013 Member – Strategic Committee (until 05.01.2016)
Board of Directors: Audit Committee: Risk Committee: Strategic Committee: After earning a degree from the Institut d’Études Politiques in Paris and postgraduate degree in financial and economic analysis, Daniel Karyotis the Centre de Perfectionnement à l’Analyse Financière, followed by a there, he moved to Standard & Poor’s where he covered the banking began his career with Société Générale on the financial markets. From sector, and then joined Caisse d’Epargne Champagne-Ardenne (CECA) where he held various management positions between 1992 and 1997.
Chairman of the Management Board of CECA in January 2002. In Caisse d’Epargne du Pas-de-Calais from 1998 to 2001, he was appointed
Financiers (SFAF – French Society of Financial Analysts). Daniel Karyotis is also a member of the Société Française des Analystes member of the BPCE Management Board from 2012 to 2016. Daniel Karyotis was Chief Finance, Risk and Operations Officer and a
Rhône Alpes since October 11, 2016. Daniel Karyotis is Chief Executive Officer of Banque Populaire Auvergne
Vice-Chairman of Banque de Savoie (since 10.11.2016) Permanent Representative of Banque Auvergne Rhône Alpes,a of the Board: i-BP (since 10.11.2016), Compagnie des Alpes (since Permanent Representative of Banque Auvergne Rhône Alpes, Membera 10.11.2016), Pramex International (since 10.11.2016)
Deputy Chief Executive Officer of CE Holding Promotion (from 05.06.2013a to 06.03.2016)
Permanent Representative of BPCE, Member of the Board anda Chairman of the Audit Committee of Crédit Foncier (from 12.11.2012 to 05.01.2016)
05.03.2016) Participation (formerly CE Holding Promotion) (from 05.06.2013 to Permanent Representative of BPCE, Member of the Board of CE Holdinga
Chief Executive Officer of Banque Populaire Loire et Lyonnais (froma of offices held Compliance with rules governing the number AFEP-Medef code: compliant French Monetary and Financial Code: compliant
February 2007 to 12.01.2012) Board of Banque Palatine (from Chairman of the Management a 12.04.2012) Management (from 2007 to Board of Palatine Asset Chairman of the Supervisory a
(from 2007 to 11.21.2012) Member of the Board of Coface a
Board of OCBF (from 2007 to Banque Palatine, Member of the 12.18.2012)
(c) 2019 AGM convened to approve the financial statements for the year ending 12.31.2018. (1) Listed company.
and Legal Affairs Departments, and of the Corporate Secretariat Member of the BPCE Management Board – Chief Executive Officer in charge of the Group Finance, Strategy
Director and ratified at the CSM of 05.27.2010 First appointed: co-opted by the Board of Directors on 08.25.2009
employment and social protection. She then ran, from November 2010 to to the President of the French Republic for questions related to From 2007 to 2010, she served as a technical advisor, and then as advisor
May 2012, the Office of the Minister of Labor, Employment and Health.
Secretary’s Office and Compliance. Committee, responsible for Strategy, Legal Affairs, the Group Company From July 2012 to May 2016, she served on the General Management
and of the Corporate Secretariat charge of the Group Finance, Strategy and Legal Affairs Departments, Member of the BPCE Management Board – Chief Executive Officer ina
Board of CE Holding Participations (formerly CE Holding Promotion) Deputy CEO and Permanent Representative of BPCE, Member of thea
Natixis Coficiné (from 10.26.2012 to 05.11.2016) Member of the Board of: BPCE IOM (from 09.19.2012 to 05.25.2016),a 05.10.2016) Chairman of the Board of Directors of SAS ISSORIA (from 06.30.2014 toa
Nexity (1)(2) (since 07.25.2012) Promotion, Member of the Board of Permanent Representative of CE Holding a
Chairman of the company (SAS) and Permanent Representative of BPCE, a 07.10.2012) Board of BPCE DOMAINES (since
Permanent Representative of BPCE, a Chairman of Issoria SAS (since 2012) of Issoria SAS
Groupe BPCE. (b) 2019 AGM convened to approve the financial statements for the year ending 12.31.2018. (1) Listed company. (2) Company outside
Term expires: 2019 AGM (b) and ratified at the CSM of 05.21.2013 First appointed: co-opted by the Board of Directors on 01.28.2013
(Conseil de l’Ordre des Avocats de Colmar) of which he is still a member.
Association from 1998 to 1999. Since 1985, he has also been Head Tutor at from 1995 to 1996, before becoming Chairman of the Colmar Bar Association (Confédération Nationale des Avocats), which he chaired In 1986 he was named Secretary General to the National Lawyers’
CRFPA d’Alsace. the Institut Universitaire de Technologie (IUT) de Haute Alsace and the of Directors of Banque Populaire Alsace Lorraine Champagne. Since September 30, 2003, Thierry Cahn has been Chairman of the Board law.
Offices held in previous fiscal years of Banque Palatine (since Member of Supervisory Board a
(b) 2019 AGM called to approve the financial statements for the year ended 12.31.2018
Attendance rate in 2016 Board of Directors: 100% Committee and: 100%
Occitane since 2006. Alain Condaminas has been Chief Executive Officer of Banque Populaire
October 2006) Chief Executive Officer of Banque Populaire Occitane (sincea 12.16.2015) Member of the Supervisory Board and Risk Committee of BPCE (sincea
i-BP (since 2001) Permanent Representative of BP Occitane, Member of the Board ofa
Committee of Multicroissance (since 11.01.2016) Permanent Representative of BP Occitane, Member of the Investmenta
(since 2007) Permanent Representative of BP Occitane, manager of SNC Immocarsoa
Board of: SOTEL (since 2001), IRDI Gestion (since 06.19.2015) Permanent Representative of BP Occitane, Member of the Supervisorya
Manager of SCI de l’Hers (since 11.07.2011)a of offices held Compliance with rules governing the number AFEP-Medef code: compliant French Monetary and Financial Code: compliant
(since 2008) Board of Directors of CELAD SA (2) Occitane, Vice-Chairman of the Permanent Representative of BP a
Member of the BPCE Supervisory a Board (since 06.27.2012) (until 05.19.2015)
Laurence Debroux (until 12.13.2016) Member of the Management Board – Chief Financial Officer of Heineken
Term expires: 2019 AGM (b) and ratified at the CSM of 05.27.2010 First appointed: co-opted by the Board of Directors on 04.01.2010 Independent Director (until 12.13.2016)
First appointed: Board Meeting of 04.01.2010 Member – Audit Committee (until 12.13.2016)
Member – Risk Committee (until 12.13.2016) First appointed: Board Meeting of 12.17.2014
Board of Directors: Audit Committee: Risk Committee: Strategic Committee*: Laurence Debroux is an HEC graduate and began her career in 1992 at
Key advisory skills: expertise in issues related to finance, communications and business strategy.
Other offices held in 2016: 04.24.2015) Member of the Executive Board - Chief Financial Officer (sincea
Member of the Board of HEC (2) (since 06.10.2016)a of offices held Compliance with rules governing the number AFEP-Medef code: compliant French Monetary and Financial Code: compliant
Alain Denizot Chairman of the Management Board of Caisse d’Epargne Nord France Europe (CENFE)
Network and Banking Development. In 2003, he was appointed Chief Executive Officer and Member of the Management Board in charge of the Development. In 2000, he joined Caisse d’Epargne de Flandre as Chief 1999 a Member of the Management Board in charge of the Network and
Chairman of the Management Board. Before being elected on May 6, 2013 early 2008. In 2011, he joined Caisse d’Epargne Nord France Europe as Chairman of the Management Board of Caisse d’Epargne de Picardie in Executive Officer of Ecureuil Assurance IARD. He was later appointed
Management Board in charge of the Risk and Finance Department, then in Financial Management. In 1995, he became a Member of the joined Caisse d’Epargne Île-de-France-Ouest as manager then Head of
Europe (since 08.06.2011) Chairman of the Management Board of Caisse d’Epargne Nord Francea
SCR and Finorpa Financement (since 06.30.2016) Permanent Representative of CENFE, Member of the Board of Finorpaa
Member of Supervisory Board of a Ecureuil Crédit (since 02.20.2008) (until 2014)
Non-voting member of the BPCE a 05.19.2011) Supervisory Board (since Board and the Audit and Risks
Then Member of the Supervisory a 05.06.2013) Committee of BPCE (since
Europe (since 11.29.2010) Board of Immobilière Nord France Chairman of the Supervisory a
Sylvie Garcelon (since 02.10.2016) Chief Executive Officer of CASDEN Banque Populaire
First appointed: co-opted by the Board of Directors on 02.10.2016 Director
Information Systems and Logistics Department. She was appointed CEO of positions first in Third-Party Asset Management and then at the Department of BRED in 2000. In 2003 she joined Natexis where she held 1994 she became Corporate Secretary at SBE before joining the Finance
Sylvie Garcelon is CEO of CASDEN Banque Populaire since May 2015.
Deputy Chief Executive Officer of CASDEN Banque Populaire (sincea May 2015)
(since 06.14.2016) Member of the Board of Fondation d’Entreprise Banque Populairea
Chairman of the Management a Board of M.A. BANQUE (since 2010) (until April 2013)
* Member of the Risk Committee until 02.09.2017. (c) 2020 AGM convened to approve the financial statements for the year ending 12.31.2019
Strategic Committee: Bourgogne, and served as a commercial court judge from 2009. private clinics. In 2000 he became a Director at Banque Populaire de Director in Sens. From 1987 to 2010 he founded and ran a regional group of Michel Grass began his career in 1983, working in healthcare as a Clinic Holding a degree in Management Sciences from Université de PARIS 1,
Anne Lalou Dean and Managing Director of Web School Factory, Managing Director of the Innovation Factory
First appointed: co-opted by the Board of Directors on 02.18.2015 and submitted for the approval of the AGM on 05.19.2015
Anne Lalou is a graduate of l’École Supérieure des Sciences Économiques et Commerciales (ESSEC). She began her career as a joining Rothschild & Cie as a Manager.
Factory since 2012. Anne Lalou has been Dean and Managing Director of the Web School relating to M&A, finance and corporate strategy. Key advisory skills: entrepreneurial experience, expertise in areas
Solutions (2) (since July 2011) Chief Executive Officer of Nexity a
of Medica (2) (since March 2012) Member of the Supervisory Board a
Partners (2) (since December 2013) Member of the Board of Kea & a
Address: 455 Promenade des Anglais BP 3297 06205 Nice Cedex 03
First appointed: co-opted by the Board of Directors on 07.30.2015 Term expires: 2019 AGM (b)
As the youngest Certified Public Accountant in the PACA region at the time, having received her CPA degree in 1991, Françoise Lemalle registered with the Compagnie des Commissaires aux Comptes (French National Statutory Auditors Association) in 1993. She headed up an accounting and audit firm of 20 people located in Mougins. She regularly conducts training courses for retailers, craftsmen and independent professionals, notably through local administrative management centers.
as a non-voting member, and since 2009 has served as Chairman. She also became a member of the Audit Committee in 2009.
In addition, she has been a member of the Board of IMF Créasol (2) since 2013 and a member of the association’s Audit Committee.
Françoise Lemalle has also been a member of the BPCE Supervisory Board since May 22, 2015.
Key advisory skills: Entrepreneurial experience, extensive knowledge of the accounting, financial and audit fields.
Permanent Representative of Caisse d’Epargne Côte d’Azur, Member ofa the Board of: FNCE (since April 2015)
In 1995, while still heading up Risk Arbitrage, he moved to London to become Global Head of Equity Derivatives (1995-2000).
Bernard Oppetit joined Paribas North America first as a Risk Arbitrage Trader (1987-1990) and then as Global Head of Risk Arbitrage (1990-1995).
In 2000 Bernard Oppetit founded Centaurus Capital, a hedge fund investment management company. Having sold its global investment business, Centaurus Capital is a holding company of which Bernard Oppetit remains Chairman.
Member of the Board of: Centaurus Capital Holdings Limited, Centaurusa Global Holding Limited, Centaurus Management Company Limited, Centaurus Capital Group
Director and Member of the Cnova (1) Audit Committee (since 11.20.2014)a
Member of the Board of: a Centaurus Capital International Limited (2)
Member of the Board of Tigers a Alliance Fund Management (2) (Vietnam) (since January 2010) (until June 2013)
Member of the Board of a Emolument Ltd (2) (from 09.25.2014 to 11.17.2014)
* Chairman of the Audit Committee until 02.09.2017. (b) 2019 AGM called to approve the financial statements for the year ended 12.31.2018. (1) Listed company. (2) Company outside Groupe BPCE.
Director First appointed: OGM of 05.29.2012 Term expires: 2020 AGM (c)
Université Paris Dauphine, Stéphanie Paix has been with Groupe BPCE since 1988.
Inspector and Head of Inspections at Banque Fédérale des Banques Populaires (1988-1994), she joined the Banque Populaire Rives de Paris as Regional Director and then Director of Production and Organization (1994-2002). In 2002, she joined Natexis Banques Populaires, where she was Director of Operations Management and then Director of Cash Management and Operations (2002-2005). In 2006 she became Chief Executive Officer of Natixis Factor, then Chief Executive Officer of Banque Populaire Atlantique (2008-2011).
Chairman of the Management Board of Caisse d’Epargne Rhône-Alpesa (CERA) (since 12.05.2011)
Chairman of the Board of Directors of Banque du Léman (Switzerland)a (since 2013), Rhône Alpes Cinéma (since 07.26.2016)
Member of the Board of Crédit Foncier (until 05.10.2016), CE Holdinga Promotion (since 09.09.2015)
Permanent Representative of CERA, Member of the Board of: Fondationa d’entreprise CERA (since 2012), Fédération Nationale des Caisses
Permanent Representative of CERA, Manager of: SCI dans la ville (sincea 05.16.2014), SCI Garibaldi Office (since 05.16.2014), SCI Lafayette Bureaux (since 05.16.2014), SCI le Ciel (since 05.16.2014), SCI le Relais (since 05.19.2014)
Representative of BPA, Chairman a of: Ouest Croissance, Ludovic de Besse (from 2008 to 01.30.2012)
Representative of BPA, Member of a the Board of Directors of: C3B
Member of the Board of FNBP a (from 2009 to 01.30.2012)
Member of the Board of Natixis a Algérie (from 09.06.2007 to
Permanent representative of a BPCE, member of the Board of Compagnie des Alpes (2) (from 03.05.2012 to 10.18.2012)
Director First appointed: co-opted by the Board of Directors on 12.14.2016
Strategic Committee: Holding a degree in Management Sciences from the Université IX Paris Dauphine, Catherine Pariset has 35 years’ experience in auditing and
Since the General Shareholders’ Meeting of February 17, 2016, Catherine Pariset is Member of the Supervisory Board of Eurodisney.
advisory, and was a partner at PricewaterhouseCoopers from 1990 to 2015, and was the partner responsible for the worldwide auditing of AXA, Sanofi, Crédit Agricole, Caisse des Dépôts, Compagnie des Alpes and Generali France. She was also a member of the board of PwC for seven
Member of the Supervisory Board of Eurodisney (since 02.17.2016)a 02.17.2016) Member of the Supervisory Board of Eurodisney Associés SCA (1) (sincea
None None None None * Chairman of the Audit Committee since 02.09.2017.(b) 2019 AGM convened to approve the financial statements for the year ending 12.31.2018.
Strategic Committee: A graduate of HEC, Henri Proglio began his career in 1972 at the Générale des Eaux Group (now Veolia Environnement), where he held various Senior Management positions. In 1990, he was appointed Chairman and CEO of CGEA, a subsidiary specialized in waste management and transport. In 2000, he became Chairman of Vivendi Environnement (Veolia Environnement), and, in 2003, Chairman and Chief Executive Officer.
Henri Proglio was Chairman and Chief Executive Officer of EDF from 2009.
Member of the Board of: Dassault Aviation(1)(2)(since 2008), ABRa Management (2) (Russia) (since 2014), Akkuyu Nuclear JSC (2) (Turkey) (since 2015)
Chairman and Chief Executive a Officer of EDF (1)(2) (since 11.25.2009) (until 11.22.2014)
Member of the National a Commission for Sectors of Vital Importance (since 12.08.2009) (until 02.17.2014)
Member of the Committee for a Atomic Energy (since 11.25.2009) (until 11.22.2014)
Member of the Board of Veolia a Environnement (1)(2) (from 21.16.2010 to 10.22.2012)
Member of the Board of South a Stream Transport BV (2) (since 11.13.2012) (until 11.26.2014)
Member of the Board of Dalkia (2) a (from 07.25.2014 to 11.22.2014)
* Member of the Supervisory Board of Natixis from 11.17.2006 to 04.30.2009. (b) 2019 AGM called to approve the financial statements for the year ended 12.31.2018. (1) Listed company. (2) Company outside Groupe BPCE.
Philippe Sueur holds a postgraduate degree in political science and history, a doctorate in law, and is an Associate Professor in Roman Law
Chairman of the Steering and Supervisory Board of Caisse d’Epargnea Île-de-France (since 04.29.2014)
Chairman of: Société d’Économie Mixte d’Aménagement du Val d’Oisea (SEMAVO) (since 1997), Institut de Formation des Animateurs de Collectivités (IFAC – Local Supervisors’ Training Institute) for France and Val d’Oise (since 2008)
Chairman of the Comité d’Expansion Économique du Val d’Oise (CEEVO)a and the Val d’Oise Technopôle (since April 2015)
statements for the year ending 12.31.2018. (2) Company outside Groupe BPCE. * Member of the Supervisory Board of Natixis from 11.17.2006 to 04.30.2009. (b) 2019 AGM convened to approve the financial
Chairman of the Groupe M6 (1) Management Board (since May 2000)a
Permanent Representative of Métropole Télévision, Chairman of: M6a Publicité SA (since 2001), Immobilière M6 SAS (since 2001), M6
Permanent Representative of Métropole Télévision, Managing Partnera of SCI 107 ave Charles de Gaulle (since 2001)
Representative of RTL Group of the Supervisory Board anda Vice-Chairman of the Compensation Committee of Atresmedia (1)
Member of the Board of a Nexans SA (1)(2) (since May 2007) (until 03.31.2014)
Chairman of: M6 Publicité (2), M6 a Web (2), M6 Interactions (2) (from
Permanent Representative of a Métropole Télévision (2) Chairman of M6 Toulouse SAS (2) (until 01.01.2014)
(a) 2017 AGM called to approve the financial statements for the year ended 12.31.2016. (1) Listed company. (2) Company outside Groupe BPCE.
This report was prepared pursuant to Article L.225-37 of thea French Commercial Code.
compiling registration documents, also published by the AMF on December 10, 2009 and amended on December 17, 2013 and on April 13, 2015, and lastly, the June 2013 Guide to applying the AFEP-Medef corporate governance code for listed companies, specifically the AMF’s 2016 report, published on November 17, 2016, the activity report from the High Committee on Corporate Governance (HCGE) published October 2016, and the Guide for supplemented by the HCGE in December 2014, November 2015 and November 2016.
Annex I of European Regulation (EC) 809/2004 of April 29, 2004 (modified) as well as recommendations N°2012-02, consolidating the recommendations published since 2009, of the Autorité des Marchés Financiers (AMF – French Financial Markets Authority)
This form of corporate governance stems from the desire to create a single custodian of Natixis’ best interests and value creation. It permits unity of action, which is an essential make a clear distinction between the strategic direction, decision-making and control functions that come under the Board of Directors’ responsibilities, and the operational and executive functions that fall to the Chief Executive Officer.
At its meeting of April 30, 2009, Natixis’ Board of Directors opted to separate the positions of Chairman of the Board and Chief Executive Officer. This decision was a result of the Company’s desire to comply with best practices in corporate governance and
Independent members do not make up two-thirds of the Natixis Audit Committee, those Committees’ work, in light of the resulting increased workload. That is why Natixis promotes a balance of directors within the Committees, which are, additionally, always chaired by an independent director.
Officer’s and Deputy Chief Executive’s evaluation of the Chairman’s, Chief Executive
As indicated above, Natixis’ Board of Directors had 15 members at March 1, 2017. The members are divided up as follows: two members from BPCE, namely François Pérol and BPCEa represented by Marguerite Bérard-Andrieu; Michel Grass; Sylvie Garcelon and Thierry Cahn, Alain Condaminas and four members from the Banque Populaire banks, namelya
One-third of the members of the Board of Directors is independent.
Factory, and CEO of the Innovation Factory. Bernard Oppetit is professional duties. Anne Lalou is the Dean of the Web School
Pursuant to Articles L.225-23 and L.225-27-1 of the French employee directors, or any employee shareholder directors. Commercial Code, Natixis’ Board of Directors does not have any
attend each of the Board of Directors’ Meetings in an advisory expertise, judgement and freedom of thought and expression Committee, Natixis’ Board of Directors examined each director’s recommended by the AFEP-Medef code and incorporated into and, more specifically, compliance with the independence criteria and following the report submitted by the Appointments As is the case every year, at its meeting of December 14, 2016,
The Board of Directors paid special attention to the appraisal of to both assess the importance of business relationships, identify “banker who is essential to all requirements of the Company’ –
Natixis applies the concept of a “reference banker” – i.e. a independence of the director’s judgement.
Web School Factory. namely Henri Proglio Consulting, Centaurus Capital, M6, and the
Natixis maintains traditional business relationships with each of necessary independence criteria.
five above-mentioned independent Board members meet the Consequently, the Natixis Board of Directors determined that the
or indirectly holds a Board membership or in which an Is not a director in any company in which Natixis directly membership in the last five years employee or director of Natixis holds or has held a Board
Has not been an auditor of the Company in the previous five years.
Directors, at its meeting of May 19, 2015, unanimously the end of the General Shareholders’ Meeting, the Board of
(9th resolution), statements for the fiscal year ending December 31, 2018 ratified the co-opting of Sylvie Garcelon (10th resolution),j well as the term of office of Alain Condaminas (11th, 12th and the terms of office of Sylvie Garcelon and Stéphanie Paix, as 13th resolutions).
renewed, for a period of four years, namely until the end of thej statements for the fiscal year ending on December 31, 2019, General Shareholders’ Meeting called to approve the financial co-opted Catherine Pariset to replace Laurence Debroux, who on December 14, 2016, the Board of Directors of Natixisj office, namely until the end of the General Shareholders’ resigned, for the remainder of her predecessor’s term of fiscal year ending on December 31, 2018.
No changes made to the Board of Directors since January 1,a
Current term expiration: 2017 AGM Nicolas de Tavernost 2019 AGM Henri Proglio, Philippe Sueur, Françoise Lemalle BPCE, François Pérol, Thierry Cahn, Catherine Pariset, Michel Grass, Anne Lalou, Bernard Oppetit, Alain Denizot, 2020 AGM Alain Condaminas, Sylvie Garcelon, Stéphanie Paix
Directors, as set out in the Act of January 27, 2011, Natixis had With respect to the principle of gender parity on the Board of of the AFEP-Medef corporate governance code.
In accordance with Article 9 of the Natixis bylaws, each director joining the Board.
directors in office. Only one Natixis Director had reached the age and a list of corporate offices are sent to the other directors and When a director is appointed, his résumé with a career summary to the shareholders.
Pursuant to the law and the bylaws, the Natixis Board of Directors, assisted by the Board’s Special Committees: Meetings, the Board concerns itself with all matters affecting granted by law or its bylaws to the General Shareholders’
deliberations. The Board of Directors performs the controls the Company’s performance and governs by virtue of its defines the strategy governing the Company’s activities anda)
Autorité de Contrôle Prudentiel et de Résolution (ACPR – Officer. Nevertheless, based on provided justification the
Insurance Sector) may authorize the accumulation of these bylaws, the Board of Directors may appoint a Chief Executive Under the conditions defined in Article 15 of the Company dismiss at any time.
corporate officer of his choosing, with or without the option The Chief Executive Officer may delegate his powers to any
Executive Officer; time by the Board of Directors on the proposal of the Chief appoints the Executive Managers (within the meaning ofc)
Directors by the Chief Executive Officer and the Deputy a joint stock company (société anonyme) with a Board of disposing the requisite powers to manage the business of Chief Executive Officer(s), or by a company director
The function of “Executive Manager” must be performed in Article L.511-13 of the French Monetary and Financial Code).
more information on Executive Managers). the institution. (see Section 2.3.3 Senior Management for agenda and oversees the execution of all decisions taken; convenes all General Shareholders’ Meetings, sets thed)
allocated to the directors by the General Shareholders’ It sets the rules for the distribution of directors' fees
periodically assesses its effectiveness, and ensures that Article L.511-55 of the French Monetary and Financial Code, governing the taking, management, monitoring and reduction regularly approves and revises the policies and strategiesi)
risks created by the economic environment; of the risks to which Natixis is or could be exposed, including their accuracy and fairness; it establishes the management consolidated financial statements of the Company, ensuring report; conducts the review and approval of the parent company andj)
Article L.255-37 of the French Commercial Code. It approves the Chairman’s report, as set out in
It reviews the draft budget for the following year; and reliability of the information intended for publishing and verifies the process of publishing and disclosing the qualityk)
disclosure by Natixis; Chief Risk Officer. is informed of any resignation/appointment of the Company’sl)
Board of Directors; Where applicable, he may raise this point directly with the outside the Group by the Chief Executive Officer or the is required to issue an opinion prior to starting any new termm)
provide each director with all the documents and information convenes and chairs the Board and organizes and manages its
Board operating procedures specified in the Internal Rules:a telecommunication facilities transmitting at least the member’s Meeting by conference call or through the use of and simultaneous streaming of the proceedings, shall be voice and whose technical characteristics allow for continuous decisions related to the preparation of parent company and In particular, the Internal Rules stipulate that, except for
Board’s work in 2016). annual report (for 2016, see point 2.3.1.4 – Assessment of the
In addition, with respect to the assessment of the Board of directors, and approved at every subsequent session by the Minutes of Board Meetings are prepared and sent to Natixis’
directorships, they are available when required, especially if they the Board and Committee(s) of which they are a member, as performance of their duties and regularly attend the meetings of ensure that with the number and commitment level of their well as the General Shareholders’ Meeting. As such, they must
Each director represents all the shareholders and endeavors to to defend and promote the values of Natixis. act in the corporate interest of Natixis at all times. He undertakes
by the bylaws and another 12 months to bring his holding to shares. He has six months to acquire the 140 shares stipulated It is recommended that each director hold at least 1,000 Natixis shares he holds in registered form.
In keeping with the laws in force, each director must enter the
He ensures that the positions taken by the Board are formally its meetings. decided on, properly reasoned, and entered into the minutes of
well as any individual attending the meetings of the Board and Members of the Board of Directors and of the Committees, as the Committees, are bound by a general confidentiality obligation
on which the director receives inside information in the context in particular: on the Natixis share by persons closely associated to them, and Directors are advised of the risk of the execution of transaction a spouse, or a partner considered to be equivalent to a spousea in accordance with national law; a dependent child, in accordance with national law;a year on the date of the transaction concerned; a relative who has shared the same household for at least onea a legal person, trust or partnership:a closely associated, person discharging managerial responsibilities or by a person director or his spouse, child, live-in parent or for which one of entity run, administered, managed or controlled by thej managerial responsibilities of which are discharged by a them receives the majority of economic benefits, the which is directly or indirectly controlled by such a person,j which is set up for the benefit of such a person, orj the economic interests of which are substantially equivalentj to those of such a person.
exempted in any way from complying with the laws and If a person is not mentioned on this list, that does not mean he is status.
regulations and it in no way prejudices his potential insider securities, as well as any other related derivatives or financial In respect of any transaction relating to Natixis shares or debt with the provisions of the Natixis S.A. Compliance Manual. instruments, directors undertake to strictly observe and comply begin 30 calendar days before the publication dates of the during shutdown periods known as “negative windows,” which In particular, the director agrees not to perform any transaction publication date of these financial statements.
This reporting obligation also applies to closely associated on December 31 of each year and any financial transactions Directors must also inform Natixis of the number of shares held
The director strives to preserve his independence in judgement, influenced by any element foreign to the corporate interest of decision and action in all circumstances. He refuses to be
D Internal charter on related party agreements agreements” in accordance with AMF recommendation changes made by Order No. 2014-863 of July 31, 2014. No. 2012-05, updated on December 17, 2014 to include the
Natixis drew up an internal charter on “related party At its meeting of February 17, 2013, the Board of Directors of
Shareholders’ Meeting, in light of the Statutory Auditors’ special notification of the Board of Directors to approval by the General agreements in Chapter 7 “Legal Information”). report (see Statutory Auditors’ special report on related party
In accordance with regulations in effect during fiscal year 2016, signing. It also reviewed all related party agreements that have the Board approved related party agreements prior to their continued to have an impact during the period.
Natixis' compensation amount for additional costs incurred by between Natixis and Banque Palatine. The amendment modifies
appears in Section 2.2 of this chapter (see directors’ individual fact sheets).
Oversight of the provisions of the Ministerial Order of November 3, 2014: oversight of the internal a
Information on the changes to risk model governance within Groupe BPCEa Report on internal control activity and resultsa procedures Adoption of the Chairman’s report on the Board’s work and on internal control and risk management a
Submission of the work by the Appointments Committeea Reappointment of directors whose term of office was due to expirea Appointment/Co-opting of new directorsa Chairmanship and composition of Special Committeesa Impact the “MAR” Regulation on transactions on the Natixis sharea Update of the Internal Rules of the Board of Directors and the Special Committeea Review of the classification of the status of directors as independent membersa Review of the summary assessment of the Board of Directors’ worka securities Convening of the General Shareholders’ Meeting and the Annual Meeting for holders of participating a
Submission of the work by the Compensation Committeea Fixed compensation of the Board Chairmana Fixed and variable compensation of the CEOa Authorization of commitments/agreements in favor of the CEOa Profit-sharing top-upa Renewal of rules for allocating directors’ feesa Establishment of an employee retention and performance plana Performance-related free share allocation to members of the Senior Management Committeea Compensation for regulated categories of staffa strategy Financial transactions and
Renewal of issue authorizations (bonds, warrants, certificates of deposit, negotiable medium-term a notes, euro commercial paper) Presentation of the senior management report (Volcker Rule)a Presentation of the follow-up letters and correspondence from the AMF, the ECB and the ACPR, and a Natixis’ response to these follow-up letters and correspondence Meeting on the consequences of Brexita Opening/closing of branches and representative branches internationallya
Assessment of the work 2.3.1.4 specialized Committees of the Board of Directors and
Board of Directors and specialized Committees, in accordance As in previous years, in 2016 Natixis assessed the work of its regarding the correct governance of listed companies. with recommendations set out in the AFEP-Medef code
As for the 2010 and 2013 fiscal years, in 2016 Natixis used the individual interviews and a questionnaire. fiscal years, Natixis carried out an internal assessment, based on services of an outside firm. For the 2011, 2012 and 2015
Suggestions were made by the directors on ways to further more international profiles, given the Company's operations, and Regarding the Board's composition, it was suggested to include organization of the Group's business lines.
In terms of the Board's duties and work, it was suggested to involve directors more upstream in certain subjects. address more non-regulatory issues, agenda permitting, and to with the business line manager concerned with the matter under files submitted to the Board, giving preference to consultation review.
Implemented in 2016, the training campaign is now threefold: at Board Meetings. Training is delivered by in-house and knowledge for a proper understanding of the issues discussed external instructors within six months of the new Board a training program on “fundamentals” for new Board membersa around five modules that provide Board members with useful and others who wish to receive it. This training is structured member taking office; an “expertise” training program on technical or complexa necessary expertise to properly understand, monitor and issues. It is designed to equip Board members with the control; criminal and regulatory), compliance principles and internal
At its December 17, 2014 meeting, Natixis’ Board of Directors and Financial Code. The duties previously assigned to the Audit order to comply with the new provisions of the French Monetary
Risk Committee, and supplemented with the new texts. Committee were divided between the Audit Committee and the decided to create a Risk Committee separate from the Audit
Françoise Lemalle (position previously held by Stéphanie Paix until February 9, 2017)
Banque Populaire banks, plus a representative of BPCE). (See shareholders (members from the Caisses d’Epargne and the
The Chairman and the members of the Audit Committee have course of their professional careers. Ms. Pariset is recognized for extensive accounting and financial expertise gained over the
Bérard-Andrieu has extensive experience as a Chief Finance her expertise in accountancy and financial auditing. Ms.
Changes made to the Audit Committee in 2016:a on February 10, 2016, Sylvie Garcelon was appointed aj
Debroux. member of the Audit Committee, to replace Laurence on December 14, 2016, Catherine Pariset was appointed aj
Under the Natixis Board of Directors’ responsibility, the Audit Committee’s primary duties are: statements; and checking the clarity of information published by Natixis anda for the creation of Natixis’ individual and consolidated financial assessing the relevance of the accounting methods adopted assessing the quality of internal control, specifically thea controlling risk, and, as and when needed, proposing consistency of the systems for measuring, monitoring and implementation of supplementary actions in this sense.
Board of Directors or, if applicable, the Audit Committee of the subsidiaries, as well as any related documents provided to the principal subsidiaries.
proposals to conduct an audit, especially concerning the financial The Audit Committee may submit to the Board of Directors any statements of the Company and its subsidiaries.
explaining any topic that falls under its remit. skills of outside experts or consultants for the purpose of The Committee may also, if it deems it appropriate, call on the
Minutes of the Audit Committee Meetings are prepared by the with the Audit Committee members and approved at the secretary of the Board of Directors. These minutes are shared
Audit Committee’s work so that it can make fully informed following session. The Board of Directors is made aware of the
two days before they were presented to Natixis’ Board of financial statements, as well as its draft budgets, at least
regarding annual financial statements and the review of the half-year and quarterly financial statements.
In order to enable it to audit the financial statements, the Audit
In 2016, the Audit Committee’s duties focused on the following items in particular: position Financial
A Organization of March 1, 2016, these members were: During 2016, the Risk Committee comprised five members. As
Laurence Debroux until 12.13.2016) Catherine Pariset (position previously held by Member and Mr. Oppetit).
Halberstadt. member of the Risk Committee, to replace Catherine on February 10, 2016, Sylvie Garcelon was appointed aj on May 9, 2016, Marguerite Bérard-Andrieu was appointed aj member of the Risk Committee, to replace Daniel Karyotis.
Natixis’ Risk Committee has internal rules specifying its powers of Directors on December 17, 2014 and amended on February 9, and its operating procedures, which was approved by the Board 2017.
The remit of the Risk Committee is also: that are used to ensure compliance with regulations as well as to issue an opinion on the procedures established by Natixisa of Natixis’ Risk Committees and those of its subsidiaries, as risk monitoring and control; to that end, it receives the reports or counterparty risks, performed at the behest of the well as the reporting on risks, specifically operational, market
presents the Board of Directors with an action plan to remedy it; to review, without prejudice, the duties of the Compensationa policy and practices are compatible with this latter’s situation Committee, if the incentives set out by Natixis’ compensation liquidity and the probability and time phasing of the expected with regard to the risks to which it is exposed, its capital, its benefits; been taken to remedy any shortcomings; to assist the Board of Directors in reviewing thea effectiveness and ensuring that corrective measures have aforementioned governance mechanism, in assessing its which Natixis is or could be exposed, including risks created by taking, management, monitoring and reduction of the risks to the economic environment; to regularly examine the strategies and policies governing thea to examine compliance risk monitoring-related items at leasta
Natixis manager (including managers of one of the main Chairman of the Board of Directors, invite to its meetings any and Natixis’ Statutory Auditors.
Chief Finance and Risk Officer, the Corporate Secretary, the permanent access to the Risk Committee. The Chief Risk Officer and the Compliance Officer have
items on the agenda in order to review and analyze the matters
Other Presentation of the latest developmentsa following: Over the 2016 fiscal year, the US Risk Committee reviewed the the governance, control and oversight plan for Natixis’ risks ina the United States (or “enhanced prudential standards”); various matters related to liquidity risk and, in particular, thea and the liquidity risk of significant business lines and product risk management framework, the contingency funding plan, offerings; US risk and risk appetite indicators;a regulatory observations made by US regulators anda supervisors.
Philippe Sueur until February 9, 2017) Michel Grass (position previously held by Member
compensation, including Natixis employees who have a decisions that Natixis’ Board of Directors issues with regard to significant impact on the Company’s risk. The Compensation
75REGISTRATION DOCUMENT 2016 - Natixis proposals to Natixis’ Board of Directors concerning: The Compensation Committee is responsible for submitting the Board of Directors of Natixis, including benefits in kind, the level and terms of compensation paid to the Chairman ofa well as the allocation of stock options or share purchases; pension plans and collective personal protection insurance, as the level and terms of compensation paid to the CEO and,a benefits in kind, pension plans and collective personal where applicable, one or more Deputy CEOs, including or share purchases; protection insurance, as well as the allocation of stock options total amount submitted to a decision by Natixis’ General rules for allocating directors’ fees to Natixis’ directors and thea
(AIFMD) or insurance activities (Solvency II); Section 619 of the US Dodd-Frank Wall Street Reform and Separation and Regulation of Banking Activities ("SRAB") and categories of staff within Asset Management activities Consumer Protection Act (the “Volcker Rule”), or regulated regulations, including for the category of staff addressed in the the annual review of Natixis’ compensation policy, specificallya likely to have a significant impact on the risk profile of Natixis those employee categories whose professional activities are or the Group; issue an opinion on the insurance taken out by Natixis to cover The Compensation Committee may have cause to review and its officers’ liability.
shares to be submitted to the Board of Directors or the General a stock subscription or purchase, or for an allocation of free
The Compensation Committee met four times in fiscal year whole (identical to that of 2015).
At least four days before each meeting, each director usually agenda in order to be able to review and analyze the topics received via a secure website a file containing the items on the addressed.
In 2016, the Committee focused on the following areas: officers Executive corporate
Review of agreements and commitments made on behalf of the Chief Executive Officera Renewal of the principle of the award of a long-term incentive plan for members of the Senior a Management Committee Analyzing the recommendations of the AFEP-Medef in terms of compensating directorsa
Directors' fees Reviewing the provisions on disbursing the directors' fees allocated to members of the Boarda
Compensation policy and regulations by the Ministerial Decree and Order of November 3, 2014, and the Commission Delegated Regulation into French law in the French Monetary and Financial Code by the Ordinance of February 20, 2014 and
Separation and Regulation of Banking Activities ("SRAB"), and Section 619 of the US Dodd-Frank Wall (EU) of March 4, 2014, as well as for employees addressed in French Law No. 2013-672 on the
“regulated population” addressed in the European CRD IV Directive of June 26, 2013, its enactment Reviewing the compliance of Natixis’ compensation policy with regulations, including for the a
Solvency II Directive) within Asset Management activities (European AIFMD Directive) and insurance activities (European Street Reform and Consumer Protection Act (the “Volcker Rule”) or identified categories of staff variable compensation by business line Reviewing Natixis’ compensation policy, including a review of the structure and the amounts of a
Reviewing specific Risk and Compliance targets (2015 review / 2016 targets)a Analyzing compensation awarded to the highest-paid employeesa compensation and long-term profit-sharing plans established within Natixis Reviewing and monitoring the achievement of performance conditions applicable to deferred variable a
Condaminas until February 9, 2017) Thierry Cahn (position previously held by Alain Member
Three of the six members are independent (Ms. Lalou and directors on the Appointments Committee is not greater than Messrs. Proglio and de Tavernost). The number of independent compliance with AFEP-Medef in Section 2.3 of this chapter).
Since February 18, 2015 the Appointments Committee is chaired 2016: No change was made to the Appointments Committee ina
The roles that devolve to Natixis’ Appointments Committee are, the Board, and assessing their individual and collective expertise, in essence, reviewing the selection of directors and Members of
Deputy CEOs of Natixis; issuing an opinion and making recommendations to the Boarda of Directors on the selection/appointment of directors; collectively; experience that the Board members have, both individually and evaluating the balance and diversity of knowledge, skills anda detailing the duties and the qualifications required for servinga spent on that service; on Natixis’ Board of Directors, and assessing the time to be representation of men and women on the Board of Directors. It deciding on a policy and a set of targets for the balanceda prepares a policy with the purpose of achieving those targets.
CEOs and the Chief Risk Officer and making recommendations on selecting and appointing Natixis’ de facto directors, Deputy of the annual report, the Board of Directors reviews the situation Board. Each year, based on this report and before the publication
Article 2.3.2 of the Board of Directors’ Internal Rules (see of each of its members based on independence criteria set out in
Appointments Committee, which prepares a report for the Qualification as an independent director is discussed by the
(identical to that of 2015). members’ attendance rate was 100% for the year as a whole The Appointments Committee met twice in fiscal year 2016. Its
At least four days before meeting, in principle each director agenda in order to review and analyze the matters to be received a file via a secure website containing the items on the addressed.
Independence of directors Verifying independence criteria for each directora the directors Evaluating the Board and
Other Identifying a person or a dominant group within the Board of Directors who might be detrimental to a Natixis’ interests
February 10, 2016, appointed Anne Lalou as Chairman of the February 10, 2016. The Board of Directors, at its meeting of
Groupe BPCE. business lines, and sharing senior management’s vision for the Chief Executive Officer better and improve the Board’s work Directors to get to know the management team that works with methods.
In addition, the meetings of this Committee allow the Board of
Basel 4 considerations; Natixis’ business lines in the context of low interest rates anda digital transformation and its impact on Natixis’ business lines;a transformation and operational excellence.a
Executive Officer starting May 14, 2009 for a six-year term. On April 30, 2009, the Board appointed Laurent Mignon as Chief
Directors on February 18, 2015 for a period of four years, to end
Natixis’ three core businesses (Corporate & Investment Banking, Management Committee that he chairs, made up of the heads of
Norbert Cron (Operations and Information Systems), Anne Lebel Financial Services), Jean Cheval (Finance and Risks),
Solutions & Insurance), André-Jean Olivier (Corporate (Human Resources), Jean-François Lequoy (Investment core strategy and oversee its management, notably as regards Committee’s remit is to examine and validate the Company’s all major projects and investments, its organization and Human the effective application of the Company’s strategy and budget, and the control of its activities.
Section 2.1 of this chapter). The Committee’s role mainly focuses on information and monitoring.
Officer. Chief Executive Officer, and Jean Cheval, Chief Finance and Risk and assume full liability toward the supervisory authorities, In this capacity, Messrs. Mignon and Cheval stand surety for, specifically the Autorité de Contrôle Prudentiel et de Résolution and Insurance Sector) and the European Central Bank (ECB), for (ACPR – French Prudential Supervisory Authority for the Banking the following activities: the bank’s Senior Management, within the meaning ofa Article L.511-13 of the French Monetary and Financial Code;
L.571-4 to L.571-9 of the same Code; to any request for information or any question, per Articles document that the ACPR may request, as well as a response disclosure to the ACPR of any accounting or financiala of November 3, 2014 on internal control of banking sector mechanisms and procedures set up to comply with the Order businesses.
Officer is vested with the broadest powers to act on behalf of In accordance with Article 15 of the bylaws, the Chief Executive the Board of Directors by law and to the provisions and the powers expressly reserved for Shareholders’ Meetings and
In conjunction with the Chief Executive Officer, the Board of conferred upon the Deputy Chief Executive Officers. They have Directors determines the scope and duration of the powers
Company’s main decisions and steer its management. set up in early May 2009 in order to examine and validate the remits.
present projects or policies falling within their departmental doing so, the members of the Senior Management Committee the CEO. Except where circumstances prevented them from business lines or different support functions were invited to were present at all meetings in 2016. Representatives from the
The Senior Management Committee also sought to identify the and defined the work to be carried out for that purpose under the opportunities offered by digital technology within the Company, action plans before their implementation.
the findings from these projects and approved the resulting “paris digitaux” (digital challenges) initiative. It then examined the Volcker Rule in the United States. In addition, it ensured that law on banking activity separation and regulation in France, and governance or adaptation of HR processes relative to risk-takers the adaptations required pursuant to Directive CRDIV on oversaw Natixis’ adaptation to changes in the economic and Beyond the strategic plan, the Senior Management Committee particular, it oversaw the implementation of the provisions of the regulatory environment in the banking and insurance sectors. In as prudential developments (Basel 3).
Directors or, failing this, under the conditions of Article L.225-103 General Shareholders’ Meetings are convened by the Board of prepared in accordance with the conditions laid out in the of the French Commercial Code. Notices of meeting are applicable regulations (Article 21 of the bylaws).
Different types of meetings2.3.4.2 the agenda. Extraordinary or Combined Meetings depending on the items on Shareholders’ Meetings may take the form of Ordinary,
Auditors and, if necessary, ratify the co-opting of a member of the Board.
present or represented at the meeting. Decisions are made by simple majority vote of the shareholders
also delivered to shareholders wishing to attend the meeting in person and who have not received an admission card by D-2, 12 name of the shareholder or the name of the registered intermediary acting on behalf of the shareholder. A certificate is they attach to the voting form or admission card request in the their clients’ status as a shareholder directly to the centralizing body of the meeting. They do so by producing a certificate that shareholders may send their proxy and absentee voting ballots, either in paper format or, on the decision of the Board of
Under the terms and conditions set forth by law and regulations, shareholders may participate and vote at any General regulations.
Directors published in the notices of meeting, through remote transmission. The Board of Directors may also decide that
Shareholders’ rights2.3.4.4 requisite portion of the share capital may, subject to the conditions and time frames set by law, request the inclusion of
In line with the provisions of Article 27 of the bylaws, each terms and conditions for their dispatch or availability are determined by law and regulations.
allow him to reach an informed opinion on the management and control of the Company. The nature of the documents and the shareholder may, subject to the terms and conditions and at the times fixed by law, request a copy of the documents needed to
Identification of shareholders2.3.4.6 the Company may, subject to the conditions provided for by the In line with the provisions of Article 5 of the bylaws, holders of shares conferring immediately, or in the future, the right to vote at Shareholders’ Meetings, notably their identity, laws and regulations in force, request from any authorized organization or intermediary, all information relating to the nationality, address, the number of shares that they own and the restrictions that may be placed on these shares.
Any individual or legal entity that owns, directly or indirectly, alone or jointly, a 1% share of the voting rights, or any multiple of 15 days following each acquisition or sale of this fraction. that they possess. This notice must be made within a period of
In the event of non-compliance with the notification requirement provided for in the previous paragraph and upon request, notification compliance date.
exceeding the fraction which should have been declared will lose their voting rights for a period of two years following the recorded in the minutes of the meeting from a shareholder representing at least 1% of the voting rights, the shares contacting Natixis’ Investor Relations (30 avenue Pierre Mendès-France 75013 Paris).
obtain/consult the list of shareholders having crossed the statutory threshold from Natixis’ registered office or by
Directive 2003/71 (Article 14.1 of Appendix 1 of Regulation 809/2004), none of the members of the Board of bodies of an issuer, or from participating in the management or conduct of the business of an issuer within at least the previous punished by official or regulatory bodies, disqualified from acting as a member of administrative, management or supervisory subject to bankruptcy, liquidation or receivership, convicted or five years.
Contracts binding the Company 2.3.5.2 members or interfere with their decision-making.
Conflicts of interest2.3.5.3 this situation does not constitute a conflict of interest.
employees while ensuring appropriate risk management. It reflects the individual and collective performance of its business compensation relative to the market benchmark and is structured to encourage the long-term commitment of the Company’s
French and international banking operators to ensure that its compensation policy is competitive and appropriate for each of
Natixis regularly compares its practices to those of comparable its businesses.
The overall compensation of Natixis employees is structured around the following three components: its local market; the position’s role and weight within the organization. It is determined based on the particularities of each business line in fixed compensation, which reflects the expected skills,a responsibilities and expertise for a particular position as well as results and the achievement of predetermined quantitative and variable compensation, awarded based on the company'sa qualitative targets; plans, especially in France.
All employees benefit from some or all of these different pay to compensate its employees for their professional duties, based on their seniority and expertise.
components based on their responsibilities, skills and performance. Natixis strives to ensure a sufficient level of fixed
The system of corporate governance set up by Natixis provides for a complete review of its compensation policies and ensures the social security and tax laws in force in Natixis’ countries of conjunction with the business lines. It is reviewed each year and complies with the principles defined by the regulators as well as they are implemented in compliance with the guidelines. The policy is developed by the Human Resources Department, in operation.
management, and finally Natixis’ Board of Directors on the recommendation of the Compensation Committee. Variable process, starting with the subsidiaries, business lines and divisions, then Natixis’ Human Resources Department and senior
There are several stages of approval in the decision-making including provisions for credit losses, liquidity and capital costs, and in accordance with the decisions taken regarding Natixis’
general conditions on the markets in which the results were obtained, factors liable to have temporarily impacted the the observation of risk and compliance rules.
regulated categories of staff and Front Office employees in the capital markets activities, individual targets systematically include qualitative targets established at the start of the year. For
The individual components of variable compensation packages are based on the achievement of individual quantitative and
and, in general, support staff and staff tasked with the validation of transactions, is based on specific objectives. It is independent
Law No. 2013-672 on the Separation and Regulation of Banking Activities (“SRAB”) and Section 619 of the US Dodd-Frank Wall applied to regulated categories of staff, Front Office staff in the capital markets activities or the employees referred to by French involved in the regulated employee identification process and in the determination of specific annual risk and compliance targets
of behavior liable to expose Natixis to an unusual material risk. compensation components currently being vested, in the event
The composition and work of the Compensation Committee are described in Section 2.3.2.3. of this chapter.
Financial Code by the Ordinance of February 20, 2014 and the
Regulated categories of staff are identified either by applying risk, or based on the employee’s total level of compensation for the previous fiscal year.
year came to a total of 328 employees, including: Regulated categories of staff at Natixis during the 2016 fiscal 264 employees identified based on qualitative criteria: directors, i.e. 15 individuals;a 11 individuals; members of Natixis’ Senior Management Committee, i.e.a key staff responsible for control functions (Internal Audit, Risk,a members of the management bodies listed above, i.e. 52individuals; Compliance) and other support functions who are not have not already been identified based on the above criteria, i.e. 28 individuals; key staff responsible for major business lines and foreigna operations (excluding Asset Management and Insurance) who exposure exceeding materiality thresholds established by individuals with authority to take, approve or veto a decision ona credit risk exposure and who are responsible for market risk regulations and who have not already been identified based on the above criteria, i.e. 158 individuals.
previous fiscal year exceeded €500,000 or placed them among the 0.3% of the highest earning employees, and who have not structured finance activities and, in capital markets activities, structured product engineers and heads of sales.
“regulated” categories of staff Compensation policy applied to 2.4.2.2 such as those set forth by European CRD IV Directive of June 26, 2013, 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 consists exclusively of directors’ fees, the amount of which is The compensation granted to members of the Board of Directors respect of their corporate office.
The deferred portion of the variable compensation awarded variable compensation is supplemented by an additional holding period of six months.
The members of the Senior Management Committee are also eligible for performance share awards under long-term plans, the four-year vesting period of which is contingent on the relative performance of the Natixis share.
product line, and on Natixis' compliance with regulations on capital requirements. These conditions are clearly indicated the results of the Company, and/or the business line, and/or the
The vesting of deferred components of variable compensation is contingent on satisfaying performance requirements linked to process of being vested may be canceled or eliminated, in the event of behavior liable to expose Natixis to an unusual material
Front Office employees in the capital markets activities, are Furthermore, regulated categories of staff, as well as is strictly limited to one year.
categories of staff comply with the rules governing caps on variable compensation relative to fixed compensation, as component at 200% of the fixed component of total compensation for regulated categories of staff.
As a reminder, Directive 2013/36/EU (“CRD IV”) caps the to regulatory caps on variable compensation, and within the European financial community vis-à-vis financial operators operates on highly specialized labor markets, both outside the European Economic Area where local operators are not subject hire and retain employees by offering them competitive pay packages. In this respect, it should be noted that Natixis
84 REGISTRATION DOCUMENT 2016 - Natixis of the Board of Directors
Chairman: fixed portion: €17,000 per year (prorated to the term ofj office), variable portion: €2,000 per meeting, capped at sixj meetings,
Members of the Risk Committee: office), fixed portion: €3,000 per year (prorated to the term ofj variable portion: €1,000 per meeting, capped at sixj meetings,
Members of the Appointments Committee: fixed portion: €2,000 per year (prorated to the term ofj office), variable portion: €1,000 per meeting, capped at twoj meetings,
Members of the Strategic Committee: variable portion: €2,000j per meeting, capped at one meeting.
connection with his duties as CEO of Natixis was €800,000 for the 2016 fiscal year and has remained unchanged since he took
Annual variable compensation submitted for review beforehand to the Compensation Committee and subsequently approved by the Board of determined based on quantitative and strategic criteria
For the 2016 fiscal year, the variable compensation target was performance of Natixis (net revenues [11.25%], net income Group share [11.25%], cost/income ratio [11.25%] and
ROTE – Return on Tangible Equity [11.25%]); financial performance in relation to the Groupe BPCE budget quantitative targets (70%), of which 25% is based on thea
Caisse d’Epargne networks, and managerial performance. The final strategic target, namely the digital transformation of the following three targets: the continued development of the asset-light model, synergies with the Banque Populaire and individual strategic targets (30%), of which 5% is for each ofa
€609,488 will be deferred over three years, 50% of which willa be indexed to the Natixis share price, and will be paid in thirds
BREAKDOWN OF ANNUAL VARIABLE COMPENSATION ■ FOR THE 2016 FISCAL YEAR BY VESTING DATE
Compensation paid to the CEO in the form of stock options or performance shares fiscal year 2016. No stock options were granted to Laurent Mignon duringa
Natixis, with a vesting period of four years. This grant fell within the authorization granted by Natixis’ General 47,463 performance shares, i.e. 0.00151% of the share capital at the allocation date, to the Chief Executive Officer of the Compensation Committee, Natixis’ Board of Directors, at its meeting of July 28, 2016, granted the free allocation of: In order to align shareholders’ interests with those ofa executive officers over time, based on the positive opinion of
Shareholders’ Meeting held on May 24, 2016 in its 19th resolution. The Chief Executive Officer of Natixis is thus if the relative performance of Natixis’ TSR measured over the whole vesting period is lower than the top two thirds of the will be vested. For each year where the annual TSR is lower than the median, a penalty of 20% will be applied. Moreover, median annual TSRs of the institutions in the EuroStoxxBank index for four consecutive years, 80% of the allocated shares the consistency of this performance. Relative performance is tested annually: if Natixis’ annual TSR is higher than the
TSR of the institutions in the EuroStoxxBank index, 20% of aligned with the relative performance of the Natixis share and
CHANGE IN THE ANNUAL FIXED AND VARIABLE ■ COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Chief Executive Officer of Natixis has committed to a yearly payment of €160,000 into this "article 82" type life insurance
Group directors who do not have a supplementary pension plan. Accordingly, and should Groupe BPCE adopt this plan, the practice for similar positions. Moreover, Groupe BPCE plans to take out an "article 82" type life insurance policy for fixed compensation which, at €960,000, is unchanged since taking the position in 2009, and is not aligned with market
Quantitative and strategic criteria for determining the range of 0% to 156.75% of the target.
after review by the Compensation Committee, as was the target which was set at 120% of fixed compensation, with a
BPCE’s financial performance 25% 12.5% net income, Group sharea 8.3% cost/income ratioa 4.2% net revenuesa
Natixis’ financial performance 45% 11.25% net revenuesa 11.25% net income, Group share*a 11.25% cost/income ratioa 11.25% ROTE*a
order to gradually align shareholders’ interests with those of executive officers.
shares awarded by the Board of Directors of Natixis, aligning the CEO with the relative performance of the Natixis share price, in
The Chief Executive Officer, like the rest of Natixis’ Senior Management Committee, is eligible for performance lock-up period.
insurance strategies, both during the vesting period for components of deferred variable compensation and during the
approved the renewal of the severance payment and the non-compete agreement upon the Chief Executive Officer’s
The Monthly Reference Compensation is equal to one-twelfth of paid over the last three calendar years of activity.
The amount of severance pay is equal to: Monthly Reference Compensation x (12 months + 1 month per year of seniority).
in the event of gross negligence or willful misconduct, if he leaves the Company at his initiative to take another position or
Furthermore, in line with the provisions of the AFEP-Medef the two years prior to leaving the Company. The fulfillment of these criteria will be verified by the Board of Directors.
The non-compete agreement is limited to a period of six months agreement.
Board of Directors must make a decision regarding whether to enforce the non-compete clause provided for under this
The amount of the severance payment, together with the monthly reference pay (both fixed and variable).
Compensation due or granted for the fiscal year €1,754,761 (a) €1,899,372
At its February 18, 2015 meeting, the Board of Directors also awarded the CEO 27,321 performance shares valued at €160,000 and, at its July 28, 2016 meeting, it (a) awarded 47,463 performance shares valued at €160,000.
Deferred for fiscal year variable compensation instruments portion of securities or similar
Deferred for fiscal year compensation for fiscal year portion of variable
March 2016 for fiscal year 2015 paid in of variable compensation
October 2016 for fiscal year 2015 paid in variable compensation portion of similar instruments
AMF TABLE NO. 3R Directors’ fees and other compensation received by non-executive directors from January 1 to December 31, 2016.
In respect of BPCE and its subsidiaries 22,050 22,050 23,625 23,625
In respect of BPCE and its subsidiaries 23,250 23,250 7,016.67 7,016.67
In respect of BPCE and its subsidiaries 1,000 1,000 N/A N/A
In respect of BPCE and its subsidiaries 24,125 24,125 23,266.67 23,266.67
Member, then Chairman, of the Natixis Strategic Committee 12,000 12,000 2,000 2,000
In respect of BPCE and its subsidiaries 24,450 24,450 16,266.67 15,666.67
In respect of BPCE and its subsidiaries 26,550 32,550 33,891.67 33,891.67
Benefits in kind in respect of BPCE (company car, housing (13), other) 0 0 5,288 5,288
Housing allowance of €66,000 for 2015 and €22,000 for 2016 is included in the fixed compensation in connection with his corporate office.(2)
Variable compensation for fiscal year 2016, of which €56,533 (50%) paid in 2017 and the balance (50%) deferred over three years in equal shares of €18,778. (3)
and by any Group companies Subscription or call options granted during the period to each executive corporate officer by the issuer corporate officer Name of executive No. and date of plan Type of options (call or subscription)
AMF TABLE NO. 5R Subscription or call options exercised during the period by each executive corporate officer
Value of options adopted for the according to the method consolidated financial statements
the Natixis Senior Management Committee. 30% of the vested shares must be held for the full term of office as Chief Executive Officer of Natixis or any other executive office at Natixis, including as a Member of (b)
Free shares that became transferable during the period for each executive corporate officer No. and date of plan
Number of exercisable options, including those exercisable by: n/a 1) Natixis directors in 2016: n/a
No subscription or call options were granted or exercised by Natixis employees in fiscal year 2016.
End of lock-in period of shares Number subscribed at number of Cumulative canceled lapsed or shares
No performance conditions are attached to the 90 shares allocated in 2013. The 31,955 shares awarded in 2014, 27,321 shares awarded in 2015 and 47,463 shares(a) awarded in 2016 are subject to performance conditions.
Shareholders’ Meeting after the May 2019 General Date term of office expires: X X (a) X X
Components of compensation due 2.4.3.5 year ended December 31, 2016 or granted in respect of the fiscal
The components of compensation concerned are: fixed compensation;a annual variable compensation;a deferred annual variable compensation;a multi-year variable compensation;a extraordinary compensation;a allocation of stock options/performance shares and any othera long-term compensation; signing bonuses;a payment; contract termination payment: severance payment/non-competea supplementary pension plan;a directors’ fees;a benefits of any kind.a
Laurent Mignon’s gross annual fixed compensation in respect of his office as CEO has remained unchanged since he took office.
of 2016 compensation in respect Annual variable quantitative and strategic criteria first reviewed by the Compensation Committee then The variable compensation in respect of fiscal year 2016 was calculated on the basis of validated by the Board of Directors.
Variable compensation consists of: relation to the Groupe BPCE budget (net revenues [4.2%], net income Group share quantitative targets (70%), of which 25% is based on the financial performance in a
No stock options were granted to Laurent Mignon during fiscal year 2016.a of Natixis’ share capital at the allocation date.
Natixis shareholders at the May 24, 2016 General Shareholders’ Meeting in the allocation of 47,463 free shares to the Company’s Chief Executive Officer, i.e. 0.00151% 19th resolution, Natixis’ Board of Directors, at its meeting of July 28, 2016, granted the
EuroStoxxBank index, 20% of the allocated shares will be lost. Finally, 30% of the shares whole vesting period is lower than the top two thirds of the TSR of the institutions in the period ending with the termination of the office as Chief Executive Officer of Natixis. delivered to the director at the end of the Vesting Period will be subject to a lock-in
Components of compensation due or granted in respect of the fiscal year ended which are subject to approval or have been
Meeting of May 20, 2014 (5th resolution). At its February 18, 2015 meeting, the Board of subject to a shareholder vote and approved at the Ordinary General Shareholders’
The Chief Executive Officer will not receive severance payments in the event of gross another position or changes his position within Groupe BPCE.
Non-compete indemnity in the event of termination of the CEO’s office.
indemnity equal to six months of fixed compensation, as in force on the date on which of the Chief Executive Officer, the Board of Directors must make a decision regarding In accordance with the recommendations of the AFEP-Medef code, upon the departure whether to enforce the non-compete clause provided for under this agreement.
applicable, received by the Chief Executive Officer is capped at twenty-four (24) months of the monthly reference pay (both fixed and variable).
The amount of the severance payment, together with the non-compete indemnity, if
Directors’ fees In 2016 Laurent Mignon received no director’s fees in respect of the 2016 fiscal year as part of his responsibilities within Groupe BPCE.
On February 6, 2015, Laurent Mignon relinquished his right to a company car. Laurent
personal protection insurance and supplemental health insurance of CEO Laurent At its February 10, 2016 meeting, the Board of Directors approved a change to the
In 2016, the total amount of benefits in kind was €15,895.
in accordance with Article L.225-37 of the French Commercial The Chairman’s report on internal control procedures is drawn up
Natixis’ internal control system covers all the steps taken by the inherent to its various activities. The objective is to ensure the institution to measure, monitor and manage the risks that are the reliability of accounting and financial information distributed effectiveness and quality of the Company’s internal operations, compliance with laws, regulations and internal policies. both internally and externally, the security of operations, and
November 3, 2014 on internal control by companies in the provisions set forth in the French Ministerial Order of structured in a manner consistent with the principles set out by banking, payment services and investment services sector. It is risk within the framework of the control exercised by the BPCE, with the objective of ensuring a consolidated approach to shareholding group.
In accordance with the new provisions of the French Monetary and Financial Code introduced by the Ordinance of February 24, of the Natixis Board of Directors regarding internal controls and 2014 and the Ministerial Order of November 3, 2014, the powers 2015.
risk management were increased significantly during fiscal year control function (see Section 2.3.2.2 Role and powers of the Risk full information on Natixis’ situation regarding risk. It may, if Committee). To carry out its mandate, the Risk Committee has external experts. It may also interview any Natixis manager who necessary, use the services of the Head of Risk Management or could help to shed light on the work of the Risk Committee.
a Risk Committee separate from the Audit Committee and In late 2014, Natixis modified its governance system by creating strategy and risk appetite and with assisting the latter in its tasked in particular with advising the Board of Directors on in 2016).
The Board of Directors now regularly approves and revises the monitoring and reduction of the risks to which Natixis is or could strategies and policies governing the taking, management, environment (see Section 2.3.1.3 Work of the Board of Directors be exposed, including risks created by the economic
activities, is based on the following organizational principles: The internal control system, which covers Natixis’ entire scope of a strict segregation of duties between units responsible fora particular accounting teams; performing transactions and those that approve them, in responsible for undertaking and validating transactions, and the full independence between the operational and functional unitsa units that control them.
Natixis’ internal control system is based on a structure that distinguishes: staff on the transactions they perform, following internal first-level permanent controls, carried out by operationala control). Transactions may be subject to separate first-level procedures and legal and regulatory requirements (level 1.1 department responsible for validating transactions (accounting, controls (level 1.2) by line management or by a functional legal or middle office functions); second-level permanent controls, performed by foura responsibility of the Corporate Secretary: independent central departments that operate under the control of operational risk (compliance and other operational first-level permanent control system, and for second-level risks), the Compliance and Permanent Control Department,j responsible for managing compliance risk, organizing the which reports to the Corporate Secretary, is notably the IT Systems Security and Business Continuityj
98 REGISTRATION DOCUMENT 2016 - Natixis and Risk Officer, is responsible for measuring, monitoring the Risk Department, which reports to the Chief Financej particular market risk, credit risk and operational risk, and managing the risks inherent to the business activities, in
Accounting and Ratios Department, which reports the Regulatory and Accounting Review team within thej quality and accuracy of accounting and regulatory functionally to the Compliance Department, verifies the information; audited activities.
processes and an evaluation of the risks in respect of the
Department. The Internal Audit Department reports to the periodic controls, carried out by the Internal Audita assessment of existing points of control in the audited Chief Executive Officer and performs audits that give rise to an consistency of the internal control mechanism throughout the Natixis organizes its control functions on a global basis to ensure whole company. The internal control system thus covers all risks
corresponding central control departments, either on a functional within subsidiaries or business lines report to Natixis’
case of business lines. basis in the case of subsidiaries or on a hierarchical basis in the
Officer and the Heads of Risk, Compliance and Internal Audit, as necessary. The role of the CFCC is to: well as Heads of operational or functional departments as controls; address all issues pertaining to the organization and planning ofa observed to the executive body; under consideration and report any significant anomalies highlight areas of emerging or recurring risk within the scopea provide the executive body with updates on ongoing controlsa performed by internal or external control functions, or by undertakings are taken into account by the operational regulators, and ensure that the conclusions from these business lines.
supplemented with the results of external audits (carried out by The conclusions of controls carried out under this system, regulators/supervisors, etc.) are reported to the Board of BPCE’s Internal Audit Department, the Statutory Auditors, the
Committee. Directors via its extensions, the Audit Committee and the Risk
General organization preventing and managing compliance risk at Natixis, thereby The Compliance Department develops best practices fora risk. It acts in accordance with instructions prescribed by helping to prevent financial loss and the associated reputation and branches.
Human Resources Department; contribute to employee training in conjunction with thej meaning of the Ministerial Order of November 3, 2014, at centralize the reporting of any anomalies within thej consolidation by the Natixis group and their communication subsidiary or business-line level, with a view to their to BPCE; and define the conditions for operating the alert confidentiality of declaring parties; mechanism provided for by this article whilst respecting the
100 REGISTRATION DOCUMENT 2016 - Natixis organizational structurea and functions independently of the operational departments. The Compliance Department reports to the Corporate Secretary as defined in the Ministerial Order of November 3, 2014. The Corporate Secretary is responsible for permanent control,
Department provides direction and impetus to Compliance As part of a broader Compliance function, Natixis’ Compliance
Compliance managers in subsidiaries and branches report to the managers in subsidiaries and branches through a “direct” link.
warrants it, to a permanent control manager who, in turn, executive body or, exceptionally, if the size of the entity
Officer through a strong functional link of a hierarchical nature. reports to the executive body, and to Natixis’ Chief Compliance
Ethics/Compliance meant to safeguard the integrity of the markets and ensure that Financiers (AMF – French Financial Markets Authority) and are customers’ interests prevail.
Department uses a company-wide “Conduct/Ethics/Training” Natixis employees and correctly applied, the Compliance line, including all subsidiaries, by the Compliance managers. function, rolled out to each core business and each business
In 2016, two policies were overhauled: the policy on conflicts of organization of the circulation of information; and the policy on interest, replacing the standards on conflicts of interest and the harmonize the frameworks concerned within the group. These professional ethics. The purpose of these two new policies is to concerning external interests, gifts, invitations and personal policies, as well as the procedures applied to Natixis S.A., throughout the year to the entities concerned. Moreover, the transactions, will be disseminated from early 2017 and overhauled in 2016 and will be deployed to all the relevant framework for monitoring rules of professional ethics took was entities in France and abroad in 2017 with a view to consolidate the overall framework.
money laundering and the financing of terrorism, the law on the accompanied with some 25,000 training sessions on combating business continuity plan and preventing market abuse. Natixis separation and regulation of banking activities/Volcker Rule, the available in France and abroad, on the aforementioned also rounded out its training offering with digital courses, regulations, but also on professional ethics. In the area of cybersecurity, training on avoiding phishing continued.
SAFIR Compliance tool. specific first-level and second-level controls, with the help of the based on social engineering are ongoing, as this type of fraud is Vigilance and prevention measures regarding payment fraud constantly changing and remains a significant challenge.
In terms of IT Systems Security (ITSS), the function’s main roles control plan has two parts, one shared with Groupe BPCE and are to define and monitor security standards. The second-level the first-level controls reported by the contributors (Information another specific to Natixis. The controls are carried out based on representatives for authorizations).
The ITSS function helps the business lines assess their risks, runs cross-business projects aimed at strengthening security conduct their business activities and inform their staff. It also
Management emergency response drill in 2015, was adapted in The Seine Flooding project, following on from the Senior three areas: protection of real estate assets and reorientation of information system, and adaptation of back-up systems. These the real estate policy, enhancement of the resilience of the
June 2016 provided an opportunity to apply the Flooding Risk adaptations will continue in 2017. The flooding of the Seine in during only one working day. Plan, and two sites were evacuated as a preventative measure
RISK MONITORING AND CONTROLS2.5.5 being governed by the Group Risk Charter.
between the shareholding central body and its subsidiary Natixis mechanism organized into functions, with the relationship The Natixis Risk function is part of the Groupe BPCE
Its scope of action extends to the following risks: credit and counterparty risk (including country risk);a market risk;a overall interest rate, liquidity and structural foreign-exchangea risk; operational risk;a specific risks related to the Insurance and Asset Managementa activities; and covers all entities consolidated by Natixis.a and global division in a matrix structure than covers all scopes The Risk Management function is organized as an independent and geographic regions.
foster a risk culture at all levels and share best practicesa within the organization.
Natixis’ risk governance authority is the Global Risk Committee, risk policy, analyzes the major risks and approves the main risk chaired by Chief Executive Officer. It defines the key areas of standards and methods implemented. For more detailed registration document.
Division’s risk indicators. procedures and their correction application, and of the
Book) program, which is a major reform of the market risk Launch of the FRTB (Fundamental Review of the Tradinga measurement framework.
Risk function (workflow process) or by the relevant Credit granted jointly to business lines and certain members of the
An IT system enables comprehensive consolidation of limits and credit exposures across a scope covering all of Natixis’
The Risk Division provides senior management and the bank’s trend analyses, scorecards, stress test results, etc. business line managers with reports analyzing Natixis’ risks: accountable, and by various control measures overseen by a Credit risk is supervised by making the various business lines dedicated monthly Committee Meeting analyzes changes in dedicated Risk Division team. As regards limit breaches, the limit breaches using specific indicators (number, total, duration, and monitors their correction.
Quarterly monitoring of watch-listed counterparties and the provisions are examined simultaneously. This examination relies process for determining specific additions to and reversals of on preparatory Committees organized by the Risk Division and the managers of the various business lines within the bank.
Senior Management Committee in charge of the business lines, the Chief Executive Officer and assembles members of the relevant support functions. Finance and Risk, the Chief Risk Officer and the heads of the
Charter, which is approved by Natixis’ Global Risk Committee. system are described in the Natixis Market Risk Management
The Risk Division: and submits them to the Market Risk Committee for approval; defines risk measurement and fair value adjustment methodsa operational limits, loss alerts); suggests limits or examines limit requests (VaR, stress tests,a or to senior management; provides alerts for areas at risk relating to the business linesa is responsible for the daily analysis and measurement of risks,a any breaches; daily reporting, and notifying front office and management of management tools.
Committee in charge of, respectively, Finance and Risks and Officer, and includes members of the Senior Management the Head of Global Markets, the Head of the Single Treasury Corporate & Investment Banking, as well as the Head of Risk,
The Committee meets every two months and is mainly responsible for: those relating to internal liquidity pricing), agreements, validating the main asset/liability management rules (includinga the business lines as part of the budget procedure) used to indicators and limits (including liquidity budgets allocated to all within the standard ALM framework set up by BPCE; monitor, manage and supervise structural balance sheet risks, validating the overall refinancing policy in conjunction witha BPCE ALM; developments; supervising the main balance sheet aggregates and theira excessive leverage risk and compliance with limits. supervising structural and balance sheet risks, includinga
The ALM Committee’s monitoring scope includes: Natixis’ entire scope of consolidation for liquidity riska intrinsic liquidity risks and which are monitored and managed (excluding insurance subsidiaries, which do not present separately in respect of ALM risks); Natixis’ entire consolidation scope for structural foreigna exchange risk; overall interest rate risk.
Natixis’ ALM is based on the following organization: the Financial Management Department proposes ALMa
Department; ALM indicators produced by the Financial Management ALM limits. It also performs the second-level control of the certain regulatory (liquidity coverage ratio, LCR) indicators on Department and the liquidity management team, and of items within its remit.
Under this organizational framework: the BPCE/Natixis single treasury and central bank collaterala coordinates the operational management of the Group’s management pool, placed under the supervision of BPCE, liquidity for the entire Group and its businesses; refinancing needs in order to secure and optimize access to by pricing rules and rules on managing conflicts of interest circulation of cash between both balance sheets is governeda
subsidiary and non-subsidiary activities without ALM riska management mandates from the ALM Committee transfer management of their risk to the Treasury through individual matching contracts: this primarily involves Corporate and Investment Banking’s financing activities; subsidiary and non-subsidiary activities that possess ALM riska management mandates match their net needs with Treasury specialized credit subsidiaries, which do not have access to the refinancing market.
The control and reduction of operational risks relies on operational risk control procedures including: drawing up and monitoring action plans (or corrective actions);a tracking the levels of risk control mechanisms.a understand their issues and to assist them in anticipating and managing their operational risks.
awareness of operational risks using training and information tools and by working closely with the business lines in order to
The mechanism is managed by Natixis’ Operational Risk hedging and reduction. It is the operational extension of the executive body and, as such, possesses full decision-making
ITSS-BC and the Internal Audit Department. It is chaired by the Chief Executive Officer or his substitute the Chief Finance and powers for issues within its area of responsibility. This Committee meets quarterly and is attended by Compliance, acting as secretary. The standing members of the Operational Risk function, apart from the Head of the department, are the
are chaired by the Head of the relevant business line with the participation of Compliance and are coordinated by the
Business-line Operational Risk Committees and support functions are offshoots of Natixis’ Operational Risk Committee.
responsibility for defining, monitoring and managing their levels of risk, producing reports of a high quality, and ensuring the
Management” of the registration document. For more detailed information see Chapter 3 “Risk
As a listed company, Natixis prepares separate consolidated formed by the Banque Populaire banks and the Caisses d’Epargne since July 1, 2009.
The reliability of these process is based on the following core principles: the period; principles applicable to Natixis companies, including the analysis and interpretation of new standards published during definition and dissemination of the accounting and regulatorya preparation of these reports; documentation and oversight of the different stages in thea audit trails justifying all published accounting anda management data, based on the individual contributions made by each entity and restatements made centrally; formal, documented first- and second-level controlsa statement, regulatory and financial information); contributing to the management of risks relating to accounting and financial information (balance sheet, income data archiving and security procedures;a that use the consolidation and data collection tools, thus allowing for best practices to be spread within the Company.
The preparation of the consolidated financial statements also relies on: the consolidation packages of each consolidated company via a formal review process; the use of a direct consolidation method, rolled outa throughout the Group, allowing for the analysis and control of of financial information. In 2016 the schedule for integrating the preparation of consolidated financial statements on aa quarterly basis, the result of which is a better level of control consolidation packages was adjusted to expedite the publication of financial statements; reporting and reconciliation of intra-group transactions at M-1a and then at M, where M is the reporting month, thus increasing the number of reconciliations and contributing to the preparation of quarterly statements; consolidation packages that incorporate accuracy and consistency checks, which must be complied with before the data can be transmitted; use of an automated control process for individual informationa provided by the consolidated entities through the use of documents for taxes, including proof of deferred taxes, for each consolidated entity, thus contributing to the final individual analysis of all entries impacting consolidateda shareholders’ equity and the preparation of supporting calculation of consolidated shareholders’ equity; part of its regulatory reporting, Natixis has software that enables it to: For the preparation of the consolidated financial statements and produce a local IFRS-compliant reporting package, including,a for foreign entities, a reporting period foreign currency conversion feature; extend its data collection and consolidation processes toa regulatory reporting; guarantee the consistency of data relating to the banking anda insurance consolidation scopes; offer retrieval features that can be used to input data into thea various reports; enable BPCE to access Natixis data through dedicateda interfaces; received from international entities through the implementation of local first-level controls followed by secure the integration process for consolidation packagesa centralized second-level controls.
continuing to roll out new modules in its consolidation package, thus facilitating the compilation and preparation of certain
In order to perfect its overall data collection system, Natixis is regulatory filings (COREP capital reporting and FINREP).
the industry-wide movement to bring publication dates forward. Finally, Natixis, and more broadly Groupe BPCE, are involved in
and control functions means that internal control procedures are process: decentralized and are tailored to the organization of each of the consolidated entities, relying on a multi-tier accounting control
The fact that most subsidiaries have their own management a first-level control where permanent and local controls ina operational business lines are integrated into the operating process and formalized in detailed control programs; an intermediate level overseen by each entity’s financial ora accounting departments where second-level controls, independent of operating processes, are performed to ensure the reliability of accounting and regulatory reporting processes and verify the exhaustive nature and quality of the first-level controls; Department as part of its regular audits.
primarily based on the following fundamental principles: The accounting and regulatory reporting control system is separation of the accounting production and control functions;a reporting and frequency; standardization of control processes within the Group’sa different business lines and entities: methods, software, ensuring the size of the team is suited to the objectives set.a
For Natixis, the system is organized based on: accounting or regulatory production teams, within thea business lines or centralized within the Accounting and Ratios regulatory reporting and the implementation of day-to-day controls; Department, that handle all work related to the correct entry of transactions and the collection of data required for authority of the Accounting and Ratios Department including all monthly and quarterly controls that make these reports first-level controls under the hierarchical and/or functionala more reliable; authority of the Accounting and Ratios Department and the functional authority of the Compliance Department. The independent second-level controls under the hierarchicala including the review of first-level controls; Regulatory and Accounting Review team, aside from managing the system, also performs its own controls, internal application.
dedicated tools that allow for the automated reconciliation ofa account entries and centralization of control results using an
In addition to the operational control tasks delegated to it, the function within the Group: Regulatory and Accounting Review team also fulfils the following duties in respect of the organization of the control definition of the control policy applicable to Natixis and itsa subsidiaries: organizational and operational principles of permanent internal control for accounting, fiscal and regulatory matters; local financial or accounting departments. This takes place through quarterly revision Committee Meetings, themed coordination of the control system within the subsidiaries,a working with the Review officers appointed by each of the workshops, and bilateral cooperation with international entities and platforms; process for alerting the accounting or finance officers. of these dashboards are then sent to each entity, including a monitoring and implementing an accounting and regulatorya control environment within each entity by deploying and operating a set of periodic reporting dashboards. The results
Work in 2017 will be focused on: continuing the progress of the project to streamline thea information systems used for market transactions (front and back office systems); the entry of data used by the various overview systems; continuing the progress of the project to streamline and poola the adjustment of production processes to IFRS 9, mainly ona account of the new provisioning mechanism and the creation of a shared tool for calculating provisions, linked to a database, as well as the review of the associated control processes; tools; systems and the launch of a similar project on the Asia platform which complements the deployment of the target the continued overhaul of the Natixis Factor overviewa data/reports as part of the Transformation and Operational Excellence project launched in 2016 by Senior Management; specific measures to automate the production of certaina controls in regulatory and tax matters.
External controls2.5.6.3 verified by: Departments responsible for preparing individual or consolidated accounts, the quality of accounting controls is
audits conducted by Statutory Auditors. This work is carrieda out by three firms working in a uniform manner each quarter compliance with policies determined and validated beforehand by Natixis and the effectiveness of local internal on most of the entities falling within Natixis’ scope of consolidation and whose opinions rely, in particular, on
The Internal Audit Department reports directly to Natixis’ Chief Executive Officer. It has strong functional ties with Groupe
The Internal Audit Department reports on all its activities and projects to the Risk Committee, which then presents a never find itself in a position of conflict of interest. support functions. It has no operational role and can therefore
Natixis’ Internal Audit Department is responsible for verifying the meaning of the Ministerial Order of November 3, 2014. In this respect, it is independent of all operational entities and the Bank’s controls and is one of the bodies responsible for the proper operation of the Bank’s internal control system within
The Internal Audit Department conducts audit assignments business activities carried out. It has full and unrestricted access to all information, confidential or otherwise. Its field of across the whole of Natixis (parent company, subsidiaries and branches) and covers all classes of risk arising from the various of permanent control assignments – and its outsourced investigation encompasses all of Natixis’ operational activities, its functional departments – notably including entities in charge operations are carried out. These analyses lead to an assessment of the suitability of existing control points in the activities. In all business lines, it carries out in-depth analyses of operations, as well as the front-to-back processes by which strengthen the comprehensiveness and robustness of the mechanisms for controlling or managing the risks audited.
CECEI in its decision of November 15, 2007, as well as those set out in Groupe BPCE’s General Inspection charter.
The Internal Audit Department monitors recommendations, and presents its audit to Senior Management, the Risk Committee permanent control teams.
on a recurring basis by the operational departments and allocation of audit resources across the scope covered. It is part of a four-year plan that sets out the intervention frequency and annual Audit Plan drafted and executed jointly with Groupe BPCE’s General Inspection, which aims to optimize the adapts resources to the risks to be controlled.
The work of Natixis’ Internal Audit Department is based on an senior management or if required by circumstances. The Audit Plan may be revised during the year at the request of address issues arising during the year and not initially included in the Audit Plan.
The Annual Audit Plan is examined by the Risk Committee. In 2016 the Internal Audit Department conducted audit
its new obligations (Basel internal models, US regulations), as well as assignments conducted in Natixis’ subsidiaries pursuant 2016. These included in particular: Several specialist projects involved all Internal Audit staff in
108 REGISTRATION DOCUMENT 2016 - Natixis assessments conducted jointly with BPCE’s General particular for Human Resources management, communication and reporting, the international expansion of Natixis and risk
Inspection; continuing workshops focusing on the consolidation of thea Audit Department’s internal standards and procedures, in effective deployment of the dedicated software Reco! proposed by BPCE across the entire Natixis scope, and the enhancing the recommendations monitoring system, with thea validated by Groupe BPCE); tightening of the alert system to flag recommendations where the implementation is too far behind schedule (currently being
addressing issues related to auditing programs and practices, as well as topics associated with risk assessment and assignment
A large quantity of work was carried out in coordination with
V@R figure (95% and 99% value at risk) that factors in scenario analyses and external data, the quality of the BCP and the company’s premises around the world. Maximum impact is estimated as part of the operational risks map, and results in a insurance.
transition to a low-carbon economy). The issues linked to global warming are already incorporated in the lending policies of
As such, the risk policy in the commodities sector has cyclones hitting this region.
restrictions in place for transactions with independent producer operating in the Gulf of Mexico on account of the risk of exposed to physical risk and to transition risk.
Prudential Supervisory Authority for the Banking and Insurance Sector), BPCE and Natixis participated in a working group incorporation of these risks: Specifically, and in line with the Autorité de Contrôle Prudentiel et de Résolution (ACPR - French addressing Article 173 of the energy transition for green growth act of August 17, 2015, with a view to draw up stress test scenarios. The working group reviewed the sectors most
All these measures have contributed to steadily reducing Natixis’ carbon footprint, which is measured every year. (see 2016 Natixis Registration Document, Chapter 6).
Investment products helping to combat climate changea Mirova, the investment firm of Natixis Asset Management, and specialized in responsible investment, offers a range of material on the fight against climate change (see 2016 Natixis Registration Document, Chapter 6).
incorporates climate change in its environmental impact assessments of its major projects: borrowers are required to
Managing the climate risks of major projects financed bya Natixis: As a signatory of the Equator Principles, Natixis emissions once it is in operation.
present an analysis of the possible alternatives of their projects, and to report annually on the project's CO2
Sector and exclusion policies: Natixis has drawn up specifica policies applicable to the following sensitive sectors: energy, mining, offshore oil platforms, nuclear, defense, palm oil. Where necessary, these policies address issues related to the energy transition.
resulted from the incorporation of the credit risks associated with this sector, and from a desire to support the energy finance coal-fired plants or thermal coal mines, nor companies whose business is over 50%-reliant on this sector. This decision
In our capacity as the Statutory Auditors of Natixis, and in of your Company in accordance with Article L. 225-37 of the French Commercial Code for the year ended December 31, accordance with Article L. 225-235 of the French Commercial Code, we hereby report on the report prepared by the Chairman
Composition of capital3.3.3 127 funds requirements and ratios in 2016 Changes in regulatory capital, regulatory own 3.3.4
Methodology for measuring market risk3.6.3 148 management Measurement methodology of market risk 3.6.4
June 26, 2013 (CRR) and the European CRD IV Directive implementing the Basel 3 reforms in Europe.
Financial Stability Board (FSB) for the purpose of improving banks’ financial communication about risks (Enhanced Disclosure
In addition, since 2013 Natixis has been working to implement all the recommendations of the working group organized by the recommendations with the information published in the Registration Document is provided in Chapter 8.
Some information in this chapter is an integral part of the notes to Natixis' consolidated financial statements and consequently by the phrase “Data certified by the Statutory Auditors in accordance with IFRS 7".
Report” (the report and the cross-reference table are available on the Natixis website - www.natixis.com, under Investors & information on items related to the Basel 3 report and to prudential publications is published in the “Risk and Pillar III
Natixis is exposed to a number of different risk factors that may be classified into the following categories: risks related to the macroeconomic environment and thea financial crisis; risks related to its ties with BPCE;a risks related to Natixis’ operations and the banking sector;a other risks including risks related to Natixis’ reputation anda image, and changes to laws and regulations.
out in the following chapters of this report, and in the report of the Chairman of the Board of Directors on Internal Control and
aware or which are not deemed material may also have an
The risk factors listed below are not the only factors incurred by Natixis. Other risks and uncertainties of which Natixis is not
Natixis’ businesses are sensitive to changes in the financial markets and more generally to economic conditions in France, Europe and the rest of the world.
Global trade slowed further in 2016 as commodities rebounded, with the price of Brent oil gaining 90% over its low point in halting the inflation freefall in importing countries, the upturn eroded consumer spending capacity in developed countries. The
company profits picked up again and real estate began making a comeback.
While growth was above 1% for the second year running, French GDP was only 4% above its 2008 pre-crisis peak. Nevertheless, presidential elections in December, and the surprise election of the Republican candidate as the next US president. As the equity markets hit peaks of volatility sparked by the Brexit vote and the steepen substantially.
Netherlands) may have a long-term upward effect on European sovereign debt risk premiums, thus impacting growth and fiscal environment in which financial institutions operate, and consequently may have an impact on Natixis’ financial position.
In response to the financial crisis and under the impetus of international and domestic regulators, governments (including regulatory measures which are a breakaway from the current framework (MiFID 2, the review of the standardized approach on countries in which Natixis entities operate) have either adopted, or are in the process of submitting to parliament, a number of credit risk, the fundamental review of the trading book, etc.).
The implementation and observation of these measures could result in: an increase in capital and liquidity requirements;a a structural increase in funding costs;a an increase in some of Natixis’ costs (compliance costs,a restructuring, etc.); a change in tax laws in Natixis’ countries of operation.a these measures (in particular those still being examined or not yet finalized) could have on financial markets in general and on
It is too early to accurately determine the scale and the impact
Natixis’ principal shareholder has a significant influence on certain corporate actions 71% of its share capital (and 71.03% of its voting rights). BPCE is therefore in a position to exercise significant influence over the
BPCE’s interests in relation to these decisions may differ from those of other Natixis shareholders.
As the central institution, BPCE is required to ensure that all of areas such as regulatory capital adequacy, risk appetite and risk management requirements. As a result, BPCE has been vested
Natixis refinances medium and long-term public and private-sector vanilla issues (senior and subordinate) at Groupe BPCE level through BPCE S.A. In the event market conditions deteriorate in the future, BPCE, which obtains financing on the international debt markets, among other sources, may have difficulty issuing debt instruments under reasonable terms and conditions.
These risks are described in greater detail in Pillar III, Chapter 2, and in Chapter 3 of the registration document dealing with the extent of these risks and the impact they may have on Natixis’ results and on the organization and management of these risks.
114 REGISTRATION DOCUMENT 2016 - Natixis 2016 was clearly an eventful year, which started off with deep concerns gripping the financial markets over the Chinese economic slowdown, followed by the unexpected outcome of the Brexit vote, then by the US elections, which generated major volatility throughout the campaign, while the year ended with the Italian referendum on constitutional reform.
This series of events took place amid widespread uncertainty, which has given rise to new types of risk in recent years: to companies, their employees, partners and customers. processes and users, with the aim of causing material losses act, perpetrated digitally in an effort to manipulate data (personal, banking/insurance, technical or strategic data), cyber risk is the risk caused by a malicious and/or fraudulenta management.
Natixis has adopted this approach and has made the resilience anticipating and being capable of responding to threats.
Natixis’ profitability, and particularly on its insurance activities. Indeed, a very low interest rate environment could heavily balance sheet rotation and very low risk tolerance. Persistently low interest rates may nevertheless have consequences on dilute the returns of Natixis Assurances’ main fund and therefore reduce the margins we earn on euro-denominated policies.
The New Frontier 2014-2017 strategic plan, the guidelines of which are in line with Groupe BPCE’s plan, aims to create a become an “asset-light” bank; to pursue and step up the internationalization of the business lines; to create a single value-added customer solutions bank dedicated entirely to customers. The strategy focuses on four areas of strength: to given the current state of the global economy, and there is no guarantee that it will achieve the goals of this new strategy.
affect its performance employees is critical to the success of its business and failure to do so may significantly
Natixis’ ability to attract and retain qualified across the financial services industry and the competition to attract qualified employees is intense. Natixis’ results depend on
Natixis’ employees are one of its most important resources and its ability to attract new employees and to retain and motivate existing employees.
the portfolios, any market downturn that reduces the value of these portfolios or increases the amount of redemptions would
These procedures may not be effective against certain risks, particularly those that Natixis has not previously identified or management procedures and policies used by Natixis do not guarantee effective risk reduction in all market configurations.
behavior. Natixis then carries out a mostly statistical analysis to quantify its risk exposure. The tools and metrics used may anticipated. Some of Natixis’ qualitative tools and metrics used to manage risk are based on its use of observed historical market
Natixis’ risk management policies and procedures may not be failure, including fraud.
addition, while no material issue has been identified to date, the risk management systems are subject to the risk of operational because of factors that Natixis has not anticipated or correctly assessed in its statistical models, or because of unexpected and provide inaccurate conclusions on future risk exposures, mainly borne by Natixis could prove far greater than those forecast based on historical averages. Moreover, Natixis’ quantitative unprecedented market trends. This inaccuracy would limit Natixis’ ability to manage its risks. Consequently, the losses expose Natixis to significant and unanticipated losses. In models do not incorporate all risks. Certain risks are subject to a more qualitative analysis that could prove insufficient and thus
in an asset, it could hedge the risk by taking a short position in
Natixis may only be partially hedged, or its strategies may not fully hedge future risks or effectively reduce risk in all market another asset whose past performance has allowed it to offset the performance of the long position. However, in some cases, effectiveness of these hedging strategies. In addition, the manner in which gains and losses resulting from certain configurations, or may even cause an increase in risks. Any unexpected change in the market can also reduce the ineffective hedges are recorded may increase the volatility of strategies it uses to hedge the various types of risk to which it is exposed prove ineffective. Many of these strategies are based
Increased competition, both in Natixis’ home market of France, its largest market, and internationally, could adversely affect Natixis’ net revenues and profitability many accounts, including transaction execution, products and services offered, innovation, reputation and price. If Natixis is firms that, like Natixis, have the ability to offer a wide range of products and services. Natixis competes with other entities on major markets with attractive and profitable product and service offerings, it may lose market share in important areas of its unable to maintain its competitiveness in France or in its other of Natixis’ major markets are likely to increase competitive pressure, as increased price pressure lowers business volumes business or incur losses on some or on all of its operations. In addition, downturns in the global economy or in the economies
Natixis’ primary business lines contend with fierce competition in whether in the form of mergers and acquisitions or through alliances and cooperation. Consolidation has created a number of
downward price pressure on Natixis’ products and services and affect Natixis’ market share.
Technological advances and the growth of e-commerce have made it possible for non-deposit taking institutions to offer electronic and Internet-based financial solutions, including electronic securities trading. These new players may exert products and services that traditionally were banking products, and for financial institutions and other companies to provide
116 REGISTRATION DOCUMENT 2016 - Natixis of other financial institutions and market participants could have an adverse impact
Any breakdown, interruption or failure of these systems could result in errors or interruptions to customer relationship thus lose transaction opportunities. Likewise, a temporary systems failed, even for a short period of time, it would be unable to meet customers’ needs in a timely manner and could information retrieval and verification costs, and even a decline in its business if, for instance, such a breakdown occurred during breakdown of Natixis’ information systems, despite back-up systems and contingency plans, could result in considerable communication and information systems to process a large number of increasingly complex transactions for its businesses.
costs (in particular insurance premiums). Subsequent to such events, Natixis may be unable to insure certain risks, resulting in relocation costs of employees affected) and increase Natixis’
Natixis is subject to significant regulation in France and in several other countries around reputational risk, failure to comply with these regulations could expose Natixis to significant intervention by regulatory authorities
Several supervisory and regulatory regimes apply to Natixis in all the countries where it conducts its business. In addition to license. The Financial Services industry has been under increased scrutiny from several regulatory authorities in recent and to fines, public warnings by the authorities, suspensions of operations or, in extreme cases, withdrawal of Natixis’ operating following: years, and the penalties and fines imposed by these regulatory authorities have increased – a trend that may be accelerated in the current financial context. Natixis’ operations and income may foreign governments, or by other international organizations. Such constraints could limit Natixis’ ability to develop its be affected by various measures and actions taken by French and European regulatory authorities, by the European Union, by actions are unpredictable and Natixis has no way of controlling them. Such changes could include, but are not limited to, the businesses or to pursue certain operations. The nature and impact of these potential changes in regulatory policies and monetary, interest rate and other policies of central banks anda regulatory authorities; markets where Natixis operates; general changes in government or regulatory policies liable toa significantly influence investor decisions, in particular in general changes in regulatory requirements, notably prudentiala rules relating to the regulatory capital adequacy framework; changes in rules and procedures relating to internal controls;a changes in the competitive environment and prices;a changes in financial reporting rules;a confiscation of assets and changes in legislation relating to foreign ownership rights; and expropriation, nationalization, price controls, exchange controls,a situation capable of affecting the demand for the products and services offered by Natixis.
Tax laws applicable to business sectors in which Group entities operate around the world, such as countries of operation. Changes in these regulations may have a material impact on the effective tax rate on its activities. Natixis
Natixis could be subject to tax adjustments. to challenge such interpretations in the future, in which case
in the number of legal proceedings and the amount of damages claimed against Natixis, or expose Natixis to sanctions from the
118 REGISTRATION DOCUMENT 2016 - Natixis must undergo resolution proceedings Natixis shareholders may suffer losses if Natixis
provisions for adapting French legislation to comply with European Union financial law) empower resolution authorities to additional Tier 1 instruments are written down or converted into equity instruments, followed by Tier 2 instruments.
goes into default or is likely to do so (and if there is no reasonable prospect that another measure may prevent this
Taking eligible liabilities into account, bail-in power would initially apply to the write-down or conversion of subordinated debt other than Tier 2 instruments, then to senior debt in the same order preferred securities.
used for liquidation proceedings, so that senior non-preferred securities would be written down or converted before senior remaining equity instruments (including those issued when converting equity instruments before resolution). If writing down
After initiating resolution proceedings, resolution authorities have the ability (known as bail-in power) to write down or convert to the write-down or conversion of eligible liabilities, such as Natixis senior non-preferred securities or preferred securities.
or converting equity instruments is not enough to restore financial stability to the institution, bail-in power may be applied
Resolution proceedings may be initiated against Groupe BPCE if prevent this default within a reasonable time and (iii) a resolution measure is required to achieve the resolution’s objectives: (a)
(i) the Group’s default has been established or can be predicted, (ii) there is no reasonable prospect that another measure may guarantee continuity of critical services, (b) ensure there is no major negative impact on financial stability, (c) protect the government’s resources by minimizing the use of exceptional considered to be in default when it does not comply with the terms of its approval to operate, whether it requests exceptional public financial assistance and (d) protecting the funds and assets of customers, especially depositors. An institution is public financial assistance (with a limited number of exceptions) or the value of its liabilities exceeds that of its assets.
capital or equity. of a temporary administrator (special manager) and issuance of for the groups to which they belong. These measures include but are not limited to: the sale of all or some of the institution’s resolution measures for institutions in default or, in some cases, to debt instruments, changes to the terms of debt instruments (including modification of the maturity and/or the amount of businesses to a third party or to a bridge bank, separation of assets, replacement or substitution of the institution as a debtor instruments, the dismissal of management, or the appointment interest payable and/or the temporary suspension of payments), suspension of its ability to trade or officially list financial
Requirements Regulation (CRR no 575/2013) and Capital Requirements Directive 4 (CRD IV) as well as by governance accordance with banking regulations (French Ministerial Order of November 3, 2014 on internal control) and the European Capital cross-controls, the details of which are described in Chapter 2 Section 2.5.1 “Chairman’s report on internal control procedures”.
The risk management governance is a structured organization involving all the levels of the bank: the Board of Directors and its Special Committees (Riska Committee, Audit Committee, etc.); the Executive Managers ("dirigeants effectifs") and the Speciala Committees on Risk they chair within the bank; the central divisions, independent of the businesses;a
Risk management at Natixis includes independent control functions, each of which monitors the risks within its scope of
Chapter 2, Section 2.5, “Chairman’s report on internal control procedures” and Sections 3.4, 3.6 and 3.7 of this chapter.
The Risk Management function recommends risk policies consistent with those of Groupe BPCE to Senior Management for approval, and makes proposals to the executive body concerning principles and rules in the following areas: risk acceptance procedures;a limit authorizations;a risk assessment;a risk supervision.a which meets once per quarter.
It plays an essential role within the Committee structure, the highest-level Committee being Natixis’ Global Risk Committee,
Directors, and to Groupe BPCE. A risk consolidation team generates an overview through the use of scorecards that
(and in Section 3.8, “Overall interest rate risk, liquidity risk and structural foreign exchange risk”).
The ALM Committee’s monitoring scope includes the overall interest rate risk, liquidity risk and structural foreign exchange risk.
training are the key drivers of the Compliance function to enhance Natixis’ non-compliance risk management.
Natixis is defined by its strong risk culture at every level of its guiding principles, as set out in the Risk Charter. Its priorities are threefold: The risk culture is central to the Risk Management function’s that cover all the bank’s major risks (credit, market and operational risks) and outline the bank’s strategic vision and harmonization of best practices within the bank through thea roll-out of a body of risk policies, standards and procedures risk appetite; implementation of e-learning campaigns addressinga operational risks; promotion of training for every employee in specific subjects,a related especially to regulatory changes.
approved by the Board of Directors after consultation by the Risk Committee.
Risk Appetite Statement3.2.3.1 control of the types of risks that the bank is prepared to take in pursuit of its business model, and ensure consistency between
recognized areas of expertise (corporate financing, market activities, asset management, insurance, and specialized liquidity, balance sheet). It declines any engagement in activities
Natixis follows a strategy of diversifying its sources of financing as well as those of Groupe BPCE, and manages its capital
The Risk appetite framework forms part of Natixis' main processes, especially with regards to: risk identification: every year risks are mapped in order toa have an overview of the risks to which Natixis is or could be exposed. With this approach, it is possible to identify material risks, the indicators of which are included in the risk appetite framework; in the budget process and overall stress tests.a institutions, Groupe BPCE has drawn up a recovery and resolution plan (PRR).
Natixis has developed a comprehensive stress tests mechanism to dynamically monitor and manage risks.
It is an integral part of the risk management framework and contributes to Natixis’ capital and regulatory requirements planning process.
The scenarios are prepared by the Economic Research team in unemployment, interest and exchange rates, stock prices and commodity prices, over a three-year period. These variables are
The scenarios are translated as levels or as shocks to economic and financial variables, such as GDP, inflation, employment and risk-weighted assets and equity.
factored into projection models used by the Group to apply stress to the various aggregates of the income statement,
The adverse scenario used for 2016 was based on a political and economic crisis in the euro zone: withdrawal of Greece, widening sovereign credit spreads, growth in unemployment rates, increased easing of monetary policies to tackle deflation.
Regulatory stress tests comply with the ad-hoc requirements of the ECB, the EBA and any other supervisor: the last two
The specific stress tests performed by the Natixis Risk Division are detailed in the dedicated sections of this document (namely with regard to the credit stress tests detailed in Chapter 3, Section 3.4.7 on the “Commitment monitoring procedures”,
company, a sovereign State and its various entities, an investment fund, or a natural person. Credit risk increases in
Credit risk is the risk of loss on Natixis’ receivables due to a debtor’s inability to honor its contractual obligations. Assessing trading operations in financial instruments on capital markets and its settlement-delivery operations.
Securitizations are transactions whereby the credit risk inherent to a set of exposures is housed in a special-purpose entity into tranches, usually for the purpose of selling them to investors. The special-purpose entity issues units that may in
(usually a securitization fund or “conduit”), which is then divided by issuing short-maturity notes (treasury notes or commercial paper).
the subordination of tranches, defined by the transaction,a determines the distribution of losses over the term of the risk
Market risk is the risk of loss in value caused by any adverse fluctuations in market parameters. These parameters include, in assets, particularly foreign exchange rates.
The lack of liquidity may lead to reduced access to capital markets, unforeseen cash or capital requirements, or legal
deliberate, accidental or natural occurrences. Internal procedures include, but are not limited to, Human Resources party information systems may result in lost earnings and thus generate losses. Similarly, unforeseen events may cause an
Furthermore, any interruptions or failures of Natixis or third interruption in the continuity of Natixis’ operations, thus generating material losses and additional costs.
The Insurance Department, which reports to Natixis’ Insurance bought from leading insurers provide coverage against division, is tasked with analyzing insurable operational risks and taking out appropriate insurance coverage. Insurance policies
Natixis’ civil liability or that of its subsidiaries or the employees for which it is responsible.
potentially significant consequences resulting from fraud, embezzlement and theft, operating losses or the incurring of
Overall interest rate risk on the banking portfolio stemming from mismatches between interest rates on assets and on liabilities.
contractual transactions. The most significant positions concern exposures to the short end of yield curves and are
whose trust, in whatever respect, is a prerequisite for the risks incurred by the bank.
Natixis is also exposed to the following risks: to profits of any difference between expected and incurred Risk related to insurance activities: insurance risk is the riska pandemics, accidents and natural disasters (such as customer behavior, changes in public healthcare policy, risk varies according to macroeconomic changes, changes in claims. Depending on the insurance product in question, the earthquakes, industrial accidents or acts of terrorism or war).
Climate risk: climate risk is the increased vulnerability ofa rainfall, wind, snow, etc.). businesses to variations in climate indices (temperature,
All of these new provisions were accompanied by a phase-in requirements. mechanism, with the aim of gradually implementing the new
(P2G). assigned a Pillar II Requirement (P2R) as well as Pillar II Guidance each institution to observe. Each institution under its purview is directly responsible for supervising significant European banks. Finally, as of November 2014, the European Central Bank is continued in 2016. Drawing on the Supervision Review and The implementation of this new supervisory framework
consolidation scope is established based on the following In accordance with Article 19 of the CRR, the regulatory principles: consolidated or consolidated under the equity method in the Entities, excluding insurance companies, that are fully accounted for under the equity method in the regulatory consolidation scope; the Group’s insurance companies are document, Note 17 of Chapter 5.1) are included in the regulatory statutory consolidation scope (see 2016 Natixis registration consolidation scope.
STATEMENT CATEGORIES WITH REGULATORY RISK CATEGORIES (EU LI 1) DIFFERENCES BETWEEN ACCOUNTING AND REGULATORY SCOPES OF CONSOLIDATION AND THE MAPPING OF FINANCIAL R
In accordance with the provisions introduced by the CRR and as described below. Each category comprises liability items with the accounting balance sheet), comprises three categories, capital (calculated based on shareholders’ equity in accordance with the national provisions defined by the ACPR, regulatory subject to thresholds.
restated by automatically applying deductions, either directly or extracted from the consolidated financial statements and and grandfathering provisions to support the roll-out of the CRR. Until 2021, regulatory capital is subject to phase-in arrangements
Commission Implementing Regulation No. 1423/2013 (Annex II). characteristics at December 31, 2016, as required by debt instruments recognized in Additional Tier 1 capital and their
T2 capital comprises: applying phase-in arrangements; subordinated debt instruments recognized as T2 capital aftera deductions made from this category via the phase-in provisionsa applied to CET1; any surplus provisions related to expected losses.a
Total prudential filters (513) Deductions after phase-in arrangements Dividend proposed for current year and related expenses (1,130)
Amount included in value of investments in associates and non-current assets (262)
o/w portion not including tax loss carry-forwards and impact of netting 799
Total deductions (5,152) Total Common Equity Tier 1 (CET1) 12,474 Hybrid capital instruments
Amount as per accounting base (before elimination of company-controlled stock: 21) 3,591
CHANGES IN REGULATORY CAPITAL, REGULATORY OWN FUNDS REQUIREMENTS 3.3.4 AND RATIOS IN 2016
Regulatory capital and capital adequacy ratio: component. The same ratios for 2015 are shown by way of The CET1, Tier 1 and total ratios are presented below by major comparison.
Pillar I these ratios must exceed the minimum limits of 4.5%, 6% In accordance with the Basel 3/CRR regulatory framework, under of 5.125%, 6.625% and 8.625%, respectively for 2016, and
Consolidated shareholders’ equity group share, net of DSNs and PSNs 18,225 17,947
o/w impact of change in base subject to phase-in arrangements (809)
Amount of Common Equity Tier 1 (CET1) at end of period 12,474
Other, including prudential adjustments and phase-in arrangements 73 o/w impact of changes in phase-in rate 76 o/w other impact of changes in base (3)
131REGISTRATION DOCUMENT 2016 - Natixis recorded in 2016, after applying phase-in arrangements: The following changes in Basel 3/CRR regulatory capital were
CET1 capital included a provision for 2016 dividends payable in cash in the amount of €1.1 billion (i.e. €0.35 per share). It also unrealized losses.
reflects the impact of the gradual application of phase-in arrangements (-€0.1 billion over the year), and particularly the entry into force on October 1, 2016 of revised phase-in arrangements on the deduction of deferred tax assets for applied on items deducted from AT1 capital, as well as the items subject to these provisions.
Market risk fell -€1.1 billion, with the change in risk inputs (-€1.6 billion) offset by the elimination of the aforementioned BPCE guarantee of +€0.4 billion.
for fiscal year 2016 was replaced by that of fiscal year 2013 (standard practice is to calculate operational risk using the average indicator for the previous three years).
Accordingly, Natixis helped collect detailed data on liabilities, as required by the Single Resolution Board (SRB) in 2016. The oversight and projection mechanisms applicable to this new ratio are currently being developed.
Leverage ratio on-balance sheet exposures (after certain restatements, notably on derivatives and repurchase agreements) and off-balance sheet exposures (after applying balance sheet equivalent conversion deadlines.
factors). The CRR was amended by a Delegated Act, which entered into force on March 31, 2015. The reporting templates that take those amendments into account have only been used since September 2016, in accordance with the implementation
Under Pillar II, the leverage ratio must be calculated and reported to the regulator as of January 1, 2014. Its publication is
Division is to provide an opinion, based on all relevant and useful information, on the risks taken by the bank.
Working with the business lines, the main duty of the Risk
Credit decisions are made within the limit authorizations granted jointly to the business lines and to certain members of the Risk function, and are approved personally by the Chief Executive Officer or any other person he authorizes to that end. They are sized by counterparty category and internal credit rating, and by the nature and duration of the commitment. Furthermore, these authorizations can be exercised only when the transaction satisfies the different criteria set out in the risk policy of each sector and activity.
Natixis’ risk policies have been defined, starting in 2010-2011, as a component of the bank’s overall risk appetite and credit risk
Natixis now has nearly 20 risk policies, which are regularly revised and cover the various Corporate & Investment Banking business lines (corporate, LBO, aircraft finance, real estate finance, project finance, commodities finance, banks, insurance, hedge funds, etc.) and the subsidiaries’ various activities (e.g. leasing for Natixis Lease and factoring for Natixis Factor, etc.).
The quantitative framework is generally based on: commitment ceilings by business line or sector;a product, or sometimes by geographic region. commitment sub-limits by type of counterparty, type ofa
The qualitative framework is for its part structured around the following criteria: business sectors: preferred sectors, banned sectors;a various criteria (size, rating, country of operation, etc.); targets: customers to be targeted or excluded based ona structuring: maximum durations, financial ratios, contractuala clauses, collateral arrangement, etc.
Checks are carried out as required during the individual processing of loan applications to ensure that the risk policy is being applied correctly. Overall monitoring also takes place on a quarterly basis (checking of compliance with ceilings and number
Measuring exposure to counterparty 3.4.3.1 risk into account the netting and collateralization criteria.
Natixis uses an internal model to measure and manage its own counterparty risk. Based on Monte Carlo-type simulations for the
These adjustments correspond to the expected loss related to a counterparty’s default risk and aim to account for the fact that Natixis cannot recover all the transactions’ market value.
Natixis reduces its exposure to counterparty risk using three measures: counterparty in question is considered as risk; the use of bilateral netting agreements under which, if aa counterparty goes into default, only the balance of the positive and negative valuations of the transactions carried out with the counterparties in question.
appendices to these agreements that govern the use ofa collateral swaps that fluctuate according to the daily valuation of the portfolios of transactions carried out with the the use of clearing houses, which stand in for their membersa by bearing most of the counterparty risk. To do this they use initial margins and a variation margin call system.
Wrong-way risk refers to the risk that Natixis’ exposure to a counterparty is heavily correlated with the counterparty’s probability of default.
assessment, monitoring and control mechanism. It covers all the methods, processes, tools and controls used to evaluate credit risk. It takes into account fundamental parameters, including probability of default (PD), which is expressed as a rating, and
With respect to country risk, the system is based on sovereign ratings and the establishment of a rating for each country that is the highest possible rating that can be given to non-sovereign counterparties. These ratings are reviewed annually or more often if necessary.
When a bank portfolio exposure does not have a directly applicable external credit rating, the Bank’s customer standards allow – on a case-by-case basis and after analysis – the
In accordance with regulatory requirements, Natixis has evaluating credit risk. This model validation phase is required for their use.
precision and consistency analysis, stress tests, analysis of model suitability, etc.
performance and governance analysis: model backtesting,a of controls, error reports, comprehensiveness of data, etc.
PD Sovereigns 2 Expert analysis-based rating models using macroeconomic criteria and the assessment of legal and political risks
9 Statistical models (decision trees or assessment of recoverable assets) by type of financed asset. The safety buffers included in the LGD models serve to cover periods of decline (primarily via bootstrap techniques)
Retail SMEs 2 Statistical models (decision trees) by type of financed asset. The safety buffers included in the LGD models serve to cover periods of decline (primarily via bootstrap techniques)
Specialized Financing 1 Model calibrated on internal defaults and segmentation by type of product and type of counterparty
Rating tool performance monitoring 3.4.5.2 and backtesting measurements of LGD models, based on the quantitative analysis of historical data and supplemented by qualitative analysis.
LGD Secured). They include a detailed analysis based on a range of indicators, e.g. differences in terms of severity and migration compared with agency ratings, observed defaults and losses and changes in ratings prior to default, and the performance
Backtesting and benchmarking are an integral part of the model approval process. Backtesting and performance-monitoring programs are used at least once a year to ensure the quality and reliability of LGD estimates and rating models and LGD grids or probability of default scales (Corporate, Banks, Sovereign and
For Natixis, the Corporate (including structured finance), Interbank and Sovereign portfolios, which are handled using dedicated rating tools, have the lowest default rates (Low Default Portfolios). These portfolios are backtested in accordance with their specific nature, namely the low number of defaults and the which is based on the default rate and internal migrations, and an analysis of the relative performance, which is based on a comparison with external ratings. Alerts are triggered by performance rules and indicators as necessary.
The role of the Rating Analysis Committee is to: provide a forum for the presentation of the results ofa performance and stability measurements; analyze the indicators whose alert thresholds have beena exceeded; or anomalies. These measures may take different forms, including changes to rating practices, methodologies, performance analyses or alert threshold values.
The severity of the internal ratings compared with the agency through these analyses.
The change in the portfolio’s credit quality over one year is also the analysis process gives an overview of the positioning of the Bank’s credit portfolio.
Additional indicators are also calculated to verify the internal risk ranking (Gini Index, average rating, previous year’s ratings, ratings of counterparties that have defaulted) and provide statistics as a supplement to the qualitative analyses.
The losses given default are calculated: on a statistical basis for the Corporate asset class;a based on internal and external histories and an externala benchmark for banks and sovereigns; using stochastic models if there is a claim against an asset.a and Bank LGD monitoring has therefore been rolled out over the past few months and is gradually being extended to all the A-IRB approved portfolios (Specialized Financing and Sovereigns).
The indicators defined for backtesting are used both to measure the model’s performance and to validate the model currently used.
process are respected, and also ensures that the tools and processes used are working properly and that data quality and consistency are good. It also runs training and provides support to Bank employees.
Natixis uses a number of credit risk reduction techniques including netting agreements, personal guarantees, asset guarantees or the use of credit-default swaps (CDS) for hedging
Risk mitigation techniques involve two types of garantee : Non-financial or personal collateral:a
With a pledge of financial collateral, the creditor is granted real security rights to one or more assets belonging to the borrower or guarantor. Forms of collateral include cash deposits, securities, commodities (such as gold), real estate assets, mortgage-backed securities, life insurance policy pledges.
The eligibility of collateral is defined according to a strict process comprising: the Bank's enforcement policy; an approval framework drawn up by the Legal Division, with aa legal document covering the acceptance of the collateral and the loan approval procedure and the mechanism for preventing the concentration of risks on certain collateral. In accordance with regulatory provisions, the bank performs the valuation of guarantees and periodically reviews these valuations should any adjustments be required.
the risk monitoring framework, based on credit risk policies,a collateral are estimated quarterly or annually on the basis of conservative valuations and haircuts, and take into account the actual enforcement of such collateral in times of economic slowdown.
In terms of monitoring, collateral and netting agreements are: provided as well as any associated improvement in risk quality; analyzed, when a loan application is approved or reviewed, toa ascertain the suitability of the instrument or guarantee checked, processed and documented based on standarda contracts or contracts approved by the Legal Division; subject to registration and monitoring procedures in the riska administration and management systems.
In the particular case of mitigators of credit risk generated by simulated future exposures.
Natixis may take steps to reduce commitments in order to lower concentration risk by counterparty, sector and geographic area.
Natixis' commitments are measured and monitored on a daily and the bank's business line heads with reports analyzing Natixis' risks: trend analyses, scorecards, stress test results, etc.
In particular, it is used to review the change in Natixis’ exposures to occasional reports describing emerging sector risks or issuing warnings about changes in specific sector risks.
Where there has been a significant change in a country, an analysis is presented to the Credit Risk Committee in order to adapt the monitoring and procedures relative to the country in question.
Moreover, the Credit Committee’s decisions regarding transactions with a significant exposure in terms of the total amount, country situation or type of the transaction under review are based on an analysis of country risk.
They are then considered for the watch list, a decision which falls upon the Risk Department or the competent Credit Committee depending on the amount of exposure.
This stress testing is regularly calculated for the Natixis consolidation scope to evaluate the risk generated in the event of an adverse trend in the economic and financial data. The results counterparty, and so on) and includes stresses on the unsecured LGD (Corporates, Banks and Sovereigns, etc.) and the secured LGD (asset or collateral values by business line).
Collective provisions provisions are based on groups of homogeneous assets and formed according to three criteria: In addition to individual provisions, Natixis also sets aside provisions to cover country risk and sector risk. These collective ratings for loans to private individuals and professionals;a sector risk;a geographic risk for other counterparties (corporate,a sovereign, etc.).
of business sectors and countries. Such evidence typically arises from a combination of micro or macroeconomic factors specific to the industry or country concerned. When necessary, an expert appraisal is sought to refine the results of this review.
Central governments or central banks 36,305 748 60 30,801 562 45
Operational risk (standardized approach) 13,709 1,097 12,719 1,017 assessment” to “Institutions”. (a) Pro forma 2015: €37,079 million of EAD reclassified from “Exposures to institutions and corporates with a short-term credit
Collective investment undertaking 147 135 282 * Europe = European Union + Europe (outside EU)
the IRB approach, excluding: internal rating (S&P equivalent) for asset classes measured using The following table shows the breakdown of exposures at risk by exposures to equities (calculated using a simple weighting);a grouped into homogenous risk classes; pool-based exposures (acquired portfolios) and third partiesa securitization positions.a
Natixis has securitized assets on its acquired balance sheet: Asset-Backed Commercial Paper); market-making activity on certain ABS (particularly derivative transactions and, to a marginal degree, through its as an investor, through transactions for its clients, througha manage ABS programs; as a sponsor, i.e. on transactions for its clients to create anda customers.
Natixis securitizes certain portfolios of loans granted to as an originator, i.e. as part of its refinancing activities whena geographic diversification strategy to underlying assets. spreads and seniority. Natixis also applies a sector and Natixis mainly invests in assets with high levels of collateral,
Provisions Committee. quarterly presentation at the meeting of the Watch List and The results of these analyses are written up and discussed in a
Furthermore, the liquidity risk is managed as part of the global hedging ratios. ALM indicators subject to limits, such as liquidity gaps and monitoring of the Group’s activities, particularly with the help of
principles in terms of risk monitoring and supervision and provide These market risk policies focus on a set of methodological strategy. a matrix approach to businesses by asset class and management