Asset & Wealth Management10.1 distribution units) coordinated by a holding company that ensures the organization’s consistency by overseeing its strategic direction. These companies are thus able to focus on their core business and on achieving robust performance while retaining the option of developing their own institutional clientele and drawing on the business line’s other support functions, based on appropriate economic models. A number of these asset managers have forged a strong reputation, such as Loomis Sayles, Harris Associates, AEW, H2O, DNCA and Ostrum Asset Management.
Asset Management: asset management activities area combined within Natixis Investment Managers. They cover all asset categories and are carried out mainly in the US and France. These activities are performed by autonomous entities (specialized asset management companies and specialized
Wealth Management: this business line covers wealtha management activities in France and Luxembourg and asset management. Natixis Wealth Management holds a key place on the French market. The bank mainly develops its customer base from the clientele of the Caisses d’Epargne and Banque Populaire banks, and to a lesser extent from that of Natixis. Private Banking offers advisory services, financial planning and expertise, and fund management solutions.
Corporate & Investment Banking advises businesses, institutional investors, insurance companies, banks and public sector entities and offers them a diversified line of customized financing solutions as well as access to the Capital Markets.
In 2016, its organizational structure was adapted to better support its customers, by strengthening strategic dialog, and to accelerate the implementation of the “Originate to Distribute” model. This led to the creation of a new Investment Banking business line, whose mission is to develop strategic dialog with customers and incorporates the Acquisition & Strategic Finance, Capital & Rating Advisory, Equity Capital Markets and Strategic
Natixis Assurances is a holding company for various operating insurance subsidiaries. In March 2014, in accordance with the plan to develop the bancassurance model, Natixis Assurances acquired PPI and casualty insurance subsidiary BPCE Assurances, which it now wholly owns. It offers a full range of individual and group life insurance, personal protection insurance, and property & casualty insurance products for the Banque Populaire and Caisse d’Epargne networks. These diversified, customized solutions are designed for retail and small business customers, farmers, companies and associations.
This business line combines a number of service-oriented businesses primarily serving the Caisse d’Epargne and Banque Populaire networks, as well as Natixis customers: Payments: This business line provides tools, infrastructure, anda services for payments: electronic banking, issuance and collection of mass electronic transfers, check processing, service vouchers, e-commerce, etc. Under the “New Dimension” plan, Payments is designed to become a pure player on the payment segment in Europe and accelerate its digital transformation. Thus, the business line recently acquired several start-ups specializing in electronic payment and e-commerce, namely: Payplug, S Money, Dalenys and Comiteo; networks, which account for a significant portion of its business; Factoring: provides companies with credit managementa solutions such as financing, insurance, and collection. Natixis Factor uses the Banque Populaire and Caisse d’Epargne
Sureties & financial guarantees: this business line is operateda by Compagnie Européenne de Garanties et Cautions (CEGC). It notably includes guarantees for mortgage loans granted to retail and business customers by the Caisse d’Epargne and Banque Populaire networks, along with legal guarantees and financial guarantees; Consumer finance: this Natixis business line includes a broada range of activities across the entire value chain for revolving loans (marketing, origination, administrative management, out-of-court collection, etc.) and administrative management services for personal loans. These activities are operated by Natixis Financement, which manages revolving loans granted by the BPCE Group networks and manages personal loans granted by the Caisses d’Epargne and by the Banque Populaire banks; Leasing: this business line provides financing solutions for reala estate and non-real estate assets under finance leases or other long-term leasing arrangements; Employee savings plans: this business line offers companiesa an employee savings management solution (administration of employee accounts, fund administration and accounting); Securities services: this business line offers back and middlea office services for retail securities custody (account administration, back office outsourcing, office services, depositary control) for the BPCE networks and external clients; Film industry financing: this business line is operated viaa Coficiné, a subsidiary specializing in structured loans for film and audiovisual activities in France and Europe.
The Corporate Center operates alongside the operating divisions. It combines Natixis’ non-strategic business lines: Coface, of which the main activities are credit insurance, factoring abroad, corporate information and rating and accounts receivable, proprietary Private Equity activity, Natixis’ stake in certain sponsored funds that is not meant to be kept within Natixis, as well as the Natixis subsidiary in Algeria.
In terms of costs, the Corporate Center recognizes the bank’s structural costs and the contribution to the Single Resolution Fund.
- net revenues: €3,274 million; - expenses: -€2,114 million; - gross operating income: €1,160 million; - provision for credit losses: -€5 million; - pre-tax profit: €184 million.
Of which €1,319 million excluding the net revenues of the XVA desks, which break down into €1,158 million in net revenues for FICT and (a) €161 million for Equities.
- net revenues: €139.6 million; - expenses: -€62.7 million; - gross operating income: €76.9 million; - provision for credit losses: €0.1 million; - pre-tax profit: €77.1 million.
Loans and receivables due from banks and similar items at amortized cost 1,399 11,448 578 329 292 13,239 27,285
Deposits and loans due to customers 1,834 19,696 (41) 70 347 14,086 35,991
FINANCIAL DATA Consolidated financial statements and notes 361Natixis Registration Document 2018
Financial assets at fair value through other comprehensive income 7,700 173 (0) 0 2,925 10,798
Concerns the SFS business lines recognized in non-current assets held for sale as at December 31, 2018 (see Notes 3.6 and 6.9).(a)
The information on capital adequacy required under IAS 1 is presented in Section 3.3.1 of Chapter 3, “Risk factors, risk management and the pillar III report”.
Loans and receivables due from credit institutions and similar items at amortized cost 26,400 0 0 0 0 0 0 49 2 0 0 0 0 0 0 48 26,398
Loans and receivables due from banks at amortized cost 48 (47) 0
Customer loans and receivables (Excluding repurchase agreements) 79,901 4,576 (1,975) 82,502 1,282 37,364 84,065 4,533 (2,150) 86,448 1,510 39,690
Guarantees on performing loans and loans in default Guarantees on performing loans and loans in default
Loans and receivables due from banks (Excluding repurchase agreements) 279 0 279 306 1 307
The disclosures on the management of market risk, overall interest rate risk, liquidity risk and structural foreign exchange risk required under IFRS 7 are presented in Section 3.2.7 of Chapter [3], “Risk factors, risk management and the pillar III report”.
The expense associated with the short-term plan is fully recognized in the 2018 financial statements in the amount of €36 million, versus €42 million at December 31, 2017.
Retention and performance plans settled in cash are recorded under “Other long-term employee benefits”. The estimated expense is based on an actuarial estimate of the
Deferred retention and performance bonuses paid in cash are probability of these conditions being met. The expense is awarded to some staff. These bonuses are subject to presence recognized over the vesting period. The amount recognized in and performance criteria. In terms of accounting treatment, they respect of fiscal year 2018 was: Year of plan (in millions of euros) Grant date Acquisition dates
Other long-term employee benefits comprise benefits other than post-employment and termination benefits not wholly due within twelve months of the end of the period in which employees have provided the related services.
FINANCIAL DATA Consolidated financial statements and notes 367Natixis Registration Document 2018 a) Amounts recognized on the balance sheet at December 31, 2018 The amount of the recognized provision on the liability side of the balance sheet corresponds to the value of the actuarial liabilities under the defined benefit plans, less the market value of the assets to hedge these benefit liabilities.
Fair value of separate assets (a) (147) (27) 0 0 (174) (171) (43) 0 0 (214)
Net amount recognized in balance sheet 126 86 51 144 406 143 125 63 123 455
Separate asset components are for the most part segregated in the balance sheets of Natixis insurance subsidiaries (ABP Life Insurance), (a) hedging the benefit liabilities of other entities within the Natixis group of consolidated companies which were transferred to hedge the post-employment benefits of a few categories of employees.
Changes recognized directly in other comprehensive income with no recycling (45) (15) 0 0 (61) 23 4 0 0 27
Changes associated with non-current assets held for sale (a) (10) (31) (10) (1) (52)
368 Natixis Registration Document 2018 c) Changes in recognized amounts on the balance sheet (Changes in hedging assets)
Revaluation adjustments – Return on assets (22) 2 (21) 25 (0) 25
Changes associated with non-current assets held for sale (a) (0) (6) (6)
Fair value of assets at start of period 171 43 214 167 38 205 o/w amounts paid out in respect of plan liquidation (9) 0 (9) (7) 0 (7)
Revaluation adjustments – Return on assets (14) 3 (10) 7 1 8
Fair value of assets at end of period 147 27 174 171 43 214
TOTAL REVALUATION ADJUSTMENTS AT START OF PERIOD 275 27 302 266 24 291
Revaluation adjustments over the period (41) (15) (57) 8 3 11
Corresponds to the actuarial liability revaluation adjustments generated in 2018 (in respect of post-employment plans) by SFS subsidiaries (a) recognized in non-current assets held for sale as at December 31, 2018 (see Notes 3.6 and 6.9).
TOTAL REVALUATION ADJUSTMENTS AT START OF PERIOD 61 0 61 42 0 42 o/w effect of ceiling on assets (7) 0 (7) (6) 0 (6)
Changes associated with non-current assets held for sale (a) 0 0 0
TOTAL REVALUATION ADJUSTMENTS AT END OF PERIOD 45 2 47 61 0 61 o/w effect of ceiling on assets (2) 0 (2) (7) 0 (7)
Corresponds to the changes in plan asset revaluation adjustments for the SFS subsidiaries recognized in non-current assets held for sale as at (a) December 31, 2018 (see Notes 3.6 and 6.9).
At December 31, 2017, €41 million of income was recognized in income in connection with the plan reduction following the new collective (a) agreement on complementary health insurance for employees. An expense of €7 million for an additional end-of-career award commitment was also recorded.
Rate of increase in healthcare costs 2.77% 4.20% 5.00% 4.18% 1.60% 5.00%
FINANCIAL DATA Consolidated financial statements and notes 371Natixis Registration Document 2018 31/12/2018 31/12/2017
Rate of increase in salaries (incl. Inflation) 2.94% 2.27% 2.27% 3.20% 2.85% 2.25% 2.25% 3.08%
Plan maturity 5 years 5 years 5 years 5 years 5 years 5 years
Natixis adapts the management of its capital structure in line with changes in economic conditions and in the risk profile of its operations. Its objectives, policies and procedures remained unchanged in 2018.
FINANCIAL DATA Consolidated financial statements and notes 373Natixis Registration Document 2018
Deeply subordinated notes amounted to €1,978 million, compared with €2,232 million at December 31, 2017, an increase of €254 million corresponding to the redemptions carried out in
Note that the gross amount of exchange rate fluctuations in deeply subordinated notes in foreign currencies recorded in income at December 31, 2018 amounted to +€47.8 million, or €33.9 million after tax, compared with €103.9 million at December 31, 2017, or €68.1 million after tax.
The main features of the perpetual deeply subordinated notes are outlined in Chapter [14] of the Pillar III report.
Management of the liquidity contract 13.3.2 established with the French Financial Markets Association (Association des Marchés Financiers) on September 23, 2008, approved by the Autorité des Marchés Financiers on October 1,
Natixis entered into a liquidity contract with an independent service provider, and in accordance with the Compliance Charter
Variations linked to changes in exchange rates 855 (0) 197 (0) 1 (0) 0 0 1,053 (0)
Financing commitments received from banksa 7,333 4,220 from customersa 88 29
FINANCIAL DATA Consolidated financial statements and notes 375Natixis Registration Document 2018
Variations linked to changes in exchange rates 762 (0) 328 (1) 0 (0) 0 0 1,091 (2)
Including the transfer from Stage 2 to Stage 1, due to the improvement over the period of the ratings of the economic sectors to which the (a) transferred amounts are related.
Corresponds to the SFS business lines recognized in non-current assets held for sale as at December 31, 2018 (see Notes 3.6 and 6.9).(b)
The financial statement of Natixis for 2018 were approved by the Board of Directors on February 12, 2019. Since that date, there have been no material changes in the financial or trading position of Natixis.
< 1 year 1-5 years > 5 years < 1 year 1-5 years > 5 years
Minimum payments receivable under irrevocable leases 55 206 118 379 51 152 50 252
The data regarding the SFS business lines recognized in non-current assets held for sale as at December 31, 2018 can be found in Note 8.9.1.4.(a)
The sources of the differences between the off-balance sheet amounts and right of use amount estimated in accordance with IFRS 16, at January 1, 2019 on the first-time recognition date (see Note 2 “Basis of presentation”) are as follows, by type: lease payments under contracts already signed but whosea underlying assets had not yet been made available on the date of transition to IFRS 16 are not included in the calculation of rights of use and lease liabilities. These lease payments are, however, included in off-balance sheet commitments; rights of use and lease liabilities are initially determined bya discounting the lease payments over the term of the contracts in accordance with IFRS 16. The lease payments included in off-balance sheet commitments are not discounted; recoverable). The lease payments included in off-balance sheet commitments at December 31, 2018 and December 31, 2017 include unrecoverable VAT, however; rights of use and lease liabilities are initially determined baseda on lease payments excluding VAT (whether or not it is contracts relating to low value assets and short-term contractsa (including short-term contracts in force on the date of transition to IFRS 16) are excluded from the calculation of rights of use and lease liabilities in accordance with the exemptions provided for by IFRS 16. Short-term contracts are, however, included in off-balance sheet commitments at
Loans and receivables due from banks and similar items at amortized cost 17,871 350 106 31,145 381 86
Deposits and loans due to banks and similar items 47,925 1,468 3 68,761 1,879 702
Deposits and loans due to customers 311 83 30 274 52 7
Net gains or losses on financial instruments at fair value through profit or loss (494) 156 503 (215) (28) (29)
Gains and losses on financial assets at fair value through other comprehensive income
In 2018 and 2017, directors’ fees paid to members of the Board of Directors included a fixed portion (€8,000 per person) and a variable portion (a) (€2,000 per Board Meeting, per person). Members of the Audit Committee and the Risk Committee received a fixed payment of €3,000 (€17,000 for its Chairman) and a variable payment of €1,000 per Board Meeting and per person (€2,000 for its Chairman). Members of the Appointments Committee and Compensation Committee received a fixed payment of €2,000 (€15,000 for its Chairman) and a variable payment of €1,000 per Board Meeting and per person (€2,000 for its Chairman). The members of the Strategic Committee received a variable payment of €2,000 and the Chairman of the Strategic Committee received a fixed payment of €12,000.
The amounts shown represent the total amount of compensation paid or delivered to the members of the Senior Management Committee.(b)
Value of performance shares granted during the fiscal year €80,000 (b) €192,000 (b)
Laurent Mignon, Chairman of the Board of Directors as of June 1, 2018
Corresponding to the value of the shares on the allocation date, for a fair value of €99,305 for (b)
Corresponding to an amount on the allocation date, for a fair value of €55,372 for 2018.(d)
I.e. for François Riahi: Social Security contributions in tranche A(1);a mandatory ARRCO contributions in tranche A(1) (13.31%);a additional ARRCO contributions in tranche B(1) (4.50%);a
The Chief Executive Officer is covered by the mandatory pension plans. He is not covered by the kind of supplementary pension plans described in Article 39 (defined benefit plan) or Article 83 (voluntary defined contribution plan) of the French General Tax Code. Natixis’ Chief Executive Officer also makes payments to the Article 82 (in reference to the French General Tax Code) life insurance policy put in place by BPCE Group. The premiums on this policy will be paid by the Chief Executive Officer and not by Natixis. Under this scheme, in 2018, Laurent Mignon, as Chief Executive Officer, paid in €58,667, and François Riahi paid in €68,444.
It is reiterated that, at its February 19, 2014, meeting, the Board of Directors approved a change to its agreement relating to a severance payment for Laurent Mignon and the establishment of a non-compete agreement. These obligations and agreements were submitted to a vote by the shareholders and approved during the Ordinary General Shareholders’ Meeting of May 20, 2014 (fifth resolution). At its February 18, 2015 meeting, the Board of Directors approved the renewal of severance payment and the non-compete agreement upon the Chief Executive Officer’s reappointment. The corresponding commitments were approved by the General Shareholders’ Meeting on May 19, 2015 when Laurent Mignon was re-appointed as Chief Executive Officer.
On May 2, 2018, the Board of Directors decided that François Riahi would, effective from his appointment as Chief Executive Officer, be entitled to the same severance payments and consideration for non-compete agreement as his predecessor, the commitments for which were approved at the May 23, 2018 General Shareholders’ Meeting.
Rules for calculating the severance payment The monthly reference compensation is equal to one-twelfth of the sum of the fixed compensation paid in respect of the last calendar year in activity and the average variable compensation paid over the last three calendar years of activity.
The Chief Executive Officer will not receive severance payments in the event of gross negligence or willful misconduct, if he leaves the Company at his initiative to take another position or changes his position within BPCE Group.
Furthermore, in line with the provisions of the Afep-Medef corporate governance code, the right to a benefit is contingent on meeting performance criteria and requirements, such as net income (Group share), ROE and the cost/income ratio reported for the two years prior to leaving the Company. Satisfaction of these criteria will be verified by the Board of Directors as necessary.
Average performance achieved over the two years prior to leaving (the measurement shall be based on the known results for the four quarters(2) prior to leaving).
PricewaterhouseCoopers Audit was appointed in replacement of KPMG by the shareholders at the General Shareholders’ Meeting of May 2016, for a term of six years ending as of the General Shareholders’ Meeting called to approve the 2022 financial statements.
Deloitte & Associés and PricewaterhouseCoopers Audit are registered as Statutory Auditors with the “Compagnie Régionale des Commissaires aux Comptes of Versailles” and are under the supervision of the “Haut Conseil du Commissariat aux Comptes”.
The Deputy Auditors are: Mireille Berthelot, from BEAS, 6 place de la Pyramide, 92908a Paris La Défense Cedex for Deloitte; Jean-Baptiste Deschryver—63 rue de Villiers 92208a Neuilly-Sur-Seine Cedex, for PricewaterhouseCoopers Audit.
FINANCIAL DATA Consolidated financial statements and notes 381Natixis Registration Document 2018
Article 7 of Law No. 2013-672 of the French Monetary and Financial Code of July 26, 2013, amending Article L.511-45, requires credit institutions to publish information on their locations and activities in each country or territory.
Net revenues, pre-tax profit, taxes and headcount by country at December 31, 201818.2
FCT Liquidité Short 1 (a) Securitization vehicle FC 100 100 100 100 France
NATIXIS ASIA LTD Other financial company FC 100 100 100 100 Hong Kong
Natixis Alternative Holding Limited (j) Holding company FC 100 100 Great Britain
NATIXIS LONDON Financial institution FC 100 100 100 100 Great Britain
NATIXIS DUBAI Financial institution FC 100 100 100 100 United Arab
FINANCIAL DATA Consolidated financial statements and notes 387Natixis Registration Document 2018
NATIXIS NORTH AMERICA LLC Holding company FC 100 100 100 100 United States
NATIXIS FINANCIAL PRODUCTS LLC Derivatives transactions FC 100 100 100 100 United States
MSR TRUST (a) Real estate finance FC 100 100 100 100 United States
NATIXIS US MTN PROGRAM LLC Issuing vehicle FC 100 100 100 100 United States
Natixis Investment Managers Australia Pty Limited Retail FC 100 100 100 100 Australia
Natixis Investment Managers Canada Corp Asset Management FC 100 100 100 100 Canada
Natixis Investment Managers Capital Corporation (formerly Natixis IM Canada Investment Corporation)* Asset Management FC 50 50 50 50 Canada
AEW CAPITAL MANAGEMENT, LP Asset Management FC 100 100 100 100 United States
AEW PARTNERS IV, INC. Asset Management FC 100 100 100 100 United States
AEW PARTNERS V, INC. Asset Management FC 100 100 100 100 United States
AEW PARTNERS VII, INC. Asset Management FC 100 100 100 100 United States
AEW SENIOR HOUSING INVESTORS II INC Asset Management FC 100 100 100 100 United States
AEW VIA INVESTORS, LTD Asset Management FC 100 100 100 100 United States
AEW VIF INVESTORS II, INC. (dd) Asset Management 100 100 United States
AURORA INVESTMENT MANAGEMENT LLC Asset Management FC 100 100 100 100 United States
EPI SLP LLC (a) Asset Management FC 60 60 60 60 United States
GATEWAY INVESTMENT ADVISERS, LLC Asset Management FC 100 100 100 100 United States
LOOMIS SAYLES SOLUTIONS, INC. Asset Management FC 100 100 100 100 United States
MC DONNELL Asset Management FC 100 100 100 100 United States
NATIXIS INVESTMENT MANAGERS, LP Holding company FC 100 100 100 100 United States
Natixis Advisors, LP Retail FC 100 100 100 100 United States
Natixis Distribution, LP Retail FC 100 100 100 100 United States
Mirova Global Sustainable Equity Fund (e) Asset Management FC 38 38 United States
DARIUS CAPITAL PARTNERS SAS Investment advisory services FC 60 60 60 60 France
DNCA Finance (p) Asset Management FC 92 82 83 72 France
Flextone Partners SAS (formerly Euro Private Equity France)* (aa) Asset Management FC 100 100 94 94 France
Mirova Management of venture capital mutual funds FC 100 100 100 100 France
AEW EUROPE ADVISORY LTD Asset Management FC 60 60 60 60 Great Britain
AEW EUROPE CC LTD Asset Management FC 60 60 60 60 Great Britain
AEW EUROPE LLP (a) Asset Management FC 60 60 60 60 Great Britain
AEW GLOBAL LTD Asset Management FC 60 60 60 60 Great Britain
MIROVA-ALTHELIA LIMITED Asset management FC 51 51 51 51 Great Britain
MV Credit LLP (y) Asset Management FC 100 100 Great Britain
PURPLE FINANCE CLO 1 (q) Securitization vehicle FC 89 89 100 100 Ireland
ASAHI NVEST INVESTMENT ADVISORY CO, LTD Retail Equity 49 49 49 49 Japan
NATIXIS INVESTMENT MANAGERS S.A. Retail FC 100 100 100 100 Luxembourg
DNCA Luxembourg (p) Asset Management FC 92 82 83 72 Luxembourg
ASG MANAGED FUTURES (w) Asset Management FC 25 25 53 53 Luxembourg
Ostrum AM Asia Ltd (formerly NAM Asia Ltd)* Asset Management FC 100 100 100 100 Singapore
EURO PRIVATE EQUITY (aa) Asset Management FC 100 100 94 94 Switzerland
MIROVA-ALTHELIA LIMITED, French Branch Asset management FC 100 51 100 51 France
Natixis Investment Managers Middle East Retail FC 100 100 100 100 United Arab
Natixis Investment Managers, Nordics filial Retail FC 100 100 100 100 Sweden
Natixis Investment Managers, Sucursal en Espana Retail FC 100 100 100 100 Spain
DNCA Finance Milan branch (p) Asset Management FC 92 82 83 72 Italy
AEW Asia Limited Australian branch Asset Management FC 100 100 100 100 Australia
NATIXIS PRIVATE EQUITY (f) Private Equity FC 100 100 100 100 France
DAHLIA A SICAR SCA (a) (f) Private Equity FC 100 100 100 100 Luxembourg
Ostrum Ultra Short Term Bonds Plus SI (C) EUR (a)* Insurance investment mutual
BPCE Prévoyance (formerly – ABP PRÉVOYANCE) Personal protection insurance FC 100 100 100 100 France
BPCE VIE (formerly – ABP VIE) Insurance FC 100 100 100 100 France
NATIXIS FINANCEMENT** (jj) Consumer finance FC 100 100 100 100 France
COMPAGNIE EUROPÉENNE DE GARANTIES ET CAUTIONS (jj) Insurance FC 100 100 100 100 France
ALTER CE (COMITEO) (h) Online service for Central works councils FC 70 70 France
FINANCIAL DATA Consolidated financial statements and notes 391Natixis Registration Document 2018
RENTABILIWEB SERVICES Internal services provider FC 100 100 100 54 France
NATIXIS LEASE IMMO** (jj) Real-estate leasing FC 100 100 100 100 France
NATIXIS BAIL** (jj) Real-estate leasing FC 100 100 100 100 France
OPCI NATIXIS LEASE INVESTMENT (a) (x) Real estate funds 100 100 France
OCEOR LEASE TAHITI** (jj) Equipment leasing FC 100 100 100 100 French
OCEOR LEASE NOUMEA** (jj) Equipment leasing FC 100 99 100 99 New Caledonia
OCEOR LEASE REUNION** (jj) Equipment leasing FC 100 100 100 100 France
SUD OUEST BAIL** (jj) Real-estate leasing FC 100 100 100 100 France
BUSINESS DATA INFORMATION Marketing and other services FC 42 42 41 41 Israel
COFACE DEBITOREN Receivables management and data FC 42 42 41 41 Germany
COFACE HOLDING ISRAEL Holding company FC 42 42 41 41 Israel
COFACE NEDERLAND SERVICES Receivables management and data FC 42 42 41 41 Netherlands
COFACE NORTH AMERICA HOLDING COMPANY Holding company FC 42 42 41 41 United States
COFACE NORTH AMERICA INSURANCE COMPANY Credit insurance and related services FC 42 42 41 41 United States
COFACE SERVICES NORTH AMERICA GROUP Holding company FC 42 42 41 41 United States
COFACE UK HOLDING Holding company FC 42 42 41 41 Great Britain
COFACE RUS INSURANCE COMPANY Credit insurance FC 42 42 41 41 Russia
COFACE SEGURO DE CREDITO MEXICO Insurance FC 42 42 41 41 Mexico
COFACE UK SERVICES LTD Receivables management and data FC 42 42 41 41 Great Britain
COFACERATING.DE Receivables management and data FC 42 42 41 41 Germany
COFACE SVERIGE – BRANCH (COFACE KREDIT) Insurance FC 42 42 41 41 Sweden
COFACE SWITZERLAND – BRANCH (COFACE EUROPE) Insurance FC 42 42 41 41 Switzerland
COFACE DANMARK – BRANCH (COFACE KREDIT) Insurance FC 42 42 41 41 Denmark
COFACE HUNGARY – BRANCH (COFACE AUSTRIA) Insurance FC 42 42 41 41 Hungary
LEID – BRANCH (COFACE AUSTRIA) Insurance FC 42 42 41 41 Lithuania
COFACE CZECH INSURANCE – BRANCH (COFACE AUSTRIA) Insurance FC 42 42 41 41 Czech Republic
COFACE SLOVAKIA INSURANCE – BRANCH (COFACE AUSTRIA) Insurance FC 42 42 41 41 Slovakia
FINANCIAL DATA Consolidated financial statements and notes 393Natixis Registration Document 2018
NATIXIS INVESTMENT CORP. Portfolio management FC 100 100 100 100 United States
NATIXIS IMMO EXPLOITATION (a) Real estate operations FC 100 100 100 100 France
FONCIÈRE KUPKA (a) Real estate operations FC 100 100 100 100 France
NATIXIS FONCIÈRE S.A. (formerly – SPAFICA) (a) Real estate investments FC 100 100 100 100 France
The change in the net book value of consolidated UCITS and seed money investments resulted in changes in percentage interests over the period, albeit (w) without affecting the principle behind fund consolidation (maintenance of the percentage interest above eligible thresholds). Total transfer of assets and liabilities of the Natixis Lease Investment real estate CIU by Natixis Bail in the third quarter of 2018.(x) Acquisition by NIM in the third quarter of 2018 of the MV Credit group, an asset manager specialized in European private debt.(y) Entity consolidated in the third quarter of 2018 after the percentage interest rose above eligible levels.(z) The ownership interest increased from 94% to 100% following the exercising of the last put options held by the structure’s managers in the third quarter of (aa) 2018.
Entity disposed of on November 8, 2018.(bb) Entity disposed of on November 23, 2018.(cc) In the fourth quarter of 2018, the three funds AEW Partners III, AEW VIF Investors and AEW VIF Investors II, used for fund management, were liquidated (dd) (non-operational shell structures).
Consolidated in the fourth quarter of 2018 after the percentage interest rose above eligible levels.(ee) Changes to the consolidation scope in the fourth quarter of 2018 as part of Natixis Investment Managers’ reorganization of its investment and distribution (ff) activities in Europe.
Information on entities that are exclusively controlled, jointly controlled or significantly influenced, and controlled structured entities that are not included in the consolidation scope, are available on the Natixis website at: Non-consolidated investments at December 31, 201819.2
Non-consolidated investments at December 31, 2018 representing 10% or more of the capital with a net carrying amount of €5 million or more: Entities Country Share of equity held (a)
FINANCIAL DATA Statutory Auditors’ report on the consolidated financial statements 395Natixis Registration Document 2018
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at December 31, 2018 and of the results of its operations for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union.
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We conducted our audit engagement in compliance with the independence rules applicable to us, for the period from January 1, 2018 to the date of our report and in particular we did not provide any services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014 or under the French Code of Ethics (code de déontologie) for statutory auditors.
In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period, as well as how we addressed those risks.
According to IFRS 9, the classification of a financial asset is based on the business model (collection, sale or mixed model) and the characteristics of contractual cash flows. Depending on the business model applied and the characteristics of its cash flows, as well as the type of model (debt or equity instruments), the financial asset is measured either at amortized cost or at fair value through other comprehensive income or profit or loss. In light of these criteria, financial instruments were analyzed as of January 1, 2018 in order to classify and measure them according to the procedures provided for by this new standard.
The procedures for taking account of macro-economica projections both in the deterioration criteria and in the measurement of expected losses.
The impact of the first-time application of IFRS 9 as at January 1, 2018 is presented in detail in Note 1 to the consolidated financial statements. The impact of the first-time application of IFRS 9 on opening equity totaled €132 million after the impact of deferred tax, including €125 million related to the implementation of the new impairment model (negative impacts). For more information, please see Notes 6.1 and 6.3 to the consolidated financial statements.
Our main work on first-time application impacts consisted in: Reviewing the accounting principles defined by the Group anda evaluating their compliance with provisions set out in IFRS 9; Verifying the comprehensiveness of the analysis carried out bya Natixis to determine the classification of financial assets; Testing, based on a sample of contracts, the analyses carrieda out by the Group of contractual cash flows and business models.
Our information system and data analysis specialists have taken note of the IT system introduced by Natixis to collect, process and control IFRS 9-related data, as well as the general IT controls rolled out within IFRS 9 applications.
FINANCIAL DATA Statutory Auditors’ report on the consolidated financial statements 397Natixis Registration Document 2018
As part of its financing activities, Natixis Group is exposed to credit and counterparty risks.
In accordance with the “impairment” component of IFRS 9, the Group recognizes impairment and provisions to cover expected loss risks (stage 1 and 2 outstandings) or known loss risks (stage
Impairment for expected credit losses (stage 1 and 2) is mainly determined based on models developed by Natixis which includes various input including probability of default, loss given default, forward-looking information, etc.
We considered these impairments to be a key audit matter as it is an area where judgment plays a significant role in the preparation of the financial statements both in terms of the determination of the inputs and procedures for impairment calculations in respect of outstandings in stages 1 and 2 and in the assessment of the individual provisioning level of outstanding loans in stage 3.
Assessing the relevance of these inputs used for thea calculation of impairments as at December 31, 2018; Performing counter calculations on the main loan books; a
We evaluated the design and tested the effectiveness of the key controls put in place by the Natixis Group in particular those related to: The identification of impairment indicators (such as past-duea payments) and the counterparty rating process; The classification of exposures in stage 3;a
In addition, we carried out a credit review, based on a sample of files selected on the basis of materiality and risk criteria, in which we: Took note of the latest available information on the situation ofa counterparties whose risk has deteriorated significantly.
The Natixis Group is involved in litigation before the courts and is the subject of investigations and requests for information from regulatory and tax authorities in different jurisdictions.
The assessment of the resulting legal and compliance (including tax) risks reflects management's estimates as of the reporting date.
The recognition of a provision and determination of its amount as well as the financial information disclosed require, by their very nature, the exercise of judgment, not least because of the difficulty of estimating the outcome and financial consequences of ongoing proceedings.
Our work also involved assessing the reasonableness of the assumptions and data used by management to estimate the amount of provisions recognized at the reporting date. In particular, we engaged tax law specialists to conduct a critical review of analyses of the tax risks identified by Natixis and the related provisions.
The determination of the fair value of some these derivative financial instruments is based on valuation techniques that include a significant amount of judgment in the choice of methodologies and data used: use of adequate internal valuation models;a determination of valuation inputs unobservable on the market; a estimation of additional valuation adjustments, to reflecta certain market, counterparty or liquidity risks.
At December 31, 2018, Level 2 financial instruments represented assets of €174,251 million and liabilities of €179,846 million. At December 31, 2018, Level 3 financial instruments represented assets of €6,975 million and liabilities of €3,415 million.
We examined the internal control procedures and systems for the identification, valuation and accounting of complex derivative financial instruments, in particular those classified in Levels 2 and 3.
We carried out these checks with the assistance of our valuation experts, with whom we also carried out independent valuations by examining, based on samples, the assumptions, methodologies and models used to estimate valuations. For 2018, this work focused on the valuation adjustments recognized by Natixis on certain products marketed in Asia.
As part of its insurance business, the Natixis Group recognizes technical reserves that represent its commitments towards policy holders.
We considered the valuation of these reserves to be a key audit matter insofar as they represent a significant amount in the Group’s accounts and since some of these reserves require the exercise of judgment in determining the assumptions (e.g. experience tables and behavioral statistics) or calculation models used.
We identified this subject as a key audit matter due to the sensitivity of deferred tax assets thus recognized to the assumptions and options adopted by management.
At December 31, 2018, €1,456 million was recognized on Natixis’ consolidated balance sheet in respect of deferred tax assets, including €866 million in tax loss carryforwards. Please refer to Notes 6.20, 6.23, 7.10 and 8.8 to the consolidated financial statements for more details.
With the help of our tax specialists we verified the appropriateness of the model adopted by management to identify existing tax loss carryforwards to be used, whether through deferred tax liabilities or future taxable profits.
FINANCIAL DATA Statutory Auditors’ report on the consolidated financial statements 401Natixis Registration Document 2018
We have also performed, in accordance with applicable professional standards in France, the specific verifications required by law and regulations of information about the Group disclosed in your Board of Directors’ Management Report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Responsibilities of management and those charged with governance for the consolidated financial statements
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional judgment throughout the audit and furthermore: identifies and assesses the risks of material misstatement ofa the consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; obtains an understanding of internal control relevant to thea audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control; evaluates the appropriateness of accounting policies used anda the reasonableness of accounting estimates and related disclosures made by management in the consolidated financial statements; assesses the appropriateness of management’s use of thea going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein;
402 Natixis Registration Document 2018 evaluates the overall presentation of the consolidated financiala statements and assesses whether these statements represent the underlying transactions and events in a manner that achieves fair presentation; obtains audit evidence regarding the financial information ofa persons or entities included in the scope of consolidation that he considers sufficient appropriate to express an opinion on the consolidated financial statements. The Statutory Auditor is responsible for the direction, supervision and completion of the audit of the consolidated financial statements as well as for the opinion expressed about those statements.
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming our independence within the meaning of the rules applicable in France such as they are set in particular by Articles L. 822-10 to L. 822-14 of the French Commercial Code (code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where appropriate, we discuss with the Audit Committee the risks that may reasonably be thought to bear on our independence, and the related safeguards.
FINANCIAL DATA Parent company financial statements and notes 403Natixis Registration Document 2018
See Note No. Off-balance sheet items – Commitments received 2018 2017
Commitments given to customers 32,387 28,613 35 Commitments on securities 8,758 10,332 35 Other commitments given 18,480 17,209
FINANCIAL DATA Parent company financial statements and notes 405Natixis Registration Document 2018
23 Interest and similar income 7,198 6,216 23 Interest and similar expenses (6,444) (5,314)
Funding/reversal of funding for general banking risks and regulated provisions 0 0
Securities portfolio2. 409 Property, plant and equipment and 3. intangible assets 410
Subordinated debt5. 411 Forward financial instruments 6. (futures and options) 411
Integration of foreign subsidiaries12. 413 Contributions to banking resolution 13. mechanisms 413 Guarantee mechanism for the assets 14. of the former GAPC hive-off vehicle 414
Corporate income tax16. 414 Changes in accounting methods and 17. comparability of financial statements 414
INFORMATION ON SHAREHOLDINGS NOTE 7 EXCEEDING THE DISCLOSURE THRESHOLD FOLLOWING INVESTMENTS IN FRENCH COMPANIES DURING 2018 419
FOREIGN EXCHANGE TRANSACTIONS, NOTE 36 FOREIGN CURRENCY LENDING AND BORROWING 440
ESTABLISHMENTS AND OPERATIONS IN NOTE 38 NON-COOPERATIVE STATES OR TERRITORIES WITHIN THE MEANING OF ARTICLE 238-0A OF THE FRENCH GENERAL TAX CODE 440
The financial statements for the fiscal year are presented in identical format to those for the previous fiscal year. Generally accepted accounting principles have been applied in compliance with the principle of prudence based on the following principles: going concern; a consistency of accounting methods; a principle of periodicity. a
Accrued interest is credited to the corresponding receivables item on the income statement.
FINANCIAL DATA Parent company financial statements and notes 409Natixis Registration Document 2018
Portfolios are reviewed quarterly and, where appropriate, loans in sectors or countries where economic circumstances suggest problems may arise are included in the base for performing loans provisions.
Loans on the watch list, for which a Basel default has been identified, are written down collectively by sector unless they are already subject to specific write-downs.
The applicable classification and measurement rules are as follows: purposes of the specialized management of a trading portfolio are also classed as securities held for trading. To be eligible in this category, these securities must, when initially recognized, be traded on an active market with easily obtainable prices representing actual and regularly occurring market transactions on an arm’s length basis.
Securities held for sale: securities which are not classified ina any other category are considered as securities held for sale.
Investment securities, shares in affiliates and othera long-term securities: Other long-term securities: investments made by Natixis inj the form of securities, with the intention of forging lasting professional relationships and creating a special relationship with the issuing company, but without any influence over the management of the corporate entities in which investments were made due to the low percentage of voting rights held.
The DCF method for measuring future cash flows is based on the establishment of business plans prepared by the management of the subsidiaries in question and approved by Natixis’ Senior Management. The discount rate on future cash flows is the result of: an average rate of return on an investment deemed to bea risk-free; an average credit spread on the market in which the subsidiarya is listed; an average beta as reflected in a sample of equivalenta companies.
Income, value adjustments and proceeds on disposal of securities portfolios are recognized as follows: income from variable-income securities is recognized as anda when received or when the payment has been subject to a resolution at a Shareholders’ Meeting; income from fixed-income securities is recognized based ona the accrual method; value adjustments and proceeds from the disposal of securitiesa are recognized under different headings depending on which portfolio they belong to: under “Net revenues” for securities held for trading andj securities held for sale, as a provision for credit losses on fixed-rate securities in thej portfolio of securities held for sale or for investment when adjustments in value relate to counterparty risk exposure, under net gains/(losses) on fixed assets:j for adjustments in the value of securities held for investment (excluding impairment for risk exposure to a counterparty) when there is a high probability of disposal of such securities held for investment due to unforeseen circumstances and for all proceeds from the disposal of securities held for investment, for investments in associates, investments in subsidiariesj and affiliates and other long-term securities.
Fixed assets are recognized at acquisition cost plus directly attributable transaction costs and borrowing costs accrued during any phase of construction or installation before they come into service.
Purchased software is amortized on a straight-line basis over its estimated useful life, which in most cases is less than five years. Internally generated software is amortized over its estimated useful life, which cannot exceed 15 years.
The notional amount of these instruments is recorded off-balance sheet for internal monitoring and regulatory purposes, but is not included in the published statement of off-balance sheet items. Details for these instruments are provided in the notes.
recognized over the period of the position. Unrealized gains and losses are not recognized.
For non-hedging activities, positions in a class of option or forward contract are marked to market at the reporting dates. Changes in market value are recognized directly in the income statement. However, for instruments traded on over-the-counter markets, gains or losses are recognized on the income statement only upon settlement of these transactions, without effect on the potential setting aside of provisions for the net risk incurred over the life of the instrument.
In accordance with Article 41 of the Amended Finance Act for 1997 (No. 97-1239 of December 29, 2007), amended by Article 121 of the Amended Finance Act for 2008 (No. 2008-1443 of December 30, 2008), of Article 5 of the Amended Finance Act for 2014 (No. 2014-1655 of December 29, 2014) and the agreement signed with the French State on May 10, 2017, Natixis manages certain public procedures on behalf of the French State, mainly consisting of loans and gifts to foreign States conferred in the framework of Public Development Aid, non-concessional loans to foreign States, gifts to the “Fund for Private-Sector Aid and Studies” and the stabilization of interest rates for export credit guaranteed by Coface.
The related transactions, some of which may be guaranteed by the State, are recognized separately in the financial statements. The State and other related creditors have a specific right over the assets and liabilities allocated to these institutional operations. The bank's assets and liabilities relative to these operations are identified on the balance sheet under each of the headings concerned with these operations.
In accordance with recommendation No. 2013-02 of the Autorité des Normes Comptables (ANC—French accounting standards authority) on rules for measuring and recognizing retirement and similar commitments, dated November 7, 2013 (which allowed the partial adoption of revised IAS 19 as adopted by the European Union in June 2012), Natixis chose to maintain the corridor method approach in the parent company financial statements.
Under this method, Natixis does not recognize the portion of net cumulative actuarial gains and losses that is lower than the greater of (i) 10% of the present value of the defined-benefit obligation and (ii) 10% of the fair value of any plan assets at the end of the previous reporting period. The portion of actuarial gains and losses outside the 10% “corridor” is therefore recognized over the average remaining working lives of the employees participating in the relevant plan.
In the event of changes to an existing plan or the implementation of a new plan, past service cost is recognized in income over the period until the benefits become vested.
The amount recognized as a provision in the balance sheet represents the present value of the obligation under defined-benefit plans at the closing date: minus any past service cost not yet recognized in income;j plus or minus any unrecognized actuarial gains or losses inj accordance with the corridor principle arising from: experience adjustments linked to demographic variables,j changes in actuarial assumptions,j differences between expected returns on plan assets andj reimbursement rights and their actual returns; minus the market value of plan assets at the closing date.j
The annual payroll costs recognized in respect ofa defined-benefit plans consist of: rights vested by beneficiaries over the period;j the interest cost reflecting the impact of unwinding thej discount on the obligation; the expected return on plan assets;j amortization of actuarial gains and losses and past servicej costs; the effects of plan curtailments and settlements.j
“Other long-term benefits” including long-service awards and deferred compensation payable in cash under Employee Retention and Performance Recognition plans are valued using the same actuarial method as that applied to post-employment benefits under defined-benefit plans, except that actuarial gains and losses are not subject to the corridor method and past service costs are recognized directly as an expense.
Cash-settled plans indexed to the share price give rise to the recognition of a payroll expense that is measured taking account of the share price on the balance sheet date and the likelihood of satisfying performance/and or service requirements. Where a service requirement exists, the calculated expense is recognized on a straight-line basis over the vesting period. When no service requirement exists, the expense is recognized immediately as a debt. The latter is then remeasured at each reporting date taking into account performance criteria and any changes in the value of underlying shares.
The corresponding expense recognized in the 2018 income statement was €14.9 million versus €42.1 million at
Plans settled in shares are recognized in accordance with CRC Regulation No. 2008-15, which provides for the recognition of a liability where there is the likelihood or the certainty that the obligation to grant shares generates an outflow in settlement without an offsetting provision: if the granting involves the issue of new shares, Natixis incursa no outflow and, as a result, no expense is recognized; if the granting involves the repurchase of shares or the grantinga of existing shares, an outflow will be recognized when the shares are issued to employees, without an offsetting provision. A provision is then set aside taking account of the entry cost of the shares or the share price on the balance sheet date if the shares have not yet been purchased and the probable number of shares granted to employees. The expense is recognized in stages over the vesting period.
The amount recognized as a provision should be the best estimate of the expenditure required to settle the present obligation at the reporting date. This amount is discounted when the effect of discounting is material. Provisions are reviewed at each reporting date and adjusted if necessary. Provisions recognized on the balance sheet, other than provisions to cover employee benefits and sector and country risks, mainly concern provisions for restructuring, provisions for disputes, fines and penalties and provisions for other risks.
On November 12, 2009, an arrangement was made by BPCE to protect a portion of the portfolios of the former GAPC hive-off vehicle(1) with retroactive effect at July 1, 2009. With this guarantee mechanism, Natixis was able to free up a significant portion of its equity allocated to segregated assets and to protect itself against the risk of loss from these portfolios subsequent to June 30, 2009. This protective arrangement was based on two mechanisms: a sub-participation in terms of risk which acted as a financiala guarantee on 85% of the nominal value of assets recognized as “securities held for investment”, “securities held for trading”, “securities held for sale” and “receivables”. Under this guarantee, Natixis is protected from the very first euro in default up to 85% of the default amount; the same time, Natixis bought an option from BPCE which, if exercised, would allow it to recover in 10 years’ time any net positive performance by the portfolio in exchange for payment of a premium.
two total return swaps (TRS), one in euros and another ina dollars, which transferred to BPCE 85% of the profit or loss recognized as from July 1, 2009. The instruments hedged by these TRS were mostly represented by “securities held for trading” and to a lesser extent by “securities held for sale”. At
It emerged in the fourth quarter that, for certain specific products managed on behalf of clients in Asia, the business model used led to the introduction of a hedging strategy that proved to be inadequate in the market conditions at year-end.
This situation explains the decrease in earnings recognized by Natixis’ Capital Markets activities in the fourth quarter of 2018, amounting to €86 million, plus €173 million of adjustments to cover the management of this stock of products.
Decision to transfer some of its Specialized Financial Services (SFS) business lines to BPCE
On September 12, 2018, Natixis and BPCE announced the planned sale by Natixis and acquisition by BPCE S.A. of the Factoring, Sureties & financial guarantees, Leasing, Consumer finance and Securities services business lines, for €2.7 billion.
This transaction, if completed, will contribute significantly to the achievement of Natixis and BPCE’s strategic plans. In particular, it will allow Natixis to step up the development of its asset-light model and BPCE to strengthen its universal banking model.
The sale should take place before the end of the first quarter of 2019, subject to the lifting of conditions precedent and in particular the completion of a capital increase by BPCE subscribed to by the Banque Populaire banks and Caisses d'Epargne and the regulatory approvals.
During the fourth quarter of 2018, the operational implementation of the project was prepared and the various stages which should lead to the completion of the transaction launched.
Interbank and similar transactions 108,160 135,065 * o/w subordinated loans 0 0 o/w reverse repurchase agreements 39,162 42,622 o/w accrued interest 148 77
Non-performing loans amounted to €49 million at December 31, 2018, compared with €63 million at December 31, 2017. At December 31, 2018, as at December 31, 2017, Natixis had no irrecoverable loans due from credit institutions.
Provisions for non-performing loans amounted to -€48 million at December 31, 2018, compared with -€61 million at
The amount of perpetual subordinated loans totaled €877 million at December 31, 2018 versus €875 million at December 31, 2017.
Restructured loans as defined in Note 1 amounted to €122 million in performing loans, before impairment, at December 31, 2018 versus €81 million at December 31, 2017. The amount after impairment stood at €119 million at December 31, 2018. No provision for impairment had been recorded at December 31, 2017.
Restructured loans as defined in Note 1 recorded as non-performing or irrecoverable loans amounted to €1,014 million before impairment at December 31, 2018 versus €1,575 million at December 31, 2017. The amount after impairment amounted to €721 million at December 31, 2018 versus €1,151 million at
Provisions for non-performing loans totaled -€859 million at December 31, 2018 versus -€969 million at December 31, 2017 (of which -€215 million at December 31, 2018 versus -€240 million at December 31, 2017 relating to provisions for irrecoverable loans).
Of which securities loaned for €25,669 million at December 31, 2018 versus €17,079 million at December 31, 2017.(b)
- a reversal of provisions on Coface shares for €13 million; - a reversal of provisions on Natixis Asia Ltd shares for €11 million; - provisions on Contango Trading S.A. shares for -€71 million; - provisions on Natixis Factor shares for -€69 million.
FINANCIAL DATA Parent company financial statements and notes 419Natixis Registration Document 2018
Breach of threshold of 5% of share capital % at 31/12/2018 Number of shares at 31/12/2018
A – BREAKDOWN OF INVESTMENTS WITH A GROSS VALUE OF OVER 1% OF THE REPORTING COMPANY’S CAPITAL - Subsidiaries and investments (holdings in excess of 10%) COFACE S.A.
1 place Costes et Bellonte – CS20003 92276 Bois-Colombes L 307,798 EUR 884,393 EUR 41.24% Compagnie Européenne de Garanties & Cautions 16 RUE HOCHE – TOUR KUPKA B – TSA 39999 92919 LA DEFENCE CEDEX U 160,996 EUR 175,814 EUR 100.00% NATIXIS WEALTH MANAGEMENT 115 RUE MONTMARTRE
NATIXIS ALGÉRIE IMMEUBLE EL KSAR – ZONE D'AFFAIRES MERCURE – LOT 34/35 BAB EZZOUAR
NATIXIS Pfandbriefbank AG Im Trutz Frankfurt 55 D-60322 Frankfurt am Main U 120,000 EUR 5,500 EUR 100.00% CONTANGO TRADING S.A.
NATIXIS TRUST 51 AVENUE JOHN F. KENNEDY L-1855 Luxembourg U 609,865 EUR 126,347 EUR 100.00% NATIXIS Marco 47 QUAI D'AUSTERLITZ
Of which subsidiaries and investments not covered under A.* Excluding income of the year.(A) 2018 fiscal year.(a)
FINANCIAL DATA Parent company financial statements and notes 421Natixis Registration Document 2018
A – BREAKDOWN OF INVESTMENTS WITH A GROSS VALUE OF OVER 1% OF THE REPORTING COMPANY’S CAPITAL - Subsidiaries and investments (holdings in excess of 10%) NATIXIS PAYMENT SOLUTIONS 30 AV PIERRE MENDÈS FRANCE
B – TOTAL DISCLOSURES ON OTHER SUBSIDIARIES AND INVESTMENTS* 21 – French companies (aggregate)
FINANCIAL DATA Parent company financial statements and notes 423Natixis Registration Document 2018
Average purchase price Amount sold or canceled Sale price Average sale price Closing number of shares
Interbank and similar transactions 96,850 124,254 * o/w repurchase agreements 27,966 38,314 o/w accrued interest 113 125
CUSTOMER TRANSACTIONS 113,291 108,125 * o/w repurchase agreements 72,466 66,235 o/w accrued interest 78 58
Securities transactions 75,270 62,296 o/w trading securities, liabilities on borrowed securities 54,860 36,508 o/w trading securities, other liabilities on securities 20,395 25,781 o/w accrued interest 15 7
(in millions of euros) 01/01/2017 Charges Reversals Translation adjustments Other (a) 31/12/2017
Future salary increases are estimated by grade based on a constant population and a three-year average. At December 31, 2018, this average (including inflation) was 2.28%, the same as at December 31, 2017.
The remaining average working lives of employees, for all benefits, is 12.0 years versus 12.8 years at December 31, 2017.
Benefits vested over the period 1 8 3 50 62 2 7 3 45 57
Expected return on plan assets, gross (2) (1) (3) (2) (2)
Plan amendments recognized over the period 3 (2) 1 3 1 4
Recognized actuarial gains and losses over the period 3 (1) 1 3 1 13 14
Change in obligation taken to income 1 3 (2) 9 11 (2) (61) 2 (18) (79)
Actuarial gains and losses/return on plan assets 13 (5) 8 (7) (1) (8)
TOTAL NET OBLIGATION AT DECEMBER 31 39 29 32 89 189 39 44 34 84 201
Debt representing 10% of the total amount of subordinated debt: Date of issuance Maturity date Currency Amount of issuance Frequency of coupon
27/06/2014 27/06/2026 EUR 900,000,000 Quarterly Euribor 3M+2% No redemption clause 900,000,000.00 Non-convertible Unsecured creditors 29/07/2015 29/07/2027 EUR 1,000,000,000 Quarterly Euribor 3M+230bp No redemption clause 1,000,000,000.00 Non-convertible Unsecured creditors
The non-voting shares issued by Natixis in November 1985 may only be redeemed if the Company is liquidated but may be eligible for buyback under the terms set out by the law dated
Financing commitments given to: Guarantees provided on behalf of: Under Article 1124-61 of regulation No. 2014-07 on transactions reporting scope (wholly-owned subsidiaries), or entered into between related parties, Natixis has no additional information to under normal market conditions. disclose, since these transactions are either excluded from the
Any losses transferred to the parent company give rise to a provision for restitution of corporate tax, deemed to offset the additional Group tax incurred if subsidiaries return to profit, and their tax contribution is decreased by the amount of prior year losses.
Final notice was received by Natixis during the 2018 fiscal year and the accounting impacts were factored in the accounts at
Natixis’ German subsidiary was subject to an audit covering the 2009 to 2014 fiscal years. At December 31, 2018 Natixis Germany received a draft notification from the German tax authorities. The impact of this reassessment was recognized at
Interest and similar income and expenses 239 226 (29) 315 2 753 400 216 118 167 1 902
Fee and commission income and expenses (6) 69 240 56 359 239 64 175 51 529
Net income from investment and trading portfolio transactions 1,332 189 1 (11) 11 1,522 1,422 190 3 (20) 1 1,596
OTHER INSTRUMENTS 402,877 339,642 o/w hedges of interest rate instrumentsa 25,352 22,906 of exchange rate instrumentsa 70 3 of other instrumentsa 7,644 2,383 o/w macro-hedges 161,665 338,391 o/w isolated open positions 258 556
FINANCIAL DATA Parent company financial statements and notes 439Natixis Registration Document 2018
FINANCIAL DATA Parent company financial statements and notes 441Natixis Registration Document 2018
It is specified that, in the event that it becomes clear that the Directors will adapt the text of the draft resolutions to include (i) transfer of the Specialized Financial Services division to BPCE a dividend payment reduced to the “ordinary” portion and (ii) the (operation “Smith”), on which the payment of the extraordinary payment at a later date (following the date of the completion of portion of the dividend depends, cannot be completed before the operation “Smith”) of an extraordinary dividend, corresponding date of the General Shareholders' Meeting, the Board of to the “extraordinary” portion.
PricewaterhouseCoopers Audit: the main engagementsa conducted in fiscal year 2018 concerned certifications and comfort letters issued in connection with issuance programs, reviews of compliance procedures and services provided as part of restructuring measures.
We considered individual impairment to be a key audit matter as it is an area where estimation plays a significant role in the preparation of the financial statements.
Advances to banks and customer loans represented €210,265 million at December 31, 2018. Individual impairment losses amounted to €907 million at
In addition, we carried out a credit review, based on a sample of files selected on the basis of materiality and risk criteria, in which we: took note of the latest available information on the situation ofa sensitive and non-performing counterparties; performed independent analyses of the assumptions used anda the estimates of provisions drawn up by management based on information provided by the institution and external data; verified that estimated impairment allowances were correctlya recognized.
Provisions for litigation and other risks amounted to €950 million at December 31, 2018 (see Note 16 to the parent company financial statements).
FINANCIAL DATA Statutory Auditors’ report on the parent company financial statements 445Natixis Registration Document 2018
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law and regulations.
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents on the financial position and the financial statements provided to shareholders, with the exception of the matter below.
The fair presentation and the consistency with the financial statements of the information relating to payment terms mentioned in Article D. 441-4 of the French Commercial Code leads us to make the following observation: as indicated in the management report, this information does not include banking transactions and related transactions, as your Company considers that they do not fall within the scope of information to be reported.
As regards the information provided in accordance with the requirements of Article L. 225-37-3 of the French Commercial Code relating to the compensation and benefits received by the directors and any other commitments made in their favor, we have verified the consistency of that information with the financial statements or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies controlling your Company or controlled by it. Based on this work, we certify the accuracy and fair presentation of this information.
In preparing the parent company financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations.
As specified in Article L. 823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional judgment throughout the audit and furthermore:
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming our independence within the meaning of the rules applicable in France such as they are set in particular by Articles L. 822-10 to L. 822-14 of the French Commercial Code (code de commerce) and in the French Code of Ethics (code de déontologie) for statutory auditors. Where appropriate, we discuss any risks to our independence and the related safeguard measures with the Audit Committee.
As part of its duties, and in keeping with the French Ministerial Order of November 3, 2014 on internal control by companies in the banking sector and European supervision by the Single Supervisory Mechanism, Natixis’ Internal Audit Department assesses the internal control procedures, with a particular focus on accounting and financial procedures, of all the consolidated entities, whether or not they have credit institution status.
For accounting, permanent and periodic controls apply to the completion and/or monitoring of: for justifying accounts, accuracy and veracity checks, such asa the procedures for management/financial account reconciliation (outstandings and income statement), reconciliation of cash accounts and checking and clearing of suspense items; consistency checks through analytical reviews;a checks to make sure income and expenses are allocated to thea correct period; verification that the presentation complies with accountinga rules; correct processing of specific transactions in line with thea relevant principles; verification of financial information (notes to the financiala statements, items of financial communication); adjustment of anomalies identified at the time of thesea controls as well as the corresponding analyses and documentation.
In addition to the operational control tasks delegated to it, the Regulatory and Accounting Review team also fulfills the following duties in respect of the organization of the control function within the Group: 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, in accordance with the policy established by Groupe BPCE; coordination of the control system within the subsidiaries,a working with the Review officers appointed by each of the local financial, compliance or risk departments. This takes place through quarterly Review committee meetings, themed workshops, and bilateral cooperation with international entities and platforms; monitoring and implementing an accounting and regulatorya control environment within each entity by collecting and operating a set of periodic reporting dashboards. The results of these dashboards are then sent to each entity, including a process for alerting the finance, compliance or risk officers.
BUSINESS LINE CONTRIBUTIONS 6.3 TO GREEN AND SUSTAINABLE GROWTH 463 Sustainable growth: financing the 6.3.1 transformation in society 463
Green growth: financing the energy 6.3.2 transition and combating climate change 469
MANAGING OUR DIRECT 6.5 ENVIRONMENTAL IMPACT 485 Environmental management of Natixis 6.5.1 buildings 485
EMPLOYEE MOBILIZATION6.6 492 Human Resources policy and diversity 6.6.1 management 492
REPORT BY ONE OF THE 6.8 STATUTORY AUDITOR ON THE CONSOLIDATED NON-FINANCIAL PERFORMANCE REPORT CONTAINED IN THE MANAGEMENT REPORT 508
In accordance with the new French regulation on extra-financial reporting (Déclaration de performance extra-financière), the following outlines Natixis' business model and its main impacts on ESR issues.
High long-term ratings Moodys : A1 Standard and Poor’s : A Fitch rating : A+
€808 bn assets under management at the end of 2018 €50.6 bn underwritten in 2018 €60.1 bn of assets under management in life insurance at the end of 2018
Drawing on a strong, widely recognized range of expertise, Natixis’ objective in terms of ESR requires the commitment of all of its business lines (CIB, Asset Management, Insurance, Services) and functions, and incorporates all aspects of ESR: environmental, social/societal and economic concerns.
In accordance with the new requirements of the non-financial performance report (the “DPEF” under French regulation),
Natixis contributed to Groupe BPCE’s risk rating policy, based on the risk analysis methodology established by the Group Risk, Compliance and Permanent Control division, which established: a universe of twenty ESR risks broken down into three types:a governance, products and services, and internal operations. These risks were identified in terms of regulations, industry practice, ESG rating agencies’ assessment criteria and requests from clients and investors; a method for ranking the risks by their frequency and severity;a an assessment of the corresponding risk management system.a
Firstly, the exercise carried out for Natixis made it possible to position risks in a matrix in order to identify priorities.
The analysis performed for Natixis identified eight major ESR issues associated with risks and/or opportunities in terms of ethics, and social and environmental responsibility.
Executives diversity Shareholder’s rights Clients protection Procurement Direct environmental footprint Physical risks
Nature of ESR issue Risk identified Risk management system Key performance indicators See chapter
Assets under management in responsible investment products (incorporation of ESG criteria, solidarity investments)
Integration of the protection of natural capital in our activities 6.3.2.2 6.3.3
The main ESR risks were identified and were already managed in internal risk management systems, in particular the Risk Appetite Framework, which was reviewed in 2018.
performance (liquidity, solvency and profitability), its strategic development or its reputation.
Conduct, non-compliance and cybersecurity risks are recognized as material risks that could significantly impact Natixis’ financial
Environment and climate risk has been identified as a strategic and reputational risk and will be subject to a materiality assessment in 2019.
Since 2017, Natixis’ ESR policy has been steered by a dedicated ESR Department reporting to Natixis’ Corporate Secretariat, a member of the Natixis Senior Management Committee.
To further its analysis and oversee the implementation of its ESR strategy, the ESR team regularly holds an ESR Steering Committee, attended by around twenty senior managers from the main business lines and corporate functions. This Committee discusses ESR best practice for the development of products and services and for internal operations.
ESR correspondents have been appointed in the overseas offices in 2018 to apply the ESR policy in all geographies.
Natixis’ ESR strategy is based on a set of international agreements and consultations within the banking industry, including: the United Nations Global Compact since 2007;a the Carbon Disclosure Project (CDP) since 2007;a the United Nations Principles for Responsible Investmenta (UN-PRI) since 2008; the Equator Principles since 2010;a the OECD Guidelines for Multinational Enterprises;a the Green Bond Principles and the Social Bond Principles (ICMA);a the Climate Bonds Initiative;a the Diversity Charter since 2009;a the Responsible Purchasing Charter since 2017.a
In 2018, Natixis also decided to involve all its business lines in measures to preserve biodiversity by joining act4nature, an initiative bringing together French businesses from all sectors of activity. Under this initiative, Natixis has undertaken to incorporate nature in its business strategy and to take real action to provide solutions to preserve and restore biodiversity, ensure that natural resources are used sustainably and that the benefits derived from nature are distributed fairly.
The 193 member states of the United Nations adopted the SDGs at the Sustainable Development Summit in New York in 2015. The SDGs form the 2030 Agenda for sustainable development, a set of 17 global targets aimed at combating inequality, exclusion and injustice, fighting climate change, protecting biodiversity and ending extreme poverty.
Mindful of its role in achieving these goals, Natixis has identified 11 SDGs to which it already makes a material contribution that is set to expand in the years to come, through financing and investments or in its own daily operations.
Financing of sustainable infrastructures (clean transportation, and oil in the Arctic
Land Degradation Neutrality Fund”, dedicated to neutrality in terms of land degradation
NON-FINANCIAL PERFORMANCE REPORT Strategic outlines and organization of the ESR policy 457Natixis Registration Document 2018
Given the importance placed on ESR ratings by investors, Natixis has increased its communications with ESR rating agencies in an effort to establish more consistent and structured dialog while addressing the areas of focus identified to guide its own ESR initiatives.
Rated by various ESG rating agencies, Natixis has recorded solid performances in social, environmental and governance areas, earning its way onto the major ESR indices (Euronext Vigeo-Eurozone, Stoxx Global ESG Leaders, etc.).
The Code of Conduct published in March 2018 summarizes the general rules of conduct that apply at Natixis in a single document. It has three clear objectives: to develop a shared corporate culture and encourage membersa of staff to think about the principles that should be applied and followed in terms of their conduct; to manage risks, always taking into account long-term valuea creation and adapting activities’ risk profiles accordingly; and to meet the expectations of Natixis’ stakeholders (its clients,a regulators, shareholders, and investors).
All the Natixis business lines and support functions are in charge of adapting the principles of the Code to their activities. Accordingly, conduct matters have been included in the governance of different Group entities via existing or newly created Conduct Committees.
Compliance with the Code of Conduct is, among others, ensured by the observance of internal policies and procedures. The Code of Conduct is a master document and internal policies and procedures must be consistent with its provisions.
The policies and procedures that apply the principles of the Code of Conduct include: risk policies (see section 3.2.3)a the corpus of procedures issued by the Compliance Departmenta (procedures on anti-corruption, anti-money- laundering/terroristfinancing, conflicts of interest, professional ethics, etc.) relating to non-compliance risks (see section 3.2.8); ESR sectorial policies (see section 6.4.1) a
With this charter, Natixis ensures the integrity and probity of its lobbying activities in compliance with its Code of Conduct and applicable laws, rules and regulations. It applies to all entities controlled by Natixis and to their employees. It covers lobbying and advocacy activities, which are coordinated by Natixis’ Public Affairs Department and its parent company, BPCE. Natixis believes that dialog and respectful discussion of diverging interests are necessary to ensure the correct functioning of the democratic process. To this end, it engages in dialogue with public and government officials on proposed legislative and regulatory requirements that impact Natixis’ business as well as its ability to serve its clients.
Natixis is registered with the competent European and national authorities and undertakes to observe the applicable codes of conduct. It has been included in the European Transparency Register since 2017 and is also registered in the French public register of lobbyists with the High Authority for Transparency in Public Life.
Finally, the code of conduct and the policies and procedures that complement its principles does not have a rule for every situation: it is the responsibility of each individual to exercise his or her personal judgment with regard to their duties and to demonstrate meticulous professional ethics. To do so, the following conduct checklist is provided.
The whistleblowing procedure is an integral part of the Conduct system. It allows any member of staff who becomes aware of an inappropriate act or behavior (illegal acts, unethical behavior, violation of the Code of Conduct or the applicable policies and procedures) to inform the competent body within Natixis and receive the guarantees and protection set forth bylaws and regulations.
This procedure is based on a global policy that forms the minimum standard to be applied across Natixis Group. At Natixis S.A., a procedure published in July 2018 updated the existing policy to take into account the latest regulatory changes.
The whistleblowing procedure is open to: all individuals with a current employment contract witha Natixis, regardless of the type or duration of the contract; employees of external companies (suppliers or subcontractors)a who work with Natixis either on a permanent or irregular basis.
The procedure provides protection to the whistleblower (who may in no circumstances be subject to disciplinary action or legal proceeding provided they have acted impartially and in good faith) and ensures the information is treated appropriately and in full confidence, in accordance with the applicable regulations.
The SDGs are universal, inclusive, interconnected, ambitious targets that provide all of Natixis’ business lines with a framework for measuring the impact of their activities, a means of raising employee awareness, a way of encouraging cooperation between business lines, and a source of business opportunities. Natixis has identified the 11 most relevant SDGs in terms of its financing and investment activities, and these goals guide the development of its products and services.
Publication of the “Solving the Sustainable Development Goals Rubik’s Cube” report In September 2018, to mark the third anniversary of Agenda 2030, Corporate & Investment Banking’s Green & Sustainable Hub (Green Hub) published its first report, entitled, “Solving the Sustainable Development Goals Rubik’s Cube—An impact-based toolkit for issuers and investors”(1). This report describes an innovative method for using the SDGs as a reference framework. It identifies eight tools for incorporating an assessment of an activity’s impact on the Sustainable Development Goals in its strategy, financing or asset management approach. The method was tested by three Natixis clients (the Ile-de-France region, ICADE and Essilor) which took part in detailed case studies. The Green Hub was invited to present its conclusions and methodology to the inter-ministerial “Agenda 2030 Roadmap” working group at the French Ministry of the Ecological and Inclusive Transition, which brings together representatives from the private sector and civil society.
A growing number of Natixis’ asset 6.3.1.1 management companies observe the Principles for Responsible Investment (PRI)
In 2018, Natixis Investment Managers, which groups the expertise of 26 asset management companies around the world
The Principles for Responsible Investment (PRI) were published by the United Nations in 2006 as a voluntary commitment encouraging institutional investors and asset managers to incorporate ESG in the management of their portfolios. As of
Thirteen Natixis Investment Managers affiliates, which together hold 72% of total assets managed by Natixis Investment Managers affiliates, have signed the PRI, namely AEW, Alliance Entreprendre, DNCA, Flexstone Partners, Investors Mutual Limited, Loomis Sayles, Mirova, MV Credit, Naxicap Partners, Ossiam, Ostrum AM, Seeyond, and Seventure Partners.
Natixis was one of the first banks besides the founding members to endorse the PRB on December 10, 2018, as part of its membership of the UNEP-FI. By endorsing the PRB, Natixis undertook to sign the principles when they will be officially confirmed at the end of a six-month public consultation period, in the second half of 2019.
Signatory banks will publicly acknowledge their positive and negative social, environmental and economic impacts. The banks agree to set public targets to address their main negative impacts and to step up their positive impacts in order to contribute to the Sustainable Development Goals (SDGs) and align with the Paris Agreement on climate change.
By endorsing the PRB, Natixis has pledged to: align its banking activities with the Paris Agreement and the1. United Nations SDGs; step up its positive impacts and minimize its negative2. impacts (via its financing and direct activities); act responsibly towards its clients;3.
This decision is a natural extension of the commitments already made by Natixis, which has been adjusting its activities to make a real positive contribution to the environment and society for several years now.
The affiliates of Natixis Investment Managers offer a range of solutions built on the conviction that ESG criteria can play an important role in identifying potential risks, seizing opportunities and generating returns for investors. Different levels of ESG criteria are available in the investment strategies applied by fund managers: ESG analysis: recognition of ESG criteria in the issuer analysis;a
NON-FINANCIAL PERFORMANCE REPORT Business line contributions to green and sustainable growth 465Natixis Registration Document 2018
In addition, Natixis Assurances has gradually incorporated ESG criteria at the start of its investment process to exclude from its discretionary portfolio management mandates and dedicated funds all issuers deemed to be defying the Sustainable Development Goals. As well as excluding the sectors and companies listed above, it removes issuers with a negative rating in Mirova’s research from its investment universe. Natixis Assurances’ life insurance investments have had no exposure to these issuers since the end of 2017.
Ostrum AM offers its customers socially responsible products on all its asset classes with a range of investment strategies, representing a total of €54.1 billion, or 21% of its total assets under management: Best in class & Positive screening: choice of best rateda issuers from an investment universe in which issuers with a high ESG risk profile are excluded; Best in universe: choice of issuers from all sectors with thea best ESG performance in the investment universe; Enhanced exclusions: exclusion of issuers with the highest ESGa risk profiles; Smart carbon strategies: choice of issuers with a limiteda carbon impact.
ESG criteria by allocating investments based on issuers’ ESG risks and excluding the riskiest issuers. This fund totals €653 million, or 8% of Seeyond’s total assets under management.
Pure equity management strategy that selects stocks based on their volatility and correlation profiles so as to reduce the overall volatility of the(2) equity portfolio.
DNCA manages €445 million in assets in SRI certified funds (European equity, international equity, European infrastructure equity). The certification of three further funds is in progress. The six funds are part of the Beyond range.
The industry-wide working group completed its work in 2018 and the certification process should be launched following the publication of a ministerial decree to this effect in 2019. AEW will seek certification for some of its funds.
In addition, two funds managed by AEW (Logistics and AEW UK Core Fund) were awarded the Green Star 2018 in the Global Real Estate Sustainability Benchmark (GRESB), which covers topics relating to the environment (measures to reduce the environmental footprint), social aspects (relationships with stakeholders and the social impact of activities) and governance (policies and procedures). A renovated building was also awarded the WELL Building Standard certification for employee well-being.
Natixis Assurances systematically includes an ESG-certified unit-linked product (SRI or TEEC certification) in all new life insurance policies. These certified unit-linked products represent €284 million end of 2018.
Several affiliates manage funds with solidarity investment certification (see 6.3.1.4 Solidarity investment) or climate certification (see section 6.3.2 Green growth: financing the energy transition and combating climate change).
Ostrum AM, Mirova and Seeyond place shareholder engagement at the center of their responsible investor approach.
Statement by members of the Institutional Investors Group for Climate Change (IIGCC) to encourage Royal Dutch Shell to better align its policies(1) with the Paris Agreement (18/05/2018).
Initiative targeting the Round Table on Sustainable Palm Oil (RSPO) by Ceres (30/07/2018).(3)
Natixis offers employee savings plans with SRI and/or Finansol (solidarity investment) certification via Natixis Interépargne, a pioneer in responsible, solidarity-based employee savings. Natixis Interépargne was the first company to offer its customers responsible and solidarity employee share ownership plans (SRI and Finansol certified respectively), even before it was legally required to do so.
Mirova’s Insertion Emplois Dynamique fund, which was launched climate scenario implied by its investments (expected in 1994, was one of the first solidarity-based “90/10” funds temperature rise) estimated at +1.5°C in June 2018, compared dedicated to job creation in France. The solidarity allocation (10% with +4.4°C at the end of 2014. The fund has €576 million in of assets) finances structures with a positive social impact across assets under management.
All investors that signed the first Accord on Fire and Building Safety in Bangladesh: the_accord.pdf
All textile companies that joined the first Accord signed in 2013.(2)
Strong growth in the Mirova Solidaire fund The Mirova Solidaire fund recorded strong inflows in 2018, at €20 million, and its assets under management amounted to €183 million at the end of the year. The fund extended its investments to emerging countries for up to 5% of net assets, whereas previously it invested only in projects or unlisted companies with a high social and/or environmental impact in the euro zone. The fund supports microloan providers via the inclusive financing solution, Helenos, based on a public-private partnership that fosters the growth of individual enterprises and solidarity companies founded by persons excluded from the job market. As an example, Helenos financed the FAER foundation in Romania which works in rural areas of Transylvania. It mainly helps farmers invest to expand their activities.
Natixis supported the development of several emblematic social impact financing solutions in 2018: social bonds, loans for projects with social goals, fixed income structured products.
The inaugural issuance of €300 million in green bonds by BPCE in 2015 was followed by the issuance of social bonds. In September 2018, BPCE and Natixis successfully issued the first social bond for local economic development. This issue was part of Groupe BPCE’s Sustainable Bond Framework and it follows two other human development bonds issued earlier in 2018 in Japanese yen.
In 2018, Natixis participated in the issuance by the African Development Bank of a 10-year social bond for €1.25 billion. This bond finances projects for vulnerable people in Africa: excluded and unemployed persons with no access to healthcare.
In 2018, Natixis jointly steered and coordinated a working group on this subject within the French Observatory for Corporate social responsibility (ORSE). It published an initial report on ways to develop the social bonds market and will continue its work in 2019.
Fixed income structured issue to finance education Natixis’ Corporate & Investment Banking Green Hub and Sustainable Development Solutions Network (a United Nations initiative) have developed a basket of sovereign bond issues focused on the Quality Education SDG. This innovative investment solution finances governments making the most efforts to achieve their education goals. The methodology selects sovereign issuers based on the budgets they assign to achieve their education goals and applies a governance filter.
The product was developed in 2018 and will be fully sold in 2019.
The GWF is an internal capital allocation model that encourages financing solutions with the most positive impact on the environment and climate change while anticipating potential changes in regulations. It adapts the expected return on different financing solutions depending on their impact on the environment and climate change by using a favorable or adverse adjustment to weighted assets. It is a purely internal model that will have no impact on prudential risk-weighted assets.
In 2018, Natixis once again played a leading role in renewable energy financing, in particular in Latin America and in offshore wind farms in Europe. Natixis is the world’s number five Mandated Lead Arranger in renewable energy financing and is the leading arranger in the Middle East and Africa region(3).
In 2018, CIB’s infrastructure financing teams arranged 20 new deals totaling €1.786 billion, representing installed capacity of 7152 MW: six onshore wind farms with a total capacity of 1,726 MW;a five offshore wind farms with a total capacity of 2,749 MW;a nine PV and concentrated solar power projects with a capacitya of 2,677 MW.
Renewable energy accounted for 71% of total financing granted by CIB in the electricity production sector.
TOTAL INSTALLED CAPACITY OF RENEWABLE ENERGY ■ PROJECTS FINANCED BY NATIXIS PER YEAR
At end-2018, renewable energy accounted for 68% of total financing granted by CIB in the electricity production sector.
The portfolio breaks down as follows: REGIONAL BREAKDOWN OF THE RENEWABLE ENERGY ■ PORTFOLIO (% OF AUM)
SECTORIAL BREAKDOWN OF THE RENEWABLE ENERGY ■ PORTFOLIO (% OF AUM)
In 2018, Natixis Energeco, which specializes in renewable energy financing in France, financed 28 new projects totaling €350 million. The projects are located in mainland France and the overseas territories, and will provide additional renewable energy capacity of 233 MW.
Coordinator for the Neoen IPO, named IPO of the Year by Euronext Natixis was Global Coordinator for the initial public offering of Neoen, a major player in the renewable energy sector. The deal totaling €697 million was named IPO of the Year by Euronext and ranked in the top 10 IPOs in Europe in 2018 (1). Neoen was founded in 2008 and is an independent electricity producer specialized in solar and wind power and actively involved in developing cutting-edge storage solutions. The group has assets in nine countries in EMEA, Australia and Latin America, with total installed capacity of 1.8 GW.
fund managed by Mirova aims to raise €500 million and the first fundraising phase was held in October, attracting €250 million, including €30 million from Natixis Assurances.
The previous fund, Mirova Eurofideme3, which completed its fundraising in 2016 with €353 million, is now almost fully invested in a diversified portfolio of European renewable energy projects. With its Eurofideme range of funds, Mirova has financed over 170 projects representing installed capacity of 1.8 GW over the past fifteen years.
The French Ministry for the Environment, Energy and Oceans created the TEEC label in 2015. Certified funds must respect obligations in terms of the activities they finance (renewable energy, construction, circular economy, green transport, agriculture), excluded activities (fossil fuels and the nuclear industry), and how they manage ESG controversies. They must also measure their effective impact on the energy and ecological transition.
In 2018, Natixis considerably expanded its financing and arrangement business in the sustainable real estate sector, with various solutions including mortgage loans, green bonds, securitization vehicles, and green loans. It closed eleven deals, including two green loans that financed over 114,000 m² in green real estate.
The DUO towers: the first green certification for a commercial real estate loan in Europe In February 2018, Natixis obtained the first ever green certification for a commercial real estate loan in Europe for the DUO towers project in Paris—a planned 90,000 m² tower with exceptional levels of energy efficiency. Climate Bonds Initiative awarded the Climate Bond Certified label to the €480 million loan facility set up to finance the project. DUO mandated Oekom Research AG to verify the Low Carbon Buildings Commercial Properties (real estate) standard and report on follow-up of environmental certification, energy consumption and CO2 emissions. Natixis was retained to complete the certification process.
AEW aims to reduce the energy consumption of part of its portfolio by 38% by 2020. The Greco (Grenelle Compliance) project has reduced energy consumption by 30% in properties for which investors have approved the recommendations, representing 110 properties with a total floor space of 713,000 m².
NON-FINANCIAL PERFORMANCE REPORT Business line contributions to green and sustainable growth 473Natixis Registration Document 2018
The consumption monitoring system has also reduced energy use by around 15% and water consumption by 59,000 m3 on the 90 sites fitted with the system since 2012.
Mirova factors in sustainable mobility by encouraging investments in securities issued by vehicle manufacturers and equipment suppliers that propose technical solutions to solve the challenge of offering more and more people mobility solutions while reducing the environmental and social impacts linked to transport. In 2018, Mirova published its conclusions in a report(2)
on the ESG issues facing vehicle manufacturers and equipment suppliers, setting out the solutions and risks identified in order to optimize the impact of its investments.
In 2018, Natixis arranged 18 green bond issues, confirming its solid positioning on this market, especially in Europe, where Natixis is the number three issuance arranger in euros(4), and in Asia, where it was systematically awarded the role of Green Structuring Advisor.
As well as green bond issuance, in 2018, Natixis also offered two types of green loans: loans earmarked to finance environment-related projects (term loans) and syndicated loans meeting ESG criteria (green revolving credit facilities or green RCF). This activity expanded sharply in 2018, with twelve deals finalized.
Innovation in 2018 €4 billion green RCF for EDF Natixis was Green Structuring Advisor on an innovative transaction for EDF. The syndicated loan’s pricing mechanism incorporated the ESR goals set in EDF’s CAP 2030 strategic plan: direct CO2 emissions, use by EDF clients of its online consumption monitoring tools, increase in its fleet of electric vehicles.
A number of innovative sustainable investment solutions were produced in 2018, including fixed income structured products, climate indices, and ESG indices.
of securities comprising the indices factors in each issuer’s climate score and is based on a transparent method designed by experts in CIB’s Green Hub. The range of climate indices managed by Natixis grew in 2018 with the launch of the Euronext(R) ECO5E index.
A new range of three Responsible Investment indices sponsored by Euronext was also created, with the latest being launched in September 2018. The methodology was based on the approach followed by Mirova/ISS-Oekom, which reconciles value creation and sustainability. Outstanding amounts sold by Natixis on the Climate and ESG indices total €1.2 billion.
The Green Weighting Factor created in 2018 will allow Natixis to decarbonize its balance sheet and gradually align the impact of its financing activities with the objectives of the Paris Agreement, i.e. to limit the global temperature rise at the end of the century to +2°C in relation to the pre-industrial era. Natixis intends to achieve this long-term objective while continuing to finance all economic sectors by increasing the presence of green solutions in its financing activities and helping its clients in the transition to lower carbon activities(1).
Natixis Assurances aligns with the 2°C climate scenario In 2018, Natixis Assurances made a proactive tangible commitment to combat climate change by aligning its investment policy with the 2°C climate scenario set in the Paris Agreement. Each year, Natixis Assurances will devote nearly 10% of its new investments to green assets, with a target of 10% of its total investments being in green assets by 2030. It invested over €430 million in green bonds in 2018. With this policy, Natixis Assurances intends to encourage and give priority to companies that contribute to the energy and ecological transition. Its commitment covers all its investment portfolios (excluding unit-linked policies).
Under this initiative, which includes French firms from all business sectors, Natixis has formally undertaken to take real action to provide solutions to preserve and restore biodiversity, ensure that natural resources are used sustainably and that the benefits derived from nature are distributed fairly.
Natixis will decide and announce individual commitments for its financing and investment activities by the end of 2019, using SMART goals (Specific, Measurable, Agreed upon, Realistic, Time-based).
To implement these commitments to biodiversity, in 2018 Natixis set up an internal working group on natural capital comprising experts from its different business lines: the ESR Department, financing (CIB and SFS), the CIB Green Hub, representatives from the Asset Management affiliates (Mirova, Ostrum AM, AEW), and Natixis Assurances. Its goal is to produce real solutions to allow Natixis’ activities to systematically measure—and mitigate if necessary—the impact of their activities on nature, to systematically integrate biodiversity in dialog with clients in sensitive sectors, and to develop products and services based on nature.
In accordance with the Equator Principles, Natixis requires itsa clients to examine all the risks and potential impacts of their
Implementation of a program to combat deforestation by a Natixis client in Ecuador Natixis participated in financing for the Fruta del Norte Gold project in Ecuador. Lundi Gold, the project developer, documented endangered and vulnerable species using the categories set by the International Union for Conservation of Nature (IUCN). As a result, the Company relocated over 35,000 species of flora and fauna and established a partnership with the Ecuadorian NGO Conservation International. Programs to fight deforestation and encourage sustainable practices on degraded land have been set up and biodiversity monitoring has also been implemented.
For agricultural commodities, Natixis helps its clients witha impact goals, in particular certification and product traceability. natural capital protection. Natixis participated in an innovative The margin reduction is paid to the ECOM Foundation, a green revolving credit facility for ECOM Agroindustrial Corp. non-profit that supports projects for producers and their Ltd, a coffee, cocoa, sugar and cotton trading company, for communities. Part of the reduction is also assigned to the $216 million over three years and $433.3 million over one year. ECOM Department that provides agronomy services and The price is indexed to ECOM’s environmental and social technical assistance to farmers and local communities.
NON-FINANCIAL PERFORMANCE REPORT Business line contributions to green and sustainable growth 477Natixis Registration Document 2018
Unhealthy oceans threaten all life on earth and have a particularly strong impact on small island nations and vulnerable coastal communities. Decades of poor management have led to the over-exploitation and degradation of ocean resources, in particular fish stocks and coral reef ecosystems. Improving the management of these natural resources can enhance productivity and operational efficiency and generate attractive returns for all stakeholders.
The Sustainable Ocean Fund (SOF), the second fund in Mirova’s Althelia Funds range, invests in companies that harness the ocean’s natural capital sustainably, build resilience in coastal ecosystems and create sustainable economic growth. SOF holds a mixed portfolio of assets in the sustainable marine products sector, the circular economy and conservation. The fund focuses on emerging markets and small island nations.
SOF’s investments will have substantial positive impacts in terms of socio-economic development and the preservation of natural resources. The fund has set the following goals for its ESG impact: climate: protection of over 17,500 hectares of mangrove foresta from deforestation and degradation (over 9 million tons of CO2e captured), production of 177,000 tons of fish protein (which has a smaller carbon footprint than beef); livelihoods: creation or continuation of over 5,500 jobs ina vulnerable coastal communities and indirect support for over 14,000 additional jobs in related value chains and businesses; ecosystems: direct protection and sustainable management ofa over 175,000 ha of marine protected areas in ecosystems with high environmental value.
SOF’s first transaction SOF made its first investment in Kampachi Farms, Mexico, which sees the development of offshore aquaculture as an urgent environmental matter as well as a considerable economic opportunity. The Company sustainably produces high-quality fish and respects nature at its offshore sites by using innovative biological and engineering solutions and working closely with regulators and the conservation community. The fish is raised in deep water pens four miles off the coast and will be available on the international market in early 2019.
In 2018, it finalized several reports, including a guide on reuse in partnership with the Fédération Française de l’Assurance (French Insurance Federation) and specifications on assessing existing buildings for reuse with the Centre Scientifique et Technique du Bâtiment (a government organization providing research into innovation in the construction industry). A reuse assessment was performed on all renovation projects over 2,000 m². In 2019, Circolab will continue to expand, increasing the number of members and pursuing its work, in particular on Building Information Modeling and maintenance.
Reuse of materials and furniture in a building of La Défense The Circolab non-profit, chaired by AEW, removed construction materials from a tower building in La Défense, Paris to reuse them, with the sale amount estimated at €470,000. In addition, furniture from the staff canteen (over 150 tables and 500 chairs) was donated to a non-profit that is setting up a middle school in Haiti.
ESR policies have been drawn up and included in the risk policies applied by the business lines working with the most sensitive sectors. These policies cover the following sectors: Coal industries
Since October 15, 2015, Natixis has undertaken to stop financing coal-fired power plants and thermal coal mining around the world.
It should be noted that the amount of Natixis’ exposure to coal-industry financing has fallen steadily since the commitment made in October 2015. At the end of 2018, financing of thermal coal mines amounted to zero and was residual in coal-fired power plants.
Since March 2009, Natixis has excluded financing, investment and offers of services to companies involved in manufacturing, storing or trading anti-personnel mines and cluster bombs.
Publication of defense sector policy The commitment made by Natixis in March 2009 was extended to include a Defense sector policy published in June 2018. This policy, which is available for consultation on the Natixis website, extends the scope of arms excluded by the Group and sets specific criteria for conducting transactions, notably with respect to arms exporting and importing countries.
Publication of Tobacco sector policy In light of the commitment undertaken in December 2017, Natixis published a detailed account of its tobacco sector policy in May 2018. The latter applies to Natixis, Ostrum and Natixis Assurance's financing, investment and services activities.
In December 2017, Natixis committed to stop providing financing for the exploration and production of oil sands and oil in the Arctic region.
Over the last three years, 305 such transactions have been managed in this way, with the following sector breakdown: BREAKDOWN OF THE NUMBER OF PROJECTS REVIEWED ■ BY SECTOR (2016-2018)(1)
Mindful of the great diversity of client transactions and financing solutions, Natixis ensures the same level of vigilance on the underlying E&S risks of certain types of transactions outside the scope of the Equator Principles. These include acquisition financing transactions not associated with an investment program, financing that is, by nature, for multiple purposes, transactions involving portfolios of assets too large for a dedicated assessment, or certain kinds of assets.
In each of these cases, the quality of governance and management of the E&S risks inherent to the industry in question are assessed on the basis of current international best practices and standards, and the services of external consultants are called upon if necessary.
This client assessment process is to be built into the bank's existing systems for establishing new client relationships and granting loans, involving the business lines, as well as the Compliance Department, Risks Department and ESR Department. The process is to be implemented following a test phase sometime in 2020.
Since 2017, Natixis’ Purchasing Department joined forces with BPCE Procurement to create an economic interest group and share thoughts and ideas on responsible purchasing: The socially responsible purchasing policy is a source of strategic and operational leverage for implementing the BPCE and Natixis ESR policy. The main objective of the policy is to promote more eco-friendly products and services that provide guarantees, and even added value, at the social and societal levels.
In 2017, Natixis participated in a joint initiative involving several French Banking and Insurance companies and signed the Responsible Purchasing Charter. The aim of the charter is to encourage the suppliers of the signatory banks to implement duty of vigilance measures as part of their overall ESR approach. The charter sets a series of commitments that both parties are required to observe, based largely on the basic principles of the United Nations Global Compact in the areas of human rights, labor, the environment and anti-corruption. (1)
Regarding the enforcement of the duty of vigilance law, Natixis alongside BPCE Procurement took part in a concerted effort in the bancassurance industry to map out ESR risks in purchasing activities, involving three other banking groups. The tool, which was delivered in June 2018, enables the following risks to be measured by country and by category of purchase: Fair practices and ethics
ESR grade built into the supplier's overall grade;a supplier action plan to be implemented where ESR grade isa below average; monitoring of supplier action plan.a
Concerning purchases made by Natixis directly in certain sensitive categories (e.g. building work, furniture, promotional objects, etc.), steps have been taken by the Real Estate and Logistics Department to question its main suppliers. In 2019, this process shall also be applied to purchases made by Natixis offices abroad.
To get the vigilance plan up and running, training courses will be provided by BPCE Procurement to help buyers become familiar with the new tools (risk mapping, ESR assessment, and implementation of appropriate risk prevention or mitigation plans).
A large majority of Natixis’ employees and establishments are located in France (83% and 75%, respectively).
The environmental risks associated with Natixis’ operations have been ruled out, as its business is not liable to generate serious adverse impacts on the environment. Furthermore, the bank already applies strict environmental regulations in Europe and the US, and has launched several initiatives to limit its impact on the environment (e.g. certified buildings, use of resources, waste management, eco-friendly business travel, etc.).
These issues are already strictly governed by a number of prevailing regulations in France, notably including labor law, the personal and property safety policy, and the Professional Risk Assessment Document. A whole host of internal agreements have also been signed in France (relating to union law, collective bargaining, gender equality, the professional integration and retention of employees with disabilities, and quality of life at work).
A questionnaire will be sent out to platforms in the APAC, Americas and EMEA regions to identify standard working conditions in the targeted countries, as well as the specific conditions applicable to Natixis employees and external service providers in the following areas: working hours;a remuneration;a conditions of dismissal;a maternity leave;a welfare protection.a
With respect to personal and property safety, a security road map will be rolled out internationally in 2019, notably including country risk monitoring tools with a view to ensuring the safety of Natixis employees and external service providers across all our business locations.
In addition to these due diligence procedures, Natixis has begun work on measuring the social and environmental risks borne by its clients when they first make contact with the bank. Using questionnaires tailored to each sector and gradually applied to existing and new clients, the project aims to compile a client ranking system based on duty of vigilance categories. (cf. Chapter 6.4.1).
The whistleblowing system forms an integral part of Natixis’ Code of Conduct and is based on a company-wide policy which sets the minimum standard to be applied throughout Natixis group. In July 2018, Natixis S.A., published an updated version of its existing whistleblowing system, to reflect the latest regulatory changes. The whistleblowing system is available to any person holding an employment contract with Natixis, as well as to employees of external service providers or subcontractors (cf. Chapter 6.2.1).
Natixis has taken a series of measures to adapt to the consequences of climate change: climate risks liable to have a direct impact on Natixis area addressed in the Business Continuity Plan (BCP), which includes the management of extreme weather events (e.g. storms, heatwaves, flooding of the Seine, etc.) that could affect the Company’s premises around the world. Maximum impact is estimated in the operational risks map, and results in a VaR figure (95% and 99% Value at Risk) that factors in scenario analyses and external data, the quality of the BCP and insurance; the environmental/climate risks linked to our businessa operations are progressively being taken into account insofar as Natixis’ clients may themselves be subject to climate risks: these include physical risks (exposure to physical consequences caused directly by climate change) and transition risks (exposure of certain sectors to the adjustments brought about by the transition to a low-carbon economy).
Measuring the climate change risks associated with our activities: physical and transition risks
Since 2016, Natixis has been part of a working group to improve the incorporation of these risks: specifically, and in line with the Autorité de Contrôle Prudentiel et de Résolution (ACPR—French Prudential Supervisory Authority for the Banking and Insurance Sector), BPCE and Natixis participated in a working group addressing Article 173, Provision V of the Energy Transition for Green Growth Act of August 17, 2015, with a view to drawing up stress test scenarios. The working group reviewed the sectors most exposed to physical risk and to transition risk.
This innovative approach covers generated emissions, prevented emissions and overall contribution to the fight against climate change. It assesses investments made relative to a benchmark scenario and compared to the principal market indices.
Green Weighting Factor: To step up its transition to greena finance, Natixis is developing a tool to gradually bring its financing activities into line with the Paris Agreement goals for the climate. (see Chapter 6.3.2); Green growth financing: Natixis is a major player ina renewable energy and sustainable infrastructure financing, and in green bonds; Investment products helping to combat climate change: NIMa also finances renewable energy via investment funds proposed by its affiliates; Climate risk projects financed by Natixis: As a signatory ofa the Equator Principles, Natixis incorporates climate change into the environmental impact assessments conducted on its major projects: borrowers are required to present an analysis of the possible alternatives to their projects, and to report annually on the project's CO2 emissions once it is in operation; Exclusion of carbon-intensive issuers: Since 2015, Natixisa has ceased all financing and investments in the coal sector and has also undertaken to stop financing oil sands and oil exploration in the Arctic (see Chapter 6.4.1).
Natixis and its subsidiaries in France (with the exception of Financial investments and affiliates—see scopes in Chapter 6.7) account for 304,834 m2 in office space and 19,411 workstations, as well as two data centers operated for Groupe BPCE.
For the purpose of managing its buildings and offices, Natixis chose to occupy buildings whose design and operation guarantee optimal environmental performance. The bank owns
The first DIL Progress audit was conducted by Bureau Veritas Certification in March 2018.
In terms of building accessibility specifically, the department takes action to facilitate access to Natixis buildings for the disabled: installation of meeting and training rooms accessible toa persons with different disabilities (employees or visitors with reduced mobility or who are visually or hearing impaired); signage and reserved spots in parking lots and garages.a
Energy consumption per m2 of usable rented office space (in MWh) 0.18 0.19 0.20
New Paris Climate Action partnership Following on from the commitment undertaken in 2015, Natixis signed a new Paris Climate Action agreement in October 2018. Natixis thus intends to take part in sustainable development goals (SDG) consistent with the French capital’s Climate Plan. In addition, the bank has set a target to reduce the energy consumption of its buildings in the Paris region by
NON-FINANCIAL PERFORMANCE REPORT Managing our direct environmental impact 487Natixis Registration Document 2018
The raw material used the most at Natixis is paper (reams, envelopes, desktop publishing, internal and external printouts, etc.).
Natixis revised its method for collecting data on paper consumption in 2018 and it now gathers this information directly from its paper supplier.
Internal consumption (reams of paper, letterhead) has been falling steadily for several years, thanks to awareness-raising initiatives, the widespread use of shared multifunction printers, and the Company-wide roll-out of laptop computers, notably as part of the bank’s Easy program. In 2018, a further 9,000 employees were allocated Easy laptop computers, giving them the digital tools needed to facilitate agile working and reducing printing needs.
Abroad, Natixis employees also reduce their paper consumption (-11% in Milan, -12% in New York and Frankfurt, -19% in Moscow, -30% in Dubai, -50% in Madrid).
This result can be attributed to an increase in energy consumption (notably the cooling system) and IT assets.
Based on calculated carbon emissions, a carbon action plan has been implemented in three main areas: Buildings: optimized occupation of work space and reduction of energy consumption; Business travel: expanded use of public transportation and “soft” modes of transportation, green company cars, prioritized use of rail travel in the Natixis travel policy, development of videoconferencing and establishment of teleworking program to limit commuting; IT: streamlining of office printers, with the widespread installation of multifunction printers.
In addition to measuring its carbon footprint, Natixis’ subsidiary Ostrum Asset Management has taken active steps to offset 100% of its direct carbon emissions since 2016.
Natixis is taking action to reduce the waste it generates. Having lowered the quantity of paper it consumes, Natixis has begun efforts to reduce that of disposable cups, which are a major source of pollution. It started by taking stock of the type and quantity of disposable cups used. In France, Natixis consumes more than 3.5 million plastic cups every year. This stage will be the starting point from which to implement solutions for reducing consumable items in 2019.
A project to reduce these wastes was initiated in 2018 and will be rolled out in 2019.
Efforts to raise employee awareness (distribution of mugs, green conferences), encourage them to generate less waste by opting for reusable rather than disposable Some Natixis platforms have been leading the way in this area: Dubai, London, New York and the Natixis Interépargne sites in Caen and Charenton have stopped using disposal cups altogether.
Natixis’ waste-sorting activities are conducted as follows: sorting and recycling of paper, plastic (bottles, cups) and metala (cans) using collection points, which are gradually being installed in offices to replace individual sorting bins and are systematically installed in new buildings; sorting and recycling of plastic pens;a furniture recycling;a collection and special disposal of used ink cartridges, batteriesa and fluorescent and neon tubes.
Abroad, Natixis offices in Frankfurt have implemented a system for the recovery and resale of WEEE. The profits of this activity are reinvested in environmental projects worldwide.
Note also that since 2018 a new waste sorting and collection circuit for used aluminum coffee capsules has been introduced in the main buildings consuming such capsules, in conjunction with the bank's coffee supplier and the companies collecting those capsules: La Poste and Paprec. Abroad, Natixis offices in New York have aligned themselves with the approach by installing collection systems for this type of capsule.
Awareness of waste sorting The bank’s new collection system for sorting and recycling paper, plastics and cans was presented to the employees assigned to support the initiative during its roll-out across our various buildings.
In 2018, Natixis furthered its efforts to promote clean mobility, in accordance with the French Energy Transition for Green Growth Act of 2015, with the publication of an inter-company mobility plan for the Greater Paris region. Five other plans were also drawn up for the main French regions in which Natixis has offices.
The 2018 telecommuting agreement specifies that, in the event of a peak in pollution involving restrictions on car usage, additional telecommuting days would be granted, as would work-from-home authorizations for employees with the means
Natixis also launched a new carpool platform, ECOpartage, which is available to all employees of the Groupe BPCE, Natixis and their subsidiaries. The in-house platform facilitates contact between employees wishing to share car journeys.
490 Natixis Registration Document 2018 the use of taxis and the reimbursement of mileage expensesa are governed by rules on specific use (approval by manager, exceptional circumstances). Natixis also prefers that its employees use green taxis (hybrid vehicles) for business travel.
In 2018, business travels by air decreased slightly while train travel increased.
Abroad, Natixis in Milan has also implemented a bicycle courier service.
Following on from this study, working groups were set up within the IT Department to address the following subjects, in conjunction with the ESR Department: energy, responsible purchasing, waste electrical and electronic equipment, and employee awareness.
Abroad, Natixis branches in Dubai, Milan and Kazakhstan hold the energy star label for all their hardware. Automatic energy-saving standby systems are also being deployed in Dubai, Madrid, Milan and Moscow. In Kazakhstan, Natixis is maximizing the life of its fixed computers, which have been in operation since 2011.
The green space helps to improve quality of life at work and foster urban biodiversity in the neighborhood.
In New York, Natixis performed cleaning work on its premises to collect and recycle paper documents. In return for this collection, Natixis donated 7,000 trees to the National Arbor Day Foundation.
In today’s constantly and profoundly changing environment (regulatory changes, digitalization, competition, societal changes), the aim of Natixis’ HR policy is to support the Company’s transformation by offering solutions to ensure the sustainable performance of all employees in a respectful working environment.
The HR strategy is centered on three objectives: supporting the transformation of the business lines, promoting a positive employee experience, and actively encouraging talented people.
Natixis receives Top Employer 2019 certification For the third year in a row, Natixis submitted its main HR processes and policies for assessment by the Top Employers Institute. The excellence of Natixis’ working conditions and its Human Resources environment were certified by a method of analysis used around the world.
In the interest of supporting the transformation of the business lines, the Human Resources Department strives to develop strategic workforce planning, maintain quality employer-employee communications, address the human aspects of change management, support the internationalization of the Natixis business lines, and offer a more agile and streamlined organizational framework and methods of operation based on new leadership roles.
Asset & Wealth Management: increase in headcount (+10.9%) due to the inclusion of Natixis Interépargne in this business line.
Payments division and to the transfer of Natixis Interépargne to Asset & Wealth Management.
Payments: creation of the division and increase in headcount due to new investments in Dalenys Payments, E-Cotiz and Sereniplay, Alter CE-Comiteo.
Some teams were transferred to Corporate & Investment Banking (in particular GTB teams).
The Atlas project to internalize some services provided by external companies continued with further expansion for the Porto branch and an increase in teams in Paris.
Breakdown of headcount (by number of contracts) 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016 2018 2017 2016
Number of new hires during the year / average annual headcount.(b)
Over 80% of employees in the Natixis France managed scope, working at 29 different companies, are covered by the collective bargaining agreements of the banking and insurance industries. There are, however, seven separate agreements across the whole scope.
Part-time workers as a % of headcount(a) 10.5 11.1 11.2 5.3 5.7 6.1 0.5 0.6 0.6 0.1 0.2 0.0 9.2 9.8 10.0
This framework currently consists of: compensation measures, through a single Natixis employeea savings plan, a supplementary collective pension plan, a profit-sharing mechanism, and consistent salary measures; internal transfer and career management opportunities;a actions to promote hiring young people while retaining oldera employees; the same complementary healthcare insurance for all Natixisa France employees; measures to address employees with disabilities, including aa Group-wide policy covering the professional integration and retention of employees with disabilities, and an allocation for children with disabilities.
Within the Natixis scope, strategic communications with representative unions were enhanced with the creation in 2017 of the Strategy and Transformation Dialog Committee aimed at establishing a better understanding of the strategy and the transformation of the business lines.
Agreement on transferring leave to the parents of sick children 100% 15/10/2018
In addition to these overall agreements, several agreements were signed by Natixis’ French entities in 2018, including five by Natixis S.A.
Under the collective bargaining agreement signed in June 2017, Natixis formally defined an SWP mechanism aimed at anticipating the bank’s changing needs in terms of workforce roles and skills to further its development.
A method has been developed and implemented to address the human aspects of change management (Change@Natixis), with the goal of serving as a framework for any major transformation project. This method addresses the need to better anticipate the impacts of transformation projects on working conditions and better incorporate human factors in the approach to change management.
Designed to simplify work on a daily basis and to facilitate cooperation among teams and job mobility, the Easy program is a collection of initiatives launched in 2017 such as the testing of new workspace arrangements and deployment of new tools to promote more interactive, collaborative and agile working methods. In 2018, several collaborative workspaces were created, impacting the daily lives of over 3,500 members of staff.
The Human Resources Department set up an online mobility solution named My Purple Career in 2018 and over half of vacancies are now filled by internal transfers (55.7% in the managed scope in France).
As Natixis continues its international expansion, an ambitious program has been implemented to help employees make the cultural adjustment. The program includes a variety of initiatives, such as: the development of international Short-Term Assignmentsa (STAs) with the aim of sharing practices among employees and developing their intercultural skills. Over 79 STAs have been conducted since the program was launched, including 39 in 2018; the establishment of a vast English program promotinga English as a working language, with initiatives and training tailored to the employee’s needs; training programs to promote interculturalism among teams.a
Compensation policy risk-taking. Each year, Natixis conducts a study comparing its compensation levels to the external market in a bid to remain competitive.
NON-FINANCIAL PERFORMANCE REPORT Employee mobilization 497Natixis Registration Document 2018 2018 Key Event
In the US, compensation levels and promotion lists are reviewed to ensure equal treatment. In Milan, Natixis monitors compensation with a view to promoting gender equality. In Madrid, a study was conducted on salary differences between men and women, which concluded that no gaps existed for equivalent positions. Lastly, in accordance with UK law, Natixis London published a report on gender pay gaps in 2018.
Average gross annual compensation of staff under permanent contracts(1) (excl. profit-sharing and employer contributions to the Company savings plan) (in thousands of euros) 83.1 80.8 79.9
Average voluntary employee profit-sharing (in thousands of euros) 5.7 5.2 5.1
Average gross employer contribution paid in respect of the Company savings plan and the collective pension plan (PERCO) (in thousands of euros) 3.4 3.2 3.2
Average gross annual compensation is calculated based on full-time permanent employees.(1)
Total payroll costs (wages and salaries, and voluntary and mandatory profit-sharing schemes) are also reported in Chapter 7.6 “Operating N.B. expenses”.
Throughout 2018, Natixis continued its efforts to improve quality of life in the workplace via the Work & Life at Natixis program, focused on its four objectives: ensuring conditions that enable employees to deliver high-quality work, improving the quality of relations and cooperation, improving well-being in the workplace, and better addressing the human aspects of transformation projects. Employees’ perception of quality of life in the workplace improved in 2018, with an average score of 6.7/10 (versus 6.3 in 2016) in the Employee Opinion survey.
Other initiatives to improve well-being in the workplace continued with, for example, the opening of a new concierge service at the Austerlitz office following the one opened in Charenton in 2017.
Natixis also signed the Cancer@work charter, undertaking to provide better support to employees suffering from cancer or a chronic illness.
The right to disconnect after hours In June 2018, Natixis signed an agreement on the right to disconnect after hours to encourage reasonable use of digital devices. All employees are reminded that they are not obliged to log on or reply to queries outside their normal working hours. This principle is reiterated automatically in all internal e-mails.
On the medical front, Natixis S.A. has an occupational health center to provide its staff with complete medical care. Natixis also has a social service staffed with full-time social workers.
Natixis S.A.’s offices and all eligible subsidiaries (those with more than 50 employees) have a CHSCT which, in cooperation with Management and occupational healthcare services, plays an active role in all areas that involve health, safety and working conditions.
In 2018, Natixis rolled out an internal mediation service to resolve staff conflicts. Employees were trained in mediation techniques by the French Mediation Institute.
Frequency of workplace accidents(a) (number per million hours worked) 6.6 7.17 5.88
Severity of workplace accidents(b) (number of days of incapacity per thousand hours worked) 0.2 0.17 0.11
Absenteeism due to illness (including for occupational illnesses)(c) (%) 3.0 3.0 3.0
Severity rate: (number of days lost due to temporary incapacity/hours worked) x 1,000, source INSEE.(b)
As a signatory of the diversity charter, Natixis is committed to preventing discrimination in every form and at every stage of Human Resources management, including recruitment, training, and management of its employees’ careers. With the support of a dedicated diversity and disability management team, and a network of contacts in the business lines, it has established a policy designed to capitalize on the diversity of profiles, experience and skills in its employee base.
Natixis sets gender equality targets in its New Dimension strategic plan, (women accounting for 20% of members of the Senior Management Committee, 30% of Global Leaders—inner leadership circle, 40% among Purple Leaders—extended leadership circle). These objectives were applied in the business lines in 2018.
The progress achieved by Natixis was recognized by certification body AFNOR, which granted Natixis “Professional Equality” certification in early 2017. A renewal audit will be performed in 2019.
Shadowing Day was held once again in 2018, allowing 20 female students from business and engineering schools to shadow a female mentor and see what a typical working day at Natixis is like. This event aims to promote jobs in finance among these young women and to attract them to positions that are still mostly held by men.
Natixis takes part in the Marie-Claire think tank on equality Natixis joined this Think-Tank organized by Marie-Claire magazine and associated to the Connecting Leaders Club, which brings together personalities from the world of business, media, and culture around the theme of equality. Various meetings on many topics have been organized to discuss and structure proposals for concrete actions for public and private decision-makers.
Natixis’ senior management supports the Women in Natixis Network (Winn), which promotes equality in management at Natixis in France and internationally (Algeria, Americas, Dubai, London, Milan and Madrid—the latest city to join Winn in October 2018), and coordinates a network on different aspects of personal and professional development. This organization is sponsored by François Riahi, Chief Executive Officer of Natixis. In 2018, Winn opened to men who can now participate in events and actively support the promotion of gender equality at Natixis. The network had over 1,000 members in 2018 (including 372 in France).
% of women in the extended leadership circle (Purple Leaders) 30.2 30.4 32.7
% of women in the leadership circle (Global Leaders) 28.0 25.0 26.5
% of women on the Senior Management Committee 27,3 9.1 9.1
Percentage of women among employees granted individual pay increases 58.9 55.7 54.2
Under the Agreement on Employment and SWP signed in 2017, Natixis has set quantified targets and taken steps to encourage the retention of older staff members and end-of-career adjustments.
Natixis has committed to maintaining the percentage of employees aged 55 or older at more than 12% of the workforce (the figure was over 15% at year-end 2018), and to ensuring that persons aged 45 and older account for at least 5% of total annual hires.
The average age of Natixis employees in France in 2018 was 43.8.
In France, Natixis aims to hire at least 47% young employees (40,2 % en 2018), offer permanent contracts to 15% of work-study participants (over 14% in 2018), and hire the equivalent of 6% of its workforce under work-study contracts.
Developing a hiring plan by participating in specialized hiringa forums, establishing partnerships with schools and universities, and developing application pools. In 2018, Natixis hired 30 employees with disabilities; Promoting the use of disability-friendly companies bya diversifying the list of approved services and partners. Natixis works with disability-friendly companies via co-contracting agreements, and for the provision of services and personnel; Conducting communication and awareness-raisinga campaigns for all Natixis employees.
Natixis also has communities of in-house trainers who help disseminate business expertise. These communities of experts will be coordinated and extended in a single trainers’ community.
Creation of MOON, the MOOC on Natixis’ activities Since 2018, all Natixis employees can access a self-service MOOC about Natixis, its history, its business lines, its activities, its strategic plan, and support for employees. The scalable MOOC includes videos, content, documents and quizzes, and is particularly used to facilitate the integration of new staff.
Launch of THINK DIGITAL, a digital acculturation platform Since 2018, all Natixis employees can access a self-service digital acculturation platform providing access to a catalog of training courses covering different topics such as data, blockchain, and design thinking. Certificates are also available. The platform uses short videos and quizzes and fun “battles” in which participants can challenge each other.
Office and IT 8.2 10.5 10.5 o/w Personal and professional efficiency, Human Resources 17.8 16.8 18.2
Provisional consolidated figures at January 21, 2019, representing at least 90% of hours of training received during the year. * number of employees trained / (headcount at 31/12/2018 + number of employees out of the scope during the year)
Natixis deploys a structured Talent Management system across all of its entities, which makes it possible to anticipate successions and contribute to the individual development plans of each employee, particularly through people reviews and career committees. In 2018, this system defined or updated all succession plans for Comex members and Natixis Global Leaders.
For all employees, the professional interview is a time of privileged exchange with his manager, dedicated to his professional and career development. It gives rise to the constitution of an individual development plan.
In addition, the Natixis Purple Academy, an internal leadership development academy, offers a variety of educational programs aimed at supporting the bank’s transformation, promoting the deployment of the leadership model, and accelerating the development of leaders and talents.
As an example, since 2013, the Natixis Leadership Program (NLP) has enabled 20 young talents to follow a course dedicated to corporate strategy, consisting of training, coaching and seminars.
In 2018, a "Development Journey" program was also launched to support high-potential Purple Leaders in the development of their individual development plan, preparing them for their next career stage.
The annual evaluation interview is an important meeting to evaluate the performance of employees. The objectives can also be reviewed or set during the year to adapt to the pace of the projects. In 2018, 47% of employees had a professional interview and 96% of employees received an annual interview during the 2018-2019 campaign.
Each year, Natixis organizes a request for student solidarity projects, the C.A.M.P.U.S. Awards, to encourage student socio-cultural, socio-athletic and sustainable development initiatives. For the seventh edition of the C.A.M.P.U.S. Awards in 2018, 10 projects presented by teams from universities, engineering and business schools were awarded financial support from Natixis (prize money of €5,000, €3,000 and €1,500).
Natixis has been a sponsor of the Passeurs d’Arts association since 2016. In France, where fewer than 2% of children have access to music programs, Passeurs d’Arts creates children’s orchestras predominantly in underprivileged neighborhoods. This initiative facilitates access to musical instrument lessons and uses music as a means to foster participants’ socialization and personal development.
Natixis also sponsored the Centre Pompidou’s Cubism exhibition from October 17, 2018 to February 25, 2019. The exhibition showcases the inventiveness, depth and wide variety of this movement, which paved the way to modern art. Natixis is proud to have supported this exhibition and to allow visitors to discover or rediscover Cubism, its revolutionary approach and its decidedly modern dimension.
In 2018, Natixis and its subsidiaries organized several collections of items to be donated to charity, including books (for Adiflor and Bibliothèques Sans Frontières), work clothes (for La Cravate Solidaire) and toys (for Secours Populaire and the charity Rejoué). A Christmas market in aid of Secours Populaire was also held in various Natixis’ offices.
In Madrid, Natixis entered into a partnership with non-profit organization Caritas to support a solidarity-based supermarket, Tres Olivos, which helps approximately 100 disadvantaged families (basic goods are subsidized to cost 80% less than regular market prices). Tres Olivos receives financial aid from Natixis Madrid employees and contributions are topped up by the company. Natixis Madrid is also a partner of a local food bank.
The partnerships with associations in the Americas set up in 2017 continued: the Central Park Conservancy and the Brooklyn Bridgea Conservancy; the Harlem RBI Bids for Kids association, which helpsa inner-city youth; the Wheelchair Sport Federation to give disabled people thea opportunity to play their sport recreationally or competitively; In the US, through the Natixis Community Giving Initiative, Natixis also supports its employees’ initiatives by publishing information and organizing collections for various associations.
participation in the Hong Kong Coastal Cleanup for the fourtha year running.
partnership with Pour un Sourire d’Enfant (PSE), witha investments over three years to finance the renovation of a school in Phnom Penh (Cambodia).
NON-FINANCIAL PERFORMANCE REPORT Reporting frameworks and methodology 505Natixis Registration Document 2018
ESR reporting in 2018 is based on the requirements of the non-financial performance report.
Information on social and environmental performance covers the scope of Natixis France (managed scope), with the exception of Worldwide staff, which are presented in the accounting consolidation scope.
The following changes in scope took place in 2018: In the Natixis Worldwide scope, the Payment Solutions businessa line, previously part of the Specialized Financial Services division, became a separate division named Payments.
Asset & Wealth Management:j in France:j two companies left the scope: Axeltis and Selectionj 1818 (68 members of staff), inclusion of Natixis Interépargne, transferred fromj Specialized Financial Services (462 members of staff); internationally: acquisition of a new company: Ecospherej Capital Limited UK (United Kingdom) (9 members of staff); Specialized Financial Services: activity transfer in France:j transfer of Natixis Interépargne to Asset & Wealthj Management (462 members of staff); Outside the Managed Scope:a in France, the Payment Solutions business line acquired aj new company: Alter CE–Comiteo (103 members of staff), internationally: the Mergers & Acquisitions business line inj the Corporate & Investment Banking division acquired two new companies: Fenchurch Advisory Partners (United Kingdom) and Vermilion Partners Limited (Hong Kong).
NON-FINANCIAL PERFORMANCE REPORT Reporting frameworks and methodology 507Natixis Registration Document 2018
On the basis of our work, our responsibility is to provide a reasoned opinion and to express a conclusion of limited assurance on: the compliance of the Report with the requirements of Articlea R. 225-105 of the French Commercial Code; the sincerity of the information provided in accordance witha paragraph 3 of sections I and II of Article R. 225-105 of the French Commercial Code, namely the results of the policies, including the key performance indicators and the actions taken in respect of the main risks, hereafter referred to as the “Information”.
It is not our responsibility, however, to assess: the company’s observance of other applicable legal anda regulatory provisions, notably in terms of its corporate duty of vigilance, the fight against corruption, or tax evasion; the compliance of its products and services with the applicablea regulations.
We believe that the work we performed while exercising oura professional judgment allows us to express a conclusion of limited assurance; a higher level of assurance would have required more extensive work.
Based on our work, we did not observe any significant misstatement likely to call into question the fact that the Non-Financial Performance Report complies with regulatory requirements and that the Information, taken as a whole, is presented in a fair manner, in accordance with the Standard.
Selected quantitative information: French and International employees for the managed scope, Percentage of permanent contracts in France and(a) at the Global level, Total new hires in France, Total departures in France of which resignations and of which Terminations, Percentage of women on the Executive Committee (COMEX), Percentage of women on the Senior Management Committee, Number of employees who receive training, Average number of training hours, Energy consumption: electricity, office buildings’ hot and cold fluid, Total paper consumption, Amount of SRI assets for DNCA, Mirova and Ostrum.
Natixis France: Natixis SA Paris and its French subsidiaries (DNCA, Ostrum, Mirova).(b)
Selected quantitative information: Green Weighting Factor: an innovative solution for a greener financing portfolio, Renewable energy financing.(c)
GENERAL INFORMATION 7.3 ON NATIXIS’ CAPITAL 518 Form and transfer of shares 7.3.1 (Chapter II, Article 4 of the bylaws) 518 Share capital7.3.2 518
Changes in the capital over the last five 7.3.6 fiscal years 522
INFORMATION FROM 7.5 ARTICLE L.225-37-5 OF THE FRENCH COMMERCIAL CODE 526
DRAFT RESOLUTIONS OF THE 7.6 COMBINED GENERAL SHAREHOLDERS’ MEETING OF MAY 28, 2019 526 Report of the Board of Directors on 7.6.1 the resolutions submitted to the Shareholders’ Meeting 526
Registration No. (1st page of the bylaws) 542 044 524 RCS PARIS
The information on the Natixis website is not part of Natixis’ registration document, unless it is specifically incorporated by reference.
A joint stock company (société anonyme) with a Board of Directors with share capital of €5,044,925,571.20.
The Board of Directors defines the guidelines for the12.1 Company’s activities and oversees their implementation. Within the limits of the corporate purpose and the powers expressly granted by law or these bylaws to General Shareholders’ Meetings, the Board concerns itself with any matter relating to good business practice and governs the business of the Company through its deliberations. The Board of Directors performs the controls and checks it deems appropriate.
The choice between these two methods for exercising Senior Management is made by the Board of Directors which may validly transact business only if: the agenda containing this item has been sent out at leasta 15 days in advance of the Board Meeting; at least two-thirds of the directors are present or representeda at the meeting.
When the Company’s Senior Management is handled by the Chairman of the Board of Directors, the following provisions concerning the Chief Executive Officer will apply to the Chairman of the Board of Directors, who will assume the title of Chairman and Chief Executive Officer.
The Chief Executive Officer is vested with the broadest powers to act in all circumstances on the Company’s behalf. He exercises those powers within the limits of the corporate purpose and subject to the powers expressly reserved for Shareholders’ Meetings and the Board of Directors by law and to the provisions and restrictions stipulated by the Internal Rules. He represents the Company in its relations with third parties.
The Chief Executive Officer may be dismissed by the Board of Directors at any time.
The Chief Executive Officer may delegate a portion of his powers to any corporate officer of his choosing, with or without the option of substituting one for another.
With respect to holders of bearer shares, proof of their status as a shareholder must be provided directly to the centralizing body of the meeting by the authorized intermediaries holding their bearer share accounts. The intermediaries do so by producing a certificate that must be attached to the voting form or admission card request in the name of the shareholder or the name of the registered intermediary acting on behalf of the shareholder. A certificate is also delivered to shareholders who wish to attend
Shareholders may vote by post or by proxy in accordance with the legal and regulatory provisions in force. In accordance with the decision of the Board of Directors, shareholders may participate in General Meetings by means of video-conferencing and may vote using all means of telecommunications and remote transmission, including the Internet, in accordance with the applicable regulations at the time of their use. This decision is disclosed in the notice of meeting published in the French official gazette (Bulletin des Annonces Légales Obligatoires—BALO). Those shareholders who use the electronic voting form offered on the website created by the meeting organizer, by the required deadline, are considered present or represented shareholders. The electronic form can be filled out and signed directly on that site by any process provided for by the Board of Directors that meets the conditions defined in the first sentence of the second paragraph of Article 1316-4 of the French Civil Code (i.e. the use of a reliable identification procedure guaranteeing that the signature is linked to the form), which may consist of a user name and password.
One or more shareholders, representing at least the required portion of the share capital and acting on the conditions and within the deadlines determined by law, are entitled to request, by registered mail with acknowledgment of receipt, or by email, the entry of draft resolutions onto the meeting’s agenda.
The Board of Directors may, at the time of the notice, decide to publicly broadcast the entire meeting by video-conference or other telecommunication means. In this case, the decision is transmitted in the announcements and notices of the meetings.
All shareholders are entitled to receive, under the conditions and on the dates stipulated by law, the documents necessary to enable them to make an informed decision on the Company’s management and control.
The Combined General Shareholders’ Meeting of May 23, 2017 resolved that these capital increases, which may not exceed an overall par value ceiling of one and a half (1.5) billion euros, divided into a par value ceiling of €1.5 billion for capital increases with preferential subscription rights and a par value ceiling of €500 million for capital increases without preferential subscription rights, could be carried out either through issuing shares or through issuing securities that give access to share capital, specifically in the form of financial instruments representing debt securities.
This authorization replaces the authorization granted by the Combined General Shareholders’ Meeting of May 21, 2013.
The Board of Directors of Natixis, at its meeting on July 28, 2016, by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, decided to award 151,283 free performance shares to the members of the Natixis Senior Management Committee, of which 47,463 to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs until July 27, 2020, inclusive, provided that presence and performance conditions are met.
The Board of Directors of Natixis, at its meeting on April 13, 2018, by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution twenty, decided to award 3,389,678 free shares to the recipients designated by the Board of Directors, of which 84,775 to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs in part until March 1, 2020, March 1, 2021, April 12, 2021 and in part until April 12, 2023 provided that presence and performance conditions are met.
The Board of Directors of Natixis, at its meeting on August 2, 2018, by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution nineteen, resolved to award 13,605 free performance shares to François Riahi, the Chief Executive Officer of Natixis since June 1, 2018. These shares will vest at the end of a vesting period that runs until May 22, 2022, inclusive, provided that presence and performance conditions are met.
The vesting period for the first tranche of the award of a total of 3,081,642 free shares, as resolved by the Board of Directors on July 28, 2016 for the 2016 Plan (by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 27, 2016, resolution twenty) expired on March 1, 2018 for certain employees of the Company and its subsidiaries designated by the Board of Directors.
By decision made on March 1, 2018, by virtue of the authority granted to him by the Board of Directors, the Chief Executive Officer of Natixis acknowledged that the number of shares to be issued to the beneficiaries of the 2016 Plan came to 945,549 new shares.
By decision made on March 20, 2018, the Chief Executive Officer of Natixis defined the scope and the timetable for the Mauve 2018 plan.
By decision made on June 26, 2018, the Company’s Chief Executive Officer set the share subscription/withdrawal period proposed under the 2018 Mauve plan at June 26 to June 29, 2018, inclusive, and set the Subscription Price for these shares for beneficiaries at €5.002 per share.
By decision made on July 27, 2018, the Chief Executive Officer of Natixis recognized Natixis’ capital increase for a total nominal amount of €19,172,488 through the issuance of 11,982,805 new shares each with a par value of €1.60, with an issue premium of €40,765,502.61, bringing the Company’s capital up from €5,021,289,259.20 to €5,040,461,747.20, and amended the bylaws accordingly (Article 3: Share capital).
SUMMARY TABLE OF CURRENT AUTHORIZATIONS GRANTED TO THE BOARD OF DIRECTORS R BY THE GENERAL SHAREHOLDERS’ MEETING AND THEIR USE BY THE BOARD OF DIRECTORS
23/05/2017 13 To carry out a reduction in the share capital by canceling treasury shares 10% of the shares making up the Company's share capital 26 months None None 23/05/2017 14 To carry out a capital increase, through the issue—with preferential subscription rights maintained—of shares and/or securities providing access to the Company's share capital or entitling holders to the allotment of debt securities €1.5bn 26 months None None 23/05/2017 15 To carry out a capital increase, through the issue—without preferential subscription rights by a public offer—of shares and/or securities providing access to the Company's share capital or entitling holders to the allotment of debt securities.
26 months None None 23/05/2017 20 To carry out a capital increase through the issue of shares or securities giving access to the Company's share capital, reserved for members of employee savings plans with waiving of preferential subscription rights in favor of said members 23/05/2018 18 To carry out a capital increase through the issue of shares or securities giving access to the Company's share capital, reserved for members of employee savings plans with waiving of preferential subscription rights in favor of said members €50m (a) (b) 26 months None None
On November 25, 1985, Banque Française du Commerce Extérieur issued 140,000 non-voting shares with a par value of FRF 5,000 (€762.25). The coupon is payable annually on November 25. Redemptions are at the initiative of the borrower.
Options held in respect of the issuer and the companies referred to above, exercised during the period, by the 10 salaried employees of the issuer and of these companies who hold the most options thereby awarded 0 N/A N/A
Number of shares at the start of the fiscal year Number of shares created during the fiscal year Number of shares at the end of the fiscal year Share capital
At December 31, 2018, Natixis’ main shareholders were as follows: % capital % voting rights
Of which 0.74% held under the BPCE Actions Natixis employee share ownership plan, including bearers of Groupe BPCE shares.
According to the Prospectus Regulation, at February 28, 2019, Natixis’ main shareholders were as follows: % capital % voting rights
Of which 0.75% held under the BPCE Actions Natixis employee share ownership plan, including bearers of Groupe BPCE shares.
The ownership of shares by directors who are individuals is not material.
The Mauve plan is reserved for Company employees included in the scope determined by the Board of Directors and comprising Natixis S.A. and the subsidiaries and branches of its Asset & Wealth Management, Corporate & Investment Banking, Insurance and Specialized Financial Services business units (excluding Financial Investments) enrolled in the Natixis Employee Savings Plan and in the Natixis International Employee Savings Plan. The scheme is also available to the retirees and pre-retirees of the companies included in this scope.
As part of the Mauve plan, beneficiaries are able to subscribe for Natixis shares (or, for international beneficiaries, under an economically similar formula) on advantageous terms and with the benefit of employer-paid contributions in compliance with the provisions of existing plans within the Natixis group.
At its meeting on November 7, 2017, the Board of Directors of Natixis decided to use in 2018 the authorization to carry out a capital increase—without preferential subscription rights—reserved for members of employee savings plans that was granted by the Combined General Shareholders’ Meeting of May 23, 2017 (resolution twenty), for the launch of the Mauve 2018 employee share ownership plan with an overall par value ceiling of €50,000,000, representing a maximum of 31,250,000 shares. In order to implement the Mauve 2018 plan, the Board of Directors invested the Chief Executive Officer with all the necessary powers, in particular to set the Subscription Price and the subscription period for the shares to be issued.
NATURAL OR LEGAL PERSONS EXERCISING OR POTENTIALLY EXERCISING 7.4.6 CONTROL OVER NATIXIS
The application of the Afep-Medef corporate governance rules and the rules set out for members of the Board of Directors prevent the risk of abusive exercise of control.
7 LEGAL INFORMATIONInformation from Article L.225-37-5 of the French Commercial Code 526 Natixis Registration Document 2018
Draft resolutions of the Combined 7.6 General Shareholders’ Meeting of May 28, 2019
These resolutions are categorized into two groups: distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits of any kind of the Chairman of the Board and the Chief Executive Officer for 2019, (v) overall budget for compensation paid in fiscal year 2018 to the employees referred to in Article L.511-71 of the French Monetary and Financial Code, (vi) ratification of the co-opting of three (3) directors, (vii) reappointment of five (5) directors, (viii) appointment of one director, (ix) trading by the Company in its own shares; the first twenty-one resolutions (resolutions one to twenty-one)a require the approval of the Ordinary General Shareholders’ Meeting: (i) approval of the financial statements and appropriation of earnings; (ii) approval of related-party agreements, (iii) approval of the items constituting the total pay and benefits of any kind granted to the Chairman of the Board and the Chief Executive Officer relating to the 2018 fiscal year, (iv) approval of the principles and criteria for determining,
Approval of the financial statements for fiscal year 2018 (resolutions one and two)
Detailed comments on the parent company and consolidated financial statements are provided in the Natixis 2018 registration document.
Consequently, the dividend per share is set at €0.78 (seventy-eight euro cents) and will be charged in full against distributable earnings for fiscal year 2018.
When the progressive income tax scale is applied to dividends, the portion of social withholding tax corresponding to CSG (contribution sociale généralisée—general social security tax) is deductible from taxable income at a rate of 6.8%.
Resolution four concerns the approval of related-party agreements and commitments pursuant to Articles L.225-38 et seq. of the French Commercial Code, authorized by the Board of Directors during fiscal year 2018 and until the Board of Directors’ Meeting of February 12, 2019. These agreements are presented in the Statutory Auditors’ special report along with those entered into prior to fiscal year 2018 and still effective, which do not need to be re-approved by shareholders (see Chapter 7 section 7.7 of the Natixis 2018 registration document).
Since February 12, 2018, your Board has authorized the following agreements: On September 12, 2018, the Board of Directors authorized thea Company to enter into a negotiation agreement with respect to the sale of Natixis' Securities & Financial Guarantees (CEGC), Leasing (Natixis Lease), Factoring (Natixis Factor), Consumer Finance (Natixis Financement) and Securities Services (EuroTitres Department) businesses of its Specialized Financial Services division to BPCE.
Concerned by this agreement are Laurent Mignon, Catherine Halberstadt, Bernard Dupouy, Thierry Cahn, Françoise Lemalle, Alain Condaminas, Alain Denizot, Sylvie Garcelon and Stéphanie Paix in their role as directors.
Resolutions five and six relate to components of compensation due or granted, between January 1, 2018 and June 1, 2018, to François Pérol, Chairman of the Board of Directors, and to Laurent Mignon, Chief Executive Officer.
Resolutions seven and eight relate to components of compensation due or granted, between June 1, 2018 and December 31, 2018, to Laurent Mignon, Chairman of the Board of Directors, and to François Riahi, Chief Executive Officer.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 528 Natixis Registration Document 2018
Compensation and benefits of any kind for the Chairman of the Board of Directors in 2018
Laurent Mignon received €175,000 gross (corresponding toa an annual gross amount of €300,000) for fiscal year 2018 in connection with his duties as Chairman of the Natixis Board of Directors, a position which he occupies since June 1, 2018.
Components of Laurent Mignon’s compensation between January 1, 2018 and June 1, 2018, the date on which he resigned from his role of Chief Executive Officer, comply with the principles approved by the General Shareholders’ Meeting on May 23, 2018.
The variable compensation component in respect of 2018 was calculated on the basis of quantitative and strategic criteria first reviewed by the Compensation Committee then validated by the Board of Directors, and submitted to a vote at the General Shareholders’ Meeting on May 23, 2018.
The variable compensation amount relative to January 1 to June 1, 2018, which shall be submitted to a vote at the General Shareholders’ Meeting of May 28, 2019, was determined by the Natixis Board of Directors based on the Compensation Committee's recommendation of €452,734, i.e. 94.32% of the target variable compensation: €156,889 will be paid in 2019, 50% of which will be indexeda to the Natixis share price; and €295,845 will be deferred over three years, 50% of which willa be indexed to the Natixis share price, and will be paid in thirds in 2020 (100% in cash), 2021 (50% in cash and 50% indexed to the Natixis share price or in shares) and 2022 (100% indexed to the Natixis share price or in shares), provided that the presence and performance conditions are met.
Allocation of free performance shares In keeping with the principle of the Chief Executive Officer's eligibility to receive free performance shares as part of Long-Term Incentive Plans for members of the Senior Management Committee of Natixis (“LTIP CDG”), at its meeting on May 23, 2018, the Board of Directors of Natixis granted 11,661 free performance shares, prorated to the term of office, to Laurent Mignon, which can lead to the acquisition of a maximum of 13,993 shares, depending on the achievement of the performance conditions, i.e. a maximum of 0.00045% of share capital at the allocation date. This allocation corresponds to 20% of Laurent Mignon's gross annual compensation pro-rated for the length of his corporate office during the 2018 financial year. The vesting of performance shares is contingent on the achievement of presence and performance conditions, which are linked to the relative performance (TSR—Total Shareholder Return) of Natixis' share, and to ESR targets.
Fringe benefits Laurent Mignon receives a family supplement (€818 in 2018), in accordance with the same rules as those applied to Natixis employees in France.
Like all staff, Laurent Mignon is covered by the mandatory pension plans. He is not covered by the kind of supplementary pension plans described in Article 39 (defined benefit plan) or Article 83 (voluntary defined contribution plan) of the French General Tax Code. In addition, the Chief Executive Officer pays into an “Article 82" type life insurance policy (in reference to the French General Tax Code), put in place by Groupe BPCE. The premiums on this policy are paid by Laurent Mignon and not by Natixis. In 2018, as Chief Executive Officer, Laurent Mignon paid €58,667 into this policy.
These arrangements were not applied upon the termination by Laurent Mignon of his position as Chief Executive Officer of Natixis and are henceforth non-applicable.
Compensation and benefits of any kind for Natixis Chief Executive Officer François Riahi in 2018
Fixed compensation The annual fixed compensation of François Riahi for full fiscal year 2018 is set at €800,000, i.e. €466,667 for the period June 1
Variable compensation François Riahi’s annual variable compensation in respect of 2018 was calculated on the basis of quantitative and strategic criteria first reviewed by the Compensation Committee then validated by the Board of Directors on May 2, 2018.
For fiscal year 2018, the target annual variable compensation was set at 120% of the CEO's fixed compensation, with a range of between 0 and 156.75% of the target, i.e. a maximum of 188.1% of the fixed compensation amount. Thus, François Riahi’s target variable compensation for full year 2018 was €960,000, i.e. €560,000 for the period June 1 to December 31, 2018.
The variable compensation amount relative to June 1 to December 31, 2018, which shall be submitted to a vote at the General Shareholders’ Meeting of May 28, 2019, was determined by the Natixis Board of Directors based on the Compensation Committee's recommendation of €528,190, i.e. 94.32% of the target variable compensation: €194,853 will be paid in 2019, 50% of which will be indexeda to the Natixis share price; €333,337 will be deferred over three years, 50% of which willa be indexed to the Natixis share price, and will be paid in thirds in 2019 (100% in cash), 2020 (50% in cash and 50% indexed to the Natixis share price or in shares) and 2021 (100% indexed to the Natixis share price or in shares), provided that the presence and performance conditions are met.
Allocation of free performance shares In keeping with the principle of the Chief Executive Officer's eligibility to receive free performance shares as part of Long-Term Incentive Plans for members of the Senior Management Committee of Natixis (“LTIP CDG”), at its meeting on August 2, 2018, the Board of Directors of Natixis allocated 13,605 free performance shares, prorated to the term of office, to François Riahi, which can lead to the acquisition of a maximum of 16,326 shares, depending on the achievement of the performance conditions, i.e. a maximum of 0.00045% of share capital at the allocation date.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 530 Natixis Registration Document 2018
The vesting of performance shares is contingent on the achievement of presence and performance conditions, which are linked to the relative performance (TSR—Total Shareholder Return) of Natixis' share, and to ESR targets.
At the end of the four-year period, the average of the overall annual ratings determines the additional percentage of shares compared to those vested through the achievement of the TSR conditions. The acquisition ceiling in the event of outperformance of TSR and ESR conditions is 120%.
François Riahi receives a family supplement (€1,388 in 2018), in accordance with the same rules as those applied to Natixis employees in France.
Severance payments and consideration for non-competeb) agreement conditions as those of his predecessor and approved during the May 19, 2015 General Shareholders' Meeting (resolution five).
It should be noted that, at its May 2, 2018 meeting, the Board of Directors approved agreements relating to severance payments and the consideration for the non-compete agreement made in favor of François Riahi under the same
Resolutions nine and ten concern the approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits of any kind of the Chairman of the Board and the Chief Executive Officer of Natixis for 2019, pursuant to Article L.225-37-2 of the French Commercial Code derived from Law No. 2016-1691 of December 9, 2016, known as the “Sapin II” law.
The fixed compensation of the Chief Executive Officer isa) set in accordance with the skills and expertise necessary for performing his duties and in line with common market practice for similar positions.
François Riahi’s fixed compensation for fiscal year 2019 remains unchanged from the previous fiscal year at €800,000 gross.
For fiscal year 2019, the criteria for determining the annual variable compensation approved by the Board of Directors on February 12, 2019, following a review by the Compensation Committee, and which will be put to a vote at the General Shareholders’ Meeting on May 28, 2019, are as follows: Quantitative
45% 11.25% net revenues a 11.25% net income (Group a share)
Target set at 120% of the fixed compensation, with a range from 0% up to 156.75% of the target, i.e. a maximum of 188.1% of the fixed compensation.
It is reiterated that the Chief Executive Officer is prohibited from using hedging or insurance strategies, both during the vesting period of components of deferred variable compensation and during the lock-up period.
Overall budget for compensation paid to the employees referred to in Article L.511-71 of the French Monetary and Financial Code during the fiscal year ended December 31, 2018 (resolution eleven)
The total amount of compensation paid to the above-mentioned Natixis employees during the fiscal year ended December 31, 2018, which, due to the deferred payment of variable compensation and the system of deferred payment is not equal to the compensation awarded for fiscal year 2018, amounted to €181 million (excluding employer social security charges). This amount includes the fixed compensation paid in 2018, the variable compensation paid in 2018 for 2017, the variable compensation paid in 2018 for previous fiscal years (2015, 2016 and 2017) and the performance shares awarded in 2013, 2014 and 2016 and delivered in 2018.
Christophe Pinault, which took place during the meeting of thea Board on December 20, 2018, to replace Alain Denizot, who resigned, to serve out the remainder of his predecessor’s term of office, i.e. until the 2019 General Shareholders’ Meeting to approve the financial statements for the year ending
Resolution twenty proposes that the shareholders appoint Daniel de Beaurepaire as a director, replacing Philippe Sueur, whose term of office expires at the end of this General Shareholders' Meeting, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
therefore initiated a process to select a new director who would replace Henri Proglio as independent director. This process was in progress at the time of preparing this report. Furthermore, Henri Proglio advised the Board of his resignation from his duties as director upon the selection of his successor. The Board accepted his resignation and asked Henri Proglio to agree to be appointed non-voting member so that the Company can continue to benefit from his experience. This appointment would come into effect upon the termination of his duties as director. Depending on the progress of the selection process for a new director, the Board may add draft resolutions for submission to the General Shareholders' Meeting of May 28, 2018 in order to implement the proposed changes. If applicable, this report will be supplemented with details on the proposed draft resolutions.
It should be noted that as of November 2018 Henri Proglio has been a director of the Company for over 12 years. Accordingly, and as per the Company's independence criteria, as of this date Henri Proglio is no longer considered as an independent director. The Board of Directors and the Appointments Committee
Resolution twenty-one asks the General Shareholders’ Meeting to renew, for a period of 18 months, the authorization to buy back shares allocated to the Board of Directors.
LEGAL INFORMATION Draft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 533Natixis Registration Document 2018
This resolution would allow the Group to benefit from the provisions introduced by French Law No. 2015-990 of August 6, 2015 for growth, activity and equality of economic opportunity (Macron law) which in particular modified and relaxed the rules relating to the awarding of free shares (including the related tax regime for companies and the beneficiaries of the attributions).
This delegation will come into effect on June 1, 2019 and remain in force until June 30, 2022.
The total number of shares which will be awarded under this resolution cannot exceed 2.5% of the share capital of Natixis at the date of the Board of Directors’ decision to award the shares. Free share grants to Natixis Executive Officers under this resolution cannot exceed a sub-limit of 0.1% of the share capital of Natixis at the date of the Board of Directors’ decision to award the shares (it being noted that these sub-limits would be deducted from the above-mentioned limit).
Resolution twenty-three asks the Extraordinary General Shareholders' Meeting to renew for a period of 26 months the authorization granted to the Board of Directors to cancel, through a reduction in share capital, all or part of the treasury shares held by Natixis or acquired under the authorization granted by the Ordinary General Shareholders' Meeting, up to 10% of the total share capital over each 24 month period. This authorization cancels and replaces the unused portion of any earlier authorizations to the same effect (see below the summary table on the financial resolutions submitted to the shareholders).
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 534 Natixis Registration Document 2018
Resolutions twenty-five, twenty-six, twenty-seven and thirty seek to grant the Board of Directors the authority to decide to increase the share capital (immediately or at some time in the future)—by various means—without preferential subscription rights maintained(1).
For each of these delegations (other than that set out in resolution thirty), the Board of Directors cannot, unless granted prior authorization by the General Shareholders' Meeting, make use of the delegation of authority during the entire duration of a public offer launched on the Company's shares by a third party.
If the Board of Directors makes use of an authority delegated to it by your General Shareholders' Meeting, it will establish, at the time of its decision, if necessary and in accordance with the law and the regulations, a supplementary report describing the final conditions of the transaction and indicating its impact on the situation of the holders of the capital stock or securities providing access to capital, particularly with respect to their share in equity. This report, along with any report by the Statutory Auditors, will be made available to the holders of the capital stock or securities providing access to capital and then brought to their attention at the next General Shareholders' Meeting.
The Board of Directors has recommended voting in favor of adopting all the resolutions submitted to this Combined General Shareholders’ Meeting.
Generally, honoring a obligations related to stock option programs or other share allocations to employees or directors of the issuer or a related company
Maximum a purchase price of €10 per share (adjustable particularly in the case of a reverse share split)
Authorization granted to a the Board of Directors to issue free shares to employees of Natixis and related companies or groups as well as to directors
Ceiling: one and a a half billion (1.5bn) to be deducted from the Overall Ceiling*
26 months May be used by your Board a of Directors to decide on these issues and proceed with these allocations to shareholders with waiving of preferential subscription rights, in France or in foreign countries, by public offer
May be used to issue a shares or securities giving access to the Company's capital* in consideration for shares in a company meeting the criteria laid down in Article L.225-148 of the French Commercial Code in connection with a public exchange offer initiated by your Company in France or abroad under local rules, in which case your Board of Directors would be free to set the exchange ratio, the pricing rules set out below would not apply
May introduce a on the French market, circumstances permitting, a non-negotiable priority subscription right* (with over-subscription privileges*, if applicable), to be exercised as determined by the Board of Directors
LEGAL INFORMATION Draft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 537Natixis Registration Document 2018
Other information for comments 26 Issue with waiving of PSRs* of shares and/or securities giving access to the Company's capital* and/or the issue of securities entitling holders to the allotment of debt securities* through an offer as set out in Article L.411-2(II) of the French Monetary and Financial Code 26 months May be used by your Board a of Directors to decide on these issues and proceed with issues through private placement*
Price of shares a and securities giving access to the share capital* set in the same way as in resolution twenty-four
May issue a shares following the issue of securities giving access to your Company's capital by your Company's Subsidiaries*
May issue, by a public offer, (i) securities giving access to shares to be issued by a Subsidiary and/or (ii) shares giving access to existing share capital or entitling holders to the allotment of the debt securities of a third party company
Included in the a ceiling set out in resolution twenty-eight and in the Overall Ceiling*
Ceilings exclude a any additional amounts issued in order to preserve the rights of holders of securities giving access to the capital*
Your Board of a Directors will review the independent appraisers report which focuses on the value of contributions
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 538 Natixis Registration Document 2018
No. Purpose Duration Reasons for possible uses of the delegated power Specific ceiling
26 months May be used to relaunch a a capital increase at the same price as that set for the initial transaction in the event of over-subscription (“Greenshoe” clause)
Included in the a ceiling for the initial issue and in the Overall Ceiling*
At the same a price as that set for the initial transaction 30 Issue of shares or securities giving access to capital reserved for members of employee savings plans with preferential subscription rights (PSR)* waived 26 months Can be used to develop a employee shareholding in France and abroad
In accordance with the Afep-Medef code and the internal regulations of the Board of Directors (available online on Natixis’ website www.natixis.com), an independent director is a person who has no ties with the Company, management or Group of a nature liable to compromise their freedom of judgment or create a conflict of interest with the management, Company or Group.
These agreements are those, either directly or through an intermediary, between the Company and the following persons: its Chief Executive Officer;a one of its Deputy Chief Executive Officers;a one of its directors, one of its shareholders holding a fraction of the voting rights greater than 10% or, if it is a a corporate shareholder, the Company that controls it in the meaning of Article L.233-3 of the French Commercial Code.
The prior approval of the Board of Directors is reasoned by justifying the interest of the agreement for the Company, in particular by specifying the financial conditions attached.
In return for the waiving of PSRs*, your Board of Directors may introduce a priority subscription right (with over-subscription privileges*, if applicable). When it has been established, this right allows shareholders, as is the case with PSRs*, to subscribe to the proposed issue proportionally to the number of old shares that they hold. However, unlike with PSRs*, this priority subscription right may only be exercised during a priority period, which is currently set at a minimum of three trading days shorter than the period set for PSRs*, and is non-negotiable. This priority period will not be applied to all issues: in the same way as for PSRs*, it could be preferable, even necessary, not to apply this priority period in order to issue common shares under the best conditions, for example, when speed is essential to the success of an issue or when an issue is made on foreign financial markets.
For a description of preferential subscription rights and a presentation of reasons for requesting that these preferential subscription rights are waived, see the paragraph entitled “Renewal of financial authorizations and delegations”
Subsidiaries Companies in which your Company owns, either directly or indirectly, more than 50% of the share capital
Private placement Since April 1, 2009, the law allows for capital increases with waiving of preferential subscription rights, up to 20% of the share capital per year, through offers exclusively available to (i) individuals providing portfolio investment and management services on behalf of third parties, or (ii) qualified investors or a limited circle of investors, provided that such investors act for their own account.
Reference Price Average of prices of the Company’s shares listed on the regulated Euronext Paris market during the 20 trading sessions preceding the decision by your Board of Directors setting the date for the opening of subscription by members of the Company or Group employee savings plan, with a maximum discount of 20%.
Your Board of Directors may, in certain cases, introduce over-subscription privileges for shareholders.If introduced, in the event that subscriptions to new shares (i.e. through the exercise of preferential subscription rights) are insufficient, unsubscribed shares would be allocated to shareholders who would have exercised over-subscription privileges to subscribe to shares in greater quantity than what they could have subscribed to using preferential subscription rights, in proportion to the rights they have and within the limit of their requests.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 540 Natixis Registration Document 2018
Conditions for the issuing of shares to which the securities giving access to share capital issued entitle the holder and dates on which these rights may be exercised: Securities giving access to share capital in the form of debt securities (for example, bonds convertible into or redeemable for shares, or bonds with share warrants attached) may entitle holders, either at any time, during set periods, or at set dates, to the allocation of shares. This allocation may be by way of conversion (for example, of convertible bonds into shares), redemption (for example, bonds redeemable in shares), exchange (for example, bonds exchangeable for shares), or the presentation of a warrant (for example, bonds with share warrants attached) or by any other way, during the issue period, regardless of whether the preferential subscription rights of holders of securities issued in this way are waived or not.
In accordance with the law, delegations of authority to issue securities giving access to shares to be issued approved by your General Shareholders' Meeting entails the waiving of shareholders' preferential subscription rights to the shares to which the securities issued entitle them. For example, if your General Shareholders' Meeting approves resolution twenty-four, you would, according to law, waive your preferential subscription rights to shares that your Company would issue, where appropriate, to redeem a possible bond redeemable in shares.
Review and approval of the financial statements for the fiscala year ended December 31, 2018; Review and approval of the consolidated financial statementsa for the fiscal year ended December 31, 2018; Appropriation of earnings for the fiscal year endeda December 31, 2018 and setting of the dividend; Approval of the agreements and commitments covered bya Articles L.225-38 et seq. of the French Commercial Code; Approval of the total compensation and benefits of any kinda paid or granted to François Pérol, Chairman of the Board of Directors, for the period from January 1 to June 1, 2018, pursuant to Article L.225-100 of the French Commercial Code; Approval of the total compensation and benefits of any kinda paid or granted to Laurent Mignon, Chief Executive Officer, for the period from January 1 to June 1, 2018, pursuant to Article L.225-100 of the French Commercial Code; Approval of the total compensation and benefits of any kinda paid or granted to Laurent Mignon, Chairman of the Board of Directors, for the period from June 1 to December 31, 2018, pursuant to Article L.225-100 of the French Commercial Code; Approval of the total compensation and benefits of any kinda paid or granted to François Riahi, Chief Executive Officer, for the period from June 1 to December 31, 2018, pursuant to Article L.225-100 of the French Commercial Code; Approval of the principles and criteria for determining,a distributing and granting the fixed, variable and non-recurring items constituting the total compensation and benefits of any kind of the Chairman of the Board of Directors for the 2019 fiscal year, pursuant to Article L.225-37-2 of the French Commercial Code; Approval of the principles and criteria for determining,a distributing and granting the fixed, variable and non-recurring items constituting the total compensation and benefits of any kind of the Chief Executive Officer for the 2019 fiscal year, pursuant to Article L.225-37-2 of the French Commercial Code;
LEGAL INFORMATION Draft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 541Natixis Registration Document 2018
Ratification of the co-opting of Nicole Etchegoïnberry as aa director; Ratification of the co-opting of Christophe Pinault as a director;a
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, having reviewed the report of the Statutory Auditors on the consolidated financial statements for the fiscal year ended on December 31, 2018, hereby approves said consolidated financial statements as presented, including the balance sheet, income statement and notes to the financial statements, as well as the transactions reflected in these financial statements or summarized in these reports.
Resolution three (Appropriation of earnings for the 2018 fiscal year and setting of the dividend)
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 542 Natixis Registration Document 2018
(i) payment to shareholders of a total dividend of €0.78 per share (of which €0.30 represents the ordinary dividend and €0.48 represents the special dividend), and (ii) allocation of the remaining distributable earnings to“Retained earnings”.
Based on the share capital at December 31. 2018, on the assumption that no treasury stock existed on that date and without taking into account any shares with immediate dividend rights created after December 31, 2018, distributable earnings will be allocated as follows: Ordinary dividend €945,086,577.60
It should be noted that dividends are not payable on shares owned by the Company. In the event that, during the payment of these dividends, the Company comes to own some of its own shares, the amounts corresponding to unpaid dividends that would have been payable on these shares will be recognized as retained earnings.
For individual beneficiaries who are residents for tax purposes in France and hold shares outside a stock savings plan, these dividends are subject to income tax: at a single flat-rate withholding tax (PFU tax) of 12.8%, thea fiscal base of which is the gross amount of dividends (Article 200 A of the French General Tax Code); or, at the express and irrevocable option of the beneficiarya when declaring their income, at the progressive income tax scale following the application of an allowance of 40% of the gross amount of dividends (Article 158-3-2° of the French General Tax Code).
Regardless of the tax treatment of dividends for income tax purposes (flat tax on capital income [PFU] or progressive income tax scale), the paying establishment located in France must collect: a mandatory non-definitive flat-rate withholding tax (PFO) at aa rate of 12.8% (Article 117 (iv) of the French General Tax Code) as an initial income tax payment, except if individual beneficiaries who are residents for tax purposes in France have applied for an exemption under the conditions set out in Article 242 (iv) of the French General Tax Code; social security charges of 17.2%.a
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, having reviewed the special report of the Statutory Auditors on the agreements and commitments subject to the provisions of Articles L.225-38 et seq. of the French Commercial Code, hereby approves all provisions of this report and the new agreements mentioned therein (other than those authorized by the Board of Directors on February 13, 2018, which were already submitted to the General Shareholders’ Meeting on May 23, 2018), having been authorized by the Board of Directors during the fiscal year ended December 31, 2018, or after this date up until the Board of Directors’ Meeting in which the financial statements for the year ended December 31, 2018, were approved.
Resolution five (Approval of the total compensation and benefits of any kind paid or granted to François Pérol, Chairman of the Board of Directors, for the period from January 1 to June 1, 2018, pursuant to Article L.225-100 of the French Commercial Code)
LEGAL INFORMATION Draft resolutions of the Combined General Shareholders’ Meeting of May 28, 2019 543Natixis Registration Document 2018
Resolution seven (Approval of the total compensation and benefits of any kind paid or granted to Laurent Mignon, Chairman of the Board of Directors, for the period from June 1 to December 31, 2018, pursuant to Article L.225-100 of the French Commercial Code)
Resolution eight (Approval of the total compensation and benefits of any kind paid or granted to François Riahi, Chief Executive Officer, for the period from June 1 to December 31, 2018, pursuant to Article L.225-100 of the French Commercial Code)
The General Shareholders' Meeting, deliberating pursuant to the quorum and majority requirements for ordinary business, pursuant to Article L.225-37-2 of the French Commercial Code, hereby approves the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits in kind of the Chairman of the Board of Directors, as set out in the corporate governance report, presented in Natixis’ 2018 registration document in Chapter 2, Section 2.4 and Chapter 7, Section 7.6.1.
Resolution ten (Approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total compensation and benefits of any kind of the Chief Executive Officer for the 2019 fiscal year, pursuant to Article L.225-37-2 of the French Commercial Code)
The General Shareholders' Meeting, deliberating pursuant to the quorum and majority requirements for ordinary business, pursuant to Article L.225-37-2 of the French Commercial Code, hereby approves the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits in kind of the Chief Executive Officer, as set out in the corporate governance report, presented in Natixis’ 2018 registration document in Chapter 2, Section 2.4 and Chapter 7, Section 7.6.1.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby ratifies the co-opting by the Board of Directors at its meeting on June 1, 2018, of Laurent Mignon as a Director, to replace François Pérol, who resigned, for the remainder of his term of office, i.e. until the end of the General Shareholders’ Meeting convened in 2019 to approve the financial statements for the year ended December 31, 2018.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Laurent Mignon as a Director, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Catherine Pariset as a Director, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Bernard Dupouy as a Director, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby resolves to reappoint Christophe Pinault as a Director, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
Resolution twenty (Appointment of Daniel de Beaurepaire as a Director, to replace Philippe Sueur)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, and taking due note of the report of the Board of Directors, hereby resolves to appoint Daniel de Beaurepaire as Director, to replace Philippe Sueur whose term of office expires at the end of this General Shareholders' Meeting, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2023 to approve the financial statements for the fiscal year ended December 31, 2022.
Resolves that Company share purchases may relate to a2) number of shares such that: the number of shares that the Company buys during thej buyback program may not, at any time, exceed 10% of the shares comprising the Company's share capital, this percentage being applied to a capital amount adjusted in accordance with transactions impacting it subsequent to this General Shareholders' Meeting. It is specified that (i) the number of shares acquired with a view to being held and subsequently tendered in connection with a merger, spin-off or asset transfer may not exceed 5% of its share capital; and (ii) when shares are bought back to promote liquidity under the conditions set out by the General Regulations of the AMF, the number of shares taken into account to calculate the 10% limit provided for by the first paragraph corresponds to the number of shares purchased, net of the number of shares resold during the authorization period,