The Supervisory Board’s comments on the Executive Board’s management report and the 2008 financial statements 192
CHAIRMAN’S REPORT ON CORPORATE GOVERNANCE AND INTERNAL CONTROL 397 Composition, preparation and organization of tasks undertaken by the Supervisory Board 398
The list of countries in which Natixis is present under its own name or through its subsidiaries or commercial representatives 488
Financial Markets Authority on April 7, 2009, in accordance with Article 212-13 of the general regulations of the Financial Markets
Authority and the corresponding sections of the present registration document is given in pages 491-492.
Immeuble Arc de Seine 30 avenue Pierre Mendès France 75013 Paris.
Natixis is one of the top-15 asset management companies worldwide and is also world No. 3 in credit insurance with Coface. Its Services business is based around powerful and fl exible industrial platforms. Natixis is also No. 1 in private equity in the French small and mediumsized businesses market.
Natixis’ fi nancial structure is strengthened through its dual affi liation to Banque Fédérale des
Key fi gures 2008 22,096 full-time equivalent employees as at December 31, 2008
(1) Excluding restructuring costs, costs related to the creation of Natixis and extraordinary items.
Trends in average monthly share price and number of shares traded since January 2006 8
Stock exchange Eurolist Paris (compartment A), eligible for deferred settlement service
Unpaid dividends, after the fi ve-year period of limitations, are paid to the French government.
Natixis offered its shareholders the option of payment in shares for dividends paid in 2008 for the 2007 fi scal year.
Average price Highest price Lowest price Number of shares traded Market value of shares traded
To enable comparison between share price data, the prices above take into account: (1) The 10-for-one stock split of November 17, 2006 for prices prior to November 17, 2006 (creation of Natixis).
In 2008, Natixis handled all relations with individual and institutional investors, financial analysts, and rating agencies.
Communication to accompany releases of fi nancial statements as at December 31, 2007, March 30, 2008, June 30, 2008, and September 30, 2008 was based on a press release and presentations for the fi nancial press and fi nancial analysts.
Natixis has continued to develop tools specifi cally tailored to its communication to individual investors: the ■ Shareholders’ Club, launched in April 2007, has continued to expand and now has nearly 20,000 members. Membership is by request and open to all registered shareholders, or those that hold at least 50 bearer shares. The Club targets shareholders who wish to develop a close relationship with the
“Biodiversité, nos vies sont liées (Biodiversity, our lives are interconnected )” exhibition, organized by the Noé Conservation association and supported by Natixis, with a communication initiative about the Cinémathèque Française). A partnership was put in place with the École de la Bourse to offer shareholders training sessions on stock market techniques. Three training courses were given in 2008, two in Paris, and one in Nice; the Natixis ■ Shareholder Consultation Committee (CCAN)
was set up in 2008. It comprises 12 Natixis shareholder representatives. This committee meets two or three times a year, at Natixis’ head offi ce, and its purpose is to enable members to meet with executives of the Company. It provides feedback and recommendations on Natixis’ communication to its individual shareholders. In 2008, the Committee met twice and talked to Philippe Dupont, Executive Chairman and
open daily from 9 a.m. to 6 p.m. to answer their questions. It was used to receive reservations for events organized by the
Club members may also register online for events through a secure extranet site accessible by password. Shareholders may also leave messages or raise questions about the website; CONTENTS< >
were reinforced and mobilized to meet the requirements for information from individual shareholders: opening hours for the toll-free number were extended ■
during the summer until September. The number of operators was increased to handle the greater number of calls (over 500 calls a day during the second fortnight of
September 2008, compared to an average of 70 per day normally), a ■ temporary dedicated extranet site was set up during the subscription period for the capital increase (from
September 1-30, 2008) with user-friendly tools (simulator of subscription rights, question and answer facility, library of reference documents relating to the operation). This temporary site enabled information about the operation to be conveyed effectively. There was signifi cant interest with almost 45,000 visitors and over 200,000 pages viewed during the period, two telephone conferences of the Shareholders’ ■
Consultative Committee were held during summer 2008 in order to obtain the opinions of its members in relation to actions undertaken for individual shareholders in relation to the capital increase. The opinions expressed by the CCAN
On May 22, 2008, over 1,500 people were scheduled to attend the Natixis General Shareholders’ Meeting in the Carrousel du
Louvre. A fi re in the Louvre area the night before the event made it impossible for the Meeting to be held at the scheduled location.
The General Shareholders’ Meeting was held, nevertheless, on the same day a few hours later than originally scheduled, at the
Palais Brongniart in Paris. Over 600 people were able to attend this combined Ordinary and Extraordinary General Shareholders’
Meeting The results of the Company were commented upon and explained and Natixis’ management answered questions from shareholders.
Toll-free number (for callers in France): 0 800 41 41 41
Holders of bearer shares are advised of the General Shareholders’ Meeting through notices published in the Bulletin des Annonces Légales Obligatoires (BALO – ciel.gouv.fr) and the fi nancial press at least 35 days prior to the Meeting date. They may also obtain information by calling the toll-free number (for calls originating in France) or by visiting the bank’s website. Copies of the Notice of Meeting and voting forms can be obtained from their fi nancial intermediary.
Registered shares must be recorded in the holder’s registered share account or administered registered share account at least three business days prior to the General Shareholders’ Meeting.
Developments relating to corporate governance, contained in this chapter, are subject to be impacted by proposed resolutions submitted to the combined Extraordinary and
Company in the UK (see Chapter VIII – “Executive Board report on the resolutions submitted to the General Meeting” and “Proposed resolutions for the AGM of April 30, 2009”).
Chairman, Supervisory Board First appointed: 6/3/2009 (2) (Chairman, Supervisory Board: Supervisory Board Meeting, 06.03.2009) Term expires: 2012 AGM (3)
Chairman, Executive Board, Caisse Nationale des Caisses d’Epargne et de Prévoyance
CEO, Banque Fédérale des Banques Populaires 50 Avenue Pierre Mendès France 75201 Paris Cedex 13
Date of birth: 10.07.1943 Natixis shares held: 3,060 1st Vice-Chairman of the Supervisory Board First appointed: AGM, 17.11.2006 (Deputy Chairman, Supervisory Board: 17.11.2006) Term expires: 2012 AGM (3)
Date of birth: 22.02.1961 Natixis shares held: 2,300 2nd Vice-Chairman of the Supervisory Board First appointed: AGM, 17.11.2006 (Deputy Chairman, Supervisory Board: 12.11.2008) Term expires: 2012 AGM (3)
Le Ponant de Paris 5 Rue Leblanc 75511 Paris Cedex 15
Chairman, Compensation Committee First appointed: 17.11.2006 Term expires: 2012 AGM (3)
Member, Supervisory Board First appointed: Supervisory Board Meeting, 30.05.2007 Term expires: 2012 AGM (3)
Chairman, BRED Banque Populaire 18 Quai de la Rapée 75012 Paris
Chairman, Steering and Supervisory Board, Caisse d’Epargne Lorraine Champagne-Ardenne 6 Rue de la Grosse-Écritoire BP 2747 57062 Reims
Member, Compensation Committee First appointment: 06.03.2009 Term expires: 2012 AGM (3)
Member, Supervisory Board First appointment: 12.11.2008 Term expires: 2012 AGM (3)
Chairman, Executive Board. Caisse d’Epargne Rhône-Alpes 42 Boulevard Eugène Deruelle BP 3276 69404 Lyon Cedex 3
Member, Audit Committee First appointed: Supervisory Board Meeting, 17.11.2006 Term expires: 2012 AGM (3)
Supervisory Board members whose term of offi ce had expired as of March 6, 2009
Member, Supervisory Board (until 05.03.2009) (Chairman, Supervisory Board from 12.11.2008 to 05.03.2009) First appointed: AGM, 17.11.2006
Member, Supervisory Board (until 05.03.2009) (Member, Audit Committee from 16.01.2008 to 05.03.2009) First appointed: AGM, 17.11.2006
Members Main role in the Company Main role outside the Company
Executive Board members whose term of offi ce expired in 2008
Member, Executive Board (until May 31, 2008) First appointed: Supervisory Board Meeting, 17.11.2006
Member, Executive Board (until February 14, 2008) First appointed: Supervisory Board Meeting, 17.11.2006
Natixis corporate governance, in its current form, is based on the by-laws adopted by Natexis Banques Populaires’ (subsequently become Natixis) at its General Shareholders’ Meeting on
Since November 17, 2006, the bank has had an Executive Board and Supervisory Board, as set out in Articles L.225-57 et seq. of the French Commercial Code.
Executive Board are determined by the provisions of the agreement signed on November 17, 2006, which aims to guarantee equal representation of the two shareholders on the
Nationale des Caisses d’Epargne (CNCE) are each members of the Board as majority shareholders and legal persons. The other 12 members from the two groups are all individuals and directors of member banks of Groupe Banque Populaire and
The Supervisory Board does not include two-thirds of independent directors in its composition as the provisions of the shareholder agreement provide for other safeguards.
German and Italian nationals respectively, are both directors, or former directors, of major banking groups and provide the Board with the insight of European partners.
Under the terms of the agreement between the two main shareholders, a representative of one of the two shareholders shall hold Chairmanship of the Supervisory Board alternately for a period of six years. The fi rst Vice-Chairman of the Supervisory
Board shall be a representative of the shareholder not represented by the Chairman of the Supervisory Board, and the second Vice-
Executive Board of Caisse Nationale des Caisses d’Epargne, has been Chairman of the Supervisory Board. The two Vice-
During 2008 there were changes to the Board’s membership: in October 2008, Luigi Maranzana was appointed provisionally ■
Supervisory Board, Bernard Comolet was appointed Chairman of the Supervisory Board and Olivier Klein was co-opted as a member of the Supervisory Board for the remaining duration of Charles Milhaud’s term of offi ce, i.e. until the close of the
On the same date, Alain Lemaire was appointed as the new permanent CNCE representative on the Supervisory Board
CORPORATE GOVERNANCE 2 Board composition and preparation and organization of its work and co-Chairman of the Audit Committee, as a replacement for
At the Supervisory Board Meeting of March 6, 2009 the resignations of Bernard Comolet and Bruno Mettling from the
Pérol as a member of the Supervisory Board and his appointment as Chairman of the Board were approved unanimously.
In accordance with the provisions of Article 14 of the by-laws, each member of the Supervisory Board must own a minimum of at least 1,000 shares during their term of offi ce.
When a new member is appointed to the Supervisory Board, their curriculum vitae with a career summary is circulated to
In accordance with French law and by-laws (Section II, Articles 14 to 18), the Supervisory Board exercises permanent control of the management of the Company by the Executive Board.
At any time of the year, it carries out the verifi cations and reviews it considers appropriate and may request from the Executive
Board’s report and the annual, parent company and consolidated fi nancial statements.
This supervision should under no circumstances imply the undertaking, whether directly or indirectly, of management actions by the Supervisory Board or its members.
The Supervisory Board approves the draft resolution proposing to the General Shareholders’ Meeting the appointment of Statutory
divestments (or creation of joint venture) by Natixis or one of its subsidiaries, for an amount in excess of €150 million; any transfers, mergers or reorganizations in which Natixis or ■
one of its main subsidiaries is involved; approval of the Company’s business plan prepared by the ■
Executive Board comprising, in particular, target rates of return and the Company’s risk policy, as well as any material changes in the strategic plan; proposals to the General Shareholders’ Meeting of any ■
The Supervisory Board has decided to adopt a set of Internal
Rules in addition to the statutory requirements, specifying certain procedures for its operation and setting out the rights and duties of its members. These are sent to each member at the time of his or her appointment.
Group, an employee or director of a shareholder controlling on its own, or in concert, the Company, in accordance with
Article L.233-3 of the French Commercial Code, or a Company consolidated by it, and has not served in such a capacity during the previous fi ve years; be a corporate offi cer of a Company in which the Company, ■
CORPORATE GOVERNANCE2 Board composition and preparation and organization of its work be a major customer, supplier, corporate or investment banker ■
Committee, shall review the member’s independence, taking into account the composition of the Company’s share capital and the existence of any potential confl icts of interest.
Supervisory Board and Committee members, as well as any person attending their meetings, have a general obligation of confi dentiality on matters discussed at such meetings, as well as any information of a confi dential nature or presented as such by its Chairman or the Executive Chairman.
Each Supervisory Board member must declare any trading in securities of the Company, in accordance with the provisions of
Supervisory Board members shall refrain from acting in a confl ict of interest with Natixis or the companies it controls, e.g. when there is a proposed transaction in which a member of the
Supervisory Board or a non-voting director is directly or indirectly concerned; certain authorities that the Board has given ■
the Executive Board through the Internal Rules: the Supervisory Board has decided, in accordance with Article
R.225-54 of the French Commercial Code, that: disposals of buildings, up to a limit not exceeding €10 million ■
per transaction; disposals of investments in any form of Company or grouping, ■
at least once a year, there will be an agenda item that deals with the evaluation of the operation of the Supervisory Board, with an account of this to be included in the Company’s annual report; operating procedures of the Board specifi ed ■
Board members participating at a meeting by videoconference or through the use of telecommunication facilities transmitting at least the member’s voice and whose technical characteristics allow for continuous and simultaneous streaming of the proceedings, shall be deemed present for the purposes of calculation of the quorum and majority.
As required, the CFO and other business division executives were also invited to provide further information on subjects raised in meetings.
Investissements (NBI); the formation of a form of joint-venture company (Société en ■
participation-SEP) between Natixis CMO and the electronic payments subsidiary Natixis Paiements; within the “Securities” business: transfer of institutional fi nancial ■
assets and liabilities to Natixis; the restructuring plan for the private banking business bringing ■
It also met with members of Comex during the course of its work.
In accordance with regulations in force, the Supervisory Board authorized a certain number of regulated contracts prior to their signature. These were: During its March 5, 2008 meeting: the contractual documentation in relation to the €25 billion ■
and CNCE of €1.5 billion granted one half by BFBP and the other half by CNCE; and a rider to this agreement relating to an additional €1 billion also granted half by BFBP and half by
During its September 3, 2008 meeting: the underwriting agreement between Natixis, BFBP, CNCE ■
and the member banks of the underwriting group constituted for the requirements of the capital increase; the agreement between Natixis, BFBP and CNCE in relation to ■
the underwriting commitment for the capital increase; the early repayment of overdrafts granted to Natixis in the fi rst ■
During its December 18, 2008 meeting: confi rmed the application of the rules of the Group retirement ■
services offered by certain Natixis subsidiaries to regional banks, formerly owned by HSBC, acquired by Groupe Banque
The AFEP-MEDEF code is available for consultation at the head offi ce of the Company and on the Natixis website.
Committee, each of which comprises six members, including two independent members. The Vice-Chairman of the Supervisory
Audit Committee, from November 17, 2006, shall be a member put forward by Caisse Nationale d’Epargne et de Prévoyance and an independent member. An independent member shall chair the Compensation Committee.
The Natixis Audit Committee does not include two-thirds of independent directors in its composition as the provisions of the shareholder agreement, signed in 2006, provide for other safeguards. These include that the Committee should be co-Chaired by an independent member.
rule No. 2001-01 of June 26, 2001, concerning internal control of credit institutions and investment fi rms, amending CRBF
rule No. 97-02 of February 21, 1997, as amended by rule
Supervisory Board, as well as Company fi nancial documents distributed at the time the fi nancial statements are approved; it gives an opinion on the choice or renewal of the Company’s ■
Statutory Auditors and examines the scope of their work, the results of their investigations and their recommendations, as well as any actions taken on the basis of these recommendations; it gives an opinion on the procedures implemented by the ■
Company to ensure compliance with regulations, as well as the monitoring and control of risks; to that end, it receives reports from the risk committees of the Company and its main subsidiaries, as well as reporting on risks, notably operational, market or counterparty risks, carried out under the supervision of the Company’s Executive Board; it gives an opinion on the appointment and removal of the head ■
of the bank’s Inspection Department; it monitors the implementation of actions based on the ■
Supervisory Board or, if applicable, the Audit Committee of the principal subsidiaries.
On the subject of audit of fi nancial statements, the Audit
Committee received presentations from the CFO and comments from the Statutory Auditors on the quarterly, interim, and full-year fi nancial statements.
Due to the appointment of Bernard Comolet as Chairman of the Supervisory Board, Didier Patault was appointed on
Committee on March 6, 2009, Bernard Jeannin was appointed to replace him as a member of the Compensation Committee.
The Natixis Compensation Committee does not include twothirds of independent directors in its composition as the provisions of the shareholder agreement, signed in 2006, provide for other safeguards. These include that the Committee should be co-Chaired by an independent member.
The Natixis Compensation Committee has internal regulations specifying its powers and its working procedures that were approved by the Supervisory Board on March 14, 2007.
It is responsible for making proposals to the Supervisory Board concerning: the level and terms of compensation paid to the Chairman ■
Chairman, it gives an opinion on the appointment of other Executive ■
Committee with any documents that may assist it in discharging its duties and to ensure it is fully informed. At the request of the
to fi scal years 2008 and 2009; on the variable compensation of Executive Board members in ■
of employment for Executive Board members; on the terms and conditions for retirement, social protection ■
The Executive Board may be made up of two to seven members appointed for a period of six years by the Supervisory Board, in accordance with French law, Article 9 of the by-laws and the shareholders’ agreement which states that members are chosen on the basis of their competence, irrespective of which of the two groups they come from.
Under the terms of the shareholders’ agreement, the appointment or removal of any Board member requires the agreement of the two principal shareholders and a double majority vote by
The Supervisory Board Meeting of November 17, 2006 appointed four Executive Board members: Philippe Dupont, Dominique
(also Chairman and Chief Executive Offi cer of Banque Fédérale des Banques Populaires) was appointed Executive Chairman and Dominique Ferrero was appointed Chief Executive Offi cer.
Meeting on February 14, 2008, the Supervisory Board formally noted Anthony Orsatelli’s resignation from his duties as member of the Executive Board and decided to appoint Jean-Marc
The Supervisory Board Meeting of March 6, 2009 recorded the resignation of Philippe Dupont from the Executive Board and appointed Dominique Ferrero as Executive Chairman of the
It is entrusted with the most extensive powers to act under any circumstances on behalf of the Company, within its corporate aims, and subject to those expressly conferred by law and the by-laws to Shareholders’ Meetings and the Supervisory Board.
As far as third parties are concerned, the Executive Chairman or the Chief Executive Offi cer can validly execute any acts binding the Company.
The Executive Board initiated and approved the work that has lead to the redefi nition of the strategic directions of the Group presented at the time of the capital increase, as well as the transformation plan for Corporate and Investment Banking announced in December 2008. The Executive Board has segregated out the portfolios of corporate and investment bank assets presenting high levels of risk and entrusted their management to a separate workout team, notably management of proprietary trading, or lines of business that Natixis no longer wishes to continue.
Contexte Économique et Concurrentiel). The Executive Board monitored the introduction of these measures. It initiated and supervised the asset disposal plans or activities initiated in relation to the reduction plan of non-performing assets, such as at the conclusion of the strategic review undertaken in the summer and autumn of 2008. It was kept informed of the disposal processes undertaken and managed its major aspects, in light of proposals formulated by contacted counterparties. It also continued to remain alert to the evolution of the monoline sector and ratifi ed the participation of Natixis in the commutation agreement proposed to the principal counterparties of CIFG.
The Executive Board has supervised the launch and realization of projects to bring together activities that, for technical reasons inherent to these business lines, had been timetabled for 2008, fi rst and foremost in the retail and institutional custody business lines, for the guarantees and sureties activity and for private banking.
Natixis relations with its two main shareholders through the governance bodies provided for when Natixis was created. It has also overseen the strengthening of operational agreements allowing for the deployment of Natixis products and services within the two networks of Groupe Caisse d’Epargne and
This meeting is held annually and its objective is to notify shareholders about the running of the Company. Its principal objective is to give an opinion on the fi nancial statements of the previous fi scal year, to determine the appropriation of income, and fi x the dividend and the conditions for its payment.
Its objective may also include the renewal of the term or appointment of Supervisory Board members, non-voting members as well as the Statutory Auditors and, if necessary, ratify the co-opting of a member of the Board.
This combines the two previous meetings (OGM and EGM) on the same date under the same notice of meeting.
The meetings include all shareholders whose securities have no outstanding payments due.
Those shareholders that are able to justify their status with an accounting entry (pursuant to the seventh paragraph of Article
R.228-1 of the French Commercial Code) in their name or in the name of the intermediary properly registered on their behalf, either in nominative shares accounts or in the accounts of bearer shares held by their authorized intermediaries, no later than three working days before the date of the Meeting, i.e. by midnight
For holders of bearer shares, their authorized intermediaries are required to justify their clients’ status as a shareholder directly to the centralizing body of the Meeting. They do so by producing a certifi cate that they attach 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
Shareholders’ Meeting by videoconference or tele-transmission under the terms and conditions fi xed under the regulations.
According to the provisions of Article 28 of the by-laws, each shareholder has the right to obtain, under the terms and conditions and at the times fi xed by law, communication of the documents necessary to enable the shareholder to give an informed opinion on the management and control of the Company. The nature of the documents and the terms and conditions for their dispatch or availability are determined by the law and regulations.
According to the provisions of Article 26 of the by-laws, each member of the Meeting has the right to as many votes as the shares he owns or represents.
According to the provisions of Article 5 of the by-laws, the
Any natural person or legal entity that owns, directly or indirectly, alone or jointly, a 1% share of the voting rights, or any multiple of this percentage, must notify the Company, by registered letter with acknowledgement of receipt, of the number of voting rights that they possess. This notifi cation must occur within 15 days of each acquisition or disposal of this fractional amount.
In the event of non-compliance with the notifi cation requirement provided for in the previous paragraph and upon request, recorded in the minutes of the Meeting from a shareholder representing at least 1% of the voting rights, the shares exceeding the fraction which should have been declared will lose their voting rights for a period of two years following the date of regularization of the notifi cation.
Policies and rules for determining compensation and all benefi ts in kind paid to members of the executive bodies
European Community directive 2006/46/EC of June 14, 2006 into French law, the modifi ed AFEP-MEDEF code is the one that the Company refers to in the preparation of the report provided for by Article L.225-68 of the French Commercial Code.
Supervisory Board took the following decisions in relation to director compensation on February 14, 2008 and December 18, 2008: Compensation and all benefits in kind of Supervisory Board members
Board comprising 18 members, two non-voting directors and two committees, each of six members.
variable portion: €2,000 per meeting, for up to fi ve ■
The Supervisory Board at its December 18, 2008 meeting, based on a motion from the Compensation Committee, decided to suspend all directors’ fee payments for Supervisory
A variable component may be paid to all or some of the
Executive Board members. It is based on Natixis and/or individual performance criteria with a target objective (projected income) and a maximum level (higher than expected income).
The Compensation Committee and the Supervisory Board have ratifi ed the proposal of the Executive Chairman of the Board to waive any rights to variable compensation for the 2008 fi scal year.
Banques Populaires on March 23, 2006. This employment contract was suspended for the duration of his term of offi ce (i.e.
until November 17, 2012) at the time of his appointment as Chief
In 2008 the fi xed compensation of François Ladam was as follows: in relation to his employment contract, a fi xed salary of ■
no compensation (fi xed or variable) in relation to his duties. ■
François Ladam left Natixis on May 31, 2008 under an early retirement provision that will end on March 31, 2009, his effective retirement date.
In 2008 the fi xed compensation paid to Anthony Orsatelli was as follows: in relation to his employment contract, a fi xed salary of ■
Anthony Orsatelli whose notice period ended on January 21, 2009. The termination of the employment contract has lead to the payment in 2009 of severance damages corresponding to two years of compensation (2008 fi xed salary + bonus in relation to 2007).
Jean-Pascal Beaufret (Appointed to the Board with effect from February 14, 2008 and resigned
Jean-Pascal Beaufret whose 6-month notice period will end during 2009. The termination of the employment contact has lead to the payment in 2009 of severance damages corresponding to six months of annual salary.
€424,174, of which €324,174 was paid in relation to his secondment to the Natixis branch in the USA; no bonus for the period; ■
in relation to his duties, the Supervisory Board in its ■
CORPORATE GOVERNANCE 2 Board composition and preparation and organization of its work school fees for his children, voluntary social security protection payments in France as well as the tax and social security charges pertaining to these benefi ts. Between February 2008 (month of his appointment as an Executive Director of Natixis) and the end of August 2008 (end of the secondment in the USA), the total amount of benefi ts that Jean-Marc Moriani enjoyed as an expatriate in the USA, was €402,361.
C - Compensation paid to Executive Board members in the form of subscription stock options
Offi cer (converting to 292,600 options after adjustment (see paragraph below)); 125,000 subscription share options for Jean-Marc Moriani, ■
member of the Executive Board (converting to 192,500 options after adjustment (see paragraph below)).
Articles L.225-181 ■ et seq. of the French Commercial Code provide for a compulsory adjustment of the exercise price and the number of subscription options after the realization of an operation affecting the capital of the issuer Company, including a capital increase in cash with a preferential subscription right, in order to preserve the investment amount made by benefi ciaries of stock option plans.
As a result, the Executive Board has decided upon an adjustment method for the exercise price and the number of subscription options granted to employees of Groupe Natixis and those of Groupe Caisse d’Epargne and Groupe Banque
This adjustment is applicable from October 6, 2008, the end date of the suspension period for the right to exercise subscription options.
scheme (Free Share Grant Plan), to Groupe Natixis employees and to those of the Caisse d’Epargne and Banque Populaire
The capital increase in September 2008 had the effect of diluting the value of Natixis shares. To protect the rights of SAGA
Executive corporate offi cers of Natixis – in the same manner as the list of permanent insiders for Natixis securities – have been individually notifi ed of the rules applicable to transactions on
Natixis shares, and notably, the exercise of options and the sale of shares relating to subscription option plans or bonus shares.
shares in which they declare that they are not contravening the legal provisions and regulations relating to insider operations and share price manipulation; prohibition on exercising options or selling shares arising from ■
to the release of information on the quarterly, interim and annual results, and 10 trading days after the release of information or publication of the aforesaid results.
No discount is applied to the exercise price of the options.
The Natixis Supervisory Board has fi xed the following rules for
Executive Board members relating to the holding of shares issued from the exercise of subscription options or share purchases: during their term of offi ce, Executive Board members should ■
CORPORATE GOVERNANCE2 Board composition and preparation and organization of its work the policy relating to the free allocation of shares approved by ■
In 2008 Dominique Ferrero enjoyed the use of a company car and parking space for an amount valued at €4,270.
Anthony Orsatelli and Jean-Marc Moriani both enjoyed the use of a company car with a value in 2008 of €4,781 and €1,798 respectively.
Philippe Dupont enjoyed benefi ts in kind (housing and a company-provided vehicle) valued in 2008 for a total of €45,237 fully paid by Banque Fédérale des Banques Populaires.
This group plan is closed to all new members from this date. The potential benefi ciaries of this plan will continue to be entitled to its benefi ts subject to ending their career within Groupe Natixis and to completing a minimum seven-year period in their position.
François Ladam was already a potential benefi ciary of this plan before November 17, 2006 in relation to his functions at Natexis
During the period from November 17, 2006 to December 18, 2008 the following Executive Board members became potential benefi ciaries: Dominique Ferrero; Anthony Orsatelli; Jean-Pascal
The Supervisory Board at its December 18, 2008 meeting acknowledged the AFEP-MEDEF recommendations on severance payments for executive directors and noted that the
Summary of the compensation, stock options and shares granted to each executive director
Philippe Dupont, Executive Chairman €651,721 €760,642 - in relation to his functions at Natixis €350,000 €350,000 - in relation to his functions at BFBP €301,721 €410,642
As a result, an informed interpretation of the compensation for corporate offi cers would suggest that the valuation of the options should not be added to their monetary compensation.
Value of options granted during the fi scal year (IFRS 2) 2008 2007
Philippe Dupont, Executive Chairman ns (1) €1,206,270 - in relation to his functions at Natixis €0 €881,505 - in relation to his functions at BFBP ns (1) €324,765
Benefi ts in kind €45,237 €45,237 €44,602 €44,602 - in relation to BFBP (car and accommodation) €45,237 €45,237 €44,602 €44,602
and benefi ts in kind actually paid to the Executive Board member as part of his functions during the fi scal year, irrespective of the grant date.
Fixed compensation in relation to employment contract €424,174 €424,174 ns ns - in France €100,000 €100,000 ns ns - in USA €324,174 €324,174 ns ns
Fixed compensation in relation to board responsibilities €175,000 0 ns ns
(1) For the period from February 2008 to December 31, 2008.
(2) Benefi ts in kind that Jean-Marc Moriani had paid on his behalf in the USA between February and August 2008: - children’s school fees: $64,389; - voluntary contributions to French social security: €50,504; - tax and social security charges on benefi ts in kind: $243,107.
(1) Variable bonus paid in 2007 by the CNCE to Anthony Orsatelli for his functions at the CNCE in 2006.
(2) Director’s fees paid by the CNCE to Anthony Orsatelli for his duties as non-voting director of the CNCE Supervisory Board.
The allocation of director’s fees has been suspended for members of the Natixis Supervisory Board in relation to the second half of 2008.
Table showing director’s fees and other compensation received by non-executive members
Member, Natixis Supervisory Board 10,000 28,000 (2) due: 18,000 paid: ns
Compensation in relation to his appointment as Chairman of the Natixis Supervisory Board
Member, Natixis Audit Committee 10,000 11,000 (2) due: 10,000 paid : 14, 000 (1)
In relation to BFBP and its subsidiaries 13,009 11,040 (3) 11,040 Compensation in relation to specialist BFBP committees 3,466 2,261 (3) 2,261
Member, Natixis Supervisory Board 10,000 14,000 (2) due: 20,000 paid : 32, 000 (1)
Member, Natixis Compensation Committee 4,000 4,000 due: 3,000 paid : 7, 000 (1)
Member, Natixis Supervisory Board 10, 000 14, 000 (2) due : 20, 000 paid : 32, 000 (1)
In relation to Natixis subsidiaries 9, 800 10, 800 (3) 10, 800
In relation to BFBP and its subsidiaries 16, 584 11, 040 (3) 11, 040 Compensation in relation to BFBP specialist committees 6, 966 7, 022 (3) 7, 022
Compensation in relation to CNCE subsidiaries other than Natixis 0 0 ns
Benefi ts in kind in relation to CNCE 400 400 ns
In relation to CNCE and its subsidiaries 136,192 189,009 (2) 188,797
Compensation in relation to CNCE subsidiaries other than Natixis 58,042 54,542 32,500
Benefi ts in kind in relation to CNCE / 7,024 5,523
Member, Natixis Audit Committee 12,500 12,500 due: 12,500 paid: 25,000 (1)
Member, Natixis Compensation Committee 4,000 10,000 (2) due: 3,000 paid: 7,000 (1)
Compensation in relation to BFBP specialist committees 3,341 7,854 (3) 7,854
Member, Natixis Supervisory Board 10,000 16,000 (2) due: 20,000 paid: 30,000 (1)
Non-voting Director, Natixis Supervisory Board 6,000 12,000 (2) due: 20,000 paid: 28,000 (1)
CORPORATE GOVERNANCE2 Board composition and preparation and organization of its work
Subscription options ns (2) ns (2) €8.27 From January 21, 2012 to - including in relation to Natixis
Subscription or purchase options exercised during 2008 by each executive corporate officer
Valuation of options according to the method adopted for the consolidated fi nancial statements Exercise price Exercise period * After adjustment following the capital increase in September 2008.
TABLE 8: GROUP (NATIXIS, GROUPE CAISSE D’EPARGNE AND GROUPE BANQUE POPULAIRE)
Information on purchase and subscription options 2002 plan 2003 plan 2004 plan 2005 plan 2007 plan 2008 plan
Yvan de LA PORTE du THEIL 43,120 43,120 43,120 47,740 61,600 ns (3)
Information on purchase and subscription options 2002 plan 2003 plan 2004 plan 2005 plan 2007 plan 2008 plan 2) Natixis Executive Board members in 2008: 254,100 369,600 392,700 431,200 1,078,000 0 - in relation to his functions within Groupe Natixis 84,700 92,400 100,100 107,800 292,600 0 - in relation to his functions within Banque Populaire 84,700 92,400 92,400 107,800 107,800 ns (3)
Subscription price after adjustment (in euros ) (2) 4.71 5.41 5.79 7.74 14.38 8.27
Cumulative number of lapsed and cancelled subscription options 117,810 120,428 95,480 88,550 275,814 1,327,480
Cumulative number of outstanding subscription options at end of period 1,301,054 4,751,850 6,361,740 7,543,690 15,123,108 6,249,312
(2) The subscription price corresponds to the average price for Natixis shares in the 20 trading days prior the decision date of the Executive Board.
(3) Taking into account individual waivers of subscription options granted in 2008.
Options granted to, or exercised by, the top ten employee optionees within Natixis S.A. below.
Total number of options granted/options exercised (1) Exercise price * Plan
Payments or benefi ts due or likely to be due as a result of the termination or change of function
Dominique Ferrero, Chief Executive Officer date appointed: November 17, 2006 date term expires: November 17, 2012 contract suspended (1) x (3)
This pension is a percentage of the average compensation of the last two years with a maximum ceiling, subject to the member having completed a period of seven years in the function and terminated his or her career in Groupe Natixis.
(4) Executive Board members do not have termination payments in relation to their corporate offi cer functions with Natixis.
In accordance with regulations, a list of the functions performed by the corporate offi cers of Natixis is shown in this document.
In accordance with the enforcement decree of the EU directive 2003/71 (Article 14.1, paragraph 2), none of the persons,
In accordance with EU regulations, there are no service agreements linking members of the Board, Executive
Banking relationships between Natixis and the groups chaired by the independent members are not of a nature as to affect the impartiality of their judgement.
Populaire and Groupe Caisse d’Epargne). There are commercial relationships between Natixis and these two shareholder groups.
Natixis does not consider this situation to constitute a confl ict of interest.
The Corporate and Investment Banking division (CIB) offers its clients – companies, institutional investors, insurancecompanies and banks – a full range of fi nancing and capitalmarkets products taking advantage of all of Natixis’ expertise: advisory services, origination, structuring and distribution. Since the beginning of 2008, this division has been organized in three business lines and two regional platforms: Corporate and Institutional Relations: ■ which manages client coverage in France and internationally, and directly manages straight fi nancing, cash management and mergers and acquisitions advisory services. Net Banking Income 2008: €521 million.
The Net Banking Income of the CIB (excluding operations transferred to Workout Portfolio Management, which is described below) was €2.86 billion in 2008 (2) compared to €2.57 billion
A ■ renewed focus on strategic customers and customer activities, including large corporate customers in France and in Southern Europe, corporate mid caps in France, institutional investors in Europe and structured fi nancing customers in the international market.
Asia (termination of most market activities, with maintenance of a simple customer-based service) and in the United States
Overall, CIB staff is expected to be reduced around 10% in 2009: at the end of 2009, the total workforce will fall to less than 5,000 employees, after having reached a maximum of 5,700 employees in March 2008. This will also result in a 10%
Workout Portfolio Management), to manage the phase down of activities involving assets most impacted by the crisis and those that are no longer considered part of the core business in light of the new strategic focus on customer activities. These activities include primarily the principal fi nance and proprietary structured credit investment activities, credit-correlation activities, portfolios of mortgage-based securities for the ABM Corp subsidiary in New York and the most complex operations within the interestrate and equity derivatives business lines. In total €31 billion in risk-weighted assets (value as at December 31, 2008) have been transferred to the GAPC. (See the Management Report in
(2) The division’s total net banking income includes that of the three business lines, as well as other net banking income of €0.34 billion, which includes €0.54 billion from Credit Portfolio Management.
No. 1 in primary ■ equity capital markets in France by number of transactions (Natixis and Lazard-Natixis) and No. 4 by amount of issues (source: Bloomberg); 2nd best broker in French securities ■ (Natixis Securities) (source: Agefi-Thomson Extel Focus France); No. 1 Mandated Lead Manager (MLA) on ■
for covered bonds in euros (source: Dealogic); No. 10 book runner on bond issues in euros ■ (source: IFR); No. 10 MLA book runner on syndicated loans ■ in the EMEA (Europe, the Middle East and Africa) zone by number of transactions, No. 19 by amount (source: Dealogic); “Eurobond deal of the year ■ ” by IFR and “Euro high grade deal of the year” by Credit Magazine for the GDF-Suez bond issue co-managed by Natixis; “ ■ Aeronautical financing transaction of the year” for the transaction arranged for the manufacturer Embraer, by Air Finance Journal; 5 transactions won awards in aeronautical ■
transaction of the year” for the transactions arranged by Natixis, awarded by the specialized magazines Project Finance Magazine and Project Finance International; “Best trade bank of the year ■ ” in commodities financing in the metals category from the specialized magazine Trade & Forfaiting Review.
Natixis has close relationships with the main corporations and institutions, particularly in Europe.
The size of the network was reviewed at the end of 2008, and two regional departments where closed (reduced from 11 to 9), as were centers in the Paris region (reduced from 5 to 3) and several offi ces abroad, among them offi ces in Panama, Bogotá
Straight Financing is the basis of the client relationship, from which other services are offered. The business optimizes use of Natixis’ regulatory capital, making use of syndication and securitization, managing a portfolio of the main credit lines, and selectively allocating commitments according to the prospects for developing Natixis’ other products and services; in doing this, the bank relies on its recognized sector experience in certain economic areas, particularly in luxury goods, food processing, telecommunications and IT services and the automobile industry.
Energy Capital Partners, Gazprombank; internationally: Nordzucker (acquisition of Danisco), Acciona ■
Natixis offers its clients cash-management services to meet their requirements for disbursements, receipts and cash-management at the national, European and international levels.
In 2008, the business line continued optimizing its organization and its processing of operations. It obtained an extension to its ISO 9001 certifi cation to cover the implementation of cashmanagement solutions on the client’s premises; until then, the certifi cation was reserved for designing products and services and processing operations.
The cross-company Projects business, which focused on the development of new applications and new products, remained busy, particularly with the introduction of the SEPA payment transfer (1) and the BIC IBAN service. In January 2008, Natixis was the fi rst European bank to issue a SEPA payment on the Euro
In 2008, Natixis acted as consultant to GDF in the divestiture of Coriance, to PAI in the divestiture of Stoeffl er, to Malteurop in the acquisition of ADM Corp., to IBM in the takeover bid/public repurchase offer on ILOG, to La Poste in outsourcing part of its premises, to Cube Infrastructure Fund (Investment Fund) in its investment in SAUR and to CDC Capital Investissement in the
Structured Finance and Commodities provides Natixis’ customers with global expertise as an arranger, based on an integrated value chain: investment, advisory services, debt structuring and distribution. It includes 7 complementary business-lines: Aeronautical Financing: ■ Natixis, via its wholly-owned subsidiary
Natixis Transport Finance, remains a key player in the market for aeronautical fi nancing, a worldwide market that refocused on a few core participants in 2008. Involved in aeronautical fi nance for more than 30 years, Natixis is currently fi nancing nearly 500 aircraft of all models and has developed a full range of fi nancing solutions (advance-payment fi nancing, fi scal leasing,
Islamic fi nance, export credits, etc.). In 2008, fi ve transactions won awards from Jane’s Transport Finance for their innovation
and Socatra (France). As part of its fi nancing of land transport, the “Angel Trains” transaction won the “best rail fi nancing
OPERATIONS 3 Corporate and Investment Banking subordinated bank fi nancing, syndication, agent services, hedging products, etc. The structure is organized in four sectors (infrastructure/environment/public-private partnerships, electricity and renewable energy, natural resources and telecommunications) over 8 regions (Paris, London, Dubai,
Acquisition and LBO financing ■ provides recognized expertise as an MLA, and acts as book runner on a complete range of fi nancing solutions (senior, subordinated, LBO, LBI,
infrastructure operations, etc.). In 2008, in spite of an economic climate with limited access to liquidity, Natixis remained a major player in the domestic market, with 9 transactions successfully arranged and syndicated, among them the key Converteam,
Maisons du Monde and Socotec transactions. Natixis was ranked No. 2 MLA in France in 2008 by amounts (source: Agefi
Hebdo/Dealogic). Natixis also continued to develop these skills internationally, particularly in Italy, where it arranged 3 of the 5 most important LBO fi nancing transactions of the year: Giochi
Asia). The business line maintains active relationships with all those involved in the value chain (producers, importers, traders and services companies) through a team of 120 account executives specialized in this market and the requirements of clients. In 2008, it confi rmed its expertise in arranging major facilities in pre-fi nancing and by supporting consolidation in the metals and energy sectors. The specialized magazine
Trade & Forfaiting Review voted Natixis “best trade bank of the year” in the “metals” category; 5 transactions arranged by
Structured Export Finance: ■ the activity meets the fi nancing and payment-security requirements generated by international contracts, particularly cross-border fi nancing, through the
Global Trade Services (GTS) range. GTS’s international contracts are based on a variety of underlying assets including raw materials, capital equipment and services, turnkey projects, and investments involving export credit agencies. The mandates won by GTS, particularly in export fi nancing (Areva,
States, as well as short/medium-term equity transactions via a dedicated subsidiary, Natixis Immo Développement.
(No. 1 with 6 transactions arranged as MLA, representing a 35% market share) and in the EMEA zone (No. 4 MLA with 9 transactions) (sources: Dealogic). REF began to reduce its portfolio of commitments in 2008, particularly through an active policy of syndication.
In spite of the signifi cant slowdown in the U.S. real estate business, REF maintained a presence in the U.S. real estate fi nance market, carrying out 11 new syndicate transactions that were widely distributed among investors and participants. By focusing on syndication and the sale of debt and subordinated interests in debt, actively managing the portfolio and covering credit risks, REF reduced its outstanding loans by about 44%
The Debt Solutions teams are involved in all fi nancing transactions originated by the CIB, to confi gure, assemble and structure them for the markets in which they are to be placed: bank syndication, sale to investors.
In the syndicated loan market, ■ Natixis is recognized for its ability to structure and distribute loans: corporate, fi nancial institutions and structured fi nance. Based in Paris, London,
“debt repackaging” business fi nanced the purchase of the network of Virgin Megastores in France by Butler Capital
Debt Solutions North America ■ provides clients of Natixis with access to the American debt markets (public and private), and offers American issuers global coverage of their debt requirements. Based in New York, it offers integrated expertise in origination, structuring, implementation and syndication of syndicated loans, Company debt, secured loans, Company securitization, municipal debts and risk transfers. In 2008, Debt
In Europe, the business has refocused on arranging the fi nancing of debt portfolios and distributing securities backed by portfolios, for companies and fi nancial institutions, including insurance companies. The fi nancial crisis and the transition to Basel II have encouraged transactions giving access to liquidity for the sellers.
The development of the swaps securitization activity facilitates execution of transactions on the capital markets. Natixis has thus adapted its range of products to the requirements of its bank customers, hedge funds or corporate issuers.
Natixis, a recognized player in European capital markets, offering its customers a diversifi ed and customized range of products in the interest rate, foreign-exchange, commodities, debt and equity markets.
Natixis offers its customers investment and hedging products in foreign-exchange, interest-rates, credit and emerging markets: forex teams give quot ■ es on simple or more complex products in the main currencies; the interest-rate activities give quot ■ es on cash products in euros (government bonds) or simple or complex derivatives
All of these products rely on a large research system and distribution teams organized by type of customers (corporate, fi nancial institutions, customers of our shareholders or local authorities), and for institutional customers by type of product.
In 2008, Natixis managed several noteworthy issues, among them: the GDF Suez transaction was recognized as the
“Eurobond deal of the year” by IFR and “Euro high grade deal of the year” by Credit Magazine, the corporate issue transactions for Danone, Lafarge and Bouygues, all for amounts greater than €1 billion; the inaugural issue from SFEF, recognized as the
and the inaugural covered issue from Bankinter (€1,500 million); long-term (more than 10 year) issues from the French agencies
SNCF and RATP and the Dutch agency BNG; the fi rst issue underwritten by the Dutch government for the investment bank
The interest-rate, foreign-exchange and loan business constitutes, after segregating the most complex products, one of the bank’s long-term activities, both in support of fi nancing activities and to meet the requirements of priority clients, particularly institutional clients.
Natixis Group are refi nanced over the short, medium and long terms, and carries out arbitrage transactions on interest-rates and loans (relative value).
Tokyo, offers services from execution to clearing on the various commodity markets.
Natixis has developed great expertise in equity markets in the areas of brokerage, arranging of primary transactions, and the structuring and sale of hedging or investment products.
In addition to being specialists in all products of the French market,
Natixis Securities’ research teams cover the major European corporations. Natixis Securities has been ranked for the second consecutive year as the No. 2 broker in French securities in 2008: No. 1 broker for trading and execution services, and No. 2 for research in France, with more than 340 securities monitored in 25 sectors. In 2008, research on French securities was ranked in the top 3 on 24 occasions, including 12 fi rst positions (source: Thomson Extel Focus France – December 2008).
In spite of the signifi cant drop in stock markets, the American institutional sales team had a performance in 2008 that was superior to that of the previous year, due to a strong diversifi cation of its customer base.
In the Equity Capital Markets fi eld, Natixis offers personalized advisory services and high value-added products on primary equity markets. Origination capacity is augmented through its links with Lazard in France.
In 2008, in spite of the particularly diffi cult economic climate,
Natixis and Lazard-Natixis confi rmed their fi rst-rate position in the business in France, together being ranked No. 1 by number of transactions, with 11 transactions managed by Natixis and
Lazard-Natixis as the lead manager and bookrunner, and No. 4 by volume (source: Bloomberg).
Natixis structured and managed several signifi cant transactions during the year: in May 2008, the OCEANE issue (2) of €150 million for Vilmorin (the only signifi cant convertible issue last year), the accelerated placement of €920 million of Vivendi shares in March (2nd largest block sale of shares by size in 2008), the two restructuring transactions carried out for Eurotunnel, respectively for €800 million in February and €915 million in
(2) OCEANE: bonds with the option for conversion into new or existing shares.
Both in the primary and secondary markets, Natixis offers its customers a wide range of equity derivative products for hedging and investments based upon a wide variety of underlying assets and investment instruments. In spite of a second halfcharacterized by high volatility and a general drop in stock-market indices, equity derivatives continued to pursue their objective of developing a balanced business mix in 2008. During the year, the business line focused on: arbitrage activities, based on the introduction of its own ■
(source: International Securities Finance); particular investment has been made in asset managers; fl ow-management products, particularly through a variance ■
For the Corporate Solutions business, the economic environment remained favorable until September: over the fi rst nine months of 2008, 99 new transactions were carried out, up from 71 over a comparable period in 2007. In the last quarter of 2008, in the context of a worsening fi nancial crisis, the business was mainly concentrated on restructuring transactions carried out with core clients.
The range of funds-based derivative products had constant business in the fi rst semester 2008, unlike in the second half of the year, which was gradually impacted by the fi nancial crisis. Currently considered non-strategic, the business is now concentrated on restructuring transactions aimed at reducing risk, both incurred by Natixis and by its customers. Factors such as hedge-fund risk aversion, the lack of liquidity and external events, such as the Madoff fraud, have weighed heavily on the performance of portfolios.
Natixis has continued to develop of specialized alternative management products. Natixis Capital Partners, a subsidiary specialized in the real estate sector, introduced its third investment fund, Captiva, whose regulatory capital stood at €420 million at the beginning of 2009. Other “new generation” products, providing enhanced transparency and covering assets in which
a range of managed funds ■ and alternative multimanagement funds; the management of specialized and structured funds. ■
York and the New York region, with some activities located in
foreign-exchange activity in 2008, offering fi nancial institutions and capital managers based in the United States a more complete range of products and services, combining consulting, analysis and the provision of an electronic brokerage platform. The North
American establishment has also enhanced its Debt Solutions business, for issuing, structuring and distributing syndicated loans, private bond issues, secured loans, securitization, localauthority bonds and risk transfers.
Natixis is present in 12 countries in Asia via a platform created in 2008, which includes the “Financing” and “Capital Markets”
Institutional and Corporate Finance: Coverage was enhanced in 2008, particularly in the Energy sector, and fi nancial sponsors now have a targeted geographical and sector network that works to complement the specialized business lines. Signifi cant transactions have been carried out: the Fraser & Neave and Parkway Holdings market transactions in Singapore, those for Tata Communications in India and those for PCCW in Hong Kong; factoring transactions in China and matched funding in India (including Videocon with the assistance of Coface), and a growing number of export credits in Indonesia,
HDFC Bank, Indian Overseas Bank), and has developed new relationships with certain funds such as La Salle Asia Opportunity
Structured and Commodities Finance: In ■ project financing, the business had a remarkable debut as
In aeronautical finance, ■ Natixis continued to display its leadership, particularly in China (Air China, Shanghai Airlines,
In financing for ■ shipping and land transport, some 15 mandates were awarded in 2008, among them: Samudera and Mermaid
In addition to these activities a regional ■ banking syndication platform was put in place in 2008. Natixis was ranked No. 17 as
MLA in syndicated loans in 2008 in the Asian zone - excluding
The Credit Strategy and Analysis teams combine quantitative and fundamental approaches that result in in-depth and independent analyses of 90 private euro-zone bond issuers. They also study trends in the credit market (developing new segments, such as government-underwritten debt) or problems specifi c to the credit market (Company liquidity). A range of publications offers clients the best opportunities available on the market at any given time.
Natixis Securities was ranked No. 2 in December 2008 for research in France, with more than 340 securities monitored in 25 sectors. In 2008, research on French securities came in the top three on 26 occasions, including 12 fi rst positions (source: Thomson Extel Focus France – December 2008).
Quantitative Research is geared to developing and maintaining models for valuing and managing the risks associated with fi nancial products like derivatives and complex structured deals. Quantitative Research acts as a vector for tailoring the product offering to client needs and is used by traders and structurers. The Natixis Foundation for Quantitative Research funds fellowships for doctoral theses and university-based research projects on subjects which directly impact the concerns of fi nancial institutions. It assists in the Bank’s technology watch activities and ensures that the latest fi nancial engineering developments are incorporated into products.
Its teams were kept particularly busy in the diffi cult context of 2008.
They also absorbed peaks of activity and controlled operational risk through increased checks, thus meeting new regulatory requirements. They also undertook measures to optimize and reduce costs, as part of the bank’s cost-reduction plan, were also undertaken.
All processes were optimized in all of the department’s activities, to increase productivity gains. The teams were also heavily involved in the bank’s large common projects.
The Information Systems Department continued system decommissioning and thus achieved post-merger synergies.
At the middle-offi ce level, information systems security was enhanced, the Financing middle offi ce was reorganized and the redistribution of the Market Data workload began.
Natixis Global Asset Management is one of Natixis’ most highlyinternationalized entities and ranks among the top 15 asset managers worldwide (1). It commands strong positions in Europe
(mainly in France), and in the USA, and is expanding in the Asia-
– which manages and ensures the consistency of overall asset management operations and also has responsibility for business development – the Natixis Global Associates worldwide distribution structure and some 20 specialized asset management companies based in Europe, the United States and Asia. Headcount totals 2,900, with almost 1,700 staff based in the USA.
This multi-boutique organizational model, which covers all asset classes and management styles, is designed to leverage the specifi c expertise of each asset management company to the full, while providing the advantages of a global distribution network.
The overall market for infl ows in asset management has contracted on all products except money-market instruments and in all of the main geographical zones. This began from the summer of 2007 and intensifi ed in the third quarter of 2008 following the bankruptcy of Lehman Brothers.
The variation in assets managed is mainly explained by negative exchange effects and market effects of €70 billion and the programmed 72 billion asset withdrawals from La Banque
compared to 2007, which was a record year for profi ts. They remain positive and the ROE is around 13%, a level that is perfectly respectable in a period of crisis. These results position the division very favorably in relation to the competition.
The multi-boutique model used by Natixis Global AM is evidence of its commercial and fi nancial strength. The strategy implemented by Natixis Global AM has been confi rmed. Transforming a Franco-
2009 will be another diffi cult year, but the division should remain in profi t, thanks to its structural assets: a good competitive position in France and the United States, recognized expertise, the premium granted to the large market players, and a cost structure that is a relatively fl exible thanks to its decentralized model.
(1) Cerrulli Ranking - July 2008, covering assets under management at the end of 2007.
Under the aegis of the Natixis Global Asset Management holding company, the division continued its policy of development on world markets and for a wide range of clients: institutions, large corporates, intermediaries and personal customers. In July 2008, the Company was designated “Asset Management fi rm of the year”, for its overall strategy, by the magazine Global Investor.
The economic and fi nancial crisis impacted the world market for infl ows in asset management, which began to contract in the summer of 2007, and especially since the end of 2008. In this new context, the amount of assets under management by NGAM stood at 446.7 billion at the end of 2008. Net infl ows are practically stable. Operating income remains positive.
“ A confi rmed strategy as a global player, and an effective multi-boutique model „ ASSETS UNDER MANAGEMENT BY CATEGORY OF ASSETS
Natixis Global Associates is Natixis Asset Management’s global distribution platform. Its distribution network already serves clients in about 30 countries on all continents. It markets the entire range of products of all Natixis’ asset management companys, tailoring them to the needs of each country and grouping them with additional services. In the USA, Natixis Global Associates mainly targets distributors of personal banking savings products.
Internationally, it services institutional clients via teams organized on a geographic basis.
In 2008, targeted actions were carried out to implement the development strategy of Natixis Global Associates. In the United
(Independent Channel and Institutional Services). Internationally, investments were oriented towards growth zones, especially
At the end of 2008, the amount of outstandings generated by
Natixis Global Associates handling distribution, Natixis’ asset management companies can concentrate even more on their core business of creating performance, while reaping the benefi t of worldwide commercial fi repower and shared support functions.
AM is one of the largest European asset managers and now delivers a wider range of high-performing management solutions to institutions, large corporates and personal banking customers of Groupe Banque Populaire and Groupe Caisse d’Epargne.
In 2008, Natixis Asset Management registered a sharp drop in the volume of its assets under management, related to a strong negative market effect and the programmed exit of €72 billion of assets from CNP’s life insurance contracts distributed by La
Other than this exceptional factor, the impact of which was marginal in terms of income, considering the diffi culties that appeared in dynamic money-market products and which were checked during the year, Natixis Asset Management stood up well, gaining market share in France and achieving second place for open funds in Europe.
The Company continued implementing its strategic plan. It adapted to the new context by increasing local relationships with clients, rationalizing the range of open funds and enhancing product expertise, particularly for the euro. Natixis
Asset Management also confi rmed its marketing ambitions to independent wealth-management consultants by taking a 25% stake in the capital of the Dorval Finance management company.
Lastly, the Asset Management division’s real estate management activity continued its organizational unifi cation and its development policy: held at 60% by Natixis Global Asset Management and at 40% by the Caisse des Dépôts et Consignations, AEW
The magazine “Mieux Vivre votre Argent” awarded a “Corbeille d’or” to the Caisse d’Epargne network for the fi nancial management of its funds delegated to Natixis Asset Management (category “Retail banks” over 1 year). Option Finance ranked Natixis Asset Management as second in France for institutional clients. Two gold trophies (best SICAV range and diversifi ed funds – “Network banks” category over three years, and best overall performance – “Insurers” category) were awarded by the magazine Le Revenu for management delegated to Natixis Asset Management. “Mieux Vivre votre Argent” awarded an Excellence Label for Réactis Equilibre from Natixis Multimanager in the “Balanced” category.
All of the American management companies directly provide distribution services for institutional clients in the United States.
Natixis Global Associates, which distributes products, provides advisory and structuring capabilities, and also offers related services that can be tailored according to differences in markets and distribution channels. Natixis Global Associates supplies both volume retailers and private investment advisers.
Investor.” Dan Fuss was selected in the list drawn up by
Private equity is one of Natixis’ historic business lines, having operated in this market for 20 years through subsidiary Natixis Private Equity (NPE). NPE is currently recognized as one of France’s market leaders in private equity for small and medium-sized businesses , with a portfolio of over 650 investments and assets under management of €4 billion in 2008.
Natixis Private Equity is one of France’s market leaders in private equity for small and mid-caps, a key player in Europe, particularly in Spain, Italy and Poland, and a player with growing visibility in very high-potential markets such as China, Brazil and
Natixis Private Equity offers international teams the opportunity to work with a key player in the private equity sector and benefi t from its experience, its network, its methods and its fi nancial support. Furthermore, in order to ensure the real sharing of experience and expertise between all of its teams in France and abroad, NPE has developped specifi c knowledge management and business development solutions for the sharing of expertise and opportunities.
“ All wealth-management solutions to meet the needs of high-net-worth individuals „ With 13.5 billion of assets under management at the end of 2008 and more than 500 employees, Natixis’ Private Banking business designs wealth-management solutions meeting the requirements of high-net-worth individuals.
A genuine investment bank for the management of wealth, it has in-depth knowledge of the legal and tax issues related to business owners and senior executives. It has also developed expertise in fi nancial engineering dedicated specifi cally to optimizing and fi nancing private aspects of corporate fi nance transactions.
At the same time, it is developing a series of products and services specially designed for the private wealth-management sector of the Groupe Caisse d’Epargne.
As part of its strategy, in November 2008 Natixis initiated a proposal to merge Banque Privée Saint-Dominique and La Compagnie 1818 - Banquiers Privés. The objective is to build a fi rst-rate private bank in France to serve the two “Banques Populaires” and “Caisse d’Epargne” networks, which together represent more than 20% of the French retail banking market.
The Services division groups six complementary and interactive business-lines, both at the commercial and technical levels, organized in specialized subsidiaries, with the exception of the retail custody-services activity, which is integrated with the parent company.
All the services are tailored to satisfy the needs of specifi c client types (i.e. private individual, professional, corporate and institutional) and are based on two core principles. Systems and processing are industrialized and pooled so as to provide effi cient and competitive solutions for the distribution networks. Natixis focuses on integrated and open systems that respond to the needs of the European market.
(source: Global Custodian); No. 2 in retail custody services in France; ■
In insurance, Natixis provides products and services covering all areas: life insurance and provident insurance for private individual clients, professionals and companies; non-life insurance marketed to private individual clients and professionals.
The development of products and services for private clients continued, particularly via Foncier Assurance, a 60%-owned subsidiary of Natixis Assurances since June 2007 (the balance being held by Crédit Foncier de France). Totally integrated into its parent company, Foncier Assurance aims to develop signifi cantly in the market for independent fi nancial advisors and partnerships.
insurance), a wider range of instruments offered by managers of repute, as well as automatic management services (reinvestment of capital-gains in secure or higher-performance instruments, gradual investment, relative stop-loss and performance corridor)
The Provident insurance activity, which is less sensitive to the fi nancial climate, is continuing to grow and reached the objectives that Natixis Assurances set itself for 2008, with revenue up by 22%.
The revenue for Autonomis dependency-insurance contracts increased by 89%, while the number of “Multi-risk Non-Work-
Populaires. From January 1, 2009, Natixis Assurances’ solutions are now offered in 13 Banques Populaires, representing about 80% of the new production of Groupe Banque Populaire’s amortizable loan issuance.
Non-life insurance, still subject to a very competitive environment, particularly in pricing, had gross production of 160,000 contracts in 2008, bringing the number of contracts in the portfolio to 680,000. The average drop of 7.4% in prices for automobile insurance in 2008 contributed to improving the competitiveness of Natixis Assurances’ products in this market.
The non-life products designed for professionals, introduced in 2008, have also produced good results, in accordance with the objectives that were set.
Prospects for infl ow in life insurance are more favorable in 2009, bearing in mind the standardization of the level of short rates, especially with the Livret A rate being reduced to 2.5% at the beginning of the year.
SACCEF and SOCAMAB to form the Compagnie Européenne de Garanties et Cautions, a multi-business platform for fi nancial guarantees and sureties. Natixis is thus providing the
French market with a major player in guarantees and sureties, of particular interest to companies and banks in the current economic climate.
The main guarantee insurance company in France, with outstanding guarantees that exceeded €53 billion at the end of 2008, the Compagnie Européenne de Garanties et de Cautions occupies 2nd place in the French market for guaranteeing mortgages to private individual clients, with 125,000 cases guaranteed in 2008. It also provides guarantees to nearly 26,000 companies, covering regulatory, tax and contractual requirements.
Natixis Garanties is the second-largest provider of professional guarantees for realtors and real-estate administrators in France, with 4,380 guarantees supplied under the Hoguet law (including the Foncia and Lamy Groups).
Natixis has a team of experts who maintain close relationships with professionals and provide guarantee services to a very wide range of economic sectors: housing, the social economy, manufacturing, fi nancing of small-to-medium-sized businesses/
Number 2 in French fi nancial leasing (source: ASF survey -
French fi nance provider for wind farms, Natixis Lease improved its positions during 2008 to achieve new production of €2.8 billion and average outstandings of €7.5 billion.
Thus, in fi nancial leasing, with €720 million, Natixis Lease improved its production by 35% in a market that grew by 7.5% (source: ASF – March 2009). Other than the increase in contributions from regional Banques Populaires, Natixis Lease used its expertise to carry out several signifi cant operations with large corporate clients: Décathlon, Leroy Merlin, Airbus, Lidl,
In Sofergie fi nancial leasing, Natixis Energéco consolidated its dominant position in fi nancing renewable energy, particularly wind and solar power, and had new production of nearly €150 million.
In equipment leasing, the preferred means for small and mediumsized businesses to fi nance their investments, Natixis Lease had an increase of 9% for new fi nancing of €1.7 billion. Of this new production, 52% was contributed by the Banques Populaires network and 18% by that of Caisses d’Epargne.
Spain and a market that is very weak, the Natixis Lease Madrid subsidiary had €102 million of new production, a result close to that of 2007. The Italian subsidiary had production of €75 million, up by 18% compared to 2007.
In 2008, Natixis Lease continued rationalizing its IT system, migrating the fi nancial leasing activity to the new Cassiopée system.
Natixis Financement provides all its expertise in the consumercredit value chain to serve the Caisse d’Epargne and Banque
Populaire networks: marketing and design, network organization, credit scoring, management of applications, collection and litigation.
The Teoz revolving credit service, distributed by Caisses d’Epargne, maintained a good rate of development, with more than 186,000 accounts opened at the end of December 2008, for a fi nancing volume that was sustained at €615 million.
Lastly, Natixis Financement manages personal loans for Caisses d’Epargne using “IZICEFi”, a tool for proposing services to clients that are appropriate for their fi nancing requirements, via an easyto -use interface. The steady progression of Caisses d’Epargne in personal loans characterized 2008, with fi nancing reaching €4.1 billion, or 27% greater than in 2007.
To support this growth, on October 1, 2008, Natixis Financement opened a third Customer Relations Center at Reims. To meet the specifi c needs of partner networks in French overseas territories, the Company will set up establishments in Guadeloupe and
A SUCCESSFUL YEAR FOR EMPLOYEE BENEFIT PLANNING, IN SPITE OF A DIFFICULT ECONOMIC SITUATION
Management are committed to developing socially-responsible saving and solidarity schemes. Natixis Asset Management is No. 1 in solidarity save-as-you-earn schemes in the French market with 54.6% market share (source: 2008 edition of the
(source: 2008 activity report from the Comité Intersyndical de l’Epargne Salariale [Inter-Union Employee Savings Committee] ).
Interépargne in 2008, in spite of the unfavorable fi nancial-markets environment and exceptional release measures, allowing savers free access to their savings in the fi rst half-year of 2008.
(PERCO) became reality in 2008 with numerous relationships established. This phenomenon should accelerate still more in 2009, under the effect of the growing number of calls for tenders relating to Company retirement schemes.
Furthermore, Natixis Interépargne has widened its product range to adapt to recent regulatory changes covering employee savings and to anticipate new market expectations. In particular, it offers a communication plan to promote companies’ benefi ts policies among employees and help them to choose between investment or the annual settlement of their contributions.
and “retirement benefi ts” products, whose competitiveness was recognized with a “Label of Excellence” awarded by the Dossiers de l’Epargne 2008.
Natixis Intertitres, the only bank player approved by the public authorities for distributing a full range of special payment vouchers, increased its market share in restaurant vouchers, where the volume increased by 13%.
For all special payment vouchers, the activity increased by 13.1% of the total volume issued, reaching more than 65 million vouchers on 31 December 2008. Their exchange value also increased by 16%. In 2008, Natixis Intertitres was chosen by the French railway operator SNCF to issue and repay the “taxi checks”, which replace the traditional taxi vouchers given to train travelers in case of disruption.
Natixis Pramex International is the subsidiary specialized in advisory services and international development for companies.
Its marketing teams work with French companies in collaboration with account executives from Natixis and Banques Populaires and are supported by a network of experts established in 16 countries.
At a time of economic and fi nancial crisis, Natixis Pramex
This international expertise covers all phases in developing companies’ business abroad: initial analysis of project, practical assistance in introducing an activity in a new country, support in international establishment.
International is rationalizing certain local structures (Shanghai will manage activities in Beijing, and Madrid will manage those of
In 2009, Natixis Pramex International will give priority to promoting the “administrative and fi nancial assistance” activities, where revenue is growing steadily, together with assistance with international establishment, a signifi cant source of development.
Since 2007, Natixis Algérie has been a full-service bank and is now developing its local banking activities for personal banking clients and professionals.
Natixis Paiements’ role includes acting as technical operator for the Banque Populaire network. It has handled 3.6 billion transactions exchanged in CORE, the new system for interbank exchange of block transactions, developed to replace SIT.
The IT system was adapted to meet the main changes during 2008: implementation of SEPA with the creation of SCT (Sepa credit transfer) and migration of the French banking community to TARGET 2 in February 2008.
In the “professionals” market, Natixis Paiements is also anticipating developments to the market for transaction acquisition, internalization of the e-commerce platform, the provision of terminals for electronic payment over broadband
(ADSL and GPRS) etc., and is taking part in tests carried out on new payment technologies (contactless payment, payment by mobile telephone).
Natixis aims to consolidate its existing strength in France to become a major European player in the payment processing and e-cash segments.
Natixis is a key European player in retail custody services, provided by the EuroTitres department and the departments for institutional custody services, funds administration and services to issuers. These activities are carried out within CACEIS, a subsidiary that is jointly owned with Crédit Agricole S.A.
Natixis offers a full range of services that are perfectly modular, from the secure provision of offi ce service processing systems, to wider services including all back-offi ce functions (order routing and execution, transaction accounting, client reporting, securities custody services, etc.).
Provided to the Banques Populaires, the Caisses d’Epargne and the other Natixis entities, these services are also offered to a wide range of clients outside the Group: network banks, specialized banks with or without networks and fi nancial institutions.
In a diffi cult market, with declining volumes and the departure of the client LCL in the fi rst quarter of 2008, EuroTitres recorded a reduction in its activity. The number of securities accounts managed stood at 3.9 million in 2008, for a level of outstandings in safe custody of €300 billion, down by 18% compared to 2007.
In 2009, Natixis will reorganize its securities services business, aiming for a unifi ed back-offi ce and IT platform, with priority given to monitoring client transactions, the quality of the service provided and the control of operational risk.
Natixis’ SLIB subsidiary produces software solutions for brokers, banks and global clearing members, to manage market fl ows from trades on European markets (trading, post-trading and clearing, portfolio management and bookkeeping).
Currently, nearly 60 institutions in seven European countries, including Natixis Securities and CACEIS Bank, use SLIB solutions to optimize their market and post-market activities, portfolio management and bookkeeping.
In 2008, two thirds of new clients were at the international level, for services including clearing, settlement/delivery, portfolio management and risk management.
BNP Paribas’ 33.40% stake will allow SLIB to accelerate its international development.
In Institutional Custody Services, through CACEIS, its subsidiary jointly-owned with Crédit Agricole SA, Natixis offers a very wide range of fi nancial services to management companies, institutional clients and businesses: CACEIS provides bank depository and custody services in ■
France, Luxembourg, Ireland and Germany. With €2,166 billion of assets under custody on December 31, 2008, the Company is among the world leaders in its business; CACEIS is also a major player in funds administration and ■
Receivables Management comprises the Coface Holding company, created by combining Coface and Natixis Factor. It supplies solutions to companies for managing, protecting and fi nancing their client receivables, and provides its expertise in four businesslines: credit insurance, factoring, business information and rating and receivables management. In addition to these activities, Coface Holding manages public export guarantees granted by the French state to Coface and Natixis, especially prospection insurance, credit insurance for exports fi nanced for over two years, foreign exchange insurance, and overseas investment guarantees.
Credit insurance protects companies against the risk of nonpayment of their customers’ receivables. Factoring allows companies to monetize their accounts receivable by transferring them to a third party, the factor, who takes responsibility for collection. With “business information and rating”, companies can learn about commercial opportunities, assess the fi nancial situation of their partners and check their partners’ ability to fulfi ll their commitments. Receivables management provides them with a service for recovering monies due to them.
Coface’s network and on specialist brokers. Abroad, it uses the same channels, as well as local partners grouped within the CreditAlliance network. Coface Holding earned more than 63% of its consolidated revenue outside France in 2008. Directly present in 65 countries at the end of 2008 (after opening in
Egypt in 2008), Coface Holding is gradually introducing its four business-lines: for each of them, the division is worldwide No. 1 for geographical coverage.
No. 1 in France for receivables management; No. 6 worldwide for factoring; No. 3 worldwide for credit insurance; No. 4 worldwide for receivables management; No. 5 worldwide for business information.
The factoring business grew by 14.2%; driven by the integration, in 2008, of acquisitions in Denmark, the Czech
Republic and in Slovakia, and by very strong internal growth, the factoring business is now present in 28 countries, compared to 16 at the end of 2007. This is the largest network in the world by geographical coverage. The two main countries where the business is present remain Germany, with Coface Finanz, No. 1 in its market, and France, with Natixis Factor, third largest factor nationally (source: ASF). Natixis Factor saw its net banking income grow by 5.3%, with a volume of factored receivables that grew by 10% (+14% for export).
It is a skill particularly more essential in a period of crisis, both for the division (which had the best claims-to-premiums ratio among the large players in credit insurance in 2008) and for its clients.
The crisis is weakening trust between clients and suppliers, and the division aims to help companies in this diffi cult period, by contributing to maintaining trust in inter-company relationships, access to debt fi nancing for small and medium-sized businesses , and in playing its role as a “circuit-breaker” in serial company bankruptcies.
In this spirit, and in liaison with the representatives of companies and the public authorities, Coface gave commitments in
French companies, whether they are clients or not. It undertakes i) to communicate to each company, free of charge and upon request, its Coface rating, its credit opinion, and the information that justifi es them, and any modifi cations to them; ii) to contact companies prior to any decision to check any payment incidents that come to the attention of Coface concerning them, to determine whether they are real and their severity; and iii) to receive and analyze the most recent information that companies wish to provide to Coface, if necessary guaranteeing total confi dentiality.
Natixis’ activities include retail banking both directly through the 20% share of income from retail banking activities through CIC
certifi cates held, and indirectly through activities – in particular for the Services division – made available to the Caisse d’Epargne and Banque Populaire banks and their customers.
Natixis has the advantage of being associated with two powerful mutualist groups, Groupe Banque Populaire and Groupe Caisse d’Epargne, which give it access to a wide base of retail banking clients.
As a mutual banking organization, each group includes: a retail banking network that includes a group of mutual banks ■
(20 Banque Populaire banks and 17 Caisse d’Epargne banks at December 31, 2008) that are owned directly or indirectly by cooperative shareholders (each group has over 3 million cooperative shareholders), as well as by Natixis through CICs, which represent 20% of their share capital (1); a central body that coordinates and supervises the activities ■
of its group (BFBP and CNCE), the capital of which is held by the retail banks; a number of entities that provide specialized products either ■
base for the Caisse d’Epargne network and robust growth for the Banque Populaire network; small businesses, in which Groupe Banque Populaire is No. 2 ■
in the market; small and medium-sized businesses ■ , in which Groupe Banque
Populaire and Caisse d’Epargne banks such as custody, electronic banking, payments processing and IT support; ties as supplier-distributor: Natixis supplies products and ■
Populaire banks defi ne the Groupe Banque Populaire’s regional footing. True to their primary vocation, they create an ongoing local banking relationship with their clients and actively participate in regional economic development.
in life insurance (+8%) and €29.5 billion in mutual funds in 2008.
Enhanced regional positioning with the acquisition of the seven regional banks of HSBC France
This large-scale project is based on respect for the brand identity of the seven regional banks, within the decentralized model used by Groupe Banque Populaire.
Banque Fédérale des Banques Populaires quickly reassigned 51% of the six other banks to their attached Banques Populaires: Banque Populaire Provençale et Corse for Banque Chaix, Banque
On December 31, 2008: Outstanding customer deposits: €64.4 billion (+11%); Outstanding loans: 74.4 billion (+12%).
The private individual client market, with about 13,500 advisers, including 600 for private management, is a major avenue for development, as confi rmed by the steady increase in the number of private individual clients and the constant growth of loans and savings.
Small businesses and corporate clients: strong positioning with comprehensive integration in the economic fabric
(source: TNS Sofres survey 2007); No. 1 bank for craftsmen ■ (source: CSA “pépites” survey 2008); No. 2 bank for professionals ■ (source: CSA “pépites” survey 2008); No. 3 bank to self-employed professionals ■ (source: CSA
Populaire, the leader in business start-ups, widened its range of products and services in 2008. Solutions for factoring and employee savings (Fructi Duo) dedicated to very small companies, and guarantees facilitating access to loans (SOCAMA, Natixis
Garanties, Oséo garanties, etc.), have contributed to the Group’s actions in creating businesses.
Facilitating access to loans for very small companies with: The 28 SOCAMA (mutual guarantee companies for small businesses), which provide surety for the fi nancing of investment
Fund, which ensures continuity of the Socama express loan without personal guarantee, and the business transfer loan with a limited personal guarantee.
The implementation of an agreement with Oséo with the support of Natixis Garanties, directed at farmers, self-employed professionals and retailers.
Partnerships with the national federation of students in speechtherapy (FNEO) and the national association of young general practitioners (SNJMG), and a presence at the major conventions for the professions, such as the MEDEC (conference for general medicine) and the national conference for certifi ed public accountants, have increased exposure to this clientele.
Supported by a rate of penetration of 38% with companies of less than 1,000 employees (source: SOFRES survey, 2007), the
In addition to traditional fi nancing techniques, the range of products to aid the growth of companies is becoming more diverse through Natixis’ specialized fi nancing subsidiaries, with: fi nancial leasing and equipment leasing with Natixis Lease. This ■
With the introduction of SEPA, the fi rst Sepa Credit Transfers
Emphasis is now being placed on Internet transactions, with the new “Cyber international” service, which allows international
New clients are also obtained through partnerships with foreign correspondents, such as those signed at the end of the year with Banque Centrale Populaire of Morocco and that with VBI for support in central Europe.
In three years, the Caisses d’Epargne have made signifi cant investments for improving their customers’ satisfaction by optimizing their marketing methods and their network. Since the program began, 2,130 Branch offi ces have been renovated and 2,135 new ATMs have been installed. The Ecureuil Attitude reception framework has been introduced in all branches. The
The historic business of Caisse d’Epargne, the collection of savings from private individuals and professional clients, had a new record year, reaching nearly €9 billion. More than ever, liquidity, security and rates of interest were the determining factors for savers, who moved massively towards the Livret A
(which had an interest rate of 4% on August 1, 2008, its highest level for 12 years), term deposits and, to a lesser extent, life insurance.
Caisse d’Epargne remains the only large French bank to pay interest on its clients’ on-demand deposits: more than 5 million personal banking clients currently have interest-bearing accounts through Caisse d’Epargne. The S’miles customer loyalty program, launched in 2006, for which Caisse d’Epargne is the exclusive banking partner, complements this unique service and contributes to satisfying and retaining customers through providing quickly accessible benefi ts. Caisse d’Epargne has also confi rmed its position as the leading issuer of Visa cards and as second-largest issuer for all card brands.
The number two bank in real estate, Caisse d’Epargne continued its efforts to support fi rst-time buyers, with the Grandioz loan and the zero-rate loan, and introduced Adoucimmo, a loan aimed at older clients with reduced installments from retirement.
The range of non-life insurance, developed by GCE Assurances, covers car insurance, home insurance, legal insurance and guarantees non-work-related accidents. The year 2008 was dynamic, with good take-up of complementary health insurance, developed with MACIF, aimed primarily at young people, students, young employed people and young families.
Caisse d’Epargne is also a partner of choice for small retailers, craftsmen and self-employed professionals, both on a professional and a private basis. 1,500 branch managers were specially trained to serve small businesses, more than 1,000 specialized managers are dedicated to them and 500 wealthmanagement account executives are available to them.
Current accounts, packages such as Franchise & Vous offering numerous account-management services (remote banking, insurance, etc.,) – and, for franchisees, e-cash solutions and secure Internet payment solutions – all increase the number of people holding bank accounts.
Whether it concerns business creation or business transfer, equipment loans, fi nancial leasing or long-term rental, smallbusiness clients have a complete range of products for fi nancing their requirements in a simple and personalized way.
Caisse d’Epargne supports regional companies from their founding to their transfer, with a complete range of fi nancing and services, as well as solutions using its regulatory capital from its regional and national investment funds. It has an extensive range of products through the expertise of the subsidiaries Cicobail and Natixis Lease, Natixis Interépargne, Natixis Garanties (which became Compagnie Européenne de Garanties et Cautions in
again expanded its range of products and services in 2008, to provide even more effective solutions to businesses.
As a partner to nearly 230,000 associations, Groupe Caisse d’Epargne has chosen to make the social economy a strong factor for development, particularly in the health and medical-social sector, mutual insurance companies and private education.
New products and services were introduced, including mutual funds adapted to the restrictions applicable to association managers and local associations, together with save-as-youearn and retirement plans. In addition to its banking solutions, it provides associations with numerous information services to help them in their day-to-day running.
Against a background of municipal elections introducing new terms of offi ce in 36,000 municipalities, the launch of the “Hospital 2012” plan in the public hospital sector, and declining revenues,
teams in areas of common expertise, defi ned the organizational principles of the HR sector and organized the teams in accordance with working priorities, a strategic study on HR for the Group was begun. This study resulted in a new organization aiming to implement new functions in accordance with the Group’s priorities, providing better coherence and resource optimization within the Group HRD, and defi ning effi cient modes of working between the Group and its divisions.
Bringing HR organization into line with the Group’s organization by division contributes to ensuring the correct application of company policy, and optimizes the sharing of HR expertise
Committees in Lyon and Paris, together with their related centers, on September 18 and 19, 2008, where opinions were noted.
The Plan began to be implemented on September 22, 2008 and continued until February 28, 2009. Employees of the parent company were able to volunteer for early departure using a special form available on the intranet. A communication kit covering the Plan and its terms was sent by letter to all employees of Natixis S.A.
The voluntary scheme applies to employees of the Natixis parent company, in France, who would like to leave the
2008 brought many changes to this team, which underwent signifi cant renewal, with the pooling of the Group HR’s various reporting teams, and with new employees joining. This team’s activities, which consist of providing its internal clients with all detailed facts and fi gures, simulations and analyses necessary for the preparation and strategic management of HR policy and for complying with HR regulatory constraints, are now divided into three main areas: Consolidated HR Group reporting, parent company Social Management Control, and the activities coming under Employee Relationships and Regulations.
The signifi cant events of 2008 were the improvement of operational reporting and reporting tools, the development of an activity to consolidate workforces for the entire Group, and the development of simulations and analyses using a new tool dedicated to examining salaries in support of annual negotiations.
The reporting team has also developed tools for calculating the compensation paid under the “plan for adaptation to the competitive and economic context.”
During 2008, in addition to its traditional role of developing and installing HR Information Systems within the Group, the HRIS
and Processes team took charge of managing projects for restructuring the HR function in France. The Group HRIS team managed the project to restructure training and the project to modernize Shared HR Services (Administrative and Wages
The project to restructure training consists of developing the range of training courses available internally and preparing a training plan, optimizing the purchasing of training and having a specialized subcontractor take over training administration. This project will retain the capability to provide training, while making signifi cant savings in administration.
The project to Modernize Shared HR Services consists of improving the productivity of the service by one-off improvements in functioning modes and tools, for example, by making forms available on-line, simplifying the process of time-monitoring with improved tools, and improving the systems for controlling pay.
In 2008, the administrative workload of managers was lightened by the development of intranet forms for collecting information received from employees and automatically integrating it into the pay system, after verifi cation by the employees of the parent company. This avoided having to process more than 5,000 paper forms manually.
In 2009, improvements to the processes and tools for managing time and controlling pay will provide new effi ciency gains. The
Group HRIS also contributed to defi ning processes implemented as part of the “plan for adaptation to the competitive and economic context”.
(promotion, salary increases, variable remuneration and bonuses), the Salary Review tool, which was already used in
division. The introduction of this tool allows this entire process to be managed effi ciently.
C ■ oncerning reporting, the Group’s reporting databases, and the process of supplying information to them, were made more reliable to allow the workforce to be consolidated for the whole of the Natixis Group, with all of its 5 business divisions and its functional departments.
Numerous French subsidiaries started using the common tools for managing pay and time.
management dialog at the level of the Group and Natixis S.A., and supporting the development of organizations.
Continuation of definition of the framework for employee/management dialog at the level of Groupe Natixis and Natixis S.A.
Personnel Representative Bodies were put in place at the level of Groupe Natixis during 2008, with the signature of an agreement concerning the exercise of union functions. To this end, agreements were signed at the Group level for defi ning the conditions for exiting the Groupe Banque Populaire agreements and for harmonizing the measures applicable in terms of incentive plans. For Natixis S.A., 2008 saw the integration of employees from Ixis Cib, Altaïr, Gestitres and Natixis Financement. Collective negotiations were carried out in this context to harmonize the status of employees.
These negotiations will continue in 2009 on the subjects of trade-union law, professional equality between men and women, retirement plans, health-care plans and provident insurance.
Details of Natixis S.A. agreements signed in 2008 with personnel representatives c ■ ompany savings scheme; c ■ hildcare expenses; f ■ amily supplement; w ■ orking time; r ■ egime and regulations for variable hours; a ■ daptation of the status of employees coming from Altaïr; d ■ etails of fi nancing of social and cultural activities; r ■ egime for compensation for supplementary hours; w ■ ork on weekends and public holidays; s ■ pecifi c working hours; s ■ upport measures concerning retirement, health-insurance plans and provident insurance under the PACEC; l ■ ong service awards and bonuses after 35 years; a ■ daptation of the status of employees coming from Natixis Financement; a ■ daptation of the status of employees coming from Gestitres.
Company beyond the collective status of employees, new internal regulations, including an appendix concerning compliance, came into force during the fi rst quarter 2008. The charter on the use of computing, digital and technological resources was attached to these new internal regulations, to defi ne the rights and duties of employees in relation to IT resources made available to them by their employer. These new regulations apply to all employees of Natixis S.A.
Continuation of sustained management/ employee dialog 2008 saw sustained management/employee dialog through 5 meetings of the Group Committee, 38 meetings of the
Central Employee Representative Committee of Natixis S.A., more than 50 meetings of the various Institutional Committees of Natixis S.A., 45 meetings of the Health, Safety and Working
3% for gross annual salaries less than or equal to €22,000, ■
2% for salaries of between €22,000 and €35,000, with a ■
The incentive plan was the subject of an agreement concluded with employee representatives in 2008, between the Natixis
In application of the law dated March 23, 2006 concerning equality of pay between men and women, Natixis has decided to allocate a specifi c budget for adjusting the salaries of women, which have unjustifi ed discrepancies with those of men. This is in addition to the budget reserved for individual and collective pay increases for 2009. An additional budget may be assigned in 2010, if necessary.
was sent to nearly 7,500 employees of the parent company and its subsidiaries. The document enabled all recipients to make a better distinction between direct remuneration
2008 was the occasion for making mobility more important in the management of human resources, particularly with the introduction of the employment-training task force. This supported employees impacted by the mergers between structures, helping them to reposition and take on new jobs and become integrated into their new functions, in accordance with the agreement on support for employment changes signed in 2007.
Concerning the Securities Services business, individual mobility was preferred: the Human Resources and operational teams provided information and support to the employees concerned about the possibility of moving to CACEIS, the entity created with Crédit Agricole, to the EuroTitres business within Natixis or towards different jobs, possibly in the provinces, in stronglydeveloping subsidiaries.
Lastly, under the cost-cutting plan, the constituent concerning the restriction on hiring was implemented by encouraging mobility between Natixis’ business-lines and structures. In the same spirit, the Employment Adaptation Plan emphasized voluntary departure of employees, organizing their replacement by moving employees impacted by workforce reductions, thus preserving employment. Information was provided to operational teams via the intranet and its employment market, where all job offers are published, including those from subsidiaries. The Human
103 students from 14 years old to those taking the BTS diploma were received for an introduction to the Company.
168 students who had opted to study for diplomas under workbased post-baccalaureate higher-education courses received practical training in our departments.
During the summer, 493 auxiliary seasonal staff joined the teams during the holiday period.
Thus, 1,590 “youth employees” were present in the Natixis parent company during summer 2008.
In October 2008, to support our presence in the forums, we developed new visual communication media, which was prepared after consultation with our trainees, to take into account their perception of the culture and values of Natixis.
They considered that their missions were interesting, with a level of responsibility and team integration that was motivating.
A privileged partnership with the “Ecole Centrale Paris” led to us meeting future engineers on several occasions. In September, we gave a presentation on our capital-markets activity to students taking the Applied Mathematics option that we sponsor.
The purpose of this new master’s degree is to meet demand from those involved in banking and to give work-based training appropriate to the CIB.
Pierre et Marie Curie, the Natixis Business Foundation presented a prize to students studying for the master’s degree in Probability and Finance, under the responsibility of Nicole El Karaoui and
Through the apprenticeship tax, we are strengthening our relationships with higher-education establishments, and in 2008, we became members of the EDHEC Corporate Club and of the
In 2008, the training activity and strategy was adapted to the context of Natixis by restructuring the training courses, thus refocusing the department’s activities on the operational requirements of business lines, increasing the development of
To carry out these changes, the training teams strengthened their partnerships with hierarchical managers and HR managers in the business lines.
The number of internal training courses was reviewed, dropping from 350 to 210, with an objective of greater operational effectiveness, while continuing to maintain the quality of the educational service.
Back and Middle Offi ce market teams; individual assessment by a linguistics expert for requests for ■
In total in 2008, 123,481 hours of training were delivered to employees of Natixis S.A. including 24% on products and markets and 21% in the linguistic area.
Dedicated to the development of managers for Natixis and its subsidiaries, Natixis Management pursues three main objectives: to cultivate a common managerial culture, help managers to develop their skills and support human-resources projects.
As in 2007, Natixis Management organized specifi c actions for senior management, such as the organization: of eight informational meetings with the Executive Board for ■
the “Top 50” circle; of four meetings and a residential seminar over two days for the ■
300 senior executives of the Group, during which speeches by members of the Executive Board were interspersed with those from external personalities, together with workshops on the defi nition of the managerial model for the Natixis Group.
A “Cohesion 300” Internet site was created in 2008, to allow participants access to the specifi c communications that were addressed to them by the directors of Natixis, and to support them in their role in passing on these messages to their teams.
Dominique Ferrero during the fi rst half-year of 2008 so that the managers could have privileged discussions with the Executive
Natixis Management has also supported the implementation of the new Talentis campaign of annual interviews for setting objectives. In particular, 4 E-learning modules have been opened to all of the Group’s managers. As well as these E-learning modules, new managers are offered six ½-day training sessions, each lasting one and a half days, covering the practical application of the conduct of individual interviews.
Human Resources Managers and Training Managers. In 2008, external coaches provided individual support to some 30 experienced managers.
Interviews are now carried out within the framework of an annual campaign lasting about three months; within Natixis S.A., the 2008 campaign was focused on setting objectives. To support managers in the preparation and conduct of the interviews, which are a special moment for discussion with their employees,
In 2009, the Human Resources department will continue the studies that began in 2008 on managing senior staff, professional equality, provident insurance, and social protection, so that a common framework can be put in place that is appropriate to the identity and specifi cs of particular business lines.
Functional departments and others 2,217 2,348 -131 * In full-time equivalents at period-end.
Committee (HSWCC) placed great reliance upon intermediary committees responsible for checking the application of rules on health, safety and working conditions at the level of particular real estate divisions. Four intermediary committees are in operation, allowing the HSWCC to concentrate on cases covering the restructuring carried out in the company, and its consequences for working conditions.
To this end, the HSWCC carried out two signifi cant assessments: one concerned evaluating the impact on working conditions, ■
workload and risks to health for certain IT activities following the application of the LEAN and EVEO methods; the other, which is still in progress, is designed to assess the ■
Also, offi cial recognition was given to the existence of the commission on “Professional behavior and the prevention of harassment and distress at work”, whose task is to centralize information on situations involving suffering at work and to list organizational and psycho-social risks. Any of the Group’s employees may now approach it.
Its existence, its role and its prerogatives were communicated within Natixis. A training program has just been approved.
and paid for by the Management, is being constructed and will provide information on the system put in place.
Due to the large number of inter-company transfers, about 10,000 of which took place during the year, the “Moving in”
RESOURCES4 Human res ources which employees set up their new working environments as a result of team redeployments following reorganization.
The Health-Support Committee, created in 2006, continues to monitor risks at the human level and makes proposals to help
Concerning employee health, the independent occupational medicine department regularly monitors employees in the
In 2008, the health service did a lot of work on setting up a “stress observatory”, which is now operational. In 2009, during their annual medical visits, Natixis’ employees will be systematically asked by doctors to reply to a questionnaire containing about a hundred items.
The Summary Systems Development Plan was begun at the end of 2005, with the aim, by 2008, of providing Natixis with a “summary systems” architecture that is modern, upgradeable and able to ensure the coherence of the various summary reports.
accounting data used for producing the various regulatory and management reports; new tools for process management and management control. ■
The work undertaken since then aims to improve the use of the new application components put in place with the SDSS
Markets fl ows will be processed in Matisse in April 2009, following a three-month phase where it is run in parallel; lastly, the forthcoming version of Matisse will handle a signifi cant number of subsidiaries and branches, as well as all the data necessary for Basel II reporting; in future, the business applications will supply Matisse with ■
data through a single platform, which will be deployed in installments over several years.
Executive Board, which meets twice a year to validate the annual security plan for Natixis and its subsidiaries, the ■ Information Systems Coordination Committee: which, fi ve times a year, brings together those involved in security, particularly IS security managers in subsidiaries.
These committees are now generalized in Natixis’ various divisions, by business line. The Natixis IT Monitoring and Approval
IT projects, setting out to identify the factors for success and to restrict the fi nancial aspects (business plans systematically produced when projects are begun). To provide the Executive
IT strategic management, the teams in charge of governance regularly produce summary reports on large projects and tables of indicators showing IT costs, covering all business components and functional departments.
In 2008, Evasion, the program to overhaul the Natixis Assurance information system, crossed several visible milestones, with an electronic document-management system activated, an Internet site created, the reliability of data and databases improved and the switch over to the new Matisse accounting system at the end of the year. At the same time, work intensifi ed on integrating the Graphtalk AIA software package, which will manage lifeinsurance operations during 2009.
With the Antarès program, Natixis will obtain two very high availability computing sites (VEGA and SIRIUS) as well as the current site at Lognes, replacing sites rented from other hosting services. The Logistics department is managing the two construction sites in compliance with standards for high environmental quality. Concerning the technical aspects, detailed studies will be fi nalized concerning the plan for laying out the rooms, installing the technical infrastructure and moving computer equipment to the new sites, including that used by the CIB.
The partnership agreement, which defi nes the roles and responsibilities of those involved in the purchasing process, is based on the general purchasing procedure disseminated to all entities of the Natixis Group at the end of 2007
Management Committee every quarter. Created from data from the supplier accounts departments in the Group’s various entities, this summary report gives a consolidated overview of expenditure for measuring the maturity of the current system according to different themes: suppliers, entities and categories of purchase.
This established that the purchase of intellectual services for technical assistance was the largest item of purchasing expenditure by Natixis in 2008.
Natixis commitment to sustainable development is applied across all business lines. Working alongside national and international bodies actively pursuing sustainable development initiatives, Natixis is among the leading fi nanciers of renewable energy projects and managers of climate change funds.
In France, Natixis is a member of the Observatory for Corporate
Social Responsibility (ORSE) and IMS-Entreprendre pour la Cité, a French association which helps companies meet their social responsibility commitments.
In 2008, Natixis stepped up efforts to direct its investment and fi nancing decisions towards responding to needs and opportunities for sustainable development.
Since the inception of the pilot phase of the European Union’s emissions trading scheme (ETS), Natixis has focused on providing clients with a broad range of solutions, enabling them to manage their carbon costs and seize trading opportunities. Through the
Carbon credits arising from projects in emerging countries are an increasingly liquid asset class. These carbon credits can be bought and sold for forward settlement through Natixis.
In addition, Natixis creates structured products for investors in carbon markets.
Finally, in 2008, Natixis continued to endow the Chair in New
Energy Strategies at Paris’ École des Mines, alongside other corporate sponsors such as EDF, Keolis, Safran, GDF Suez and
The research theme for this chair is to explore the potential impacts of transformational energy technologies on business, the economy and society. Some of the initiatives that are expected to be rapidly effective include biomass energy applications, the extension of quota markets to new sectors, and other international and national energy projects. In 2008, the chair published a report on the future of biomass energy.
Through its subsidiary, Energeco, Natixis Lease provided fi nancing for the following renewable energy projects in 2008: provision of €107 million in fi nancing for 15 wind farms with a ■
In 2008, Natixis Project Financing department provided fi nancing for nine renewable energy projects representing an aggregate power output of 545 megawatts. This concerned fi ve wind farm projects and four solar power projects located in Western
Europe (France, Italy and Spain) and the United States. To date,
An affi liate of the French water treatment giant, Veolia Environnement, Eolfi specializes in the development, acquisition, construction and operation of renewable energy facilities in France, Poland, Greece and the United States.
The Natixis subsidiary Natixis Environnement & Infrastructures is a portfolio manager regulated by the AMF specializing in project fi nance. It manages €960 million in funds through six investment funds specializing in environmental engineering and sustainable infrastructure. The two renewable energy mutual funds (FIDEME)
and the European Carbon Fund (ECF) are close to fully invested.
In late 2007, Natixis Environnement & Infrastructures launched the EUROFIDEME 2 and European Kyoto Fund. Natixis is a longterm investor in both funds.
Natixis Environnement & Infrastructures Luxembourg, made its fi rst round of investments, worth a total of €250 million.
In 2008, Natixis Environnement & Infrastructures provided fi nancing for the Anshan energy effi ciency project in China. This involved the structuring, acquisition and syndication by ECF of 13 million metric tons of carbon emission reductions (CERs) from China’s second-largest iron and steel producer, Anshan Iron and Steel Group (AISG). It represents the largest investment in the Clean Development Mechanism (CDM) market, outside the greenhouse gas offsets segment.
projects, representing a total emission reduction of 60 million metric tons of CO
. The projects fi nanced by ECF are located in Latin America, North Africa and Asia. The year also saw the launch of data exchange between national and international registers under Kyoto as well as the realization of assets contributed to the ECF for the fi rst time. This enabled the fund to accrue a substantial surplus and to envisage the payment of dividends to investors.
Credit offi cers systematically complete environmental scorecards for submission to the credit committees. Scorecards are used to rate the potential environmental impact of fi nancing projects irrespective of the amount concerned. Scorecards measure environmental impact using a three-tier rating system – A, B or C
SUSTAINABLE DEVELOPMENT5 A fi rm commitment to sustainable development ratings, as appropriate for the industry sector or country – together with regulatory compliance. The other key criteria included in evaluations are the fi ndings of environmental assessments and the risk of opposition to projects. As from 2006, Coface introduced a specifi c risk monitoring procedure for projects with potentially high environmental risk. This procedure is supported by a variety of bank structures (project and commodity fi nancing).
At least 30 days before taking the decision to provide export credit backing, Coface publishes a list of key projects on its website
(www.coface.com) and provides information on each project’s potential environmental and social impacts based on the results of its project impact assessment. The purpose of publication is to seek feedback from stakeholders and other interested parties.
It then provides disclosure relating to projects that are funded or guaranteed by it and certifi es that standards are met.
Natixis has adopted a policy of non-investment in companies linked to the manufacture, trade and stockpiling of landmines and cluster bombs.
Natixis Asset Management has been a forerunner in the fi eld of
Socially Responsible Investment (SRI) for more than a quarter century. Some of its key achievements over this period include: the launch of ■ Natixis Impact Nord-Sud Développement in 1985 (1). This fund supports sustainable development and solidarity with emerging nations while promoting access to micro credit for underprivileged populations; in partnership with Natixis Interépargne, it established ■ Fructi
(3) New-generation best-in-class, an investment screening approach focusing on integrating Environment, Social and Governance (ESG) factors into fi nancial assessments.
France, according to the semiannual barometer of the SRI universe published by Novethic (2); in addition, ■ Natixis Interépargne is the leader in the fi eld of SRI employee savings plans, according to the 2008 report (3) of the Inter-Union Employee Savings Committee (CIES), covering all CIES-approved employee savings schemes.
Natixis Asset Management fi rmly believes in the importance of extra-fi nancial value drivers for asset management and uses SRI as a key input in developing its investment strategy.
Environmental, Social and Governance (ESG) standards to its mainstream asset management activities.
During the year, Natixis Asset Management took steps to consolidate its position in the sustainable development capital space while reinforcing its promotional efforts and tactical marketing campaigns: a signatory to the global Principles for Responsible Investmen ■ t (6)
in July 2008, building on its longstanding ties to the French
Microfi nance Awards” held in October 2008 and organized by the non-profi t international development organization, PlaNet
together its open-end SRI funds under the Natixis Impact umbrella; in addition, on October 1, 2008, it introduced two new funds ■
which are managed according to an Integrated SRI approach: Natixis Impact Europe Equities Fund and Natixis Impact Euro
Équilibre, Natixis Impact Nord-Sud Développement and the private equity mutual fund set up to manage the solidarity mutual investment sub-funds of Natixis Asset Management’s employee savings plans, have won the seal of approval of Finansol (1),the
In 2008, Natixis Asset Management provided €2.5 million in fi nancing via its UCI Insertion Emplois Équilibre for 58 jobcreation projects in association with the non-profi t foundation
France Active. This funding has helped to provide jobs for a total of 2,930 people (1) (47% of whom were facing employment diffi culties).
In 2008, the updated KYC procedure circulated to staff outlined the various principles to be applied in each business line. These principles incorporate the provisions and risk-based approach of the Third European Directive which will apply to Natixis as soon as it is transposed into French law. Different due diligence procedures are applied commensurate with the level of risk posed.
As from late 2006, Natixis further tightened its system of reporting of suspicious fi nancial transactions by implementing Norkom
As part of its ongoing efforts to counter fi nancing of terrorism and breaches of fi nancial embargos, Natixis updated offi cial sanction lists compiled by European and U.S. authorities (OFAC), extended its checks on customer databases, and implemented new versions of the FircoSoft watchlist fi ltering solution at the majority of its subsidiaries.
complete training cycle was organized for a broad cross-section of employees of Natixis’ parent company and its French-based subsidiaries. During the year, Natixis stepped up efforts to notify employees about compliance issues using a dedicated intranet portal which informs staff as legislation and regulations are promulgated at domestic, European and international levels and enables them to consult updates to relevant policies and procedures.
(2) The French Economic Modernization Act of August 4, 2008 imposed requirements on Company savings schemes, intercompany savings scheme and group savings schemes to offer solidarity-based investment sub-funds to employees as from January 1, 2010.
Since Natixis’ creation in November 2006, consumption has been monitored at all Group entities.
The progressive rollout of networked multifunction printers is helping to reduce paper and ink cartridge consumption. Printers are set by default to double-sided, ink-saving mode.
In 2008, Natixis’ Logistics Division initiated an integrated management system built upon ISO 9001 (quality management)
In 2008, Natixis embarked on an ISO 14001 certifi cation program covering the facilities management and maintenance of its offi ce buildings. A pilot environmental management system (EMS) has been implemented at two corporate offi ce buildings and the fi ndings of a preliminary audit carried out in October identifi ed ten non-conformities and four corrective actions.
The reported non-conformities and corrective actions have been closed out and the EMS has been implemented at all corporate offi ce buildings managed by Natixis’ logistics department. A full certifi cation audit is scheduled for 2009.
French High Environmental Quality (HQE) standard for its data centers in the Paris region. This initiative will serve as a pilot project to transfer the methodology and processes for integrating
Natixis’ waste sorting procedures have been established over successive years and have now reached a level of maturity enabling tangible results to be achieved in the various waste management categories: paper, batteries, ink cartridges, IT and offi ce materials, telecommunications, etc.
For this reason, in 2008, Natixis decided to extend the replacement cycle for its desktop and laptop computers from three to four years, representing an annual replacement rate of 20%. Servers are replaced every three years.
Waste treatment for used mobile telephone handsets is handled by Ateliers du Bocage, a branch of the French humanitarian association Emmaus. Functional handsets are sold through
The carbon footprint assessment conducted within Natixis in 2006 showed that business travel has a signifi cant impact on the environment. In 2007 the bank initiated a corporate travel program to develop alternatives to using private automobiles for commuting and travel between corporate premises.
Similarly, Natixis is a participant in the Mobilité capitale network for companies based in the Paris region which are interested in implementing corporate travel plans.
In this area, the bank has introduced a variety of initiatives to promote the use of public transport and so-called “soft”
transport modes: in 2005, Natixis began providing part funding for a public bus service which serves its sites in the Paris suburb of Charenton-le-Pont. Staff are encouraged to use public transport facilities in the vicinity of Natixis’ sites while shuttle bus services also operate between its various sites in the Paris region. Finally, facilities for parking bicycles are provided at the bank’s largest offi ce buildings, and 123 bicycle parking spots have been developed at eight locations in central Paris and the
For business journeys, as from 2008, Natixis introduced a policy of using rail in preference to air for travel within France as well as to Belgium, the Netherlands, Luxembourg and London. The initial results of this policy were perceptible as from August 2008, with a marked increase in train reservations and a concomitant decrease in air travel for journeys between Paris and the French regional cities of Marseille, Strasbourg and Bordeaux.
Furthermore, to help reduce the need for employees to travel to meetings, Natixis is promoting the use of videoconferencing and webcasting within its organization. In recent years, it has succeeded in steadily increasing reliance on videoconferencing with 888 videoconferences held in 2008, versus 856 in 2007 and
Efforts have also been directed towards enhancing the environmental performance of the vehicle fl eet, notably through the use of low-emission vehicles and, as from 2008, the introduction of a one-model policy for vehicle fl eet purchasing which is based on emissions effi ciency.
As from 2005, the Group’s tendering process was updated to incorporate sustainable purchasing practices. In 2008, it introduced social and environmental responsibility criteria for the evaluation of supplier performance.
Agency work alongside Natixis’ procurement staff to ensure that criteria are regularly reviewed and revised to comply with any updates to procurement frameworks and regulatory systems.
In 2008, Natixis took part in two new projects in line with its objective to extend the scope of its sustainability commitments and explore new avenues for the reduction of environmental impacts.
The so-called Écocitoyen Paris Rive Gauche project was initiated in 2008 in the 13th arrondissement of Paris, the district which is home to Natixis’ headquarters building as well as fi ve smaller offi ce buildings. Natixis has a total of 4,400 employees based in the district.
“soft” modes of transport; society ■ : strengthening the diverse social-economic, cultural and generational fabric of Paris’ 13th arrondissement; economy ■ : promoting local businesses and services.
October 2008 in order to establish a baseline evaluation and earmark the initiatives to be pursued in the coming year.
Natixis is a sponsor to the French non-profi t association, Noé
Noé Conservation 2008 awareness-raising campaign focusing on twenty topics, ranging from health, leisure, work, the arts through to nutrition, which aimed to educate the public about our dependence on species diversity and the practical contributions that can be made to preserve biodiversity.
June to October 2008 and will travel throughout French regions in 2009. Natixis organized a number of special events for its shareholders and employees in conjunction with the exhibition and set up a French-language website (www.agisavecnoe.com).
During 2008, Natixis continued to demonstrate an ongoing commitment to managing diversity.
Concerning the advancement of women in the workplace, women account for 45.5% of the total workforce of the parent company. In addition, women occupied 36.9% of managerial positions within Natixis S.A. in 2008 and this proportion is set to increase insofar as women made up 58.1% of promotions to executive level, compared with 54.8% in 2007. As a result, the percentage of women occupying managerial positions within the
scheme to ensure pay equality will be implemented as from 2009.
In this area, agreements have now been signed in certain subsidiaries, such as Coface and Natixis Factor, covering the areas of recruitment, training, professional development and compensation.
Accommodating employees with disabilities has been identifi ed as a fundamental social responsibility issue for Natixis. A dedicated body was set up in 2006 to supervise the Group’s policy in this area. Its work is supported by a baseline assessment and action plan which was developed with the assistance of the disability services organization, Agefi ph.
awareness workshops. A total of 120 people have participated in the project since its inception. Further workshops are planned for 2009 and will be organized both for newly hired
In the fi eld of external communications, Natixis has carried out development work on its website to ensure it is accessible to disabled persons. In 2008, the Group’s website became the fi rst bank website in France to achieve bronze level certifi cation under the French AccessiWeb standard.
Staff are kept informed of the Group’s initiatives in the sphere of disability equality through a dedicated newsletter and a designated space on its human resources intranet portal.
Corporate sponsorship and patronage activities enable Natixis to engage with civil society by supporting projects that extend beyond the confi nes of its traditional business boundaries. The key focus for outreach efforts is to create a two-way dialog and mutual benefi ts while fi rmly embedding the enterprise in the social, cultural and natural environment.
For the fourth year running, Natixis was a partner in the “World Fight
Against Malaria Day”. As part of this commitment, it participated in the following awareness and fundraising activities: funding for public awareness initiatives organized by the French ■
NGO, Plan France, including a poster campaign in Paris metro stations; providing support for a press conference and colloquium on ■
malaria research held on April 22, 2008 and hosted by the
Institut Pasteur in France; providing support for exhibitions, conferences and concerts ■
Cameroon to employees as well as through an awarenessraising and fundraising event.
In addition, Natixis continued to provide fi nancing for training programs on malaria prevention for local communities and for the distribution of impregnated mosquito nets. Projects initiated in 2005 with the Plan France and Les Enfants de l’Air NGOs were stepped up in 2008 in Cameroon, Burkina Faso and Niger. These projects have provided tangible results in malaria eradication and have helped to save thousands of lives.
Finally, Natixis also provided sponsorship for the restoration of treasures from the collection of the legendary fi lm pioneer
Georges Melies as part of a year-long exhibition highlighting his contribution to modern-day cinematography. The “Movie
Magician: Melies” exhibition held by the Cinémathèque Française in Paris, gave the public an opportunity to view some of Melies’
most popular fi lms along with costumes, props, set designs and screenings for young audiences.
The main changes in the consolidation scope in 2008 concerned the removal of Natixis Investor Services, following its merger with
As of December 31, 2008, the salaried workforce amounted to 26,595 persons and the total number of full-time equivalent (FTE)
See “Human Resources” section herein for the workforce breakdown by business line.
In 2008, 106 fi xed-term contracts were converted to permanent contracts.
The proportion of managerial employees in the overall workforce has increased steadily over several years. Managerial employees represent 68.5% of the workforce (67.1% in 2007) and 72.6% of the parent company’s workforce (see table below).
total of 1,362 new employees were hired during the year, representing a 30% reduction on 2007. Of this total, 1,021 recruits were hired under permanent contracts and 341 under fi xed-term contracts.
New hires in 2008 represented almost 9.7% of total employees in France.
SUSTAINABLE DEVELOPMENT 5 NRE Annexes – Workforce information 109 employees hired from subsidiaries. This compares with a total of 821 persons hired by the parent company in 2007.
A total of 73 employees were transferred into Natixis from Groupe
Banque Populaire and Groupe Caisse d’Epargne or from Natixis partnerships in 2008, with managers accounting for 68% of this total.
The resignation rate among permanent employees was 3.7%, versus 4.7% a year earlier.
The total number of overtime hours worked by employees in France amounted to 33,536 hours in 2008. Overtime hours converted to full-time equivalent amounted to 20.9.
Overtime worked by parent company employees amounted to 15,042 hours, representing 9.3 FTEs.
of the average salaried workforce, representing a monthly average of 526 FTEs.
In 2008, 96 employees opted for voluntary redundancy under workforce reduction and employment preservation plans. Of this total, 87 employees left for personal reasons and nine opted for early retirement.
Managers employed on the basis of a fi xed number of days rather than an hourly basis work 209 days. This includes the additional work day stipulated under the Act of June 30, 2004 concerning solidarity and the autonomy of the elderly and disabled.
Employees have the option of choosing part-time work arrangements on the basis of 50%, 60%, 70%, 80% or 90% of a full-time equivalent. Similarly, managers employed on the basis of a fi xed number of days may opt for part-time work arrangements on the basis of 105, 126, 147, 167 or 188 days.
Around 9.3% of all France-based employees have opted to work under part-time work arrangements.
new employees hired on a full-time basis under fi xed-term or permanent contracts (excluding subsidized employment programs) was revised to €19,000; increases to base compensation were structured as follows: ■
2% for salaries of between €22,000 and €35,000 with a ■
ceiling of €550, 1% for salaries of between €35,000 and €70,000 with a ■
carried out a detailed review of the situation of employees who have not had a salary increase in the three years prior to
Average gross annual compensation for permanent employees on a full-time equivalent basis (fi xed and variable components excluding profi t-sharing, incentive plans and employer’s matching contributions to the employee savings plan) was €72,000 for the
(CHSCT) to focus specifi cally on workplace conditions related to reorganizations underway within the Company and their implications for working conditions.
To this end, the CHSCT prepared two signifi cant assessment reports: the fi rst concerned an assessment of the impact on working ■
conditions, staff workloads and health risks arising from the implementation of Lean and “Drive Towards Operational
Excellence” programs in specifi c IT operations; the other ongoing assessment is designed to evaluate the ■
Within the Group, Natixis organized initiatives to publicize the role and powers of the organization. A training program has also been approved. Initiatives will be rolled out in 2009 and specifi c training modules will be provided for the commission’s members, HR line managers, management staff and employees as a whole. Funds have been earmarked by Management for the development of a Workplace Hygiene and Safety Committee intranet site to provide information on the framework put in place.
Committee was consulted on ten occasions in 2008 and meets on an ad hoc basis as and when urgent decisions are required.
Its role is to contribute in facilitating the integration of employees who are redeployed as part of the corporate reorganization process.
A support committee was set up in 2006 to monitor occupational health risks and make proposals to assist decision-making by
As in previous years, a free-of-charge infl uenza vaccination campaign in the workplace was organized in the fall.
The number of training hours provided within the Group, which amounted to 275,000 hours in 2008, testifi es to the importance that Natixis and its subsidiaries place on developing employee capabilities. Overall, 11,014 France-based employees followed at least one training course in 2008. This included 7,431 managerial and supervisory staff and 3,583 employees.
being a key area of focus for sales and marketing staff. All employees receive ongoing training on compliance and antimoney laundering legislation and regulations.
The Group produces an annual report on training activities which is distributed to employees of Natixis and its subsidiaries. The report compiles data on training courses as follows: cross-cutting training activities (information technology, foreign languages, regulatory affairs, etc.), training pathways (induction, functional training, managerial training) and other training initiatives
Group employees are eligible for training and can register online for up to 350 different training courses.
As at December 31, 2008, women made up 51.1% of the total workforce employed in France. ■
Percentage of women in the total workforce employed in France 51.1% 50.9% 50.8%
Percentage of women among the total workforce employed in France 49.0% 49.1% 50.4% 48.7%
Percentage of women among the parent company workforce 37.1% 41.5% 50.4% 45.2%
Working hours: ■ Women accounted for 93.3% of employees working under part-time arrangements compared with 92.8%
Percentage of women occupying ■ managerial positions: The proportion of women employed in management functions in France was 40.9% at December 31, 2008 compared to 40.5%
Women accounted for 54.0% of trainees and 52.2% of total training hours dispensed to staff employed in France. Both percentages are higher than the proportionate share of women in the workforce.
The age pyramid for France-based employees employed on permanent contracts is relatively balanced. Approximately, 32.2% of employees are aged below 36. At the other extreme, 1,146 employees are aged 56 years and above, representing 8.3% of the workforce. In coming years, employee turnover is due to increase signifi cantly due to natural attrition, thereby creating promotional opportunities within the enterprise.
In 2006, as part of its commitment to diversity management, the parent company appointed a diversity champion to draw up an action plan to promote the integration of disabled persons into the workforce.
Specifi c training is also provided to senior HR managers in the recruitment of disabled persons. Similar initiatives were undertaken in the subsidiaries, with a particular focus on training for managers.
Awareness-raising days on disability issues were included in the 2008 training plan and are extended to all managers of staff.
Natixis adopted a similar approach for the upgrade of its corporate website in 2007. The site incorporates a number of features designed to facilitate access by disabled persons.
Thanks to this support, the Group’s central works council and locally-based works councils are able to subsidize a range of social, cultural and recreational activities for staff.
Also, in order to facilitate personnel traveling from one site to another and the organization of meetings, a uniform payment system has been applied across the nine company and intercompany canteens in the Paris region. This enables employees to pay a standardized price for foods services when
SUSTAINABLE DEVELOPMENT 5 NRE Annexes – Workforce information visiting Group sites. Natixis subsidizes between 35% and 75% of the price of meals, according to employees’ remuneration.
In addition, a mutual-assistance scheme exists for employees suffering accidents or encountering serious personal diffi culties.
The purchasing department includes clauses affi rming respect for human rights and equality in invitations to tender.
Contracts with suppliers also feature clauses affi rming compliance with the terms of the Universal Declaration of Human Rights and the UN Convention on the Rights of the Child together with the conventions of the International Labor Organization to which
METHODS USED BY INTERNATIONAL SUBSIDIARIES TO ACCOUNT FOR THE IMPACT OF THEIR OPERATIONS ON REGIONAL DEVELOPMENT AND LOCAL POPULATIONS
The workforce indicators presented herein include all indicators referenced in the Decree of February 20, 2002 relative to the implementation of the New Economic Regulations (NRE) Act.
The 2008 reporting scope comprises Natixis and its subsidiaries in mainland France (representing 435,000 sq.m of offi ce space and approximately 20,000 workstations).
Natixis’ principal offi ce locations in Paris and Charentonle -Pont are managed by the Group’s logistics department and are in the process of obtaining ISO 14001 certifi cation.
The bank’s energy and fl uid consumption is managed by the logistics department. Its policy is to minimize the direct environmental impacts of the bank’s operations, while maintaining a high standard of working conditions for employees. In an effort to strike the right balance, Natixis sets qualitative and quantitative consumption targets for individual buildings on an annual basis.
The environmental quality of buildings is systematically assessed during the design stage. The approach has enabled Natixis to develop specifi c policies for the optimization of construction and facilities management activities. The so-called Antares project for the construction of a new data center in the Val d’Europe area near Paris is a prime example of this policy. The project integrates key long-term fi nancial, architectural and technical constraints. Building materials and equipment have been chosen not only on the basis of initial investment cost, but also according to their full lifecycle cost, i.e. their projected operating costs over the building’s estimated useful life. This approach will lead to the implementation of modern, energy effi cient and environmentally friendly solutions for the new building.
Potentially sensitive technical facilities have been replaced in line with efforts to curb the discharges of Legionella bacteria into the atmosphere.
Emissions of ozone-depleting substances and other air pollutants: Nitrogen oxides and sulfur oxides (EN 19, EN 20)
Collection, transportation and treatment by an approved external service provider in accordance with legislation.
Since Q4/2007, Natixis has contracted a specialist WEEE reprocessing company to transport and treat waste in accordance with legislation.
MEASURES TAKEN TO MITIGATE NEGATIVE IMPACTS ON BIOLOGICAL DIVERSITY, NATURAL ENVIRONMENTS AND PROTECTED ANIMAL AND PLANT SPECIES
Since 2005, the bank has engaged awareness-raising and training initiatives for employees about everyday habits that help minimize the Company’s impact on the environment (Ademe partnership, Gestes verts campaign). A dedicated website was established and is regulatory updated.
Given the bank’s activities, emissions of polluting substances are very rare.
INFORMATION ON TARGETS SET FOR INTERNATIONAL SUBSIDIARIES IN RELATIONS TO ITEMS 1 TO 6 ABOVE
Objectives relating to building facilities management and information for employees apply to all the bank’s international subsidiaries.
Information concerning the parent company and proposed allocation of net income 191
Higher interest rates, coupled with the drop in property prices and the large increase in the number of subprime mortgages granted in 2005, 2006 and 2007, contributed to a signifi cant increase in the number of payment defaults and delinquencies relating to mortgages in the United States during 2007 and 2008. These defaults and delinquencies in turn impacted mortgage-backed securities and other structured credit products, resulting in severe declines in value and, in many cases, the disappearance of the trading market.
September 2008. The uncertainty as to the health of fi nancial institutions has resulted in a signifi cant slowdown in worldwide credit markets, and a sharp reduction in the amount of available liquidity, a situation that continues as of the date of the present
The tightening of credit has affected the general level of economic activity and led to signifi cant drops in the main stock market indices. The impact of this situation on the economic environment has been worsened by a signifi cant reduction in consumer demand following losses in the fi nancial and property markets. The reduction in economic activity and the negative outlook have caused an increase in unemployment, a signifi cant reduction in investment, a slowdown in several industrial sectors such as automobile manufacturing, and a worldwide recession.
Simultaneously, the worsening economic climate has increased the rate of default among borrowers. Furthermore, the interbank credit market is highly disrupted, as banking and fi nancial counterparties (which represent a very large part of the Group’s outstanding credit risks) carry a level of default risk that is both high and diffi cult to assess.
Natixis was historically dependent in part on the international debt markets to maintain its equity capital ratios (through the issuance of subordinated debt and hybrid capital securities).
Natixis holds a portfolio of loans and fi nancial instruments backed by loans (collateralized debt obligations or “CDOs”), and certain other assets, the value of which has been affected by adverse market conditions. Natixis also has exposure to certain sectors that could be particularly vulnerable if economic conditions continue to deteriorate, including leveraged buyouts (LBOs) and commercial real estate. Specifi c information on the exposure in question is described in the notes to the consolidated fi nancial statements, in this Registration Document.
Natixis has announced its intention to phase down certain activities that are affected by the fi nancial crisis, particularly corporate and investment banking activities that involve incurring proprietary risks, including exposure to structured product risks in
These procedures (which would only be applicable to a capital reduction not resulting from losses) could render more complex or delay any transaction in which Natixis seeks to raise new equity capital.
The proposed merger between CNCE and BFBP may have a significant impact on the strategy and business of Groupe Natixis
would hold more than 70% of the capital of Natixis and would be able, acting alone, to take any corporate decision requiring the approval of shareholders, except in cases where this shareholder would not have the right to vote under applicable laws or regulations.
Although the transaction between CNCE and BFBP should have no direct impact on Natixis’ activity, it is possible that the new post-merger strategy might have a signifi cant impact on the business of Natixis or on the commercial relationships between
The merger, if it were to go forward, would require modifi cation of the shareholders’ agreement between BFBP and CNCE (signed in the presence of Natixis), particularly to the non-competition commitment granted for the benefi t of Natixis by these two groups concerning some of their activities. The other clauses of the agreement would in theory no longer be applicable when the merger is carried out, but nevertheless will remain applicable until the effective date of the merger. If the merger is not carried out, these contractual commitments will remain applicable under the conditions set forth herein, unless they are renegotiated in whole or in part by the parties.
Any coordinated action between BFBP and CNCE will further limit the ability of other shareholders to infl uence the corporate governance of Natixis.
The shareholders’ agreement between BFBP and CNCE limits the flexibility of Natixis to raise equity capital or to use its shares for acquisitions, and could have significant anti-takeover effects
BFBP and CNCE have each committed to hold an identical number of Natixis shares and to maintain their percentage holding at 34% or more of the equity capital of Natixis until at least November 17, 2016. Consequently, Natixis’ ability to issue shares or to use its shares in the context of acquisitions in the
Company’s interest will be limited, given that these operations will require the approval of both BFBP and CNCE, and a mechanism allowing the two shareholders to maintain their percentage holding in the equity capital following the transaction. BFBP’s and CNCE’s ownership of a large percentage of Natixis’ share capital and any coordination between them may also have the effect of delaying, deferring or preventing a change in Natixis’
The risk management policies and procedures of Natixis are subject to the approval and control of BFBP and CNCE
BFBP and CNCE are both required to ensure the compliance of the entire Groupe Banque Populaire and Groupe Caisse d’Epargne, respectively, with applicable French banking regulations in areas such as regulatory capital adequacy and risk management. As a result, BFBP and CNCE have been granted signifi cant approval rights over important aspects of the risk management policies of Natixis (which is part of both Groupe
BFBP and CNCE have the power to approve the appointment or removal of the director of internal audit of Natixis, as well as certain aspects of risk management, such as the approval of credit limits and the classifi cation of loans, to customers that are common to Natixis and one or both of the two shareholder groups, as doubtful loans. The interests of BFBP and CNCE (on behalf of their respective groups) with respect to risk management may be different from those of Natixis.
Under the shareholders’ agreement, BFBP and CNCE have established a mechanism for the appointment of members of the Supervisory Board and of the Executive Board of Natixis, and have also agreed on the implementation of various corporate governance measures. In addition, the shareholders’ agreement provides that certain decisions deemed essential, such as the purchase or sale of an interest or the creation of a joint venture by Natixis or one of its subsidiaries in an amount exceeding €150 million, require the approval of both BFBP and CNCE
Banques Populaires and Caisses d’Epargne, it is not entitled to vote at these meetings and does not have control over decisions that require the consent of the shareholders of Banques
If the equal ownership of the shares of Natixis by BFBP and CNCE
is not substantially maintained, or if BFBP and CNCE cease to control Natixis jointly, or if certain legislative changes or other circumstances occur (see paragraph entitled “Major Contracts”
in Chapter 8), then Banques Populaires and Caisses d’Epargne will each have the right to repurchase the 20% equity interests from Natixis, at a price based on the proportionate share of the net assets of such bank represented by the equity interests, taking into account the valuation method used to determine the initial price paid by Natixis for those interests. The repurchase price may be different from the price that Natixis could have obtained through a sale to an unaffi liated third party. Moreover, following the repurchase Natixis will no longer have an economic interest in the results of the affected bank or banks, and its ability to sell products and services through the affected bank or banks could be impaired.
FINANCIAL DATA6 Risk factors of Groupe Banque Populaire and Groupe Caisse d’Epargne are faced with a range of savings, investment or other products from which to choose, including in some cases products and services of competitors that are offered by banks within each group. There can be no assurance that products or services provided by Natixis will be uniformly selected, or promoted, over the other services offered by the two banking networks. Although Groupe Banque
However, this agreement not to compete contains certain exceptions, in particular for operations conducted by either
BFBP or CNCE and their subsidiaries at the time the agreement was signed, and that were not contributed to Natixis as part of the combination transactions. In particular, these exceptions include life and property insurance, areas in which the Caisses d’Epargne offer their customers products of CNCE affi liates that were not contributed to Natixis. As a result, Natixis may fi nd itself competing directly or indirectly with the services provided by one or both of its principal shareholders.
activities, which are summarized below and described in detail under “Risk Management” in the management report. The risk factors described in the following paragraphs (and above in the section “Risks related to the Financial Crisis”) elaborate on, or give specifi c examples of these different types of risks and describe certain additional risks faced by Natixis.
These parameters include but are not limited to bond prices, interest rates, securities and commodities prices, derivatives prices and prices of all other assets, such as real estate and foreign exchange rates.
management, which is the risk to earnings arising from asset and liability mismatches in the banking book or in the insurance business; the risk associated with investment ■ activities, which is directly connected to changes in the value of invested assets within securities portfolios; and the risk associated with certain other ■ activities, such as real estate, which is indirectly affected by changes in the value of negotiable assets held in the normal course of business.
Operational risk. ■ Operational risk is the risk of losses due to inadequate or failed internal processes, or due to external events, whether deliberate, accidental or natural occurrences.
The French government has modifi ed the rules applicable to the
Livret A, a regulated savings account developed by the French government to fi nance requirements for social housing. Since
January 1, 2009, all authorized French fi nancial institutions may offer the Livret A to their clients. Until then, only the Caisses d’Epargne and the Banque Postale (a subsidiary of the Groupe La
Poste) were authorized to distribute the Livret A. This modifi cation was made following a decision by the European Commission in
May 2007, according to which the previous regime was declared incompatible with community competition law.
The Livret A offers depositors a fi xed interest rate that is not subject to tax. The deposits collected by the banks are transferred to the Caisse des Dépôts et des Consignations, which centralizes the funds and uses them to fi nance social housing. The fi nancial institutions distributing the Livret A receive a commission at a rate that is fi xed by the government. In 2008, Groupe Caisse d’Epargne recorded €740 million in net banking income for its distribution of the Livret A.
The reform also includes a reduction in commission rates from 1.0% to 0.6% (subject, for the Caisses d’Epargne, to an additional commission received during a transition period, set at 0.3% in 2009 and 2010 and 0.1% in 2011). The commission will also only be based on the funds transferred to Caisse des
Dépôts et Consignations, which, when the reform is complete, will represent about 70% of the funds collected from Livret A
Although Natixis endeavors to establish an appropriate level of provisions, its lending businesses may have to increase their provisions for loan losses in the future as a result of increases in non-performing assets, deteriorating economic conditions leading to increases in defaults and bankruptcies, or for other reasons. Any signifi cant increase in provisions for loan losses or a signifi cant change in Natixis’ estimate of the risk of loss inherent in its portfolio of non-impaired loans, as well as the occurrence of loan losses in excess of the provisions allocated with respect thereto would have an adverse effect on Natixis’ results of operations and fi nancial condition.
Natixis’ employees are its most important resource and, in many areas of the fi nancial services industry, competition for qualifi ed personnel is intense. Natixis’ results depend on its ability to attract new employees and to retain and motivate its existing employees. Changes in the business environment may cause
Natixis to move employees from one business to another or to reduce the number of employees in certain of its businesses; this may cause temporary disruptions as employees adapt to new roles and may reduce Natixis’ ability to take advantage of improvements in the business environment. This may impact
Future events may be different than those reflected in the management assumptions and estimates used in the preparation of Natixis’ financial statements, which may cause unexpected losses in the future
Natixis may incur significant losses on its trading and investment activities due to market fluctuations and volatility
Volatility can also lead to losses relating to a broad range of other trading and hedging products Natixis uses, including swaps, futures, options and structured products, if they prove to be insuffi cient or excessive in relation to Natixis’ expectations.
To the extent that Natixis owns assets, or has net long positions, in any of those markets, a downturn in those markets can result in losses due to a decline in the value of its net long positions.
Market downturns, such as the current one, are likely to lead to a decline in the volume of transactions that Natixis executes for its customers and as a market maker, and, therefore, to a decline in its net banking income from these activities. In addition, because the fees that Natixis charges for managing its customers’ portfolios are in many cases based on the value or performance of those portfolios, a market downturn that reduces the value of its customers’ portfolios or increases the amount of withdrawals would reduce the revenues Natixis receives from its asset management and private banking businesses.
FINANCIAL DATA 6 Risk factors banking income. Natixis is particularly vulnerable to fl uctuations in the exchange rate between the United States dollar and the euro, as a signifi cant portion of its net banking income and results of operations income is earned in the United States.
As with most other banks, Natixis relies heavily on communications and information systems to conduct its business, as its activities require it to process a large number of increasingly complex transactions. Any failure or interruption or breach in security of these systems could result in failures or interruptions in customer relationship management, general ledger, deposit, trading and/
or loan organization systems. If, for example, Natixis’ information systems failed, even for a short period of time, it would be unable to serve some customers’ needs in a timely manner and could thus lose their business. Likewise, a temporary shutdown of
Natixis’ information systems, despite back-up recovery systems and contingency plans, could result in considerable information retrieval and verifi cation costs, and even a decline in its proprietary business if, for instance, such a shutdown occurs during the implementation of its hedging policies. The inability of Natixis’
Natixis also faces the risk of operational failure or termination of any of the clearing agents, exchanges, clearing houses, depositaries or other fi nancial intermediaries or outside vendors it uses to execute or facilitate its securities transactions. As its interconnectivity with its customers grows, Natixis may also increasingly face the risk of operational failure with respect to its customers’ systems. Natixis cannot provide assurances that such failures or interruptions in its systems or in those of such other parties will not occur or, if they do occur, that they will be adequately addressed.
Unforeseen events can interrupt Natixis’ operations and cause substantial losses and additional costs
Unforeseen events like severe natural disasters, pandemics, terrorist attacks or other states of emergency can lead to an abrupt interruption of Natixis’ operations and, to the extent not, partially or entirely, covered by insurance, can cause substantial losses. Such losses can relate to property, fi nancial assets, trading positions and key employees. Such unforeseen events may additionally disrupt Natixis’ infrastructure, or that of third parties with which it conducts business, and can also lead to additional costs (such as relocation costs of employees affected)
Natixis may be vulnerable to political, macroeconomic and financial environments or circumstances specific to the countries where it does business
United States, although limited, are subject to risk of loss from various unfavorable political, economic and legal developments, including currency fl uctuations, social instability, changes in governmental policies or policies of central banks, expropriation, nationalization, confi scation of assets and changes in legislation relating to local ownership.
A variety of supervisory and regulatory regimes apply to Natixis in each of the jurisdictions in which it operates. Non-compliance could lead to signifi cant intervention by regulatory authorities and fi nes, public reprimand, damage to reputation, enforced suspension of operations or, in extreme cases, withdrawal of authorization to operate. The fi nancial services industry has experienced increased scrutiny from a variety of regulators in recent years, as well as an increase in the penalties and fi nes sought by regulatory authorities, a trend that may be accelerated in the current fi nancial context. Natixis’ businesses and earnings can be affected by the policies and actions of the various regulatory authorities of France, other European Union or foreign
signifi cantly infl uence investor decisions in particular markets in which Natixis operates; general ■ changes in regulatory requirements, for example prudential rules relating to the capital adequacy framework, such as the modifi cations being made to the regulations implementing the Basel II requirements; change ■ s in rules and procedures relating to internal controls; changes in the competitive environment and pricing practices; ■
controls, confi scation of assets and changes in legislation relating to foreign ownership; and any adverse change in the political, military or diplomatic ■
As a multinational banking group involved in complex and large-scale cross-border transactions, Natixis is subject to tax legislation in a number of countries. Natixis structures its business globally in order to optimize its effective tax rate. Modifi cations to the tax regime by the competent authorities in those countries may have a signifi cant effect on the results of Natixis. Natixis manages its business so as to create value from the synergies and commercial capacities of its different entities. Natixis also endeavors to structure the fi nancial products sold to its clients in a tax-effi cient manner. The structures of Natixis’ intragroup transactions and of the fi nancial products sold by Natixis are based on Natixis’ own interpretations of applicable tax laws and regulations, generally relying on opinions received from independent tax counsel, and to the extent necessary, on rulings or specifi c guidance from competent tax authorities. There can be no assurance that the tax authorities will not seek to challenge such interpretations, in which case Natixis could become subject to tax claims.
If any of the variety of instruments and strategies that Natixis uses to hedge its exposure to various types of risk in its businesses is not effective, Natixis may incur losses. Many of its strategies are based on historical trading patterns and correlations. For example, if Natixis holds a long position in an asset, it may hedge
Even though external growth does not constitute a signifi cant part of its current strategy, in the future, Natixis may consider external growth opportunities from time to time. Even though Natixis expects to review the companies it will acquire or joint ventures into which it will enter, it is generally not feasible for these reviews to be comprehensive in all respects. As a result, Natixis may have to assume unanticipated liabilities, an acquisition or joint venture may not perform as well as expected, the synergies expected may not be realized in whole or in part, or the transaction may give rise to costs that are higher than foreseen. In addition, it might have diffi culty integrating any entity with which it combines its operations. Failure to complete announced business combinations or failure to integrate acquired businesses or joint ventures successfully into the businesses of Natixis could materially adversely affect Natixis’ profi tability. It could also lead to departures of key employees or lead to increased costs and reduced profi tability if Natixis felt compelled to offer them fi nancial incentives to remain. In the case of joint ventures, Natixis is subject to additional risks and uncertainties in that it may be dependent on, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under its control. In addition, confl icts or disagreements between
Competition is intense in all of Natixis’ primary business areas in
Natixis’ profitability and business prospects could be adversely affected by reputational and legal risk
Various issues may give rise to reputational risk and cause harm to Natixis and its business prospects. These issues include inappropriately dealing with potential confl icts of interest; legal and regulatory requirements; ethical issues; money laundering laws; information security policies and sales and trading practices. Failure to address these issues appropriately could also give rise to additional legal risk to Natixis, which could increase the number of litigation asserted and the amount of damages asserted against Natixis, or subject Natixis to regulatory sanctions. (See Section 5.8 “Legal risks” of the management report in Chapter 6, and in particular, the paragraph on “Legal and arbitration procedures”).
The data included in the Management Report have been restated in order to take into account the following: The creation of a new business line, GAPC (Workout Portfolio ■
Management), the purpose of which is to manage on a runoff basis the Group’s non-core Corporate and Investment Banking activities, which include primarily structured credit, complex interest-rate and equity derivatives and structured fund-based derivatives. GAPC activities were separated for fi nancial and management accounting purposes effective as of the end of 2008. The income statement of the CIB business line for 2008 (annual and quarterly) and 2007 (annual only) has been restated to refl ect the results of operations of the GAPC, on the one hand, and the New CIB1 business line (excluding GAPC), on the other hand. The restated data were prepared using the following methodology: net banking income from the GAPC represents revenues from ■
to staff assigned to the GAPC or New CIB business lines, as well as indirect expenses split between the GAPC and the “New” CIB on the basis of cost drivers. The GAPC’s quarterly expenses in 2008 were calculated by dividing fullyear expenses into four equal parts. The New CIB’s quarterly expenses were obtained by subtracting the amount allocated to the GAPC from total Corporate and Investment Banking
and the New CIB, they were broken down between the two subgroups in the same proportions as in 2008, the cost of risk for 2007 and 2008 was broken down on the ■
division was allocated to the GAPC; the transfer of the Leasing and International Services activities ■
June 30, 2008); the conversion of data, when denominated in foreign currencies, ■
in relation to the ownership of CICs (cooperative investment certifi cates), refl ecting the contribution of hybrid capital),
at the start of the quarter and 75% of amounts deducted from Tier 1 capital in relation to interest in securitization transactions rated B or lower.
NET INCOME (GROUP SHARE) (2,799.2) 1,101.5 (3,900.7) ns * Before restructuring income and expenses.
collapsed, the effects of the crisis were limited mainly to credit underlyings, particularly structured credit products.
Brothers’ resulted in a severe disruption in all markets. The crisis worsened suddenly and its impact spread to virtually all of Natixis’ business lines.
transformation of its CIB businesses and to terminate substantially all of its most complex proprietary and derivatives operations. These activities have been segregated and placed in a special structure in the CIB division.
around structured lending, simple market products that allow Natixis to leverage cross-selling opportunities (which performed well during crisis times), simple investment products, and a heavily de-risked equity business that includes simple derivatives and brokerage, a narrower international presence, involving sharp cutbacks ■
in Asia and the United States, the closure of marginal offi ces, and the indefi nite deferral of development projects, a reduced risk profi le and stronger controls, with an end to ■
most pure proprietary business and high-volatility activities, enhanced operational effi ciency, entailing a steep cut in ■
new strategic choices, because: they offer no synergies with other activities;−
of capital or cash that they tie up; or their risk profi le no longer − complies with management’s guidelines; gradually and proactively externalizing segregated assets −
Natixis’ ■ net banking income amounted to €2,934 million for the year ended December 31, 2008, down 51% compared with 2007.
Of this, €1,276 million came in the fourth quarter, when equity and interest-rate derivatives were hurt by the surge in volatility and the increase in the cost of hedging (€1,017 million).
The Corporate and Institutional Relations business line showed good resilience in 2008 in a very poor global fi nancial environment. The Debt and Financing business line recorded a 7% decline in net banking income compared with 2007. While performances were very strong in commodities, fi nancial engineering, shipping and land transport, the real estate and LBO segments were down, as would be expected given the CIB division’s new strategic direction. Net banking income was up 10% in the Capital Markets business line.
Its net banking income was -€3,452 million in 2008. Excluding the impact of the crisis, it was €315 million.
The division’s fi nancial results he ld up well, with net banking income edging up 1% or €11 million to €1,477 million over the year. Adjusting for change in the scope of consolidation
In Private Equity, net banking income amounted to €80 million, −
down 79% compared with 2007. Despite an increase in capital gains on disposals, the results refl ected the value adjustments on individual investments in the portfolio, as well as an increase in risk.
The ■ Receivables Management division posted a strong increase in its 2008 revenue, fueled by credit insurance and factoring. Credit insurance was nevertheless hurt by a surge in claims in the fourth quarter. The loss ratio increased from 49% in 2007 to 73% in 2008. The division’s net banking income, which amounted to €800 million, was down 14%
End-of-period risk-weighted assets ■ totaled €163.1 billion as of December 31, 2008, up from €156.9 billion as of
March 31, 2008.The €6.2 billion increase in risk-weighted assets in the nine months from April 1, 2008 refl ects the impact of a signifi cant reduction in risk-weighted assets that would have occurred under the former calculation methodology, which was more than offset by the impact of changes in methodology imposed by the regulator, particularly with respect to market risk (adding €12.5 billion ).
compared with 2007. At constant scope of consolidation and exchange rates, they were down 3%.
Gross operating income was a -€1,754 million excluding restructuring income and expenses.
The ■ cost of risk increased signifi cantly. It amounted to €1,817 million in 2008, including €988 million recorded in the fourth quarter alone.
€1,536 million (of which €1,002 million in the fourth quarter), and breaks down as follows: €306 million on monoline insurers and credit derivative −
€375 million on the Madoff fraud (or 80% of − estimated net exposure); €317 million on counterparty defaults in the Corporate −
Excluding the impact of the crisis, the cost of risk amounted ■
The contribution from the two networks consolidated under the equity method totaled €449 million, down 30% year-on-year due to the fall in net income recorded by the Caisses d’Epargne and Banques Populaires networks (-34% combined). Two further factors were a lower amount of accretion profi t, offset by the positive impact of lower consolidation adjustments relating to capital gains on available-for-sale securities.
Impairment of goodwill ■ represented a charge of €73 million, including €69 million related to goodwill on CIB businesses
amounts that may be used to offset taxable income in future years.
Excluding the segregated assets (GAPC), underlying net income (Group share) was positive, amounting to €987 million.
Recurrent ROE ns 6.2% ns 97.3% 17.3% 5.8% ns 8.5% ns ns
The CIB division nevertheless recorded a signifi cant increase in customer activity over the year. The increase held up towards the end of the period, against the backdrop of a profound reorganization of the Group’s operations.
The ■ crisis caused a total decrease of €3,540 million in net banking income, of which €1,283 million was recorded in the fourth quarter alone.
The €3,540 million impact of the crisis on net banking income breaks down as a positive impact of €227 million for the “New”
Excluding the impact of the crisis, net banking income worked out at €2,945 million, breaking down as €2,630 million for the
at 5,466 full-time-equivalent (FTE) employees, compared with 5,660 FTEs at the end of 2007, a reduction of 194 FTEs over the year.
The cost of risk ■ amounted to €1,500 million, of which €882 million was recorded in the fourth quarter of 2008 alone and €1,277 million stemmed from the crisis. The “continuing” cost of risk assessed on an individual basis also continued to rise.
This strong performance was nevertheless more than offset by a sharp increase in the cost of risk following counterparty defaults in Corporate Solutions and provisions for the Icelandic banks and Lehman Brothers.
After the segregation of proprietary activities, ABS and a portion of Structured Credit Europe, the Debt and Financing business line’s net banking income was €976 million, down 7% compared with 2007.
Aside from an adverse impact from exchange rates across the board (the U.S. dollar’s 7% decline against the euro), performances varied from one business line to another.
Average loans nevertheless increased by 24% year-on-year, due to the very substantial amount of new fi nancing in 2007.
Maison du Monde), and move up the rankings in Italy (three
RBS), while at the same time continuing to back prudent fi nancing policies across the sector.
Net banking income was up 44% in ■ Shipping. The 34%
Commercial performance was very strong among corporate customers in 2008, especially outside France. Business with banks and asset managers also held up well. The proportion of the business line’s activity from France declined compared to international business.
Commodities. This performance can be attributed primarily to a sharp deterioration in the Equity Derivatives & Arbitrage business, particularly in the fourth quarter, due to the high level of volatility in the markets.
Commodity trading recorded strong growth in 2008, particularly in OTC derivatives, although the trend was less favorable towards the end of the period due to the large decline in prices in the leading commodity markets, which impacted the brokerage business (Natixis Commodities Markets).
Net banking income was up in Corporate Solutions. A sizeable loss was nevertheless taken due to an increase in the cost of risk in the fourth quarter following the default of two counterparties.
The bulk of the Alternative Assets business has been transferred to the GAPC. Management activities are all that remain within scope of the “New” CIB.
The Fixed Income business line enjoyed a very strong increase in net banking income compared with 2007, due to the good results obtained in the Treasury Management and Arbitrage, and
Fixed Income revenue advanced due to the resilience of plain vanilla interest-rate derivatives and growth in commercial activity.
The Foreign Exchange business did well in 2008, thanks to the reinforcement of teams working in the United States.
The segregated structure’s net banking income includes the following impacts from the crisis: writedow ■ ns on RMBS/ABS CDOs containing sub-prime debt: €1,202 million; impact from the widening of spreads on CMBSs, other CDOs ■
Despite the crisis, the division managed to keep gross operating income at a similar level to 2007 by putting a tight rein on operating expenses.
This position was unwound in the fi rst half of 2008. With the agreement of the AMF, the French market regulator, Natixis
Impairment was recognized in December in respect of credit risk on certain fi xed-income securities, formerly part of the ABS+ fund but are now held in the AFS category. This had a €17 million impact on the cost of risk.
The crisis had a total impact of €89 million on the Asset
The main factors affecting the change in assets under management are as follows: market conditions, which were diffi cult throughout the year and ■
worsened signifi cantly in the fourth quarter, pushed down the value of assets under management. Over the year, the market impact totaled -€79.4 billion; net asset outfl ows were only very slight over the period ■
Net banking income ■ amounted to €1,357.5 million, down 21% or -€352.3 million compared with 2007.
U.S., bearing in mind that US hedge funds enjoyed an excellent year in 2007, a year that also saw a high level of performance-related fees on real-estate funds; a 6% decline in commissions due to the fall in average ■ assets under management.
T ■ he Asset Management division’s operating expenses were down 24% compared with 2007 at €965.0 million. At constant exchange rates, expenses fell by 21%.
Payroll charges fell by 32% year-on-year, due to the signifi cant reduction in variable compensation.
The market impact represented -€22.6 billion, or 5.8% of assets under management as of the end of December 2007. The impact of large declines in European share indices in the last quarter was partially offset by the easing of interest rates in the fi xed-income market.
Postale (€72.2 billion) accounted for 74% of the change in assets under management in Europe.
systems, services to private individuals; Securities Services: retail and institutional custody, asset ■
environment, the Services division’s operations remained strong in most business lines in 2008. Efforts were focused on direct customers, but work was also done to improve the penetration rate in the retail network of the two main shareholder groups. The Sureties and Financial Guarantees,
Provident Insurance and Employee Benefi ts Planning business lines were able to benefi t from potential within the shareholder networks, thereby keeping their revenues at a healthy level. At the same time, the Specialized Finance business lines recorded excellent results, in aggregate terms as well as volumes, thanks to new business in equipment and property leasing and growth in consumer fi nance.
economic environment nevertheless weighed on the division’s overall performance, especially in the fi nal quarter.
The Services division’s ■ net banking income amounted to €1,477.3 million, up 1% or €11.1 million compared with 2007.
Net banking income was down 2% after adjusting for changes in the scope of consolidation and a non-recuring item in the securities service business line relating to (i) the acquisition by CACEIS of custody operations formerly owned by HVB in
Germany and hedge fund manager Olympia, (ii) the transfer of Natexis’ former institutional securities service operations to
The Services division’s ■ expenses totaled €955.4 million, up 5% year-on-year. On a constant-structure basis, they were down 2%, showing that the various business lines adapted to the slowing of revenue growth.
Based on a constant consolidation scope, the headcount increased by 134 FTEs, due to the Group’s aggressive growth in the Insurance, Consumer Finance and International
The Services division’s ■ gross operating income amounted to €521.9 million, down 6% or -€34.8 million compared with 2007. Based on a constant scope of consolidation, however, it was down only 2%.
Its business now assists more than 47,000 corporate clients and nearly 754,000 households.
Net banking income ■ nevertheless fell by 12% or -€15 million to €107 million, penalized by risk-related expenses, mainly in the form of fair-value adjustments on the business line’s rental property portfolio.
Natixis Financement enjoyed buoyant business, in revolving credit as well as personal loans.
The personal loans business enjoyed strong growth, due to the successful integration of the new technical platform for the rollout of the offering in the Caisses d’Epargne network.
Net banking income ■ amounted to €99.7 million, up 18% or €15.5 million compared with 2007.
checks (used by private individuals who employ someone for personal services) by 38%.
Net banking income ■ amounted to €98.7 million, up 9% or €8 million.
Electronic payment systems continued to grow, with the number of cards in circulation up 5% over the year and the number of cleared transactions up 4%.
On June 30, 2008, securities held by Natixis on behalf of institutional clients as well as all securities held by Natixis
held steady in 2008, despite the fact that some midcap clients deferred their acquisition plans due to the economic environment.
The International Services business recorded ■ net banking income of nearly €40 million in 2008, a year-on-year increase of 24%, or €8 million, buoyed by revenue growth for Natixis
FINANCIAL DATA 6 Management Report 4.4 - Private Equity and Private Banking division
The division’s operating expenses totaled €169.7 million, compared with €171.3 million in 2007, down 1%.
The Private Equity and Private Banking division’s underlying net loss (Group share) was €9.9 million, nearly €258 million below the signifi cant positive underlying net income earned in 2007.
Investments remained strong over the year, advancing by 27% to €778 million, up from €615 million in 2007. Proprietary investments were €438 million, or 56% of the total.
Divestments amounted to €601.7 million over the year, compared with €680 million in 2007, a fall of 12%. Of this, €424 million (70%
With the exception of the LBO business line, managed capital increased in all business segments, with more marked growth internationally (+31% compared with 2007).
Dominique and La Compagnie 1818 - Banquiers Privés to merge in the second half of 2009. This merger is intended to facilitate the development of wealth management on behalf of direct customers, the creation of products and services for the highnet -worth customers of the Caisses d’Epargne and Banques
Populaires networks, and the sale of products and services through independent wealth advisers.
This stagnation refl ects an environment marked by a high cost of liquidity hurting new loan production and a rise in early repayments.
The Receivables Management division increased its revenue in a very poor economic environment in 2008 due to a healthy growth in credit insurance and the development of factoring.
A new and more radical series of measures was taken in
Coface rating and credit opinion, and the information on which they were based; keep it informed, in real time, of any possible change to its ■
rating or credit opinion; check with the fi rm the veracity of any payment incident ■
concerning it that may have been brought to Coface’s attention by third-party sources before any decision is made; receive and review, with the utmost confi dentiality, any up-to- ■
Denmark’s leading factoring company, Midt Factoring, specialized in multi-service receivables management solutions.
Over the year as a whole, divisional revenues amounted to €1,682 million, up 7.1% compared with 2007, due to growth of 16.8% in factoring. Credit-insurance revenues grew by 5.0%.
The division’s net banking income amounted to €800.0 million, compared with €925.3 million in 2007, down 14% or -€125.3 million due to a surge in claims towards the end of 2008.
Net banking income for the credit insurance business line amounted to €314.6 million, compared with €489.6 million in 2007, down 36%. The decline is attributable to the increase in claims throughout the year, and especially in the fourth quarter. The increase in revenue was not suffi cient to offset higher claims.
The loss ratio was 72.6% over the year, compared with 49.1%
in 2007. It deteriorated by 3.4 points in each of the fi rst three quarters and by 13.4 points in the fi nal quarter.
Net banking income for the factoring business line amounted to €247.3 million, compared with €213.9 million in 2007, up 16%. Excluding change in the scope of consolidation and currency impact, growth remained strong at 13%, buoyed by the robust performance over the fi rst nine months.
The volume of factored receivables totaled €50.6 billion, onethird of which were in France.
Kompass (consolidated for only 10 months in 2007) and the consolidation of Polish operations.
The number of FTEs increased by a total of 7%, but by only 3%
excluding change in the scope of consolidation. This increase is consistent with the increase in the factoring business line and the international expansion of the services business lines.
The division’s gross operating income amounted to €104.4 million, compared with €257.0 million in 2007, down 59% or -€152.6 million.
The cost of risk increased substantially to €28.0 million, nearly double the 2007 level of €14.7 million. Of this, €23.1 million is attributable to the impairment of client receivables in the factoring business line due to the economic crisis.
Banques Populaires and Caisses d’Epargne, to the “share of net income of associates” line came to €449 million, down 30% compared with 2007 (€642 million).
Aggregate net income for the two networks (100%) was down 34% at €1,943 million.
(3) At the time of the initial consolidation of the CICs by Natixis, unrealized capital gains made by the two networks on part of their investment portfolios were treated as capital, limiting recognition of goodwill. The effective realization of these capital gains by the two networks in 2008 generated revenues recognized under net banking income that Natixis cannot recognize twice. These revenues have therefore been deducted (after tax) from the share of net income of associates line.
(+11% year-on-year), and by medium- and long-term equipment loans in other markets (+15% year-on-year).
Groupe Banque Populaire’s income before tax amounted to €1,379 million, down 26%. The fall was accentuated by the fact that the 2007 fi nancial statements included a €49 million capital gain on the disposal of BISE, Crédit Coopératif’s former Polish subsidiary.
Groupe Banque Populaire’s net income amounted to €1,025 million, down 23% compared with 2007.
Natixis’ 20% share of this sum came to €205 million, down 23%.
There was also an accretion gain of €25.4 million, down 34%
offset by consolidation adjustments on AFS assets and cashfl ow hedges for €27 million.
Share accounted for under the equity method 183.6 319.0 (135.4) (42)%
Groupe Caisse d’Epargne’s net banking income amounted to €5,743 million in 2008, down 11% compared with 2007.
Gross operating income amounted to €1,293 million, down 39% compared with 2007.
Groupe Caisse d’Epargne recorded net income of €918 million, down 42%.
Individual risk increased sharply, with most of the increase in the
(€375 million), Lehman Brothers (€293 million) and Icelandic banks (€94 million).
Natixis’ general risk management system is managed in accordance with banking regulations and governance guidelines followed by the Banque Populaire and Caisse d’Epargne Groups.
The system is the responsibility of Natixis’ Executive Board and is built around three tiers of coordinated risk management: internal controls are carried out by operational or functional ■
Group, including: a clear delineation between front- and back-offi ce functions, ■
fi rst-tier controls at ■ the operating level, a distinction between periodic and permanent controls; ■
a worldwide basis so as to ensure the consistency of internal procedures; a specifi c central ■ body function assigned jointly to Groupe
The Risk Management and Compliance Departments carry out permanent controls. The control system comes under the overall supervision of Natixis’ Executive Board and Supervisory Board, which is assisted in its duties by the Audit Committee.
The joint-control system aimed at ensuring the consolidation and monitoring of Natixis’ risks by its central institutions is assisted by the permanent Global Risks Committees set up at the time of
The Risk Management Department draws up risk policies in keeping with those of its two central institutions. These policies are then submitted to the Executive Board for approval.
To carry out its role in terms of measuring, consolidating, monitoring and reporting risks, Natixis’ Risk Management
Department uses a dedicated IT system suited to the Group’s various businesses.
It uses a basic set of risk tools, with data provided by the management systems of each business line. The Risk
The basic risk tools encompass many applications, built around three functions: measuring and monitoring economic risk; ■
Action taken over the year included: a wide-ranging review of existing limits with banking ■
CIB operations; the implementation of new methodology used to determine ■
counterparty-risk assessments, thereby making it possible to evaluate the probability of default within one year; information systems providing an overview of outstanding ■
loans and exposure limits using a single risk-consolidation tool based on an amalgamated counterparty database.
Generally speaking, the relevant business line prepares a credit fi le providing the appropriate amount of detail and looking at all the questions needed to form an opinion. The fi le includes a proposed rating, based on the appropriate engine for the asset class and market segment.
asset classes, consistent with Natixis’ risk profi le; an information system used for managing the successive ■
stages of the rating process, from start to fi nish, archiving every step in the process through to the validation of the fi nal rating; processes, procedures and controls that place internal ratings ■
at the heart of the risk-management system, from transaction origination to ex-post analysis of defaulting counterparties; lastly, a project-mode approach, which involves working with ■
A statistics-based model developed by Groupe Banque Populaire, which assesses the likelihood of default within one year, is also used for corporate entities for which parent company fi nancial statements are available.
Statistics and the results of this work are reviewed by oversight committees responsible for imposing corrective measures or adjustments wherever necessary, such as the enrichment or redefi nition of models, or the modifi cation of reference samples.
Work carried out in 2008 demonstrated Natixis’ prudence with respect to sovereign debt, in light of actual defaults. This was also the case for virtually all the points on the scale applied to major counterparties. Work done in 2009 will ensure that this prudence is maintained, given the ongoing deterioration in the economic environment.
The Risk Management Department carries out various types of controls as part of its monitoring function. It ensures that procedures are correctly applied, that the internal rating system works properly, and that the data used in the various rating systems are reliable. The Risk Management Department also organizes regular training and support sessions aimed at ratingsystem users.
aimed at assessing the suitability of the instrument or guarantee provided and the reduction in risk it confers; verifi cation, processing and documentation work based on the ■
Natixis’ Credit Portfolio Management Department takes action to reduce exposure by counterparty, by sector and by region.
balance sheet, but bear the counterparty risk attached to the credit-default sellers, which are generally OECD banks. These transactions are subject to the same decision-making and monitoring procedures as those applying to all derivatives.
All risk-reduction techniques are vetted during preparatory work carried out to calculate regulatory capital requirements.
Committee Meeting. The Committee analyzes the breach on the basis of specifi c indicators (number, business lines concerned, etc.). It looks closely at signifi cant breaches and monitors the return to normal.
Cases presenting an increase in risk are identifi ed as they arise and reported immediately to the Risk Management Department, the Special Affairs and Disputes Department and the business line concerned, in accordance with counterparty surveillance and alert procedures.
Department and the Risk Management Department, and validated by the appropriate credit committee, depending on the level of exposure.
Sensitive cases are reviewed at least once a quarter, and are passed on to the Counterparty Watch List Committee, which meets quarterly.
Affairs and Disputes Department, which intervenes whenever necessary in diffi cult cases and recovers debt in the event of litigation.
Department, meets once a quarter. It is chaired by the Chief
The work of the Group Provisions Committee is based on reviews carried out by the Counterparty Watch List Committee, the same case analysis materials being presented at Meetings.
For the latter, objective impairment indicators are sought using analysis and close monitoring of business sectors and countries.
Financial assets at fair value through profi t and loss (excluding variable-rate securities) 262,963 262,963 177,595
Available-for-sale fi nancial assets (excluding variable-rate securities) 25,696 (124) 25,572 29,057
Loans and advances to fi nancial institutions* 65,381 516 (324)* 65,573 112,394
Held-to-maturity fi nancial assets 6,411 6,411 6,501 * Including collective provisions.