As a reminder, for the 2016 fiscal year, a modification in the accounting treatment of the technical loss on merger pursuant to ANC regulation n° 2015-06 applicable as of January 1, 2016, was recorded. Pursuant to this regulation, the loss should be broken down and recognized according to the various natures of underlying assets to which it is allocated. This allocation could only be applied at the first time application of the regulation according to existing capital gains at the merger date, i.e. according the extra-accounting allocation originally applied.
The application of this regulation led to the recognition of €269.5 million in “investments in subsidiaries and affiliates” corresponding to the merger losses accounted for as part of the total transfer of assets and liabilities of Natixis Garantie to Natixis, based on existing capital gains at this date and according to the allocation.
FINANCIAL DATA Parent company financial statements and notes 355Natixis Registration Document 2017
At December 31, 2017 Natixis no longer had any perpetual subordinated loans; at December 31, 2016 the amount of perpetual subordinated loans totaled €40 million.
December 31, 2017, as at December 31, 2016, Natixis had no irrecoverable loans due from credit institutions.
Provisions for non-performing loans amounted to -€61 million at December 31, 2017, compared with -€635 million at
Provisions for non-performing loans totaled -€969 million at December 31, 2017 versus -€1,218 million at December 31, 2016 (of which -€240 million at December 31, 2017 versus -€274 million at December 31, 2016 relating to provisions for irrecoverable loans).
FINANCIAL DATA Parent company financial statements and notes 357Natixis Registration Document 2017
For these categories of securities, the gross values shown in the “Securities held for sale” and “Securities held for investment” columns are (a) redemption value.
Of which Bonds and other listed fixed-income securities for €18,856 million at December 31, 2017 versus €18,488 million at December 31, 2016.(c)
total amount of securities held for investment sold before maturity totaled €15 million in 2017, compared with €38 million for fiscal year 2016.The
the valuation of Nushi shares for -€103 million;the valuation of Natixis Algérie shares for -€14 million;the total transfer of assets and liabilities of Natixis HCP for -€50 million;the total transfer of assets and liabilities of Natixis Consumer Finance for -€353 million;the inclusion of Natixis Financement shares for +€354 million in the scope of Natixis Consumer Finance’s TUP;the Natixis Funding capital reduction for €63 million;the disposal of Nexgen Financial Holding shares for €58 million.-
FINANCIAL DATA Parent company financial statements and notes 359Natixis Registration Document 2017
he table below was drawn up in accordance with the provisions of Article L.247-1 of the French Commercial Code: Breach of threshold of 5% of share capital % at 12.31.2017 Number of shares at
Compagnie Européenne de Garanties & Cautions 16 rue Hoche – Tour Kupka B – TSA 39999 92919 La Defence Cedex U 160,996 EUR 175,814 EUR 100.00%
NATIXIS Pfandbriefbank AG Im Trutz Frankfurt 55 D-60322 Frankfurt am Main U 120,000 EUR 5,500 EUR 100.00%
Natixis Financement 30 av. Pierre-Mendes-France 75013 Paris U 73,802 EUR 36,528 EUR 100.00%
Natixis Trust 51 avenue John F. Kennedy L-1855 Luxembourg U 609,865 EUR 126,345 EUR 100.00%
DF EFG3 Limited Maples Corporate Services Limited Of Po Box 309, Ugland House Grand Cayman, Ky1-1104 U 85,000 USD 0 USD 100.00%
B - TOTAL DISCLOSURES ON OTHER SUBSIDIARIES AND INVESTMENTS* 21 - French companies (aggregate)
FINANCIAL DATA Parent company financial statements and notes 363Natixis Registration Document 2017
FINANCIAL DATA Parent company financial statements and notes 367Natixis Registration Document 2017
Provisions for impairment deducted from assets (1,894) (315) 675 64 35 (1,435)
Future salary increases are estimated by grade based on a constant population and a three-year average. At December 31, 2017, this average (including inflation) was 2.28% versus 2.50% at December 31, 2016.
Benefits vested over the period 2 7 3 45 57 2 6 2 39 49
Plan amendments recognized over the period 3 1 4 3 3
Change in obligation taken to income (2) (61) 2 (18) (79) 5 6 2 13 26
Actuarial gains and losses/return on plan assets (7) (1) (8) (9) (9)
Total net obligation at December 31 39 44 34 84 201 47 96 32 111 286
FINANCIAL DATA Parent company financial statements and notes 371Natixis Registration Document 2017
The capital increase in fiscal year 2016 corresponds to the allocation of 957,368 free shares to certain Natixis employees,
FINANCIAL DATA Parent company financial statements and notes 373Natixis Registration Document 2017
FINANCIAL DATA Parent company financial statements and notes 375Natixis Registration Document 2017
Natixis S.A. has opted to outsource a portion of its employee benefits. For 2017, the accounting impact was -€68 million in social security (d) expenses for contributions paid to insurance companies and +€68 million for a reversal of provisions for employee benefits.
For 2016, including income relating to Natixis’ claim on the taxation in previous fiscal years of dividends and capital gains on the disposal of CCIs (a) as well as the impact of tax audits.
With some exceptions, the tax consolidation agreement at Natixis group is based on the principle of neutrality, whereby each subsidiary determines its tax and contributes to the group tax as if it were not consolidated.
Any losses transferred to the parent company give rise to a provision for restitution of corporate tax, deemed to offset the additional group tax incurred if subsidiaries return to profit, and their tax contribution is decreased by the amount of prior year losses.
On October 6, 2017, the Constitutional Council declared Article L.235 ter ZCA of the French General Tax Code in its version resulting in Law No. 2015-1786 of the December 29, 2015 Amended Finance Act for 2015 to be unconstitutional. This Article introduced an addition 3% contribution on distributed earnings. Until 2016, the expense related to this contribution was recorded under the tax line for the period during which the payout decision was made. This amounted to €20.9 million for the 2016 fiscal year. In 2017, reimbursements received for the 2012 to 2016 fiscal years were recognized under tax for a total of €105.6 million plus interest on arrears.
Interest and similar income and expenses 400 216 118 167 1 902 216 233 300 146 895
Income from variable-income securities 744 1 745 1,016 13 24 1,053
OTHER INSTRUMENTS 339,642 321,167 o/w hedges of interest rate instrumentsa 22,906 26,508 of exchange rate instrumentsa 3 3 of other instrumentsa 2,383 5,274 o/w macro-hedges 338,391 545,766 o/w isolated open positions 556 335
FINANCIAL DATA Parent company financial statements and notes 379Natixis Registration Document 2017
Independent audit, certification and examination of the separate and consolidated accounts 7.5 5.3
FINANCIAL DATA Parent company financial statements and notes 381Natixis Registration Document 2017
These obligations form part of the global struggle against territories that are non-cooperative on tax matters based on the work of various OECD working groups and summits, and are also part of the fight against money laundering and the financing of terrorism.
Income before tax, depreciation, amortization and provisions 2,259,385,434.57 738,855,652.86 872,230,135.57 1,061,747,058.72 1,058,912,618.73
Income after tax, depreciation, amortization and provisions 2,323,073,936.17 1,305,316,943.00 1,134,225,514.40 1,621,448,753.36 1,678,182,285.17
In compliance with the assignment entrusted to us by your General Shareholders’ Meeting, we carried out the audit of the parent company financial statements of Natixis S.A. for the year ended December 31, 2017, as appended to this report.
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our responsibilities under these standards are further described in the “Statutory Auditors' responsibilities for the audit of the parent company financial statements” section of our report.
Natixis S.A. recognizes provisions on an individual basis to cover incurred credit losses on loans and receivables originated as part of its financing activities.
Please refer to paragraph 1 of Note 1 and to Notes 4, 16 and 30 to the parent company financial statements for more details.
Provisions for litigation and other risks amounted to €1,089 million at December 31, 2017 (see Note 16 to the parent company financial statements).
As part of its Corporate & Investment Banking activity, Natixis S.A. holds securities that are marked-to-market on the asset side of its balance sheet, including a significant portion of financial instruments that are not quoted on an active market.
The determination of the market value of these financial instruments is based on valuation techniques that include a significant amount of judgement in the choice of methodologies and data used: determination of valuation inputs that are not observable ona the market; use of internal valuation models;a estimation of additional valuation adjustments, to reflecta certain market, counterparty or liquidity risks.
Please refer to paragraph 2 of Note 1 and to Notes 5, 26 and 27 to the parent company financial statements for more details.
We carried out these checks with the assistance of our valuation experts, with whom we also carried out independent valuations by examining, on a sample basis, the assumptions, methodologies and models used to estimate the main valuation adjustments.
AUDIT OF THE MANAGEMENT REPORT AND OTHER DOCUMENTS ADDRESSED TO SHAREHOLDERS
We have also performed, in accordance with applicable professional standards in France, the specific verifications required by law.
Information disclosed in the management report and in the other documents addressed to shareholders on the financial position and the parent company financial statements
We certify the existence, in the section of the Board of Directors’ management report devoted to corporate governance, of the information required under Articles L. 225-37-3 and L. 225-37-4 of the French Commercial Code.
We were appointed Statutory Auditors of Natixis S.A. by the General Shareholders' Meetings held on May 24, 2016 in the case of PricewaterhouseCoopers Audit, on November 17, 2006 in the case of Mazars and on June 16, 1998 in the case of Deloitte & Associés (taking into account the mergers of firms that have occurred since that date). The appointment was previously held by other entities of the Deloitte network for which the full history of appointments cannot be established.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE PARENT COMPANY FINANCIAL STATEMENTS
Our role is to issue a report on the parent company financial statements. Our objective is to obtain reasonable assurance on whether the parent company financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company financial statements.
The Finance Department prepares Natixis’ consolidated financial statements and all consolidated regulatory reports (including solvency and liquidity ratios) using the tools and databases developed and administered by Natixis S.A.
As a listed company, Natixis prepares separate consolidated financial and regulatory statements, although the sub-group it leads has been included in the BPCE consolidation group formed by the Banque Populaire and the Caisse d’Epargne banks since
As part of the regulatory process introduced by the Single Supervisory Mechanism regarding the internal control systems of credit institutions, Natixis’ Internal Audit Department uses the results of the periodic audits it performs to assess internal control procedures. There is a particular focus on accounting and financial procedures of all consolidated entities, whether or not they have credit institution status.
For accounting, permanent and periodic controls apply to the completion and monitoring of: for justifying accounts, accuracy and veracity checks, such asa the procedures for management/financial account reconciliation (outstandings and income statement), reconciliation of cash accounts and checking and clearing of suspense items; consistency checks through analytical reviews;a checks to make sure income and expenses are allocated to thea correct period; verification that the presentation complies with accountinga rules; correct processing of specific transactions in line with thea relevant principles; verification of financial information (notes to the financiala statements, items of financial communication); adjustment of anomalies identified at the time of thesea controls as well as the corresponding analyses and documentation.
For all these scopes, Natixis and its subsidiaries are continuing to upgrade their accounting and financial control procedures and equip themselves with suitable audit trail tools. In this respect, Natixis’ Finance Department supervises, assists and monitors the various controls performed by the subsidiaries.
In 2017, the highlights of the accounting and financial control environment included: preserving a strict schedule for preparing the various financiala filings; the continuation of large-scale projects to streamline thea information systems used for market transactions (front- and back-office systems), and the migration of the associated software, which continued in 2017; increasingly automated production of liquidity reporting (LCR,a NSFR and AER), within the same application chain, reducing the number of manual entries and guaranteeing the auditability of data; the continuation of a project to streamline and pool data inputa by setting up shared data warehouses for all overview functions (Risk, Accounting and Ratios, Financial Oversight and Financial Management); the launch of a project to enable the introduction within thea Asia-Pacific platform of specialized tools that have been progressively used and phased in at Natixis since 2008; the continued overhaul of the Natixis Factor overview systemsa which in 2017 saw the deployment within the subsidiary of specialized accounting and reconciliation tools; the work and discussions on the adjustment of productiona processes to IFRS 9, mainly on account of the new provisioning mechanism and the creation of a shared tool for calculating provisions, linked to a database; the strengthening of prudential, fiscal and, more generally,a manual entry controls; the reinforcement of monitoring processes of local controla systems and support for the Review officers, particularly those covering Algeria and the EMEA platform.
In addition to the control procedures followed by the Finance Departments responsible for preparing individual or consolidated accounts, the quality of accounting controls is verified by: ad hoc audit assignments conducted by BPCE’s Generala Inspection and Natixis’ Internal Audit Department; inspections carried out by the banking supervisory authority;a audits conducted by Statutory Auditors. This work is carrieda out by a group of firms working in a uniform manner each quarter on most of the entities falling within Natixis’ scope of consolidation and whose opinions rely, in particular, on compliance with policies determined and validated beforehand by Natixis and the effectiveness of local internal control procedures.
STRATEGIC OUTLINES AND 6.1 ORGANIZATION OF THE ESR POLICY 392 Strategic pillars of ESR6.1.1 392
BUSINESS LINE CONTRIBUTIONS 6.2 TO GREEN AND SUSTAINABLE GROWTH 399 Supporting the development of the energy 6.2.1 transition and combating climate change 399
Incorporating social and environmental 6.3.3 criteria in financing operations and investments 406
REPORTING FRAMEWORKS 6.5 AND METHODOLOGY 433 Specific methodological information on audited data 433
As a key source of financing for the economy, Natixis has a role to play in the transition to sustainable development, and in 2017 decided to further its environmental and social responsibility (ESR) ambitions.
ESR is one of the main cross-business drivers used to achieve the goals of the "New Dimension” 2018-2020 strategic plan, which is aimed at creating lasting value. It is backed by enhanced governance, with the establishment of a dedicated department reporting directly to a member of the Senior Management Committee.
It involves an assessment of the social and environmental risks run by Natixis' business lines, while driving performance and development: ESR will fuel the Company's strategic dialog with customers and support their own transition to a more sustainable model, with the development of innovative offers.
RISK MANAGEMENT with the integration of ESG criteria in our financing and investments
ONBOARDING employees’ commitment, manage our direct impacts on the environment, responsible purchasing policy, solidarity initiatives
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Strategic outlines and organization of the ESR policy 393Natixis Registration Document 2017
Design and implement a green incentive : internal mechanism aiming at promoting the most virtuous financing in terms of climate impact.
Build and implement an Environmental and Social screening tool for our financings.
Manage our direct environmental impact: • Implement our Mobility Plan to improve employees’ transportation • Develop green areas within our buildings • Extend the new waste sorting system • Manage our resource consumption and carbon emission
Representatives from different Natixis business lines (Corporate & Investment Banking, Asset & Wealth Management, Insurance, Specialized Financial Services) take part in business forums aimed at developing ESR in the business lines, while the officers of the functional departments (Real Estate and Logistics, Human Resources, Compliance, etc.) are involved in projects to incorporate sustainable development in the Company's operations.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Strategic outlines and organization of the ESR policy 395Natixis Registration Document 2017
Mindful of its role in achieving these goals, Natixis has identified eight SDGs to which it already makes a material contribution that is set to expand in the years to come, through financing and investments or in its own daily operations.
Natixis is N°1 in solidarity asset management(1), distributing funds that actively contribute to creating jobs, for people in difficulty.
Natixis has committed to end financing and investment for the tobacco industry as it is a public health issue.
Since 2011, Natixis is an active sponsor of the French Fondation Gustave Roussy for research against cancer.
Since November 2015 Natixis’ buildings run on “green” electricity, i.e. from fully renewable sources of energy, pursuant to the terms of its energy.
Several Natixis Buildings have environmental certifications attesting to their environmental performance. Included in Natixis’ real estate are 10 buildings with HQE, BBC or BREEAM certifications.
Apart from the financing of renewable energies, Natixis has taken various initiatives to fight climate change: Natixis Asset Management, Mirova and Natixis Assurances measure and reduce their portfolio carbon exposure, offer products with climate certifications...
Natixis committed itself to reduce the carbon impact of its buildings in Ile-de-France by 20 % by 2020, compared to 2010).
The goal is for each employee to act with the highest professional ethics and a keen sense of responsibility, notably by embracing Natixis’ corporate and social responsibility commitments.
2010, Natixis assesses and manages the environmental and social risks associated with major projects it finances and observes a set of policies governing sensitive business sectors.
In its business lines, Natixis supports the energy transition and the emergence of a sustainable economic model by developing eco-friendly activities and helping its customers achieve their own transition. As a signatory of the Equator Principles since
Finally, Natixis also aims to prevent objectionable behavior and act responsibly towards society: as a signatory of the United Nations Global Compact, Natixis undertakes to observe human rights in the conduct of its businesses and to combat terrorist financing, money laundering, corruption and tax evasion.
earning its way onto the major ESR indices (Euronext Vigeo – Eurozone, Stoxx Global ESG Leaders, etc.).
Rated by various ESG rating agencies, Natixis has recorded solid performances in social, environmental and governance areas,
The following table shows the most recent assessments of the top ESR rating agencies and their previous rating.
Agency ESR rating (year of last rating) ESR rating (previous year)
Business line contributions to green 6.2 and sustainable growth 2017 drew to a close with the One Planet Summit, where the commitments undertaken in the 2015 Paris Agreement on Climate were ramped up and players in both the public and private sector launched a powerful drive to combat global warming.
Participating States established tight deadlines calling for the implementation rules of the Agreement to be finalized by the end of 2018. Meanwhile, a number of private-sector players, including Natixis, set ambitious targets in terms of investments in low-carbon technologies (e.g. French Business Climate Pledge) and supervision of carbon-intensive industries (e.g. Climate Action 100+).
The purpose of “green finance” is to support companies and/or projects that benefit the environment, for example by cutting down on pollution and carbon emissions, improving energy efficiency, and attenuating and adapting to climate change.
PV power accounted for the lion's share of installed capacity in 2016 (47%), followed by wind farms (34%) and hydropower (15.5%).
Natixis supports the development of renewable energies around the world through its local offices, particularly in Europe, the Middle East, Australia, and North and South America. Financing activity was very robust in 2017, especially in the fast-growing offshore wind power sector and in the Middle East, where Natixis has secured a position as a top-tier creditor supporting renewable energy projects. Natixis is No. 3 in the MENA (Middle East and North Africa) region, according to the rankings established by leading publication IJ Global.
In the Corporate & Investment Banking division, the Global Infrastructure and Projects (GIP) team financed 14 new deals in 2017 for a total amount of €6.89 billion (of which €2.218 billion arranged by Natixis) and a total capacity of 4,851 MW: four offshore wind farms with a total capacity of 1,715 MW;a three onshore wind farms with a capacity of 404 MW;a seven solar PV projects with a capacity of 2,732 MW.a
Both strategic projects for the two Emirates will play a critical role in supplying clean energy at an extremely competitive cost (less than $30 per MWh). The Mohammed bin Rashid Al Maktoum solar park will be fully operational in 2020, and the Emirate plans to increase its total capacity to 5,000 MW by 2030. The park spans 16 km2 and will generate 2.5 million MWh per year. It uses an innovative technology that moves the solar panels to face the sun and will ultimately lead to savings of 6.5 million metric tons of CO2 per year.
Natixis Lease subsidiary Natixis Energeco is an active supporter of renewable energies in mainland France and overseas territories.
In 2017, Natixis Energeco financed 35 new deals for a total arranged amount of €429 million.
The high number of solar PV calls for tender in 2017 significantly increased the volume of projects and triggered a constant decline in purchase prices.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Business line contributions to green and sustainable growth 401Natixis Registration Document 2017 it continued its partnership with Engie Green, acquiring 50%a of two solar PV parks in southern France (18 MWp), bringing the combined capacity of solar parks co-owned by Engie Green and Mirova to 90 MWp; it bought an entire portfolio of wind power projects (27 MW)a developed by Amiens-based green energy producer H2Air, helped by a senior credit facility issued by Natixis Energeco.
In Europe, Mirova-Eurofideme 3 strengthened its partnership with Austrian developer RP Global, thus far focusing predominantly on wind power projects in France and hydroelectric dams in Portugal. The partnership was expanded in 2017 to include a portfolio of wind farms in Croatia (80 MW), commissioned in 2014 and 2016, and benefiting from special rates on the electricity generated for 14 years.
Incorporating environmental performance criteria into infrastructure and real estate financing is a top priority in the energy transition, one pursued by several Natixis business lines: AEW Europe's ESR policy in real estate asset management
AEW Europe, a subsidiary of Natixis Investment managers and La Banque Postale Asset Management, provides real estate investment advisory and real estate asset management services for third parties. AEW Europe includes a range of environmental criteria when making acquisitions and managing its portfolio: for the acquisition of new buildings, only energy-efficienta buildings having obtained environmental certification (HQE(1), BREEAM(2), LEED(3) or BBC(4)) are accepted; for the purchase of existing buildings, environmentala performance assessments are systematically carried out and are included in the provisional spending budget for environmental improvements; improve environmental performance and comply with the energy transition for green growth act.
for the portfolio under management, actions plans have beena implemented, in relation to home-owners and renters, to
Following the certification programs conducted in 2017, three existing buildings and five new buildings were awarded HQE/BBC or HQE Exploitation certification.
AEW Europe also conducted energy audit campaigns on building portfolios in order to prepare a plan for cutting energy consumption by 38% in accordance with the Grenelle Environmental Act. These campaigns are part of the Greco (Grenelle Compliance) project which, since 2012, has already covered a portfolio of nearly 250 properties.
In the interest of furthering its initiatives for better managing energy usage, and in order to better monitor the performance of buildings in use, an energy and water consumption monitoring system has been up and running at 90 sites since 2012, representing average cost savings of 15% on the equipped buildings. Furthermore, an environmental information system for all assets in its portfolio has been under development since 2015. With this system, the properties’ environmental performance can be centrally managed and monitored.
Lastly, AEW Europe took part in a working group organized by the French association of investment property companies (Association française des sociétés de placement immobilier – ASPIM), aimed at drafting and publishing a “Real Estate SRI certification” in 2018.
In 2017, the New York branch arranged its first Green Bond CMBS using an environmental certification, and launched a PACE bond securitization program to finance the installation of solar PV panels and energy-improvement works (see details in Chapter 6.2.3).
Other offers and commitments targeting the energy transition and the prevention of climate change
Launch of the “Land Degradation Neutrality Fund” This investment vehicle, designed to support the Sustainable Development Goals and sustainable land management in particular (goal 15) was officially launched at the 13th Conference of the Parties (COP 13) to the United Nations Convention to Combat Desertification (UNCCD) in Ordos, China.
The fund has a target size of $300 million and its purpose is to raise public and private-sector capital to finance projects making a significant contribution to land degradation neutrality by promoting sustainable land management practices, aimed at preventing the degradation of fertile land and restoring already damaged land. The fund is supported by a large network of partners, including the European Investment Bank (EIB), which actively contributed to the design and structuring of the vehicle, and the French Development Agency (AFD).
In 2017, Mirova also finalized the purchase of a 51% stake in Althelia Ecosphere, an asset management company specializing in impact investing.
By the end of 2018, Natixis will include an ESG- and/or Climate-certified unit-linked vehicle in its offer, for any new life insurance policy taken out.
Also in 2017, Natixis Assurances also signed onto the joint issuers/investors initiative launched by the French Insurance Federation, in partnership with MEDEF, on the transparency of climate data.
In home insurance, Natixis Assurances has developed a variety of offers, such as multi-risk home guarantees for sustainable development installations (solar panels, energy storage batteries, rainwater collection tanks, etc.).
In auto assurance, Natixis Assurances grants discounts to drivers who drive less than 8,000 km per year and to owners of electric cars. The goal for 2018 is to target excellence in personal and property safety, while developing products and applying virtuous processes.
Natixis made new pro-climate commitments at the One Planet Summit: Two years after discontinuing loans to the coal industry worldwide, Natixis announced that it would be implementing an internal Green Incentive mechanism in 2018 to strengthen the alignment of its financing activities with the goals of the Paris Agreement along with its contribution to the transition to a low-carbon economy. (see Chapter 6.3.5 for details).
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Business line contributions to green and sustainable growth 403Natixis Registration Document 2017
Natixis Asset Management has been committed to sustainable development and socially responsible investment (SRI) for nearly 30 years(1). It decided to take additional steps in recent years by developing a responsible management approach that it applies to all its investment processes.
The aim of this approach is to facilitate the integration of sustainability criteria in investment decisions across the board, in accordance with the recommendations of the leading international standards such as the United Nations Principles for Responsible Investment (UN-PRI), of which Natixis AM has been a signatory since 2008.
This approach is the result of an extensive analysis conducted over several years, centered around four key commitments and special pro-climate initiatives implemented daily by the investment teams depending on the specific characteristics of their asset class: Understanding sustainable development prioritiesa
Natixis Asset Management has adopted two complementary approaches in all areas of portfolio management expertise to improve the way it handles extra-financial concerns: identification of ESG criteria to be included, based on thej specific features of each asset class: The portfolio management teams assess the materiality of ESG criteria, thereby gradually identifying how they will include these criteria in their analysis of issuers, exclusion of certain issuers involved in controversialj weapons activities, or who have breached the principles of the United Nations Global Compact and/or the OECD Guidelines for Multinational Enterprises, from Natixis Asset Management's investment universe.
SRI and solidarity-based investing made considerable strides in 2017, both in terms of assets under management and the percentage of AuM managed by Natixis Asset Management.
SRI and solidarity assets under management (in billions of euros) in Natixis AM open-ended, dedicated and employee savings funds(a) 19.5 17.2 16.4
Source: Natixis Asset Management at 12.31.2017 in open-ended, (a) dedicated and employee saving funds.
This approach, gradually being rolled out to its directly held asset classes, is founded on three pillars, as described in the energy transition report available on its website: Natixis Impact Nord Sud Développement – Natixis’ first solidarity-based investment fund – was created in 1985. A full range of SRI and(1) solidarity-based investment funds has since been developed.
404 Natixis Registration Document 2017 ratings on issuer ESG commitments;a definition of investment themes and a selective investmenta approach; transparency: Natixis Assurances transparently communicatesa and reports on changes in the carbon footprint of its investments.
Naxicap Partners has implemented an ambitious ESG integration policy and formally established an ESG charter including criteria for excluding certain industries and activities. It put together a four-person ESG team: a Head of ESG focused exclusively on this function was hired, two members of the Investor Relations team devote part of their time to ESG, and one member of the Management Board coordinates the team's activity.
Naxicap Partners’ official ESG policy details the steps that must be followed in the investment process, which are strictly monitored by the Middle Office, including: the obligation to conduct a pre-investment ESG analysis, the performance of an ESG audit by external specialists, the inclusion of an ESG clause in the shareholders’ agreement, the preparation of an action plan discussed by company Supervisory Boards, and a seller's ESG audit when the investment is sold. Each company's ESG performance is monitored, based in particular on annual data collection on specific indicators. A report published once a year, available online, summarizes and analyses the data, while highlighting interesting initiatives and points of improvement.
Major institutional investors are now looking to invest in the segment in accordance with increasingly rigorous governance for such issues.
Natixis is an active member of the Green Bond Principles initiative and several of its business lines are actively participating in this impressive market growth: Natixis’ Corporate & Investment Banking division facilitated several green bond issues in 2017, in both the private and public sector: Agence France Trésor, ENEL, CDC, SNCF Réseau, CTG, DBS, Engie, EIB, AFD, Mizuho, etc.
Mirova, also a signatory of the Green Bond Principles, has implemented a specific global green bond strategy and manages €1.2 billion in green bonds through its various funds and mandates.
As a result, it was able to issue a $72 million green-specific tranche out of a total issue of $300 million.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Business line contributions to green and sustainable growth 405Natixis Registration Document 2017
Natixis is the corporate, investment, insurance and financial services arm of Groupe BPCE. Its activities are entirely dedicated to providing financial advice and support to its business customers and contributing to the social and economic advancement of the countries where it operates.
Furthermore, through its subsidiary Mirova, Natixis is the French market leader in solidarity-based investment, allowing it to support numerous companies that provide social or environmental value, including the creation of jobs or low-income housing for disadvantaged people, organic farming projects and development projects in the southern hemisphere.
In 2017, Mirova boasted 31.2% market share (based on total AUM in solidarity-based funds). It is also the No. 1 asset management company in solidarity-based investment solutions in France, with 23.1% market share (source: Finansol survey).
Natixis’ Compliance Department oversees the systems governing the prevention of money laundering and terrorist financing, prevention of fraud, information system security, business continuity and personal data protection.
Corruption is a fraudulent and unethical act subject to heavy criminal and administrative penalties.
To comply with the requirements set out in Article 17 of the law of December 9, 2016 on transparency, prevention of corruption and the modernization of the economy (“Sapin II”), in 2017 Natixis carried out a campaign to strengthen and align the rules and procedures of its compliance framework with the top international standards in corruption prevention.
INCORPORATING SOCIAL 6.3.3 AND ENVIRONMENTAL CRITERIA IN FINANCING OPERATIONS AND INVESTMENTS
Environmental and social criteria in Corporate & Investment Banking’s financing business lines are assessed by the new ESR Department, which ensures the quality of the assessment, monitors E&S risks in transactions, analyzes reputational risk of involved parties, and implements ESR policies in sensitive sectors.
The detail of this analysis and decision process, the means put in place and all the information required on the operations audited under the process are presented in detail in the annual Equator Principles report (published every year before July 31 and available on the Natixis website): and-social-risk-management.
Such transactions include external growth financing deals not associated with a physical investment program, general-purpose corporate financing, portfolios of assets that are too large for a dedicated assessment, or certain kinds of assets.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Management of ESG risks in our business lines 407Natixis Registration Document 2017
For all the financing transactions referred to above, and also when deemed necessary for any other transaction, an analysis is performed to determine whether the borrowing company, its operator or main shareholder has a history of poor management in its operations, from an environmental, social or health and safety standpoint.
Overview of financing transactions over the last three years 212 transactions were subject to an assessment, E&S risk monitoring and/or reputational risk analysis over the last three years, including 89 transactions in 2017 alone, up 35% compared to 2016.
BREAKDOWN OF THE 212 TRANSACTIONS BY ■ GEOGRAPHIC AREA (CONSOLIDATED DATA FOR 2015,
For the most sensitive sectors, ESR policies for internal use were established and integrated into the Risk Policies of the business lines working in the sectors in question.
This commitment also applies to investments made by Natixis Asset Management, covering all directly managed portfolios, and to Natixis Assurances, which no longer invests its general-purpose funds in industrial companies deriving 50% or more of their business from coal-fired power plants and/or thermal coal mining.
Discontinued financing of oil derived from oil sands and exploration/production of oil in the Arctic In December 2017, Natixis made a commitment to no longer finance the exploration, production, transportation and storage of oil derived from oil sands, all around the world.
This commitment to protect the Arctic upholds the position already adopted by Natixis Asset Management and Mirova, which since 2016 have headed a group of investors that signed a declaration calling for the Arctic region to be protected against oil exploration activities, and for adherence to national commitments to combat climate change in this particularly hydrocarbon-rich area of the world.
Natixis sees tobacco as a major danger to public health, and this exclusion has deepened its commitment to the fight against cancer, as a supporter of Fondation Gustave Roussy since 2011.
The French law on the duty of care requires Natixis to prepare, publish and implement a duty of care action plan containing measures that can identify and prevent the risks of violating human rights and basic freedoms, harming the environment, and endangering occupational health and safety, associated with the activities conducted by Natixis, its subsidiaries, sub-contractors and suppliers.
Lastly, Natixis’ Compliance Department adapted the bank's whistleblowing system to take new regulations into account (including in particular the duty of care, but also the Sapin 2 Act).
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Management of ESG risks in our business lines 409Natixis Registration Document 2017
The tool maps out risks by drawing on the expertise of the chosen supplier for each purchasing category, in addition to statistics on each country, in accordance with recognized standards. Natixis’ ESR Department helped verify the sources and indicators for risks to the environment, health and safety, and human rights.
The large majority of its employees and establishments are located in France (73% and 75%, respectively).
Internal agreements have also been signed, covering the following issues in France: union law;a collective bargaining;a gender equality;a professional integration and retention of employees witha disabilities; quality of life at work.a
In 2018, the bank will focus specifically on countries where these risks are highest and on countries with more than 100 Natixis employees, regardless of the level of risk.
Research will be carried out on local regulations in these countries, occupational health and safety conditions applicable for Natixis employees, and the use of local external service providers.
For several years now, Natixis has addressed the human rights and environmental risks incurred by some of its financing activities, most notably by applying the Equator Principles for project financing and policies applied to sensitive sectors (see Chapter 6.3.3).
Any internal or external employees who believe they have witnessed an illegal activity, unethical behavior, or a breach of our Code of Conduct or applicable policies and procedures is entitled to use this system.
Natixis protects whistleblowers. Under no circumstances may they be subject to any disciplinary action or legal proceeding, provided they have acted impartially and in good faith.
The environmental/climate risks linked to our businessa operations are progressively taken into account insofar as Natixis’ clients can be subject to climate risks: these include physical risks (exposure to physical consequences caused directly by climate change) and transition risks (exposure of certain sectors to the adjustments brought about by the transition to a low-carbon economy).
This innovative approach covers generated emissions, prevented emissions and overall contribution to the fight against climate change. It assesses investments made relative to a benchmark scenario and against the principal market indices.
Applied to the strategies managed by Mirova, the methodology shows that the investments made by the Natixis subsidiary are generally in line with – if not below – the 2°C scenario and much better than the main benchmark indices.
Lastly, Natixis Assurance has published its ESG investment policy, which includes the carbon footprint of its investments, as assessed using the “Carbon Impact Analytics(1)” method. The assessments are measured in metric tons of CO2 equivalent per million euros invested for each asset class (equities, fixed income) and changes are monitored for each portfolio. The carbon footprint is converted into a temperature increase, used to estimate the convergence gap relative to the 2°C target set by the Paris Agreement.
According to the last assessment (at December 31, 2016), 65% of the Natixis Assurances portfolio had been subject to a carbon footprint assessment: 85% of fixed income investments and 30% of equity funds (dedicated funds).
In the interest of assessing physical risks, Natixis and Mirova supported Carbone 4 in the development of the new CRIS method.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Management of ESG risks in our business lines 411Natixis Registration Document 2017 2017 Key Event
Launch of the Climate Risk Impact Screening (CRIS) method The CRIS method, designed by Carbone 4, is used to assess the physical risks incurred by financial players as a result of climate change. This method is an operational response to growing demand for information on the potential impacts of climate change on infrastructures, businesses and even national economies.
Natixis believes it has a responsibility to actively combat climate change and has developed an active strategy aimed at reducing its direct and indirect impacts on the environment resulting from its financing and investment activities.
Investment products helping to combat climate change:a Mirova, the investment firm of Natixis Asset Management specialized in socially responsible investment, offers a range of vehicles dedicated to the fight against climate change (see Chapter 6.2.2).
New initiative to steer the new business portfolio towardsa greener projects: Green Incentive Mechanism.
From a broader standpoint, Natixis believes that adjusting the tools used to steer its business lines would have a positive influence on the structure and impact of its financing activities by strengthening their alignment with the goals of the Paris Agreement and its contribution to the transition to a low-carbon economy. To this end, the bank has taken steps to implement an internal Green Incentive Mechanism.
Launch of an internal Green Incentive Mechanism In honor of Climate Finance Day held in late 2017, Natixis CEO Laurent Mignon announced that Natixis would be rolling out an internal Green Incentive Mechanism.
The mechanism will apply to all Natixis financing activities in Corporate & Investment Banking and Specialized Financial Services around the world.
It will subsequently lead to a modification of the indicators used for capital allocation and oversight of Natixis’ business lines. The Green Incentive Mechanism will also improve the internal ROE on projects with a positive impact on the climate and environment.
The considerations inherent in our internal operations are critical to the success of our overall ESR policy. They can be found in many aspects of our business: management of our direct impact on the environment, which isa material on a scale covering all Natixis employees and establishments (over 17,000 employees in 48 countries); the responsible purchasing policy used to select suppliers anda sub-contractors offering environmental and social guarantees; the HR policy guiding the company's transformation, includinga solutions to ensure the sustainable performance of all employees in a respectful working environment, thus securing their full engagement; contribution to the community and mobilization of employeea support for solidarity-based projects.
The Real Estate and Logistics Department has introduced a total cost approach to its projects and investments that allows it to factor in the environmental impact of its activities. It is especially involved in setting up and monitoring environmental certifications, optimizing energy consumption and ensuring building accessibility.
Natixis and its subsidiaries in France (with the exception of Financial investments and affiliates – see scopes in Chapter 6.5) account for 295,617 m2 in office space and 19,257 workstations, as well as three data centers (two of which are operated for Groupe BPCE).
For the purpose of managing its buildings and offices, Natixis chose to occupy buildings whose design and operation guarantee optimal environmental performance. The bank works in 10 certified buildings (HQE(1), BBC(2), HPE(3) or BREEAM(4)
Internationally, Natixis occupies environmentally certified offices: Building 1251, its New York head office which houses most of its employees, obtained the LEED(1) gold-level environmental certification for its design and construction.
Natixis' teams in Hong Kong work in the "ICC" building, which received several certifications for its environmental performances (platinum-level BEAM(2) certification, bronze-level LEED certification(1) for interior design).
The people responsible for the management, operation and technical maintenance of the group’s buildings receive in-depth training in this field. These teams keep up to date in surveillance and alert procedures, as well as protocols and resources dedicated to the prevention of environmental risks and pollution.
Combining these measures with efforts to raise employee awareness of “eco-gestures” has been steadily reducing energy consumption in Natixis buildings since 2010.
Energy consumption per workstation (in MWh), excl. data centers 2.90 3.04 3.03
Energy consumption per m² of usable floor space (in MWh), excl. data centers 0.19 0.20 0.19
Since November 2015, Natixis’ buildings have run on “green” electricity, i.e. from fully renewable sources of energy, pursuant to the terms of its energy supply contract with ENGIE. This energy source is guaranteed by the supplier and certified (AlpEnergie’Pure 2015).
Consumption (in m3 per m2 of usable floor space) 0.25 0.25 0.23
Everyday consumption by employees (reams of paper, letterhead paper) is steadily falling. General installation of multi-function printers offering the “my print” function, combined with awareness-raising initiatives, has positively contributed to this trend.
In desktop publishing, paper consumption was stable (173 metric tons in 2016 versus 172 metric tons in 2015).
Regular communication raises employee awareness of sustainable development in an effort to reduce their impact on the environment, with communication campaigns on workplace eco-gestures. In 2017, several articles were published via internal communication media (Intranet, magazine, etc.) and events were held for staff during Sustainable Development Week.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Internal mobilization and management of our direct impacts 415Natixis Registration Document 2017 2017 Key Event
Awareness campaign on ICT energy consumption In the modern digital era, the business world simply cannot function without information and communication technologies (ICTs). They are used to hold remote meetings, send documents, do research, and so much more. It is estimated that, altogether, digital technologies are responsible for 10% of the world's electricity consumption.
In honor of sustainable development Week, Natixis encouraged its employees to be frugal and expedient in their everyday use of ICTs: e-mail and document management, online research, etc.
Each year, Natixis performs a Carbon Assessment covering the scope of Natixis France (managed scope, excluding data centers), for the purpose of: meeting regulatory requirements (Grenelle 2 Act, Energya Transition Act); providing Natixis with the tools needed to reduce its impact ona the environment; monitoring its commitment to reducing the bank's energya consumption and Scope 1 and 2 carbon emissions under the Paris Climate Action Partnership Agreement.
Results of the Natixis France carbon assessment (managed scope, excluding data centers)
This result can be attributed to an increase in headcount (12,560 FTEs in 2017 versus 12,300 in 2016), but also in the number of business trips (primarily by air), fixed assets (IT equipment) and the amount of purchases.
For 2017, the breakdown was as follows: Fiscal Year 2017 Carbon emissions (in metric tons of CO2 equivalent)
Scope 1: direct combustion of fossil fuels and refrigerant gas leaks 2,797
Initiatives have been undertaken to address material sources of carbon emissions in the conduct of Natixis’ business, predominantly through the use of financial products offered to its customers: an assessment of the environmental impact of investment vehicles offered by Natixis was performed in certain business lines (see Chapter 6.3.5).
Based on calculated carbon emissions, a carbon action plan has been implemented in three main areas: Buildings: optimized occupation of work space and reductiona of energy consumption; Business travel: expanded use of public transportation anda “soft” modes of transportation, green company cars, prioritized use of train travel in the Natixis travel policy, development of videoconferencing and establishment of a telecommuting program to limit commuting; IT: streamlining of office printers, with the widespreada installation of multi-function printers.
Natixis confirms its commitment to the Paris Climate Action Partnership Agreement In signing the Paris Climate Action Partnership Agreement in 2015, Natixis undertook to reduce the energy consumption and carbon emissions of its buildings in the Greater Paris area by 20% (compared to 2010).
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Internal mobilization and management of our direct impacts 417Natixis Registration Document 2017
Waste-sorting is managed by the Real Estate and Logistics Department and consists of the following: sorting and recycling of paper, plastic (bottles, cups) and metala (cans) using individual sorting bins or collection points gradually installed in the offices; collection and special disposal of used ink cartridges anda batteries; recovery of WEEE (Waste Electrical and Electronic Equipment)a by recycling companies; sorting and recycling of plastic pens.a
The volume of paper and ink cartridge waste came down significantly, in line with the decline in printouts.
It should be noted that paper and cartridge waste recorded a continuous decline due to decreased printing.
Initiatives are in place to gradually recover metal (cans) and plastic waste (bottles, cups), as new sorting systems are installed.
Hazardous industrial waste (WEEE, solvents, paint, varnish, infectious waste, etc.) is recycled or disposed of properly.
European Week for Waste Reduction (EWWR) Natixis organized several events during EWWR, aimed at promoting sorting and recycling of office waste: New waste collection systems were presented for the sorting and recycling of paper, plastic and aluminum cans, and waste recovery and recycling specialist Paprec gave a workshop describing the waste sorting chain and recycling process.
In 2017, Natixis furthered its efforts to promote clean mobility, in accordance with the French Energy Transition for Green Growth Act of 2015. Article 51 of the Act states that any company with at least 100 employees working at the same site, located within the scope of an urban travel plan, is required to prepare a mobility plan for 2018.
To raise employee awareness of the mobility plan, Natixis launched a communication campaign during European Mobility Week: special events were organized, flyers were distributed, and employees were asked to complete a survey on their travel habits and expectations in terms of home-office commutes and travel between Natixis locations.
The environmental impact of the company car fleet can be significant. In 2017 alone nearly 14 million kilometers were driven. Natixis is therefore selecting more eco-friendly vehicles – in terms of both CO2 and particulate emissions – under its car policy.
In 2017, maximum CO2 emissions were reduced and capped at the following levels: 115 g/km for service vehicles;a 135 g/km for commercial vehicles;a 165 g/km for other vehicles.a
Use of gas and electric hybrid cars is also on the rise, making up 9% of the company car fleet at end-2017 versus 6% at end-2016.
As diesel engine vehicles are being replaced in favor of gas and/or hybrid electric vehicles, the average CO2 emission rate of Natixis’ fleet fell from 116 g in 2014 to 114 g in 2017. This downtrend should accelerate as manufacturers expand their range of clean vehicles and as regulatory measures evolve (restricted traffic areas, fuel tax recovery, measurement of polluting emissions).
Since 2011, the business travel and expenses policy has set rules ensuring the safety and comfort of employees during business trips, while contributing to the policy of optimizing the costs and managing the environmental impact of these trips. This policy applies to Natixis and its subsidiaries, excluding Financial investments in France. The subsidiaries and branches abroad establish travel rules that are consistent with the “Worldwide Travel” policy.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Internal mobilization and management of our direct impacts 419Natixis Registration Document 2017 when vehicles are used on a short-term rental basis, thea category depends on the circumstances (number and type of people transported); 58,288 video conferences were held in 2017 (compared to the use of alternatives to travel should be preferreda (conference calls, video conferences and web conferences). Use of these alternatives further increased at Natixis in 2017: These rules are fully accessible on the Intranet. A travel agency listed to cover the worldwide scope has been tasked with applying these rules to travel booked by employees.
In terms of urgent courier services in the Paris region, the Real Estate and Logistics Department has suggested using bike couriers for distances under 3 km. In 2017, 33% of courier services were provided by bike couriers, representing a total distance of over 4,000 km traveled.
A variety of tools have been made available to buyers and suppliers: a set of “responsible purchasing standards” that set out thea regulatory or recommended social and environmental criteria for the most commonly purchased product categories; a Supplier Relations Charter incorporating its sustainablea development values; sustainable development clauses in calls for tender anda contracts.
Natixis’ ESR Department took part in the “developing responsible procurement” project implemented under the Groupe BPCE CSR approach, including an action plan with three priority objectives: optimizing the environmental and social impact of purchases, contributing to the economic and social development of the regions, and promoting best business practices.
An extensive analysis was conducted on how to simply and efficiently assess the ESR performance of suppliers, based on a questionnaire that was tested by several Groupe BPCE banks and is set for broader deployment in 2018.
Responsible Purchasing Charter In 2017, Natixis participated in a joint initiative involving several French Banking and Insurance companies, and signed the Responsible Purchasing Charter.
In keeping with previous years, the Purchasing Department conducted an ESR survey in 2017 of 30 service providers (IT services, advisory services, call centers, catering, energy, mail services, IT hardware, transportation). None of the companies that responded were given an overall score that posed a high risk for Natixis.
persons in 2017, maintaining the established budgets and significantly increasing new services provided by these companies, including management of meeting rooms and increased co-contracting during new calls for tender on mail and archiving services.
Lastly, in accordance with its Disability agreement, Natixis reiterated its commitments to companies working with disabled
The budget for disability-friendly companies in 2017 was €2.9 million, up from previous years (€2.3 million in 2015 and €2.5 million in 2016).
Natixis is a unique company, enhanced by the richness of its identity and history. It owes its success to the commitment of its people and to the longstanding trust of its customers.
the aim of Natixis’ HR policy is to support the company’s transformation by offering solutions to ensure the sustainable performance of all employees in a respectful working environment.
Natixis receives “Top Employer 2018” certification For the second year in a row, Natixis submitted its main HR processes and policies for assessment by the Top Employers Institute. The excellence of Natixis’ working conditions and its Human Resources environment were certified by a method of analysis used around the world.
Supporting the transformation 6.4.3.1 of the business lines streamlined organizational framework and methods of operation based on new leadership roles.
The “Natixis Worldwide” scope covers all of Natixis and its subsidiaries around the world, including Financial investments and entities within the accounting consolidation scope (Coface, Fimipar, Natixis Algérie).
Total breakdown of the 20,898 FTEs by business line: Corporate & Investment Banking: 2,984, Asset & Wealth Management: 4,228, Insurance:(1) 1,601, Specialized Financial Services: 3,777, Support Departments and others: 4,432, Financial Investments: 3,877. The employees of the Corporate & Investment Banking support functions have been reassigned to the Support Departments and to International Operations. The breakdown of FTEs by entity for the Corporate & Investment Banking and Support Departments was 3,639 and 3,778.
A proposed Cash Equity partnership between Natixis and ODDO BHF was submitted to the employee representative bodies at the end of 2017. It is scheduled for implementation in mid-2018 and will notably include the transfer of research and sales/execution teams from Natixis to ODDO.
Insurance: the business line continued to expand, increasing its headcount by +4.9%.
Specialized Financial Services: headcount up +7.9%. New internal and external investments were carried out in the Payment Solutions business line, including in particular the acquisition of PayPlug, Dalenys Payment, and S’Money and its subsidiaries.
Including incoming/outgoing transfers (excl. the managed scope), with the exception of Bati Lease S.A. (consolidated in December 2017).(a)
Since 2016, staff whose fixed-term contracts were changed to permanent contracts have been added to new hires and deducted from departures (no pro forma in 2015).
It was expanded by a new BPCE Agreement signed in December 2017, including the return to work of employees holding corporate office.
Collective bargaining agreement on cross-functional mobility, with the aim of streamlining the bank's structure 100 06.30.2017
Agreement on additional healthcare guarantees and reimbursement of healthcare costs 100 10.19.2017
Amendment No. 3 to the Natixis supplementary collective pension plan 100 10.19.2017
In addition to these overall agreements, 68 agreements were signed by Natixis’ French entities in 2017.
A method was developed and implemented in 2017 to address the human aspects of change management, with the goal of serving as a framework for any major transformation project.
In 2017, Natixis began working to simplify its organizational structure by: reducing the number of managerial levels and makinga teams larger; recognizing talented employees by creating three leadershipa roles (manager-leaders, expert leaders and project leaders); establishing a new leadership model, based on Natixis Purplea Touch, to guide the actions of all leaders and help them drive the company's transformation.
To further this effort, a collective agreement on cross-functional mobility was entered into in June 2017 with the unions, defining a harmonized framework to allow each entity to implement its structural plans and manage changes in leadership roles.
The establishment of simplified structures and new leadership roles will continue through the end of 2018.
Internal transfers between divisions (as a %) 10.8 16.8 25.4 7.1 25.0 5.3 0.7 5.9 - - 11.1 - 2.0 14.3 2.8 2017 cross-functional transfers in France (118) and internationally (142).(a)
To promote a positive employee experience, Natixis regularly supports and measures employee engagement, monitors quality of life in the workplace, and develops a diversity-inclusive approach.
Natixis’ compensation policy is structured in such a way as to promote employee engagement over the long term and increase the Company's employer appeal, while discouraging excessive risk-taking. Each year, Natixis conducts a study comparing its compensation to the external market in a bid to maintain competitive compensation.
The compensation policy is centered on three components and reflects both individual and collective performance: fixed compensation reflects, at the individual level, the skills,a responsibilities and expertise expected for a position, as well as the role and importance of duties in the organization; risk-takers may be deferred (from 40% to 60% for the highest amounts); variable compensation is granted where applicable, based ona the achievement of individual and collective targets. Pursuant to the various regulations in force, and to encourage performance over the long term, a significant portion of variable compensation granted to employees identified as
Furthermore, in 2013, 2014, 2015 and 2016 Natixis gave its employees the opportunity to purchase Natixis shares under preferential conditions via employee share ownership operations. A new employee share ownership plan is currently under review for fiscal year 2018.
The compensation policy also incorporates the fundamental objectives of equality in the workplace and non-discrimination pursued by Natixis. To this end, in its latest agreement on gender equality in the workplace, Natixis S.A. renewed its commitments to equal pay between men and women, and launched new measures to improve efforts to decrease the wage gap between men and women.
Average gross annual compensation of staff under permanent contracts (excl. profit-sharing and employer contributions to the Company savings plan) (in thousands of euros) 80.8 79.9 80.3
Voluntary employee profit-sharing (in millions of euros) * 127.4 118.4 125.3
Total employer contribution paid in respect of the Company savings plan and the collective pension plan (PERCO) (in millions of euros) 40.5 38.8 35.6
Within the scope of Natixis France (managed scope), the amount of profit-sharing per employee paid in 2017 in respect of 2016 averaged €2,367, the amount of incentives (voluntary profit-sharing) averaged €5,184, and the amounts of the contribution paid per beneficiary averaged €2,337 for the employee savings plan and €644 for the collective pension plan (PERCO).
At the end of 2015, the Senior Management Committee signed the “15 Work/Life Balance Commitments” charter. An initiative of the French Ministry of Social Affairs, Health and Women’s Rights, and by the OPE (French observatory aimed at improving the balance between work and home life), the charter encourages signatory companies to take action in favor of a better work-balance.
Natixis continued rolling out its telecommuting program this year in France, with more than 2,500 telecommuters at end-2017, i.e. 25% of employees within the scopes of operation where the program has been implemented.
The “Work & Life at Natixis” program launched in 2016, both in France and abroad, ensures that all Natixis entities can share and expand these different initiatives. In 2017, the second annual “Work & Life Week” provided an opportunity to hold conferences on the collaborative workplace, as well as various local events in Paris, the provinces and abroad.
In 2016 negotiation began with the unions to consolidate this approach, through the Committee on Psychosocial Risk Prevention and Monitoring, as well as tools to assess stress and the social environment in the workplace.
With the Stress Observatory, employees can complete a stress questionnaire during their periodic medical exam. From a company-wide standpoint, the observatory maintains a statistical database used to measure the global stress level of staff and how it changes over time, based on organizational and
Frequency of workplace accidents(a) (by number per million hours worked) 7.17 5.80 6.66
In Dubai, healthcare professionals offer health assessments and raise employee awareness on the importance of good posture and methods to alleviate tension and reduce stress.
As a signatory of the diversity charter since 2009, Natixis is committed to preventing discrimination in every form and at every stage of Human Resources management, including recruitment, training and management of its employees’ careers. With the support of a dedicated diversity and disability management team, and a network of contacts in the business lines, it has established a policy designed to capitalize on the diversity of profiles, experiences and skills in its employee base.
employees, and the professional integration and retention of employees with disabilities.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Internal mobilization and management of our direct impacts 427Natixis Registration Document 2017
Winn had over 800 members, 400 of which internationally across the Winn Hong Kong, Winn London, Winn Americas and Winn Dubai networks, plus the newly created Winn Algeria network.
Natixis London also works with “We are the City” and “Gender Network” to share best practices on gender equality. In Milan, Natixis belongs to a network promoting women's access to management positions (“ValoreD”).
Other noteworthy initiatives promoting gender equality: When hiring in the United States, Natixis looks for applicants from a variety of backgrounds to fill all types of positions.
Percentage of women in the workforce 51.4 51.6 51.6 35.1 37.6 36.7 32.9 30.8 29.9 43.2 44.2 44.9 36.6 37.2 36.6
Natixis committed to maintaining at least a 12% representation rate of employees aged 55 and older in its workforce, and to hire at least 5% of employees aged 45 and older out of total annual hires.
A part-time employment program for older staff, with support measures, and skills sponsorship initiatives with associations are available to employees over 58. Since its inception in 2015, the skills sponsorship program for older employees provides staff in France with opportunities to volunteer their time over a period of at least one year (one day or two half-days per week) at one of 9 different associations. These associations support different causes, including disabilities, the environment, children's aid and pre-professional integration.
In accordance with the Agreement on Employment and SWP, Natixis has also made commitments in favor of employees under 30, including hiring them under permanent contracts, developing work-study programs and providing acclimation services for new hires.
and hire the equivalent of 6% of its workforce under work-study contracts.
In France, Natixis aims to hire at least 47% young employees, offer permanent contracts to 15% of work-study participants,
Sponsorship agreement with Université Paris-Dauphine In 2017, Natixis entered into a sponsorship agreement with the Paris-Dauphine Foundation and University to support the “Talents de l’Université” program. This program is designed for high-level artistic and athletic students and young entrepreneurs and adjusts their schedule to allow them to complete their studies while pursuing their artistic and athletic interests.
Nearly 1400 work-study participants, 1200 interns (excluding short-term introductory work placements) and 100 international corporate volunteers worked at Natixis in 2017.
Events organized during European Disability Employment Week (EDEW) Over the course of EDEW, Natixis offered a program of events centered on innovation and inclusive technologies. Two exceptional projects (bionic hand and exoskeletons) and the Roger Voice app (an app that subtitles phone conversations for the deaf and hearing-impaired) were presented by their designers to Natixis employees.
Natixis has also launched various international initiatives in favor of persons with disabilities: in most countries of operation, there are laws in place to protect employees with disabilities, and Natixis undertakes to promote opportunities for all employees.
Natixis has hired several employees with disabilities at its international offices (e.g. Frankfurt, Milan, Madrid, Moscow). These employees are provided with the necessary arrangements in terms of accessibility, equipment (special chairs and offices) and work management (e.g. adjusted hours and work days).
Attracting, retaining and developing talented employees is a cornerstone of Natixis’ HR strategy. The Company allocates substantial resources to its talent management and training programs.
The aim of the training policy is to meet the Company's transformation priorities and to secure career development paths. It meets the bank's changing needs in terms of professions and skills and maintains employee value on the market.
The policy is centered on four goals: preparing and supporting transfers within the Company, building managerial skills and consolidating shared practices, strengthening team professionalism, and supporting major business line projects and programs.
In 2017, efforts along these lines were focused on providing new leadership training courses to all Natixis leaders, ramping up the development of digital skills and improving English skills.
Office and ITa 10.5 10.5 12.3 o/w Personal and professional efficiency, Human Resources 16.8 18.2 -
Provisional consolidated figures at 01.21.2018, representing at least 90% of hours of training received during the year.
The professional evaluation is held at least once every two years and provides an invaluable opportunity for managers and their employees to discuss professional and career development.
In 2017, a revised, harmonized groupwide Talent Management program was rolled out at all Natixis entities. Through individual appraisals and career committees, the program anticipates succession needs and builds an individual development plan for each employee including steps for career advancement.
In addition, the Natixis “Purple Academy” created in 2015 offers a variety of educational programs aimed at supporting the bank's transition, promoting the deployment of the leadership model, and accelerating the development of company directors, leaders and talents.
Natixis has been a supporter of the Fondation Gustave Roussy’s cancer research since 2011. After its support of three teams researching the personalization of cancer treatment, Natixis renewed its commitment in 2016 by awarding a research grant to three new teams working in three cutting-edge fields of cancer research: immunotherapy, precision medicine and DNA repair.
In 2017, Natixis served as a partner on two events offered by Gustave Roussy: a concert held at Gaveau Hall to support ovary cancer research, and a digital campaign carried out during international breast cancer awareness month Pink October. Natixis also joined forces with Gustave Roussy and Racing 92, as the official sponsor of "Movember", an international month aimed at promoting awareness of men's health issues, for the last ten years.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Internal mobilization and management of our direct impacts 431Natixis Registration Document 2017
Natixis answered the call to solidarity for the Antilles put out by the Fondation de France to provide aid to populations devastated by the destruction of Hurricane Irma in September 2017.
Since 2013, Natixis has been allowing its staff to use their leave to go on solidarity missions with charity associations under the sponsorship of Planète Urgence. Natixis funds the mission preparation, journey and logistics expenses. In 2017, 24 missions were carried out for the protection of biodiversity, educational support for very young children, and adult skills training in various fields (office suites, project management, skills transfers, etc.).
Since 2014 Natixis has given employees with more than one year of seniority an extra day of leave to do charity work for associations. In 2017, there were 126 volunteer missions in projects as diverse as helping at food banks and charity clothing stores, manning stands for Christmas toy distribution, setting up temporary movie theaters at children’s hospitals, and more.
Since 2011 Natixis managers have been involved in the “Nos Quartiers ont des Talents” program aimed at helping young people from priority neighborhoods or disadvantaged backgrounds to find their first job. In 2017, Natixis mentored an additional 28 young people.
In Madrid, Natixis entered into a partnership with non-profit organization Caritas to support a solidarity-based supermarket, “Tres Olivos”, which helps approximately 100 disadvantaged families (basic goods are subsidized to cost 80% less than regular market prices). Tres Olivos receives financial aid from Natixis Madrid employees and contributions are topped up by the Company.
In the US, through the “Natixis Community Giving Initiative”, Natixis also supports its employees’ initiatives by publishing information and organizing collections for various associations.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Reporting frameworks and methodology 433Natixis Registration Document 2017
The ESR report for 2017 is based on the following standards: the social and environmental information set out in thea Grenelle 2 Act and the energy transition for green growth act, which govern reporting structure; the GRI 4 framework(1).a
Information on social and environmental performance covers the scope of Natixis France (managed scope), with the exception of Worldwide and FTS staff including in the accounting consolidation scope.
The “Natixis Worldwide” scope covers all of Natixis and its subsidiaries around the world, including Financial Investments and entities within the accounting consolidation scope (Coface, Fimipar, Natixis Algérie).
• Outside the Managed Scope: in France, the Payment Solutions business line was expandeda through the acquisition of six companies: S-Money, Lakooz, Payplug, e-cotiz, Serenipay and Dalenys Payment; in the Specialized Financial Services division, Bati Lease S.A.a joined the Lease Financing business line; outside France, the financial investment in Ellisphere was sold;a the only remaining financial investment is Natixis Algérie.a
• Departures include external departures of employees on permanent employment contract or fixed-term employment contracts and transfers to Groupe BPCE, and conversions from fixed-term employment contracts to permanent employment contracts.
• SRI and solidarity assets under management include open-ended, dedicated (to Natixis’ clients) and employee savings funds that take into account environmental, social and governance criteria and are managed by Natixis Asset Management.
Some pollution indicators have not been included as they are considered to be irrelevant given the nature of Natixis’ operations, which do not generate any serious or specific pollution: measures for the prevention, reduction or remediation ofa discharges into the air, water or ground that are seriously damaging to the environment; the consideration of noise pollution and all types of pollutiona specific to a particular activity.
Natixis also believes that information about land use is not relevant as, given the layout of its buildings, which are often multi-story, their footprint is limited.
Lastly, considering its business sector, occupational illnesses are not significant and do not require specific monitoring.
Specialized Financial Services Lease financing Natixis Lease S.A. Sucursal en España
Report by one of the Statutory 6.6 Auditors, a designated independent third-party body, on the consolidated social, environmental and societal information contained in the management report
It is our responsibility, on the basis of our work: to certify that the ESR Information required is included in thea management report, or that any omission is explained pursuant to the third Sub-Paragraph of Article R.225-105 of the French Commercial Code (Certificate of inclusion of the ESR Information); to draw a conclusion expressing reasonable assurance on thea fact that all the significant aspects of the ESR Information, taken as a whole, are presented in a fair manner, in accordance with the Standards (Reasoned opinion on the fairness of the ESR Information).
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY Report by one of the Statutory Auditors 437Natixis Registration Document 2017
We held meetings with six individuals responsible for preparing the CSR Information at the departments in charge of gathering the information, and where applicable, with the individuals responsible for the internal control and risk management procedures, in order to: assess the appropriate nature of the Standard in terms of itsa relevance, completeness, reliability, objectivity, and comprehensible nature, taking best practices in the sector into consideration, where applicable; ascertain that an information-gathering, compilation,a processing and control process had been implemented, with a view to the completeness and consistency of the Information, and familiarize ourselves with the internal control and risk management procedures relating to the preparation of the ESR Information.
We determined the nature and extent of our checks and controls in accordance with the nature and significance of the CSR Information, in view of the company’s specific features, the social and environmental challenges posed by its business activities, its sustainable development strategy and of best practices in the sector.
Finally, we have assessed the relevance of the related explanations, where applicable, regarding the total or partial absence of certain information.
We believe that the sampling methods and the size of the samples chosen by us while exercising our professional judgement allow us to express a conclusion of limited assurance; a higher level of assurance would have required more extensive work. Due to the use of sampling techniques and other limitations inherent to information and internal control systems, the risk of not detecting a material misstatement in the CSR Information cannot be totally eliminated.
Based on our work, we did not observe any significant misstatement likely to call into question the fact that the ESR Information, taken as a whole, is presented in a fair manner, in accordance with the Standard.
GENERAL INFORMATION 7.2 ON NATIXIS’ CAPITAL 445 Form and transfer of shares7.2.1 (Chapter II, Article 4 of the bylaws) 445 Share capital7.2.2 445
DRAFT RESOLUTIONS OF THE 7.5 COMBINED GENERAL SHAREHOLDERS’ MEETING OF MAY 23, 2018 454 Report of the Board of Directors on 7.5.1 the resolutions submitted to the Shareholders’ Meeting 454
Agenda and draft resolutions 7.5.2 of the Combined General Shareholders’ Meeting of May 23, 2018 462
A joint stock company (société anonyme) with share capital of €5,021,289,259.20.
The term of the Company, created on November 20, 1919, was raised to 99 years beginning on November 9, 1994, unless it is extended or dissolved early.
Any individual or legal entity owning directly or indirectly, alone or jointly, a fraction of 1% of the voting rights (on the basis of all the voting rights attached to the shares, including those deprived of voting rights), or any multiple of this percentage, shall notify the Company by registered letter with acknowledgment of receipt of the number of votes they possess. This notice must be made within a period of 15 days following each acquisition or sale of this fraction.
The Chairman's duties end at the latest at the end of the Ordinary General Shareholders' Meeting convened to approve the financial statements of the past fiscal year during which the Chairman reached the age of sixty-five.
Chief Executive Officer, on the basis of a specific agenda. The Chairman is bound by the requests made in this manner.
The Board of Directors establishes Internal Rules which may stipulate that, except for adopting decisions concerning the preparation of the annual financial statements and the management report as well as for preparing the consolidated financial statements and the group’s management report, the directors who participate in the Board Meeting by videoconference or by using telecommunication means, under the conditions permitted or required by law and the regulations in force, are deemed present for calculating the quorum and the majority.
In the event of an Emergency, the notice and convening periods of the Board of Directors are not subject to Article 11.1 above, provided that the Chairman of the Company’s Board of Directors has: given prior notice to the directors providing the reason for thea Emergency as per the foregoing definition; and provided all directors, along with the notice of said meeting,a with all the necessary information for their analysis.
The Board of Directors defines the guidelines for the12.1 Company’s activities and oversees their implementation. Within the limits of the corporate purpose and the powers expressly granted by law or these by-laws to General Shareholders’ Meetings, the Board concerns itself with any matter relating to good business practice and governs the business of the Company through its deliberations. The Board of Directors performs the controls and checks it deems appropriate.
Directors' fees may be allocated to the Board of Directors by the General Shareholders' Meeting. The Board distributes them freely among its members.
The Company’s Senior Management is the responsibility of either the Chairman of the Board of Directors, or that of another individual appointed by the Board of Directors bearing the title of Chief Executive Officer.
The choice between these two Senior Management procedures is made by the Board of Directors which may take valid decisions only if: the agenda containing this item has been sent out at leasta 15 days in advance of the Board Meeting; at least two-thirds of the directors are present or representeda at the meeting.
Article 15 – Chief Executive Officer exercises those powers within the limits of the corporate purpose and subject to the powers expressly reserved for Shareholders’ Meetings and the Board of Directors by law and to the provisions and restrictions stipulated by the Internal Rules. He represents the Company in its relations with third parties.
The Board of Directors may limit the powers of the Chief Executive Officer. However, the limitation of these powers is not enforceable against third parties.
The shareholders’ decisions are made in General Shareholders’ Meetings, which are qualified as ordinary or extraordinary.
Those shareholders who use the electronic voting form offered on the website created by the meeting organizer, by the required deadline, are considered present or represented shareholders. The electronic form can be filled out and signed directly on that site by any process provided for by the Board of Directors that meets the conditions defined in the first sentence of the second paragraph of Article 1316-4 of the French Civil Code (i.e. the use of a reliable identification procedure guaranteeing that the signature is linked to the form), which may consist of a user name and password.
Decisions of the General Shareholders’ Meeting are recorded in minutes entered into a special register and signed by the officers of the meeting.
It determines the amount of the directors' fees to be allocated to the Board of Directors.
The Extraordinary General Shareholders’ Meeting may be convened at any time either by the Board of Directors or pursuant to any legal provision. It may amend any of the provisions of these bylaws, in particular it can increase or reduce the share capital, extend the Company’s duration or decide its early dissolution, however, it cannot change the Company’s nationality or increase the shareholders’ commitments.
accounting documents imposed by both the laws governing companies and by banking regulations.
The Combined General Shareholders’ Meeting of May 23, 2017, granted the Board of Directors financial authorization for a 26-month period to carry out capital increases with retention or cancellation of preferential subscription rights (these authorizations replaced those granted by the Combined General Shareholders’ Meeting of May 19, 2015).
The Combined General Shareholders’ Meeting resolved that these capital increases, which may not exceed an overall par value ceiling of one and a half (1.5) billion euros, divided into a par value ceiling of €1.5 billion for capital increases with preferential subscription rights and a par value ceiling of €500 million for capital increases without preferential subscription rights, could be carried out either through issuing shares or through issuing securities that give access to share capital, specifically in the form of financial instruments representing debt securities.
The Combined General Shareholders’ Meeting of May 24, 2016 (resolutions nineteen and twenty) authorized the Board of Directors, for a 38-month period, to carry out one or more free share awards to the employees and directors of Natixis and its affiliates under the following conditions: award of free shares in connection with the Long Terma Incentive Plan (LTIP): award limited to 0.2% of the Company’s share capital at the date of the Board of Directors’ decision to award the shares, with a sub-ceiling of 0.3% of the share capital for executive corporate officers. Permanent allocation is contingent on satisfying a performance requirement; award of free shares for the payment of a portion of annuala variable compensation: award limited to 2.5% of the Company’s share capital at the date of the Board of Directors’ decision to award the shares, with a sub-ceiling of 0.1% of the capital for executive corporate officers. Permanent allocation is contingent on satisfying one or more performance requirements for the persons referred to in Article L.511-71 of the French Monetary and Financial Code.
The Board of Directors of Natixis, at its meeting on July 31,a 2014, by virtue of the authorization granted by the General Shareholders’ Meeting of May 21, 2013, resolution seventeen, resolved to award 31,955 free performance shares to the Chief Executive Officer of Natixis. These shares will vest at the end of a vesting period that runs until July 31, 2018, inclusive, contingent upon the meeting of presence and performance criteria.
February 17, 2013, under the 2013 Plan (by virtue of the authorization granted by the Combined General Shareholders’ Meeting of March 27, 2010, resolution eighteen), expired on March 3, 2017, for beneficiaries transferred abroad at the time of vesting.
LEGAL INFORMATION General information on Natixis’ capital 447Natixis Registration Document 2017
None None 05.23.2017 16 To carry out a capital increase through the issue – without preferential subscription rights maintained – of shares and/or securities giving access to the Company's share capital or entitling holders to the allotment of debt securities through an offer as set out in Article L.411-2 (II) of the French Monetary and Financial Code €500m(a) 26 months
None None 05.23.2017 17 To carry out a capital increase through the issue – without preferential subscription rights – of shares and/or securities providing access to the Company's share capital or entitling holders to the allotment of debt securities as remuneration for contributions in kind involving capital stock or securities giving access to capital 10% of the share capital(a)
On November 17, 2006, the Combined General Shareholders’ Meeting authorized the Natixis Management Board to grant, on one or more occasions, stock options to some, or all, employees or directors of the Company or of related companies, within the
In 2007, the Natixis Management Board resolved to grant stock options to certain employees and directors of Natixis, Groupe Banque Populaire and Groupe Caisse d’Epargne.
On May 24, 2007, the Combined General Shareholders’ Meeting once again authorized the Natixis Management Board to grant stock options to some, or all, employees or directors of the Company or of related companies, within the meaning of Article L.225-180 of the French Commercial Code. This authorization also involved a maximum of 10,000,000 shares (i.e. 15,400,000 shares following the adjustment resulting from the September 2008 capital increase).
No stock options were granted in fiscal years 2009 to 2017.
Meeting Option exercise start date Option expiry date Option exercise price (in euros)
Options held in respect of the issuer and the companies referred to above, exercised during the period, by the 10 salaried employees of the issuer and of these companies who hold the most options thereby awarded 0 n/a n/a
Shares issued in respect of the capital increase reserved for employees 8,439,630 13,503,408 10,127,556
Shares issued in respect of the capital increase reserved for employees 8,505,624 13,608,998.40 31,428,280.68
At December 31, 2017, Natixis’ main shareholders were as follows: % capital % voting rights
LEGAL INFORMATION Distribution of share capital and voting rights 451Natixis Registration Document 2017
At this same meeting, the Board of Directors (by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution twenty), decided to award 2,995,377 free shares to employees eligible for the 2016 employee retention and performance recognition plan, and 86,265 shares to the Chief Executive Officer of Natixis; the Natixis Board of Directors, at its meeting on April 10, 2017a (by virtue of the authorization granted by the Combined General Shareholders’ Meeting of May 24, 2016, resolution twenty), decided to award 3,012,307 free shares to the recipients designated by the Board of Directors; the Natixis Board of Directors, at its meeting on May 23, 2017a (by virtue of the authorization granted by the General Shareholders’ Meeting of May 24, 2016, resolution nineteen), decided to award 49,458 performance shares to the members of the Natixis Senior Management Committee, and 29,911 shares to the Chief Executive Officer of Natixis.
Issues of share capital reserved for employees of companies enrolled in the Natixis employee savings plans
As part of the Mauve plan, beneficiaries are able to subscribe for Natixis shares (or, for international beneficiaries, under an economically similar formula) on advantageous terms and with the benefit of employer-paid contributions in compliance with the provisions of existing plans within the Natixis Group.
At its meeting on November 7, 2017, the Board of Directors of Natixis decided to use in 2018 the authorization to carry out a capital increase – without preferential subscription rights – reserved for members of employee savings plans that was granted by the Combined General Shareholders’ Meeting of May 23, 2017 (resolution twenty), for the launch of the Mauve 2018 employee share ownership plan with an overall par value ceiling of €50,000,000, representing a maximum of 31,250,000 shares. In order to implement the Mauve 2018 plan, the Board of Directors invested the Chief Executive Officer with all the necessary powers, in particular to set the Subscription Price and the subscription period for the shares to be issued.
BPCE assumes the responsibilities provided for by banking regulations as principal shareholder of Natixis.
Natixis’ main shareholder BPCE held 70.99% of the share capital and 71.02% of the voting rights at December 31, 2017. Given its capital structure, Natixis believes that a hostile takeover bid would have very little chance of succeeding.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 23, 2018 454 Natixis Registration Document 2017
The draft resolutions below are the drafts available as of the date of publication of this registration document. The final versions of these drafts will be published in the French official gazette (BALO) of April 11, 2018, and posted online on the Natixis website: www.natixis.com.
You may refer to this 2017 registration document for the statement on the financial condition, activity and results of Natixis and its group during the past fiscal year and the various disclosures required by the legal and regulatory provisions in effect (also available on the Natixis website: www.natixis.com).
Resolutions requiring the approval of the Ordinary General Shareholders’ Meeting (resolutions one to seventeen)
Approval of the financial statements for fiscal year 2017 (resolutions one and two)
Consequently, the dividend per share is set at €0.37 (thirty-seven euro cents) and will be charged in full against distributable earnings for fiscal year 2017.
tax scale), the paying establishment located in France must collect: Regardless of the tax treatment of dividends for income tax purposes (flat tax on capital income (PFU) or progressive income a mandatory non-definitive flat-rate withholding tax (PFO) at aa rate of 12.8% (Article 117 (iv) of the French General Tax Code) as an initial income tax payment, except if individual beneficiaries who are residents for tax purposes in France have applied for an exemption under the conditions set out in Article 242 (iv) of the French General Tax Code; social security charges of 17.2%.a
In accordance with legal provisions, we remind you that for the three fiscal years prior to fiscal year 2017, the following dividends were distributed: Fiscal year Number of shares on which a dividend was paid
Resolution four concerns the approval of related-party agreements pursuant to Articles L.225-38 et seq. of the French Commercial Code, authorized by the Board of Directors during fiscal year 2017 and until the Board of Directors’ Meeting of February 13, 2018. These agreements are presented in the Statutory Auditors’ special report along with those entered into prior to fiscal year 2017 and still effective, which do not need to be resubmitted to the shareholders (see Chapter 7 section 7.6 of the Natixis 2017 registration document).
In accordance with the principles approved by the General Shareholders’ Meeting on May 23, 2017, François Pérol received no compensation in 2017 in connection with his duties as Chairman of the Natixis Board of Directors.
The components of Laurent Mignon’s compensation for 2017 comply with the principles approved by the General Shareholders’ Meeting on May 23, 2017.
For fiscal year 2017, the target annual variable compensationb) was set at €1,152,000, i.e. 120% of Laurent Mignon’s fixed compensation, with a range of between 0 and 156.75% of the target, i.e. a maximum of 188.1% of his fixed compensation. The following targets were set for 2017: quantitative targets (70%), 25% of which based onj financial performance in relation to the Groupe BPCE budget (net revenues [4.2%], net income Group share of [12.5%] and cost/income ratio [8.3%]) and 45% based on the financial performance of Natixis (net revenues [11.25%], net income Group share [11.25%], cost/income ratio [11.25%] and ROTE – Return on Tangible Equity [11.25%]); individual strategic targets (30%) (i) of which 10% allocatedj to each of the following two objectives: (x) the development and launch of the 2018-2020 strategic plan, and (y) the continued progress in the digital transformation of Natixis and its business lines and (ii) of which 5% allocated to each of the following two strategic objectives: (x) the development of Natixis' collaboration with Groupe BPCE networks and (y) managerial performance assessed based on the ability to anticipate developments, make decisions, lead the Group, and manage executive officers.
As recommended by the Compensation Committee, the Natixis Board of Directors set the amount of variable compensation for 2017 at €1,660,863. This amount shall be submitted to a vote at the General Shareholders’ Meeting of May 23, 2018, and is equivalent to 144.17% of the target variable compensation: €520,789 will be paid in 2018, 50% of which will bej indexed to the Natixis share price;
This aligns the Chief Executive Officer of Natixis, and the other members of its Senior Management Committee, with the relative performance of Natixis shares and the consistency of this performance. The performance conditions applicable to shares allocated in 2017 differ from the previous plan: the relative performance of Natixis shares is assessed against the average Total Shareholder Return (TSR) of the Euro Stoxx Banks index, and no longer against the median TSR of the institutions making up the index. The purpose of this change is to limit the impact of market volatility on the classification of smaller capitalizations. The annual performance of Natixis shares versus the Euro Stoxx Banks index will be compared every year over the four years covered by the plan, i.e. fiscal years 2017, 2018, 2019 and 2020, for each of the annual tranches, each representing 25% of the shares awarded. Based on the relative performance of Natixis’ TSR against the average TSR of the Euro Stoxx Banks index, a ratio will be applied for each annual tranche, as follows: performance below 90%: no vesting of shares allocatedj out of the annual tranche; performance equal to 90%: 80% of the shares of thej annual tranche shall vest; performance equal to 100%: 100% of the shares of thej annual tranche shall vest; performance greater than or equal to 120%: 110% of thej shares of the annual tranche shall vest.
Laurent Mignon receives a family supplement (€2,379 in 2017), in accordance with the same rules as those applied to Natixis employees in France.
Like all staff, Laurent Mignon is covered by the mandatory pension plans. He is not covered by the kind of supplementary pension plans described in article 39 (defined benefit plan) or article 83 (voluntary defined contribution plan) of the French General Tax Code. In accordance with the undertakings given by Laurent Mignon during the past fiscal year, in 2017 the Chief Executive Officer paid €140,800 net (corresponding to €160,000 gross of his annual compensation) into an "article 82" type life insurance policy (in reference to the French General Tax Code), put in place by Groupe BPCE. The premiums on this policy will be paid by Laurent Mignon and not by Natixis.
It is reiterated that, at its February 19, 2014, meeting, the Board of Directors approved a change to its agreement relating to a severance payment and the establishment of a non-compete agreement. These obligations and agreements were submitted to a vote by the shareholders and approved during the Ordinary General Shareholders’ Meeting of May 20, 2014 (resolution five). At its meeting on February 18, 2015, the Board of Directors authorized the renewal of severance pay as well as the non-compete agreement upon the Chief Executive Officer’s reappointment.
The method for calculating severance pay is set out in section 2.4 of the 2017 registration document.
Approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits in kind of the Chairman of the Board and the Chief Executive Officer (resolutions seven and eight)
Resolutions seven and eight concern the approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits of any kind of the Chairman of the Board and the Chief Executive Officer of Natixis for 2018, pursuant to Article L.225-37-2 of the French Commercial Code derived from Law No. 2016-1691 of December 9, 2016, known as the “Sapin 2” law.
After consulting with the Compensation Committee and before pay packages are approved by the General Shareholders' Meeting, the Board of Directors determines the various pay components of Natixis' executive corporate officers based on the principles of competitiveness in comparison with market practices for similar positions, and the way said components relate to performance.
No specific compensation is provided for the position of Chairman of the Natixis Board of Directors which is exercised by the President of the BPCE Management Board, as these duties fall within the scope of his responsibility and are thus included in the definition of his compensation components as President of the BPCE Management Board.
The Chairman remains, however, eligible for directors’ attendance fees, but in accordance with the rules applicable within Groupe BPCE, the portion of directors’ fees going to BPCE directors (including that of the Chairman) is granted and paid to BPCE and not to the directors.
The fixed compensation of the Chief Executive Officer is seta) in accordance with the skills and expertise necessary for performing his duties and in line with common market practice for similar positions.
Furthermore, the Chief Executive Officer’s compensation isb) closely linked to the Company’s performance, specifically through annual variable compensation that is contingent upon the achievement of predetermined objectives, the details and rate of achievement of which (i) are assessed at the end of the fiscal year by the Board of Directors on the basis of the opinion of the Compensation Committee and (ii) are then put to a vote at the General Shareholders’ Meeting. Criteria include quantitative criteria relating to the financial performance of BPCE. As a reminder, Natixis is deeply embedded in Groupe BPCE in this regard, with intertwined strategic plans aimed at their mutual success. These plans also include targets linked to Natixis' performance as well as strategic targets.
February 13, 2018, following a review by the Compensation Committee, and which will be put to a vote at the General Shareholders’ Meeting on May 23, 2018, are as follows: For fiscal year 2018, the criteria for determining the annual variable compensation approved by the Board of Directors on
BPCE’s financial performance 25% 12.5% net income, group sharea 8.3% cost/income ratioa 4.2% net revenuesa
Strategic criteria 30% 5% oversight in terms of a supervision and control 15% roll-out of the 2018-2020 a Strategic Plan 5% implementation of Natixis a transformation 5% managerial performancea
The Chief Executive Officer is eligible to receive performancec) shares equivalent to 20% of his fixed compensation under the long-term compensation plans for members of the Natixis Senior Management Committee. The vesting of these shares is contingent upon continued service and the achievement of performance conditions. The total of the annual variable compensation and allocation of performance shares in favor of the Chief Executive Officer during the fiscal year cannot exceed twice his fixed gross annual compensation.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 23, 2018 458 Natixis Registration Document 2017
In accordance with the provisions of Article L.511-73 of the French Monetary and Financial Code, the purpose of resolution nine is to consult with shareholders at the General Shareholders’ Meeting about the overall budget for compensation paid to Natixis employees referred to in Article L.511-71 of the same Code during fiscal year 2017.
Information on the compensation policy, especially for employee categories whose professional activities are likely to have a significant impact on the risk profile of Natixis, is set out in the
Bernard Dupouy, 62 years old, is Chairman of the Board of Directors of Banque Populaire Aquitaine Centre Atlantique (see Bernard Dupouy’s résumé in Chapter 2 “Corporate Governance” section 2.2 of the 2017 Natixis registration document).
To (i) avoid renewing large numbers of directors in 2019 all at once, and (ii) to stagger renewals more evenly (in line with the recommendations of the Afep-Medef Corporate Governance Code), Bernard Oppetit, Anne Lalou, Thierry Cahn and Françoise Lemalle (i) resigned as directors of the Company with effect from the end of the Board of Directors' meeting of May 23, 2018, prior to the General Shareholders' Meeting on the same day and (ii) have agreed to reapply as directors at the same General Shareholders’ Meeting.
To balance out the number of directors’ terms of office expiring every year, the above “procedure” is expected to be applied at the next Annual General Shareholders’ Meetings.
In resolution sixteen, shareholders are asked to acknowledge the expiry of the mandate of substitute Statutory Auditor Franck Boyer and not to provide for a replacement (contingent on the adoption of resolution 19 pertaining to the amendment of Article 19 of the Company’s bylaws).
The Board of Directors would thus be authorized to set up a treasury share buyback program up to a limit of 10% of the total number of shares comprising the Company's share capital, or 5% of the total number of shares comprising the Company's share capital acquired with a view to being held and subsequently tendered in connection with a merger, spin-off or asset transfer. The Company cannot under any circumstance own at any given time more than 10% of the shares comprising its share capital. These share purchases would be for the purposes of: managing the liquidity contract;a allocating or transferring shares to employees in respect ofa their share of the Company profits, Employee Savings plans or share buyback programs and to freely allocate shares or any other form of share allocation to members of staff; canceling shares;a payment or exchange in connection with merger anda acquisition transactions.
Resolutions requiring the approval of the Extraordinary General Shareholders’ Meeting (resolutions eighteen to twenty-one)
Resolution eighteen asks the General Shareholders’ Meeting to delegate authority to the Board of Directors to decide on a capital increase without preferential subscription rights reserved for members of employee savings plans, up to a par value limit of fifty (50) million euros. Such a capital increase would be aimed at closely aligning employees with the Company’s development.
A detailed description of the Company’s business since the start of the fiscal year underway is included in the 2017 Natixis registration document.
Resolution nineteen concerns the amendment of Article 19 of the bylaws which is aimed at harmonizing this article with Article L.823-1 of the French Commercial Code as drafted in Law No. 2016-1691 of December 9, 2016, known as the “Sapin II” Law.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 23, 2018 460 Natixis Registration Document 2017
Delegation of authority to the Board of Directors to make the necessary amendments to the bylaws in order to ensure that they comply with legislative and regulatory provisions (resolution twenty)
Resolution twenty asks shareholders to delegate powers to the Board of Directors which are necessary for ensuring that the bylaws comply with legislative and regulatory provisions, as provided for in Article L.225-36 of the French Commercial Code, contingent upon ratification of these amendments by the next General Shareholders’ Meeting.
SUMMARY TABLE ON THE FINANCIAL RESOLUTIONS SUBMITTED TO THE SHAREHOLDERS’ MEETING BY YOUR BOARD R OF DIRECTORS
No. Subject Duration Reasons for possible uses of the delegated power Specific ceiling
Tendering shares upon exercising a rights attached to securities granting rights to capital
Canceling all or a portion of the a securities bought back
Promoting the share in the secondary a market or the liquidity of the Company's share through an investment services provider in connection with a liquidity contract that meets the terms of the compliance charter recognized by the AMF (French Financial Markets Authority)
Any other goal authorized or that a may be authorized by law or regulations in effect.
The number of shares a acquired with a view to holding them or subsequently tendering them in connection with a merger, spin-off or contribution may not exceed 5% of the share capital
The Board of a Directors ensures that buybacks are executed in accordance with prudential requirements, such as those established by regulation 18 Issue of shares or securities giving access to capital reserved for members of employee savings plans with preferential subscription rights (PSR)* waived 26 months
Price set by your Board of Directors within a limit of a minimum issue price for shares or securities giving access to capital of: - 80% of the Reference Price*
* Reference Price Average of prices of the Company’s shares listed on the regulated Euronext Paris market during the 20 trading sessions preceding the decision by your Board of Directors setting the date for the opening of subscription by members of the Company or group employee savings plan (or similar plan).
Delegation of authority to the Board of Directors to decidea whether to increase share capital through the issue of shares and/or securities providing access to the capital of the Company, reserved for members of employee savings plans with waiving of preferential subscription rights in favor of said members; Amendment of Article 19 “Statutory Auditors” of thea Company’s bylaws; Delegation of authority to the Board of Directors to make thea necessary amendments to the bylaws in order to ensure that they comply with legislative and regulatory provisions; Powers to complete formalities.a
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby: notes that the financial statements finalized as ofa December 31, 2017, and approved by the shareholders at this meeting show earnings for the 2017 fiscal year of €1,678,182,285.17; notes that, after taking into account retained earnings ofa €1,107,367,314.03 and as the legal reserve exceeds 10% of the share capital, distributable earnings amount to €2,785,549,599.20; resolves to appropriate the distributable earnings as follows:a payment to shareholders of €0.37 per share, and(i)
Based on the share capital at December 31, 2017, and on the assumption that no treasury stock existed on that date, this should break down as follows: To the dividend €1,160,823,288.06
For individual beneficiaries who are residents for tax purposes in France who hold shares outside a stock saving plan, these dividends are subject to income tax: a single flat-rate withholding tax (PFU tax) of 12.8%, the fiscala base of which is the gross amount of dividends (Article 200 A of the French General Tax Code); scale following the application of an allowance of 40% of the gross amount of dividends (Article 158-3-2° of the French General Tax Code).
or, at the express and irrevocable option of the beneficiarya when declaring his/her income, at the progressive income tax
Regardless of the tax treatment of dividends for income tax purposes (PFU or progressive income tax scale), the paying establishment located in France must collect: a mandatory non-definitive flat-rate withholding tax (PFO) at aa rate of 12.8% (Article 117 iv of the French General Tax Code) as an initial income tax payment, except if individual beneficiaries who are residents for tax purposes in France have applied for an exemption under the conditions set out in Article 242 (iv) of the French General Tax Code; social withholding tax at a rate of 17.2%.a
In accordance with legal provisions, the shareholders hereby note that for the three fiscal years prior to fiscal year 2017, the following dividends were distributed: Fiscal year Number of shares on which a dividend was paid
The dividend will be detached from the share on May 28, 2018, and paid starting on May 30, 2018.
Resolution five (Approval of the total compensation and benefits of any kind paid or granted to the Chairman of the Board of Directors for fiscal year 2017)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby approves, in accordance with Article L.225-100 of the French Commercial Code, the components of
Resolution six (Approval of the total compensation and benefits of any kind paid or granted to the Chief Executive Officer for fiscal year 2017)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby approves, in accordance with Article L.225-100 of the French Commercial Code, the components of compensation paid or granted in respect of the fiscal year ended December 31, 2017, to Laurent Mignon, Chief Executive Officer, as set out in the corporate governance report, presented in Natixis’ 2017 registration document in Chapter 2, Section 2.4 and Chapter 7, Section 7.5.1.
7 LEGAL INFORMATIONDraft resolutions of the Combined General Shareholders’ Meeting of May 23, 2018 464 Natixis Registration Document 2017
Resolution eight (Approval of the principles and criteria for determining, distributing and granting the fixed, variable and non-recurring items constituting the total pay and benefits in kind of the Chief Executive Officer for fiscal year 2018)
Resolution nine (Overall budget for compensation paid to the employees referred to in Article L.511-71 of the French Monetary and Financial Code during the fiscal year ended December 31, 2017)
Resolution eleven (Appointment of Bernard Oppetit as a director, following his resignation to encourage the staggering of directors’ terms of office)
Bernard Oppetit has indicated that he accepts this new term of office and that he does not hold any position nor is he the subject of any measure likely to prevent him from exercising this function.
Resolution twelve (Appointment of Anne Lalou as a director, following his resignation to encourage the staggering of directors’ terms of office)
business, and taking due note of the report of the Board of Directors, hereby resolves to reappoint Anne Lalou as a director, following her resignation, in order to encourage the staggering of directors’ terms of office, for a period of four (4) years terminating at the end of the General Shareholders’ Meeting convened in 2022 to approve the financial statements for the fiscal year ended December 31, 2021.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary
Resolution thirteen (Appointment of Thierry Cahn as a director, following his resignation to encourage the staggering of directors’ terms of office)
Resolution fourteen (Appointment of Françoise Lemalle as a director, following his resignation to encourage the staggering of directors’ terms of office)
Françoise Lemalle has indicated that she accepts this new term of office and that she does not hold any position nor is she the subject of any measure likely to prevent her from exercising this function
Resolution fifteen (Noting of expiry of the mandate of the firm Mazars S.A., principal Statutory Auditor, and non-renewal of said mandate)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, and noting the expiry of the mandate of the firm Mazars S.A. at the end of this meeting, hereby resolves not to replace it.
Resolution sixteen (Noting of expiry of the mandate of Franck Boyer, substitute Statutory Auditor, and non-renewal of said mandate)
Auditor Franck Boyer at the end of this meeting, hereby resolves, in accordance with applicable laws and contingent upon the adoption of resolution nineteen below, not to replace him.
Resolution seventeen (Authorization to be granted to the Board of Directors concerning the trading by the Company in its own shares)
This program is also intended to enable the Company to implement any market practices that might be permitted by the AMF and, more generally, to conduct any other transaction that complies with the regulations in effect. In such a scenario, the Company will notify its shareholders by means of a press release; Resolves that Company share purchases may relate to a2) number of shares such that: the number of shares acquired with a view to being held and subsequently tendered in connection with a merger, spin-off or asset transfer may not exceed 5% of its share capital; and (ii) when the shares are bought back to promote liquidity under the conditions set out by the General Regulations of the AMF, the number of shares taken into account to calculate the 10% limit provided for by the first paragraph corresponds to the number of shares purchased, net of the number of shares resold during the authorization period, the number of shares that the Company buys during thej buyback program may not, at any time, exceed 10% of the shares comprising the Company's share capital, this percentage being applied to a capital amount adjusted in accordance with transactions impacting it subsequent to this General Shareholders' Meeting. It is specified that (i)
Resolution eighteen (Delegation of authority to the Board of Directors to decide whether to increase share capital through the issue of shares and/or securities providing access to the capital of the Company, reserved for members of employee savings plans with waiving of preferential subscription rights in favor of said members)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for extraordinary business, having reviewed the report of the Board of Directors and the special report of the Statutory Auditors, in accordance with the provisions of Articles L.225-129-2, L.225-129-6, L.225-138 I and II, L.225-138-1, L.228-91 and L.228-92 of the French Commercial Code, and with the provisions of Articles L.3332-18 through L.3332-24 of the French Labor Code: Delegates to the Board of Directors, with the right to1) sub-delegate said power under the terms set out by law, its authority to decide whether to increase share capital, in one or more stages, in France or abroad, by a maximum amount of fifty (50) million euros, through the issue of shares or securities giving access to capital reserved for members of employee savings plans implemented in one company or a group of companies in France or elsewhere, falling within the scope of consolidation or combining financial statements pursuant to Article L.3344-1 of the French Labor Code; with the understanding that (i) this resolution may be used to implement leverage effect formulas and (ii) the par value ceiling on capital increases carried out or liable to be carried out in future under this delegation of authority will be applied against the amount of the overall ceiling established in paragraph three of resolution fourteen submitted at the General Shareholders’ Meeting of May 23, 2017, or, where appropriate, to the overall ceiling established under the same kind of resolution which may supersede said resolution during the period in which this delegation of authority remains valid and is set without taking into account the par value of shares to be issued to safeguard, in accordance with the law and if necessary the contractual stipulations providing for other adjustments, the rights of holders of securities giving access to the Company’s capital; Resolves that the delegation of issue granted under this2) delegation shall be valid for twenty-six (26) months from the date of this meeting; lock-up period provided for under Article L.3332-25 of the French Labor Code is greater than or equal to 10 years; for the purposes of this paragraph, the Reference Price means the average of the prices listed for the Company’s stock on the regulated Euronext Paris market during the 20 trading sessions preceding the decision setting the date for the opening of subscription for members of a Company or group employee savings plan (or similar plan); Resolves that the issue price for new shares or securities3) giving access to capital shall be determined under the conditions provided for by law, in particular Articles L.3332-18 and seq. of the French Labor Code and shall be at least equal to 80% of the Reference Price (as defined below) or to 70% of the Reference Price where the
Resolution nineteen (Amendment of Article 19 “Statutory Auditors” of the Company’s bylaws)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for extraordinary business, hereby resolves to amend Article 19 “Statutory Auditors” of the Company’s bylaws in order to reflect the new drafting of Article L.823-1 of the French Commercial Code (as amended by Law No. 2016-1691 of December 9, 2016, known as the “Sapin II” Law): Previous drafting New drafting
Resolution twenty (Delegation of authority to the Board of Directors to make the necessary amendments to the bylaws to ensure that they comply with legislative and regulatory provisions)
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for extraordinary business, having taken note of the report by the Board of Directors and pursuant to the provisions of Article L.225-36 of the French Commercial Code, hereby authorizes the Board of Directors to make the necessary amendments to the Company’s bylaws to ensure that they comply with legislative and regulatory
We are required to inform you, on the basis of the information provided to us, of the key features, terms and conditions as well as the reasons justifying the relevance for the Company of the contractual agreements and commitments that have been indicated to us or that we may have identified in the performance of our assignment. It is not our role to comment as to whether they are beneficial, or to ascertain the existence of any other agreements and commitments. It is your responsibility, in accordance with Article R. 225-31 of the French Commercial
AGREEMENTS AND COMMITMENTS SUBMITTED FOR THE APPROVAL OF THE GENERAL SHAREHOLDERS’ MEETING
On August 1, 2017, the Board of Directors authorized the signature of an enrollment rider to the group insurance policy under Article 82 of the French General Tax Code, taken out by BPCE with Arial CNP Assurances for executive officers of Groupe BPCE who do not benefit from the “Pension plan for Groupe BPCE company directors” or the “Natixis pension guarantee” plan. This rider was signed on October 17, 2017. This rider indirectly affects Laurent Mignon as Chief Executive Officer.
Marguerite Bérard-Andrieu, member of the BPCE Managementa Board and permanent representative of BPCE at Natixis,
Alain Condaminas, member of the BPCE Supervisory Boarda and member of the Natixis Board of Directors,
Françoise Lemalle, member of the BPCE Supervisory Boarda and member of the Natixis Board of Directors, and
Stéphanie Paix, member of the BPCE Supervisory Board anda member of the Natixis Board of Directors.
LEGAL INFORMATION Statutory Auditors’ special report on related-party agreements and commitments 469Natixis Registration Document 2017
In accordance with Article R. 225-30 of the French Commercial Code, we were notified of the ongoing execution in the previous fiscal year of the following agreements and commitments, already approved by the General Shareholders’ Meeting in previous years.
1. Compensation agreement between Natixis and Banque Palatine and amendment to the agreement
On February 10, 2016, the Board of Directors, authorized the signing of a compensation agreement between Natixis and Banque Palatine to offset particular additional costs sustained by Banque Palatine in connection with the transfer of the investment services provided to its clients to Natixis EuroTitres and Caceis, and previously provided by a service provider outside Groupe BPCE.
This agreement was approved by the May 24, 2016 General Shareholders' Meeting.
Directors concerned at the date on which the agreement was signed: BPCE, Member of the Board and shareholder of Banquej Palatine and Natixis, represented by Daniel Karyotis on the Natixis Board of Directors
On February 9, 2017, the Board of Directors authorized the signing of an amendment to the compensation agreement between Natixis and Banque Palatine originally signed on February 16, 2016, designed to offset particular additional costs sustained by Banque Palatine in connection with the transfer of the investment services provided to its clients to Natixis EuroTitres and Caceis, and previously provided by a service provider outside Groupe BPCE.
This amendment changed the amount of Natixis’ compensation in order to take into account an additional cost that was not anticipated by the parties when the protocol was signed. The Board of Directors of Natixis considered that the agreement allows Natixis (EuroTitres department) to benefit from additional activity related to services rendered to Banque Palatine clients under the pricing conditions applicable to the services of Groupe BPCE entities.
This amendment was rejected by the May 23, 2017 General Shareholders' Meeting.
Directors concerned at the date on which the amendment to the compensation agreement was signed: BPCE, represented by Marguerite Bérard-Andrieu on thej Natixis Board of Directors.
Sylvie Garcelon, Member of the Board of Banque Palatinej and Natixis
The expense recognized by Natixis in respect of the amendment to the cancellation agreement amounted to €800,000 (including tax) for fiscal year 2017.
2. Amendment to Laurent Mignon’s personal protection and health insurance scheme
This agreement had no financial impact in 2017, other than for employer contributions paid under these plans.
3. Renewal as required of the commitments and agreements made in favor of Laurent Mignon
The non-compete agreement as authorized by the Board ofa Directors on February 19, 2014. This non-compete agreement is limited to a period of six months, and includes a payment equal to six months’ fixed compensation, as paid on the date when his corporate office is terminated, on the understanding that the total amount of the severance payment and the non-compete payment may not exceed a cap set at 24 months’ monthly compensation, as defined in the commitment relating to his severance payment. This provision is in line with the implementation of the New Frontier plan and retention practices. This agreement was approved at the Ordinary General Shareholders' Meeting of May20, 2014.
The discussions with CNP continued, and initially resulted in a master memorandum of agreement between CNP Assurances, BPCE, and Natixis, which was authorized by the Board of Directors on November 4, 2014, and then in a Memorandum of Understanding, as well as in various specific agreements referred to in that protocol (“the new partnership agreements”), which were authorized by the Board of Directors on February 18, 2015, and where the main provisions are as follows: Memorandum of Understanding between CNP Assurances, BPCE and Natixis, the aim of which is to: acknowledge the non-renewal of the Current Agreements;a determine, organize, and manage the contractual packagea formed by the New Partnership Agreements, for which the protocol is the umbrella agreement; determine the term of the New Partnership Agreements,a namely seven years as from January 1, 2016. At the end of this seven-year period, BPCE will be able to either extend the new partnership agreements for a period of three years as from January 1, 2023, or to purchase CNP’s insurance deposit inventory. BPCE will have the option of acquiring the existing portfolio at December 31, 2020, and CNP the option, in 2020 and 2022, of notifying BPCE of its desire to initiate discussions with a view to such sale; determine and organize the operation of the Partnershipa Monitoring Committee (and of any potential sub-committees set up by the latter); and more broadly, organize and manage the relations between thea Parties under the Renewed Partnership.
Daniel Karyotis, member of the BPCE Management Board,j and permanent representative of BPCE at Natixis,
Catherine Halberstadt, member of the BPCE Supervisoryj Board, and member of the Natixis Board of Directors,
Didier Patault, member of the BPCE Supervisory Board andj member of the Natixis Board of Directors,
Pierre Valentin, member of the BPCE Supervisory Board andj member of the Natixis Board of Directors.
Agreements entered into by CNP Assurances, BPCE, Natixis, and ABP Vie (a subsidiary of Natixis Assurances)
Daniel Karyotis, member of the BPCE Management Boardj and permanent representative of BPCE at Natixis,
Alain Condaminas, member of the BPCE Supervisory Board,j and member of the Natixis Board of Directors,
Thierry Cahn, member of the BPCE Supervisory Board andj member of the Natixis Board of Directors, and
BPCE, Member of the Board and shareholder of Natixis,j represented by Daniel Karyotis, Chief Financial Officer and Member of the BPCE Management Board, BPCE’s Permanent Representative on the Natixis Board of Directors.
that BPCE re-lends all or part of the USD resources raised from Natixis.
Stéphanie Paix, Chairman of the Management Board ofj Caisse d’Epargne Rhône-Alpes, Natixis Director.
BPCE, represented by Daniel Karyotis, Chief Financial Officerj and Member of the BPCE Management Board, BPCE’s Permanent Representative on the Natixis Board of Directors.
Term of the agreement: the agreement will end on the final maturity date.
8. Preliminary agreement between Natixis and BPCE regarding the guarantee mechanism covering certain GAPC assets and the agreements pertaining to the guarantee.
On November 12, 2009, the Board of Directors approved a number of agreements regarding the guarantee covering certain GAPC assets, namely: the Financial Guarantee agreement, under which BPCE agreesa to grant Natixis a financial guarantee; the ISDA Master Agreement and Appendix, between BPCEa and Natixis; total return swap agreements between Natixis and BPCE, onea of which relates to euro-denominated assets and the other to US dollar-denominated assets; the Call Option granted by BPCE to Natixis;a the “Miroir NLI” Reciprocal Financial Guarantee betweena Natixis and Natixis Luxembourg Investissements; the “Miroir NFP” Reciprocal Financial Guarantee betweena Natixis and Natixis Financial Products Inc.; the “Miroir NFUSA” Reciprocal Financial Guarantee betweena Natixis and Natixis Funding USA, LLC; the “Miroir IXIS CMNA Australia” Reciprocal Financiala Guarantee between Natixis and IXIS CMNA Australia No. 2 SCA; the “Miroir NFP” Reciprocal total return swap agreementa between Natixis and Natixis Financial Products Inc.; the “Miroir NREC” Reciprocal total return swap agreementa between Natixis and Natixis Real Estate Capital Inc.; Management Committee). These agreements were approved by the May 27, 2010 General Shareholders' Meeting.
Yvan de la Porte du Theil, Member of the BPCEj Management Board, Member of the Natixis Board of Directors.
Francis Henry, Member of the BPCE Supervisory Board,j Member of the Natixis Board of Directors.
Bernard Jeannin, Member of the BPCE Supervisory Board,j Member of the Natixis Board of Directors, and
The change in the fair value of the total return swaps gave rise to the recognition of an expense of €5,512,905 for the fiscal year ended December 31, 2017, in respect of Natixis’ activities, and to an expense of USD 416,159 in respect of the subsidiaries’ activities. This expense was neutralized in Natixis’ accounts by recognizing an offsetting expense against the subsidiaries.
The income recognized by Natixis in respect of cancellation payments amounted to €28,730 in the 2017 fiscal year.
9. Authorization of a related-party agreement on the Chapel Deal between Natixis and BPCE
Jean-Bernard Mateu, Chairman of the Management Board ofj Caisse d’Epargne Rhône-Alpes, Natixis Director.
Term of the agreement: the agreement will enter into effect for the parties while Natixis is affiliated to BPCE, within the meaning of the provisions of Article L. 511-31 of the French Monetary and Financial Code.
BPCE, represented by Nicolas Duhamel, Chief Financialj Officer and Member of the BPCE Management Board, BPCE’s permanent representative on the Natixis Board of Directors.
The income recognized in respect of the activation of guarantees in the 2017 fiscal year amounted to €537,244.
The income recognized by Natixis in respect of this agreement amounted to €92,500 for the fiscal year ended December 31, 2017.
IXIS CIB (previously known as CDC Marchés and then as CDC IXIS Capital Markets) was required to enter into a number of letters of joint and several commitment and guarantee with its various successive shareholders, namely the Caisse des Dépôts (CDC), CDC Finance - CDC IXIS (to which CNCE became the successor in interest following the merger dated December 31, 2004) and CNCE.
All of these letters of joint and several guarantee and commitment had expired or been terminated at the date of this report, but continue to apply retrospectively to all the guaranteed transactions entered into prior to the date on which the underlying joint and several guarantees were terminated or expired, until these transactions have been fully unwound.
from the Chief Executive Officer of CDC dated October 12, 2004, enforce their rights directly against CDC until the maturity of the guaranteed transactions, as if this commitment had been taken out directly by CDC on behalf of the IXIS CIB creditors.
French original signed in Neuilly-sur-Seine and Paris La Défense on March 23, 2018
STATEMENT BY THE PERSON 8.1 RESPONSIBLE FOR THE REGISTRATION DOCUMENT 476
CROSS-REFERENCE TABLE 8.6 BETWEEN ARTICLES OF THE CRR, BASEL COMMITTEE/ EBA TABLES AND STATEMENTS, AND THE PILLAR III REPORT 482
in the scope of consolidation as well as a description of all the main risks and uncertainties with which they are confronted.
ADDITIONAL INFORMATION Documents available to the public 477Natixis Registration Document 2017
Registration document page number 1. Persons responsible 476 2. Statutory Auditors 321 3. Selected financial information
3.1. Selected historical financial information regarding the issuer for each fiscal year 12-13 3.2. Selected historical financial information for interim periods N/A
4. Risk factors 101 to 108 5. Information about the issuer
5.1. History and development of the Company 8 to 11 6. Business overview
6.1. Main activities 14 to 29 6.2. Main markets 293 to 299 6.3. Exceptional events N/A
6.4. Extent to which the issuer is dependent on patents or licenses, industrial, commercial or financial contracts or new manufacturing processes 6.5. The basis for any statements made by the issuer regarding its competitive position 14 to 29 7. Organizational structure
7.1. Brief description of the Group 11 to 13 7.2. List of principal subsidiaries 217 to 221; 8. Property, plant and equipment
10.1. Information concerning the issuer’s capital resources 118 to 126; 198-199 10.2. Sources and amounts of the issuer’s cash flows 200-201 10.3. Information on the issuer’s borrowing conditions and funding structure 151 to 155 10.4. Information regarding any restrictions on the use of capital resources that have materially affected, or could materially affect, the issuer’s operations
10.5. Information regarding the anticipated sources of funds needed to fulfill commitments referred to in items 5.2. and 8.1 11. Research and development, patents and licenses 169
15.1. Amount of compensation and benefits in kind 85 to 98
16.1. Date of expiration of current terms of office 38 to 63 16.2. Service contracts with members of the administrative bodies 84 16.3. Information about the issuer’s Audit Committee and Compensation Committee 74-75; 78-79 16.4. Statement as whether or not the issuer complies with the corporate governance regime 63 17.1. Number of employees 420 17.2. Directors’ shareholdings and stock options 94; 448-449 17.3. Arrangements for involving employees in the issuer’s capital 243 18. Major shareholders
20. Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses 20.1. Historical financial information 194 to 337; 20.2. Pro forma financial information 12-13; 295 to 300 20.3. Financial statements 194 to 337; 20.4. Auditing of historical annual financial information 338 to 343; 20.5. Age of latest financial information 338 to 343; 20.6. Interim financial and other information N/A
23. Third party information and statement by experts and declarations of any interest N/A
Internal control and risk management procedures relating to the preparation and processing of a accounting and financial information
Information relative to the locations and activities in each country or territorya 323 to 329 4. Declaration by the person responsible for the registration document 476 5. Statutory Auditors’ report on the financial statements 382 to 386 6. Statutory Auditors’ report on the consolidated financial statements 338 to 343 7. Statutory Auditors’ special report on related-party agreements and commitments 468 to 474 8. Statutory Auditors’ fees 322
Natixis parent company 344 to 381 2. Progress made and difficulties encountered in 2016 178 to 182 3. Research and development 169 4. Significant events after the reporting period 315 5. Trends and outlook 14 to 29 6. Risk factors 101 to 108 7. Report on corporate governance
Items related to the composition, operation and authority of the Board of Directors 36 to 84
Factors likely to be material in the event of a public tender offer (Article L.225-37-5 of the French Commercial Code)
Article 435 (1) (EBA) EU OVA - Bank risk management approach 2.1 Governance & 2.2 Risk management organization 2.4 Risk appetite 2.7 Stress tests
Article 435 (1) (EBA) CRA - General information about credit risk 5.1. Credit risk control organization 5.2. Credit policy
Article 436 (b) EU LI3 - Differences between consolidation scopes (entity by entity)
Article 436 (b) EU LIA – Explanations of differences between accounting and regulatory exposure amounts 3.2 Prudential consolidation scope 31 to 35 118 to 120
Art. 442 (c) NX03 - Exposures and EAD and by Basel exposure class
NX11BIS - EAD by exposure class and by agency – Standardized approach
CRBA - Additional disclosure related to the credit quality of assets
ADDITIONAL INFORMATION Cross-reference table between articles of the CRR, Basel Committee/ EBA tables and statements, and the Pillar III report 483Natixis Registration Document 2017
Article 442 (c) (EBA) EU CRB-B - Total and average net amount of exposures
Article 442 (d) (EBA) EU CRB-C - Geographical breakdown of exposures
Article 442 (e) (EBA) EU CRB-D - Concentration of exposures by industry or counterparty type
Article 442 (f) (EBA) EU CRB-E - Maturity of exposures Table 22 68
(EBA) EU CRD - Qualitative disclosures on banks’ use of external credit ratings under the standardized approach for credit risk 5.6. Credit risk: standardized approach
Article 444 (e) (EBA) EU CR5 - EAD by asset class and risk weight Table 25 71
(EBA) EU CRE - Qualitative disclosures related to IRB models 5.7. Credit risk: internal ratings-based approach
(EBA) EU CR8 - RWA flow statements of credit risk exposures under IRB
Article 444 (e) (EBA) EU CCR3 - Standardized approach of CCR exposures by regulatory portfolio and risk weight
Article 452 (e) (EBA) EU CCR4 - CCR exposures by portfolio and PD scale
Article 449 (BCBS) SECA – Qualitative disclosure requirements related to securitization exposures 7.2. Management of risks related to securitization transactions
(BCBS) SEC3 - Securitization exposures in the banking book and associated regulatory capital requirements – bank acting as originator or as sponsor
(EBA) EU MRB A - Qualitative disclosures for banks using the Internal Models Approach (IMA)
(EBA) EU MRB B - Qualitative disclosures for banks using the Internal Models Approach (IMA)
Article 455 (g) (EBA) EU MR4 - Comparison of VaR estimates with gains/losses
(BCBS) OR3 – Change in operational losses declared in 2017 - Corep approach
Table 1 (EU LI1): Differences between accounting and regulatory scopes of consolidation and the mapping of financial statements categories with regulatory risk categories
Table 2: (EU LI3): Differences between consolidation scopes (entity by entity) 33 to 35
Table 3: Transition from accounting capital to regulatory capital after application of phase-in arrangements
Table 6 (CCyB1): Geographical distribution of credit exposures used in contracyclic buffer
Table 7: Changes in regulatory capital after application of phase-in arrangements over the period
Table 9 (NX02): RWA Basel 3 by Natixis main business line 48 126
Table 13 (NX05): EAD by geography and by exposure class 55 137
Table 23 (CRD-D): Risk weights under S.A. exposures by asset class and by rating agency
Table 24 (EU CR4): Standardized approach – credit risk exposure and credit risk mitigation
Table 25 (EU CR5): Standardized approach – EAD by asset class and risk weight 71
Table 26 (EDTF 15): Indicative correspondences between internal ratings based on expert judgment and external agency ratings (corporates, banks, specialized financing institutions)
Table 27 (NX16): Average weighted PD and average weighted LGD by geography 73
Table 30 (EU CR8): RWA flow statements of credit risk exposures under IRB 77
Table 33 (NX23): Breakdown of equity exposures by Natixis main business line 81
Table 38 (EU CCR4): IRB – CCR exposures by portfolio and PD scale 87 to 89
Table 45 (NX31-A): On- and off-balance sheet EAD according to Natixis’ role in the banking book
Market risk Table 50 (EU MR1): Market risk own funds requirements 104
Table 53 (EU MR2-A): Market risk under internal models approach 105
Table 55 (LR1): Comparison of accounting exposures and leverage exposures 115 157
Table 56: Measure of sensitivity to +1% variation in interest rates, by maturity at December 31, 2017
Table 57: Interest rate gap by maturity at December 31, 2017 118 159
Table 62: (OR3): Change in operational losses declared in 2017 - Corep view 126
Table 66: Exposures to countries subject to a rescue plan 141 175
Appendix 2: Issuance of capital instruments at December 31, 2017 152 to 159
123; 11 Changes in regulatory capital 44 to 47 123 to 125 12 Regulatory capital targets 48 126 13 Risk-weighted assets by business line and by type of risk 48 126 14 Risk-weighted assets and capital requirements by method and exposure class 15 Table of credit risks by Basel portfolio 54; 71; 77; 16 Changes in risk-weighted assets by type of risk 47 125 17 Description of back-testing models 74-75; 102 130-132; Liquidity and Funding 18 Liquidity management 108 to 115 151 to 157 20 Balance sheet by contractual maturities 120-121 161
Market risks 22 Reconciliation of risk-weighted assets and accounting items for exposures sensitive to market risks 23 Significant market risk factors 144 24 Market risk modeling principles 102-103 140 to 143 25 Market risks management techniques 105 143 to 146
Credit risks 26 Structure of the loan book 52 to 55; 64 to 68; 71; 27 Impairment policy - Loan provisions and impairment 59 133 to 135 28 Changes in provisions and impairment 275 29 Counterparty risks on market transactions 84 128 30 Information relating to collateral and counterparty risk mitigation measures 60 133
Agreements signed with unions or employee representatives in terms a of health and safety at work
ADDITIONAL INFORMATION Cross-reference table of Environmental and Social Responsibility Information 489Natixis Registration Document 2017
The prevention, reduction or compensation of air, water a and land emissions that seriously damage the environment
ADAM Association for the Defense of Minority Shareholders (Association de Défense des Actionnaires Minoritaires).
ALM Asset and liability management - Management of the financial risks borne by an institution’s balance sheet (interest rate, currency, liquidity) and its refinancing policy in order to protect the bank’s asset value and/or its future Profitability.
A supervisory framework established in 1988 by the Basel Committee aiming to maintain the solvency and stability of the international banking system by establishing uniform minimum capital requirements for banks on the international level. It established a minimum capital adequacy ratio of 8% in relation to all the risks borne by a bank.
A means of asset financing whereby the lender is routinely informed of the value of the borrower’s assets pledged as collateral.
Ratio of total capital (Tier 1 and 2) to risk-weighted assets (RWA).
Code of Conduct The Natixis Code of Conduct (Ethical Principles) reflects Natixis' DNA; it gathers in a single overarching document all Natixis rules and guidelines in four main fields: be client-centric, behave ethically individually and collectively, act responsibly towards society, protect Natixis and Groupe BPCE assets and reputation. The Code of Conduct applies to all Natixis employees, entities and affiliates over the world, across all business lines. It also applies to our suppliers and all our business partners in their dealings with Natixis.
Collateral A transferable asset or guarantee pledged to secure reimbursement on a loan in the event that the borrower fails to meet its payment obligations.
A bilateral financial contract whereby the protection buyer periodically pays a premium to the protection seller, who in turn promises to compensate for any losses on a reference asset (a bond issued by a government, financial institution or company) upon the occurrence of a credit event (bankruptcy, default, deferred payment or restructuring). It is a mechanism to protect against credit risk.
CVA Credit valuation adjustment, i.e. the expected loss related to counterparty’s default risk. The CVA aims to account for the fact that the full market value of the transactions cannot be recovered. The method for determining the CVA is primarily based on the use of market inputs in connection with the practices of market professionals.
Equity (tranche) In a securitization arrangement, the equity tranche refers to the tranche that bears the first losses incurred from defaults within the underlying portfolio.
IFACI French Institute of Internal Auditing and Control (Institut Français de l’Audit et du Contrôle Internes).
Insurance risk Encompasses asset and liability risks (interest rate, valuation, counterparty and forex risk) as well as risks related to the pricing of mortality risk premiums and the risks associated with life and non-life insurance, including pandemics, accidents and natural disasters (such as earthquakes, hurricanes, industrial accidents, acts of terrorism and military conflict).
Leverage effect The leverage effect accounts for the rate of return on equity based on the after-tax rate of return on invested capital (return on capital employed) and the cost of debt. By definition, it is equal to the difference between the rate of return on equity and the return on capital employed.
A measure introduced to improve the short-term resilience of banks’ liquidity risk profiles. The LCR requires banks to maintain a reserve of risk-free assets that can be converted easily into cash on the market in order to cover its cash outflows minus cash inflows over a 30-day stress period without the support of central banks.
MREL Minimum requirement for own funds and eligible liabilities - Ratio defined in the European Bank Recovery and Resolution Directive indicating the minimum requirement for own funds and eligible liabilities that have to be available to absorb losses in the event of resolution
OCI Other comprehensive income, which contains the income and expense items (including reclassification adjustments) not included in net income/loss as required or authorized by IFRS.
Pillar III Pillar III is concerned with establishing market discipline through a series of reporting requirements. These requirements – both qualitative and quantitative – are intended to improve financial transparency in the assessment of risk exposure, risk assessment procedures and capital adequacy.
Securitization A transaction whereby credit risk on loan receivables is transferred to investors by an entity through the issuance of negotiable securities. This may involve the transfer of receivables (physical securitization) or the transfer of risks only (credit derivatives). Some securitization transactions are subordinated through the creation of tranches.
Treasury stock The equity share held by the company, especially through the share buyback program. Treasury stock does not bestow voting rights and is not included in the calculation of earnings per share, with the exception of securities held in association with a liquidity contract.
30, avenue Pierre Mendès France 75013 Paris www.natixis.com A joint company with a Board of Directors with share capital of €5,021,289,259.20 euros