MARKET CAPITALIZATION in EUR billions based on average number of shares outstanding
Banque Fédérale des Banques Populaires of which Alizé Levier corporate investment plan (2.2%) 75.3% Public 22.8% Employees (other corporate mutual funds) 1.9%
Shareholders' Meeting in the weeks that follow the event, as well as downloading all financial communications documents, including Annual Reports, analyst presentations and
Shareholders who do not attend the Meeting in person can take part in the vote by: ■ giving proxy to the Chairman of the Meeting, by returning the signed form of proxy to the bank, or.
Executive and co-founder of one of France's top two food services groups.
François Ladam is not a member of the Board of Directors.
Internal restructuring operations between subsidiaries are also subject to Board approval.
To make it easier for directors to exercise their judgment concerning the activities of the bank and its subsidiaries, in 2003 the decision was made to place several Natexis
5 – Internal Rules of the Board of Directors and Directors' Charter
EUR24,400 in fixed fees and EUR134,200 in variable, attendancebased fees) and EUR23,790 in fees for attendance at
Banques Populaires and, where applicable as a director of any subsidiaries of the bank and/or of Banque Fédérale des Banques Populaires, the controlling shareholder of
The table on page 17 shows the fees paid to the Auditors in 2003 and 2002.
In 2003, we set up a strategic oversight system spanning all of the bank's businesses, in order to tailor growth projects more closely to market developments and the Banque Populaire Group's goals.
A comparative study of equivalent organizations showed that our bank represents a benchmark in this area. Instead of resting on our laurels, we made further improvements to server management, enhanced the allocation of roles among the various players and made changes that allow us to use IT resources more efficiently.
IT operations.The service commitment was strengthened by drafting specific service contracts for each activity. At the same time, significant progress was made in implementing standard incident management practices, with the development of an incident database managed jointly by the
Growth in the loan book was optimized through dynamic asset management processes.
Natexis Banques Populaires provides banking services to 90% of the top 350 French groups and is the fifth largest lender to large corporates and mid-sized companies in France
In 2003, its ISO certification was renewed, based on 2000 standards, testifying to quality of its services and the efficiency of its processes.
The Madrid and Milan branches enjoyed sustained growth. In Spain, the bank participated in financing the second phase of the Barcelona tramway project. In Italy, the local branch was selected as joint arranger of a syndicated facility for
EUR 700 million syndicated loan for Publicis Natexis Banques Populaires was selected by Publicis as mandated lead arranger and agent, alongside BNP Paribas, ABN Amro,
The branch has got off to a good start, selling just under EUR16 million worth of lease financing in its first year. In the medium-term, Natexis
Crédit Maritime Mutuel should ensure that Natexis Lease meets its objectives for the current year.
These changes paved the way for a more local service and faster response times, leading to higher quality services and increased client satisfaction.
Crédit Coopératif, which joined the Banque Populaire Group the previous year.The merger has opened up new avenues of growth for Natexis Factorem, through Crédit Coopératif,
In the government securities repo market, it is one of the leading
In Foreign Exchange, plans are being made to install new trading
Natexis ABM Corp. (specialized exclusively in floating rate mortgage bonds) and Natexis Arbitrage
Technology Services business line completed several major projects, with the integration of back-office processing for major new client banks and the reorganization of the business line's structures.
■ Risk management activities were tightened up and a new contractual framework was drafted, governing relations with all client categories.
Interépargne are also developing a pensions offering, for selfemployed professionals and companies. In fund management and life insurance, the business line intends to speed up the development of long-term savings products and guaranteed funds.
Assurances, this new product testifies to the Banque Populaire Group's commitment to putting people first.
(excluding the effect of adjustments to align reserving methods) compared with income of EUR7 million in 2002, a EUR52.5 million loss in 2001 and income of EUR128.1 million in 2000.
Impulse program to improve control over costs and risks, strengthen the organization's international integration and prepare for a new phase in its development once the crisis was over.
Integration of local teams and portfolios was completed in record time.
Europe continued to grow and plans are currently being made to roll out a credit insurance offering in these countries, starting in Poland where the first credit insurance branch was opened in October 2003.
During the year, we also launched a collective review of our values.
The profit-sharing and incentive bonus agreements between the parent company and employee representatives were renewed during the year, giving employees the opportunity to share in the growth of our bank's earnings and overall profitability, as well as in our productivity gains (see table 2 and 3).
Actions gained 8.97% (versus a 7.28% rise in the benchmark index,
At EUR19.6 million, Banque Privée Saint Dominique NBI is down 18% compared to 2002, due to a reduction in both management and movement commissions.
Taking into account net income from investments in the amount of + EUR8 million and technical charges (similar to banking charges) for - EUR10 million, NBI for the Insurance business lines totaled EUR217.2 million, compared to EUR144.6 million in 2002.
The change is not attributable to NBI, which was stable over the period, but rather to a tight control over operating expenses, resulting in a 4% decrease in relation to 2002.The half-yearly analysis of Income before exceptional items and tax confirmed a significant improvement in performances (second half of 2002: - EUR103 million, first half of 2003: - EUR46 million, and second half of 2003: - EUR12 million).
Review of the consolidated balance sheet Assets in EUR billions December 31, 2003 December 31, 2002
Under banking regulations, no single loan or advance may exceed 25% of capital, and the sum of risks exceeding 10%
In terms of debt borrowings taking the form of bonds, negotiable debt securities and commercial paper: senior (bonds, EMTN, ECP, USCP, negotiable debt securities) or subordinated borrowings (redeemable subordinated securities), the principal clauses are as follows: ■ Senior debt: (i) Debt contracted in connection with issue programs: The EMTN program contains a standard guarantee clause consisting in a pledge to maintain the borrowing rank ("Negative Pledge"). No financial covenant or covenant related to the Natexis Banques Populaires rating is anticipated.
an ag em en t r ep or t publication of the June 30, 2005 consolidated financial statements in accordance with the IAS/IFRS primary basis of accounting.
Corporate information The following information concerns the parent company, Natexis Banques Populaires.
The Company also contributes to the education of young people under qualification contracts.
Manner in which the Company’s foreign subsidiaries take into account the impact of their activities on regional development and local populations Not applicable.
Deferred income, accrued charges and other liabilities 14 13,693 13,956 12,366 of which institutional activities 98 108 106
2 – Accounting policies and valuation methods 2.1 – Customer loans Loans are recorded in the balance sheet at face value. Undrawn amounts on loans already committed and agreed are included in off-balance sheet items under the heading Financing commitments given.
In assets in the consolidated balance sheet, the net loan outstandings underlying the options are covered by zero-coupon securities held by these entities. Changes in net income of these entities are solely due to increases in the value of the zero-coupon securities until their redemption date and the end of the arrangement in 2014. Over this period, the increase in value of these securities exactly offsets the full provision of these loans underlying the options to ensure the complete neutrality of net income and the cash necessary to refinance these transactions.
In accordance with French banking regulations, unrealized losses on such securities are not provided, except where there is an intention to dispose of the securities in the short term, in which case the provision covers market risks, and the charge is recorded in Net gains/(losses) on disposals of fixed assets, or there is a risk of counterparty failure, in which case the charge is recorded within Provisions for loan losses and country risks;
■ Equity securities held for investment are securities acquired in an entity which is to be managed with the aim of increasing its value and obtaining the highest possible capital gain in the long term.Where necessary, a provision is raised to ensure that the net book value does not exceed the estimated value (recent transaction value, value based on profitability, market value for listed securities or other valuation method used at the time of acquisition).
2.6 – Income, adjustments in value and gains or losses on securities ■ Income from variable income securities is recorded on a receipts basis.
Accrued income, prepaid expenses and other assets 9,790 11,474 of which institutional activities - -
Shareholders’ equity 3,913 3,752 Common stock 769 759 Additional paid-in capital 1,791 1,750 Retained earnings 1,088 1,136 Net income for the year 265 107
Guarantees given on behalf of: 12,211 15,237 financial institutions 1,514 1,687 customers 10,697 13,550 of which institutional activities 5 9
As of December 31, 2002, reinsurers’ shares of technical reserves were transferred from Insurance company investment portfolios to Accrued income, prepaid expenses and other assets, while amounts receivable on deposits with grantor companies were transferred from Accrued income, prepaid expenses and other assets to Insurance company investment portfolios. The account balances as of December 31, 2001 were adjusted accordingly for this reclassification to enable year-on-year comparison, in the amount of EUR2,291 million for fiscal year 2001.
Common stock Additional Retained Shareholders’ FGBR Total Minority paid-in capital earnings (1) equity before shareholders’ interests in EUR millions FGBR equity
Fi na nc ia l i nf or m at io n Co ns ol id at ed fi na nc ia l s ta te m en ts 31 – Net gains/(losses) on disposals of fixed assets in EUR millions 2003 2002 2001
COFACE Credit insurance and services 98 98 98 98 (2) (2)
COFACE INTERCREDIT POLAND Information and debt management services 97 71 97 71 (2) (2)
COFACE INTERCREDIT SLOVENIA Information and debt management services 60 44 60 44 (2) (2)
COFACERATING.FR Information and debt management services 100 98 100 98 (2) (2)
KOMPASS HOLDING (Sub-group) Holding company 100 98 - - - -
KOMPASS JAPAN Marketing and other services 100 98 - - - -
VERITAS CREDIT CORPORATION Information and debt management services (12) (12) 100 98 (2) (2)
BP DEVELOPPEMENT (formely +X DEVELOPPEMENT) Venture capital 28 28 33 33 33 33
It should be understood that the agreements reported on are only those provided by the French Commercial Code and that the report does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.
Cash, central banks and post office banks 1 15 77 194
Fi na nc ia l i nf or m at io n Co m pa ny fi na nc ia l s ta te m en ts 1 – Accounting policies and valuation methods
The results of this method were validated using normal market comparisons or the revalued net worth method.
In accordance with the letter issued by the General Secretariat of the Banking Commission dated October 21, 1997, non-operating real estate assets, whether occupied or leased-out, have been provided on a case-by-case basis to cover all risks of unrealized capital loss.
Computer program internal development costs are expensed in the year incurred, where the computer
■ The accounting treatment of speculative positions is identical as regards interest flows; however, capital losses arising on the period-end mark-to-market are provided for via a charge to income, unlike hedging transactions.
OPTIONS AND FORWARD CONTRACTS: The nominal value of the underlying instrument covered by the option or forward contract is recorded off-balance sheet, with hedging and trading transactions separately identified.
1.16 – Employee-related liabilities and retirement benefit commitments Employee-related liabilities mainly comprise commitments in respect of: ■ retirement termination payments; ■ early-retirement and supplementary pension contributions; ■ payments for the cessation of salaried employee activity; ■ employer contributions payable to private health insurance companies in respect of retired employees; ■ long-service medals.
Natexis Banques Populaires opted against early application of this regulation. This regulation contains transitional provisions applicable from January 1, 2003 regarding expenses arising from multi-annual major repair or revision programs and renewal expenses. Accordingly, a provision for major repairs totaling EUR1 million, of which EUR0.7 million was deducted from opening shareholders’ equity, was recorded in fiscal year 2003.
Home purchase loans 123 219 258 of which accrued interest receivable - 1 1 of which accrued interest receivable 7 2 28 of which accrued interest receivable 7 2 7 of which non-performing loans - 1 2 of which provisions for loan losses - (1) (1)
Investments in affiliates and other securities held for investment 174 179 209
Gross Net December 31, 2003 company reported period period during 2003
Off-balance sheet items: Forward financial instruments (10) (12) (5) Financing commitments 33 25 19 Guarantee commitments 11 7 7 Other commitments given (4) 153 151 Other 1 3 2
Depreciation, amortization and provisions for impairment of property and equipment and intangible assets
The Natexis Banques Populaires capital markets risk control system is based on three core principles: ■ a control architecture organized around three control levels: the middle office of each entity, Internal Control, and the Risk Management division, which is responsible for the independent supervision of risks; ■ a capital markets risk measurement methodology aimed at identifying the risks to which the bank is exposed; ■ a limits system consistent with the risk indicators defined in the internal risk measurement methodology.This system covers both Natexis Banques Populaires and its subsidiaries.
Natexis Banques Populaires capital markets risk is controlled using a methodology that measures the risks to which the various group entities are exposed. The current methodology consists of a number of standard indicators, although Natexis Banques Populaires is developing an internal model based on VaR.
The main standard indicators used are the sensitivities of the various entities to specific risks (interest rate, foreign exchange, equity markets, commodities, volatility, issuer, etc.).
There are two elements to foreign exchange risk: ■ the foreign exchange operating risk generated by capital markets activity. This risk is monitored by the Capital Markets Risk Management Committee and the ALM Committee; ■ the foreign exchange non-operating risk, particularly for Group entities. This risk is monitored by the ALM Committee.
The director of information system security has been attached since 2002 to the director of Information Systems and Logistics as opposed to Internal Audit. The director’s
As part of the regulatory process implemented by the French Banking Commission (CRBF Regulation No. 97.02) for the prudential monitoring of credit institutions, Internal Audit of Natexis Banques Populaires assesses, based on the results of periodic audits, the internal control procedures, particularly the accounting and financial procedures, for all entities within the scope of consolidation, whether or not they have credit institution status.
As statutory auditors of Natexis Banques Populaires, and in accordance with the last paragraph of Article L225-235 of the French Commercial Code, we hereby report to you on the report prepared by the Chairman of your company in accordance with Article L225-37 of the French Commercial Code for the year ended December 31, 2003.
Populaire Val-de-France, in replacement of Mr. René Clavaud, who is set to succeed Mr. Christian Hébrard as Banque
Shareholders, having taken due note of the proposed appropriation of earnings recommended by the Board of
In accordance with the law, shareholders are reminded that dividends paid in respect of the last three fiscal years were as follows: Dividend per share with a par value of EUR16 EUR2.50 EUR2.50 EUR1.50
Shareholders confer full powers, including that of delegation, on the Board of Directors and Executive Management to implement and realize the buyback program, and to place stock market orders, sign all documents, and more generally, do all that is necessary.
Shareholders hereby renew the term of office as Director of Mr. Jean-François Comas for a period of six years, expiring at the end of the Annual General Meeting held to adopt the 2009 financial statements.
Closing number of shares 33,213,635 531,418,160 2000 Opening number of shares 33,213,635 531,418,160
Banque Fédérale des Banques Populaires 75.34% 84.69% of which employee share ownership (Alizé Levier ESOP) 2.25% 2.64%
To the best of Natexis Banques Populaires’ knowledge, no other shareholder, other than those cited in the table above, holds more than 5% of the common stock or voting rights.
CCBP was created in 1921 to support the expansion of the Banque Populaire regional banks, and to perform both institutional activities on behalf of the Banque Populaire regional banks (management and monitoring of excess treasury balances of Banques Populaires regional banks, special assignments on behalf of the Chambre Syndicale des Banques Populaires, debenture loan issues and issues of similar securities) and operating banking activities in the competitive market sector.
Other simplification measures were implemented during fiscal years 1999 and 2000: absorption of Banques Populaires Ingénierie (B.P.I.) by Natexis Banques Populaires in December 1999; restructuring of the private equity division in December 1999; transfer in June 2000 to Natexis Banques Populaires of Bail Banque Populaire shares held by the Banque Populaire regional banks, in consideration for the issue of 606,225 Natexis Banques Populaires shares and transfer of Natexis Gestion’collective asset management activities to Banque Populaire Asset Management.
We have audited in accordance with professional standards applicable in France the consolidated financial statements for the year ended December 31, 2003, approved by the Board of Directors.We expressed an unqualified opinion, including an observation drawing attention to Note 2.17 to the consolidated financial statements which details the changes in accounting methods made during the year, arising from the first-time application of CRC Regulation No. 2002-03 on the accounting treatment of credit risks in companies falling within the scope of the French Banking and Financial Regulation Committee and CRC Regulation No. 2002-10 on the depreciation and impairment of assets.
To facilitate the understanding of the reference document, the following thematic table can be used to identify the main information required by the regulations and decrees of the Autorité des Marchés Financiers.
The twin advantages of top-notch ratings and human dimensions ensure CDC IXIS Capital Markets offers clients both security and reactivity.
In a press release dated 2 October 2003, Caisse des dépôts et consignations and Caisse Nationale des Caisses d’Epargne et de Prévoyance (CNCEP) announced they had signed an agreement on 1 October 2003 that provides for them to take their partnership onto a new level. The two Groups are to consolidate their partnership on a lasting basis by re-balancing their respective roles within a universal bank due to be created by integrating EULIA and CDC IXIS into Caisse d’Epargne Group.
This fine performance paves the way for CDC IXIS Capital Markets to continue to expand in a secure manner in 2004, against a backdrop of ambitious change.
O rg an is at io n al ch ar t
T h is d ep ar tm en t ac ts as m ar ke t m ak er o n a la rg e ra n g e o f m o n e y -m a rk e t in st ru m e n ts in c lu d in g fo re x sh o rt -t er m sw ap s, ce rt ifi ca te s o f d ep o si t an d co m m er ci al p ap er
. It al so c o n d u ct s p ro p ri et ar y tr ad in g o n m aj o r eq u it y a n d c o n v e rt ib le b o n d m ar ke ts
I The regulations concerning money laundering, which fall under the control of France’s Banking Commission.
I The “Compliance Manual”, which contains all the personal and professional compliance rules applicable to CDC IXIS Capital Markets employees (rules of good conduct, prevention of conflicts of interest, transparency as regards personal securities transactions, etc.).
- In response to Basle II requirements, a new incident recording tool has been in use in the front and back offices since mid-2003. This tool is used to organise the operational risk IT system.
Structural factors such as the separation of functions, the system of limits and the different levels of control, have been described in previous parts of this chapter. Another key element of risk monitoring and management concerns the quality of the reporting system.
In view of the highly interlinked nature of BackOffice work and accounts processing within the Company, accounting information is produced in a decentralised manner: I front office operational activities and their results
Substitute Mr Dominique Paul 32, rue Guersant AGM of 30/6/97 AGM voting Auditors 75017 Paris on 2004 financial statements
risk insurance transactions on behalf of clients and arranged the first catastrophe bond for a major European corporate.
Lastly, we also concluded several mandates in our balance-sheet and hybrid product structuring activity in 2003, including France’s first tier one direct deal on behalf of a French client, for €800 million.
CDC IXIS–LCF Rothschild Midcaps, the midcap equity-broking venture in which CDC IXIS Capital Markets owns a 50% share, continued to develop commercially in an even tougher market than that for large caps.
Daily and weekly control reports are then produced for inspection by the Chairman of the Executive Board and by the Executive Committee. The risk situation is also presented on a monthly basis to the Chairman of the Supervisory Board. Lastly, all of these market-risk measures and limits are presented and validated by CDC IXIS’s Monthly Market Risks Committee, which was set up in 2003 and is chaired by the Chairman of the CDC IXIS Executive Board.
Credit analysis is divided into three sectors – Corporations, Banks and Securitisation – so that each counterparty is under the responsibility of analysts covering the sector in question. The effectiveness of Risk Control within the CDC IXIS Group is founded on a high degree of integration and a mechanism of specialised committees covering Markets & Corporate Financing on the one hand and Financial Counterparties on the other.
CDC IXIS Capital Markets continued to implement Operational Risk Management mechanisms in 2003. These mechanisms now include some 20 Operational Risk Correspondents, located in all the Company’s units in France, as well as in subsidiaries and foreign branches. Correspondents act as local supervisors for the use of ORIS, the software tool developed by CDC IXIS and which forms the hub of its Operational Risk Information System.
As in the last three years, we will strive to confirm our positioning as a multi-specialist in a selection of well-identified, high value-added businesses where we have the ability to leverage our reactivity, technical expertise and innovative capability.
CDC IXIS FINANCIAL GUARANTY HOLDING SA F CDC Finance-CDC IXIS’s permanent representative on the Supervisory Board (since 16 September 2003; previously Censor)
CDC IXIS PRIVATE EQUITY SA F Member of Board of Directors (since 27 February 2003)
CDC IXIS CAPITAL MARKETS SA F Member of Supervisory Board MARTIGNAC FINANCE SA F Vice-Chairman of Supervisory Board
ALCATEL (listed) SA F Member of Board of Directors (since 17 April 2003) AREVA (listed) SA F Member of Supervisory Board SCOR (listed) SA F Member of Board of Directors (since 15 May 2003) TECHNIP (listed) SA F Member of Board of Directors (since 11 April 2003) THALES (listed) SA F Member of Board of Directors
The consolidated accounts have been drawn up in accordance with French accounting principles applicable to the consolidated accounts of credit institutions as specified in regulation No. 99-07 of the French Accounting Regulation Committee (Comité de la Réglementation Comptable - CRC).
3.14 Subordinated debts This section includes all debt materialised by perpetual loans, whose redemption in the event of liquidation of the debtor is only possible after the other creditors’ claims have been settled.
3.16 Corporate tax This line item includes current tax for the fiscal year after deduction of any tax credits which may be offset against the amount due, together with deferred tax.
3.17 Special purpose vehicles Special purpose vehicles are structures that have been created specifically to manage one or more transactions on behalf of a company.
Total marketable Total investment o/w Millions of euros securities securities doubtful
Commitments granted to credit institutions - - - - - -
The CDC IXIS Executive Board has set up a Market Risk Committee that reports to the Chairman of the CDC IXIS Executive Board. This Committee is in charge of recommending regulations on market-risk monitoring and supervision, and ensuring that the regulations are in line with those established at Group level. It also ensures that the regulations are adhered to and, from a general standpoint, issues its opinion to the Supervisory Board on all matters relating to market risk.
Credit-risk equivalent Counterparties Counterparties Other Total Total weighted at 0% weighted at 20% counterparties 31/12/03 31/12/02
DEPRECIATION, AMORTISATION AND PROVISIONS ON TANGIBLE AND INTANGIBLE ASSETS (16) (11) (10)
Securities received or sold under resale or repurchase agreements Securities purchased under resale agreements are included under other loans to credit institutions or loans to customers in accordance with CRB regulation 89-07. Securities sold under repurchase agreements are booked as debt.
There are three categories of credit derivatives: Credit Default Swaps, Total Rate of Return Swaps and Credit Linked Notes which are deemed equivalent to options, swaps and securities.
1.3. Term The Company has a 99-year term, expiring on 31 March 2086, except in the event of extension or dissolution.