SOCIAL AND ENVIRONMENTAL PERFORMANCE 35 2.1 Strategic outlines and organization of the sustainable development policy 36 2.2 Reporting frameworks and methodology 49 2.3 Labor information 50 2.4 Environmental information 58 2.5 Social information 63 2.6 Report of the Statutory Auditors appointed as independent third-party bodies on the consolidated social, environmental and corporate information provided in the Management Report 65
New Frontier is targeting additional revenue synergies of €400 million with the Groupe BPCE networks over 2014-2017, in particular with the Investment Solutions and Specialized Financial Services business lines.
Basel 3 risk-weighted assets (a ) (in billions of euros) 120.1 145.2
In Energy and Commodities, Natixis provides sector coverage and also structures loans specifi c to these markets: pre-export fi nancing, transactional facilities, borrowing base fi nancing, reserve-based lending for oil and mining operations, etc. In this way, Natixis promotes all of its business lines to its customers.
Global Transaction Banking (GTB) employs some 500 people around the world, primarily in France, but also in Asia (Hong Kong, Singapore and Shanghai). Global Transaction Banking distributes and manages four types of offers within the Wholesale Banking division: V account administration and associated treasury products; V cash management; V trade finance (import and export documentary credit as well as associated financing) relating to ordinary international trade deals; V and correspondent banking (2,700 banks covered in 150 countries).
Close cooperation with Groupe BPCE allows the Group’s entire customer base to benefi t from the Global Transaction Banking offer along with the various areas of expertise available (national and international geographic coverage, local networks, etc.). The structure is completely integrated, from product design and development to marketing and operational processes.
Assets under management rose signifi cantly to €629.2 billion in 2013, the highest level ever reached and up €50.5 billion or +8.7% over the year on a constant-euro basis. This sharp rise was driven by a positive market effect of €37.2 billion and substantial net infl ows of €13.4 billion, the highest since 2007. This can be attributed to signifi cant infl ows in the United States (€22.4 billion) and in Asia (€0.8 billion) while in Europe outfl ows stood at €9.8 billion. Excluding money market products, net infl ows would have been positive in Europe (€2.4 billion).
Eagle Asia Partners: Eagle Asia Partners was founded in 2007 by three well-known professionals and consists of the seasoned, historic team from GIC and TIF Ventures, a Private Equity entity for the Singapore government’s investments. This company, which manages $220 million, is 40%-owned by Natixis and specializes in the primary fund-of-funds segment, primarily in China, India and Southeast Asia.
The objective of further increasing synergies with the Banque Populaire and Caisse d’Epargne networks has also been included in the 2014-2017 “New Frontier” plan. This is a major element for Specialized Financial Services.
Natixis Paiements, the No. 3 payments operator in France, with market share of over 20% in the exchange systems and electronic banking fi eld, processed close to 6.7 billion mass transactions in 2013.
In 2013, activities centered mainly on three areas: innovation, business development and automation of processes.
V Approval of the plan to refocus Corporate and Investment Banking (CIB): CIB’s operations were split into a segment known as “CIB continuing activities”, consisting of the operations to be maintained, and another containing the assets to be run off within GAPC. This separation was intended to ensure optimal proactive management of the assets segregated within GAPC, to protect the operations retained within “CIB continuing activities”, and to highlight the performance of the operations within “CIB continuing activities”.
The implementation of the Guarantee was accompanied by a change in governance at the end of summer 2009, resulting in: The establishment of a CSG (Comité de Suivi de la Garantie – Guarantee Monitoring Committee), responsible solely for the GAPC scope covered by the Guarantee: V the members of the CSG are the Executive Chairman of BPCE and the Chief Executive Officer of Natixis. The Heads of Finance, Risk, Legal Affairs and Strategy of BPCE and Natixis are systematically invited to the meetings, in addition to the GAPC management team; V the CSG meets every quarter and can also be convened at will when circumstances so require; V in order to be in a position to properly carry out its responsibilities, the CSG receives regular reports of necessary information and follow-up on issues dealt with by other Committees connected with the Guarantee or the guaranteed assets; V the CSG is the decision-making body for all issues relating to the Guarantee. It is notably responsible for monitoring the proper performance of the Guarantee and in this respect may intervene in any decision, or any plans, of the CGAC (Comité de Gestion des Actifs Cantonnés – Segregated Assets Management Committee), likely to have an impact on the Guarantee mechanism and/or the obligations of Natixis or of BPCE.
V The CCAN is dedicated to individual investor relations, in particular the preparation of the year’s two main meetings with shareholders: the General Shareholders’ Meeting and the Actionaria trade show.
2013 Key events Natixis Energéco: expertise as both arranger and agent serving our shareholder networks’ customers
Natixis Energéco: a pioneer in the financing of renewable energy storage
Number of solidarity-based FCPEs (French employee savings funds) 25 24 25
In order to monitor the energy effi ciency of buildings in use more effectively, a system was set up in 2012 on six pilot sites to monitor energy and water consumption. The roll-out of this system to a large share of the portfolio began in 2013 with the outfi tting of some 20 buildings.
French Private Equity investment companies are members of the Association Française des Investissurs pour la Croissance (AFIC - French Private Equity Association), which strengthened its commitment to extra-fi nancial criteria with the creation of an ESG commission in February 2013. This commission’s role is to promote the consideration of ESG (environmental, social, governance) extra-fi nancial criteria by Private Equity companies that are AFIC members, and their holdings. It has produced a document that provides a framework for information and discussion between managers and investors.
Activity 50 projects underwent environmental and social due diligence reviews in 2013 versus 26 in 2012. The breakdown of these projects by sector, region and category is shown below. Most of the loans for these transactions were approved. Some may still be in the analysis phase, however, or have been shelved for various reasons.
Since 2009, Natixis has been ISO 9001 (1) and 14001 (2) certifi ed for the operation of its buildings. This certifi cation is a seal of approval for the environmental quality and management systems introduced for all of the central buildings managed by the Real Estate and Logistics Department. In 2012, these certifi cations were renewed and extended to the operating departments of Natixis’ data centers. They cover 246,000 m² (i.e. 87% of the surface area managed by the Real Estate and Logistics Department and 73% of the total surface area).
2013 Key event In 2013, nearly 800 Natixis employees moved into the “Nouveau Bercy” green building, renovated in 2012.
In 2013, the Real Estate and Logistics Department continued its policy of switching to energy-effi cient lighting, with the systematic replacement of incandescent light bulbs with energysaving bulbs and the roll-out of automatic detection lighting systems.
2013 saw the signing of an employment agreement (see section 2.3.4). The agreement includes a generational component and will strengthen the employee career management policy throughout the professional lifetime of employees.
The information in this document covers the 2013 fi scal year. The reporting period considered is one fully calendar year, running from January 1 to December 31.
The current set of agreements on the management of working hours includes several types of contracts (part-time, short-time, special working conditions for employees with disabilities, etc.) and provides for the associated terms and conditions of compensation and social security contributions.
Many initiatives were carried out in 2013 under this agreement: Natixis participated in specialized recruitment forums and hired 42 disabled staff, including 9 under permanent contracts, bringing the number of disabled employees to 286 at the end of 2013.
In 2013, measures to promote subcontracting to disability-friendly companies were consolidated. Natixis fi nished mapping the services that could be subcontracted and signifi cantly increased the calls for tenders it directed at this sector when cocontracting, on-site service and supply contracts came up for renewal.
Ordinary industrial waste - not sorted (in metric tons) 841 653 614
In terms of consumer security, Natixis’ employees are obliged to go about their business in an honest and fair way. When a fi nancial product or service is sold, they are subject to a number of rules in the interests of, and to protect, their customers: V customer categorization imposed by the regulations, including professional customers, eligible counterparties and nonprofessional customers; V an assessment of the suitability and appropriateness of the products and services to be supplied: employees are obliged to check that the customer has the level of competency required to understand and deal with the risks inherent in the product or service offered and that the product meets their investment objectives.
3.2 STRUCTURE OF THE CORPORATE AND EXECUTIVE BODIES 69 3.2.1 Board of Directors at March 1, 2014 69 3.2.2 Senior Management at March 1, 2014 71 3.2.3 Senior Management Committee and Executive Committee 71 3.2.4 List of corporate offi cers’ positions 72 3.3 ROLE AND OPERATING RULES OF THE CORPORATE BODIES 92 3.3.1 Board of Directors 92 3.3.2 Specialist committees: extensions of the Board of Directors 98 3.3.3 Senior Management 102 3.3.4 Shareholders’ meetings 103 3.4 POLICIES AND RULES FOR DETERMINING COMPENSATION AND BENEFITS OF ANY KIND PAID TO MEMBERS OF THE CORPORATE BODIES 105
In accordance with Article 26 of Law No. 2008-649 of July 3, 2008, involving various provisions to adapt Company law to EU law, the Corporate Governance Code to which reference has voluntarily been made when preparing this report is the Corporate Governance Code for listed companies by the Association Française des Entreprises Privées (AFEP – French Association of Private Sector Companies) and the Mouvement des Entreprises de France (Medef – French Business Confederation), hereinafter referred to as the “AFEP/Medef Code” and revised in June 2013. The AFEP/Medef Code is available for consultation at the Company’s head offi ce and on the Natixis website.
Board of Directors of Banque Populaire d’Alsace Immeuble le Concorde 4, quai Kléber BP 10401 67000 Strasbourg Cedex
Director First appointed: Co-opted by the Board on 04.01.2010 and ratifi ed at the CSM of 05.27.2010 Term expires: 2015 AGM (b)
Chairman, Audit Committee First appointed: Board Meeting of 12.17.2009 Term expires: 2015 AGM (b)
Nicolas de Tavernost* Date of birth: 08.22.1950 Nationality: French Natixis shares held: 1,000
Member of the Board and Chairman of the Strategic Committee of: Legrand S.A., (since May 2012) Director and Member of the Audit & Compensation Committee of: Smurfi t Kappa (since November 2012) Member of the Board of: Le Cercle de l’Industrie (Association of the Chairmen of the leading French industrial companies) (since early 2012) Vice-Chairman of: La Fabrique de l’Industrie (think-tank on French industrial issues) (since November 2012)
Member of the Board of: Sequana (1 ) (2)(until 2013) Permanent Representative of: Natixis, non-voting member of BPCE (until 07.11.2013)
Bernard Oppetit (born August 5, 1956). Chairman of Centaurus Capital, a hedge fund group he founded in London in 2000, Bernard Oppetit is also an independent director of Natixis. With a degree from the École Polytechnique, he forged his career with Paribas from 1979 to 2000, fi rst in Paris, then New York and fi nally London. As Deputy Director of the Financial Management division (1980-1987), Bernard Oppetit joined Paribas North America fi rst as a Risk Arbitrage Trader (1987-1990) and then as Global Head of Risk Arbitrage (1990-1995). In 1995, still heading up Risk Arbitrage, he moved to London to become Global Head of Equity Derivatives (1995-2000). Key advisory skills: renowned fi nancial markets specialist, entrepreneurial experience in Europe.
Member of the Board of: Natixis (1), Siparex Associés (2), Crédit Foncier Representative of Caisse d’Epargne Rhône Alpes, member of the Supervisory Board of: IT-CE Representative of Caisse d’Epargne Rhône Alpes, member of the Board of Directors of: Compagnie des Alpes (2), Fondation d’entreprise CERA, Fédération Nationale des Caisses d’Epargne (FNCE), Habitat en Région (2)
Vice-Chairman of: Association Nationale des Maires de Stations Classées et Communes Touristiques (2)
Member of the BPCE Supervisory Board Chairman of the Steering and Supervisory Board of: Caisse d’Epargne Languedoc-Roussillon (CELR) Chairman of the Board of Directors of: SLE Vallée des Gardons Vice-Chairman of the Supervisory Board of: Banque Palatine Member of the Supervisory Board of: Banque Palatine Member of the Board of: CE Holding Promotion, Clinique Bonnefon (2), Pierre et Lise Immobilier (2), FNCE Managing Partner of: SCI Les Trois Cyprès (2), SCI Les Amandiers (2)
In addition to the legal and statutory requirements with which it complies, the Board of Directors has adopted a set of internal rules governing its operation and setting out the rights and duties of its members. These are sent to each member at the time of his appointment.
As per the French Monetary and Financial Code, Natixis places the names of directors on the list of permanent insiders made available to the AMF. Permanent insiders are those individuals who have regular access to inside information regarding Natixis. Directors are individually informed that they are on this list by a letter from the Head of Compliance with a return receipt.
Options granted during the fi scal year by the issuer and any company included in the scope for issue over the period, to the top ten salaried employees of the issuer and of any company included in this scope who hold the most number of options granted in this way 0 n/a n/a
R centralize logging and reporting of malfunctions resulting in non-compliance at subsidiary or business-line level, with a view to their consolidation by Natixis,
At Natixis, the Code of Conduct refers to the set of rules applicable to the professional conduct expected of our employees when providing investment services. These rules are set out in the AMF’s General Regulations and are meant to safeguard the integrity of the markets and the primacy of the client’s interests.
All of this work was carried out in coordination with BPCE’s General Inspection. To this end, nine meetings were held during the year. These meetings provided a forum for addressing issues related to auditing programs and practices (Internal Audit Coordination Committee), as well as topics associated with risk assessment and assignment evaluation (the Risk Assessment Committee instituted in 2011).
V subsidiary and non-subsidiary activities without ALM risk management mandates from the ALM Committee transfer management of their risk to the Treasury through individual matching contracts: the activities involved primarily correspond to Wholesale Banking’s financing activities; V subsidiary and non-subsidiary activities that possess ALM risk management mandates match their net needs with Treasury subject to rules and limits set by the ALM Committee. These comprise the market activities and the activities of the specialized credit subsidiaries, which do not have access to the refinancing market.
The largest positions involve exposures to the short end of yield curves and are notably linked to time-lags between Libor reset dates. This risk is measured in terms of the sensitivity of the economic value of portfolios by percentage point of the yield curve and by currency. It is controlled, for the largest portfolios, through limits confi rmed and monitored by the Finance and Risk Department. As regards Treasury, in which most positions are concentrated, this mechanism is rounded out with interest rate and spread stress which are also subject to limits. VaR is measured daily but is not subject to a limit.
Natixis has incurred signifi cant losses in recent years, and may continue to post losses on its portfolio of assets impacted by the fi nancial crisis (GAPC – workout portfolio – assets). As the GAPC credit portfolio has continued to decrease as a result of disposals and 85% of it is still covered by the guarantee granted by BPCE, described in Chapter [1] of this registration document, this risk is now associated with a lower volume of assets. For further information on the workout portfolio and its assets, refer to section [1.5] “GAPC”.
The prudential consolidation scope is established on the basis of the statutory consolidation scope. The main difference between these two scopes lies in the consolidation method for insurance companies, which are accounted for by the equity method under the prudential scope, regardless of the statutory consolidation method.
The following deductions are made: V treasury shares held and stated at their carrying value; V intangible assets, including set-up costs and goodwill; V unrealized capital gains and losses due to perceived own credit risk.
V Capital resulting from the issue of subordinated securities or loans (perpetual subordinated securities); V Capital subject to the conditions of Article 4d of CRBF Regulation No. 90-02 of February 23, 1990 pertaining to capital (redeemable subordinated securities); V Capital instruments: 45% of pre-tax net unrealized capital gains recognized as Tier 2 capital; V Positive difference between the sum of value adjustments and portfolio-assessed impairment and projected losses calculated using internal ratings-based approaches.
Risk policies are tailored to each sector and activity according to their development targets and cover the large majority of Natixis’ portfolio.
Natixis buys credit-default swaps and enters into synthetic securitization transactions in order to reduce all or part of the credit risk exposure attached to some assets by transferring the risk to the market. CDS-protected loans remain on Natixis’ balance sheet, but bear the counterparty risk attached to the credit-default sellers, which are generally OECD banks. Transactions with nonbank third parties are fully collateralized in cash.
The scenarios, as well as the models and methods selected to assess their impact, are documented and this documentation is reviewed at each update.
R PRESENTATION OF BANKING BOOK SECURITIZATION POSITIONS (INCLUDING SECURITIZATION POSITIONS DEDUCTED FROM CAPITAL)
The 99% 1-day VaR level for Natixis’ trading portfolios averaged €7.9 million. It peaked at €10.6 million on May 9, 2013 and stood at €6.3 million at December 31, 2013.
The following chart shows results of backtesting (ex-post comparison of potential losses, as calculated ex-ante by VaR, with actual P&L impacts) on the regulatory scope, and can be used to verify the solidity of the VaR indicator: VaR excluding guarantee VaR excluding guaranteeP&L
As a subsidiary of Groupe BPCE operating in Wholesale Banking, Asset Management and specialized fi nance, Natixis’ liquidity risk management policy is an integral part of the Group’s overall policy. It sets out to optimize Natixis’ activities within a clear, shared and standardized framework in terms of governance and ALM regulations and in line with the Group’s risk constraints. In particular, these constraints are part of the regulatory commitments made by the Group when creating Natixis, which includes BPCE’s obligation to guarantee the liquidity of its subsidiary.
Natixis was exposed to the following risks at December 31, 2013.
5.1 MANAGEMENT REPORT AT DECEMBER 31, 2013 190 5.1.1 Note on methodology 190 5.1.3 Consolidated results 193 5.1.4 Analysis of Natixis business lines 195 5.1.5 Refi nancing 203 5.1.6 Post-closing events 204 5.1.7 Information concerning Natixis S.A. 204 5.2 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES 206 5.3 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 351
FINANCIAL DATA5 Management report at December 31, 2013 5.1 Management report at December 31, 2013 5.1.1 NOTE ON METHODOLOGY
ROE (return on equity) and ROTE (return on tangible equity) for Natixis and the business lines are calculated as follows: V the result used to determine Natixis’ ROE is net income (group share), from which DSN interest expense is deducted, net of tax effects as recognized in equity. The equity used is average annual shareholders’ equity (group share) under IFRS, after distribution of dividends, eliminating unrealized or deferred gains and losses recognized in equity and excluding DSNs; V Business line ROE is calculated based on normative equity, plus goodwill and intangible fixed assets related to the business line; V Natixis’ ROTE is determined using, as the denominator, the average book value after distribution of dividends, excluding average hybrid debt, average intangible fixed assets, and average goodwill, including goodwill recognized on companies accounted for by the equity method. The numerator comprises net income (Group share) minus interest paid on DSNs net of tax.
FINANCIAL DATA5 Management report at December 31, 2013 V At €629.2 billion, NGAM’s AuM reached a record high on a constant-euro basis; V NGAM US also reached a peak at $419.4 billion, with AuM at Harris topping $100 billion ($118.1 billion at end-2013 vs. $76.2 billion at end-2012); V NGAM US Distribution recorded record gross and net inflows of $56.9 billion and $16.7 billion, respectively; V NGAM International Distribution posted gross inflows of $23.9 billion and record net inflows of €10.6 billion in longterm products. Net inflows for all products combined totaled €9.9 billion, close to 2011 levels; V H
Gains or losses on other assets, which made a positive contribution of €17 million in 2013, was mainly linked to a capital gain on the sale of an operating property.
In 2013, GAPC’s net loss was very low at just -€3 million.
V Income from Flow Derivatives rose by 31% thanks to a solid showing from Equity Finance.
NGAM furthered its developed over the entire year, as refl ected in the improvement in its professional rankings and awards.
Leasing refocused its new business efforts on the BP and CE networks, where it saw growth of 8%.
Natixis Algérie continued to expand its activity in 2013. Localcurrency customer deposits were up 42% year-on-year, while average on- and off-balance sheet assets rose by 17% on 2012. New Algerian regulations limiting fees on foreign exchange transactions weighed on revenues in the second half. Net revenues of Natixs Algérie stood at €66 million, up 4.6% on 2012 (+8.5% at constant exchange rates).
- Non-recyclable gains and losses recorded directly in equity (70) (114)
Net gains or losses on fi nancial instruments at fair value through profi t and loss 7.3 1,643 2,079
** Since the Banque Populaire and Caisse d’Epargne cooperative investment certifi cates (CCIs) were sold at the beginning of the period and therefore excluded from the consolidation scope, no share of net income or other comprehensive income has been recognized in Natixis’ fi nancial statements at December 31, 2013. The overall change as a result of this sale amounted to €831 million at December 31, 2013, compared with December 31, 2012.
Issuance and redemption of deeply subordinated notes and preference shares (2,537)
(3) Other fl ows from fi nancing activities can be broken down as follows: V redemption of deeply subordinated notes for -€273 million; V interest paid related to deeply subordinated notes for -€86 million; V redemption and interest related to subordinated debts for -€1,227 million.
NOTE 1 BASIS OF PRESENTATION 216 1.1 IFRS standards and IFRIC interpretations applied by the Group 216 1.2 Presentation of the consolidated fi nancial statements 218 1.3 Year-end 218 1.4 Notes to the consolidated fi nancial statements 218
IFRS 10 replaces IAS 27, “Consolidated and Separate Financial Statements,” for the section on consolidated financial statements and the SIC 12 interpretation on special purpose entities. It defines a single audit model applicable to all entities, whether or not they are structured entities. The control of an entity will now be analyzed using three cumulative criteria: influence over relevant activities of the entity, exposure to the entity’s variable returns and the ability to influence variable returns obtained by the entity. After a review, given the new criteria, of each entity in which Natixis has an interest, it appeared that the application of IFRS 10 had no significant impact on the consolidation scope of Natixis and its balance sheet.
IFRS 12 combines and improves the information to be disclosed for subsidiaries, partnerships, affiliates and structured entities.
V Acquisition of 42% of IJCOF Corporate following the contribution of Coface Services’ commercial loan recovery activity.
V Deconsolidation of NBP Preferred Capital III LLC after preferred shares were reimbursed on February 6, 2013.
For risk analysis purposes, a distinction must be made between the policies taken out by the German branch Coface Deutschland and those taken out by Compagnie Française d’Assurance pour le Commerce Extérieur: V under the German policies, the credit insurer is only liable for losses in excess of a deductible termed the Aggregate First Loss. This first loss contractually defines the amount of first losses that are not covered by the credit insurer. The coverage provided by Coface Kredit via these policies is similar to “Natural disaster” type coverage. An analysis of these structures shows that the amount of the first loss is systematically higher than the expected loss, namely the average losses expected over the year. Accordingly, the “majority of risks” criterion is deemed not to be satisfied. The SPEs involved in these structures are accordingly not consolidated; V the French policies taken out by Coface rarely include noncovered “first losses”. But the policies only cover a small portion of the receivables held by the SPE. Furthermore, the quality of portfolio risk covered by Coface, compared to that borne by the other stakeholders (other insurers, sponsors, sellers) is not such as to transfer the majority of the structure’s risks to Coface. Such entities are accordingly not consolidated.
Investors may wish to invest for relatively short periods, in which case the asset-backed commercial paper (ABCP) held by a conduit may be transformed into treasury notes issued with shorter maturities.
FINANCIAL DATA5 Consolidated fi nancial statements and notes In addition, the “NAXICAP RENDEMENT 2018” securitization fund set up in 2012 is no longer consolidated in Natixis’ consolidated fi nancial statements as of December 31, 2013 in connection with the deconsolidation of BP Développement.
Gains or losses arising from changes in the fair value (excluding revenues) of available-for-sale fi nancial assets that are not hedged are recognized directly in equity under “unrealized capital gains or losses”. Accrued or earned income is recognized in the income statement under “interest and similar income” using the effective interest rate method. Available-for-sale fi nancial assets are tested for impairment at each reporting date. Where there is objective evidence that an asset is impaired and a decline in the fair value has already been recognized directly in equity, the cumulative impairment loss is removed from equity and taken to income under “Provision for credit losses” (debt instruments) or “Net revenues” (equity instruments).
Financial assets are grouped according to three characteristics: credit rating for loans to individual and small business customers, and industry risk and geographic risk for corporate, sovereign and other similar counterparties.
Level 2 fair value comprises instruments quoted on an inactive market and instruments measured using a valuation technique incorporating parameters that are either directly observable (prices) or indirectly observable (price derivatives) through to maturity. This mainly includes: Simple instruments
The main models used to value and manage fi xed-income products are Hull & White models (one-factor and two-factor models or one-factor Hull & White stochastic volatility model), the Hunt Kennedy model and the “smiled” BGM model.
Combination approach depending on the products, based on expected cash fl ows and scoring techniques in relation to the NAV of benchmark products
In accordance with IAS 37.80 provisions for restructuring do not include expenses directly related to the restructuring, specifi cally in the case of expenses related to voluntary redundancies and early retirements.
The amount of this provision is disclosed in Note 6.16.2 “Contingency reserves” and in Note 7.6 “General operating expenses”.
In accordance with IAS 32, issued fi nancial instruments are classifi ed as debt or equity depending on whether or not they incorporate a contractual obligation to deliver cash to the holder: V deeply subordinated notes and preference shares are classified in equity in light of the 2009 renegotiation of a clause making the payment of interest non-optional in the event of positive consolidated income and which has since become discretionary.
Treasury share derivatives are recognized differently depending on how they are unwound: V as equity instruments, if they are unwound by trading a fixed number of treasury shares for a fixed amount of cash or another financial asset, and if this trade is the only possible unwinding method. In such case, the instruments are not subsequently revalued; V as derivatives, if they are unwound via a net cash settlement or a net treasury shares settlement. In such case, the fair value changes in the instruments are recorded in the income statement.
Loans and receivables at fair value through profi t and loss 6.1.1.1 and 6.1.1.2 4,279 3,100
At December 31, 2013, fi nancial liabilities at fair value through profi t and loss primarily comprised derivatives not used as hedging instruments.
The spreadlocks were transferred to Level 3 of the fair value hierarchy in the amount of €288.5 million at December 31, 2013 subsequent to a change in the valuation model based on proprietary data.
Provisions for impairments of fi nancial assets (689) 365 (66) 31 (359) (651) 322 (124) 22 (431)
The adjustments to the income statement of statutory 2012 take into account restatements of the carrying costs of the CCIs and Natixis’ share in the income of the Banque Populaire banks and the Caisses d’Epargne at December 31, 2012, as well as the resulting tax implications.
(c) Excluding restatement of items related to the sale of CCIs. Segment disclosures restated to refl ect the sale of CCIs are presented in Note 9.
(in millions of euros) Performing loans Non-performing loans Impairments Net outstandings
(a) Net outstandings at December 31, 2012 were restated in the amount of €84.827 million based on the guarantees given by CEGC (See Note 14.1). The guarantees given by CEGC as part of its activity are now treated for accounting purposes as insurance contracts in accordance with IFRS 4, “Insurance Contracts”, and are recognized on the liabilities side of the balance sheet as stated in Note 2.10.
12.1 Number of employees * Full-time equivalent current employees of Natixis at the reporting date.
The comparative data provided below are compliant with IAS 19 (revised).
Revaluation adjustments - past-experience effect (7) 14 8 1 (3) (2)
Total revaluation adjustments at start of period 41 (21) 20 13 (22) (9)
Change in fair value of investments carried at fair value through profi t and loss 580 580 580 580
Depreciation, amortization and impairment on property, plant and equipment and intangible assets (39) (36)
The Deputy Auditors are: V BEAS, 7-9 Villa Houssay – 92200 Neuilly-sur-Seine; V Malcolm McLarty, 1 cours Valmy - 92923 Paris La Défense Cedex; V Franck Boyer, Immeuble Exaltis – 61, rue Henri-Régnault – 92075 La Défense cedex.
WTC OWNER LLC (1) (17) Real estate fi nance 0 0 100 100 United States
The Group recognized deferred tax assets in respect of tax loss carry-forwards (Notes 5.21 and 6.8 to the consolidated fi nancial statements). We examined the main estimates and assumptions on which the recognition of deferred tax assets was based.
Funding/reversal of funding for general banking risks and regulated provisions 2 7
Natixis’ separate fi nancial statements have been prepared and presented in accordance with the standards applicable to credit institutions laid out by the Comité de la réglementation comptable (CRC – French Accounting Regulation Committee) and the Comité de la réglementation bancaire et fi nancière (CRBF – French Banking and Financial Regulation Committee).
V Other long-term securities: investments made by Natixis in the form of securities, with the intention of forging lasting professional relationships and creating a special relationship with the issuing company, but without any influence over the management of the corporate entities in which investments were made due to the low percentage of voting rights held. They are recognized at their acquisition date at the purchase price excluding acquisition costs. They are included in the balance sheet at the lower of historical cost or value in use. Unrealized losses are subject to a provision for impairment.
The measurement approaches used to determine value in use are the following, as appropriate: R the net asset value method,
INTERBANK AND SIMILAR TRANSACTIONS 173,236 157,853 * o/w repurchased securities: 62,928 49,013 o/w accrued interest 8 7
As described in Note 1.10 to the company fi nancial statements, a guarantee mechanism with BPCE has been in place since July 1, 2009 covering certain assets ring-fenced in the Workout Portfolio Management structure (GAPC). We reviewed the monitoring of this mechanism and the corresponding accounting treatment in the company fi nancial statements.
In our capacity as your Company’s Statutory Auditors, we hereby submit our report on related-party agreements and commitments.
Corporate offi cers concerned: V Mr. Pérol, Chairman of the BPCE Executive Board, Chairman of the Natixis Board of Directors; V Mr. Gentili, Member of the BPCE Supervisory Board, Natixis Director; V Mr. Patault, Member of the BPCE Supervisory Board, Natixis Director; V Mr. Sueur, Vice-Chairman of the Steering and Supervisory Committee of Caisse d’Epargne Ile-de-France, Natixis Director; V Mr. Cahn, Member of the BPCE Supervisory Board, Natixis Director; V Mr. Condaminas, Member of the BPCE Supervisory Board, Natixis Director; V Mrs. Halberstadt, Member of the BPCE Supervisory Board, Natixis Director; V Mr. Valentin, Member of the BPCE Supervisory Board, Natixis Director; V Mrs. Paix, Chairman of the Executive Board of Caisse d’Epargne Rhône Alpes, Natixis Director; V BPCE, represented by Mr. Karyotis, Chief Financial Officer and Member of the BPCE Executive Board, BPCE’s permanent representative on the Natixis Board of Directors.
2.1.14 “CLICK’N TRADE” SERVICE AND PARTNERSHIP AGREEMENT BETWEEN IXIS CIB, CNCE AND BANQUE PALATINE
On December 19, 2001, the Supervisory Board approved a de facto association agreement between CDC, CNCE (the successor in title to CDC Ixis), and Ixis CIB (formerly CDC Ixis Capital Markets). This agreement, which is automatically renewed every three years, replaced the agreement entered into on August 30, 1996 between CDC and CDC Ixis Capital Markets (formerly CDC Marchés).
2.2.2 AMENDMENT NO. 1 TO THE P3CI SUBSCRIPTION AGREEMENT BETWEEN NATIXIS AND BPCE
On February 17, 2013, the Board of Directors authorized Amendment No. 1 to the P3CI subscription agreement entered into by Natixis and BPCE on January 5, 2012. This amendment specifi cally provided for the buyback and cancellation of Cooperative Investment Certifi cates held by Natixis, as well as for the repayment of the P3CI and other transactions.
The Board of Directors may appoint a Secretary, who may or may not be selected from among its members.
11.2 In the event of an emergency as defi ned below (“Emergency”), the following accelerated procedure may be applied.
Should the Board of Directors fail to convene the Extraordinary General Shareholders’ Meeting, the Statutory Auditors may do so.
(c) Amount deducted from the ceiling decided in resolution No. 10 of the General Shareholders’ Meeting of May 21, 2013 (€1.5 bn).
The table below shows the number and percentage of shares held as treasury shares at December 31, 2012 and December 31, 2013.
In a decision taken on July 25, 2013, the Chief Executive Offi cer of Natixis acknowledged the implementation of the capital increase of €13,503,408 through the issue of 8,439,630 new shares with a nominal of €1.60, which breaks down into €13,503,408 in nominal value and €10,127,556 in issue premiums, and amended the bylaws accordingly.
In addition, according to the decisions made at the Ordinary General Shareholders’ Meeting on July 31, 2013, a special dividend of 65 (sixty-fi ve) euro cents per share was paid out following the Banque Populaire banks and Caisses d’Epargnes’ purchase of the Cooperative Investment Certifi cates (CCIs) held by Natixis.
Fixed compensation €800,000 Gross fi xed compensation in respect of 2013. Laurent Mignon’s gross annual fi xed compensation in respect of his offi ce as CEO has remained unchanged since he took offi ce.
V individual qualitative targets (30%), associated in particular with the defi nition of the strategic plan in line with that of BPCE, the development of cooperation with the Groupe BPCE networks, and the implementation of plans aimed at adapting the business lines and support functions to the objectives of the Operational Effi ciency Plan.
Finally, resolution twelve relates to the granting of the powers required to complete the legal formalities and publications relating to ordinary and extraordinary business.
The maximum purchase price under this resolution will be seven (7) euros per share (or the equivalent value of this amount on the same date in any other currency). This maximum price applies only to purchases decided from the date of this meeting and not to forward transactions entered into by virtue of an authorization given at a previous General Shareholders’ Meeting and providing for purchases of shares subsequent to the date of this meeting. The shareholders delegate to the Board of Directors, in the event of a change in the par value of the share, capital increases by capitalization of reserves, free share allocations, splitting or reverse-splitting of shares, distribution of reserves or of any other assets, redemption of capital, or any other transaction affecting the share capital, the power to adjust the maximum purchase price indicated above so as to take into account the impact of these transactions on the share value.
e) Training V Policy application V The total number of training hours G4-LA9 54
V Energy consumption and measures taken to improve energy effi ciency and the use of renewable energy sources
V In relation to jobs and regional development V Upon surrounding and local communities G4-24, G4-26 63