Our insurance businesses continued to expand activities we developed new products and services operate across the entire value chain, drawing on our
Despite a complex economic and political backdrop, Natixis is on target to meet the goals set out in our New Dimension plan, which provides our roadmap solutions, while at the same time remaining agile and
≈ €6bn Free capital Following Natixis’ plans to sell its Factoring, Sureties and Guarantees, leasing, Consumer Finance and Securities Services business lines to BPCE S.A.
At December 31, 2018, Corporate & Investment Banking (CIB) comprised 2,423 employees (FTEs) in 28 countries around the world. 52.1% of the employees were located in France, and
Resulting from the merger of the Equity Finance (Equity Derivatives) and Securities Financing group (Fixed Income) teams, Global Securities Financing aims to promote dialog with clients in order to provide them with multi-underlying and multi-product solutions. With 65 employees in Paris, London, Frankfurt, New York, Hong Kong and Tokyo, Global Securities Financing’s primary areas of expertise are collateralized funding and collateral management (repos, securities lending/borrowing, etc.), repo market-making and credit and sovereign securities lending/borrowing, and index (equity) market-making as well as a Solutions Department. The pooling of expertise facilitates the development of innovative hybrid solutions.
Global Markets Research received a number of awards recognizing the expertise of its teams and their commitment to their clients. Euromoney ranked it no. 4 for Fixed Income Research and No. 1 across seven categories: Consumer Products & Retail, Corporate Hybrid Bonds, Covered Bonds & Pfandbriefe, Green Bonds/SRI, Credit Strategy, Supranational & Agencies, and Securitization & ABS. This is the first time that Natixis has secured the lead position in the Credit Strategy category, which is known as the most competitive group (source: Euromoney Fixed Income Survey 2018).
With 40 years’ experience in the sector, Natixis is one of the biggest players in aviation worldwide and finances nearly 4% of the global fleet. It covers all types of assets (medium/long-haul, regional), and all manufacturers. It caters to airlines and aircraft leasing companies, with strong growth in the latter client category, including a first-time deal for the Dublin-based company SDH Wings involving a $295 million facility to finance the acquisition of a portfolio of six aircraft.
Natixis joined Marco Polo, a consortium bringing together a global network of banks and R3 and TradeX that allows businesses to manage and finance their trade and supply chain finance transactions.
Operating on the principal European, American and Asian markets, Natixis advises and supports all categories of issuers (corporates, financial institutions, sovereigns/supranationals/ branches), helping them obtain financing on the euro and foreign-currency bond markets (£, $, ¥), and particularly in the green bond, investment grade, covered bond, high yield, hybrid and private placement segments.
expiry date of the financial guarantee is the date from which Natixis is no longer required to pay over to BPCE the sums recovered on assets in the guaranteed portfolio having defaulted. It post-dates the expiry date of the guarantee by 15 years.
In line with Groupe BPCE’s “Together” and “Growing Differently” projects, the 2018-2020 plan maintained its goal of further increasing synergies with the Banque Populaire and Caisse d’Epargne networks. It is supplemented by the strong ambition to pursue an innovation and digitalization strategy to make the businesses 100% digital by 2020.
The PERCO collective pension plan continued to grow, with a further increase of nearly 6% in the number of savers holding assets in a PERCO and assets under management showing firm resistance (+3.2%) despite a fall in the markets in the final quarter. The market share of PERCO accounts under management was 28.6% (source: AFG at June 30, 2018).
Natixis Payments signed a partnership agreement with fintech Transferwise that will make it possible for individual customers of the Banque Populaire banks and Caisses d’Epargne to use their mobile banking app to transfer money to more than 60 countries at the best possible exchange rate. This was a first for Europe.
The new tag line is intended as a clearer, more engaging motto. It underscores the Group's commitment to trade and commerce, as levers for wealth creation and stability. The slogan also captures the Group's fundamental commitment to helping companies grow.
Created in November 2007, the Natixis Shareholders’ Club had 15,082 members at December 31, 2018, the majority of whom are e-members. Membership of the Shareholders’ Club is open to any shareholder who holds at least one registered or bearer share.
The Committee then divided into groups to work on replacinga the 2011 glossary of key financial terms. This workshop was a response to requests made by Consultative Committee members during the self-assessment of the work carried out in 2017.
Nearly 400 shareholders attended in person and nearly 7,000 shareholders voted prior to the meeting via the Votaccess platform.
At the 2018 Agefi Awards, Natixis was awarded the Shareholder Prize for shareholder democracy, information transparency and communication quality in the CAC 80 companies category. This is the first time that Natixis has received this prize, which honors the work of the Individual Shareholder Relations and Corporate Governance teams. The award recognizes: the existence of a Shareholders’ Consultative Committee;j the organization of information meetings for shareholders;j the AGM convening notice and its translation into English;j the existence of a user-friendly space on the website dedicated to the AGM;j separate resolutions for each related-party agreement;j the use of Votaccess by the Company;j the publication of a summary of the AGM on the Company’s website;j the publication of the Q&A session at the meeting;j the availability of a video recording of the AGM on the Company’s website.j
CORPORATE GOVERNANCE Natixis Governance at March 1, 2019 39Natixis Registration Document 2018
Natixis shares held: 18,828 Address: 30 avenue Pierre Mendès France 75013 Paris
Member of the BPCE Supervisory a Board (since 27/06/2012) � (until 19/05/2015)
Member of the Board of Habitat en a Région (since 2013) � (until 14/12/2016)
Key advisory skills: expertise in business administration, with in-depth knowledge of retail banking, the regional economy and French overseas territories.
Member of the Board of: Crédit Foncier de France (since October 2009),a BPCE International et Outre-Mer (since 05/08/2013)
Permanent Representative of CE Holding Promotion, Member of the Boarda of Habitat en Région Services (from 2016 to12/11/2018)
Permanent Representative of CERA, a Member of the Board of Compagnie des Alpes(1) (from 18/10/2012) � (until 16/02/2015)
Permanent Representative of a Metropole Télévision(2), Member of the Shareholders’ Committee of Multi 4 SAS(2) (from 2006 to 15/09/2014)
Permanent Representative of M6 a Publicité(2), Chairman of the Board of Directors of: M6 Créations SAS(2) (since15/09/2014) � (until 02/01/2015)
“In controlled companies, independent directors should account for at least a third of Board members.”
Independent directors account for 26.6% of Board members. Henri Proglio has been a member of the Board of Directors (or the Supervisory Board) since November 17, 2006. Consequently, as of November 17, 2018, Henri Proglio could no longer be considered an independent director based on the independence criteria used by the Company. The Board of Directors and Appointments Committee therefore began the process for selecting a new independent director. This process was still ongoing at the time this report was prepared. Henri Proglio has confirmed he will stop performing his duties as a Board member as soon as his successor is chosen.
The Chief Risk Officer may not be relieved of his duties without the prior agreement of the Board of Directors. Where applicable, he may raise this point directly with the Board of Directors; is required to issue an opinion before the Chief Executivem) Officer or the Deputy Chief Executive Officers can accept any offices outside the Group.
Among these Internal Rules, which were last amended on February 9, 2017, particular attention should be drawn to the following provisions: circumstances requiring the Board of Directors’ priora authorization: the extension of Natixis’ activities to include new corej businesses not currently exercised by the Company, the appointment or dismissal of the CEO or, wherej applicable, one or more Deputy CEOs, any acquisition or increase in shareholdings, as well as anyj investments, divestments or the formation of joint ventures by Natixis or any of its main subsidiaries, involving an amount in excess of €100 million, in the event that the Group’s structure is modified, any asset transfers, mergers or spin-offs in which Natixis isj involved; criteria used to determine whether members of the Board ofa Directors are “independent”: An independent director is a person who has no ties with the management, Company or Group of a nature liable to compromise their freedom of judgment or create a conflict of interest with the management, Company or Group.
In addition, with respect to the assessment of the Board of Directors’ work, the internal rules specify that, at least once a year, an agenda item will be devoted to evaluating the Board’s operation, an account of which will be included in Natixis’ annual report (for 2018, see point 2.3.1.4 “Assessment of the Board’s work in 2018”).
In addition, all directors must receive training by attending, where necessary, the training modules provided by the Company (see Section 2.3.1.5).
At its February 12, 2019 meeting, the Board of Directors reviewed the terms and conditions of “Project Smith,” i.e. Natixis' proposed sale of its Specialized Financial Services division's Securities & Guarantees (CEGC), Leasing (Natixis Lease), Factoring (Natixis Factor), Consumer Finance (Natixis Financement) and securities custody/account administration (EuroTitres) businesses to BPCE. It also reviewed the draft agreement for the sale by Natixis to BPCE of all shares held by Natixis in CEGC, Natixis Lease, Natixis Factor and Natixis Financement (the “Disposal Agreement”) and the agreement for the sale by Natixis to BPCE of EuroTitres' goodwill (the “EuroTitres Agreement”). After this review, the Board authorized Natixis to sign the Disposal Agreement and the EuroTitres Agreement, including their appendices.
Some directors believe that the Board's handouts could include a summary that highlights the most noteworthy points, as is the case for the Audit and Risk Committees.
Two of the five members are independent members (Catherine Pariset and Bernard Oppetit). Note that the opinions and recommendations of the Risk Committee are adopted if the majority of members present, including the Chairman, vote for them.
At the proposal of the Chairman, the Risk Committee may, if deemed appropriate by the Committee and after consulting the Chairman of the Board of Directors, invite to its meetings any Natixis manager (including managers of one of the main subsidiaries or the Chairman of its Risk Committee) who is able to shed light on issues handled by the Risk Committee. It can also invite the Chief Financial Officer, the Chief Risk Officer, the Corporate Secretary, the Natixis Head of Internal Audit, the BPCE Head of Inspection Générale, and Natixis’ Statutory Auditors. The Chief Risk Officer, the Compliance Officer, and the Natixis Head of Internal Audit have permanent direct access to the Risk Committee.
Compliance Monitoring of compliance risks / Compliance control activity and resultsa
The Strategic Committee is made up of all the directors as well as the members of the Senior Management Committee of Natixis.
In the event of the absence of the Chief Executive Officer, the other executive managers will ensure business continuity until the Board of Directors appoints a new Chief Executive Officer based on a recommendation by the Appointments Committee.
Members of the Natixis Board of Directors include BPCE (Natixis’ main shareholder) and employees or individuals holding other jobs within Groupe BPCE, particularly in the Caisse d’Epargne and the Banque Populaire banks. Natixis and its subsidiaries maintain business relations with BPCE and the entities of Groupe BPCE. Furthermore, members of the Natixis Board of Directors include independent directors belonging to third-party groups that can maintain banking or business relations with Natixis or its subsidiaries.
Laurent Mignon’s fixed compensation for 2018 was €960,000 for the full year, or €400,000 for the period from January 1 to
For fiscal year 2019, the criteria for determining the annual variable compensation approved by the Board of Directors on February 12, 2019, following a review by the Compensation Committee, and which will be put to a vote at the General Shareholders’ Meeting on May 28, 2019, are as follows: Rules for determining variable compensation for 2019
Corresponding to the value of the shares on the allocation date, for a fair value of €47,460 for 2018 and €99,305 for 2017.(b)
In respect of BPCE and its subsidiaries 2,400 2,400 1,800 1,800
Name of executive corporate officer No. and date of plan Number of shares that became transferable during the period Vesting conditions
Executive corporate officers Yes No Yes No Yes No Yes No
From Jan. 1 to June 1: €452,734 From June 1 to Dec. 31: €528,190
The following targets were set for 2018: quantitative targets (70%), of which 25% is based on the financial performance in relation a to the Groupe BPCE budget (net revenues [4.2%], net income (Group share) [12.5%] and cost/income ratio [8.3%]) and 45% is based on the financial performance of Natixis (net revenues [11.25%], net income (Group share) [11.25%], cost/income ratio [11.25%] and Return on Tangible Equity [11.25%]); individual strategic targets (30%), 15% of which related to the implementation of the a 2018-2020 strategic plan; the three other strategic targets, each assigned a weight of 5%, being related to oversight in terms of supervision and control as provided for in regulations (including the implementation of the RAF and the activation of the threshold breach remediation process); the implementation of Natixis transformation; and managerial performance assessed with regard to the ability to anticipate developments, make decisions and lead the Group, and manage executive officers.
Thus, a deterioration in market conditions or in the economic or political environment affecting certain countries or business sectors of Natixis’ counterparties could lead to a substantial increase in losses and provisions for losses and a deterioration in the provision for credit losses for Natixis. The occurrence of one or more of these events could have a material adverse effect on Natixis’ business, results and financial position.
The valuation adjustments include a component that reflects the credit risk inherent in Natixis’ own debt. The additional fair value adjustments for the derivatives portfolios take into account, in particular, the credit quality of the counterparty for the derivatives portfolios shown on the asset side of Natixis’ balance sheet and the fact that Natixis may fail to recover some or all the market value of these portfolios.
Compliance risk is defined as the risk of a legal, administrative or disciplinary penalty, but also of financial loss or reputational damage, that results from a failure to comply with the legislative and regulatory provisions, codes of conduct and standards of good practice specific to banking and insurance activities, whether national or international.
The Compliance Department performs permanent second-level controls mainly in the following areas: customer protection, professional ethics and compliance, market abuse and financial security. At December 31, 2018, 3,715 second-level controls were assessed. (For more information on Compliance and on ITSS-BC, refer to section 3.2.8)
In terms of IT Systems Security and Business Continuity (ITSS-BC), the department’s main role is to define and monitor security standards (see section 3.2.8). The second-level control plan has two parts, one shared with Groupe BPCE and another specific to Natixis, and is the result of a risk-based approach. The controls are carried out based on the first-level controls reported by the contributors (Information Systems Security Department or the appropriate security representatives for authorizations). ITSS-BC performs around 6,000 second-level controls every year.
Mandatory e-learning for all employees was established. The platform was operationally implemented through the definition of performance indicators and dashboards adapted to each entity.
The internal rating system is an integral part of Natixis’ credit risk assessment, monitoring and control mechanism. It covers all the methods, processes, tools and controls used to evaluate credit risk. It takes into account fundamental inputs, including probability of default (PD), which corresponds to a rating, and loss given default (LGD), which is expressed as a percentage.
For outstandings measured using the standardized approach, Natixis uses external rating systems of the agencies Fitch Ratings, Standard & Poor's and Moody's.
Main internal models: PD, LGD, CCF and volatility discounts (EU CRE)
LGD Sovereigns 1 Quantitative model based on internal and external defaults. The assessment of LGD during periods of decline is included insofar as all defaults are included for the LGD model.
It draws on a structure of preparatory Committees that are jointly steered by the Risk division and each of the bank’s business lines.
New scenarios were reviewed in 2018 and presented to the Global Risk Committee as well as to the Senior Management Committee. These internal credit stress test scenarios are defined based on: macroeconomic assumptions prepared in collaboration witha the economic research and country risk teams and with Groupe BPCE, and comprising three scenarios for the 2019-2021 period: a baseline scenario and its practical adaptation via the bank’s provisioning policy, and two credit scenarios (a tech stock crisis and a sharp interest rate hike scenario); specific business scenarios to factor in risks that would nota have been covered by the macroeconomic scenarios. Standard scenarios are therefore defined (an average of three per business) based on business types (Banks, Corporates, Insurance, Aerospace, etc.).
Furthermore, the liquidity risk is managed as part of the global monitoring of the Group’s activities, particularly with the help of ALM indicators subject to limits, such as liquidity gaps and hedging ratios.
These measurements give a snapshot of VaR and help identify potential losses in each business, based on a pre-determined confidence level (99%) and time period (1 day).
Correlation assumptions are based on the rating of each issuer’s creditworthiness within the IRC horizon (one year). The simulation process is based on intra-sector correlation inputs.
Overall stress tests are subject to continuous review. They are performed daily and can be grouped into two categories: historic stress tests consist of reproducing sets of changesj in market parameters observed during past crises in order to create an ex-post simulation of the P&L changes recorded. While stress tests do not have any predictive value, they do make it possible to gauge the exposure of the portfolio to known scenarios. There are 12 hypothetical stress tests covering the most significant events since 1987, the year of the stock market crash, including the Lehman Brothers collapse in the 2008 period and the terrorist attack of September 11, 2001, through to the sovereign debt crisis in hypothetical stress tests are used to simulate changes inj market parameters for all the activities, based on plausible assumptions regarding one market’s predicted response compared with another’s, depending on the nature of the initial stress. Stresses are determined through a joint effort involving the Risk division, the front office and Economic Research. A set of seven scenarios have been defined: fall in stock market indices combined with a flattening of1. the yield curve and an increase in credit spreads; strong rise in European interest rates in an inflationary2. environment; failure of a financial institution with a rise in credit3. spreads and interest rates and a moderate fall in equity markets; commodity crisis based on a scenario of disruption to4. supply due to geopolitical events; emerging market crisis reflecting the consequences of a5. sudden withdrawal of capital from an emerging country during a global economic downturn (higher refinancing costs, stock market crash and depreciation of the currency against the US dollar); failure of a high-profile corporate based on a credit market6. shock; liquidity crisis characterized mainly by a sharp widening of7. European interbank spreads, a widening of the liquidity spread and higher “peripheral” yields.
The aim of this policy is twofold: ensure the reliability of the result announced by applying thea principle of prudence; protect Natixis from adverse events that cannot be easilya hedged or that are non-hedgeable.
the support and control functions under the responsibility ofa an operational risk manager covering—in addition to the
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 144 Natixis Registration Document 2018
In 2018, nearly 3,800 incidents that occurred in the year (representing 7,400 single incidents) were reported a single incident potentially comprising several individual incidents) were entered into the recording tool by the Natixis business lines. The application of reporting threshold has helped to reduce the number of declarations made since 2016, particularly in the Specialized Financial Services and Asset & Wealth Management business lines and the cross-business functions.
RISK FACTORS, RISK MANAGEMENT AND PILLAR III Risk management 147Natixis Registration Document 2018
Under its annual medium-term funding program in 2018, Natixis raised €11 billion net in resources with a term of more than one year (net the value of buybacks and calls) versus €10.6 billion in 2017. 29% of this program was achieved via structured private placements, with the remainder predominantly provided by BPCE as part of the Group’s medium-term funding policy approved by the Group ALM Committee.
next two years. Furthermore, the Fed will probably have to soften its program to shrink its balance sheet initiated at the end of 2017 in the event of a major economic slowdown.
On the European credit market, core banks’ senior unsecured spreads trended upwards throughout the year with an acceleration from November onwards. The banks’ significant refinancing needs in 2019, particularly in anticipation of the maturity of the first TLTRO II bonds in June 2020, explain the widening of spreads. The spread on five-year senior unsecured debt issued by French banks ended the year at Euribor3M +56 bp, an increase of +41 bp. The non-preferred debt (MREL/TLAC eligible) for these same banks was less resilient, with the spread widening +70 bp.
Finally, Natixis analyzes the sensitivity of net interest income (ΔNII) to changes in market interest rates using NII stress tests. At December 31, 2018, the sensitivity of the Bank’s NII to changes in interest rates was as follows: NII SENSITIVITY AND ECONOMIC VALUE OF EQUITY (IRRBB—TABLE B)■
portfolio’s economic value for a 200 bp decline in interest rates at December 31, 2018. The sensitivity of Natixis’ NII to interest
The Compliance Department is equipped with a set of tools to cover all the areas within its remit, namely: behavioral analysis tools, used in conjunction with KYC tools,a to detect money laundering and internal fraud and prevent terrorist financing; data-comparison systems to verify client databases and filtera transactions to ensure compliance with embargoes; tools to track sensitive transactions, keep insider lists, managea conflicts of interest and detect instances of market abuse.
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIRisk management 158 Natixis Registration Document 2018
Natixis Assurances is the Insurance division of the Natixis group and is divided into two businesses: the personal insurance business, focused on developinga portfolios of life insurance and endowment policies for investment and retirement purposes, as well as personal protection insurance portfolios; the non-life insurance business, focused on developinga portfolios for auto and multi-risk home insurance, personal accident insurance, legal protection, healthcare and property and casualty insurance.
Net exposure at 31/12/2018 AAA AA A BBB BB B CCC CC
Cofinpar Full consolidation Equity method Credit insurance and related services France
Coface Canada – Branch (Coface Europe) Full consolidation Equity method Credit insurance and related services Canada
Coface Singapore – Branch (Coface Europe) Full consolidation Equity method Credit insurance and related services Singapore
Fructifonds Profil 9 Full consolidation Equity method Insurance investment mutual fund France
Residual amounts deducted from Additional Tier 1 capital with regard to deduction from Common Equity Tier 1 capital during the phase-in period pursuant to Article 472 of Regulation (EU) No. 575/2013 0
54a o/w new holdings not subject to phase-in arrangements 0 54b o/w holdings existing before January 1, 2013 and subject to phase-in arrangements 0
Institution specific buffer requirement (CET1 requirement in accordance with Article 92 (1) (a) plus capital conservation and countercyclical buffer requirements, plus systemic risk buffer, plus the systemically important institution buffer (G-SII or 0-SII buffer), expressed as a percentage of risk exposure amount) 1.939% CRD 128, 129, 130 65 o/w capital conservation buffer requirement 1.875%
Uncertainty with respect to liquidation o/w: 181 23 3 15 222 210 12
Deferred tax assets that rely on future earnings (excluding temporary differences) 142 2
Other, including prudential adjustments and phase-in arrangements 127 0 o/w impact of changes in phase-in rate 79 0 o/w other impact of changes in base 48 0
Market risk was down by a slight €0.1 billion at €9.6 billion at
(in millions of euros) 31/12/2018 31/12/2017 1 Total consolidated assets reported in the financial statements 495,496 519,987
1 On-balance sheet items (excluding derivatives and SFTs, but including collateral) 238,045 267,356 2 (Asset amounts deducted in determining Tier 1 capital) (4,941) (4,401)
RISK FACTORS, RISK MANAGEMENT AND PILLAR III Basel 3 Pillar III disclosures 183Natixis Registration Document 2018
Other exposures secured by mortgages on immovable property 37 51 88
3 RISK FACTORS, RISK MANAGEMENT AND PILLAR IIIBasel 3 Pillar III disclosures 184 Natixis Registration Document 2018
RISK FACTORS, RISK MANAGEMENT AND PILLAR III Basel 3 Pillar III disclosures 195Natixis Registration Document 2018
Unsecured wholesale funding, of which: 71,716 65,730 69,907 66,177 57,069 52,070 55,073 51,624
Article 435 (1) (EBA) MRA – Qualitative disclosure requirements related to market risk 135 to 138
Art. 442 c) NX03 – Exposures and EAD and by Basel exposure class 133
Article 453 (f) and (g) (EBA) EU CR3 – Credit risk mitigation techniques – Overview 184
Article 442 (e) (EBA) EU CRB-D – Concentration of exposures by industry or counterparty type 189
(EBA) EU CR8 – RWA flow statements of credit risk exposures under IRB
Article 455 (e) (EBA) EU MR2 – A – Market risk under internal models approach 210
Article 49 1) and 4) (EBA) EU INS1 – Non-deducted holdings in insurance undertakings 178
Credit risk exposure and credit risk mitigation under SA (EU CR4) 194
Standardized approach – CCR exposures by regulatory portfolio and risk weight (EU CCR3) 201
In addition, Asset Management pursued the development of its multi-boutique model.
At the PFI Awards, Natixis was named the 2018 Americas Bank of the Year, as well as Best Infrastructure Bank: Mexico by Latin Finance.
With its international network of origination teams, Natixis consolidated its expertise and global leadership in the euro-denominated covered bonds segment by being voted “Best Euro Lead Managers for Covered Bonds” (source: GlobalCapital magazine). As an active player in the energy transition, Natixis also operates in the green bond segment. It has also managed many dual-tranche issues.
In Mergers & Acquisitions, Natixis made strategic investments in three independent M&A consulting firms that are leaders in their respective market segments: Fenchurch Advisory Partners
In asset allocation, Natixis Assurances made a proactive and tangible commitment to combat climate change and announced that it will be aligning its investment policy with the 2°C climate scenario set in the Paris Agreement. This means that, every year, Natixis Assurances will devote 10% of its investments to green assets, with a target of 10% of total investments in green assets by 2030. It invested more than €350 million in green bonds in 2018. With this policy, it intends to encourage and prioritize companies that contribute to the energy and ecological transition.
Ongoing innovation:a after being the first French banking group to offer Apple Payj to its retail customers, Groupe BPCE extended its offering to include Samsung Pay and Garmin Pay, doubling the volume of mobile payments in just one year (9.2 million in 2018), thanks to Natixis Payments’ investments over the years,j Groupe BPCE also became the first French banking group to offer Instant Payment to their customers, maintaining the Group’s lead in innovation and technology.
Change in the value of goodwill was nil in 2018 as it was in 2017.
At 15.6%, ROE improved by 2.9 points from December 31, 2017.
ROE after tax totaled 9.9% in 2018, down 3.6 points compared with 2017 (13.5%). Excluding non-recurring items and the impact of equity derivatives in Asia, ROE after tax amounted to 13.1% in 2018, since CIB’s effective tax rate fell in 2018, reflecting the impact of the tax reform in the US and the company's control of its risk-weighted assets (RWA).
Factoring generated €60.8 billion in factoring revenues in France, up 11%, with Natixis Factor boasting market share of
At €27.5 billion, AuM for employee savings plans continued to increase with annual growth of 6%.
The loss ratio net of reinsurance was 45.1% compared with 51.4% in 2017, i.e. an improvement of 6.2 points thanks to the efficiency of claims expense management plans and an improved economic climate in the first half of the year, although the risk environment normalized in the second half of the year.
Excluding these items, net revenues stood at +€49 million in 2018 versus +€43 million in 2017, comprising for the most part revenues from Treasury and ALM operations.
At December 31, 2018, Natixis’ gross operating income stood at +€1,760 million, a +€406 million increase compared with December 31, 2017, due to a €472 million increase in net revenues, less a €66 million increase in operating expenses.
Natixis’ financial statements at December 31, 2018, showed positive net income of €1,834,308,793.77 and, taking into account retained earnings of €1,625,059,649.69, showed distributable earnings of €3,459,368,443.46.
Central banks are nevertheless expected to continue tightening monetary policies, although the Fed’s approach may prove more gradual than initially planned—only one interest rate hike is expected in 2019 (+25 bp), since the latest data from 2018 suggests a marked slowdown in the US manufacturing sector. For the European Central Bank, 2019 will be a pivotal year, given the end of its net asset purchase program (APP) in December 2018 and the increasing likelihood that it will engage in the first bout of monetary tightening since April 2011.
Revaluation of own credit risk on financial liabilities designated at fair value through profit or loss 384 (185)
Revaluation of hedging derivatives of equity financial assets recognized at fair value through other comprehensive income 0 0 0
TOTAL CHANGES IN UNREALIZED OR DEFERRED GAINS OR LOSSES 297 (20) 277
Financial assets at fair value through profit or loss 8.1 214,086 225,663 184,497
Shareholders’ equity at December 31, 2017 after appropriation of income 5,020 5,956 2,232 (25) 6,159 First-time application of IFRS 9 (h) (32)
Cash flow on assets and liabilities held for sale (350) (1)
Scope of the structured entities 5.1 with which Natixis has dealings 271 Interests held in non-consolidated 5.2 structured entities 274 Non-consolidated structured entities 5.3 in which Natixis is involved only as a sponsor 276
Loans and receivables due from banks and similar items at amortized cost
Financial liabilities designated at fair value through profit or loss 144,885 63,620 12,816 221,321
Loans and receivables Loans and receivables due from banks at amortized cost
Current accounts overdrawn Loans and receivables due from banks at amortized cost
As Natixis is a financial conglomerate, it applies this provision to its insurance entities, which will continue to be accounted for as per IAS 39 in Natixis’ consolidated financial statements until January 1, 2022. The main entities affected by this measure are CEGC, the Coface insurance subsidiaries, Natixis Assurances, BPCE Vie and its consolidated funds, Natixis Life, BPCE Prévoyance, BPCE Assurances and BPCE IARD (the list of the entities affected is provided in Note 19).
The amendment “Annual Improvements to IFRSsa 2014-2016 Cycle” adopted by the European Commission on February 7, 2018 with mandatory application from January 1, 2018. This amendment is part of the annual improvement process that aims to simplify and clarify international accounting standards. The following standards were modified: IAS 28 “Investments in Associates and Joint Ventures”, IFRS 1 “First-time Adoption of International Financial Reporting Standards”, and IFRS 12 “Disclosure of Interests in other Entities”. This amendment had no impact on Natixis’ financial statements; mandatory application from January 1, 2018. This amendment clarifies the accounting treatment of share-based payment transactions with details of the criteria to be taken into account when determining fair value, the impact of tax withholdings on plans and the accounting treatment to be applied if the terms and conditions of share-based payment plans are changed. This amendment had no impact on Natixis’ financial statements; The amendment to IFRS 2 “Share-based Payment” adopteda by the European Commission on February 26, 2018 with
Natixis has chosen the modified retrospective method for the first-time application of this standard. This method will involve valuing lease liabilities based on residual payments by using the discount rates appropriate to the residual terms of the leases. The option of not recognizing contracts with a residual term of less than 12 months at January 1, 2019 in the balance sheet will be applied and initial direct costs will be excluded from the measurement of the right of use. Rights of use will be measured by referring to the lease liability amount determined on that date.
Given Natixis’ activities, IFRS 16 will be applied, to a very large extent, to real estate assets leased for use as offices. Overall, Natixis estimates that rights of use and lease liabilities will amount to less than €1.4 billion on the first-time application date; IFRIC interpretation 23 “Uncertainty over Income Taxa Treatments” adopted by the European Commission on October 23, 2018 with mandatory application from January 1, 2019. This interpretation sets out the procedures for recognizing and measuring payable and deferred tax if there is uncertainty over the tax treatment applied. The method that provides the best projection of the tax uncertainty’s outcome should be used. Natixis has begun an analysis of its approach to identifying and documenting tax uncertainties and risks, but at this stage it is not expecting a significant valuation impact; IFRS 17 “Insurance Contracts”, published by the IASB ona May 18, 2017, will replace IFRS 4 “Insurance Contracts”. Initially applicable on January 1, 2021, with a comparison at January 1, 2020, this standard should only come into force from January 1, 2022. During its meeting on November 14, 2018, the IASB in fact decided to defer its application by a year, as clarifications still need to be given regarding key aspects of the standard. It was also decided to align the schedule for the temporary exemption from IFRS 9 for insurers so that it coincides with the application of IFRS 17 from
Significant influence is the power to participate in the financial and operating policy decisions of the corporate entity owned without having control over such policies. A significant influence is presumed to exist if Natixis directly or indirectly owns at least 20% of the voting rights of the Company in question. IAS 28 defines companies over which a significant influence is exercised as associates. These are consolidated using the equity method in accordance with the same terms as those applicable to joint ventures (see above), with the exception of Private Equity investments, which Natixis classifies under financial assets at fair value through profit or loss, in accordance with the option available under IAS 28.
Gains or losses on disposals of associates are presented in “Gains or losses on other assets” in the consolidated income statement.
Combinations between entities or operations under joint control are understood to be combinations in which several operations are combined and all the interested parties (entities or operations) are ultimately controlled by the same party or parties for a relatively long period before and after the combination. Such combinations do not fall within the scope of IFRS 3R.
Natixis elected to use the option available under IFRS 1 on first-time adoption, namely to transfer the cumulative balance of the translation adjustments existing at January 1, 2004 to consolidated reserves. If a foreign entity is subsequently sold, the gain or loss on the disposal will include only those translation gains or losses arising after January 1, 2004.
Consolidation in the second quarter of 2018 of Natixisa Alternative Holding Limited following the acquisition by the latter of Fenchurch Partners LLP, an advisory firm specializing in mergers and acquisitions, itself fully consolidated; Consolidation in the second quarter of 2018 of Investima 77a following the acquisition by the latter of Vermilion Partners, an advisory firm specializing in mergers and acquisitions. Full consolidation of the following five entities: Vermilion Partners (Holdings) Limited, Vermilion Partners Limited, Vermilion Partners (UK) Limited, Vermilion Partners LLP and Vermilion (Beijing) Advisory Company Limited; Creation on April 3, 2018 and consolidation of the securitizationa vehicle Eole Collateral.
Risks associated with interests in joint 4.4.4 ventures and associates held by entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are managed by means of contractual agreements.
In addition, Natixis is rarely a shareholder in such entities and, when it is, it generally holds a minority interest. The entities for which Natixis is the majority shareholder are limited in number and do not have a material impact on the consolidated financial statements.
The size of structured entities equates: for Securitization, to the total issues on the liability side of thea balance sheet; for Asset Management, to the fund’s net assets;a for Structured Financing, to the amount of the remaining loana outstandings due to banks in the pool (drawn outstandings); for other activities, to the total assets.a
Of which €0.2 million at January 1, 2018 for the SFS business lines (excluding CEGC) recognized in non-current assets held for sale as at (a) December 31, 2018 (see Notes 3.6 and 6.9).
Financial liabilities at fair value through profit or loss (derivatives) - - - - -
Interest accrued or received on debt instruments is recorded in income under “Interest and similar income” using the effective interest rate method. In case of sale, changes in the fair value of debt instruments are transferred to income under “Gains or losses on financial assets at fair value through other comprehensive income”.
IAS 17 also describes three indicators that individually or in combination could also lead to a lease being classified as a finance lease: if the lessee cancels the lease, the lessor’s losses associateda with the cancellation are borne by the lessee (capital loss on the asset, etc.) ; gains or losses from the change in the fair value of the residuala value accrue to the lessee; the lessee has the ability to continue the lease at a rent that isa substantially below the market rent.
The best case and worst case economic scenarios aim to represent the uncertainty surrounding the estimated economic variables in the central scenario (GDP, inflation rate, unemployment rate, yield curve, price of oil, French real estate, euro/dollar exchange rate and stock market and volatility indices). More specifically, these scenarios are developed, where possible, based on the variability between the various contributions to the market consensuses (maximum and minimum values contributed by the various banks operating in the market place for a given variable). If a consensus is not available for a variable, the best case and worst case scenarios are developed from the observed historical variability of the variable.
FINANCIAL DATA Consolidated financial statements and notes 289Natixis Registration Document 2018
Uncertainties related to Brexit effective withdrawal. Complex negotiations are under way to redefine the new economic relations between the United Kingdom and the European Union. The political and economic consequences of Brexit are still uncertain, however, and the uncertainties are increasing as the exit date approaches and the possibility of a hard exit without a deal takes shape.
Gains and losses on financial assets at fair value through other comprehensive 7.4 income
Provisions for impairment of financial assets (396) 246 (53) 6 (196)
Of which in 2018: +€20 million of provision write-backs for corporate tax refunds relating to non-consolidated entities and that are no longer (c) applicable, +€20 million of adjustments to provisions for tax risks written back following the completion of tax audits in 2018, and +€8 million of tax savings resulting from the offset of previously unrecognized tax losses against 2018 profits (€80.2 million at December 31, 2017).
The company Natixis S.A. was subject to an audit covering the 2008 to 2013 fiscal years, which resulted in the receipt of a reassessment notice in December 2016.
For the record, at December 31, 2017, under IAS 39, financial assets were designated at fair value through profit or loss when this choice provided more pertinent information or when these instruments incorporated one or more significant and separable embedded derivatives.
Some liabilities issued and recognized at fair value through profit and loss are covered by a guarantee. The effect of this guarantee is incorporated into the fair value of the liabilities.
Of which €2.6 million at January 1, 2018 for the SFS business lines recognized in non-current assets held for sale as at December 31, 2018.(b)
Amount of OCI for CFH transactions (38) 29 (0) 6 (3) 57
Financial assets at fair value through profit or loss 156,299 29,101 127,198 103,213 23,536 79,677
Hedging derivatives (assets) 306 306 o/w interest rate derivatives 306 306
Financial liabilities designated under the fair value option 26,711 3,726 22,800 185 o/w securities under the fair value option 22,132 21,950 182 o/w other financial liabilities under the fair value option 4,579 3,726 851 3
Long (15Y) callable range accrual note on fixed income and credit (default event)
Fixed-income securities under the fair value option 1,524 7 10 735 (467) (0) 5 (3) 1,811
Variable-income securities under the fair value option 756 46 (15) 41 (107) (0) 4 724
Sensitivity analysis of the fair value of financial instruments measured according to Level 3 – Assets and Liabilities
Securities held for trading 399 326 1 122 o/w variable-income securities 166 86
Securities under the fair value option 2 0 o/w fixed-income securities 2 0 o/w variable-income securities 0
The fair value of loans with an initial term of less than one year is considered to be the same as their carrying amount. This is also generally the case for financial assets with a term of one year or
FINANCIAL DATA Consolidated financial statements and notes 329Natixis Registration Document 2018
FINANCIAL DATA Consolidated financial statements and notes 333Natixis Registration Document 2018
Sources of deferred tax on non-recyclable OCI 40 38 23 454 57 (79)
Unimpaired assets for which expected credit losses are measured on a lifetime basis
Of which €270 million in contract assets (accrued income) at December 31, 2018.(a)
At December 31, 2018 and December 31, 2017, Natixis did not have any assets obtained by taking possession of guarantees on its balance sheet.
Of which +€10.8 million in goodwill recorded on the acquisition of Vermilion and +€36.6 million on the acquisition of Fenchurch.(b)
- the expiry of an EMTN issued in 2006 on January 20, 2017, for -€500 million; - the repayment of a loan from BPCE on December 7, 2017 for €40 million.
The table below presents the balances of financial assets and Likewise, delinquencies and non-performing loans are deemed to liabilities by contractual maturity in the balance sheet. have a “perpetual” maturity. Variable-income assets, derivative financial instruments for trading and hedging purposes as well as revaluations of components hedged or unhedged by financial assets and liabilities are considered as having a “perpetual” maturity.
Loans and receivables due from banks 7 1 10 8 1 0 27
When they are hedged, loans and receivables also include the fair value of the hedged component of assets classified in this category (fair value hedges).
The impairment criteria for non-amortizing securities categorized as available-for-sale assets are as follows: automatic impairment if there are unrealized losses of morea than 50% at the reporting date; automatic impairment if there are unrealized losses for a perioda of more than 24 consecutive months; case-by-case analysis of securities presenting unrealized lossesa of more than 30% at the reporting date; case-by-case analysis of securities presenting unrealized lossesa for more than six consecutive months.
FINANCIAL DATA Consolidated financial statements and notes 347Natixis Registration Document 2018
In the case of deferred profit-sharing assets, a recoverability test is carried out. Deferred profit-sharing may be recovered depending on the intention and ability of companies to steer future compensation of contracts according to resources. These are sensitive to: changes in the equity and bond markets;a changes in net inflows, which result from the commerciala appeal of policies and the propensity of policy holders to renew their contracts; available reserves and own resources within companies to holda assets for a period compatible with changes in liabilities and consistent with market cycles.
Loans and receivables due from banks 0 0 0 0 0 0 0 0
Available-for-sale financial assets 3,556 5 (3) (63) Available-for-sale securities—Equity investments 211 (1) 0 11 Other available-for-sale securities 3,345 6 (3) (74)
The amounts of the guarantees shown are those used under Basel prudential regulations to reduce capital requirements. Guarantees for insurance companies accounted for using the equity method in the prudential accounting scope are therefore excluded, as are exposures relative to these entities.
Market risk, overall interest rate risk, liquidity risk and structural foreign exchange 11.3 risk
The expected number of units at the vesting date is funded by equity swaps. *
b) Changes in recognized amounts on the balance sheet (Changes in actuarial liabilities)
Changes recognized directly in other comprehensive income with no recycling (14) 3 (10) 7 1 8
FINANCIAL DATA Consolidated financial statements and notes 369Natixis Registration Document 2018 d) Composition of plan assets
The main transactions between Natixis and related parties (BPCE and subsidiaries, Banque Populaire network including Banque Populaire banks and their subsidiaries, the Caisse d’Epargne network including the Caisses d’Epargne and their subsidiaries and all the affiliates consolidated using the equity method) are described below: (in millions of euros)
As a reminder, the amount of the CEO’s severance payment, combined with the non-compete indemnity if warranted, may not exceed the equivalent of 24 months of monthly reference compensation, and no severance benefit is to be paid in the event of gross negligence or willful misconduct, if he leaves the Company at his initiative to take another position, or changes his position within BPCE Group.
o/w fees paid to the Statutory Auditors in France for the certification of accounts 3,034 3,124 o/w fees paid to the Statutory Auditors in France for services other than the certification of accounts 259 32
NATIXIS INVESTMENT MANAGERS CAPITAL CORPORATION (FORMERLY NATIXIS IM CANADA INVESTMENT CORPORATION)* Asset Management
Vermilion Partners LLP (i) Mergers and acquisitions advisory services FC 51 51 Great Britain
Vermilion (Beijing) Advisory Company Limited (i) Mergers and acquisitions advisory services FC 51 51 China
AEW VIF INVESTORS, INC. (dd) Asset Management 100 100 United States
Ostrum AM (formerly Natixis Asset Management)* (ff) Asset Management 100 100 France
AEW EUROPE PARTNERSHIP Asset Management FC 60 60 60 60 Great Britain
AEW GLOBAL ADVISORS (EUROPE) LTD Asset Management FC 100 100 100 100 Great Britain
H2O ASSET MANAGEMENT Corporate member Asset Management FC 50 50 50 50 Great Britain
FINANCIAL DATA Consolidated financial statements and notes 389Natixis Registration Document 2018
NATIXIS US HOLDINGS INC. Holding company FC 100 100 100 100 United States
VEGA INVESTMENT MANAGERS Mutual fund holding 1818 IMMOBILIER Real estate operations FC 100 100 100 100 France
SELECTION 1818** (cc) Investment product distribution to IWMAs 100 100 France
COFACE CENTRAL EUROPE HOLDING Holding company FC 42 42 41 41 Austria
NATIXIS ALTAIR IT SHARED SERVICES (k) Data services 100 100 France
Change in registered company name in 2018.* French subsidiaries whose individual prudential oversight is performed based on Group consolidated ratios in accordance with the provisions of regulation ** (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013 relative to regulatory requirements applicable to credit institutions and investment firms. Structured entity.(a) Diluted during the first quarter of 2018 following a capital increase reserved for the founders and the implementation of a bonus share allocation for the (b) founders.
The application of IFRS 9 “Financial instruments” as of January 1, 2018 introduced significant changes in the rules for the classification and measurement as well as the impairment of financial assets, generating financial and operational impacts.
The determination of individual impairment losses and thea associated governance and validation system.
Please refer to Notes 6.23, 7.8, 7.10 and 8.17 to the consolidated financial statements for more details.
We took note of the status of ongoing proceedings and the main risks identified by the Natixis Group, mainly through regular discussions with management (and more specifically Natixis S.A.'s legal, compliance and tax departments) and by reviewing the documentation made available to us.
As part of its Corporate & Investment Banking activity, the Natixis Group holds on its balance sheet a significant portion of complex derivative financial instruments recognized at fair value.
The Natixis Group recognizes deferred tax assets at the reporting date in respect of tax loss carryforwards when it is considered likely that the tax entity concerned will have future taxable profits that tax loss carryforwards may be set off against, within a certain timeframe.
Commitments received from banks 8,743 7,056 35 Commitments on securities 8,212 10,231 35 Other commitments received 10,987 9,809
Employee benefits8. 412 Share-based employee retention and 9. performance recognition plans 412
The procedure for setting up the deposit and resolution guarantee fund was changed by a decree dated October 27, 2015. Contributions made to the deposit and resolution guarantee fund may be paid in the form of partner or association certificates and cash security deposits recognized as assets on the balance sheet and contributions (which are non-refundable in the event of a voluntary withdrawal of approval to operate) recorded in income as “Taxes other than on income” among other operating expenses.
Operating property, plant and equipment 532 62 (2) 1 593 other property, plant and equipment 364 34 (3) (1) 394
Total net obligation at January 1 39 44 34 84 201 47 96 32 111 286
Benefits paid over the period (1) (6) (2) (43) (52) (3) (5) (2) (38) (48)
Rate and duration before first redemption date Rate after first redemption date 2018 2017
At December 31, 2018, the share capital was composed of 3,150,288,592 shares, each with a par value of €1.60. All shares confer the same rights on their holders, except for treasury shares, which have no voting rights.
monitoring process overseen by the Risk function. This process involves: Monitoring of Natixis’ subsidiaries and branches in non-cooperative countries forms an integral part of Natixis’ risk local Risk Officers/functions that have a functional link to thea central Risk Control Department; specific reporting procedures that respect local constraints buta also comply with overall risk requirements.
The preparation of the consolidated financial statements also relies on: the use of a direct consolidation method, rolled out throughouta the Group, allowing for the analysis and control of the consolidation packages of each consolidated company via a formal review process; preparation of consolidated financial statements on a quarterlya basis. This allows for greater control over financial reporting within tight time frames; reporting and reconciliation of intra-group transactions at M-1a and then at M, where M is the reporting month, thus increasing the number of reconciliations and contributing to the preparation of quarterly statements; use of an automated control process for individual informationa provided by the consolidated entities through the use of consolidation packages that incorporate accuracy and consistency checks, which must be complied with before the data can be transmitted; individual analysis of all entries impacting consolidateda shareholders’ equity and the preparation of supporting documents for taxes, including proof of deferred taxes, for each consolidated entity, thus contributing to the substantiation of consolidated shareholders’ equity.
FINANCIAL DATA Internal control procedures relating to accounting and financial information 449Natixis Registration Document 2018 independent second-level controls under the hierarchicala authority of the Accounting and Ratios Department and the functional authority of the Compliance Department. The Regulatory and Accounting Review team, aside from managing the system, also performs its own controls, including the review of first-level controls; dedicated tools that allow for the automated reconciliation ofa account entries and centralization of control results using an internal application.
STRATEGIC OUTLINES AND 6.1 ORGANIZATION OF THE ESR POLICY 452 Natixis' business model6.1.1 452
Paris Action Climat partnership and 100 hectares” charter from the city of Paris
Also in 2018, Natixis adopted the Charter for Responsible Lobbying and Advocacy Activities with respect to Governmental Bodies and Officials, available on its website. ( conduite).
The process sets out a clear timeline, with: immediate acknowledgment of the report;a notification within 15 business days of the date ofa acknowledgment of whether the information reported is eligible for further investigation; notification within three months of the date of acknowledgmenta of the steps taken to process the information reported or, if this process has been completed, the action taken (or not taken) based on the information.
This pioneer strategy was rewarded by outstanding market and clients’ recognition in 2018. Natixis was in particular awarded
and ranks among the biggest asset management companies (€808 billion in assets under management at December 31, 2018), has pursued its pledge to take Environmental, Social and Governance (ESG) issues into consideration in the investment models its 26 affiliates develop autonomously. Recognition of ESG criteria, which have been an integral part of the investment policies of Ostrum AM and Mirova since their creation, is gaining ground in all of Natixis Investment Managers.
DNCA manages six funds with €505 million in assets under management incorporating ESG criteria (or 2.2% of total assets under management). They are part of the Beyond range and follow a two-step investment process: exclusion of issuers with ESR risks from the portfolio. This filtera meets the requirements set out in the government-recognized SRI certification; selection of issuers having a positive impact on the sustainablea economic transition.
Mirova manages three TEEC certified funds, with total assets under management of €1.3 billion: Mirova Europe Environmental Equity Fund, Mirova Green Bond–Global and Mirova-Eurofideme 3.
Natixis Car Lease has had electric and hybrid vehicles available for lease since its creation and at the end of 2018, 8% of its leased vehicles were electric or hybrid.
Particular attention is paid to companies in the sectors with the biggest positive or negative impact on the climate, namely energy, industry, construction and public works, transport, low carbon facilities and solutions.
The methodology was enhanced in 2018 to assess portfolio coherence with the climate scenarios set in the Paris Agreement(1), using: the CIA methodology;a climate scenarios from the Intergovernmental Panel on Climatea Change (IPCC); investment projections from the International Energy Agencya (IEA).
Natixis is part of a working group with other financial institutions ensure consistency in how it quantifies the carbon footprint of its seeking to establish industry-wide principles for calculating the different activities. These principles will provide a framework in carbon footprint of the portfolios managed by banks, insurers and which to establish detailed targets for reducing the carbon asset managers. Given the wide variety of its business lines, footprint as part of the international Science Based Targets for Natixis is particularly keen to find common principles that will Finance (SBTF) initiative.
BREAKDOWN OF THE NUMBER OF PROJECTS REVIEWED ■ BY GEOGRAPHIC AREA (2016-2018)
NON-FINANCIAL PERFORMANCE REPORT Managing environmental & social risks 481Natixis Registration Document 2018
In the interest of establishing lasting relations with its clients, the objective is to raise awareness among the business lines—before a credit decision is made—of all the situations that can give rise to reputational risk, and where necessary to consider appropriate measures.
In accordance with Article 173, Provision VI of the Energy Transition for Green Growth Act, establishing new ESG reporting obligations, certain Natixis subsidiaries have conducted extensive efforts to measure the carbon footprint of their portfolios.
The increase in water consumption in 2018 was due to the inclusion of two new buildings, the consumption of which was not identified separately in previous years.
NON-FINANCIAL PERFORMANCE REPORT Managing our direct environmental impact 489Natixis Registration Document 2018
2018, for a total of 1,031 hires (i.e. 95% of all hires completed). Over 6,000 résumés are managed in the internal job pool.
It also meets transparency requirements vis-à-vis its external stakeholders, such as the ACPR, the ECB and the AMF, but also internal stakeholders. A compensation logbook gives Natixis employees in France an individualized view of their salary, additional forms of compensation, social security coverage, and employee savings plan for the previous year.
In terms of training, Natixis has set up two talent development programs for its female employees: “Réussir sa carrière au féminin” (achieving success in youra career as a woman) for managers and experienced executives. 296 female employees of Natixis in France have participated in the program since its launch, including 43 in 2018; “Progresser au féminin” (moving forward in your career as aa woman) for female technical staff, with the aim of giving them the keys to defining their career path, confirming their ambitions and developing their leadership skills. 143 female employees of Natixis in France have participated in the program since its launch, including 43 in 2018.
In 2018, Natixis renewed its support for the Paris Opera Academy, of which it is a founding patron, for three more seasons.
Report by one of the Statutory Auditor 6.8 on the consolidated Non-Financial Performance Report contained in the Management Report
We verified that the Report covers the scope of consolidation,a i.e. all the companies included in the scope of consolidation as defined in Article L. 233-16, within the limitations set out in the Report; We reviewed the data collection process used to ensure thea completeness and sincerity of the Information reported; For the key performance indicators and the other quantitative (a)a results we considered to be the most important, we applied: analytical procedures to verify that the data collected werej correctly consolidated and that changes were consistent, detailed tests based on surveys to verify that definitions andj procedures were correctly applied and to reconcile data with supporting documents. This review was performed on a selection of contributing entities (b) covering between 31% and 100% of consolidated data in the key performance indicators and results selected for these tests; We consulted documents and held interviews to corroboratea the qualitative information (action and results) we deemed the most important (c) ; We assessed the overall consistency of the Report based ona our understanding of all the companies included within the scope of consolidation.
The Company is a joint stock company (société anonyme) with a Board of Directors. It is governed by the regulations governing commercial companies, by the provisions of the French Monetary and Financial Code (Code monétaire et financier) and by these bylaws.
The term of the Company, created on November 20, 1919, was increased to 99 years beginning on November 9, 1994, unless it is extended or dissolved early.
The Board of Directors elects a Chairman who must be an individual, selected from among its members. The Chairman is elected for the duration of his term as director and may be re-elected.
Of which 0.67% held outside of employee savings plans by employees and former employees.
LEGAL INFORMATION Distribution of share capital and voting rights 525Natixis Registration Document 2018
You may refer to this 2018 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).
All of the Company's shares are eligible for this tax treatment.
For fiscal year 2018, the target annual variable compensation was set at 120% of the Chief Executive Officer, with a range of between 0 and 156.75% of the target, i.e. a maximum of 188.1% of his fixed compensation. Accordingly, Laurent Mignon's variable compensation target was €1,152,000 for full year 2018, i.e. €480,000 for the period from January 1 to June 1, 2018. The targets for 2018 were as follows: 70% quantitative targets, 25% of which based ona Groupe BPCE's financial performance (net revenues [4.2%], net income (Group share) of [12.5%] and cost/income ratio [8.3%]) and 45% based on Natixis' financial performance (net revenues [11.25%], net income (Group share) [11.25%], cost/income ratio [11.25%] and ROTE—Return on Tangible Equity [11.25%]); 30% individual strategic targets, (i) 15% of which related toa the implementation of the 2018-2020 strategic plan: success of the CIB sector approach, Asset Management Active Thinking strategy, the Innove2020 project in the Insurance business line, implementation of the Payments strategy; and (ii) 5% of which related to oversight in terms of supervision and control as provided for in regulations including the implementation of the RAF; and (iii) 5% of which related to the implementation of Natixis transformation; and (iv) 5% of which related to the managerial performance, assessed by taking into account the ability to anticipate developments, make decisions and lead the Group.
The method for calculating severance pay is set out in section 2.4 of the 2018 registration document.
The characteristics of severance payments and the consideration for the non-compete agreement, along with the method for calculating severance pay are set out in section 2.4 of the 2018 registration document.
The Chief Executive Officer is eligible to receive performancec) shares 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 annual variable compensation and performance shares in favor of the Chief Executive Officer during the fiscal year cannot exceed twice his fixed compensation.
Laurent Mignon, 55 years old, is the President of the BPCE Management Board (see Laurent Mignon’s résumé in Chapter 2 “Corporate Governance” section 2.2 of the 2018 Natixis registration document).
Christophe Pinault, 57 years old, is the Chairman of the Caisse d'Epargne et de Prévoyance Bretagne Pays de Loire Management Board.
Canceling all or a portion of a the securities bought back
26 months May be used by your Board a of Directors to decide on these issues, on one or more occasions
Determination a by your Board of Directors of the amounts to be incorporated and of the amount of new share capital and/or the new par value of existing share capital
Price set by your a Board of Directors equal to the average of the prices listed on the market during the 20 trading sessions preceding the decision setting the date for the opening of subscription, less the maximum discount set out by law.
The General Shareholders’ Meeting, deliberating in accordance with the quorum and majority requirements for ordinary business, hereby ratifies the co-opting by the Board of Directors at its meeting on December 20, 2018, of Nicole Etchegoïnberry as a Director, to replace Stéphanie Paix, who resigned, for the remainder of her term of office, i.e. until the end of the General Shareholders’ Meeting convened in 2020 to approve the financial statements for the year ended December 31, 2019.
Corporate officers concerned on the applicable date: François Pérol, Chairman of the BPCE Management Board anda Chairman of the Natixis Board of Directors; Stève Gentili, a member of the BPCE Supervisory Board anda Natixis director; Didier Patault, a member of the BPCE Supervisory Board anda Natixis director; Bernard Jeannin, a member of the BPCE Supervisory Boarda and Natixis director; Olivier Klein, a member of the BPCE Management Board anda Natixis director; Jean Criton, a member of the BPCE Supervisory Board anda Natixis director; Philippe Queuille, a member of the BPCE Management Boarda and Natixis director; Philippe Sueur, Vice-Chairman of the Steering and Supervisorya Board of Caisse d’Epargne Ile-de-France and Natixis director; Jean-Bernard Mateu, Chairman of the Management Board ofa Caisse d’Epargne Rhône-Alpes and Natixis director; BPCE, as represented by Nicolas Duhamel, Chief Financiala Officer and a member of the BPCE Management Board and BPCE’s permanent representative on the Natixis Board of Directors.
This agreement was approved by the April 30, 2009 General Shareholders' Meeting.
Renewal as required of the commitments 15. and agreements made in favor of Laurent Mignon
Any person wishing to obtain additional information about Natixis can request documents free of charge and without obligation: by mail: Natixis Communication financière – a Relations investisseurs Immeuble Arc-de-Seine 30, avenue Pierre-Mendès-France 75013 Paris by e-mail: investorelations@natixis.coma
Credit and counterparty risk The risk of loss from the inability of clients, issuers or other counterparties to honor their financial commitments. Credit risk includes counterparty risk related to market transactions and securitization.
Hedge fund A hedge fund is a speculative investment fund that seeks to generate absolute return through a high degree of management flexibility.
The Financial Stability Board (FSB) coordinates the comprehensive measures intended to reduce the moral hazard and risks posed by global systemically important financial institutions (G-SIFIs) to the global financial system. These institutions meet the criteria established by the Basel Committee as outlined in “Global systemically important banks: Assessment methodology and the additional loss absorbency requirement” and identified in a list published in November 2011. The FSB updates this list in November of each year. To date there are 29 such institutions.
Volatility A measurement of the magnitude of an asset’s price fluctuation and thus a measurement of its risk. Volatility corresponds to the standard deviation of the asset’s immediate returns over a given period.