LEGAL INFORMATION 403 6.1 Natixis Bylaws 404 6.2 General information on Natixis’ capital 410 6.3 Distribution of share capital and voting rights 414 6.4 Information from Article L.225-100-3 of the French Commercial Code 416 6.5 Purpose and draft resolutions submitted to the Combined Shareholders’ Meeting of May 21, 2013 417
Natixis’ business lines fi nancing products to the most sophisticated arrangements, after which they assist the businesses in implementing them. Operating in France and abroad, they are capable of providing solutions that meet clients’ specifi c geographic requirements.
With nearly 500 employees in 12 countries, the Asia-Pacifi c platform covers the majority of the fi nancing and capital markets. Its goal is to assist the Bank’s clients and build up specialized business expertise in this fast-growing region.
Investment Solutions boasts internationally-acknowledged asset management expertise, as well as distribution structures adapted to the specifi c features and regulations of the various markets in which it operates. By implementing this model, the Banque Populaire and Caisse d’Epargne networks are able to strengthen their positioning on the fi nancial savings segment in France and to tap into new growth potential internationally.
In 2012, Natixis Asset Management rolled out its new strategic plan. The business was organized into six specialized divisions: Fixed Income, European Equities, Investment and Client Solutions, Volatility and Structured Products, Global Emerging and Responsible Investment. Under this framework, two new brands have been created: “Seeyond”, for volatility management and structured product investment, and “Mirova”, dedicated to responsible investing and a leader in the fi elds of SRI (socially responsible investment). Furthermore, a new structure, VEGA Investment Managers, was created by merging 1818 Gestion and Natixis Multimanager. It is 40%-owned by Natixis Asset Management.
R Absolute Asia Asset Management ($0.8 billion): Asian equities (excluding Japan), emerging Asian equities.
2012 signifi cant events R Banque Populaire’ s continued its drive to win over new customers in all customer groups: individual customers with a sharp increase in active and insured customers, private banking with strong growth in loan outstandings, and companies with an increase in active customers. Loans outstanding rose by 3.3% and on-balance sheet savings rose by 6.0(2)%.
Loans outstanding to individual customers amounted to € 89.1 billion, a 3.7% increase compared to last year. Home loans outstanding rose by 4% in 2012. New consumer loans increased by 5.4%.
The car insurance offer was enhanced with the addition of a new smartphone application by Natixis Assurances: Rouler serein gives users access to all emergency numbers and can be used to fi ll out a pre-complete a claim form in the event of an incident.
In 2012, the high end of the range was optimized with the addition of structured products and life-insurance vehicles via the open-architecture platform offered by Banque Privée 1818.
R 2012 Top Com d’Or award for “La banque, nouvelle defi nition” (Banking redefi ned) corporate campaign. For the fi rst time, Caisse d’Epargne is ranked among the top ten of the most useful companies for the French (4).
The same applied to electronic funds-transfer solutions, with the Carte Achat Public and the web-based collection service SP+, which has met growing success with local authorities.
In addition, without prejudice to the benefi t of paragraph (iii), in the event of a legislative amendment conferring a voting right to the holders of CCIs, Natixis undertakes to act in concert with BPCE and the Caisses d’Epargne, to make the necessary adjustments while either maintaining the rights and characteristics of the securities issued or replacing Caisse d’Epargne CCIs with securities possessing the same
V The Natixis Risk Department, Natixis Finance Department and BPCE’s representatives are each completely free to add items deemed relevant to the CGAC agenda.
PRESENTATION OF NATIXIS1 Natixis and its shareholders 1.6.4 SHARE PRICE INFORMATION
The average daily volume of Natixis shares traded on the market amounted to around 5.7 million in 2012 versus an average of around 6.2 million in 2011.
* Mirova is a Natixis Asset Management brand dedicated to SRI expertise .
Investments by solidarity funds therefore help create jobs or access to housing for people in diffi culty. They are used for arranging micro-loans or developing organic farming.
To this end, Natixis Asset Management has developed a range of diversifi ed solidarity products and the venture capital mutual fund (FCPR) Natixis Solidaire. These investment products are more specifi cally designed for companies wishing to offer their employees a PERCO (collective pension plan) scheme.
Number of solidarity-based funds with the Finansol label 8 10 6
The Private Equity business line is a partner of the European Venture Philanthropy Association (EVPA) and has supported this organization since 2006. Regular discussions with the EVPA are a source of inspiration in thinking on ESG criteria.
Compliance with and observation of professional rules of conduct are among Natixis’ core values. Through its preventative and monitoring activities, the Compliance D epartment enhances the trust afforded by our customers, the markets and the regulators. In addition, in 2012, for the fi rst time, more than 110 awareness-raising initiatives were organised during the 360° safety day to strengthen the compliance culture among our employees.
The organizational structure set up within Wholesale Banking is based on the principle of that both business lines and the ESR team are involved in the assessment and managements of transactions .
For category A transactions - and category B where appropriate - the ESR team conducts a second review of the E&S documentation for the projects and the independent expert’s report, if one is required, simultaneously with the study by the business lines. Particular attention is paid to the transactions that pose the highest potential E&S risks. This parallel review is intended to support and confi rm the analysis by the business line, or to correct it.
The measures to mitigate the identifi ed environmental and social impacts will be monitored, as will the implementation of the management plans by providing the project’s stakeholders with reports and documentation.
2012 Key event In 2012 Natixis inaugurated its fi rst “disability friendly” meeting room to receive visitors with reduced mobility or who are hearing or sight impaired.
Buyers and prescribers have continued to apply the purchasing framework introduced in 2007, based on Natixis’ environmental and social criteria. This provides the clauses required for the different categories of services, classifi ed by level (regulatory, required by Natixis and recommended).
(1) GRI: Global Reporting Initiative, a multi-stakeholder association that develops and disseminates an internationally recognized sustainable development reporting framework.
Natixis France Natixis and all of its subsidiaries in France 14,031
For internal organisation reasons, Natixis is currently unable to provide accurate data beyond the French scope for certain areas of information.
(b) With respect to employees under contract, “FTE staff” incorporates workforce participation rates and subsidiary consolidation rates, but excludes employees on long-term leave.
These measures enable the Central Works Council and locallybased works councils to offer all staff a range of social, cultural and recreational activities at attractive prices.
The CHSCT’s “Offi ce Moves” Commission was also called on in 2012, particularly for preparations for the outfi tting of the Nouveau Bercy building in Charenton-le-Pont. The Commission examines site plans and may issue remarks or ask for changes in the plans, with the aim of improving employees’ physical working conditions.
Percentage of women in the workforce (as %) 51.1 51.2 51.9
Under 25 25-29 years 30-34 years 35-39 years 40-44 years 45-49 years 50-54 years 55 and over
Measures have been taken to optimize water consumption, which has been rising for the past three years: continuous monitoring of the systems to detect any leaks, fi tting of pressure relief devices and installation of rain gauges to stop automatic sprinklers while it is raining.
Measures taken to safeguard against all forms of corruption are described in section [2.1.1.3] “ CSR risk management” .
Member of BPCE Management Board Chief Finance, Risk and Operations Offi cer 50, avenue Pierre- Mendès- France 75201 Paris Cedex 13
Mr. Henri Proglio * Date of birth: 06.29.1949 Nationality: French Natixis shares held: 1,000
Structure of the corporate and executive bodies 3.2.2 SENIOR MANAGEMENT AT MARCH 1, 2013
CORPORATE GOVERNANCE3 Structure of the corporate and executive bodies Jean Criton (born on June 2, 1947) Jean Criton was a Member of the Board of Natixis until May 29, 2012 After studying law and political science, Jean Criton began his professional career in internal audit with the Banque Populaire Group. He has spent his entire career there: after several years with the central institution , he occupied management positions in three regional Banque Populaire banks – Banque Populaire du Centre, Banque Populaire Nord de Paris and BICS Banque Populaire – before conducting the merger that gave rise to Banque Populaire Rives de Paris.
Laurence Debroux (born July 25, 1969) Laurence Debroux has been Chief Executive Offi cer of Corporate Finance and Administration for JCDecaux S.A. since 2010 and an independent member of the Board of Natixis. A graduate of HEC, Laurence Debroux began her career in 1992 at Merrill Lynch Bank. From 1993 to 1996, she worked in the Finance Division of Elf Aquitaine. In 1996, she joined Sanofi - fi rst as Chief Financing & Treasury Offi cer and then as Chief Financial Offi cer before becoming Director of Strategy and being promoted to the Executive Committee of Sanofi Aventis.
Laurence Debroux brings the Board of Directors the scope of her expertise in fi nancial analysis, communications and corporate strategy.
Stève Gentili (born June 5, 1949) Stève Gentili has been Chairman of BRED Banque Populaire since 2004. He is also Vice-Chairman of the Supervisory Board of BPCE. With a degree in IT, management and economics and a degree from the Collège des sciences sociales et économiques, Stève Gentili began his career working for a cabinet minister and at the Ministry of Economics and Finance. Until 2004, he managed a major agri-food company. In addition to his conversance with international trade, Stève Gentili brings his bank management experience to Natixis’ Board of Directors. Moreover, he is an expert in relations between France and French-speaking countries, as Chairman of the economic organization of the Francophone Summit.
Has not held any salaried positions or corporate offi ce in the last fi ve years with BPCE, Natixis or any of its subsidiaries OK OK OK OK OK
Accordingly, an independent member of the Board of Directors may not: V be an employee or a corporate officer of Natixis or the Group, or an employee or director of a shareholder with a controlling interest, either on its own or in concert, in Natixis (as per Article L.233-3 of the French Commercial Code) or in a company consolidated by it, or have served in such a capacity during the last five years; V be a corporate officer of a company in which Natixis holds a directorship either directly or indirectly, or in which a designated employee of Natixis or a corporate officer of Natixis (currently or during the last five years) holds a directorship; V be a client, supplier, corporate banker or investment banker who is: R signifi cant to Natixis or its Group,
Directors representing major shareholders in Natixis, in either a direct or indirect capacity, may be considered independent if these shareholders do not control Natixis within the meaning of Article L.233-3 of the French Commercial Code. However, if a director represents a shareholder of Natixis who holds, directly or indirectly, more than 10% of the share capital or voting rights, the Board shall, based on a report from the Appointments and Compensation Committee, systematically review the member’s independence, taking into account the structure of Natixis’ share capital and the existence of any potential confl icts of interest.
The director s of Natixis agree to comply with the guidelines contained in this Charter.
Each director must declare any trading in Company shares to the AMF, in accordance with the provisions of Article L.621-182 of the French Monetary and Financial Code.
Depending on its agenda, the Audit Committee also benefi ted from the presence at its various meetings of the Natixis Chief Finance and Risk Offi cer, as well as the H ead of Finance, the Head of Risk, the H eads of Internal Audit for Natixis and BPCE, the Corporate Secretary and the H ead of C ompliance for Natixis.
The classifi cation of Independent Director is discussed by the Appointments and Compensation Committee, which prepares a report for the Board of Directors. Each year, based on this report and before the publication of the annual report, the Board of Directors reviews the situation of each of its member based on independence criteria set out in Article 2.3.2 of the Board of Directors’ internal regulations. Furthermore, members are considered to be independent when their position as a member of the Appointments and Compensation Committee does not constitute a confl ict of interest with the company in question (in particular, they are not employees of the company in question).
As Natixis’ decision-making body, the Senior Management Committee’s remit is to examine and validate the Company’s core strategy and oversee its management, notably as regards the effective application of the Company’s strategy and budget; all major projects and investments; its organization and Human Resources; the performance of its business lines and its results; and the control of its activities.
The Senior Management Committee initiated an operational effi ciency program (OEP) and set its target level. The recommendations of the different subprograms were presented to it for approval.
With respect to holders of bearer shares, it is their authorized intermediaries, who hold accounts of bearer shares that prove their clients’ status as a shareholder directly to the centralizing body of the meeting. They do so by producing a certifi cate that they attach to the voting form or admission card request in the name of the shareholder or the name of the registered intermediary acting on behalf of the shareholder. A certifi cate is also delivered to shareholders wishing to attend the meeting in person and who have not received an admission card by D-3, 12: 00 a.m., Paris time.
In accordance with the enforcement decree of EU Directive 2003/71 (Article 14.1 of Appendix 1 of Regulation 809/2004), none of the members of the Board of Directors or Senior Management has been convicted of fraud, subject to bankruptcy, liquidation or receivership, convicted or punished by offi cial or regulatory bodies, disqualifi ed from acting as a member of administrative, management or supervisory bodies of an issuer, or from participating in the management or conduct of the business of an issuer within at least the previous fi ve years .
The Audit Plan may be revised during the year at the request of Senior Management or if required by circumstances.
The Risk Department provides Senior Management and the bank’s business line managers with reports analyzing Natixis’ risks: trend analyses, scorecards, the results of stress tests, etc.
Only one backtesting exception was observed in 2012 relative to regulations. The loss responsible for this exception exceeding VaR by more than 20% was reported to the Audit Committee and the ACP in connection with the alert thresholds defi ned under Regulation no. 97–02 (Articles 17 ter and 38). This exception was classifi ed as purely technical by the Audit Committee.
The reliability of this process is based on the following core principles: V definition and dissemination of the accounting principles applicable to Natixis companies, including the analysis and interpretation of new IFRS accounting regulations published during the period; V use of the direct consolidation method, broadly rolled out throughout the group, allowing for the analysis and control of the consolidation packages of each consolidated company via a formal review process; V preparation of consolidated financial statements on a quarterly basis. This allows for greater control over financial reporting, thus anticipating significant transactions over the fiscal year; V reporting and reconciliation of intra-group transactions at M-1 and then at M, where M is the reporting month, thus increasing the number of reconciliations and contributing to the preparation of quarterly statements; V use of an automated control process for individual information 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; V individual analysis of all entries impacting consolidated shareholders’ equity and the preparation of supporting documents for taxes, including proof of deferred taxes, for each consolidated entity, thus contributing to the final calculation of consolidated shareholders’ equity; V an audit trail justifying all accounting entries published in the financial statements and their notes based on the individual financial statements of each of the consolidated entities and consolidation entries; V the establishment of a half-yearly approval file that documents items controlled in reports sent to BPCE; V data archiving and security procedures; V provision of support and appropriate training to the accounting teams of those consolidated entities where the consolidation system is rolled out, thus allowing for best practices to be spread within the Company.
The 2012 fi scal year was dedicated to: V a tighter timetable for publishing the financial statements; V developing a permanent structure for work previously defined under the framework of implementing the New Deal “support functions” plan, based on: R real-time control processes that are decentralized within the business lines and centralized period-end controls, continuing to streamline IT systems used by the control system,
This discussion is then supplemented by setting out the main insurance policies taken out by Natixis, the legal proceedings currently in progress and the risks related to insurance activities.
RISK MANAGEMENT4 Risk factors Intense competition, both in Natixis’ home market of France, its largest market, and internationally, could adversely affect Natixis’ net revenues and profi tability
Regulatory capital requirements for credit risk, counter party risk and dilution risk 8,029 9,838
Similarly, it makes proposals to the executive body concerning principles and rules in the following areas: V risk acceptance procedures; V limit authorizations; V risk assessment; V risk supervision.
The limits governing country exposure (country caps) are examined at least once a year and approved by the Natixis Global Risk Committee in light of the countries’ ratings and situations. Where there has been a signifi cant change in a country, an analysis is presented to the Credit Risk Committee in order to adapt the monitoring and procedures relative to the country in question.
This Committee is organized by the Risk Department and chaired by the Chief Executive Offi cer and assembles members of the Senior Management Committee in charge of the business lines, Finance and Risk, the Head of Risk and the heads of the relevant support functions.
SMEs recorded in the corporate entities category 1.9% 0.2% 0.0% 0.2% 2.3% 2.4%
Breakdown by internal rating (S&P equivalent) for asset classes subject to the IRB approach, after excluding: V exposure to equities (calculated using a simple weighting approach); V pool-based exposure (acquired portfolios); V securization positions ; V generic counterparties.
In accordance with Articles 17ter and 38 of CRBF regulation 97-02 governing loss alerts, the Audit Committee and ACP were notifi ed of this exception, which exceeded VaR by more than 20%.
R STRESSED NATIXIS Va R Change in regulatory Stressed VaR and End-of-period VaR including the BPCE guarantee.
These fi gures are arrived at by taking losses and gains into account, excluding income gaps from one fi scal year to the next.
This risk is measured in terms of the sensitivity of portfolios’ economic value by basis point on the yield curve and by currency. For the largest portfolios it is controlled through limits approved and monitored by the Risk Department. As regards Treasury, in which most positions are concentrated, this mechanism is rounded out with daily VaR measurements governed by limits and stress tests.
Basing their argument on a report by the Autorité des Marchés Financiers (AMF - French Financial Markets Authority ), which has not been made public, the plaintiffs allege that Lagardère SCA failed to comply with market regulations when it issued bonds redeemable in EADS shares, subscribed by Natixis, in April 2006.
The sensitivity of equity to variations in interest rates is mitigated by the classifi cation of approximately €4.1 billion, fair value, in interest-bearing securities in the category of held-tomaturity securities.
CEGC uses a default mapping tool and database tailored to its activities and developed on the basis of business line processes. This database is the standard reference framework used to catalog incidents and high-risk situations and to monitor corrective action plans, according to the methodology implemented by Natixis.
Breakdowns by rating and type of underlying for US RMBS were as follows at December 31, 2012: Breakdown by rating % breakdown
% net exposure BPCE guarantee (including assets hold by SAHARA) 66%
FINANCIAL DATA5 Management Report at December 31, 2012 5.1 Management Report 5.1.1 METHODOLOGY
FINANCIAL DATA5 Management Report at December 31, 2012 V creation of the Naxicap Rendement 2018 fund by Naxicap in the second quarter, with the aim of offering a high-yield bond product for life insurance vehicles, mainly distributed by Banque Populaire Rives de Paris, Banque Privée 1818 and the Primonial Group; V fund raising for NSO1 in the second quarter (Naxicap Secondary Opportunities I), a secondary fund managed by Naxicap, structured for Rothschild et Cie; V fund raising for Caspian II (direct investment in the US) in the second quarter of 2012.
As a result, Factoring completed an innovative deal in commercial receivables securitization, rated AAA by Moody’s and Fitch, with Wholesale Banking acting as lead arranger. This deal satisfi ed the objective of diversifying Groupe BPCE medium-term funding sources.
Excluding the impact of the P3CI deal and the revaluation of own senior debt, net revenues climbed 4% over the year to €6,75 2 million, a solid performance under the circumstances.
FINANCIAL DATA5 Management Report at December 31, 2012 OPERATING EXPENSES AND HEADCOUNT
The share in income from associates, consisting primarily of the 20% consolidation of income from shareholder networks via CCIs, was down 19% in relation to 2011. This decline can be attributed to the decreased contribution of the networks (including -13% for the Caisses d’Epargne and -29% for the Banque Populaire banks), where business was hurt by the sluggish economic climate in France.
In 2012, average trading VaR was limited to €7.3 million compared to €9.8 million in 2011 (excluding GAPC). At year-end it amounted to €5 million, versus €10.1 million at end-2011.
In 2012, Wholesale Banking’s expenses were stable at €1,689 million, in line with 2011 at constant exchange rates. Fixed payroll costs increased 2% at constant exchange rates and scope of consolidation, due to the 1% drop in average headcount. Variable payroll expenses, measured in accordance with CRD 3 for market professionals, fell 10% year-on-year. Other operating expenses were stable at constant exchange rates: the impacts of cost controls, particularly in IT (-5%) were overshadowed by the increase in taxes and documentation and database costs.
In 2012, the fi nancial climate was less than buoyant for the Insurance division’s Investment Solutions business (with clients shifting back to on-balance sheet savings and adopting a wait-and-see attitude due to uncertainty on the tax treatment of life insurance products, mainly owing to the increase of the ceiling on the Livret A passbook savings account).
Revenue generated from non-core entities came out at €146 million in 2012, down 11.4% over 2011, owing to the gradual reduction of factoring activities.
These operations helped stabilize the excess liquidity on the market at extremely high levels (€695 billion on average in 2012 versus €125 billion in 2011). The ECB also cut its key interest rates by 25 bp in July 2012. As a result, the euro benchmark rate eased continuously throughout the year, with the Eonia averaging 0.23% and the three -month Euribor 0.57%.
Equity component of share-based payment plans 2011 dividend paid in 2012
FINANCIAL DATA5 Consolidated fi nancial statements and notes NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
Companies controlled exclusively by Natixis are fully consolidated. Under IAS 27 (revised), control is presumed to exist when the parent has: V ownership, directly or indirectly through subsidiaries, of more than half of the voting rights of an entity; V power to govern the financial and operating policies of the entity under the by-laws or an agreement; V power to appoint or remove the majority of the members of the Board of Directors or equivalent governing body; V power to assemble the majority of voting rights at meetings of the Board of Directors or an equivalent governing body.
The method used to measure minority interests and goodwill varies depending on whether IFRS 3 or IFRS 3R is applied.
Note that Natixis impaired goodwill allocated to the Wholesale Banking business and the GAPC portfolio at the end of 2008, and the Private Equity goodwill at the end of 2009.
R SASU Immobilière Natixis Bail held by OPCI Natixis Lease Investissement; V Natixis Garanties owns three SCIs that hold the business line’s operating property. All three were included in Natixis’ scope of consolidation as of December 31, 2012. They are: R SCI Champs-Élysées,
If the fair value of an available-for-sale fi nancial asset increases during a subsequent period, and this increase can be objectively linked to an event occurring after the impairment loss was charged to income: V reversals of impairment losses on equity instruments are recorded in equity rather than in the income statement,
For industry risk, the Sector Risk Department of the Risk division prepares a segment analysis included in a rating scale equivalent to the one used for rating major corporate risks. The rating procedure is based on the determination of an inherent score that is adjusted according to the position in the cycle, inherent fragility, and whether or not there is an outside threat, and the positioning of the Natixis portfolio. Sectors whose rating is BB- or lower are automatically reviewed for their potential provisioning.
The section below describes the underlying principles used to value assets resulting from securitization transactions for which no market prices could be identifi ed and which were therefore measured using valuation models: U.S. non-residential ABS CDOs
Other intangible assets primarily comprise: V purchased goodwill with an indefinite useful life, which is not amortized but tested for impairment at least annually; V components of the Coface portfolio, which are amortized over the term of the contracts (eight to ten years for France).
A sale is highly likely if: V a plan to sell the asset (or group of assets) is made by management; V a non-binding offer has been submitted by at least one potential buyer; V it is unlikely that significant changes will be made to the plan or that it will be withdrawn.
If Natixis has neither transferred the contractual rights nor substantially retained all of the risks and rewards, Natixis then determines whether it has transferred control of the asset. If control is considered to have been relinquished, the fi nancial asset is derecognized. If the Group retains control of the asset, it remains on the balance sheet to the extent of Natixis’ “continuing involvement”.
A provision is set aside for defi ned benefi t plans based on an actuarial assessment of the benefi t obligation using the projected unit credit method. This method draws on demographic and fi nancial assumptions (specifi cally the discount rate based on the AA Corporate bond rate curve). The value of any plan assets is deducted from the obligation. This valuation is carried out on a regular basis by independent actuaries.
Loyalty and performance plans settled in shares: Under IFRS 2 “Share-based payment”, employee bonus share awards give rise to an expense representing the fair value of the goods or services received at the grant date. This payroll expense is recognized against equity. The fair value of the services received is calculated by reference to the fair value of the shares at the grant date, less the present value of dividends forfeited by employees during the vesting period, taking into account the presence conditions.
In preparing its fi nancial statements, Natixis is required to make certain estimates and assumptions based on available information that is likely to require expert judgment. These estimates and assumptions constitute sources of uncertainty which may affect the calculation of income and expenses in the income statement, the value of assets and liabilities in the balance sheet, and/or certain disclosures in the notes to the fi nancial statements. The fi nancial crisis has led to greater use of accounting estimates. As a result, future results of certain operations may differ signifi cantly from the estimates used in the fi nancial statements at December 31, 2012.
Average number of ordinary shares issued and outstanding over the period 3,083,910,364 2,998,344,128
Net earnings/(loss) attributable to the Group (in millions of euros) 901 1,562
(b) In 2012, permanent impairment of variable-income securities stands at €172 million compared with €390 million in 2011. This expense involves insurance portfolios for €122 million (€247 million in 2011), the impact of which is neutralized, given the profi t-sharing mechanism. The 2012 expense is divided between an additional impairment on previously-impaired for €94 million, including €70 million on the insurance portfolios (€226 million in 2011, including €157 on insurance portfolios), newly-impaired provisions on securities tied to the application of automatic criteria as defi ned in accounting principles and methods for €29 million, including €5 million for insurance portfolios (€100 million in 2011, including €31 million on insurance portfolios) and provisions on newly-impaired securities tied to the application of criteria for analysis for €49 million, including €48 million for insurance portfolios (€63 million in 2011, including €60 million on insurance portfolios).
The fair value of held-to-maturity fi nancial assets totaled €4, 045 million at December 31, 2012, compared with €4, 224 million at December 31, 2011.
Transferred fi nancial assets that are not derecognized are essentially composed of the following instruments: V repurchased securities; V securities lending backed by cash remittals; V dry securities lending; V securitization for which the counterparties to the associated debts have recourse only to the transferred assets.
Consolidated fi nancial statements and notes 6.12 Due to banks and customer deposits
Provisions for impairment deducted from assets 5,498 835 (904) (986) (7) 6 7 4,448
Provisions for employee benefi ts 396 88 (36) (18) (1) (1) 428
FINANCIAL DATA5 Consolidated fi nancial statements and notes R DECEMBER 31, 2011 01.01.2011 Increase
(in millions of euros) 12.31.2011 Issues (a) Redemptions (b) Translation adjustments Other (c) 12.31.2012
Securities issued for trading purposes 46,249 45,228 1,022 26,995 26,025 969
= Consolidated taxable income/(loss) 402 1,303 x Theoretical tax rate 33.33% 33.33%
R fi nancing Portfolio Management and Global Transaction Banking, which is tasked with optimizing the bank’s balance sheet and developing the available fl ow,
Natixis consolidates these operations via its 20% ownership of the Banque Populaire and Caisse d’Epargne retail banking networks and via the business lines distributed by the networks. Both shareholder groups’ networks have distinct yet complementary market positions. The Caisses d’Epargne have a strong presence in the personal and small business customer segment, offering a full spectrum of products and services. They also boast robust local roots and are prime movers in regional development, offering local authorities, social housing organizations and businesses an extensive range of products and services. The Banque Populaire network focuses on professionals, SMEs and retail customers.
Net income for the period (Group share) 321 245 266 (1) 70 901
Procedures for managing large exposures are designed to prevent excessive concentration of risks on a single benefi ciary. The regulation is underpinned by an obligation to be respected at all times: all risks associated with a single counterparty cannot exceed 25% of the bank’s capital. Natixis complied with this requirement during 2012.
FINANCIAL DATA5 Consolidated fi nancial statements and notes Share-based retention and performance plans
Rate of increase in healthcare costs 4.50% 5.00% 4.50% 4.30% 4.50%
Unrecognized past service cost 4 24 29 * o.w. –€22 million relating to a funding surplus in 2012 compared with –€36 million in 2011.
FINANCIAL DATA5 Consolidated fi nancial statements and notes NOTE 13 COMMITMENTS
The main transactions between Natixis and related parties (BPCE and subsidiaries, Groupe Banque Populaire including Banque Populaire banks and their subsidiaries, Groupe Caisse d’Epargne including Caisses d’Epargne and their subsidiaries, investments consolidated proportionally with respect to the portion not eliminated on consolidation and all affi liates consolidated by the equity method) are described below: (in millions of euros)
Assets Assets at fair value through profi t and loss 8,587 4,202 19,895 12,161 4,322 19,383
Net gains or losses on available-for-sale fi nancial assets 147 21
Lending and fi nancial institution Equity 20 20 20 20 France
These consolidated fi nancial statements have been approved by the Board of Directors. Our role is to express an opinion on these fi nancial statements based on our audit.
As described in Note 5.7 to the consolidated fi nancial statements, a guarantee mechanism with by BPCE has been in place since July 1st, 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.
See note no. Off-balance sheet items - Commitments received 2012 2011
NOTE 24 STATEMENT OF ASSETS, LIABILITIES AND COMMITMENTS RELATED TO MANAGEMENT OF PUBLIC PROCEDURES 382
In accordance with CRC Regulation no. 2008-17, reclassifi cations from the “held for trading” to the “held for sale” and “held for investment” categories and from “held for sale” to “held for investment” are permitted in exceptional market circumstances requiring a change in strategy or when the securities in question have ceased to be tradable on an active market since their acquisition.
For non-hedging activities, positions in a class of option or forward contract are marked to market at the reporting dates. Changes in market value are recognized directly on the income statement. However, for instruments traded on over-thecounter markets, gains or losses are recognized on the income statement only upon settlement of these transactions, without effect on the potential setting aside of provisions for the net risk incurred over the life of the instrument.
The annual payroll costs recognized in respect of defi ned benefi ts plans consist of: V rights vested by beneficiaries over the period; V the interest cost reflecting the impact of unwinding the discount on the obligation; V the expected return on plan assets; V amortization of actuarial gains and losses and past service costs; V the effects of plan curtailments and settlements.
Plans settled in shares are recognized in accordance with CRC Rule no. 2008-15, which provides for the recognition of a liability where there is the likelihood or the certainty that the obligation to grant shares generates an outfl ow in settlement without an offsetting provision: V if the granting is made by means of the issue of new shares, and outflow in settlement is not deemed to be likely and, as a result, no expense is recognized; V if the granting is made by redemption of shares or the granting of existing shares, the possibility of an outflow in settlement is deemed likely and without an offsetting provision. A provision is then set aside taking account of the entry cost of the shares or the share price on the balance sheet date if the shares have not yet been purchased and the probable number of shares granted to employees. The expense is recognized in stages over the vesting period.
D) Investments with a book value less than or equal to €150,000 1,028,145.96
NATIXIS AUSTRALIA PTY AURORA PLACE LEVEL 3088 PHILIP STREET 2000 SYDNEY AUD63,000 AUD(2,507) 100.00%
NATIXIS JAPAN SECURITIES CO., Ltd. 1-11-1, MARUNOUCHI, CHIYODA-KU TOKYO 100-6226 EUR87,750 EUR(1,887) 100.00%
Due to banks 157,853 140,790 o/w accrued interest 102 o/w other amounts due 0 19 o/w accrued interest 444 546
Securities transactions 56,243 40,747 o/w securities held for trading 0 0 o/w liabilities on securities held for trading 56,234 40,735 o/w accrued interest 8 12
Future salary increases are estimated by grade based on a constant population and a three-year average. At December 31, 2012, the average (including infl ation) was 3.48%.
Total net obligation at January 1 83 105 29 54 271 70 83 25 62 240
Total transfer of assets and liabilities - Natixis Private Banking 3 3
From 6 months to 1 year 1-5 years > 5 years Perpetual Total
Concerning the information given in accordance with the requirements of article L.225-102-1 of the French Commercial Code (“Code de commerce”) relating to remunerations and benefi ts received by the directors and any other commitments made in their favor, we have verifi ed its consistency with the fi nancial statements or with the underlying information used to prepare these fi nancial statements and, where applicable, with the information obtained by your Company from companies controlling your Company or controlled by it. Based on this work, we attest the accuracy and fair presentation of this information.
2.1. Agreements and commitments approved in previous years and continued during the year
On December 18, 2008, the Supervisory Board approved an agreement providing for the distribution of Natixis products and services to the regional banks acquired by Groupe Banque Populaire from HSBC, pursuant to which Natixis is to be the exclusive supplier of the regional banks in the businesses concerned by the agreement as from 2009. The agreement also stipulates that the terms and conditions governing dealings between Natixis and Groupe Banque Populaire shall apply to the former HSBC banks.
Income recognized by Natixis in respect of this agreement amounted to €1,632,689.08 for the fi scal year ended December 31, 2012.
All of these letters of joint and several guarantees and commitments had terminated or expired at the date of this report, but continue to apply retrospectively to all guaranteed transactions entered into prior to the date on which the underlying joint and several guarantees terminated or expired, until these transactions have been fully unwound.
2.1.17 LETTERS OF JOINT AND SEVERAL GUARANTEES AND COMMITMENTS BETWEEN IXIS AND ITS SUBSIDIARIES IN FORCE
On June 15, 2006, the Supervisory Board approved letters of joint and several guarantees and commitments between Ixis CIB and: a) Natixis Financial Products Inc. (formerly Ixis Financial Products Inc.) for the USMTN issue. The guarantee given by Ixis CIB in connection with this agreement can be invoiced at 0.02%; b) Natixis Financial Products Inc. (formerly Ixis Financial Products Inc.) for the issue of warrants. The guarantee given by Ixis CIB in connection with this agreement can be invoiced at 0.02%; c) Natixis Securities North America Inc. (formerly Ixis Securities NA) for securities lending transactions. The guarantee given by Ixis CIB in connection with this agreement can be invoiced at 0.02% per year, applicable to the overall exposure with average risk over the period.
On February 22, 2012, the Board of Directors authorized a new invoicing agreement between Natixis and BPCE pertaining to Natixis’ affi liation with BPCE in replacement of the existing affi liation agreement.
The unexercised options from the November 15, 2005 plan expired on November 14, 2012.
V Your Company may at no time hold a number of shares representing more than 10% of its share capital adjusted by transactions affecting it subsequent to this Shareholders’ Meeting
V May introduce on the French market, circumstances permitting, a non-negotiable priority subscription right*, which may be reducible*, for which the Board of Directors will set the exercise criteria
Purpose and draft resolutions submitted to the Combined Shareholders’ Meeting of May 21, 2013
V Ceiling included in the Overall Ceiling* V Ceiling excludes any additional amounts issued in order to preserve the rights of holders of securities giving access to the capital*
V Your Board of Directors will review the independent appraisers report which focuses on the value of contributions
V Included in the ceiling for the initial issue and in the Overall Ceiling*
Pursuant to the AFEP- Medef code and the Internal Rules of the Board of Directors (see section [3.3.1.2] “Role and powers of the Board of Directors” of this Registration Document), 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 confl ict of interest with the management, Company or Group. Accordingly, an independent member of the Board of Directors may not: V be an employee or a corporate offi cer of Natixis or the Group, or an employee or Board member of a shareholder with a controlling interest, either on its own or in concert, in Natixis (as per Article L.233-3 of the French Commercial Code) or in a Company consolidated by it, or have served in such a capacity during the previous fi ve years; V be a corporate offi cer of a company in which Natixis holds a directorship either directly or indirectly, or in which a designated employee of Natixis or a corporate offi cer of Natixis (currently or within the last fi ve years) holds a directorship; V be a customer, supplier, investment or corporate banker: – that is material for Natixis or the Group, – or for which Natixis or the Group represents a signifi cant portion of such person’s business; V have a close family relationship with a corporate offi cer of Natixis or the Group; V have been an auditor of Natixis or a Group company during the last fi ve years; V be a member of Natixis’ Board of Directors since more than twelve years; V receive or have received signifi cant additional compensation from Natixis or the Group, excluding directors’ fees, including participation in any stock option plan or other performance-based compensation.
Private placement Since April 1, 2009, the law has allowed for capital increases with waiving of preferential subscription rights, up to 20% of the share capital per year, through offers exclusively available to (i) individuals providing portfolio investment and management services on behalf of third parties, or (ii) qualifi ed investors or a limited circle of investors, provided that such investors act for their own account. Their purpose is to optimize capital raising for the Company and benefi t from more favorable market conditions, because this fi nancing method is both faster and simpler than capital increases offered to the public.
Regulatory minimum issue price set on the issue date, which is currently: V For shares: the average weighted market price during the three trading days on the NYSE Euronext Paris regulated exchange prior to the date on which the subscription price for the capital increase is determined, less 5%, where necessary, after any corrections to this average to take into consideration the difference in the effective date.
Features of securities giving access to the share capital of the Company: Resolutions Ten through Eighteen submitted to this Shareholders’ Meeting will authorize your Board of Directors to issue securities giving access to the share capital of the Company, either through the issue of new shares such as bonds convertible into or redeemable for shares, or bonds with share warrants attached or through the delivery of existing shares such as “OCEANEs” (bonds which are convertible into new shares or exchangeable for existing shares); these securities could either be in the form of debt securities as in the examples given above, or capital securities such as shares with share warrants attached. However, in accordance with the law, capital securities convertible or transformable into debt securities cannot be issued. Conditions for the issuing of shares to which the securities giving access to share capital issued entitle the holder and dates on which these rights may be exercised: Securities giving access to share capital in the form of debt securities (for example, bonds convertible into or redeemable for shares, or bonds with share warrants attached) may entitle holders, either at any time, during set periods, or at set dates, to the allocation of shares. This allocation may be through way of conversion (for example, of convertible bonds into shares), redemption (for example, bonds redeemable in shares), exchange (for example, bonds exchangeable for shares), or the presentation of a warrant (for example, bonds with share warrants attached) or by any other way, during the issue period, regardless of whether the preferential subscription rights of holders of securities issued in this way are waived or not. In accordance with the law, delegations of authority to issue securities giving access to share capital approved by your Shareholders’ Meeting entails the waiving of shareholders’ preferential subscription rights to the share capital to which the securities issued entitle them. For example, if your Shareholders’ Meeting approves resolution Eleven, you would according to law waive your preferential subscription rights to shares that your Company would issue, where appropriate, to redeem a possible bond redeemable in shares.
R offer to the public all or part of unsubscribed shares or (in the case of securities giving access to the share capital) securities, on the market in France or abroad,
The Shareholders’ Meeting establishes the effective period of the authorization provided in this resolution at twenty-six (26) months from this meeting and recognizes that, in the event that the Board of Directors uses this delegation of authority, it would prepare an additional report, certifi ed by the Statutory Auditors, setting out the fi nal conditions of the transaction and providing information for judging the actual impact on the shareholders’ situation.
This authorization is granted for a period of thirty-eight (38) months from this meeting and voids, from this day, as applicable, any unused part of any prior delegation of authority for the same purpose and in particular the delegation of authority granted by the Combined General Shareholders’ Meeting on May 27, 2010 in resolution Eighteen.
04.20.2012 Notice of the General Shareholders’ Meeting of May 29, 2012 1201632 04.20.2012 Parent company fi nancial statements at December 31, 2011 1201233 04.20.2012 Consolidated fi nancial statements at December 31, 2011 1201282 04.27.2012 Notifi cation to holders of “titres participatifs” 1201853 05.11.2012 Notifi cation to attend the General Shareholders’ Meeting of May 29, 2012 1202446 05.18.2012 Second notifi cation to holders of “titres participatifs” 1202710 06.04.2012 Approval of the annual fi nancial statements by the General Shareholders’ Meeting of May 29, 2012 1203537 7.3.4 FILINGS WITH THE CLERK OF THE PARIS TRIBUNAL DE COMMERCE
2) The weekly disclosures of the trading in the Company’s own shares are published on the Natixis website www.natixis. com under Investor Relations / Regulated Information in France / Share buyback weekly statements.
Cross-reference table for the Annual Financial Report 7.5 Cross-reference table for the Annual Financial Report
Training V Policy application V The total number of training hours LA10 60
Fair practices V Measures taken to avoid corruption V Measures taken to safeguard the health and safety of consumers
CECEl Comité des établissements de crédit et des entreprises d’investissement, which became Autorité de contrôle prudentiel/ French Credit Institutions and Investment Firms Committee, which has become the Regulatory Control Body