NATIXIS - 2018 Registration document and annual financial report

OVERVIEW OF THE FISCAL YEAR Management report at December 31, 2018

Management report 4.2 at December 31, 2018

CONSOLIDATED RESULTS 4.2.1

2018

2017 pro forma Change 2018/2017

*

(in millions of euros)

4

Net revenues

9,616 8,917

9,467 8,810

+1.6% +1.2% +2.9% (1.5)% (16.9)% +0.1% +13.2% +11.2% +0.4% (1.0)% +57.9% (5.5)%

+3.1% +2.8% +4.2% +0.5%

o/w main business lines

Expenses

(6,823)

(6,632)

Gross operating income Provision for credit losses Net operating income

2,793 (215) 2,578

2,835 (258) 2,577

Associates

29 54

26 48

Gains or losses on other assets Change in value of goodwill

0

0

Pre-tax profit

2,661 (781) (304) 1,577 71.0% 16,145

2,651 (789) (192) 1,669 70.1% 16,352

Tax

Non-controlling interests Net income (Group share)

Cost/income ratio

Shareholder's equity (average)

ROE

9.2%

9.6%

ROTE

11.8%

11.9%

*

At constant exchange rates.

Analysis of changes in the main items comprising the consolidated income statement Net revenues Natixis’ net revenues stood at €9,616 million at December 31, 2018, up 3.1% from 2017 at constant exchange rates. At €8,917 million, net revenues generated by the main business lines (1) were up 2.8% at constant exchange rates versus 2017. The various divisions posted an increase in revenues, with the exception of Corporate & Investment Banking whose net revenues were penalized by lower revenues in Asia due to the impact of equity derivatives (--€259 million). At constant exchange rates, net revenues were up 13% for Asset & Wealth Management, 8% for Insurance and 6.5% for SFS, while CIB revenues were down 8%. Excluding non-recurring items classified under Investor Relations (2) and excluding the impact of equity derivatives in Asia for CIB, Natixis’ net revenues would be up 4.4% at constant exchange rates compared with 2017, while net revenues would be up 5.1% for the business lines and down 2.5% for CIB. The Corporate Center’s net revenues stood at €699 million in 2018, of which €678 million for Coface. They include +€48 million for the return of foreign-currency DSNs to the historic exchange rate, versus -€104 million in 2017.

Meanwhile, revenue synergies achieved with the BPCE networks exceeded the strategic plan’s targets.

Operating expenses and headcount Recurring expenses totaled €6,823 million, up 4.2% at constant exchange rates compared with 2017. At constant exchange rates, costs increased 7% for the Asset & Wealth Management division, 1% for the CIB division, 2% for the Insurance division and 7% for SFS. Corporate Center expenses were up €915 million in 2018 compared with €883 million in 2017. They include €488 million in expenses for Coface and €164 million for the Single Resolution Fund contribution. Headcount at the end of the period stood at 21,652 FTE, up 4% year-on-year, with a 3% increase in the business lines and 4% growth in the Corporate Center. Gross operating income Gross operating income stood at €2,793 million in 2018, a slight increase of 0.5% at constant exchange rates versus 2017.

Under the New Dimension plan’s presentation of the divisions, the term “Net revenues generated by the business lines” now includes Asset & (1) Wealth Management, CIB, Insurance and SFS, and no longer includes Coface Resulting from CIB's settlement of the legal dispute with Société Wallone du Logement in 2018, the capital gain for the Corporate Center from (2) the disposal of Caceis in 2017 and, as is customary, the impact of the return of foreign-currency DSNs to the historic exchange rate.

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Natixis Registration Document 2018