NATIXIS - 2018 Registration document and annual financial report

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

Pre-tax profit therefore totaled €2,661 million in 2018 versus €2,651 million in 2017.

Pre-tax profit The provision for credit losses was €215 million in 2018, down 16.9% compared with 2017. The provision for credit losses of the main business lines as a percentage of assets amounted to 16 basis points in 2018 versus 23 basis points in 2017. Revenues from Associates climbed to €29 million in 2018 versus €26 million in 2017. Gains or losses on other assets totaled €54 million in 2018, €31 million from the sale of Axeltis by the Asset Management business and €11 million from the sale of Sélection 1818 by the Wealth Management business line. In 2017 this item totaled €48 million, including €21.5 million from the disposal of the Ellisphere subsidiary (Financial Investments) and €18 million following the liquidation of a holding company. Change in the value of goodwill was nil in 2018 as it was in 2017.

Recurring net income (Group share) The recurring tax expense came to €781 million in 2018. The effective tax rate was 29.7% in 2018. After incorporating -€304 million in non-controlling interests, net income (Group share) amounted to €1,577 million in 2018, down 5.5% compared with 2017. Consolidated management ROE after tax (excluding non-recurring items) came to 9.4% in 2018, giving an accounting ROE of 9.2%. Consolidated management ROTE after tax (excluding non-recurring items) came to 12.0% in 2018, giving an accounting ROTE of 11.8%. Excluding non-recurring items and the impact of equity derivatives in Asia, Natixis’ ROTE is expected at 13.9%.

ANALYSIS BY NATIXIS MAIN BUSINESS LINE 4.2.2

Asset & Wealth Management 4.2.2.1

2018

2017 pro forma Change 2018/2017

*

(in millions of euros)

Net revenues

3,419 3,274

3,113 2,972

+9.8% +10.2% +1.8% +4.0% +23.4%

+12.6% +13.1% +1.8% +6.6% +26.5%

Asset Management Wealth Management

144

142

Expenses

(2,264)

(2,178)

Gross operating income Provision for credit losses

1,154

936

(1)

0

Pre-tax profit

1,192 66.2% 4,116 15.6%

947

+25.9%

Cost/income ratio

69.9% 3,773 12.8%

Shareholders' equity (average)

ROE

*

At constant USD exchange rates.

CHANGE IN ASSETS UNDER MANAGEMENT ■ OVER THE YEAR (IN BILLIONS OF EUROS ) (1)

Asset & Wealth Management revenues were up 9.8% for the period to €3,418.6 million (12.6% at constant exchange rates). Expenses also rose, but to a lesser degree, by 4.0% (up 6.6% at constant exchange rates). Gross operating income jumped 23.4% (26.5% at constant exchange rates) to €1,154.3 million. At 15.6%, ROE improved by 2.9 points from December 31, 2017. A – Asset Management Assets under management at end-December 2018 stood at €802.1 billion , down 3% at current exchange rates (-6% at constant exchange rates) compared with December 31, 2017. This was due to a highly unfavorable market effect (-€44.5 billion) and, to a lesser extent, the scope effect (-€4.8 billion). These effects were partially offset by the favorable exchange rate (+€20.4 billion).

-3% / -€28.8bn

-4.8

20.4

0.0 -44.5

802.1

At contant exchange rates: -6% / -€49.2bn

830.8

Outstandings at31/12/2018

Outstandings at31/12/2017

Currency effect

Scope effect (a)

Net inflows

Market effect

2018 scope effects: (1) - Natixis IM Private Equity: acquisition of the asset management company MV Credit in Q3 2018 (+€1.7 billion); - Natixis IM Europe: disposal of VEGA IM in Q4 2018 (-€6.5 billion).

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Natixis Registration Document 2018