NATIXIS - 2018 Registration document and annual financial report

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

Revenues from Financial Services excluding Payments were up 2%, with net revenues on Employee Savings Plans up 4%. Payments revenues increased by 16% year-on-year. This growth was driven by the performance of historical businesses (Flows, Electronic Banking and Service Vouchers) and by acquisitions carried out over the last two fiscal years which accelerated business expansion. Accordingly, Merchants Solutions profited from the surge in business volumes generated from recent acquisitions made by Natixis Payment Solutions (Dalenys and PayPlug).

At €1,004 million at end-2018, Specialized Financial Services expenses were up 7% compared with 2017, a result largely owed to scope changes for the Payments business lines. Overall, gross operating income rose 6% to €468 million. Provision for credit losses was down significantly to €23 million thanks to effective overall risk management and better-quality data that have an impact on IFRS9 provisions. Net operating income stood at €445 million, up 20%, and ROE at 14%.

4

Corporate Center 4.2.2.5

2018

2017 pro forma

Change

(in millions of euros)

Net revenues

699 678

657 624

+6.4% +8.7%

Coface

Corporate Center excluding Coface

21

33

(36.4)% +3.5% (4.8)% (78.7)% (21.4)%

Expenses

(915) (215)

(883) (226)

Gross operating income Provision for credit losses

(15)

(71)

Pre-tax profit

(216)

(275)

Net revenues from the Corporate Center stood at €669 million versus €657 million in 2017. Coface net revenues in the first half of 2018 totaled €678 million, a sharp increase of 9% (+11% at constant exchange rates) compared with 2017. 2017 revenues were up 2% to €1.4 billion compared with 2017. Credit insurance, which accounts for 95% of revenues, was up 3% while factoring was down 7%. At constant exchange rates, global turnover was higher (+5%). 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. Net revenues from the Corporate Center excluding Coface stood at +€21 million versus +€33 million in 2017. The key factors are as follows: exchange rate fluctuations of deeply subordinated notes issued a in dollars stood at +€48 million in 2018 compared with -€104 million in 2017; the sale of the equity interest in Caceis in 2017 generated a €74 million in capital gains; the equity interest in EFG Hermes was measured at fair value a through profit or loss in 2018, with an impact of -€21 million over the year;

FVA hedging had a -€55 million impact compared to a +€20 million in 2017 due mainly to wider funding spreads in 2018. 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. Expenses from the Corporate Center stood at €915 million in 2018 versus €883 million in 2017. At €488 million, Coface expenses were down slightly by 1% compared with 2017, and up 3% at constant exchange rates when restated for non-recurring Fit to Win expenses. Expenses from the Corporate Center excluding Coface were for: Single Resolution Fund contributions totaling €164 million in a 2018 versus €121 million in 2017; the expenses of Natixis Private Equity (Finance division) and a Natixis Algérie totaling €38 million in 2018 compared with €53 million in 2017, including six months' worth of expenses for Corporate Data Solutions, which was sold in June 2017; and the support function expenses not invoiced to the Natixis a business lines; these totaled €224 million in 2018 compared with €225 million in 2017. The provision for credit losses of the Corporate Center stood at -€15 million versus -€71 million in 2017, which mainly consisted of a €60 million general provision for litigation.

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Natixis Registration Document 2018