NATIXIS - 2018 Registration document and annual financial report

5 FINANCIAL DATA

Consolidated financial statements and notes

IMPACT OF THE FIRST-TIME APPLICATION OF IFRS 9

NOTE 1

AS OF JANUARY 1, 2018

Preamble 1.1 From January 1, 2018, Natixis has applied IFRS 9 “Financial instruments”, which replaced IAS 39 “Financial instruments: Recognition and Measurement” with new rules for classifying and measuring financial assets and a new impairment model for expected credit losses. Note that Natixis opted for the early adoption of IFRS 9 for its financial liabilities (see Note 2.1). Natixis has chosen to continue to apply IAS 39 for insurance entities, as authorized by the amendment to IFRS 4 (see Note 2.1) and for hedging, as permitted by IFRS 9. The main impacts of the first-time application of IFRS 9 (with the exception of the impact of the provisions relating to financial liabilities, which have been applied since January 1, 2016) on the opening balance sheet at January 1, 2018 are as follows: Classification and measurement Most financial assets that were measured at amortized cost under IAS 39 continue to meet the conditions for measurement at amortized cost under IFRS 9. Similarly, most financial assets measured at fair value under IAS 39 (available-for-sale financial assets and financial assets at fair value through profit or loss) continue to be measured at fair value under IFRS 9. As of January 1, 2018, the main reclassifications were: for financing portfolios: a repurchase agreements classified as loans and receivables j and liabilities measured at amortized cost under IAS 39 and considered part of a trading business model under IFRS 9 were reclassified as “Financial assets at fair value through profit or loss” for €47,328 million, and as “Financial liabilities at fair value through profit or loss” for €63,620 million, and are now measured at fair value through profit or loss, repurchase agreements designated under the fair value j option under IAS 39 for the purpose of comprehensive management at fair value and considered part of a trading business model were classified as “Financial assets at fair value through profit or loss” under IFRS 9, for €44,695 million. This reclassification had no impact on the balance sheet, since assets designated under the fair value option through profit or loss and assets held for trading were measured in the same way and presented in the same line of the balance sheet under IAS 39; for securities portfolios: a debt securities held in the liquidity reserve, which under j IAS 39 were recognized as “Available-for-sale assets”, are managed under a hold to collect and sell business model and were therefore reclassified as “Financial assets at fair value through other comprehensive income” (recyclable to income), for €9,466 million, Mutual fund and venture capital mutual fund units, except for j those in the insurance business, classified as equity instruments under IAS 39 and recognized as “Available-for-sale assets” or as “Financial assets under the fair value option”, are considered to be debt instruments with non-basic (non-SPPI) characteristics under IFRS 9, and

as a result they are recognized as “Financial assets at fair value through profit or loss”, for €1,645 million, investments in associates recognized as available-for-sale j assets under IAS 39, which, as allowed under IFRS 9, are either recognized as “Financial assets at fair value through profit or loss”, for €379 million, or under the option provided for by IFRS 9, are recognized as “Financial assets at fair value through other comprehensive income” (not recyclable to income even in the event of disposal), for €71 million. In this last case, only dividends are recorded in income, securitization fund units measured at amortized cost and j classified as loans and receivables under IAS 39 (i) are measured at fair value through profit or loss under IFRS 9 if their contractual cash flows are not solely payments of principal and interest, (ii) are measured at fair value through other comprehensive income if they are managed under a hold to collect and sell business model, and (iii) will continue to be recognized at amortized cost if they are managed under a hold to collect business model. For first-time application, in addition to an SPPI analysis (see Note 6.1.2) and a credit risk analysis of securitization fund units, an SPPI analysis of the pool of underlying assets was carried out and did not call into question the meeting of SPPI criteria by the securitization fund units. At January 1, 2018, securitization fund units measured at fair value through profit or loss and reclassified to this category amounted to €23 million; Natixis’ other positions will continue to be recognized at amortized cost. Guarantee deposits and margin calls with collateral status composed of cash mainly held with clearing houses also meet the definition of financial instruments within the meaning of IAS 32. They are closely linked to the activities or instruments that they cover and are an integral part of the business model of the activity to which they relate. Nearly all the cash guarantee deposits and margin calls, previously recognized in “accrual accounts, other assets and liabilities”, are therefore now included in instruments at fair value through profit or loss, in accordance with ANC recommendation 2017-02 on the format of the consolidated financial statements of banking institutions in line with international standards. Reclassifications between categories of financial assets measured at amortized cost and fair value through profit or loss or through other comprehensive income had an impact on Natixis’ consolidated equity at January 1, 2018 owing to the different measurement methods applicable to these assets and to the retroactive application of the standard. Nevertheless, as these reclassifications are limited or affect assets whose fair value does not vary significantly from their value at cost due notably to the residual maturity of the transactions in question, these reclassifications had an impact of €3 million (after tax) on Natixis’ opening equity at January 1, 2018. The reclassifications between different categories under IAS 39 and IFRS 9 are presented in Notes 1.2.1 and 1.2.2. The classification and measurement principles applied to financial instruments are described in Notes 6.1 and 6.3.

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Natixis Registration Document 2018