NATIXIS - 2018 Registration document and annual financial report

FINANCIAL DATA Consolidated financial statements and notes

The carrying amounts used are those listed in the consolidated financial statements of the ultimate parent company at the date of completion of the transaction. Transactions involving two entities controlled by Natixis and those involving an entity controlled by Natixis and an entity controlled by BPCE are considered to have been carried out by entities under joint control. Principles adopted for the measurement and recognition of the transactions resulting in the creation of Natixis in 2006 The assets contributed by the former CNCE to Natixis fall into two categories: shares in the Corporate & Investment Banking and service a subsidiaries; a portion of the cooperative investment certificates (CCIs) a conferring entitlement to the share capital of the Caisses d’Epargne. The contribution values used for consolidation purposes in respect of both categories of assets are the carrying amounts of these assets in the former CNCE’s consolidated financial statements, restated in accordance with IFRS as adopted in the European Union. Other transactions affecting the structure of the Group that led to the creation of Natixis were accounted for by the acquisition method for consolidation purposes, in accordance with IFRS 3. Goodwill arising in connection with the above-mentioned business combination on December 31, 2006 was accounted for as follows: Goodwill on contributed entities As the contributions were recognized at their net carrying amount under IFRS, no valuation adjustments have been recorded for the various assets and liabilities contributed. The difference between the acquisition cost and the Group’s interest in the net assets of the contributed entities does not constitute goodwill within the meaning of IFRS 3, since the acquisition cost takes into account the real value of the shares, while the contributions were recognized at their net carrying amount. Each of the differences observed was recognized in “Consolidated reserves”. An amount of €3.170 billion was charged against the issue premium in this respect at December 31, 2006. Goodwill on other transactions The goodwill arising from the transaction resulting in the creation of Natixis amounted to €484 million, which breaks down as follows: €229 million for the former IAMG, €21 million for the former IXIS CIB and €8 million for the former Novacrédit, plus the goodwill recorded in “Investments in associates” relating to the Caisse d’Epargne CCIs (€190 million) and the Banque Populaire CCIs (€36 million). Since then, goodwill relating to the former IXIS CIB has been fully written-down. In light of the sale of the cooperative investment certificates during fiscal year 2013, the associated goodwill is no longer included in the consolidated balance sheet.

Other goodwill

In 2018, goodwill increased by +€129 million, excluding translation adjustments (+€67 million).

Impairment tests All items of goodwill are impaired, based on the value in use of the cash-generating units (CGUs) to which they have been allocated. For the Coface CGU, a listed entity since June 2014, which is not one of Natixis’ core businesses and which is managed on an asset basis, as in previous years, value in use was supplemented by other approaches using market data including market multiples, stock market prices and brokers’ target prices. An average valuation was determined by weighting the different approaches, with the respective weighting of each approach unchanged compared with the previous fiscal year. At December 31, 2018, as in 2017, the CGUs are the same as the divisions in the “New Dimension” strategic plan, i.e. “Asset & Wealth Management”, “Corporate & Investment Banking”, “Insurance” and “Specialized Financial Services”. Value in use is determined principally by discounting the expected future cash flows from the CGUs (Discounted Cash Flow (DCF) method) on the basis of the five-year medium-term business plans drawn up by Natixis. The following assumptions were used: estimated future cash flows: forecast data drawn from a multi-year plans established by the business lines and updated as part of the 2019 budget process; perpetual growth rate: 2.5% for all valuations; a discount rate: use of a specific rate for each CGU: 8.7% for a Asset & Wealth Management (9.7% in 2017), 10.6% for CIB (11.4% in 2017), 10.2% for Insurance (11.5% in 2017), 9,3% for Coface (10,8% in 2017) and 11.2% for Specialized Financial Services (12.2% in 2017). The discount rates were determined by factoring in the following: for the Asset & Wealth Management, Corporate & Investment a Banking, Insurance and Specialized Financial Services CGUs, the risk-free interest rate of the Euro-Bund zone, averaged over a depth of 10 years, plus a risk premium calculated according to a sample of CGU-representative companies; for the Coface CGU, the interest rate references used were a determined according to a similar method to the other CGUs, using samples of equivalent companies for the insurance and factoring activities. These tests did not result in the recognition of impairment losses at December 31, 2018. A 30 bp increase in discount rates (assumption based on the historical annual variability observed over one year using 2012-2018 historical data) combined with a 50 bp reduction in perpetual growth rates would reduce the value in use of CGUs by: -9.7% for the Asset & Wealth Management CGU; a -5.0% for the Corporate & Investment Banking CGU; a -7.6% for the Insurance CGU; a -5.3% for the Specialized Financial Services CGU; a -4.8% for the Coface CGU; a and would not lead to the recognition of any impairment losses for these CGUs.

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Natixis Registration Document 2018