NATIXIS - 2018 Registration document and annual financial report

FINANCIAL DATA Consolidated financial statements and notes

Financing and guarantee 6.21 commitments a) Financial Guarantees Off balance sheet commitments

losses associated with financial assets must in fact take into account the flows generated by guarantees considered an integral part of the debt instrument; IAS 37, for guarantees received in respect of non-financial a liabilities falling within the scope of IAS 37. The specific treatment applied to the guarantee granted to Natixis by BPCE regarding former GAPC hive-off assets is disclosed in Note 6.7. b) Financing commitments Financing commitments are irrevocable commitments by Natixis to grant a loan under pre-defined conditions. The vast majority of the financing commitments granted by Natixis give rise to loans granted at market rates at the grant date and recognized at amortized cost. As such, and in accordance with IFRS 9, the commitment to lend and the loan itself are considered successive stages of one and the same instrument. The commitment to lend does not, therefore, fall within the scope of IFRS 9: it is treated as an off-balance sheet transaction and is not revalued. Financing commitments are eligible for the provisioning mechanism under IFRS 9, however (see Note 6.3) . IFRS 9 provides that the issuer of a financing commitment must apply provisioning criteria to loan commitments that do not fall within the scope of this standard. The provisions recognized in respect of these commitments are presented in Note 8.17 “Summary of provisions”. The procedure for setting up the deposit and resolution guarantee fund was changed by a decree dated October 27, 2015. Contributions made to the deposit and resolution guarantee fund may be paid in the form of partner or association certificates and cash security deposits (guarantee of irrevocable commitment) recognized as assets on the balance sheet and contributions (which are non-refundable in the event of a voluntary withdrawal of approval to operate) recorded in income as “Taxes and regulatory contributions” among other operating expenses (see Note 7.7) . Directive 2014/59/EU (BRRD—Bank Recovery and Resolution Directive) which establishes the framework for the recovery and resolution of banks and investment firms and European regulation 806/2014 (SRM regulation) established the introduction of a resolution fund as of 2015. In 2016, this fund became a Single Resolution Fund (SRF) between the member States participating in the Single Supervisory Mechanism (SSM). The SRF is a resolution financing mechanism available to the resolution authority (Single Resolution Board). The latter may use this fund when implementing resolution procedures. In accordance with delegated regulation 2015/63 and implementing regulation 2015/81 supplementing the BRRD Directive on ex-ante contributions to financing mechanisms for the resolution, the Single Resolution Board set the level of contributions to the Single Resolution Fund for 2017. Contributions paid to the fund may be made in cash security deposits recognized as assets on the balance sheet (15% in cash security deposits) and in contributions recorded in income as “Taxes and regulatory contributions” (see Note 7.7) . Contributions to banking resolution 6.22 mechanisms

Financial guarantee commitments not classified as derivatives are contracts requiring the issuer to make specific payments to repay the business guaranteed for a loss that it has incurred owing to the failure of a debtor to make the contractual installments due. The exercise of these rights is subject to the occurrence of an uncertain future event. Financial guarantees given are stated initially at fair value, then subsequently at the higher of: the amount initially recognized upon inception less, where a appropriate, the amount of amortization recorded in line with the principles outlined in IAS 15 “Revenue from Contracts with Customers”. This amortization represents the deferred recognition of the fees received over the period covered by the guarantee; and the amount of the provision determined according to the a provisions of the expected credit loss model (see Note 6.3) . The provisions are presented in Note 8.17 “Summary of provisions”. All the financial guarantees issued by insurance subsidiaries that also meet the definition of an insurance contract were accounted for in line with the requirements of IFRS 4 “Insurance Contracts” (se e Note 9). Specific case of guarantees issued to mutual funds Natixis guarantees the capital and/or returns on units in certain mutual funds. These guarantees are executed solely in the event that the net asset value of each of the units in the fund at maturity is lower than the guaranteed net asset value. Although similar to derivatives, the capital and/or performance guarantees given by Natixis to certain mutual funds at January 1, 2018 are recognized as financial guarantees and provisioned in keeping with IFRS 9, given how difficult it is to measure the size of the operational risk in the guarantee’s fair value. The market risks and parameters relating to these instruments are currently being analyzed in order to build a valuation model that meets all the requirements of IFRS 13. The expected impact on income should not be material. At December 31, 2018, these guarantees were included in the scope of the financial instruments eligible for the IFRS 9 impairment model based on counterparty risk. Guarantee commitments received There are no IFRS standards covering financial guarantees received (other than derivatives or insurance contracts). In the absence of specific guidance, the accounting treatment applied must be determined by analogy with the accounting treatment prescribed by other standards in similar situations. Accordingly, guarantees received meeting the definition of a financial guarantee for an issuer are accounted for in accordance with: IAS 9, for guarantees received in respect of financial assets a (debt instruments). The measurement of the expected credit

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Natixis Registration Document 2018