NATIXIS // 2021 Universal Registration Document

9 GLOSSARY

Acronym/Term

Definition

Pricing

Pricing.

See PD.

Probability of default

Process

Process.

Rating

An appraisal by a credit rating agency (Moody’s, Fitch Ratings, Standard & Poor’s) of the creditworthiness of an issuer (company, government or other public entity) or a transaction (bond issue, securitization, covered bond). The rating has a direct impact on the cost of raising capital. An organization that specializes in assessing the creditworthiness of issuers of debt securities, i.e. their ability to honor their commitments (repayment of capital and interest within the contractual period). Guarantees that may consist of assets in the form of tangible or intangible assets, movable or immovable, such as raw materials, precious metals, sums of money, financial instruments or insurance contracts. The securitization of an exposure that is already securitized where the risk associated with an underlying pool of exposures is tranched and at least one of the underlying exposures is a securitization position. The degree of risk, by type and by business line, that the institution is prepared to take on in the pursuit of its strategic objectives. Risk appetite can be expressed through either quantitative or qualitative criteria. Document describing the interface between the organization’s key processes and the implementation of the governance that puts the RAS into action. Risk-based capital.

Rating agency

RBC

Real collateral

Resecuritization

Risk appetite

Risk Appetite Framework (RAF) Risk Appetite Statement (RAS)

Document setting out, in qualitative and quantitative terms, the risks that the bank is prepared to take.

Risk Assessment

Risk Assessment.

Risk weight (RW)

The percentage value by which a given exposure is multiplied, used in the calculation of the corresponding risk-weighted assets.

Risk-weighted assets (RWA)

Exposure value multiplied by its risk weight.

Risk-weighted assets

See RWA.

RMBS

Residential Mortgage-Backed Security, i.e. a debt security backed by a pool of assets consisting of residential mortgage loans. Net income (excluding returns on hybrid securities recognized as equity instruments) divided by shareholders’ equity (restated for hybrid securities), used to measure the profit generated on capital.

ROE (Return On Equity)

RSSl

Head of Information Systems Security.

RTT

Compensatory time off in lieu of overtime pay (Réduction du Temps de Travail).

RW

Risk weight.

RWA

Risk Weighted Assets, or risk-weighted EAD.

S&P

Standard & Poor’s.

SA (Standardized Approach)

Approach used to measure credit risk as defined by EU Regulations.

Sales

Sales.

SCPl

Real estate investment trust (Société Civile de Placement Immobilier).

SEC

US Securities and Exchange Commission.

Securitization

A transaction whereby credit risk on loan receivables is transferred to investors by an entity through the issuance of negotiable securities. This may involve the transfer of receivables (physical securitization) or the transfer of risks only (credit derivatives). Some securitization transactions are subordinated through the creation of tranches.

SEF

Structured Export Finance.

SEPA

Single Euro Payments Area.

SFEF

Société de Financement de l’Économie Française (SPV set up by the French government to refinance French banks during the financial crisis).

SFS

Specialized Financial Services.

Share

An equity security issued by a corporation, representing a certificate of ownership and conferring on its possessor (the “shareholder”) proportional rights in the distribution of any profits or net assets as well as a voting right at the General Shareholders’ Meeting. Société d’Investissement France Active : The investment company through which France Active receives solidarity-based savings and invests them in the Social and Solidarity-Based Economy and socially innovative companies.

SIFA

560

NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2021