NATIXIS - Meeting notice combined general shareholder's meeting

MANAGEMENT REPORT AT DECEMBER 31, 2018

ANALYSIS OF CHANGES IN¢THE¢MAIN ITEMS COMPRISING THE CONSOLIDATED INCOME STATEMENT NET REVENUES Natixis’ net revenues stood at €9,616Ʉmillion at DecemberɄ31, 2018, up 3.1% from 2017 at constant exchange rates. At €8,917Ʉmillion, net revenues generated by the main business lines Ʉ (1) were up 2.8% at constant exchange rates versus 2017. The various divisions posted an increase in revenues, with the exception of Corporate & Investment Banking whose net revenues were penalized by lower revenues in Asia due to the impact of equity derivatives (-€259Ʉmillion). At constant exchange rates, net revenues were up 13% for Asset & Wealth Management, 8% for Insurance and 6.5% for SFS, while CIB revenues were down 8%. Excluding non-recurring items classified under Investor RelationsɄ (2) and excluding the impact of equity derivatives in Asia for CIB, Natixis’ net revenues would be up 4.4% at constant exchange rates compared with 2017, while net revenues would be up 5.1% for the business lines and down 2.5% for CIB. The Corporate Center’s net revenues stood at €699Ʉmillion in 2018, of which €678Ʉmillion for Coface. They include +€48Ʉmillion for the return of foreign-currency DSNs to the historic exchange rate, versus -€104Ʉmillion in 2017. Meanwhile, revenue synergies achieved with the BPCE networks exceeded the strategic plan’s targets. OPERATING EXPENSES AND HEADCOUNT Recurring expenses totaled €6,823Ʉmillion, up 4.2% at constant exchange rates compared with 2017. At constant exchange rates, costs increased 7% for the Asset & Wealth Management division, 1% for the CIB division, 2% for the Insurance division and 7% for SFS. Corporate Center expenses were up €915Ʉmillion in 2018 compared with €883Ʉmillion in 2017. They include €488Ʉ million in expenses for Coface and €164Ʉ million for the Single Resolution Fund contribution.

Headcount at the end of the period stood at 21,652 FTE, up 4% year- on-year, with a 3% increase in the business lines and 4% growth in the Corporate Center. CROSS OPERATING INCOME Gross operating income stood at €2,793Ʉmillion in 2018, a slight increase of 0.5% at constant exchange rates versus 2017. PRE-TAX PROFIT The provision for credit losses was €215Ʉmillion in 2018, down 16.9% compared with 2017. The provision for credit losses of the main business lines as a percentage of assets amounted to 16Ʉbasis points in 2018 versus 23 basis points in 2017. Revenues from Associates climbed to €29Ʉ million in 2018 versus €26Ʉmillion in 2017. Gains or losses on other assets totaled €54Ʉmillion in 2018, €31Ʉmillion from the sale of Axeltis by the Asset Management business and €11Ʉmillion from the sale of Sélection 1818 by the Wealth Management business line. In 2017 this item totaled €48Ʉmillion, including €21.5Ʉmillion from the disposal of the Ellisphere subsidiary (Financial Investments) and €18Ʉmillion following the liquidation of a holding company. Change in the value of goodwill was nil in 2018 as it was in 2017. Pre-tax profit therefore totaled €2,661Ʉ million in 2018 versus €2,651Ʉmillion in 2017. RECURRING NET INCOME (GROUP SHARE) The recurring tax expense came to €781Ʉmillion in 2018. The effective tax rate was 29.7% in 2018. After incorporating -€304Ʉ million in non-controlling interests, net income (Group share) amounted to €1,577Ʉmillion in 2018, down 5.5% compared with 2017. Consolidated management ROE after tax (excluding non-recurring items) came to 9.4% in 2018, giving an accounting ROE of 9.2%. Consolidated management ROTE after tax (excluding non-recurring items) came to 12.0% in 2018, giving an accounting ROTE of 11.8%. Excluding non-recurring items and the impact of equity derivatives in Asia, Natixis’ ROTE is expected at 13.9%.

REPORT

(1) Under the New Dimension plan’s presentation of the divisions, the term “Net revenues generated by the business lines” now includes Asset & Wealth Management, CIB, Insurance and SFS, and no longer includes Coface. (2) Resulting from CIB’s settlement of the legal dispute with Société Wallone du Logement in 2018, the capital gain for the Corporate Center from the disposal of Caceis in 2017 and, as is customary, the impact of the return of foreign-currency DSNs to the historic exchange rate

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NATIXIS 2019 MEETING NOTICE