NATIXIS_PILLAR_III_2017_EN

9 OVERALL INTEREST RATE, LIQUIDITY AND STRUCTURAL FOREIGN EXCHANGE RISKS Management of liquidity and funding risk

funding structure: the funding structure is monitored to ensure a that resources are well diversified, by type of counterparty, by market segment and by geographic area, in order to mitigate all concentration risk (see section 3.8.2.4); market depth tests conducted by the Joint Refinancing Pool: a these liquidity tests aim to explore the limits established by our counterparties on our issues.

In 2017, the diversification strategy undertaken in recent years consolidated as liquidity spreads fell and the businesses’ refinancing needs stabilized. The favorable market environment made it possible to focus on optimizing the efficiency of refinancing and the cost of the resources raised (due to its impact on other ALM constraints), rather than seeking asset growth. This led to: increased growth and rotation of structured issues in private a placement, particularly in Asia, supporting the strategy of distributing “solution” Global Markets offers that generate greater value; the establishment of a strategy for the circulation of liquidity a raised through private placements within the Group, aimed at improving asset/liability matching; the consolidation of “corporate” liquidity inflows through a various product offers (account administration, accounts, open deposits with notice dates, “Natixis Deposit” specialized professional fund, EETCs, etc.). Thanks to these actions, Natixis maintained a stable refinancing structure on both a yearly and quarterly basis. Finally, the weight of resources provided by the Group was as always linked to the BPCE/Natixis Joint Refinancing Pool, cross-exchanges of liquidity for the purpose of managing and maximizing liquidity gaps and regulatory ratios, and the Group policy, making BPCE the sole public issuer in the long-term segment. The following charts are established for information purposes on the basis of management data at year-end.

BUSINESS CONTINUITY PLAN 9.2.3 UNDER LIQUIDITY STRESS

(Data certified by the Statutory Auditors in accordance with IFRS 7) The aim of this Business Continuity Plan (“BCP under Liquidity Stress”) is to ensure that, in the event of a liquidity crisis altering the Group's ability to obtain funding, all resources are used in a coordinated and optimized manner to allow the Group to meet its current and future financial obligations and thus maintain business continuity. Given that Natixis is supervised by BPCE, in its capacity as the central institution, and given the close interactions between BPCE and Natixis in terms of liquidity management within the framework of the joint refinancing pool (see section 3.9.2.1) , this plan is defined in accordance with the Groupe BPCE business continuity plan, in the event of a crisis affecting access to liquidity for Natixis, BPCE and/or the entire banking system. A governance system (dedicated teams and Committees, activation and de-activation rules, reporting and communication procedure, etc.) and remediation plans to enhance liquidity and reduce funding requirements are defined and documented. In addition, the BCP is regularly tested to ensure that it is operational, in accordance with regulations. Funding strategy 9.2.4.1 As indicated in section 3.9.2.1, since mid-2011 Natixis’ funding structure has been rooted in the organization of a joint refinancing pool shared by Natixis and BPCE, placed under the authority of the Group ALM Committee. This platform was implemented in order to secure the Group’s financing and optimize the management and allocation of liquidity within the Group in accordance with pre-defined rules, to reduce market financing and funding costs. In particular, Natixis’ funding model is based on strong centralization of liquidity and liquidity access points through three Treasury platforms (Paris, New York and Hong Kong). FUNDING PRINCIPLES 9.2.4 AND STRUCTURE

GROSS WEIGHT OF ON-BALANCE SHEET FUNDING ■ SOURCES, BY MAJOR CATEGORY OF VEHICLE AND/OR BY CUSTOMER SEGMENT AT END-2017 REPORTING DATE

Central banks Credit institution Financial customers Non-financial customers Other customers Debt issues Bpce

40%

3% 4% 4% 4% 1%

29%

2% 3% 5% 2%

1%

Demand deposits 1%

Term deposits

Other deposits

Debt issues

Amounts owed to Groupe BPCE

110

NATIXIS Risk report Pillar III 2017