NATIXIS_PILLAR_III_2017_EN

3 CAPITAL MANAGEMENT AND CAPITAL ADEQUACY

Changes in regulatory capital, regulatory own fund requirements and ratios in 2017

2017

(in millions of euros)

Additional Tier 1 (AT1) capital Amount at start of period New eligible instruments issued Redemptions during the period

1,770

833

(364)

Other, including prudential adjustments and phase-in arrangements

57

o/w impact of changes in phase-in rate o/w other impact of changes in basis

(98) 155

Amount of Additional Tier 1 (AT1) capital at end of period

2,297

Tier 1 capital

14,271

Tier 2 capital Amount at start of period

2,555

New eligible instruments issued Redemptions during the period

0 0

Other, including prudential adjustments and phase-in arrangements

(286)

o/w impact of changes in phase-in rate o/w other impact of changes in basis Amount of Tier 2 capital at end of period

104

(390) 2,269

TOTAL REGULATORY CAPITAL

16,540

The following changes in Basel 3/CRR regulatory capital were recorded in 2017, after applying phase-in arrangements: Common Equity Tier 1 (CET1) capital totaled €12 billion at December 31, 2017, down €0.5 billion over the year. Shareholders’ equity (Group share) remained stable for the year at €19.8 billion, as the incorporation of net income for the year in the amount of €1.67 billion and the issuance of new deeply subordinated instruments in the amount of €0.5 billion (net the value of exercised calls) were primarily offset by the negative impact of translation adjustments in the amount of -€0.67 billion, dividend payments for 2016 in the amount of -€1.1 billion and the impact of acquisitions (including puts on minority interests) in the amount of -€0.34 billion. CET1 capital included a provision for 2017 dividends payable in cash in the amount of €1.16 billion (i.e. €0.37 per share) and was impacted by goodwill on acquisitions (-€0.2 billion). Even though

the phase-in period for deductions is coming to an end, the substantial reduction of the tax base for deferred tax assets to be deducted (-€0.325 billion) more than offset this impact. Aside from the items above, Additional Tier 1 capital rose by €0.5 billion, primarily due to two issuances worth $500 million each for a total of €833 million and the exercise of a call option in October 2017 (€364 million face value). The balance was primarily due to the change in the phase-in rate applied on items deducted from AT1 capital, as well as the items subject to these provisions. Tier 2 capital was down by -€0.3 billion for the year due to the impact of the prudential haircut on instruments eligible as Tier 2 capital, a reduction in excess provisions over expected losses and changes in the impact of phase-in arrangements over the period.

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NATIXIS Risk report Pillar III 2017