NATIXIS_PILLAR_III_2017_EN

3 CAPITAL MANAGEMENT AND CAPITAL ADEQUACY Capital planning

Capital planning 3.5

Capital planning consists of determining Natixis’ target capital adequacy level, continually ensuring compliance with regulatory capital requirements in all compartments and capital adequacy in line with the risk appetite defined by the institution, and adapting capital allocation and measurement of businesses' profitability accordingly. As a result, under the New Frontier strategic plan, the target fully loaded CET1 ratio, without taking into account phase-in measures except for those concerning deferred tax assets, ranged from 9.5% to 10.5%, with the target fully loaded CET1 ratio for the end of the plan (i.e., December 31, 2017) set at 10.5%. With a fully-loaded CET1 ratio of 10.65% at December 31, 2017 (before the impact of the new IFRS 9 standard), Natixis is thus in line with this benchmark. The new plan, titled “New Dimension”, has set the target CET1 ratio after dividends at 11% at the end of the plan. The capital planning system adapts all processes with the aim of ultimately meeting the requirements of the supervisory authorities, shareholders and investors: continuously maintaining the targets set in terms of capital a adequacy;

developing an internal approach for measuring capital a requirements and overseeing Natixis’ resilience in stress scenarios (ICAAP); projecting capital requirements specific to business activity, a within the framework of Natixis’ overall capital adequacy policy; anticipating regulatory changes and their impact on Natixis’ a various businesses. implementing a system for analyzing the capital consumption a of the businesses and their profitability on the basis of Basel 3/CRR risk-weighted assets; allocating capital to the businesses, within the framework of a strategic plan and annual budget procedures, taking into account business requirements, profitability and balance among the businesses. Outlook The European MREL ratio introduced by the BRRD directive is applicable to Natixis, unless otherwise stipulated, according to the methods still to be defined by the Single Resolution Board Together with Groupe BPCE as a whole, Natixis contributed to collecting detailed information on liabilities , as required by the SRB in 2017. As the BRRD directive is currently under review, the mechanisms for managing and preparing for this new ratio are not yet finalized.

TABLE 9 (NX02): RWA BASEL 3 BY NATIXIS MAIN BUSINESS R

Basel 3 RWA at 12.31.2017

Division (in millions of euros)

Total

Credit  (a)

Market  (b)

Operational

Corporate and Investment Banking  (c)

58,991 11,652

42,931

8,739

7,321 4,717

Asset & Wealth Management

6,935 7,201

Insurance

7,201

Specialized Financial Services

16,681 16,172

14,426 13,492

2,255

Corporate Center  (d)

2,189

491

TOTAL AT 12.31.2017

110,697

84,985

10,928

14,784

TOTAL AT 12.31.2016

115,524

86,968

14,847

13,709

Including counterparty risk. (a) Including settlement-delivery risk of €1,198 million in CVA RWA. (b) Including Treasury & Collateral Management. (c) Including Financial Investments. (d)

48

NATIXIS Risk report Pillar III 2017