NATIXIS_REGISTRATION_DOCUMENT_2017

3 RISKS AND CAPITAL ADEQUACY Summary of annual risks

the level of interest rates in financial markets generally, and a yield on products that compete with Natixis’ Asset Management products, such as bank savings deposits and bonds; tax incentives that favor other investment products; or a regulatory initiatives in the financial markets, which may a provide incentives to banks to distribute Asset Management products or, conversely, to seek to increase deposits at the expense of Asset Management products. Moreover, if Natixis is unable to maintain a satisfactory level of performance with respect to its Asset Management products, clients may withdraw funds or may decline to renew investment mandates. If these or other factors were to adversely affect demand for Natixis’ products, net inflows would be reduced and, as a result, assets under management would be lower, causing a reduction in Natixis’ net revenues and negatively impacting its results of operations. Claims experienced by Natixis Insurance affiliates could be inconsistent with the assumptions they use to price their products and establish their reserves The earnings of the Insurance affiliates of Natixis depend significantly on the extent to which the actual claims or annuities paid (in the case of life insurance) are consistent with the assumptions used to set the prices for their products and establish the technical provisions. Natixis uses its own experience and industry data to make actuarial and loss ratio estimates, including to determine the pricing of insurance products and establishing the related actuarial liabilities. However, there can be no assurance that actual experience will match these estimates, and unanticipated risks such as pandemic diseases or natural disasters could result in loss experience inconsistent with the relevant pricing and reserving assumptions. To the extent that the actual benefits paid by Natixis to policyholders are higher than the underlying assumptions used in initially establishing the future policy benefit reserves, or events or trends cause Natixis to change the underlying assumptions, Natixis may be exposed to greater than expected liabilities, which may adversely affect Natixis’ Insurance business, results of operations and financial condition. Despite the risk management policies, procedures and methods in place, Natixis may be exposed to unidentified or unanticipated risks likely to give rise to significant losses Natixis’ risk management policies and procedures may not be effective in limiting its exposure to all types of market environments or all types of risk, including risks that Natixis has not been able to identify or preempt. Furthermore, the risk management procedures and policies used by Natixis do not guarantee effective risk reduction in all market configurations. These procedures may not be effective against certain risks, particularly those that Natixis has not previously identified or anticipated. Some of Natixis’ qualitative tools and metrics used to manage risk are based on its use of observed historical market behavior. Natixis then carries out a mostly statistical analysis to quantify its risk exposure. The tools and metrics used may provide inaccurate conclusions on future risk exposures, mainly because of factors that Natixis has not anticipated or correctly assessed in its statistical models, or because of unexpected and unprecedented market trends. This inaccuracy would limit Natixis’ ability to manage its risks. Consequently, the losses borne by Natixis could prove far

Changes in accounting principles may have an impact on Natixis’ financial statements and capital ratios and result in additional costs Applicable accounting principles evolve and change over time, and Natixis’ financial statements and capital ratios are exposed to the risk of changes to such principles. For example, in July 2014, the International Accounting Standards Board published IFRS 9 “Financial Instruments,” which replaced IAS 39 as from January 1, 2018, after its adoption by the European Union. The standard amends and complements the rules on the classification and measurement of financial instruments. It includes a new impairment model based on expected credit losses (“ECL”), while the current model is based on provisions for incurred losses, and new rules on general hedge accounting. The new approach based on ECL could result in substantial additional impairment charges for Natixis and add volatility to its regulatory capital ratios, and the costs incurred by Natixis relating to the implementation of such norms may have a negative impact on its results of operations. Natixis may generate lower revenues from brokerage and other fee-based businesses during market downturns A market downturn is likely to lower the volume of transactions that Natixis executes for its customers and in its capacity as a market maker, thus reducing net revenues from these transactions. In addition, Asset Management fees charged by Natixis to its customers are often based on the value or performance of the portfolios, so that any market downturn, legislative, regulatory or policy change or political or geopolitical event that reduces the value of the assets under management in such portfolios or increases the amount of redemptions would reduce Natixis’ revenues from its Asset & Wealth Management businesses. Independent of market changes, any under-performance of Natixis’ Asset Management business may result in a decrease in assets under management (in particular, as a result of mutual fund redemptions) and in lower fees, premiums and other portfolio management income earned by Natixis. Demand for Asset Management products could vary on the basis of a variety of factors, some of which are outside the control of Natixis Demand for Asset Management products and services, which represents a significant share of the overall net revenues and net income of Natixis, can be significantly affected by numerous factors beyond management’s control. Adverse developments can reduce the amount of new funds invested by Natixis’ clients, and can cause investors to withdraw assets from the funds and portfolios that Natixis manages. The factors beyond the control of Natixis that can significantly impact demand for its Asset Management products and services include the following elements: the macroeconomic climate, globally and, more specifically, in a the countries in which Natixis markets its products, which impacts the capacity of individuals to save money and to invest (directly or indirectly) in Asset Management products and which can also affect demand of institutional investors for these products; the level of equity markets globally and in the principal regions a in which Natixis’ products are distributed, which can impact the attractiveness of Asset Management products for investors and thus affect the level of investments in Natixis’ funds;

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Natixis Registration Document 2017