NATIXIS_REGISTRATION_DOCUMENT_2017

RISKS AND CAPITAL ADEQUACY Capital management and capital adequacy

COMPOSITION OF CAPITAL 3.4.3

amount exceedingthreshold 2on materialholdingsof capital j instrumentsissuedby financialentities, amount exceeding threshold 2 on deferred tax assets j dependent on future earnings and resulting from temporary differences, amount exceeding threshold 3 common to amounts not j deductedin respectof threshold 2, any surplus deduction of Additional Tier One capital (see j below) . Additional Tier One (AT1) capital AT1 capitalcomprises: subordinateddebt instrumentsrecognizedas AT1 after applying a phase-inarrangements; deductionsmade from this categoryvia the phase-inprovisions a appliedto CET1; any surplusdeductionof Tier 2 capital (see below) . a The Risk and Pillar IIIreport containsdetailedinformationon debt instruments recognized in Additional Tier 1 capital and their characteristics at December 31, 2017, as required by CommissionImplementingRegulationNo. 1423/2013(Annex II). Tier Two (T2) capital T2 capitalcomprises: subordinated debt instruments recognized as T2 capital after a applyingphase-inarrangements; deductionsmade from this categoryvia the phase-inprovisions a appliedto CET1; any surplusprovisionsrelatedto expectedlosses. a The Risk and Pillar IIIreport containsdetailedinformationon debt instrumentsrecognizedin Tier 2capitaland their characteristicsat December 31,2017, as required by Commission Implementing Regulation No. 1423/2013(Annex II) - Pillar III available on the Natixis website ( www.natixis.com ). At December 31,2017, the transition from shareholders'equity to regulatory CET1 capital, Tier 1 capital and total capital after applying phase-in arrangements, is summarized in the table below.

In accordance with the provisions introduced by the CRR and with the national provisions defined by the ACPR, regulatory capital (calculated based on shareholders’ equity in accordance with the accountingbalance sheet), comprisesthree categories, as describedbelow. Each category comprises liability items extracted from the consolidated financial statements and restated by automatically applyingdeductions,either directlyor subjectto thresholds. Until 2021, regulatorycapital is subject to phase-inarrangements and grandfatheringprovisionsto supportthe roll-outof the CRR. Common Equity Tier One (CET1) CET1 is calculated using shareholders’ equity (excluding reclassifiedhybridsecurities),with the followingrestatements: deductionsnot subjectto phase-inarrangements: a estimateddividend, j goodwilland intangibleassets, j recyclable unrealized gains and losses on hedging j derivatives, own credit risk on debts issued and financial instruments j (Debit ValueAdjustment), prudentvaluationadjustments, j expected loss on equity positions and shortfall of provisions j on expectedlosseson credit positions, revaluation adjustments on defined-benefit pension plan j commitments; deductionssubjectto phase-inarrangements: a non-banknon-controllinginterests, j bank non-controlling interests exceeding the limits set by j regulations, deferred tax assets dependent on future earnings, but not j relatedto temporarydifferences, recyclablegains or losseson available-for-saleassets, j company-controlledstock and cross-shareholdings, j amount exceeding threshold 1 on non-material holdings of j capital instrumentsissuedby financialentities,

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Natixis Registration Document 2017