NATIXIS_REGISTRATION_DOCUMENT_2017

RISKS AND CAPITAL ADEQUACY Overall interest rate, liquidity and structural foreign exchange risks

NATIXIS’ SHORT-TERM ISSUANCE PROGRAM OUTSTANDINGS R

Commercial Papers

Certificates of Deposit

(in millions of euros or euro equivalents)

Program amount

45,000  (a) 20,897  (b)

24,507

Outstandings at 12.31.2017

5,312

NEU CP program only. (a) Outstandings of the NEU CP and US CD programs. (b)

3

to September 2018while reducing its monthly purchases from €60 billion to €30 billion. The yield on the 10-year Bund, which was at -0.18%at the start of the year, ended the year at 0.43%. There was high volatility in the 10Y yield in the first half of the year mainly due to France-relatedrisk in the months preceding the presidentialelection. On the European credit market, bank spreads on unsecured senior debt continued to narrow throughout the year. The five-year credit spread of French banks on senior unsecured preferred debt ended the year at Euribor3M+15bp, a decline of 29 bp from 2017. For the first time, the volume of non-preferred debt (MREL/TLAC eligible) issued by European banks (€104 billion)exceededthat of preferreddebt (€80 billion). Against this market backdrop, Natixis raised a total of €22.3 billionin funding in 2017 under its medium- and long-term refinancing program. As the only long-term issuer in the public issues segment,BPCE providedNatixis with financingfor a total euro-equivalentamountof €6.5 billion.

Long-term funding In 2017, growth figures for the United States and Europe reaffirmed the strength of their respective economies,with the IMF estimating GDP growth of 2.2% in the United States and 2.1% in Europe in 2017. However,the accommodativemonetary policies of the Federal Reserve and ECB have yet to achieve target inflation (PCE US price index 1.8%, Eurozone PCI 1.5%). The persistentweakness of inflation can be largely attributed to moderaterises in wagesand oil prices. In the United States, the positive economic situation led the FederalReserveto graduallyraise interestrates (+25 bp in March and again in June and December).On the long end of the curve, 10-year US Treasuries dropped 4 bp to 2.41% in 2017. The near-stagnantperformanceof long rates is due to low inflation. The curve's flattening is attributable to doubts surrounding US policy and its effect on medium-termgrowth. In Europe, the ECB announced in October 2017 that it would extend its quantitativeeasing programan additionalnine months Regulatory liquidity ratios 3.9.2.5 In 2010, the Basel Committee introduced new liquidity risk measures: the Liquidity Coverage Ratio (LCR, January 2013) is a a short-termliquidity ratio whose aim is to ensure that, in stress scenarios, banks hold enough liquid assets to cover their net cash outflowsfor a 30-dayperiod; the Net Stable Funding Ratio (NSFR, October 2014) is a a long-termstructural liquidity ratio developedto strengthenthe resilienceof the banking sector by requiring banks to maintain a stable funding profile and by limitingmaturity transformation to less than one year. These rules were enacted in the European Union through Regulation(EU) No. 575/2013of June 26,2013, which laid down the filing obligations in force during the observationperiod from January 1, 2014, and set forth the conditions of implementation of these prudential requirements. For the LCR, Delegated Regulation (EU) No. 2015/61, published on October 10, 2014, entered into force on October 1, 2015. The NSFR, which the Basel Committeewishedto establishas a minimumrequirement as from 2018, is still in the observation period; a legislative proposal was submitted by the European Commission on November 23, 2016, to enact the NSFR within the European Union. NATIXIS’ MEDIUM- AND LONG-TERM DEBT ISSUANCE PROGRAM R (in millions of euros or euro equivalents) Issues at 12.31.2017 Outstandings at 12.31.2017

EMTN 8,237

NEU MTN

USMTN Bond issues

500 730

44

5,821 8,806

13,649

213

To date, Europeanregulationsrequire: compliance with the LCR as from October 1, 2015; required a minimum ratio of 80% on January 1, 2017, and 100% from January 1,2018; quarterly statements on stable funding, which are entirely a descriptive (amounts and terms) without any weighting applied. Natixis determines its LCR on a consolidated basis and operationallymanages its liquidity position and liquidity coverage requirements relative to these new metrics, having set a minimum ratio of 100%. Natixis regularly assesses its contribution to the Group’s NSFR based on its interpretationof known legislation. Liquid asset buffers The Delegated Act on the LCR, adopted on October 10, 2014, defined liquid assets and the criteria they must meet to be eligible for the liquiditybuffer used to cover fundingneeds in the event of a short-termliquiditycrisis. Liquid assets must meet a number of intrinsic requirements (issuer, rating, market liquidity, etc.) and operational requirements (availability of assets, diversification, etc.)in a 30 calendarday liquiditystressscenario.

155

Natixis Registration Document 2017