NATIXIS_REGISTRATION_DOCUMENT_2017

OVERVIEW OF THE FISCAL YEAR Management report at December 31, 2017

In a competitive market that is being transformed by digital innovation, non-life insurance continued to grow rapidly on the back of the favorable effects of the Hamon Act and the growth of real estate finance in the networks. Consequently, the Banque Populaire banks and the Caisse d’Epargne sold 1.3 million non-life insurance policies in 2017. This is an increase of 2.4% compared to 2016, buoyed by strong momentum in automotive (+3%) multi-risk home (+6%) and personal accident coverage policies (+15%). The number of policies under management grew by 5% to €5.6 million for the Banque Populaire and Caisse d’Epargne networks. Earned premiums increased by 8% to €1,386 million. Net revenues for Insurance businesses totaled €733.9 million, up 12.0% compared to 2016, resulting from: strong net revenue growth in life insurance (up 20%), propelled a by considerable growth in assets under management (up 15%), supported in turn by the roll-out of the offer in the Caisse d’Epargne network. Despite the persistently low interest-rate environment in 2017, lower bond yields were offset by the diversification of sources of investment (in private placements or the direct financing of the economy);

the stability of net revenues in Personal Protection insurance a and in Payment Protection insurance, as growth was offset by a deterioration in claims expense from 2016; the growth in Property & Casualty Insurance net revenues a (+13%), attributable to lower costs for extreme weather events in 2017 compared to 2016, an improvement in the past claims expense and fewer large claims in 2017 compared to 2016. The combined ratio stood at 92.1%, a slight improvement on 2016. Operating expenses were up 16.2% to €438.7 million, as the business developed and the strategic ambitions fell into place: the roll-out of the new life insurance range in the Caisses d'Epargne, the launch of strategic non-life insurance projects (overhaul of the claims information system) and the wind-down of the Assurément#2016, Impulse and Paris Digitaux (digital challenges) initiatives. Gross operating income rose 6.4% to €295 million. At 22.1%, the division's ROE improved by 1.3 points compared to 2016.

4

Specialized Financial Services 4.1.4.4

2017

2016 pro forma

Change (%)

(in millions of euros)

Net revenues

1,382

1,352

2.2% 2.6% 0.0% 4.7% 1.6% 3.2% 6.2% 2.2% 0.6% 2.9%

Specialized Financing

862 158 200 216 265

840 158 191 213 257

Factoring

Sureties & Financial Guarantees

Leasing

Consumer Finance

Film Industry Financing

23

21

Payments

336 184

329 183

Financial Services

Employee Savings Schemes

91 93

89 94

Securities Services

(1.5)%

Expenses

(939)

(885)

6.0%

Gross operating income Provision for credit losses

443 (73) 371

466 (57) 440

(4.9)% 27.2% (15.9)%

Pre-tax profit

Cost/income ratio Equity (average)

67.9% 1,929 13.0%

65.5% 1,745 16.5%

ROE

Specialized Financing posted solid momentum overall. With €54.9 billion in factoring revenues in France, up 17%, the Factoring business boasted market share of 18.5% at September 30, 2017. Leasing developed its business serving the Banque Populaire and Caisse d’Epargne networks. Its new business, more than half of which is in equipment leasing, was up 4% year-on-year.

Consumer Finance achieved record sales, with an annual increase of 9% for total new loan production, 10% of which was for personal loans, while revolving loans remained virtually stable. After two outstanding years, Sureties and Guarantees maintained strong business volumes, with a very active loan guarantee market for retail customers, especially during the first half of the year, in a low interest-rate environment.

187

Natixis Registration Document 2017