NATIXIS_REGISTRATION_DOCUMENT_2017

FINANCIAL DATA Consolidated financial statements and notes

However, given the predominant impact of operational risk on the fair value of the guarantee, guarantees granted to mutual funds are treatedas financialguarantees. Guarantee commitments received There are no IFRS standards prescribing the accounting treatment of financial guarantees received. In the absence of specific guidance, the accounting treatment applied must be determinedby analogywith the accountingtreatmentprescribed by other standards in similar situations. Accordingly,guarantees received meeting the definition of a financial guarantee for an issuer are accountedfor in accordancewith: IAS 39, for guarantees received in respect of financial a instruments; IAS 37, for guarantees received in respect of liabilities falling a withinthe scopeof IAS 37. The specific treatment applied to the guarantee granted to Natixis by BPCE regarding former GAPC hive-off assets is disclosedin Note 5.7. b) Financing commitments All financing commitmentsgranted by Natixis give rise to loans granted at market rates at the grant date. The drawn-down portion of these commitments is classified in “Loans and receivables”. These financing commitments are contingent liabilitiesand are recognizedin accordancewith IAS 37. On initial recognition, they are not entered in the balance sheet. A provisionis recognizedin liabilitiesif the cost of the commitment exceedsthe associatedrevenues. The procedure for setting up the deposit and resolution guarantee fund was changed by a decree dated October 27, 2015. Contributions made to the deposit and resolution guaranteefund may be paid in the form of partner or association certificates and cash security deposits (guarantee of irrevocable commitment) recognized as assets on the balance sheet and contributions (which are non-refundable in the event of a voluntarywithdrawalof approval to operate) recorded in income as “Taxes and regulatory contributions”among other operating expenses (see Note 7.6) . Directive 2014/59/EU (BRRD - Bank Recovery and Resolution Directive)which establishesthe frameworkfor the recovery and resolution of banks and investment firms and European regulation 806/2014 (SRM regulation) established the introduction of a resolution fund as of 2015. In 2016, this fund became a Single Resolution Fund (SRF) between the member States participatingin the Single SupervisoryMechanism(SSM). The SRF is a resolution financing mechanism available to the resolutionauthority(SingleResolutionBoard). The latter may use this fundwhen implementingresolutionprocedures. In accordance with Delegated Regulation 2015/63 and Implementing Regulation 2015/81 supplementing the BRRD Directive on ex-ante contributions to financing mechanisms for the resolution, the Single Resolution Board set the level of contributions to the Single Resolution Fund for 2017. Contributions paid to the fund may be made in cash security Contributions to banking resolution 5.22 mechanisms

depositsrecognizedas assetson the balancesheet (15% in cash security deposits) and in contributions recorded in income as “Taxesand regulatorycontributions” (see Note 7.6) .

Use of estimates in preparing 5.23 the financial statements

In preparing its financial statements,Natixis is required to make certain estimates and assumptions based on available information that is likely to require expert judgment. These estimates and assumptions constitute sources of uncertainty which may affect the calculationof income and expenses in the income statement, the value of assets and liabilities in the balance sheet and/or certain disclosures in the notes to the financial statements. As a result, future results of certain operationsmay differ significantlyfrom the estimatesused in the financialstatementsat December 31,2017. Accountingestimateswhich requireassumptionsto be made are mainlyused to measurethe items set out below: Financial instruments recorded at fair value The fair value of hybrid market instruments not traded on an activemarket is calculatedusing valuationtechniques.Valuations producedusing valuationmodels are adjusted,dependingon the instrumentsin questionand the associatedrisks, to take account of the bid and ask price for the net position, modeling risks, assumptions regarding the funding cost of future cash flows from uncollateralizedor imperfectly collateralizedderivatives, as well as counterparty and input risks. The fair values obtained from these methods may differ from the actual prices at which such transactionsmight be executed in the event of a sale on the market. The valuation models used to price illiquid financial instruments are describedin Note 5.6. Impairment of loans and receivables At the reporting date, Natixis assesses whether there is any objective evidence of impairment for loans and receivables, either on an individual basis or collectively by risk category. To identify evidence of impairment, Natixis analyzes trends in a numberof objectivecriteria,but also relies on the judgmentof its own expert teams.Similarly,Natixismay use its expert judgment to establish the likely timing of recoveries (where the aim is to calculate the amount of individual impairment losses), or to adjust the amount of expected losses under the Basel framework,on which the amountof collectiveprovisionis based. Valuation of unlisted equity instruments classified as “Available-for-sale financial assets” Unlisted equity instruments classified as available-for-sale financial assets primarily consist of investments in non-consolidated companies. The fair value of investments in unlisted non-consolidated companies is obtained principally by using valuationmethods based on multiples or DCF (discounted cash flow). Use of these methods requires certain choices and assumptions to be made in advance (in particular, projected expectedfuturecash flows and discountrates).

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Natixis Registration Document 2017