NATIXIS_REGISTRATION_DOCUMENT_2017

5 FINANCIAL DATA

Parent company financial statements and notes

Integration of foreign subsidiaries 12. The financial statements of foreign subsidiaries, prepared in accordance with local rules, are restated in accordance with generally accepted accounting principles in France, translated into euros when the functional currency is not the euro and included in Natixis’ financial statements after the elimination of intra-grouptransactions. Items from the balance sheet and income statement are translatedat the end of the reportingperiod. The differencearising from the translationof foreignsubsidiaries’ capitalallocationsare recordedin the accrualaccounts. Contributions to banking resolution 13. mechanisms 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 recognized as assets on the balance sheet and contributions(which are non-refundablein the event of a voluntary withdrawal of approval to operate) recorded in income as “Taxes other than on income” among other operatingexpenses. 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 contributionsto the SingleResolutionFund. Contributionspaid to the fund may be made in cash security deposits recognized as assets on the balance sheet (15% in cash security deposits)and in contributions recorded in income as “Taxes other than on income”. Guarantee mechanism for the assets 14. of the former GAPC hive-off vehicle On November 12,2009, an arrangementwas made by BPCE to protect a portion of the portfolios of the former GAPC (1) hive-off vehicle with retroactive effect at July 1, 2009. With this guaranteemechanism,Natixis was able to free up a significant portionof its equity allocatedto segregatedassets and to protect itself against the risk of loss from these portfoliossubsequentto June 30, 2009. This protective arrangementwas based on two mechanisms:

a sub-participationin terms of risk which acted as a financial a guarantee on 85% of the nominal value of assets recognized as “securities held for investment”, “securities held for trading”, “securities held for sale” and “receivables”. Under this guarantee, Natixis is protected from the very first euro in defaultup to 85%of the defaultamount; two total return swaps (TRS), one in euros and another in a dollars, which transferred to BPCE 85% of the profit or loss recognized as from July 1, 2009. The instruments hedged by these TRS were mostly represented by “securities held for trading” and to a lesser extent by “securitiesheld for sale”. At the same time, Natixis bought an option from BPCE which, if exercised, would allow it to recover in 10 years’ time any net positive performanceby the portfolio in exchangefor payment of a premium. At December 31,2017 (as was the case at December 31,2016), the financial guaranteenow has almost no impact in accounting and prudential terms, as the positions which it backed have almostall been sold or closed. The same is true of the guaranteecomprisingTRS and an option, with the option in the money. Non-recurring income 15. Non-recurringincome and expense items are determinedbased on their amount, their unusual nature with respect to current operations, and the likelihood of the events in question repeating. Corporate income tax 16. Due to additional contributions, the corporate tax rate used to calculate the expense payable for the year was 44.43% for France.Applicablelocal corporatetax rates were used for foreign subsidiaries. Changes in accounting methods and 17 comparability of financial statements There were no changesto accountingmethods in respect of the 2017 fiscal year. As a reminder, for the 2016 fiscal year, a modification in the accountingtreatmentof the technicalloss on mergerpursuantto ANC regulationn° 2015-06applicableas of January 1,2016, was recorded. Pursuant to this regulation, the loss should be broken down and recognized according to the various natures of underlying assets to which it is allocated. This allocation could only be applied at the first time application of the regulation according to existing capital gains at the merger date, i.e. accordingthe extra-accountingallocationoriginallyapplied. The application of this regulation led to the recognition of €269.5 million in “investments in subsidiaries and affiliates” correspondingto the merger losses accountedfor as part of the total transfer of assets and liabilities of Natixis Garantie to Natixis, based on existingcapital gains at this date and according to the allocation.

The GAPC hive-off vehicle was closed in the second quarter of 2014 in accordance with Natixis’ strategic plan. (1)

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Natixis Registration Document 2017