NATIXIS_SHARHOLDERS_MEETING_2018
MANAGEMENT REPORT AT DECEMBER 31, 2017
CHANGES IN REGULATORY CAPITAL, REGULATORY OWN FUNDS REQUIREMENTS AND RATIOS IN 2017 REGULATORY CAPITAL AND CAPITAL ADEQUACY RATIO
In accordance with the Basel 3/CRR regulatory framework, under Pillar I these ratios must exceed the minimum limits of 4.5%, 6% and 8%, respectively, in addition to the cumulative safety buffers of 5.75%, 7.25% and 9.25%, respectively for 2017, and 6.375%, 7.875% and 9.875%, respectively for 2018.
The 2017 CET1, Tier 1 and total ratios are presented below by major component. The same ratios for 2016 are shown by way of comparison.
TOTAL CAPITAL RATIO
REPORT
12.31.2017
12.31.2016
(inmillions of euros)
Shareholders’ equity (Group share)
19,795
19,836
Deeply subordinated notes (DSN)
2,232
1,611
Perpetual subordinated notes (PSN)
0
0
Consolidated shareholders’ equity (Group share), net of DSNs and PSNs
17,563
18,225
Minority interests (amount before phase-in arrangements)
137
90
Intangible assets
(511)
(521)
Goodwill
(3,131)
(2,945)
Dividends proposed to the General Shareholders’ Meeting and expenses
(1,160)
(1,130)
Deductions, prudential restatements and phase-in arrangements
(924)
(1,245)
TOTAL COMMON EQUITY TIER 1 CAPITAL
11,975
12,474
Deeply subordinated notes (DSN) and preference shares
2,397
1,979
Additional Tier 1 capital
0
0
Tier 1 deductions and phase-in arrangements
(101)
(208)
TOTAL TIER 1 CAPITAL
14,271
14,244
Tier 2 instruments
2,955
3,082
Other Tier 2 capital
0
100
Tier 2 deductions and phase-in arrangements
(686)
(628)
Overall capital
16,540
16,799
TOTAL RISK-WEIGHTED ASSETS
110,697
115,524
Credit risk-weighted assets
86,182
90,704
Market risk-weighted assets
9,730
11,111
Operational risk-weighted assets
14,784
13,709
Capital adequacy ratios Common Equity Tier 1 ratio
10.8%
10.8%
Tier 1 ratio
12.9%
12.3%
Total capital ratio
14.9%
14.5%
The following changes in Basel 3/CRR regulatory capital were recorded in 2017, after applying phase-in arrangements. Common Equity Tier 1 (CET1) capital totaled €12 billion at December 31, 2017, down €0.5 billion over the year. Shareholders’ equity (Group share) remained stable for the year at €19.8 billion, as the incorporation of net income for the year in the amount of €1.67 billion and the issuance of new deeply subordinated instruments in the amount of €0.5 billion (net the value of exercised calls) were primarily offset by the negative impact of translation adjustments in the amount of -€0.67 billion, dividend payments for 2016 in the amount of -€1.1 billion and the impact of acquisitions (including puts on minority interests) in the amount of -€0.34 billion. CET1 capital included a provision for 2017 dividends payable in cash in the amount of €1.16 billion (i.e. €0.37 per share) and was impacted by goodwill on acquisitions (-€0.2 billion). Even though the phase-in period
for deductions is coming to an end, the substantial reduction of the tax base for deferred tax assets to be deducted (-€0.325) more than offset this impact. Aside from the items above, Additional Tier 1 capital rose by €0.5 billion, primarily due to two issuances worth $500 million each for a total of €833 million and the exercise of a call option in October 2017 (€364 million of euros). The balance was primarily due to the change in the phase-in rate applied on items deducted from AT1 capital, as well as the items subject to these provisions. Tier 2 capital was down by -€0.3 billion for the year due to the impact of the prudential haircut on instruments eligible as Tier 2 capital, a reduction in excess provisions over expected losses and changes in the impact of phase-in arrangements over the period. At €110.7 billion, risk-weighted assets decreased €4.8 billion over the year.
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NATIXIS 2018 MEETING NOTICE
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