NATIXIS - Universal registration document and financial report 2019

RISK FACTORS, RISK MANAGEMENT AND PILLAR III Risk management

Other risks 3.2.10 Risks related 3.2.10.1

Competition Authority/Natixis Intertitres and Natixis On October 9, 2015, a company operating in the meal voucher industry lodged a complaint with the Competition Authority to contest industry practices with respect to the issuance and acceptance of meal vouchers. The complaint targeted several French companies operating in the meal voucher industry, including Natixis Intertitres. In its decision of December 17, 2019, the Competition Authority ruled that Natixis had participated in two practices designed to keep new entrants out of the meal voucher market: the exchange of confidential information and the adoption of a series of agreements intended to lock up the market. Natixis Intertitres received a fine of €4,360,000, along with two other fines totalling €78,962,000, jointly and severally with Natixis. This decision was the subject of a press release from the Competition Authority dated December 18, 2019. Natixis and Natixis Intertitres have decided to appeal this decision as soon as formal notification is received. Bucephalus Capital Limited/Darius Capital Partners On June 7, 2019, Bucephalus Capital Limited (a company under English law), together with other firms, brought claims against Darius Capital Partners (a company under French law that is 60% owned by Natixis Investment Managers), before the Commercial Court of Paris to contest the breach of various contractual obligations, particularly with respect to a framework agreement dated September 5, 2013 setting out their contractual relations and various subsequent agreements. Bucephalus Capital Limited claims a total of €178,487,500. Darius Capital Partners consider these claims to be unfounded. BCE/Natixis Wealth Management Luxembourg Following a notice of grievance dated March 18, 2019, the European Central Bank decided on October 21, 2019 to impose an administrative penalty of €1,850,000 on Natixis Wealth Management Luxembourg. The Company had been found to be in breach of the large exposures limit and large exposures reporting requirements between 2016 and 2017. The case is now closed. AMF/NAM Finance After inspecting Natixis Asset Management Finance’s compliance with its professional obligations, especially “efficient portfolio management” transactions carried out in 2016, the AMF decided on July 17, 2017 to issue a notice of grievance against the firm and refer the case to the AMF Enforcement Committee. On September 25, 2019, the Enforcement Committee fined NAM Finance €1 million. The case is now closed. AMF/NIM International While the above-mentioned case was in progress, the AMF decided in early June 2017 to launch a similar inspection of Natixis Investment Managers International. In early June 2018, the AMF decided to issue a notice of grievance against NIM International and refer the case to the AMF Enforcement Committee. On September 25, 2019, the Enforcement Committee fined NIM International €2 million. The case is now closed. Situation of dependency Natixis is not dependent on any patent or license, or on any industrial, commercial or financial supply contract.

to Insurance activities

Natixis Assurances Natixis Assurances is the Insurance division of the Natixis group and is divided into two businesses: the personal Insurance business, focused on developing portfolios V of life insurance and endowment policies for investment and retirement purposes, as well as personal protection insurance portfolios; the Non-Life Insurance business, focused on developing portfolios V for auto and multi-risk home insurance, personal accident insurance, legal protection, healthcare and property and casualty insurance. Given the predominance of the Investment Solutions activity, the main risks to which Natixis Assurances is exposed are financial. The Company is also exposed to underwriting risks (for both Life and Non-Life Insurance), as well as counterparty risk. Market risk Market risk is in large part borne by the subsidiary BPCE Vie on the financial assets that underpin its commitments with guaranteed principal and returns (euro-denominated policies: €58.2 billion on the main fund balance sheet). The Company is exposed to asset impairment risk (fall in the equity or real estate market, widening spreads, interest rate hikes) as well as the risk of lower interest rates which would generate insufficient income to meet its guaranteed principal and returns. To manage this risk, BPCE Vie has only sold policies with a minimum guaranteed return in recent years: more than 95% of the policies have a zero minimum guaranteed return. The minimum guaranteed return averages 0.13%. To manage market risk, the sources of return have been diversified, namely via investments in new asset classes (financing the economy, infrastructure, etc.). This diversification is managed by a strategic allocation, defined on a yearly basis, that takes into account regulatory constraints, commitments to policyholders and commercial requirements. Credit Risk Credit risk is monitored and managed in compliance with Natixis Assurances’ standards and internal limits. At December 31, 2019, 67% of the fixed-income portfolio is invested in securities rated equal to or higher than A-. Life insurance underwriting risk The main risk to which life insurance underwriting is exposed is linked to the Investment Solutions activity. In an especially low interest-rate environment, the biggest risk is that of fewer redemptions and/or excessive inflows in euro-denominated vehicles, as reinvestments in securities dilute the main fund’s return. To prioritize inflows in unit-linked policies, measures have been taken, such as the creation of unit-linked products and communication campaigns, and a communication campaign targeting customers and the network. Non-life Insurance underwriting risk The Non-Life Insurance underwriting risk to which Natixis Assurances is exposed is borne by its subsidiary BPCE Assurances: premium risk: to ensure that the premiums paid by the V policyholders match the transferred risk, BPCE Assurances implemented a portfolio monitoring policy whereby each policy is given a score based on its track record over three years. Factored in are types of claims, number of claims, their cost and other

3

153

www.natixis.com

NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019