NATIXIS - Universal registration document and financial report 2019

PRESENTATION OF NATIXIS History and links with BPCE

Financial solidarity mechanismwith BPCE 1.1.2 Including Natixis, all the institutions affiliated with the central institution of Groupe BPCE benefit from a guarantee and solidarity mechanism the purpose of which, according to Articles L. 511-31 and L. 512-107-6 of the French Monetary and Financial Code, is to guarantee the liquidity and capital adequacy of all affiliated institutions, and to organize financial support within the Group.

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In the event of court-ordered liquidation concerning all the affiliates, the external creditors of all the affiliates are managed by their ranking and in the order of hierarchy in an identical fashion and irrespective of their association with any given affiliated entity. Consequently, holders of AT1 capital and other pari passu securities would be more affected than holders of T2 capital and other pari passu securities, who would be more affected than holders of senior non-preferred external debt, who, in turn, would be more affected than holders of senior preferred external debt. In the event of resolution, identical write-down and/or conversion rates would be applied to the debts and credits of the same ranking and irrespective of their association to any given affiliated entity, and in the order of the hierarchy set out above. Only the entities not concerned by court-ordered liquidation nor resolution measures and which do not contribute to the Group solidarity mechanism, as is the case of Natixis, are excluded from contributing to the bail-in of other failing affiliates. It should be noted that the guarantee funds referred to above comprise a Groupe BPCE internal guarantee mechanism activated at the initiative of the BPCE Executive Board, or the competent authority dealing with banking crises which may request their use if deemed necessary.

This financial support is based on legislative provisions imposing a legal solidarity mechanism by which the central institution is required to restore the liquidity or solvency of affiliates in difficulty, and/or all affiliates of the Group, by providing, as necessary, the total capacity and regulatory capital of all contributing affiliates. As a result of this fully-engaged legal solidarity mechanism, one or several affiliates cannot be placed in court-ordered liquidation nor be concerned by the resolution measures within the meaning of Directive 2014/59 EU, unless this is the case for all the affiliates. Accordingly, should Natixis encounter financial difficulty, (i) BPCE would firstly provide support using its own regulatory capital in accordance with its duty as a shareholder; (ii) should this prove insufficient, it would use the mutual guarantee fund created by BPCE which, at December 31, 2019 totaled €357.8 million in assets provided jointly by the Banque Populaire and Caisse d’Epargne networks, and which is increased through an annual contribution (subject to the amounts which would be used in the event of a call for funds); (iii) should BPCE’s regulatory capital and this mutual guarantee fund prove insufficient, BPCE would draw on (in equal proportions) both the Banque Populaire and Caisse d’Epargne networks’ own guarantee funds totaling €900 million and; finally (iv) should recourse to BPCE’s regulatory capital and these three guarantee funds prove insufficient, additional sums would be requested from all the Banque Populaire and Caisse d’Epargne banks.

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019