NATIXIS - Universal registration document and financial report 2019

OVERVIEW OF THE FISCAL YEAR Management report at December 31, 2019

percentage of assets amounted to 50 basis points in 2019 versus 19 basis points in 2018. Revenues from Associates climbed to €21 million in 2019 versus €29 million in 2018. Gains or losses on other assets totaled €687 million in 2019, of which €697 million was attributable to the disposal of the retail banking activities to BPCE S.A. in the first quarter of 2019, versus €54 million in 2018. Change in the value of goodwill reached €5 million in 2019. Pre-tax profit therefore totaled €2,945 million in 2019 versus €2,281 million in 2018. Recurring net income (Group share) The recurring tax expenses came to €669 million in 2019, with an effective tax rate of 22.9%. After incorporating -€304 million in non-controlling interests , net income (Group share) amounted to €1,897 million in 2019, up sharply from 2018 owing to the exceptional capital gains from the sale of retail banking activities to BPCE S.A. Consolidated management ROE after tax (excluding non-recurring items) came to 7.8% in 2019, giving an accounting ROE of 11.1%. Consolidated management ROTE after tax (excluding non-recurring items) came to 10.0% in 2019, giving an accounting ROTE of 14.3%.

Operating expenses and headcount Recurring expenses totaled €6,632, up 2.4% at constant exchange rates compared with 2018. Asset & Wealth Management expenses were up 3% at constant exchange rates. CIB expenses came down very slightly by -0.3% at constant exchange rates, while those of the Insurance and Payments divisions rose 7% and 8.5% respectively. Financial investments expenses were up 6.5%. Corporate Center expenses were stable at€497 million, despite increasing the contribution to the Single Resolution Fund to €170 million in 2019 versus €160 million in 2018. Headcount at the end of the period stood at 19,639 FTE, up 3% year-on-year, with a 2% increase for the business lines and Financial investments, and 6% growth for the Corporate Center with the strengthening of the control functions and the expansion of the IT teams in Porto. Gross operating income Gross operating income stood at €2,564 million in 2019, up 5% at constant exchange rates versus 2018.

Pre-tax profit

At €332 million in 2019, provision for credit losses was up sharply compared with first-half 2018 where it totaled €193 million. The provision for credit losses of the main business lines as a

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Analysis by Natixis main business line 4.2.2 Asset & Wealth Management 4.2.2.1

Change 2019/2018

2019

2018 pro forma

(in millions of euros)

Current

Constant

Net revenues

3,760 3,511

3,513 3,274

7.0% 7.2% 3.3% 5.8% 6.3% 8.4%

4.1% 4.1% 3.3% 5.8% 3.3% 5.7%

Asset Management Wealth Management Employee Savings Plans

149 100

144

95

Operating expenses

(2,492)

(2,343)

Gross operating income Provision for credit losses

1,268

1,170

(8)

(2)

Pre-tax profit

1,266 66.3% 4,477 14.8%

1,208 66.7% 4,180 15.7%

4.8%

Cost/income ratio Equity (Average)

ROE

Recurring expenses of the AWM division increased 7% compared with December 31, 2018 at current exchange rates to €3,760 million (+4.1% at constant exchange rates). Expenses increased at a slower rate (+6.3% at current exchange rates, or +3.3% at constant exchange rates) to €,2,492 million. Gross operating income rose 8.4% at current exchange rates (+5.7% at constant exchange rates) to €1,268 million. At 14.8%, the division’s ROE was down 0.9 points from December 31, 2018.

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019