NATIXIS - Universal registration document and financial report 2019

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

C – Employee Savings Plans Assets under management at December 2019 totaled €27.0 billion , representing an increase of €0.4 billion, or 1% compared with December 31, 2018, thanks to a very favorable market effect (+€3.7 billion) which more than offset negative net placements (-€3.3 billion). Average assets under management totaled €28.7 billion in 2019 , up +5%.

At December 31, 2019, net revenues were up 6% to €100 million compared with December 31, 2018 on the back of account administration products, financial management fees and other products (Car Lease business). Expenses stood at €83 million, up 5% compared with December 31, 2018 , largely due to higher IT costs.

Corporate & Investment Banking 4.2.2.2

Change 2019/2018 Current

2019

2018 pro forma

(in millions of euros)

Constant

Net revenues Global Markets

3,337 1,509 1,118

3,266 1,332 1,159

2.2%

0.0%

13.3% (3.5)% 143.7%

11.4% (4.9)% 135.0%

Fixed Income

Equity

417 (26)

171

XVA desk

2

4

Financing

1,408

1,438

(2.1)%

(4.8)%

Investment Banking

395

372 123

6.1%

4.8%

Other items

24

(80.2)%

(80.8)%

Operating expenses

(2,235)

(2,202)

1.5% 3.6%

(0.3)%

Gross operating income Provision for credit losses

1,102 (312)

1,064 (174)

0.6%

79.2%

Pre-tax profit

786

904

(13.1)%

Cost/income ratio Equity (Average)

67.0% 6,719

67.4% 6,539 10.0%

ROE

8.4%

In 2019, Corporate & Investment Banking net income remained stable compared with 2018 at constant exchange rates, and included income of €68 million for the settlement of the litigation with Société Wallone du Logement, booked as a non-recurring item under financial communication in the third quarter of 2018. Excluding non-recurring item and one-off autocalls in Asia (€259 million in the fourth quarter of 2018), net revenues shed 5.4% at constant exchange rates. Capital Market revenues totaled €1,509 million in 2019, up 11.4% compared with 2018 at constant exchange rates. Revenues from Fixed Income, Forex, Credit, Commodities and Treasury activities stood at €1,118 million in 2019, down 4.9% on 2018 at constant exchange rates. The following changes were observed in each segment: fixed Income and Forex revenues fell 23.9%, with the Fixed Income V business shedding 23.7% due to a loss of momentum in France and Asia on long-term issuance, while the Forex business decreased 24.3% due to poor currency volatility and lower volumes on the flow activity; revenues from Credit activities were up 15.1%. The business V recorded continued growth in securitization activities, in both the US and Europe; revenues from repo activities , now split evenly between Fixed V Income and Equity, fell 7.5% compared with 2018 on account of stricter regulatory constraints and tighter margins caused by a more competitive market.

Revenues from joint ventures (i.e. with income shared equally between Global Markets and Investment Banking to ensure team alignment) were mixed in 2019. Strategic and Acquisition Finance revenues had a limited decrease of 1.2% in a leveraged buyout (LBO) market showing signs of strain. Revenues from syndication on the bond market gained 33.5% compared with 2018. Revenues generated by the primary bond market increased 10.8% while secondary market revenues recovered sharply due to a favorable comparison base effect owed to the recognition in the last quarter of 2018 of the negative impact from the management of debt positions in a highly unfavorable market. At €417 million, Equity revenues increased 135.0% compared with 2018 at constant exchange rates and down slightly (-4.4%) excluding one-off autocalls in Asia. Sales were again focused on new products over the course of 2019. At €1,408 million, Financing revenues including TTS (Trade & Treasury Solutions) as well as Film Industry Financing (Coficiné) fell 4.8% compared with 2018 at constant exchange rates. Revenues from origination and syndication were down 18.1% compared with 2018, penalized by the decrease in real estate finance securitization activities in the US amid a less dynamic market, especially in the CMBS segment. The revenues of the financing portfolio remained stable at constant exchange rates in a context of pressure on margins. ENR (Energy & Natural Resources) and Trade Finance revenues drifted lower to 11.2% at constant exchange rates due to a weaker average per-barrel oil price than last year.

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019