NATIXIS - Universal registration document and financial report 2019

FINANCIAL DATA Consolidated financial statements and notes

IFRS 17 “Insurance Contracts” , published by the IASB on May 18, V 2017, will replace IFRS 4 “Insurance Contracts”. Initially applicable on January 1, 2021, with a comparison at January 1, 2020, this standard should only come into force from January 1, 2022. During its meeting on November 14, 2018, the IASB in fact decided to defer its application by a year, as clarifications still need to be given regarding key aspects of the standard. It also decided to align the schedule for the temporary exemption from IFRS 9 for insurers so that it coincides with the application of IFRS 17 from January 1, 2022. A draft amendment “Exposure Draft ED/2019/4 Amendments to IFRS 17” was published on June 26, 2019. IFRS 17 establishes the principles of recognition, measurement, presentation and disclosure for insurance contracts and investment contracts with discretionary participation. Liabilities under these contracts, which are currently valued at historical cost, will have to be recognized at present value under IFRS 17. As such, insurance contracts will be valued based on their future cash flows, including a risk margin in order to factor in the uncertainty relating to these cash flows. IFRS 17 also introduces the concept of the contractual service margin. This represents the insurer's unearned profit and will be released over time as services are rendered to the insured. The standard demands a more detailed level of granularity in calculations than previously as it requires estimates by group of contracts. These accounting changes could change the profile of insurance inactivities (particularly for life insurance) and also introduce greater income volatility. Despite the uncertainties still surrounding implementation of the standard (application date, possible changes in the text, exposure draft published on June 26, 2019), Groupe BPCE's insurance entities have project teams in place tasked with addressing the changes resulting from the standard and are continuing their preparations: examination and documentation of choices permitted by the standard, modeling, adjustments to systems and organizational structures, accounting production and transition strategy, financial communication and change management.

Furthermore, in valuing its financial instruments for the consolidated financial statements established at December 31, 2019, Natixis took into account the recommendation published on October 15, 2008 by the AMF, the Conseil National de la Comptabilité (CNC – French National Accounting Board), the Commission Bancaire (French Banking Commission) and the Autorité de Contrôle des Assurances et des Mutuelles (ACAM – French insurance regulator), and the guide published by the IASB on October 31, 2008, entitled “Measuring and disclosing the fair value of financial instruments in markets that are no longer active”. These two texts underline the importance of using judgment to determine fair value in illiquid markets. Natixis no longer systematically uses models based on observable data as a result of this recommendation.

1.2

Presentation

of the consolidated financial statements

The consolidated financial statements have been prepared in accordance with the assessment and presentation principles set out in Notes 3 and 6 below. 1.3 The consolidated financial statements are based on the individual financial statements at December 31, 2019 of the entities included in Natixis’ consolidation scope. Year-end

1.4

Notes to the consolidated

5

financial statements Unless otherwise indicated, the figures given in the notes are expressed in millions of euros.

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019