NATIXIS - Universal registration document and financial report 2019

5 FINANCIAL DATA

Consolidated financial statements and notes

an asset and a hedging derivative when the criteria for hedge accounting are not met; where a portfolio of financial assets and liabilities is managed and V recognized at fair value as part of a documented policy of asset and liability management. Financial assets designated at fair value through profit or loss mainly consist of financial assets representative of unit-linked policies from insurance activities.

9.4.1.1

Conditions for classification of financial

assets under the fair value option Financial assets are designated at fair value through profit or loss when this choice provides more pertinent information or when these instruments incorporate one or more significant and separable embedded derivatives. The use of the fair value option is considered to provide more pertinent information in two situations: where there is an accounting mismatch between economically V linked assets and liabilities. This arises for example in the case of

31/12/2019

31/12/2018

Managed on a fair value basis

Managed on a fair value basis

Carrying amount

Accounting mismatch

Embedded derivatives

Carrying amount

Accounting mismatch

Embedded derivatives

(in millions of euros)

Loans and receivables due from banks Loans and receivables due from customers Debt instruments in the form of securities

2,670

622

2,048

2,353

843

1,510

Equity instruments

18,385 21,055

18,385 19,007

15,148 17,501

15,148 15,991

TOTAL

2,048

1,510

Available-for-sale financial assets 9.4.2 The table below shows available-for-sale financial assets by type of instrument (fixed-income securities, variable-income securities). It discloses the gross value before impairment, the amount of impairment and the net value after impairment.

(in millions of euros)

31/12/2018

31/12/2019

Securities

51,592 42,651

48,045 40,452

Debt instruments V

Other equity instruments issued (a) V

8,509

7,133

Accrued interest V

432

460

Impairment of available-for-sale assets

(201)

(245)

Debt instruments V

(50)

(38)

Other equity instruments issued (b) V

(151)

(207)

TOTAL

51,391

47,801

Including mutual fund units. (a) At December 31, 2019, permanent impairment of variable-income securities stood at €53 million, compared with €69 million at December 31, 2018. (b) This expense was 89% offset by the profit-sharing mechanism. The 2019 expense can be broken down into an additional impairment loss on previously impaired securities for €16 million (€13 million at December 31, 2018) and an allowance for newly impaired securities for €37 million (€56 million at December 31, 2018).

9.4.3

Investment property

31/12/2019

31/12/2018

Depreciation, amortization and impairment Net value

Depreciation, amortization and

Gross value

(in millions of euros)

Gross value

impairment Net value

Investment property – At fair value Investment property – At historical cost Investment property – UL policies

1,070

1,070

970

0

970

40

(14)

26

40

(13)

27

402

402

374

0

374

TOTAL

1,512

(14)

1,498

1,385

(13)

1,371

The fair value of investment property, for which the valuation techniques are described in Note 8.5.3, is classified in Level 3 of the fair value hierarchy of IFRS 13.

Changes in fair value give rise to the symmetrical recognition of a deferred profit-sharing reserve equal to 89% of the related base amount on average at December 31, 2019, compared with 88% at December 31, 2018 (see Note 9.2.5) .

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019