Natixis : Preparation of the 1Q19 Financial Communication

Paris, April 11, 2019

Preparation of the 1Q19 Financial Communication:

The 2018 quarterly series have been restated following the disposal of the retail banking activities (Factoring, Sureties & Financial guarantees, Leasing, Consumer finance and Securities services) to BPCE S.A. finalized on March 31, 2019. The loss of control over these entities being anterior to the transfer date of the securities, Natixis’ published financial statements will not be impacted by the 1Q19 contribution of such subsidiaries as a consequence.

In order to ensure comparability with the published financial statements, the 2018 quarterly series disclosed hereafter have been restated for the contribution of such entities. Over previous periods, such a contribution was supplemented by expenses related to the SFS business line (e.g. Corporate Secretary) that will still impact Natixis’ published financial statements in 1Q19. For the purpose of comparability, such expenses have been restated in the quarterly series disclosed hereafter and will thus be isolated from the net income for the financial communication (a table bridging the gap with the accounting figures will be disclosed).

                  Besides, 1Q19 results will be positively impacted by the disposal of the retail banking activities to BPCE S.A. due to the realization of a capital gain (Gain or loss on other assets - Corporate Center) and tax adjustments (Income tax). These impacts will be booked as exceptional items for financial communication purposes.

Changes in Natixis’ account presentation following the disposal of the retail banking activities to BPCE S.A.

• Employee savings plan is reallocated to Asset & Wealth Management
• Film industry financing is reallocated to Corporate & Investment Banking
• Insurance is not impacted
• Payments becomes a standalone business line
• Financial Investments are isolated and include Coface, Natixis Algeria and the private equity run-off activities. The Corporate Center is refocused on Natixis’ holding and ALM functions and carries the Single Resolution Fund contribution within its expenses

Additional impacts on the quarterly series from the disposal of the retail banking activities to BPCE S.A.

• New support function services provided by Natixis to the activities sold (TSA / SLA), as well as the cancellation of services or analytical items that have been made obsolete following such a disposal are factored in
• The reclassification as Net revenues of the residual IT and logistic services that continue to be provided to the activities sold. Such services now being provided to entities that do not fall under Natixis’ scope of consolidation anymore, they have been reclassified as Net revenues instead of expense deductions
• The implementation of introductory fees between the Natixis CIB Coverage and the entities sold

                         
                        In order to ensure comparability between the 2018 and 2019 quarterly series, these impacts have been simulated retroactively as of January 1^st, 2018, even though they only impact the published financial statements as of their implementation date in 2019. These items essentially impact the Corporate Center and more marginally the CIB. The others business lines are unimpacted.
                         
                  

Appendix (non-audited):

Update of the 2018 quarterly series following the disposal of the retail banking activities to BPCE S.A
                   
                   

Natixis excl. perimeter sold
€m	1Q18	2Q18		3Q18		4Q18					2018
Net revenues	2,193	2,360		2,156		2,040					8,749
Expenses	(1,675)	(1,528)		(1,499)		(1,656)					(6,357)
Gross operating income	518	832		658		383					2,391
Provision for credit losses	(36)	(41)		(93)		(23)					(193)
Net operating income	482	791		565		361					2,199
Associates	7	3		6		13					29
Gain or loss on other assets	6	4		0		44					54
Pre-tax profit	495	798		570		418					2,281
Tax	(175)	(234)		(154)		(110)					(673)
Minority interests	(60)	(57)		(59)		(127)					(303)
Net income (group share)	260	507		358		181					1,306
RWA (Basel 3 - in €bn)	94.1	96.6		96.0		95.2					95.2

AWM
€m		1Q18		2Q18		3Q18	4Q18					2018
Net revenues		799		842		841	1,032					3,513
Asset Management(1)		762		805		805	998					3,369
Wealth management		37		37		36	34					144
Expenses		(548)		(569)		(584)	(642)					(2,343)
Gross operating income		251		273		257	389					1,170
Provision for credit losses		0		(1)		(1)	0					(2)
Net operating income		251		272		256	390					1,169
Associates		0		0		0	2					3
Other items		0		(3)		(2)	41					37
Pre-tax profit		251		269		255	433					1,208
Cost/Income ratio		68.6%		67.6%		69.4%	62.3%					66.7%
Cost/Income ratio excl. IFRIC21		68.1%		67.7%		69.6%	62.4%					66.7%
RWA (Basel 3 - in €bn)		11.7		11.8		12.5	12.3					12.3
Normative capital allocation (Basel 3)		4,143		4,065		4,150	4,363					4,180
RoE after tax (Basel 3)(2)		13.7%		15.2%		13.9%	19.6%					15.7%
RoE after tax (Basel 3) excl. IFRIC 21(2)		14.0%		15.1%		13.8%	19.5%					15.7%
(1) Asset management including Private equity and Employee savings plan (2) Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

CIB
€m		1Q18		2Q18		3Q18	4Q18					2018
Net revenues		944		976		828	518					3,266
Global markets		527		457		334	14					1,332
FIC-T		378		299		252	231					1,159
Equity		148		145		97	(219)					171
CVA/DVA desk		1		13		(15)	2					2
Global finance(1)		341		394		341	362					1,438
Investment banking(2)		82		85		78	126					372
Other		(7)		41		74	16					123
Expenses		(566)		(551)		(525)	(559)					(2,202)
Gross operating income		378		425		302	(41)					1,064
Provision for credit losses		(31)		(37)		(98)	(9)					(174)
Net operating income		347		388		204	(50)					890
Associates		4		3		3	3					12
Other items		3		0		0	0					3
Pre-tax profit		353		391		207	(47)					904
Cost/Income ratio		60.0%		56.4%		63.5%	107.9%					67.4%
Cost/Income ratio excl. IFRIC21		57.7%		57.2%		64.4%	109.4%					67.4%
RWA (Basel 3 - in €bn)		59.7		61.7		61.2	61.1					61.1
Normative capital allocation (Basel 3)		6,435		6,416		6,676	6,631					6,539
RoE after tax (Basel 3)(3)		16.0%		17.6%		9.0%	NR					10.0%
RoE after tax (Basel 3) excl. IFRIC 21(3)		17.0%		17.2%		8.7%	NR					10.0%

(1) Global finance includes Film industry financing
(2) Including M&A
(3) Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Insurance
€m		1Q18		2Q18		3Q18	4Q18					2018
Net revenues		204		193		192	201					790
Expenses		(118)		(108)		(103)	(118)					(448)
Gross operating income		86		85		89	83					342
Provision for credit losses		0		0		0	0					0
Net operating income		86		85		89	83					342
Associates		3		0		3	9					15
Other items		0		0		0	0					0
Pre-tax profit		89		85		92	91					356
Cost/Income ratio		58.0%		56.1%		53.8%	58.9%					56.7%
Cost/Income ratio excl. IFRIC21		51.1%		58.5%		56.2%	61.2%					56.7%
RWA (Basel 3 - in €bn)		7.3		7.0		7.1	7.3					7.3
Normative capital allocation (Basel 3)		853		868		828	841					848
RoE after tax (Basel 3)(1)		28.6%		26.4%		30.3%	30.7%					29.0%
RoE after tax (Basel 3) excl. IFRIC 21(1)		33.0%		24.9%		28.8%	29.2%					29.0%
(1) Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Payments
€m		1Q18		2Q18		3Q18	4Q18					2018
Net revenues		93		95		96	105					389
Expenses		(79)		(88)		(84)	(90)					(341)
Gross operating income		14		7		12	15					48
Provision for credit losses		0		0		0	(2)					(2)
Net operating income		14		7		12	13					46
Associates		0		0		0	0					0
Other items		0		1		0	0					1
Pre-tax profit		14		8		12	13					47
Cost/Income ratio		85.2%		92.2%		87.6%	85.7%					87.6%
Cost/Income ratio excl. IFRIC21		84.5%		92.4%		87.9%	85.9%					87.6%
RWA (Basel 3 - in €bn)		1.0		1.2		1.0	1.1					1.1
Normative capital allocation (Basel 3)		295		300		352	332					320
RoE after tax (Basel 3)(1)		12.8%		7.4%		9.6%	10.1%					9.9%
RoE after tax (Basel 3) excl. IFRIC 21(1)		13.4%		7.2%		9.4%	9.9%					9.9%
(1) Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Financial investments
€m	1Q18	2Q18		3Q18		4Q18								2018
Net revenues	190	174		197		181								742
Coface	177	156		180		165								678
Other	13	18		17		16								64
Expenses	(130)	(125)		(131)		(140)								(526)
Gross operating income	59	49		66		41								215
Provision for credit losses	(6)	1		1		3								(1)
Net operating income	54	50		67		44								214
Associates	0	0		0		0								0
Other items	2	3		0		0								5
Pre-tax profit	56	53		67		44								220
RWA (Basel 3 - in €bn)	5.3	5.6		5.5		5.6								5.6

Corporate center
€m		1Q18		2Q18		3Q18	4Q18					2018
Net revenues		(37)		79		3	3					49
Expenses		(232)		(87)		(71)	(107)					(497)
SRF		(160)		0		0	0					(160)
Other		(73)		(86)		(71)	(107)					(337)
Gross operating income		(269)		(7)		(68)	(104)					(448)
Provision for credit losses		1		(4)		4	(15)					(14)
Net operating income		(269)		(11)		(63)	(118)					(462)
Associates		0		0		0	0					0
Other items		1		2		2	3					8
Pre-tax profit		(267)		(9)		(62)	(115)					(453)
RWA (Basel 3 - in €bn)		9.0		9.4		8.7	7.8					7.8

For information purposes, the P&L of the retail banking activities sold to BPCE S.A. over 2018 is as follows:

Perimeter sold
€m		1Q18		2Q18		3Q18		4Q18				2018
Net revenues		241		242		242		237				963
Expenses		(141)		(138)		(139)		(143)				(561)
Gross operating income		100		104		103		94				401
Provision for credit losses		(8)		1		(9)		(6)				(22)
Net operating income		92		105		95		88				380
Associates		0		0		0		0				0
Other items		0		0		0		0				0
Pre-tax profit		92		105		94		88				380
Tax		(29)		(32)		(30)		(17)				(108)
Minority interests		0		0		0		0				(1)
Net income (group share)		62		73		64		71				271

About Natixis
Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the 2nd-largest banking group in France through its two retail banking networks, Banque Populaire and Caisse d’Epargne.
With more than 18,000 employees, Natixis has a number of areas of expertise that are organized into four main business lines: Asset & Wealth Management, Corporate & Investment Banking, Insurance and Payments.
A global player, Natixis has its own client base of companies, financial institutions and institutional investors as well as the client base of individuals, professionals and small and medium-size businesses of Groupe BPCE’s banking networks.
Listed on the Paris stock exchange, it has a solid financial base with a CET1 capital under Basel 3⁽¹⁾ of €12 billion, a Basel 3 CET1 Ratio ⁽¹⁾ of 10.8 % and quality long-term ratings (Standard & Poor’s: A+ / Moody’s: A1 / Fitch Ratings: A+).
⁽¹⁾ Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in.
Figures as at December 31, 2018

     Contacts

Investor Relations:	[e-mail]
Damien Souchet	T + 33 1 58 55 41 10
Noémie Louvel	T + 33 1 78 40 37 87

    www.natixis.com

Attachment

• PR quarterly series