NATIXIS BANK. Annual accounts

Transcription

1 NATIXIS BANK Annual accounts 2016

2 MEMBERS OF THE BOARD OF DIRECTORS * CHAIRMAN Georges Eric Nivelleau de la Bruniere Chief Executive Officer Banque Privée 1818 DIRECTORS Jacques-Antoine Allain Deputy General Manager Banque Privée 1818 Alain Demoustier Senior Banker BPCE s networks Natixis Valerie Derambure Deputy Chief Executive Officer Banque Privée 1818 Nicolas Dhonte, since November 24 th, 2016 Deputy Chief Executive Officer Natixis Bank Evelyne Etienne Deputy Chief Executive Officer Natixis Bank SENIOR MANAGEMENT Eric Theron Chief Executive Officer Nicolas Dhonte, Deputy Chief Executive Officer Olivier Gayraud Chief Operating Officer Natixis Patrick Rougier Deputy Chief Executive Officer Natixis Bank Jean-Michel Strasser Chief Operating Officer Natixis Emmanuel Strauss Tax Division Director Natixis Eric Theron Chief Executive Officer Natixis Bank Evelyne Etienne Deputy Chief Executive Officer Patrick Rougier Deputy Chief Executive Officer STATUTORY AUDITORS PricewaterhouseCoopers Cooperative Society, Luxembourg * As of December 31 st, NATIXIS BANK I ANNUAL ACCOUNTS 2016

3 SOMMAIRE 2 MEMBERS OF THE BOARD OF DIRECTORS 4 STATUTORY AUDITOR S REPORT 5 ANNUAL ACCOUNTS Balance sheet and off-balance sheet items as at December 31, Profit and loss account for the year ended December 31, Appendix to December 31, MANAGEMENT REPORT

4 STATUTORY AUDITOR S REPORT Report on the annual accounts We have audited the accompanying financial statements of Natixis Bank, including the balance sheet as at December 31, 2016, the profit and loss for the year then ended and the appendix comprising a summary of principle accounting policies and other explanatory notes. Responsibility of the Board of Directors for the annual accounts The Board of Directors is responsible for the preparation and fair presentation of these annual financial statements in accordance with the legal and regulatory requirements relating to the preparation and presentation of the annual statements in force in Luxembourg as well as the internal control it deems necessary to enable the preparation of the annual statements with no material misstatement, whether due to fraud or due to errors. Responsibility of the Statutory Auditor Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the International Standards on Auditing as adopted by the Supervisory Board of the Financial Sector for Luxembourg. These standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatements. An audit involves the implementation of procedures to obtain audit evidence about the amounts and disclosures in the annual statements. The procedures chosen depend on the judgement of the independent auditor, as well as the assessment of the risks that the annual statements contain significant anomalies, whether due to fraud or due to errors. In carrying out this assessment, the Auditor shall take into account the internal control in force in the entity relating to the preparation and fair presentation of the annual statements in order to define appropriate audit procedures in the circumstances, and not for the purpose of expressing an opinion on the effective functioning of the entity s internal control. An audit also includes the assessment of the appropriateness of the accounting methods adopted and the reasonableness of the accounting estimates made by the Board of Directors, as well as the assessment of the overall presentation of the annual accounts. We believe that the evidence gathered is sufficient and appropriate to support our opinion. Opinion In our opinion, the annual accounts give a true and fair view of the financial position of Natixis Bank as at December 31, 2016, and the results for the year then ended, in accordance with legal and regulatory requirements relating to the preparation and presentation of annual accounts in force in Luxembourg. Other information Responsibility for other information rests with the Board of Directors. The other information consists of the information contained in the management report but does not include the annual accounts and our audit report on these annual accounts. Our opinion on the annual accounts does not extend to the other information and we do not express any form of assurance on this information. As regards our audit of the annual accounts, our responsibility is to read the other information and, in doing so, to assess whether there is a significant inconsistency between them and the annual accounts or the knowledge we acquired during the audit, or if the other information otherwise appears to contain a material misstatement. If, in light of the work we have done, we conclude that there is a material misstatement in the other information, we are obligated to report this fact. We have nothing to report in this regard. Report on other legal and regulatory requirements The management report is in line with the annual accounts and has been prepared in accordance with the applicable legal requirements. PricewaterhouseCoopers, cooperative Society Represented by Cyril Lamorlette Luxembourg, March 28, NATIXIS BANK I ANNUAL ACCOUNTS 2016

5 Annual accounts Balance sheet and off-balance sheet items as at December 31, Profit and loss account for the year ended December 31, Appendix to December 31,

6 BALANCE SHEET AND OFF-BALANCE SHEET ITEMS AS AT DECEMBER 31, 2016 ASSETS (IN EUR) Notes Cash, assets with central banks and post office giro institutions 3, 5, 39, ,552, ,124,533 Loans and advances to credit institutions 3, 6, 12, 39, 40 2,557,284,769 1,487,802,972 a) at sight 75,621,152 41,085,429 b) other receivables 2,481,663,617 1,446,717,543 Trade receivables 3, 6, 12, 39, ,050,918 1,403,301,093 Bonds and fixed-income securities 3, 7, 39, ,615,940 Shares and other variable-income securities 3, 4, 7, 39, ,628, ,099,203 Shares in affiliated companies 7, 10, 29 74,370 74,370 Intangible assets 10, 11 13,630,053 15,108,941 Tangible assets , ,837 Other assets 8 1,369,428 1,732,081 Accrual accounts 9 6,168,433 8,111,040 TOTAL ASSETS 13 3,552,165,357 3,498,403,010 OFF-BALANCE SHEET (IN EUR) Notes Contingent liabilities 3, 4, 39, 40 16,680,831 17,659,644 including: - guarantees and assets given as collateral 16,680,831 17,659,644 Commitments 3, 4, 23, 24, 39, ,079,846 24,768,977 6 NATIXIS BANK I ANNUAL ACCOUNTS 2016

7 Annual accounts LIABILITIES (IN EUR) Notes Debts due to credit institutions 3, 20, 39, 40 1,128,311,407 2,101,522,536 a) at sight 665,803 11,112,860 b) with agreed maturity dates or periods of notice 7 1,127,645,604 2,090,409,676 Payables to clients 3, 20, 39 1,563,582, ,469,054 a) other payables aa) at sight 473,497, ,758,952 ab) with agreed maturity dates or periods of notice 1,090,084, ,710,102 Other liabilities 14 11,891,087 7,788,018 Accrual accounts 15 4,714,502 5,600,159 Provisions 6,213,690 4,712,381 a) provisions for taxes 16 1,316,935 1,734,852 b) other provisions 17 4,896,755 2,977,529 Subscribed capital ,542, ,542,500 Reserves 19 25,097,711 26,909,921 Result of the year 19 1,812,209 4,858,441 TOTAL LIABILITIES 21 3,552,165,357 3,498,403,010 7

8 PROFIT AND LOSS ACCOUNT For the year ended December 31, 2016 (IN EUR) Notes Interest and similar income 27,293,163 23,546,804 including: - on fixed-income securities 1,415, ,236 Interest and similar charges (8,905,822) (10,464,471) Income from securities , ,851 including: - income from shares in affiliated companies 45,000 27,000 Commissions received 12,561,323 13,898,517 Commissions paid (3,156,386) (3,177,952) Profit from financial transactions 577, ,061 Other operating income 27 2,214,934 3,188,668 General administrative expenses (23,374,806) (23,793,710) a) staff expenses 30, 31, 36 (14,255,607) (14,102,769) including: - salaries and wages (10,427,392) (10,230,512) - payroll expenses (2,348,032) (2,290,064) including: - payroll expenses covering pensions (1,349,750) (1,280,070) b) other administrative expenses 33, 36 (9,119,199) (9,690,941) Value adjustments on intangible and tangible assets 11 (1,406,337) (1,766,018) Other operating charges 34 (7,711,335) (7,432,738) Value adjustments on receivables and provisions for contingent liabilities and commitments (5,084,128) (21,899) TO BE CARRIED FORWARD (6,802,337) (5,620,887) 8 NATIXIS BANK I ANNUAL ACCOUNTS 2016

9 Annual accounts (IN EUR) Notes Report: (6,802,337) (5,620,887) Write-backs of value adjustments on receivables and provisions for contingent liabilities and commitments 28 9,093,061 11,737,125 Income taxes from ordinary activities (266,497) (685,124) Income from ordinary activities, net of tax 2,024,227 5,431,114 Other taxes not included in the items above (212,018) (572,673) RESULT OF THE YEAR 1,812,209 4,858,441 9

10 APPENDIX AT DECEMBER 31, 2016 Note 1 - General 1.1. CONSTITUTION OF THE BANK NATIXIS BANK hereinafter referred to as the Bank was incorporated in Luxembourg on November 24, 1989 under the name Banque Internationale d Epargne et de Crédit (Luxembourg) SA and in the form of a public limited company. The company merged (Extraordinary General Meeting of November 28, 1994) by absorption with BRED International (Luxembourg) SA and took the name of Banque Populaire du Luxembourg SA. In September 2003, the Bank changed its name to Natexis Private Banking Luxembourg SA. It also changed the address of its registered office to 51, avenue JF Kennedy, L-1855 Luxembourg. Following the merger in November 2006 between Natexis (Groupe Banque Populaire) and Ixis (Groupe Caisse d Epargne) which gave birth to Natixis, the Bank has changed its name to: NATIXIS PRIVATE BANKING INTERNATIONAL. The current name, NATIXIS BANK, was adopted following a decision taken by the Extraordinary General Shareholders Meeting of 25 August 2010, which also approved the proposed contribution of the banking business by Natixis Trust (formerly Natixis Luxembourg SA) made on 30 September with retroactive effect to July 1, The Bank opened a branch in Belgium in July As at December 31, 2016, the Bank is a wholly-owned subsidiary of Natixis Trust (formerly Natixis Luxembourg SA), a company incorporated under Luxembourg laws with its registered office in Luxembourg, itself a subsidiary of the Natixis Group in France ADMINISTRATION OF THE BANK The Board of Directors of the Bank is mainly composed of the directors of the Natixis Group. The commercial policy and valuation rules of the Bank, insofar as they are not determined by Luxembourg laws and regulations, shall be determined and supervised by the Board of Directors. The Bank has developed a range of products and activities that it makes available to all its shareholders in various geographical areas as well as to its clientele that has been developed directly NATURE OF ACTIVITIES The purpose of the Bank is to carry out all banking and credit activities. Note 2 - Principal accounting methods The annual accounts of the Bank have been prepared in accordance with legal requirements as well as generally accepted accounting principles in the banking sector in the Grand Duchy of Luxembourg. The financial year coincides with the calendar year. The Bank shall, on the basis of the criteria laid down by Luxembourg Law, be exempt from the obligation to draw up consolidated accounts and a consolidated management report for the financial year ending on December 31, Consequently, in accordance with legal requirements, these financial statements have been presented on an unconsolidated basis. The consolidated financial statements of the Group are available as described in Note 35. The main accounting policies that have been applied are as follows: 10 NATIXIS BANK I ANNUAL ACCOUNTS 2016

11 Appendix 2.1. THE DATE ON WHICH THE BALANCE SHEET TRANSACTIONS ARE RECORDED The Bank s balance sheet includes assets and liabilities in accordance with the date of availability of the funds, that is, the effective date of transfer CURRENCY TRANSLATION The Bank draws up its annual accounts in euro (EUR), the currency of its capital. The Bank uses the multi-currency accounting method of recording transactions in the original currency on the day the contract is concluded. Income and expenses expressed in foreign currencies are converted into EUR at the exchange rates applicable on the date of their recording. All assets and liabilities denominated in foreign currencies, including assets classified as financial fixed assets and tangible and intangible assets, are translated into the currency of the capital at the spot rates in effect on the balance sheet closing date. Transactions in foreign currencies not yet settled are converted into euro at forward rates for the remaining maturity date as of the balance sheet date. Unhedged forward transactions are valued individually on the basis of the forward rates in effect at the balance sheet date. Capital gains are disregarded; capital losses are recognised under Provisions: other provisions in the balance sheet FINANCIAL INSTRUMENTS The Bank s contingent liabilities arising from financial instruments such as interest rate swaps, forward rate agreements, financial futures and options are recorded at the transaction date in the off-balance sheet accounts. At the balance sheet date, a provision is made for unrealised capital losses recognised at the time of the individual valuation at the market price of the transactions not yet settled. This provision is shown under liabilities Provisions: other provisions. The unrealised gains are disregarded. No provision is made in cases where the financial instrument is hedged by an inverse transaction in such a way that the position is said to be closed. No provision is made where the financial instrument specifically covers an asset or liability item and the economic unit is established SPECIFIC VALUE ADJUSTMENTS ON DOUBTFUL ACCOUNTS AND UNCOLLECTIBLE RECEIVABLES The Bank makes specific value adjustments on doubtful debts and uncollectible receivables within the limits deemed appropriate by the Board of Directors. Value adjustments are deducted from the asset items to which they relate FLAT-RATE PROVISION FOR RISKY ASSETS The Bank s policy is to establish, in accordance with the provisions of the Luxembourg tax legislation, a flat-rate provision for risky assets within the meaning of prudential banking regulations. The purpose of this provision is to hedge risks that are probable but not yet identified at the time of drawing up the annual accounts. The maximum rate of the provision, constituted free of tax, amounts to 1.25% of the risky assets. The flat-rate provision for risky assets is broken down in proportion to the elements of the basis used to calculate the provision between: - A portion of the value adjustment, which is deducted from the asset items that make up the risky assets; and - A portion of the provision, which is attributable to the credit risk affecting off-balance sheet items, foreign exchange risk and market risks, is included in Provisions: Other provisions in the balance sheet liabilities. There are no lump-sum provisions as at December 31, OTHER PROVISIONS The Bank establishes provisions for liabilities and charges for the following purposes: - to cover losses or liabilities that are clearly defined as to their nature but are, at the balance sheet date, probable or certain but undetermined as to their amount or as to the date of their occurrence; - to cover expenses arising in the course of the financial year or a previous financial year and which are clearly circumscribed as to their nature but are, at the balance sheet date, probable or certain but undetermined as to their amount or as to the date of their occurrence. 11

12 2.7. SECURITIES AND FINANCIAL FIXED ASSETS Securities and long-term investments are recorded at the purchase price at which they are included in the Bank s portfolio. The Bank applies the weighted average price method for the determination of realised or not yet realised losses. Securities, for financial assets, investments and trading are valued using the lowest purchase price or fair value method, respectively, with the exception of securities borrowed in the framework of a securities borrowing transaction for which the valuation is made at the redemption value of the securities concluded between the parties SHARES AND OTHER VARIABLE- INCOME SECURITIES Shares and other variable-income securities are valued in accordance with the principles set out in note BONDS AND FIXED-INCOME SECURITIES Shares and other fixed-income securities are valued in accordance with the principles set out in note INVESTMENTS AND SHARES IN AFFILIATED COMPANIES Investments in affiliated companies shall be valued in accordance with the principles set out in note ADMINISTRATION FEES The administration expenses are amortised on a straightline basis over a maximum period of five years OTHER INTANGIBLE ASSETS The value of other intangible assets whose use is limited over time is reduced by the value adjustments calculated so as to amortise these items over their estimated useful lives. Depending on the assets, depreciation periods range from three to ten years TANGIBLE ASSETS Tangible assets are recorded at their acquisition price. The value of tangible assets whose use is limited in time is reduced by the value adjustments calculated so as to amortise these items over their estimated useful life. Depending on the assets, amortization periods range from three to eight years DEBTS Debts are recorded as liabilities at their repayment amount RECEIVABLES Receivables are recorded in the balance sheet at their purchase price less any repayments and any value adjustments. The Bank s policy is to establish specific provisions for doubtful accounts, depending on the circumstances and for the amounts determined by the responsible bodies TAXES Tax expenses are recognised according to the principle of the specificity of the financial years and not in the year in which the payment occurs SECURITIES SOLD UNDER REPURCHASE AGREEMENTS Under Luxembourg laws, securities repurchased on the basis of a firm sale and redemption agreement are maintained in the securities portfolio. 12 NATIXIS BANK I ANNUAL ACCOUNTS 2016

13 Appendix Note 3 - Breakdown of primary financial instruments according to residual duration, excluding the trading portfolio The primary financial instruments are disclosed in notes 3 and 4, depending on whether they belong to the trading portfolio or not, within the meaning of the regulations in force on the definition of capital ratios in accordance with Article 56 of the amended Law of April 5, 1993 on the financial sector, and as defined below. The trading portfolio includes: The proper positions, whether long or short, by: - money market instruments; - fixed income securities; - variable-income securities including units of collective investment schemes; - commodities. Derivative instruments relating thereto, when taken or held with the intention of: - settling them in the short term; or - benefitting in the short term from actual and/or expected discrepancies between their purchase and sale price; or - benefitting in the short term from other price or interest rate fluctuations. Positions resulting from concurrent purchases and sales made for own account, Positions linked to underwriting commitments for transferable securities or money market instruments; All other positions taken or held to hedge other positions in the trading portfolio. The primary financial assets and liabilities, excluding the trading portfolio, are as follows based on their residual maturity at December 31, 2016: (MILLIONS OF EUR) Up to 3 months 3 months to 1 year 1 year to 5 years More than 5 years or an undetermined duration Total Financial assets Cash, assets with central banks and post office giro institutions Loans and advances to credit institutions at sight on time or at notice 1, , , ,446.7 Trade receivables Bonds and other fixedincome securities Shares and other variable-income securities ,5 5,

14 (MILLIONS OF EUR) Up to 3 months 3 months to 1 year 1 year to 5 years More than 5 years or an undetermined duration Total Financial liabilities Amounts owed to credit institutions at sight on time or at notice , ,090.4 Payables to clients at sight other debts that are on time or at notice , Contingent liabilities Commitments The distinction between at sight and on time or at notice is based on the nature of the transaction and not on the residual maturity as at December 31, 2015 or This is valid for the following table of notes. Note 4 - Breakdown of the financial instruments of the trading portfolio The primary financial assets of the trading portfolio are as follows, based on their remaining maturity at December 31, 2016: (MILLIONS OF EUR) Financial assets Shares and other variable-income securities Up to 3 months Note 5 - Cash, assets with central banks and post office giro institutions In accordance with the requirements of the European Central Bank, the Banque Centrale du Luxembourg (hereinafter BcL ) has set up, as from January 1, 1999, a system of minimum reserves to which all Luxembourg credit institutions are subject. On December 31, 2016, out of a total amount of EUR 124,854,236 deposited with BcL, the minimum reserve maintained by the Bank amounted to EUR 4,854,236 (2015: EUR 3,748,772). As at December 31, 2015 or 2016, the amount of the minimum reserve maintained by the Bank with the National Bank of Belgium amounted to EUR 28,250 (2015: EUR 3,565,707). Note 6 - Receivables Other trade receivables and receivables from credit institutions are carried at their acquisition cost and interest is prorated through Accrual accounts. The amounts receivable subject to value adjustments amounted to EUR 4,999,956 at December 31, 2016, of which EUR 3,257,682 related to legal entities and EUR 1,742,274 related to natural persons. 14 NATIXIS BANK I ANNUAL ACCOUNTS 2016

15 Appendix Note 7 - Securities The transferable securities under Shares and other variable-income securities, Bonds and other fixed-income securities and Shares in affiliated companies are broken down as follows according to whether they are listed or not: (IN EUR) 2016 Values listed 2016 Values unlisted 2016 Total Shares and other variable-income securities* 350,388,000 5,711, ,099,203 Bonds and other fixed-income securities - 100,615, ,615,940 Shares in affiliated companies - 74,370 74, ,388, ,401, ,789,513 Shares and other listed variable-income securities are classified in the trading portfolio. Shares and other non-listed variable-income securities are classified in the investment portfolio as shares and other fixedincome securities. As at December 31, 2016, value adjustments were recorded on shares and other unlisted variable-income securities for an amount of EUR 4,413,062. As at December 31, 2015, fixed-income securities were included in Loans and advances to credit institutions, for EUR 92,000,000. The Bank had made this decision in previous financial years following the financial crisis (illiquid securities). As at December 31, 2016, these securities, which are included in Bonds and other fixed-income securities, amount to EUR 100,615,940 and are all issued by the Group. The Bank considers these liquid securities as at December 31, (IN EUR) 2015 Values listed 2015 Values unlisted 2015 Total Shares and other variable-income securities* 350,125,000 5,503, ,628,378 Shares in affiliated companies - 74,370 74, ,125,000 5,577, ,702,748 * This portfolio of EUR 350,388,000 was borrowed as part of a securities lending transaction with a related party with a maturity date of 22 March The equivalent debt is taken over for the same amount under Amounts owed to credit institutions - with agreed maturities or periods of notice on the liabilities side of the balance sheet. An identical transaction for an amount of EUR 350,125,000 was concluded in 2015 with a maturity date of February 5, Shares and variable-income securities are classified in the Bank s trading portfolio. 15

16 Note 8 - Other assets (IN EUR) Short-term receivables 10,532 - Tax advances 1,006,138 1,530,614 Other 352, ,467 1,369,428 1,732,081 Note 9 - Accruals assets (IN EUR) Accrued interest 4,474,657 6,395,910 Income receivable 1,382,456 1,114,629 Prepaid expenses 311, ,501 6,168,433 8,111,040 Note 10 - Fixed asset movements The evolution of the Bank s fixed assets during the year was as follows: (IN EUR) Acquisition value at the beginning of the financial year Inputs Disposals Transfers Acquisition value at the closing date Accumulated value adjustment at year-end Net value at year-end 1. Shares in affiliated companies 74, , Property, plant and equipment - Technical facilities and equipment - Other installations, tools and furniture 7,079, , ,224,690 (6,791,853) 432,837 4,098, , ,208,092 (4,107,668) 100,424 2,980,906 35, ,016,598 (2,684,185) 332, Intangible assets 22,925,281 3,125, ,051,061 (10,942,120) 15,108,941 - Administration fees 743, ,147 (743,147) - - Software and IT licenses 19,256,687 47,651-2,850,606 22,154,943 (10,008,722) 12,146,221 - Merger premium 190, ,251 (190,251) - - Assets in progress* 2,735,196 3,078,129 - (2,850,606) 2,962,720-2,962,720 * The assets in progress item concerns IT tools developed internally by the Bank. Amortisation begins on the date of use of the asset. The acquisition value at the beginning of the financial year has been modified in relation to the annual accounts as at 31 December Note 11 - Intangible assets Intangible assets not fully amortised include computer software licenses and other items related to the migration project of the new banking software. 16 NATIXIS BANK I ANNUAL ACCOUNTS 2016

17 Appendix Note 12 - Receivables from related companies and businesses with which the bank has an equity interest As at December 31, 2016, receivables from affiliated companies and from companies with which the Bank has an equity interest relate to the following items: (IN EUR) Affiliated companies 2015 Affiliated companies 2016 Loans and advances to credit institutions 2,184,061,107 1,214,111,672 Trade receivables 60,087, ,082,492 Accrued interest not yet due 927,333 2,025,023 2,245,075,470 2,135,219,187 At the request of the Bank, the CSSF approved the total exemption of risks taken by the Natixis/BCPE Group in the calculation of large-risk limits in accordance with article 20 of CSSF Regulation no The breakdown of the amounts included in this note as at December 31, 2015 has been modified to ensure comparability with the amount as at December 31, Note 13 - Assets in foreign currency As at December 31, 2016, the aggregate amount of assets denominated in foreign currencies (excluding EUR), converted into EUR, amounts to EUR 1,145,502,046 (2015: EUR 449,865,280). Note 14 - Other liabilities (IN EUR) Preferred creditors 1,507,982 1,322,614 Miscellaneous creditors 4,361,198 1,162,291 Other 6,021,907 5,303,113 11,891,087 7,788,018 The preferred creditors item includes, in particular, social security contributions, VAT payable and taxes on wages. The Miscellaneous creditors item mainly includes cheques issued for the customer being cashed. The Other item mainly includes the tax consolidation debt, as well as the holdings of the customers accounts in escheat. 17

18 Note 15 - Accruals liabilities (IN EUR) Accrued interest 1,956,867 2,818,436 Expenses to pay 2,757,635 2,781,723 4,714,502 5,600,159 Note 16 - Provisions for taxes The Bank is fully consolidated in a tax consolidation group comprising Natixis Trust, Natixis Bank (since January 1, 2011) and other subsidiaries of Natixis Trust. Natixis Trust (founder company) is at the head of this tax consolidation group. The tax charge is determined according to the tax rules applicable to each entity and recognised among the different members of the group. The total tax is payable by the company. Note 17 - Other provisions Other provisions relate mainly to variable compensation for personnel, provisions for contingencies and losses and provisions for litigation. Provisions for taxes include provisions up to EUR 1,734,852 for current tax liabilities (2015: EUR 1,316,935). Note 18 - Subscribed capital and issue premium On August 25, 2010, in consideration for the contribution of the Business Line by Natixis Luxembourg SA, the Bank issued new shares with a par value of EUR 2,500 each, corresponding to a total amount of EUR 764,010,000 bringing the capital from EUR 46,532,500 to EUR 810,542,500. The Ordinary General Meeting held on April 20, 2012, decided to distribute the entire issue premium for an amount of EUR 2,436,374. As of December 31, 2016, the share capital of the Bank is EUR 810,542,500 represented by shares with a par value of EUR 2,500 each. Note 19 - Changes in reserves and deferred results (IN EUR) Legal reserve Other reserves Profit for the year Total Balance as at January 1, ,482,727 18,614,984 1,812,209 26,909, profit allocation 90,610 1,721,599 -,1,812, profits - - 4,858,441 4,858,441 BALANCE AS AT DECEMBER 31, ,573,337 20,336,583 4,858,441 31,768, NATIXIS BANK I ANNUAL ACCOUNTS 2016

19 Appendix LEGAL RESERVE In accordance with Luxembourg Law, the Bank shall annually allocate to the legal reserve an amount equal to 5% of the net profit for the year until this reserve reaches 10% of the subscribed capital, a ceiling that was reached in Distribution of the legal reserve is not permitted OTHER RESERVES In accordance with current tax legislation, the Bank has reduced its Wealth Tax (IF) expense. In this context, the Bank decided to allocate to unavailable reserves an amount equal to five times the amount of the Wealth Tax which can be reduced based on the applicable legislation. Note 20 - Amounts owed to affiliated companies and companies with which the bank has an equity interest As at December 31, 2016, liabilities to affiliated companies and companies with which the Bank has an equity interest covered the following items: (IN EUR) Affiliated companies 2015 Affiliated companies 2016 Amounts owed to credit institutions 1,128,304,027 1,735,112,382 Payables to clients 1,044,401, ,191,957 Other liabilities 2,429,661 3,114,785 Accrued interest not yet due 927,333 1,805,004 2,176,062,543 1,888,224,128 Note 21 - Liabilities in foreign currencies As at December 31, 2016 the total amount of liabilities denominated in foreign currencies (excluding EUR), converted to EUR amounts to EUR 1,145,000,686 (2015: EUR 449,830,123). Note 22 - Contingent liabilities (IN EUR) Guarantees and other direct credit substitutes 16,680,831 17,659,644 Contingent liabilities do not include 2016 and 2015 guarantees and other direct credit substitutes against affiliated companies. Note 23 - Assets pledged by the bank as guarantee for its own liabilities As at December 31, 2016 and 2015, the Bank has not given assets as collateral for its own commitments. This amount is presented under loans and advances owed to credit institutions. The securities lending transaction, as described in note 7, was conducted by the Bank in exchange for a security with a value of EUR 350,388,

20 Note 24 - Commitments The Bank s liabilities consist mainly of unused confirmed credit of EUR 24,768,977 (2015: EUR 428,079,846). There was no forward purchases in 2016 and The variation is mainly explained by a confirmed unused credit line for an Institutional Client for EUR 406,000,000 which was terminated in May The Bank has no commitments to companies with which it has an equity interest, nor in respect of affiliated companies. The Bank has contracted certain other commitments which are neither mentioned in the balance sheet nor off-balance sheet but whose information is of assistance in assessing the financial position. The commitments concerned are as follows: (IN EUR) Commitments to pay fixed rent for buildings or property leased through a leasing contract 3,403,925 2,173,254 Note 25 - Transactions related to exchange, interest rates and other market prices The types of 2016 current futures are: Exchange rate transactions - Forward exchange transactions (cash deferred). The exchange rate related translations meet coverage goals of the effects of fluctuations in exchange rates. Note 26 - Management and representation services The Bank offers the following services: - Management or financial adviser; - Custody and administration of securities; - Renting of vault space; - Fiduciary representation; - Custodian of mutual funds. Transactions related to interest rates As at December 31, 2016, there are no transactions related to interest rates in the books of the Bank. 20 NATIXIS BANK I ANNUAL ACCOUNTS 2016

21 Appendix Note 27 - Other operating income (IN EUR) Income related to prior years 1,824,548 1,231,654 AGDL refund (note 36) 42,206 50,350 AGDL provision write-back (note 36) - 1,328,775 Natixis Trust Management fees 164, ,296 Gain on operations 59,620 2,803 Other 123, ,790 2,214,934 3,188,668 Note 28 - Value correction write-back on receivables and provisions for liabilities and commitments A correction value write-back was recorded on a trade receivable in the amount of EUR 11,710,780. A loss on bad debt was provisions for liabilities and commitments recorded under other operating expenses for the amount of EUR 6,728,020 (note 34). Note 29 - Main subsidiaries and affiliates As at December 31, 2016, the list of the main companies in which the Bank holds a 20% stake, is as follows: Name Registered office Eyquem Fund Management Limited Liability Company* 51, avenue JF Kennedy L-1855 Luxembourg Proportion of the capital held % Equity** EUR 80,319 including profits for the year ** * EUR (2,265) Dividends paid during the year EUR 27,000 * This company is in liquidation. ** As at December 31, 2016 = audited figures. 21

22 Note 30 - Workforce numbers During the 2016 year, the average number of staff employed by the Bank breaks down as follows: Management 5 5 Executives Employees The breakdown of staff on 31 December 2015 has been amended to ensure comparability with the figures as at December 31, Note 31 - Remuneration and pension obligations of members of the board of directors COMPENSATION OF MEMBERS OF THE VARIOUS BODIES OF THE BANK (MILLIONS OF EURO) Remuneration paid in 2015 due to their duties Remuneration paid in 2016 due to their duties Board of Directors - - Senior Management 1,5 1,6 5 members 5 members The data as at December 31, 2015 have been amended to ensure comparability with the figures as at December 31, PENSION OBLIGATIONS OF MEMBERS OF THE VARIOUS BODIES OF THE BANK (IN EUR) Pension obligations as at December 31, 2015 Pension obligations as at December 31, 2016 Board of Directors - - Senior Management member 1 member 22 NATIXIS BANK I ANNUAL ACCOUNTS 2016

23 Appendix Note 32 - Advances, loans and commitments of members of the board of directors Note 33 - Auditor fees Fees excluding VAT charged to the Bank by the auditor and its network are as follows: As at December 31, 2016 and 2015, the Bank did not grant advances, loans or commitments to the members of the Board of Directors. (IN EUR) Statutory audit of annual accounts 187, ,000 Other insurance services 100,973 53,500 Tax reporting and advisory service 12,000 10,705 Other services 29,000 13, , ,505 Note 34 - Other operating charges (IN EUR) Expenses related to prior years 807, ,904 AGDL amortisation (note 36) 98,160 - Losses on bad debts (note 28) 6,678,909 6,754,363 Other 126,326 91,471 7,711,335 7,432,738 23

24 Note 35 - Parent company The Bank is a subsidiary of Natixis Trust (formerly Natixis Luxembourg SA) whose registered office is located in Luxembourg. Natixis Trust itself is consolidated within Natixis, a bank established in France. The consolidated financial statements of these entities may be obtained at the following address: 30, avenue Pierre-Mendès F Paris Note 36 - Mutual guarantee of deposits and investor compensation The Law concerning the resolution, adjustment and liquidation measures of credit institutions and some investment companies as well as deposit and investor compensation guarantee schemes ( the Law ), transposing into Luxembourg law the Directive 2014/59/EU establishing a framework for the reorganisation and resolution of credit institutions and investment companies and the Directive 2014/49/EU on deposit and investor compensation guarantee schemes, was passed on December 18, The guarantee system for deposits and investor compensation in force until then implemented by the Luxembourg Deposit Guarantee Association (AGDL) is replaced by a new contributory system of deposit and investor compensation guarantees. The new system guarantees all eligible deposits of each depositor up to an amount of EUR 100,000 and investments up to an amount of EUR 20,000. The Law further provides that deposits resulting from specific transactions or fulfilling a social objective or linked to particular life events are protected beyond EUR 100,000 for a period of 12 months. The provisions made in the Bank s annual accounts over the years to be able to comply, where applicable, with their obligations to the AGDL are used gradually for their contribution to the new Luxembourg Resolution Fund (FRL) and Luxembourg Deposit Guarantee Fund (FGDL). reach at least 1% of insured deposits, as defined in Article 1 Number 36 of the Act, of all credit institutions authorised in all participating Member States. This amount will be collected from credit institutions by annual contributions during The target level of FGDL funding is set at 0.8% of guaranteed deposits, as defined in Article 163 number 8 of the Act, of member institutions and will be reached by the end of When the level of 0.8% is reached, the Luxembourg banks continue to contribute for 8 more years in order to provide an additional safety cushion of 0.8% of guaranteed deposits as defined in Article 163, paragraph 8 of the Law. Contributions paid by the Bank in 2016 in connection with these mechanisms amounted to EUR 293,143 and are recorded in Other operating expenses. The Bank completely took over the provision made in the amount of EUR 1,328,775 on December 31, 2016 and is recorded in Other operating income (note 27). In addition, during the 2016 year, the Bank has recovered EUR 50,350 (2015: EUR 42,206) of the funds advanced (see note 27). The amount of FRL funding by the end of the 2024 year will 24 NATIXIS BANK I ANNUAL ACCOUNTS 2016

25 Appendix Note 37 - Information on credit risk The financial information presented in this note are the amounts included in the calculation of the solvency ratio which is determined based on FinRep financial statements and not the financial statements under the LuxGAAP reference. FINANCIAL INSTRUMENTS (MILLIONS OF EURO) Weighted credit risk* 2015 Items at risk 2016 Weighted credit risk* 2016 Balance sheet items Assets at risk 1, , ,939.6 Off-balance sheet items other than derivatives Contingent liabilities and commitments OTC DERIVATIVES (MILLIONS OF EURO) Weighted derivatives* 2015 Equivalent risk 2016 Weighted derivatives* 2016 Transactions related to interest rates Transactions related to exchange rates TOTAL CREDIT RISK 1, , ,967.7 * Credit risk is weighted according to the standard method in accordance with CSSF Circular 06/273. The bank does not hold derivatives outside the trading portfolio as of December 31, Note 38 - Breakdown of derivatives by category of instruments and residual duration As at December 31, 2016, the Bank has no derivative financial instruments outside the trading portfolio (as defined in note 3), it was the same as at December 31,

26 Note 39 - Breakdown of balance sheet and off-balance sheet items by country group The table below shows the breakdown of primary financial instruments by country group as at December 31, 2016 and (MILLIONS OF EURO) Country zone Assets (book value) Savings and Loans Banking European Union 2, ,383.5 Other Countries in Zone A Supranational outstanding amounts - - Others Trade receivables European Union Other Countries in Zone A Supranational outstanding amounts - - Others Variable-income securities European Union Other Countries in Zone A - - Supranational outstanding amounts - - Others - - Liabilities Amounts owed to credit institutions European Union 1, ,101.2 Other Countries in Zone A Supranational outstanding amounts - - Others - - Amounts owed to Clients European Union 1, Other Countries in Zone A Supranational outstanding amounts - - Others Off-balance sheet items Contingent liabilities European Union Other Countries in Zone A - - Supranational outstanding amounts - - Others - - Commitments European Union Other Countries in Zone A - - Supranational outstanding amounts - - Others NATIXIS BANK I ANNUAL ACCOUNTS 2016

27 Appendix Note 40 - Breakdown of assets and off-balance sheet items by economic sector The breakdown of assets by economic sector is presented for the most significant items as follows: (MILLIONS OF EURO) ECONOMIC SECTORS Asset items (book value, in millions of EUR) Public Sector Receivables - - VMRF - - Central banks Receivables Multilateral Development Banks VMRF - - Other Banks Receivables 2, ,487.8 VMRF VMRV Mutual funds Receivables VMRF VMRV - - Holdings Receivables ,020.0 VMRF - - Other Financial Institutions Receivables VMRV Other Companies Receivables VMRV Households Receivables VMRF: Fixed income securities VMRV: Variable-income securities. 27

28 The table below shows the display of off-balance sheet items by economic sector as at December 31, 2016 and (MILLIONS OF EURO) ECONOMIC SECTORS Type of outstanding amount Other Banks Contingent liabilities Commitments - - Holdings Contingent liabilities Commitments - - Mutual funds Contingent liabilities - - Commitments - - Other Companies Contingent liabilities Commitments Households Contingent liabilities Commitments Note 41 - Foreign currency position The main foreign currency positions as at December 31, 2016 are as follows ( short position under brackets): (MILLIONS OF EURO) Net reporting positions 2015 Net forward positions 2016 Cash positions 2016 Net reporting positions 2016 EUR (0.03) - (0.5) (0.5) USD (0.04) GLOBAL NET POSITION (0.07) - (0.1) (0.1) Note 42 - Return on assets The return on assets of the Bank as at December 31, 2016 is 0.13% (2015: 0.05%). The return on assets is calculated by dividing net income for the year by the balance sheet total. 28 NATIXIS BANK I ANNUAL ACCOUNTS 2016

29 Management report Management report Management report of the board of directors to the ordinary general shareholders meeting 29

30 MANAGEMENT REPORT OF THE BOARD OF DIRECTORS TO THE ORDINARY GENERAL SHAREHOLDERS MEETING According to the articles of Incorporation of the Bank, we have the honour of presenting the Balance Sheet and the Profit and Loss Statement as at December 31, 2016, and our Management Report Financial Statements 1.1. PROFIT ALLOCATION Subject to your approval of the allocation of profits as presented in the table below: Profit for the year EUR 4,858,441 TOTAL EUR 4,858,441 Distributed as follows: Legal reserve (allocation) EUR 242, Wealth Tax Reserve EUR 3,468,738 Dividend distribution EUR 1,146,781 TOTAL EUR 4,858,441 For information purposes: Balance of the reserve established under the Wealth tax reserve charged at the end of 2016 EUR 20,336, NATIXIS BANK I ANNUAL ACCOUNTS 2016

31 Management report After allocation, the Bank s Shareholders Equity (Capital, Reserves and Deferred Income) will amounts to EUR compared to EUR 837,452,420 at the end of 2015, for a total balance sheet of EUR 3,498,403,010 compared to EUR 3,552,165,357 at the end of BALANCE SHEET ANALYSIS The main balance sheet trends are: For Assets Cash, balances with central banks and post office giro institutions : the decrease of 42 million compared to the end of 2015, mainly concerns the deposit made with the Central Bank of Luxembourg. This deposit helps maintain high quality asset structure in the framework of respect of the LCR (Liquidity Coverage Ratio) ratio and respect the amount for the reserve requirement. Loans and advances to credit institutions : the decrease of 41.8% of those outstanding amounts, for a total of billion at the end of 2016, mainly corresponds to loans made with Natixis Paris not renewed this year. Receivables from customers : the increase is primarily a loan to an affiliate of Natixis US Holding Incorporated ( Nushi ) for $800 million. This operation was conducted on 19 December Shares and other variable income securities : this item records a securities borrowing to Natixis Paris, for million. Intangible assets : the progress of these assets relates to additional investments due to changes in the Bank s computer system. For Liabilities Amounts owed to credit institutions : these outstanding amounts rose 86.2%, mainly concerning the Natixis and BPCE scope. They include a forward debt of million, with Natixis Paris, as part of a securities loan transaction (accounting for the repayment obligation on 22 March 2017). An identical transaction for million was reached in 2015 with a maturity date of 2 February They also relate to a forward debt for $800 million related to the transaction with Nushi. Amounts due to customers : deposits that have not been renewed by Natixis Luxembourg Investment, a company of Natixis, for billion mainly explain the variation. Reserves : the increase in this item is essentially a special allocation to the wealth tax reserve. 2. Evolution of the bank in 2016 and prospects for 2017 outlook The Bank: - is strong in its strategic positioning on High Net Worth Individual ( HNWI ) and Ultra High Net Worth Individuals ( UHNW ) target clientele in Wealth Management, with the consequent closure of off-target accounts: about 1,200 accounts between 2012 and 2015 (reduction of 340 million of client assets and GDP loss of around 5.3 million on a full year as of 2015); - is strong in its international expansion through a presence in Belgium as a branch; - is strong in the continuous strengthening of its sales force; consolidated its development, notably through organisation with the BPCE network, with Natixis and its own customers, both private and institutional. In 2016, for its private banking, the Bank has strongly developed in its strategic markets: HNWI and UHNWI clients both in Luxembourg and in its branch in Brussels. Deposit assets increased from 5.3 billion to 6.7 billion. However, it should be noted that new assets gathered during the latest financial years have a lower ROA driven by a highly competitive market, the reason why the net banking income (NBI) of the Private Banking business from 2012 to 2015 remained relatively stable, up 4% in To address the challenges facing the international financial institutions and make every effort to ensure the success of its strategy, the Bank, during 2016 and following the successful migration performed after 2014, continued to make the necessary improvements to its IT resources. The deployment of a new transactional website was carried out in the 1 st quarter of In 2016, the IT equipment underwent a complete overhaul to upgrade the operating system to Windows Version 10. The success of the information system migration has given the Bank an indispensable technological tool to support its business model and strengthen the BPCE group wealth management banking capacity. In this context of technological innovation and investment, the Bank was able to fully control the progression of the level of charges but recorded a tightening of around 4 million of its GDP. In fact, the GDP of Major Customer (BGC) Banking has settled after the maturity in 2016 of significant accounts and an activity decrease due to the absence of new accounts. The Private Banking business including the Belgian branch, saw its GDP grow by 4% to pass the threshold of 18 million, amounting to 18.6 million. This was the result of a cross effect between, on the one hand, the increase in assets under custody, and on the other hand, the tightening of the ROA of these new assets. 31