NATIXIS_REGISTRATION_DOCUMENT_2017

5 FINANCIAL DATA

Consolidated financial statements and notes

Committees will be established as part of the impairment calculation and control framework. They will be composed of members of various Natixis departments,including the Finance Department and Risk Department, along with experts. The purposeof these committeeswill be to proposeparametersand macroeconomic scenarios for approval and to ensure that assumptionsare consistent. The new provisioning model could lead the amount of impairments for credit risk to increase insofar as all financial assets will be assessed based on expected credit losses over a horizon of at least 12 months. Furthermore, the volume of financial assets to which lifetime expected credit losses are applied will be greater than the volume of financial assets for which objective evidence of impairment exists as set out in IAS 39. In terms of hedge accounting: Like Groupe BPCE, Natixis has chosen the option offered by IFRS 9 of not applying its provisionsrelating to hedge accounting and of continuing to apply IAS 39 for hedge accounting transactions. Considering the limited number of asset reclassifications,the majority of hedge accounting transactions recognizedaccordingto IAS 39 will continue to be recognizedin the samemanneras of January 1,2018. Furthermore, information included in the notes to the financial statements will comply with the provisions of IFRS 7 as amendedby IFRS 9. In terms of applying IFRS 9 to insurance activities: The amendment to IFRS 4 applying IFRS 9 “Financial Instruments” with IFRS 4 “Insurance Contracts” with specific provisions for financial conglomerates, was adopted on November 3,2017 and is applicable as of January 1, 2018. This European regulationwill allow European financial conglomerates to defer application of IFRS 9 to their insurance divisions until January 1, 2021 (effective date of the new IFRS 17 "Insurance Contracts"standard)as long as they: do not transfer financial instruments between the insurance a division and other divisions of the conglomerate (with the exceptionof instrumentsat fair value throughprofit or loss); As a financial conglomerate, Natixis intends to apply this provision for its insurance entities, which will continue to be coveredby IAS 39. The main entities concernedby this measure are CEGC,the Cofaceinsurancesubsidiaries,NatixisAssurances, BPCE Vie and its consolidated funds, Natixis Life, ADIR, BPCE Prévoyance,BPCEAssurancesand BPCE IARD. The new IFRS 15 standard “Revenue from Contractswith a Customers” was adopted by the European Commission on September 22, 2016 and is applicable retrospectively from January 1, 2018. The amendment entitled “Clarifications to IFRS 15”, adopted by the European Commission on October 31,2017, is alsomandatoryfromJanuary 1, 2018. indicatethe insuranceentitiesthat apply IAS 39; a providespecificadditionalinformationin the Notes. a

IFRS 15 will replace current standards and interpretations on revenue recognition and imposes a single model for accounting for revenuearisingfromcontractswith customers. Under IFRS 15, the entity must recognize income arising from ordinary activities at an amount that reflects the consideration that the entity expects to receive in exchangefor the transfer of goods and servicespromisedto customers. IFRS 15 thus introduces a new five-stage general approach for the recognitionof income: identificationof contractswith customers; a identificationof specific performanceobligations (or items) to a be recognizedseparatelyfromone another; determinationof overalltransactionprice; a allocation of transaction price to the various specific a performanceobligations; recognitionof revenuewhen performanceobligationsare met. a IFRS 15applies to all contractswith customersexcept for leases (coveredby IAS 17), insurancecontracts(coveredby IFRS 4) and financial instruments(covered by IFRS 9). If specific stipulations relating to revenue or contract costs are specified under a differentstandard,thesewill first be applied. Natixis started to analyze the impact of the application of this new standardin the secondhalf of 2016 and has now completed this work. This analysisdrewon assessmentscarriedout within the entities affected and was used to identify the main items that could be involved,including: fee and commissionincome, notably those relating to banking a services when this income is not included in the effective interest rate, or those relating to asset management or financialengineeringservices; income from other activities, in particular for services included a in leases. This work confirmedthat Natixis is only very slightly affected by certain issues related to first-time application of IFRS 15 that have been identified within other banking institutions such as real estatedevelopment,loyaltyprogramsand telephony. Based on the work performed, Natixis does not expect any material impact upon the first-time application of IFRS 15, on either opening equity at January 1, 2018 or on income and expenseitems in fiscal 2018. Pursuant to the option available under IFRS 15, Natixis does not intend to provide comparative information in its financial statements. IFRS 16 “Leases” , adopted by the European Commissionon a October 31, 2017, will replace IAS 17 “Leases” and interpretationsrelated to the accountingof these contracts. It will be applicable retrospectively as of January 1, 2019, accordingto specificphase-inconditions. Under IFRS 16,lease contractsshall be accountedsuch that they identify an asset and convey the right to use this asset for a periodof time.

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Natixis Registration Document 2017