NATIXIS - 2018 Registration document and annual financial report

5 FINANCIAL DATA

Consolidated financial statements and notes

Conditions for classification of financial assets under 9.4.1.1 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 a linked assets and liabilities. This arises for example in the case of 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 a and 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.

31/12/2018

31/12/2017

Managed on a fair value basis

Managed on a fair value basis

Embedded derivatives

Embedded derivatives

Carrying amount

Accounting mismatch

Carrying amount

Accounting mismatch

(in millions of euros)

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

0

0

0

0

0

0

0

0

0

0

0

0

2,011

2,011

0

0

2,353

843

0 0

1,510

2,541

972

0

1,569

Equity instruments

15,148

15,148

0

13,667

13,304

363

0

TOTAL

17,501

15,991

0

1,510

18,220

16,287

363

1,569

9.4.2

Available-for-sale financial assets

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 carrying amount net of impairment.

31/12/2018

01/01/2018

(in millions of euros)

Securities

48,045 40,452

47,097 39,225

Debt instruments a

Equity instruments (a)

7,133

7,401

a

Accrued interest a

460

472

Impairment of available-for-sale assets

(245)

(200)

Debt instruments a

(38)

(15)

Equity instruments (b)

(207)

(184)

a

TOTAL

47,801

46,898

Including mutual fund units. (a) At December 31, 2018, permanent impairment of variable-income securities stood at €69 million, compared with €15 million at December 31, (b) 2017. This expense was 88% offset by the profit-sharing mechanism. The 2018 expense can be broken down into an additional impairment loss on previously impaired securities for €13 million (€7 million at December 31, 2017) and an allowance for newly impaired securities for €56 million (€9 million at December 31, 2017).

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Natixis Registration Document 2018