NATIXIS -2020 Universal Registration Document

FINANCIAL DATA Consolidated financial statements and notes

Note 2

Consolidation methods and principles

Consolidation scope 2.1 Natixis’ consolidated financial statements include the financial statements of Natixis and its main subsidiaries. Only subsidiaries making a material contribution to the Group’s financial statements are consolidated.

Materiality is determined based on specific thresholds for each of the Group’s business lines and on a qualitative assessment of the relevance of each entity’s contribution to the consolidated financial statements of Natixis.The main thresholds applicable are as follows:

Business lines (in millions of euros)

Total balance sheet

Net revenues

Net income

Corporate and investment banking Asset & Wealth Management

250

15

+/(2) +/(2) +/(2) +/(2) +/(2)

60 60 60 60

5 5 5 5

Insurance Payments

Corporate Center

By way of exception to the thresholds described above, and in order to comply with Article 19 of Regulation (EU) No. 575/2013, the consolidation threshold was €10 million (total balance sheet and off-balance sheet commitments excluding derivatives) for entities that meet the definition of financial institutions or ancillary services undertakings. In terms of mutual funds and real estate holdingswithin the scope of Natixis Assurances, the materiality thresholdused for inclusion in the consolidation scope is as follows: total assets or carrying amount of the mutual fund greater than V 0.5% of Natixis Assurances’ investments; the total amount of the entities excluded from the scope does not V represent more than 5% of total investments. The consolidation scope includes all of the material entities over which Natixis exercises exclusive control, joint control or significant influence. The IFRS standards stipulate three types of control: exclusive control, joint control and significant influence. Determining the type of control that exists is not limited to identifying the voting rights held, but also involves an analysis of the economic and legal relations existing between the various entities being analyzed. In determining whether it exercises control or has a significant influence, Natixis considers current voting rights and potential voting rights if they are exercisable or convertible at any time, and if they grant power over the entity’s relevant activities. Potential voting rights arise from stock options on ordinary shares or from the conversion of bonds into new ordinary shares. However, potential voting rights are not taken into account when determining the percentage of ownership except if it is concluded that these voting rights provide access to economic benefits attached to the underlying shares. The scope of Natixis’ consolidated entities is provided in Note 17 to the financial statements. The percentageof ownershipand the voting rights held are indicated for each entity within the consolidation scope. The percentage of ownership represents the equity share directly and indirectly held by Natixis in the entities within the consolidationscope. The percentage of ownership is used to determine Natixis’ share in the net assets of the company owned.

2.2

The notion of control

and consolidation methods Control of an entity 2.2.1 The entities controlled by Natixis are consolidated using the full consolidation method, in accordance with IFRS 10. This standard defines a single audit model applicable to all entities, whether they are traditionally governed entities or structured entities (see Note 4) . The control of an entity will be analyzed using three cumulative criteria: power over the entity’s relevant activities; V exposure or entitlement to variable returns by virtue of its relations V with the entity; the ability to exercise its power over the entity to influence the V variable returns obtained. When voting rights or similar rights are fundamental to an entity’s governance, control is generally understood to mean holding over 50% of voting rights. If this is not the case, control is determined through the exercise of judgment and by taking into account all facts and circumstances, such as: the objectives, terms and circumstances surrounding the creation V of the entity; the nature of the entity’s relevant activitiesand the decision-making V processes concerning these activities; the scope of Natixis’ decision-makingrights (from voting rights or V contractual agreements) over the management of the entity’s relevant activities (i.e. activities having a significant impact on the entity’s returns); exposure to variability in the entity’s returns (the significanceof the V returns received by Natixis compared with the returns received by the other investors, etc.) ; rights held by other parties (withdrawal rights, early redemption V rights, rights regarding the dissolution of the entity, etc.) If, after reviewing these criteria, Natixis concludes that its decision-makingrights over the management of the entity’s relevant activities enable it to influence the variable returns obtained, Natixis does have control pursuant to IFRS 10 and the entity in question will be subject to full consolidation.

5

265

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020