NATIXIS -2020 Universal Registration Document

5 FINANCIAL DATA

Parent company financial statements and notes

In the case of a securities borrowing transaction, the borrowed securities are recorded in the trading securities category with a corresponding liability to the securities debt to the lender for an amount equal to the market price of the securities borrowed on the date of borrowing. Borrowed securities (including borrowed securities that have been loaned out) are presented in the balance sheet as a deduction from the debt representing the value of the borrowed securities. The applicable classification and measurement rules are afsollows: securities held for trading : securities that are originally bought or V sold with the intention of reselling or repurchasing them in the short term, and securities held as part of a market-making operation. Securities bought or sold for the purposes of the specializedmanagement of a trading portfolio are also classed as securities held for trading. In order to be eligible for this category, the securitiesmust be tradable on an active market as of the date of their initial recognition and their market prices must be accessible, representing actual transactions regularly occurring in the market under normal trading conditions. On acquisition, securities held for trading are recognized at the price paid including any accrued interest. Transaction costs are recognized in expenses. At each balance sheet date, they are measured at market value and the grand total of any valuationdifference is recognizedon the income statement under the heading “Balance of transactions on securities held for trading”; securities held for sale : securities which are not classified in any V other category are considered as securities held for sale. They are reported on the balance sheet at their purchase price, excluding acquisition costs. Any difference between the purchase price (excluding accrued interest) and the redemption price is recognized in income over the remaining life of the securities. They are valued at year-end at their lowest carrying amount or market value. Unrealized losses give rise to the recognition of an impairment loss, whose calculation factors in gains from any hedging transactions conducted. Unrealized gains are not recognized; securities held for investment : securities held for investment are V dated fixed-incomesecurities acquired with the stated intention of holding them to maturity and for which Natixis has the ability to hold them through to maturity. They are reported on the balance sheet at their purchase price, excluding acquisition costs. Any difference between the purchase price and the redemption price is recorded in income over the remaining life of the securities. In line with regulatory requirements, unrealized losses are not subject to impairment, unless there is a strong likelihood that the instruments will be sold before maturity due to unforeseen circumstancesor if there is a risk of default by the issuer of these instruments. Unrealized gains are not recognized; investments in associates, subsidiaries and affiliates and other V long-term investments other long-term securities : investments made by Natixis in the V form of securities, with the intention of forging lasting professional relationships and creating a special relationship with the issuing company, but without any influence over the management of the corporate entities in which investments were made due to the low percentage of voting rights held.

They are recognized at their acquisition date at the purchase price excluding acquisition costs. They are included in the balance sheet at their lowest historical cost or value in use. Unrealized losses are subject to a provision for impairment; investments in associates : investmentsin the form of securities V that are deemed useful to Natixis’ business if held for the long term. They are recognized at their acquisition date at the purchase price excluding acquisition costs. These securities are valued individually at their lowest value in use at the reporting date and their acquisition cost. Unrealized losses are subject to a provision for impairment; investments in subsidiaries and affiliates : shares and other V variable-income securities in related corporate entities over which Natixis exercises exclusive control, i.e. corporate entities likely to be fully consolidated in Natixis’ consolidation scope. They are recognized at their acquisition date at the purchase price excluding acquisition costs. These securities are valued individually at their lowest value in use at the reporting date and their acquisition cost. Unrealized losses are subject to a provision for impairment. The measurement approaches used to determine value in use are the following, as appropriate: the net asset method (restated or not); V the peer comparison method; V the discounted future cash flows (DCF) method; V The DCF method for measuring future cash flows is based on the establishmentof businessplans preparedby the managementof the subsidiaries in question and approved by Natixis’ senior management. The discount rate on future cash flows is threesult of: an average rate of return on an investment deemed to berisk-free; V an average credit spread on the market in which the subsidiary is V listed; an average beta as reflected in a sample of equivalent companies. V Treasury shares : Natixis may hold treasury shares to regulate its V share price under a liquidity agreement. These shares are recognizedas securities held for trading and follow the same rules as other securities in this category. Moreover, treasury shares acquired through arbitraging on stock market indexes are recognized as securities held for trading. Treasury shares held for distributionto employeesare classifiedas held for sale and follow the corresponding rules. Income, value adjustments and proceeds on disposal of securities portfolios are recognized as follows: income from variable-income securities is recognizedas and when V receivedor when the payment has been subject to a resolutionat a General Shareholders’ Meeting; income from fixed-income securities is recognized based on the V accrual method; the stock market price method; or V a combination of these methods. V

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020