NATIXIS -2020 Universal Registration Document

LEGAL AND GENERAL INFORMATION Glossary

Acronym/Term

Definition

Pricing Rating

Pricing

An appraisal by a credit rating agency (Moody’s, Fitch Ratings, Standard & Poor’s) of the creditworthiness of an issuer (company, government or other public entity) or a transaction (bond issue, securitization, covered bond). The rating has a direct impact on the cost of raising capital. An organization that specializes in assessing the creditworthiness of issuers of debt securities, i.e. their ability to honor their commitments (repayment of capital and interest within the contractual period).

Rating agency

RBC

Risk-based capital

Securities comprising tangible or intangible assets, movable or immovable assets, such as commodities, precious metals, cash, financial instruments or insurance policies.

Real security

Regulatory capital requirement

The amount of capital that banks are required to hold, i.e. 8% of risk-weighted assets (RWA).

The securitization of an exposure that is already securitized where the risk associated with an underlying pool of exposures is tranched and at least one of the underlying exposures is a securitization position. The degree of risk, by type and by business, that the institution is prepared to take on in the pursuit of its strategic objectives. Risk appetite can be expressed through either quantitative or qualitative criteria. Document describing the interface between the organization’s key processes and the implementation of the governance that puts the RAS into action.

Resecuritization

Risk appetite

Risk Appetite Framework (RAF) Risk Appetite Statement (RAS)

Document setting out, in qualitative and quantitative terms, the risks that the bank is prepared to take.

Risk weight (RW)

The percentage value by which a given exposure is multiplied, used in the calculation of the corresponding risk-weighted assets.

Risk-weighted assets (RWA)

Exposure value multiplied by its risk weight.

RMBS

Residential Mortgage-Backed Security, i.e. a debt security backed by a pool of assets consisting of residential mortgage loans. Net income (excluding returns on hybrid securities recognized as equity instruments) divided by shareholders’ equity (restated for hybrid securities), used to measure the profit generated on capital.

ROE (Return On Equity)

RTT

Compensatory time off in lieu of overtime pay ( Réduction du Temps de Travail )

RW

Risk weight

RWA S&P

Risk Weighted Assets, or risk-weighted EAD

Standard & Poor’s

SA (Standardized Approach)

Approach used to measure credit risk as defined by EU regulations.

SCPl SEC

Real estate investment trust ( Société Civile de Placement Immobilier )

US Securities and Exchange Commission

Securitization

A transaction whereby credit risk on loan receivables is transferred to investors by an entity through the issuance of negotiable securities. This may involve the transfer of receivables (physical securitization) or the transfer of risks only (credit derivatives). Some securitization transactions are subordinated through the creation of tranches.

SEF

Structured Export Finance Single Euro Payments Area

SEPA

Société de Financement de l’Économie Française (SPV set up by the French government to refinance French banks during the financial crisis).

SFEF

SFS

Specialized Financial Services

Share

An equity security issued by a corporation, representing a certificate of ownership and conferring on its possessor (the “shareholder”) proportional rights in the distribution of any profits or net assets as well as a voting right at the General Shareholders’ Meeting. Société d’Investissement France Active : The investment company through which France Active receives solidarity-based savings and invests them in the Social and Solidarity-Based Economy and socially innovative companies.

SIFA

Small cap

Small market capitalization Senior Management Committee Small and medium-sized enterprises Small and medium-sized industries

SMC SME

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SMI

Solvency

Measures the ability of a business or an individual to repay its debt over the medium to long term. For a bank, solvency reflects its ability to cope with the losses that its risk profile is likely to trigger. Solvency analysis is not the same as liquidity analysis. The liquidity of a business is its ability to honor its payments in the normal course of its business, to find new funding sources and to achieve a balance at all times between its incomings and outgoings. For an insurance company, solvency is covered by the Solvency II Directive (see Solvency II).

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020