2007 REGISTRATION DOCUMENT Profi le 1 SUSTAINABLE DEVELOPMENT 95 2007 Key fi gures 6 5 A Proven Committment to Sustainable Simplifi ed fi nancial organization chart Development 96 (at December 31, 2007) 8 NRE Appendices – Workforce Information 108 International network 9 NRE Appendices – Environmental Data 120 1 NATIXIS AND ITS SHAREHOLDERS 11 FINANCIAL DATA 125 The Natixis shares 12 6 Risk factors 126 Key share data 14 2007 Management report 136 Value created for shareholders 15 The Supervisory Board’s comments on Shareholder relations 16 the Executive Board’s management report and the 2007 fi nancial statements 179 CORPORATE GOVERNANCE 19 Recent events 180 2 Financial data 181 Introduction 20 Statutory Auditors’ report Structure of the executive bodies 21 on the consolidated fi nancial statements 316 Role and rules of operation of the Auditors’ report on the parent company executive bodies 45 fi nancial statements 370 Specialist committees 48 Auditors’ report on related party Activities of the executive bodies 50 agreements 372 Activities of the specialist committees 52 Policies and rules for determining CHAIRMAN’S REPORT compensation paid to members of the 7 executive bodies 53 ON CORPORATE GOVERNANCE Competence and integrity of members AND INTERNAL CONTROL 377 of the Supervisory Board 58 Preparation and Organization of Tasks Agreements between the bank and undertaken by the Supervisory Board 378 members of the Board and executive bodies 58 Internal control procedures 379 Potential confl icts of interest 58 Auditors’ report on Chairman’s report 395 Executive committee (March 2008) 59 Auditors 60 8 ADDITIONAL INFORMATION 397 ACTIVITIES 61 Legal information 398 3 Additional information 408 Corporate and Investment Banking 62 Asset Management 71 Private Equity and Private Banking 74 Cross-reference table 429 Services 76 Receivables Management 81 Major contribution from retail banking 83 4 RESOURCES 87 Human Resources 88 Other resources 93 <>CONTENTS Profi le Formed from the combination at the end of 2006 of the corporate and investment banking and services activities of Groupe Banque Populaire and Groupe Caisse d’Epargne, Natixis is a key player in the European banking industry. It has a diversifi ed business portfolio with solid expertise, large customer bases and a strong international presence. Natixis generated net banking income of €6 billion and net income (Group share) of €1.1 billion in 2007. It has approximately 24,000 employees in some 60 countries. Natixis’ activities are organized into five business divisions: 1 ■ Corporate and Investment Banking; ■ Asset Management; 2 ■ Private Equity and Private Banking; ■ Services; 3 ■ Receivables Management. Retail banking also makes a direct contribution to Natixis’ performance via the Group’s 20% 4 interest (1) in the share capital of the Banque Populaire banks and the Caisse d’Epargne banks, as well as an indirect contribution through the sale of Natixis’ products and services at the two networks’ branches, which together make up around 25% of the French retail 5 banking market. Natixis has a strong position in all of its business divisions. As the banking partner of 6 nearly all the largest companies in France, it also plays a very active role in serving fi nancial institutions (banks, insurance companies, pension funds, etc.). It has gradually built up an ever-expanding international customer base. 7 Natixis is one of the top 15 asset management companies worldwide and is also world No. 3 in credit insurance with Coface. Its Services business is based on powerful and fl exible 8 This document is an English-translation of industrial platforms. Natixis is also No. 1 in private equity in the French SMB market. the French document de référence filed with the Autorité des Marchés Financiers (AMF) Natixis’ development is underpinned by the growth of its various business lines and on April 18, 2008, in compliance with article opportunities arising from the merging of entities offering a strong strategic fi t in terms of 212-13 of the AMF’s standard regulations. both technical expertise and business assets. With its broad range of products and services Only the original French version can be used to support a financial transaction, provided – including structured fi nance, capital markets, asset management and fi nancial services it is accompanied by a note d’opération – the Group is able to meet the needs of its own corporate and institutional clients as well as duly certified by the Autorité des Marchés the personal banking, small business and SMB customers of Groupe Banque Populaire and Financiers. The document de référence was Groupe Caisse d’Epargne. produced by the issuer, and the signatories to it are responsible for its contents. Thanks to its performance and solid fi nancial structure, Natixis has benefi ted from a high The English language version of this report rating from the three main credit rating agencies (AA/Aa2/AA-). is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, the original language version of the document in French prevails over the translation. Copies of this document de référence may be obtained free of charge from Natixis, (1) Natixis holds cooperative investment certifi cates (CCIs) representing 20% of the share capital of each Immeuble Arc de Seine of the Banque Populaire banks and each of the Caisse d’Epargne banks (with the exception of Caisse 30 avenue Pierre Mendès France d’Epargne et de Prévoyance de Martinique and Caisse d’Epargne et de Prévoyance de Nouvelle 75013 Paris. Calédonie), enabling it to consolidate under the equity method 20% of the net income of the Banque Populaire banks and the Caisse d’Epargne banks. <>CONTENTS 1 2 3 4 5 6 7 8 2 2007 REGISTRATION DOCUMENT - NATIXIS <>CONTENTS MESSAGES Messages CHARLES MILHAUD, CHAIRMAN OF THE SUPERVISORY BOARD OF NATIXIS 1 2007 was a troubled year for the banking industry. In an major shareholders to take over the US credit enhancement 2 increasingly globalized world, the US subprime crisis was quick business at the height of the turmoil, underscored their sense to affect all banks and lead to a widespread lack of confi dence of responsibility and ability to act together in order to further the and highly unstable fi nancial markets. The crisis left its mark interests of Natixis and its shareholders. It also highlighted their 3 on the whole of the industry, with some of the world’s most desire to build a long-term relationship based on trust with the powerful banks hitting serious diffi culties that forced them into markets, in line with the objectives assigned to Natixis. emergency recapitalizations. 4 The situation in the banking industry is now extremely Like other players in the industry, Natixis was not spared these changeable. Numerous players are going to have to effects. However, although the asset writedowns required at restructure their business portfolios and plenty of changes and 5 the end of the year reduced annual earnings, our economic regroupings are liable to ensue. Against this backdrop, those fundamentals remain intact. Not only do the new conditions banks endowed with strong and distinctive know-how will pose no threat to the business model envisaged jointly by have the upper hand. Natixis’ powerful client base, recognized 6 Groupe Banque Populaire and Groupe Caisse d’Epargne business-line expertise and solid capital structure, clearly give when Natixis was created, but they will also ultimately highlight us an advantage in this respect. the powers of the new combine. The decision of our two 7 8 NATIXIS - 2007 REGISTRATION DOCUMENT 3 <>CONTENTS PHILIPPE DUPONT, EXECUTIVE CHAIRMAN Natixis has had to cope with some“ particularly tough conditions in its fi rst year of existence. What conclusions can you draw 1 from this fi rst year? „ 2 A: As you say, Natixis was only recently-created and 2007 3 was our fi rst full year of business. The fi nancial crisis which got underway in the summer worsened signifi cantly in the fourth quarter. This pattern was clearly visible in Natixis’ accounts. 4 Our fi rst-half results were very good and ahead of objectives. However, the writedowns we were forced to make on certain asset portfolios at the end of the year meant that our full- 5 year results were not satisfactory, even though Natixis was proportionately somewhat less affected than many of our rivals. Detailed analysis demonstrates some solid performances 6 during the year, with most of our business lines making strong progress. The crisis had a very heavy impact, but the effects were concentrated on a very few segments of our Corporate 7 and Investment Banking business. The Group’s overall behavior nevertheless confi rmed our ability to resist a particularly violent shock and underscored the solidity of our chosen business 8 model. Despite the prevailing environment, we managed to execute the bulk of the sizeable integration measures that were planned, and within schedule. The highly solid capital structure sought by our two main shareholders when Natixis was created is also enabling us to negotiate the current turbulence in good conditions. As a result, a distinction clearly needs to be made between an exceptional global fi nancial situation and our underlying performances, which were both encouraging and in line with our expectations. When the time is right, it will also be necessary to examine the extent to which the new accounting standards (IFRS) have shaped external analysts’ views of the crisis. Although it is never advisable to distinguish between economic reality and its translation into accounting terms (or even to oppose the two concepts), scope exists to better evaluate the increased volatility that ensues from the practice of automatically marking-to-market the value of most fi nancial assets in bank’s balance sheets.