Financial guarantee contracts are initially measured at fair value and subsequently at the one of the following, whichever is greater: - the value adjustment amount for losses determined in accordance with the provisions of the “Impairment” section of IFRS 9; or - the amount initially recognised less, if any, accumulated income recognised in accordance with the principles of IFRS 15 Revenue from Contracts with Customers. PROVISIONS (INCLUDING IAS 37) CFM Indosuez Wealth identifies legal or implicit obligations resulting from a past event, in cases in which it is likely that an outflow of resources will be required to settle them, where the timing or amount are uncertain but of which a reliable estimate can be made. These estimates are discounted, where applicable, whenever there is a material impact. In respect of non-credit risk obligations, CFM Indosuez Wealth has set up provisions that cover: - operational risks - employee benefits - performance risk on off-balance sheet commitments - litigation and liability guarantees - tax risks (excluding income tax) - risks associated with home savings. This provision is set aside to cover commitments with unfavourable consequences under home savings contracts. These commitments relate, on the one hand, to the obligation to remunerate savings in the future at a rate fixed at the opening of the contract for an indefinite period, and, on the other hand, to the granting of credit to subscribers to home savings accounts and plans at a fixed rate fixed at the opening of the contract. This provision is calculated for each generation of home savings plan and for all home savings accounts, bearing in mind that it is not possible to offset commitments relating to different generations. Commitments are established taking into account, in particular: - the modelled behaviour of subscribers, using assumptions of changes in these behaviours, based on historical observations and which may not reflect actual future changes - an estimate of the amount and duration of future borrowings based on historical long-term observations - the curve of observable rates on the market and reasonably anticipated changes in such rates. The amount of the following provisions may also be estimated: - the provision for operating risks, for which an inventory of proven risks and an assessment by Management of the frequency of the incident and the amount of the potential financial impact are taken into account. - provisions for legal risks resulting from Management’s best assessment, taking into account the information in its possession at the end of the financial year. Detailed information is provided in Note 6.15, Provisions. EMPLOYEE BENEFITS (IAS 19) Employee benefits, in accordance with IAS 19, fall into four categories: - short-term benefits - retirement benefits, which are themselves classified into the two categories described below: defined benefit plans and defined contribution plans - other long-term benefits (long-service awards, bonuses and remuneration payable 12 months or more after the end of the financial period) - severance pay. SHORT-TERM BENEFITS Short-term benefits are those granted to employees during their period of employment, and which are expected to be settled in full within 12 months of the financial year in which the services were rendered, such as salaries, bonuses, paid annual leave, related social security charges and taxes, as well as employee profit-sharing and incentive schemes. These benefits are recognised as expenses in the financial year in which the services were rendered by the staff. POST-EMPLOYMENT BENEFITS Defined benefit plans At each closing date, CFM Indosuez Wealth determines its retirement and similar benefits as well as all the employee benefits granted in respect of defined benefit plans. In accordance with IAS 19, these commitments are assessed based on a set of actuarial, financial and demographic assumptions, using the Projected Unit Credit method. Under this method, for each year of service by an employee, a cost is allocated corresponding to the rights accrued over the period. This cost is calculated based on the discounted future benefit. Calculations of costs related to pension benefits and other future employee benefits are based on assumptions made by Management regarding the discount rate, staff turnover rate and changes in salary and social security costs. (see note 7.4 “Retirement benefits – defined benefit plans”). Discount rates are determined based on the average term of the commitment, that is, the arithmetical average of the terms calculated between the valuation date and the payment date, weighted by employee turnover assumptions. The underlying item used is the discount rate by reference to the iBoxx AA. index In accordance with IAS 19, CFM Indosuez Wealth recognises all actuarial gains and losses in equity non-recyclable to income. Actuarial gains and losses consist of experience adjustments (difference Annual Report 2025 91
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