2Q19 results: A well-balanced business model to navigate the current environment
Reported net income at €346m in 2Q19 and €1.1bn in 1H19
Financial strength with a Basel 3 fully-loaded CET1 ratio1 at 11.5%, well above our 2020 target (11%)
STRENGTH OF A DIVERSIFIED BUSINESS MODEL
2Q19 UNDERLYING NET REVENUES2 AT €2.3BN, STABLE VS. A RECORD 2Q18
AWM: Strong net revenue growth and positive net inflows in the US notably
Strength of our active asset management model with underlyingnet revenues2 up +11% YoY in 2Q19 (+4% in 1H19) in part driven by high levels of performance fees that reached €138m this quarter (€171m in 1H19)
Demonstration of the strength of the multiboutique model with €(2)bn net outflows on LT products despite €(6)bn net outflows at H2O. More than +€3bn net inflows on LT products across other affiliates, of which +€2bn in the US
The average fee rate remains in line with the New Dimension target at ~30bps
Strong AuM growth of +5% over the quarter to reach €898bn, including WCM
Projected partnership between Ostrum AM and LBP AM to create a key player in life insurance asset management
CIB: Revenue diversification and tight cost control to create value despite an elevated cost of risk due to a large single file
Underlying net revenues2 down YoY in 2Q19 with a high base effect in Global finance. Resilience of Global markets activities with revenues up QoQ and FIC-T also up YoY. Growth from IB/M&A and our Green & Sustainable Hub
Strict cost control, down -7% YoY at constant exchange rate in 2Q19
Cost of risk elevated this quarter driven by a large single file
Underlying RoE2 at 9.3% in 2Q19 and 11.7% with a normalized cost of risk of 30bps
Insurance: Sustained growth and profitability
Underlying net revenues2 up +7% YoY with a positive jaws effect both in 2Q19 and 1H19
Underlying RoE2 >30% in 1H19, in line with the New Dimension 2020 target
Payments: Continued growth dynamic
Underlying net revenues2 up +10% YoY with a positive jaws effect both in 2Q19 and 1H19
Increase in business volumes from Dalenys & PayPlug, up more than +20%
SUSTAINABLE VALUE CREATION AND FINANCIAL STRENGTH
Organic capital creation of 38bps in 2Q19. Basel 3 FL CET1 ratio1 at 11.5% as at June 30, 2019, well above our 2020 target (11%)
Underlying net income2 at €363m in 2Q19 and €555m in 1H19, despite an elevated cost of risk (63bps in 2Q19 and 43bps in 1H19)
Underlying RoTE2 at 9.6% in 2Q19 and 10.8% with a normalized cost of risk of 30bps
Underlying RoTE2 adjusted3 at 12.8% over New Dimension as at June 30, 2019
FOCUS ON THE IMPLEMENTATION OF OUR 2020 AMBITIONS
François Riahi, Natixis Chief Executive Officer, said: “Natixis recorded solid results across all its businesses in the second quarter of 2019. Our diversified and balanced business model proves, once again, its worth in an uncertain economic environment. In Asset & Wealth Management our multi-boutique model demonstrated its robustness. Revenues and assets under management both continued to rise despite outflows at H2O and with net flows in the United States turning back positive. We also announced our ambition to create a 100% SRI-compliant European leader in insurance-related fixed income asset management with La Banque Postale. In Corporate & Investment Banking, we enjoyed sustained performances, including in our capital markets activities despite a less favorable environment than last year to which we notably adapt through tighter cost control. In Insurance and Payments, we continued to combine strong growth with a positive jaws effect. We further bolstered our capital position with our CET1 standing at 11.5%, above our 2020 objective.”
Figures restated as communicated on April 11, 2019 following the disposal of the retail banking activities. See page 13 for the reconciliation of the restated figures with the accounting view 1 See note on methodology 2 Excluding exceptional items. Excluding exceptional items and excluding IFRIC 21 for cost/income, RoE and RoTE (see note on methodology) 3 Adjusting for the non-recurring impact on 4Q18 revenues from Asian equity derivatives and a 30bps normalized cost of risk in 2Q19, net of tax
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About Groupe BPCE
Groupe BPCE is the second-largest banking group in France. Through its 100,000 staff, the group serves 35 million customers – individuals, professionals, companies, investors and local government bodies – around the world. It operates in the retail banking and insurance fields in France via its two major networks, Banque Populaire and Caisse d’Epargne, along with Banque Palatine and Oney. It also pursues its activities worldwide with the asset & wealth management services provided by Natixis Investment Managers and the wholesale banking expertise of Natixis Corporate & Investment Banking. The Group's financial strength is recognized by four credit rating agencies with the following senior preferred LT ratings: Moody's (A1, stable outlook), Standard & Poor's (A, stable outlook), Fitch (AA-, negative outlook) and R&I (A+, stable outlook).
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