Second-quarter 2012 results

Commercial strength of the three core businesses ⁽¹⁾

Good performances by the core businesses, with net revenues of €1,509m, down just 6% on a very high Q2-11 comparison base and in an uncertain economic environment

Resilience of CIB revenues (-16% vs Q2-11)

Revenue growth for the Investment Solutions division, with an increase in net revenues for Asset Management (+14% vs Q2-11, +5% at constant exchange rates), driven by activity in the United States

Very satisfactory quarter for the Specialized Financial Services businesses (net revenues up 3% and gross operating income up 14% vs Q2-11)

Net income (Group share) of €394m in Q2-12, including non-operating items of €132m after tax⁽²⁾

Migration of the CIB to a Wholesale Banking model

Continuation of the CIB adaptation plan and strategic changes announced in November 2011

Migration of the CIB to a Wholesale Banking model in the service of players in the economy: development of customer relationships and the advisory businesses, deployment of the “Originate to Distribute” model

Reinforcement of the financial structure in preparation for Basel 3

Core Tier 1 ratio: 10.9% as of June 30, 2012, i.e. organic generation of 30 bp in Q2-12

Reduction of €10bn in CIB and GAPC assets to refinance between September 2011 and June 2012, at constant exchange rates

Laurent Mignon, CEO of Natixis, said: “The commercial momentum of the businesses in the second quarter of 2012 enabled Natixis to continue its preparation for Basel 3, by further reducing its liquidity needs and by increasing its solvency, without compromising profitability. In this perspective, we are establishing a Wholesale Bank, a new organization focused on the needs of our customers and guaranteeing optimal utilization of our balance sheet.”

The Board of Directors reviewed Natixis’ consolidated results for the second quarter of 2012 on August 2, 2012. The market environment deteriorated during the quarter. As of June 30, 2012, the Euro Stoxx 50 index was down 8.6% compared with March 31, 2012, with the Euro Stoxx Banks index down 16.6% over the same period. Economically, the environment remains uncertain, particularly in Europe.

In this context, Natixis’ businesses turned in resilient commercial performances, while the implementation of the plan to reduce the consumption of scarce resources (capital and liquidity) continued. In total, since the launch of the New Deal plan three years ago, the consumption of scarce resources has been reined in by approximately 40%.

Q2-12 was characterized notably by:

• A continuation of the improvement in solvency. As of June 30, 2012, the Core Tier 1 ratio was 10.9%, implying the organic generation of 30 basis points in Q2-12.

• A further reduction in CIB and GAPC liquidity needs: -€1.1 billion in Q2-12. On a cumulative basis, the reduction since September 30, 2011 stands at €8 billion (€10 billion at constant exchange rates).

• Continued implementation of the strategic refocus of the CIB announced in November 2011: streamlining and refocusing of activities and portfolios on priority customers and geographies, cost-cutting plan, plan to develop the “Originate to Distribute” model. Proprietary trading activity has been cut to the bone. The development of structuring partnerships with investors (insurers, asset managers, etc.) continues. The CIB’s shift to the “Originate to Distribute” model will result in an adaptation of its organization: plan to establish independent portfolio management, strengthening of the sales and syndication forces.
• New asset disposals in the CIB: €0.4 billion in Q2-12 (€0.8 billion in H1-12); and GAPC: €0.8 billion in Q2-12 (€2 billion in H1-12), with limited haircuts.
• Good resilience of the net revenues of the core businesses (CIB, Investment Solutions and SFS) in a much more adverse environment. The net revenues of the core businesses amounted to €1,509 million in Q2-12, a decline of 6% on a very demanding Q2-11 comparison base. In the first half of 2012, the net revenues of the core businesses grew by 15% compared with the previous half-year (H2-11). Each core business reported H1-12 net revenues above the 2011 half-yearly average. The core businesses’ aggregate cost/income ratio was 64.6% in H1-12, compared with 70.5% in H2-11, amidst the continuation of selective investments.

• Revenue synergies with Groupe BPCE networks broadly on target: cumulative additional revenues totaled €241 million as of June 30, 2012, compared with a straight-line target of €246 million (end-2013 objective of €395 million).

• Net revenues excluding non-operating items of €1,633 million, a decline of 4% (excluding P3CI interest) on a very demanding Q2-11 comparison base.
• Net income (Group share) of €394 million (€263 million excluding non-operating items).

1. Core businesses: Corporate and Investment Banking, Investment Solutions, Specialized Financial Services

2. Details in the appendices

Get the full results in the document linked below