Second-Quarter 2016 and First-Half 2016 Results
REVENUES UP 2% IN 2Q16 DRIVEN BY GOOD CORE-BUSINESS MOMENTUM Reported NET INCOME of €381m in 2Q16
CORE-BUSINESSES : STRONG MOMENTUM IN CORPORATE & INVESTMENT BANKING IN 2Q16
- Investment Solutions: resilience of Asset Management and continued rollout of Insurance offering in the Caisses d’Epargne network
Asset Management: €787bn of assets under management at June 30, 2016, €10bn higher than at end-March 2016 with limited outflow of €2bn in 2Q16
Insurance: momentum from all segments lifted overall turnover to €1.7bn in 2Q16, up 12% yoy, excluding reinsurance agreement with CNP
- Corporate & Investment Banking: marked rebound in Capital Markets activities
Capital Markets: FIC-T posted excellent performances in 2Q16, soaring 35% vs. 2Q15, while Equities continued to grow (up 4% vs. 2Q15 in revenues)
Structured Financing: increased contribution of fees in revenues to 39% in 2Q16 vs. 37% in 2015
- Specialized Financial Services: robust performances in Specialized Financing
Brisk production in the Leasing segment (+7% vs. 2Q15), and 22% yoy growth in factored turnover
SHARP IMPROVEMENT IN ROTE(1,2) TO 11.7% IN 2Q16 (+70BPS YOY)
- Natixis’ revenues over €2.2bn in 2Q16, up 2% yoy and up 7% qoq. Expense growth (excluding IFRIC 21) restricted to 3% vs. 1Q16
- Core-business revenues of nearly €2.1bn in 2Q16, up 2% yoy and 6% qoq
- Restated net income (group share and excluding the IFRIC 21 impact) up 5% to €400m. Reported net income (group share) of €381m in 2Q16, including a €31m negative impact from a goodwill writedown on Coface
- Restated net income (group share and excluding the IFRIC 21 impact) almost stable to €711m in 1H16, showing the strong resilience of the business model in a difficult environment
REINFORCED SOLVENCY AND DIVIDEND POLICY CONFIRMED
- CET1 ratio of 11.3%(3) at end-June 2016, before factoring in the dividend
- Leverage ratio(1) kept above 4% at end-June 2016
- 65bps of CET1 ratio generated so far in 2016, equivalent to €730m (€0.24 per share), of which €440m above the minimum payout of 50%, distributable in the absence of acquisitions
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- See note on methodology (2) Excluding IFRIC 21 (3) Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in except for DTAs on tax-loss carryforwards and pro forma of additional phase-in of DTAs following ECB regulation 2016/445
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The Board of Directors examined Natixis’ second-quarter 2016 accounts.
For Natixis, the main features of 2Q16 were (1):
2% increase in Natixis’ net revenues and core-business revenues to €2.224bn and €2.060bn, respectively, relative to 2Q15.
Within the Investment Solutions core business, Asset Management recorded limited outflow of €2bn and €10bn growth in AuM relative to end-March 2016, thanks notably to a positive exchange-rate effect.
Insurance continued to enjoy sustained momentum in all segments and the life insurance offering was rolled out in half of Caisses d’Epargne network at end-June 2016. Overall Insurance turnover (excluding the reinsurance treaty with CNP) climbed 12% vs. 2Q15.
In Corporate & Investment Banking, new Structured Financing production amounted to €7.5bn, largely thanks to Real Estate Finance Europe, Acquisitions & Strategic Finance and GEC Trade (Global Energy & Commodities). In the Capital Markets segment, the quarter featured significant year-on-year growth in Rates & Forex and further development in M&A.
In Specialized Financial Services, solid performances in Leasing and Factoring showed up in a 4% rise in net revenues from Specialized Financing.
a 4% increase in expenses relative to a year earlier, excluding the €35m additional contribution to the Single Resolution Fund during the quarter,
an €88m provision for credit loss reflecting the end of provisioning efforts in the Oil and Gas sector,
restated net income (group share) and excluding the IFRIC 21 impact of €400m, up 5% relative to 2Q15,
reported net income (group share) of €381m, including a goodwill impairment on Coface, with a negative impact of €31m,
a leverage ratio(1) of 4.1% at end-June 2016,
a CET1 ratio(2) of 11.0% at end-June 2016.
Laurent Mignon, Natixis Chief Executive Officer, said: “Thanks to our balanced business model and the unrelenting efforts of our teams, our three core businesses continue to expand in a manner perfectly consistent with our strategic objectives. This enables us to confirm our ability to attain the profitability targets enshrined in the New Frontier strategic plan. To accelerate the transformation of Natixis’ business, we intend to continue to develop the business of Investment Solutions, to deepen revenue synergies with Group BPCE retail networks and to adapt our asset-light model in Corporate & Investment Banking by adopting a more cross-cutting organization geared to expanding our origination capacity. In addition, in recognition of the structural changes being driven by new technologies in all of our business lines and processes, we are currently working on a transformation and operational excellence project due to be presented this November.”
- See note on methodology
- Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in except for DTAs on tax-loss carryforwards and pro forma of additional phase-in of DTAs following ECB regulation 2016/445
This media release may contain objectives and comments relating to the objectives and strategy of Natixis. Any such objectives inherently depend on assumptions, project considerations, objectives and expectations linked to future and uncertain events, transactions, products and services as well as suppositions regarding future performances and synergies.
No assurance can be given that such objectives will be realized. They are subject to inherent risks and uncertainties, and are based on assumptions relating to Natixis, its subsidiaries and associates, and the business development thereof; trends in the sector; future acquisitions and investments; macroeconomic conditions and conditions in Natixis' principal localmarkets; competition and regulation. Occurrence of such events is not certain, and outcomes may prove different from current expectations, significantly affecting expected results. Actual results may differ significantly from those implied by such objectives.
Information in this media release relating to parties other than Natixis or taken from external sources has not been subject to independent verification, and Natixis makes no warranty as to the accuracy, fairness, precision or completeness of the information or opinions herein. Neither Natixis nor its representatives shall be liable for any errors or omissions, or for any prejudice resulting from the use of this media release, its contents or any document or information referred to herein. Figures in this press release are unaudited.
NATIXIS financial disclosures for the second quarter 2016 are contained in this press release and in the presentation attached herewith, available online at www.natixis.com in the “Investor Relations” section.
The conference call to discuss the results, scheduled for Friday July 29th, 2016 at 9:00 a.m. CET, will be webcast live on www.natixis.com (on the “Investor Relations” page).
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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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