NATIXIS :FOURTH-QUARTER AND FULL YEAR 2014 RESULTS
(Thomson Reuters ONE) -
Paris, February 19, 2015
2014 and 4Q14 results
Revenues and profitability increase in 2014:
· Core businesses net revenues: +7% at ?7.0bn
· Net income: +16% at ?1.3bn
Significant progress in New Frontier strategic plan
Core businesses: dynamic activity levels in 2014
* Development of main Wholesale Banking franchises driven by international
business: ?28bn of new loan production in Structured financing in 2014 and
strong growth in Equity Derivatives
* Record year for Asset management: ?736bn ($883bn) of assets under
management, up ?106bn during the year, notably thanks to ?32bn of net inflow
excluding money-market
* Strong growth in Insurance positions: 25% advance in overall revenues in
2014
* Rollout of SFS solutions in the networks: strong momentum in Consumer
Finance (outstanding +9%), Employee savings schemes (AuM +6%) and Payments
(cards in circulation +19%)
Improved profit-earning capacity and profitability((1))
* Core-business net revenues progressed by 7% to ?7.0bn during the year, ahead
of the strategic plan pace, and by 9% to ?1.8bn vs. 4Q13
* Gross operating income rose 10% vs. 2013 and 3% vs. 4Q13
* Core-business cost of risk fell sharply to 38bps in 2014 vs. 53bps in 2013
* Net income (group share), excluding GAPC, at ?1.3bn in 2014 (+16% vs. 2013)
and at ?288m in 4Q14 (+15% vs. 4Q13)
* Core-business ROE improved 200bps vs. 2013 to 12.2%
* Significant increase in EPS((2)) : up 26% in 2014 vs. 2013, to ?0,39
Solid financial structure and dividend policy confirmed
* Ordinary dividend((3)) of ?0.20 in cash per share for 2014, equivalent to a
51% payout((2))
* Exceptional dividend((3) )of ?0.14 in cash per share following the capital
released up by the Coface IPO
* Basel 3 CET1 ratio((4)) of 11.4% at December 31, 2014, up 100bps vs. end-
December 2013 after distribution
Strategic progress
Capital re-allocation toward core businesses almost completed:
* IPO of 59% of Coface capital
* GAPC closed at end-June 2014
Increased weighting for Investment Solutions among core businesses:
* Projected acquisition of DNCA((5)). 35% of capital allocated to Investment
Solutions post- acquisition
* Creation of a single Insurance platform
(1) See note on methodology (2) Excluding FV adjustment on own senior debt (3)
Proposal to be submitted to Shareholders' Shareholders' Meeting of May 19, 2015
(4) Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish
compromise - without phase-in except for DTAs on tax loss carry forwards (5) The
transaction is notably subject to the consultation process with employee
representatives, to regulatory approvals and the approval of the Competition
Authority
The Board of Directors examined Natixis's full-year 2014 and fourth-quarter
2014 accounts on February 18, 2014.
For Natixis, the main features of 2014 were((1)):
* a 7% rise in core-business revenues during the year, fuelled by good
performances from Wholesale Banking business lines and notably from Equity
derivatives and Financing, as well as by strong activity levels in
Investment Solutions, both in Asset management and Insurance.
Revenue growth within Specialized Financial Services was moderate, but included
solid performances in the Consumer finance, Employee savings schemes and
Payments segments.
* a 1.2pp-reduction in the cost-income ratio to 69.6%,
* a substantial 22%-decrease in cost of risk vs. 2013,
* a 16% advance in net income excluding GAPC to ?1.277bn,
* a 200bp-improvement vs. 2013 in core-business ROE to 12.2%,
* a 100bp-improvement in the Basel 3 CET1 ratio((2) )vs. end-2013 to 11.4%,
including payment of an ordinary dividend ((3)) of ?0.20 in cash per share,
and an exceptional dividend((3)) of ?0.14 in cash per share linked to the
partial divestment of Coface,
* The successful implementation of the first stages of the New Frontier plan,
including notably a reallocation of capital to core businesses almost
completed and an increase in the weighting of Investment Solutions among
core businesses.
Laurent Mignon, Natixis Chief Executive Officer says: "The first year of the New
Frontier strategic plan has been highly positive. The re-allocation of our
capital toward our core businesses is now virtually complete. All our businesses
made progress and exceeded their revenue targets in France and abroad, notably
fuelled by excellent performances in Investment Solutions - Asset Management and
Insurance - and by the rollout of the Originate-To-Distribute model in Wholesale
Banking. The construction of our asset-light model is gaining pace. The capital
being freed-up is enabling us to respect our dividend payout commitments and
fund the growth initiatives underpinning our strategy, particularly the
acquisitions planned of DNCA and Leonardo and Co, an expert body in M&A for
Midcap, subsidiary of Banca Leonardo. DNCA would represent a major reinforcement
to our position in Asset management in Europe and make a positive contribution
to growth right from 2015."
1. See note on methodology
2. Based on CRR-CRD4 rules published on June 26, 2013, including the Danish
compromise - no phase-in except for DTAs on loss carry-forwards
3. Proposal to be submitted to the General Shareholders' Meeting of May
19, 2015
1 - Natixis's 2014 and 4Q14 results
1.1 Exceptional items
+----------------------------------------------------------------+-------------+
| Exceptional items - in ?m 4Q14 4Q13 |2014 2013 |
| ---------------------------------------------------------------+------------ |
| Restructuring costs (82) | (82) |
| Corporate center (Expenses) | |
| ---------------------------------------------------------------+------------ |
| Gain from disposal of Natixis's stake in Lazard | 99 |
| Corporate Center in 2Q14 (net revenues) | |
| ---------------------------------------------------------------+------------ |
| First application of IFRS 13 (1Q13) and change in | |
| related methodologies (2Q14) and FVA impact (4Q14) (82) |(119) 72 |
| FIC-T (Net revenues) | |
| ---------------------------------------------------------------+------------ |
| Impairment in Corporate Data Solution goodwill | |
| (Financial Investments) and Others (Financial (8) |(62) |
| Investments/Corporate Center) | |
| ---------------------------------------------------------------+------------ |
| Gain from disposal of operating property assets | |
| (3Q14) | 75 |
| Corporate Center (Gain or loss on other assets) | |
| ---------------------------------------------------------------+------------ |
| Impact on pre-tax profit (90) (82) | (7) (10) |
| | |
| Impact on net income (61) (51) | 24 (5) |
+----------------------------------------------------------------+-------------+
+----------------------------------------------------------------+-------------+
| FV adjustment on own senior debt((1)) - in ?m 4Q14 4Q13 |2014 2013 |
| Corporate Center (net revenues) | |
| ---------------------------------------------------------------+------------ |
| Impact on pre-tax profit (18) (91) |(208) (195) |
| | |
| Impact on net income (12) (55) |(135) (121) |
+----------------------------------------------------------------+-------------+
+----------------------------------------------------------------+-------------+
| Total impact on net income - in ?m (73) (105)|(111) (125) |
+----------------------------------------------------------------+-------------+
(1) See note on methodology
1.2 2014 results
+------------------------------------------------------------------------------+
| Pro forma and excluding exceptional 2014 2013 2014 vs. 2013 |
| items((1)) In ?m |
| -------------------------------------------- ------------------------------- |
| Net revenues 7,743 7,343 5% |
| |
| of which core businesses 6,980 6,496 7% |
| |
| Expenses (5,391) (5,196) 4% |
| -------------------------------------------- ------------------------------- |
| Gross operating income 2,352 2,147 10% |
| -------------------------------------------- ------------------------------- |
| Provision for credit losses (300) (385) (22)% |
| -------------------------------------------- ------------------------------- |
| Pre-tax profit 2,095 1,786 17% |
| -------------------------------------------- ------------------------------- |
| Income tax (742) (667) 11% |
| -------------------------------------------- ------------------------------- |
| Minority interest (76) (14) |
| -------------------------------------------- ------------------------------- |
| Net income (gs) excl. GAPC 1,277 1,105 16% |
| -------------------------------------------- ------------------------------- |
| GAPC after tax (28) (3) |
| -------------------------------------------- ------------------------------- |
| Net income (gs) 1,249 1,102 13% |
| -------------------------------------------- ------------------------------- |
| ROTE excl. GAPC 9.4% 9.0% |
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
| in ?m 2014 2013 2014 vs. 2013 |
| -------------------------------------------- ------------------------------- |
| Exceptional items 24 (5) |
| -------------------------------------------- ------------------------------- |
| Net income (gs) - including exceptional 1,273 1,097 16% |
| items |
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
| in ?m 2014 2013 2014 vs. 2013 |
| -------------------------------------------- ------------------------------- |
| FV adjustment on own senior debt (net of (135) (121) |
| tax) |
| -------------------------------------------- ------------------------------- |
| Net income (gs) - reported 1,138 976 17% |
+------------------------------------------------------------------------------+
(1) See note on methodology
Unless stated otherwise, the commentary that follows refers to pro forma results
excluding exceptional items (see detail p3).
NET REVENUES
Natixis's net revenues rose 5% to ?7.743bn vs. 2013, and included a 7% increase
in core-business revenues to ?6.980bn. The breakdown by core business was as
follows:
* Wholesale Banking net revenues progressed 4%, buoyed by good performances in
Structured financing and Equity derivatives and by the rollout of activities
in international markets (international net revenues +8% in 2014),
* Investment Solutions expanded net revenues by a healthy 15% during the year,
fuelled by strong growth in Asset management and Insurance,
* Net revenues from Specialized Financial Services rose 1% and benefited from
good production levels in the Consumer finance segment,
* Net revenues from Financial Investments dipped 2%, and included a reduced
contribution from Corporate Data Solutions (being run-off) but a 5% increase
in net revenues from Coface (on a constant currency and structure basis and
excluding exceptional items).
EXPENSES
Operating expenses rose 4% to ?5.391bn. The cost-income ratio improved by
1.2ppts to 69.6%, thanks to a positive jaw effect.
Gross operating income advanced 10% to ?2.352bn in 2014.
PROVISION FOR CREDIT LOSS
The provision for credit loss (excluding GAPC) shrank by 22% to ?300m. The core-
business provision for credit loss declined to 38bps of outstanding loans in
2014, close to the level of 30-35bps anticipated across the cycle.
PRE-TAX PROFIT
Pre-tax profit climbed 17% in one year, to ?2.095bn.
NET INCOME
Net income (group share) excluding GAPC made significant progress during the
year, advancing 16% to ?1.277bn. After factoring in the GAPC impact in 1H14 (the
GAPC was closed on June 30, 2014), net income (group share) reached ?1.249bn.
After restating for exceptional items (+?24m) and the fair-value adjustment on
own senior debt (-?135m net of tax), reported net income (group share)
progressed 17% to ?1.138bn.
1.3 4Q14 results
+------------------------------------------------------------------------------+
| Pro forma and excluding exceptional items((1)) 4Q14 4Q13 4Q14 |
| - In ?m vs. 4Q13 |
| ------------------------------------------------- -------------------------- |
| Net revenues 1,994 1,877 6% |
| |
| of which core businesses 1,801 1,657 9% |
| |
| Expenses (1,440) (1,339) 8% |
| ------------------------------------------------- -------------------------- |
| Gross operating income 554 538 3% |
| ------------------------------------------------- -------------------------- |
| Provision for credit losses (78) (96) (18)% |
| ------------------------------------------------- -------------------------- |
| Pre-tax profit 483 451 7% |
| ------------------------------------------------- -------------------------- |
| Income tax (167) (195) (14)% |
| ------------------------------------------------- -------------------------- |
| Minority interest (28) (5) |
| ------------------------------------------------- -------------------------- |
| Net income (gs) excl. GAPC 288 251 15% |
| ------------------------------------------------- -------------------------- |
| GAPC after tax 15 |
| ------------------------------------------------- -------------------------- |
| Net income (gs) 288 266 8% |
| ------------------------------------------------- -------------------------- |
| ROTE excl. GAPC 8.3% 8.0% |
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
| in ?m 4Q14 4Q13 4Q14 |
| vs. 4Q13 |
| ------------------------------------------------- -------------------------- |
| Exceptional items (61) (51) |
| ------------------------------------------------- -------------------------- |
| Net income (gs) - including exceptional items 227 215 5% |
+------------------------------------------------------------------------------+
+------------------------------------------------------------------------------+
| in ?m 4Q14 4Q13 4Q14 |
| vs. 4Q13 |
| ------------------------------------------------- -------------------------- |
| FV adjustment on own senior debt (net of tax) (12) (55) |
| ------------------------------------------------- -------------------------- |
| Net income (gs) - reported 215 161 34% |
+------------------------------------------------------------------------------+
1. See note on methodology
Unless stated otherwise, the commentary that follows refers to pro forma results
excluding exceptional items (see detail p3).
NET REVENUES
Natixis's net revenues rose 6% in 4Q14 vs. 4Q13, and included a 9% increase in
core-business net revenues. The breakdown by core business was as follows:
* In Wholesale Banking, sustained 8% net revenue growth in 4Q14 was fuelled by
both Financing and Capital markets,
* Net revenues from Investment Solutions advanced 13%, with both Asset
management and Insurance again recording significant growth,
* Net revenues from Specialized Financial Services were stable, and included a
2% increase in Financial services,
* Net revenues from Financial Investments contracted 5% overall, but included
a 24% reduction in the contribution from Corporate Data Solutions (being run
off).
EXPENSES
Operating expenses amounted to ?1.440bn. Gross operating income improved 3% vs.
4Q13, to ?554m.
PROVISION FOR CREDIT LOSS
The provision for credit loss contracted 18% year-on-year to ?78m.
PRE-TAX PROFIT
Pre-tax profit progressed 7% to ?483m.
NET INCOME
Net income (group share) excluding GAPC climbed 15% to ?288m. After restating
for exceptional items (-?61m) and the fair-value adjustment on own senior debt
(-?12m net of tax), reported net income (group share) climbed 34% to ?215m vs.
?161m in 4Q13.
2 - Financial Structure
Natixis's Basel 3 CET1 ratio((1)) reached 11.4% at December 31, 2014.
Based on a Basel 3 CET1 ratio((1)) of 11.5% at September 30, 2014, the
respective impacts in the fourth quarter of 2014 were as follows:
* effect of allocating net income (group share) to retained earnings in 4Q14,
excluding the dividend: +21bps,
* scheduled 4Q14 dividend((2)): -12bps,
* RWA effects: +7bps,
* exchange rates and other effects: +9bps,
* exceptional dividend((2)): -44bps.
Basel 3 capital and risk-weighted assets((1)) amounted to ?13.1bn and ?115.1bn,
respectively, at December 31, 2014.
EQUITY CAPITAL - TIER ONE CAPITAL - BOOK VALUE PER SHARE
Equity capital (group share) amounted to ?18.9bn at December 31, 2014, of which
?1.0bn was in the form of hybrid securities (DSNs and preferred shares)
recognized in equity capital at fair value.
Core Tier 1 capital (Basel 3 - phased-in) amounted to ?12.6n, and Tier 1 capital
(Basel 3 - phased-in) to ?13.8bn.
Natixis's risk-weighted assets totaled ?115.2bn at December 31, 2014 (Basel 3 -
phased-in).
Under Basel 3 (phased-in), the CET1 ratio stood at 10.9% at December 31, 2014;
the Tier 1 ratio was 12.0% and the total ratio 13.8%.
Book value per share((3)) was ?5.27 at December 31, 2014, based on
3,114,018,033 shares excluding treasury stock (the total number of shares stands
at 3,116,507,621). Net tangible book value per share((3)) (after deducting
goodwill and intangible fixed assets) was ?4.20.
OVERALL CAPITAL ADEQUACY RATIO
As at December 31, 2014, the financial conglomerate's capital exceeded the
regulatory minimum by around ?7bn.
1. Based on CRR-CRD4 rules published on June 26, 2013, including the Danish
compromise - no phase-in except for DTAs on loss carry forwards
2. Proposal to be submitted to the General Shareholders Meeting of May 19, 2015
3. Post distribution scheduled for 2014
3 - Results by business line
Wholesale Banking
Data excludes exceptional items((1))
+------------------------------------------------------------------------------+
| in ?m 4Q14 4Q13 4Q14 vs. 4Q13 2014 2014 vs. 2013 |
| ---------------------------------------------------------------------------- |
| Net revenues 705 652 8% 2,899 4% |
| |
| o/w Commercial banking 113 102 11% 412 6% |
| |
| o/w Structured financing 273 259 6% 1,104 5% |
| |
| o/w Capital markets 330 304 9% 1,414 (1)% |
| |
| Expenses (444) (396) 12% (1,712) 3% |
| ---------------------------------------------------------------------------- |
| Gross operating income 262 256 2% 1,188 4% |
| ---------------------------------------------------------------------------- |
| Provision for credit (48) (88) (45)% (186) (40)% |
| losses |
| ---------------------------------------------------------------------------- |
| Pre-tax profit 218 168 30% 1,023 24% |
| ---------------------------------------------------------------------------- |
| Cost/income ratio 62.9% 60.8% 59.0% |
| ---------------------------------------------------------------------------- |
| ROE after tax((1)) 8.4% 6.3% 9.7% |
+------------------------------------------------------------------------------+
1. See note on methodology
Wholesale Banking net revenues increased 4% to ?2.899bn in 2014. In 4Q14, they
advanced 8% to ?705m, with all business lines contributing positively.
Over 2014 as a whole, expenses inched up by only 3%, while the cost-income ratio
improved to 59.0%.
Gross operating income rose 4% to ?1.188bn in 2014 and 2% to ?262m in 4Q14 vs.
4Q13.
The provision for credit loss tumbled 40% to ?186m in 2014, testifying to the
close attention paid to portfolio quality. It was also down by 45% to ?48m in
4Q14.
Pre-tax profit advanced 24% to ?1.023bn in full-year 2014 and 30% to ?218m in
4Q14.
After-tax ROE (after capital allocation according to Basel 3 rules) widened by
210bps to 9.7% in 2014.
New Structured Financing production remained brisk at ?8.3bn in 4Q14, thereby
lifting the full-year total to ?28bn. The Global Energy & Commodities, Real
Estate and ASF fared particularly well.
Net revenues grew 6% to ?273m in 4Q14 and 5% to ?1.104bn over the full year. The
proportion of net revenues accounted by fees increased to 33% in 2014,
reflecting progress with the Originate-to-Distribute model.
Commercial Banking had a particularly good fourth quarter, with new production
expanding sharply to ?6.4bn, thanks to robust business with corporate clients.
The 11% growth in net revenues was also fueled by Trade Finance and
international expansion, notably via the Asia platform.
Over the full year, new production amounted to ?16bn and net revenues to ?412m,
a 6% increase vs. 2013.
The Interest Rate, Foreign Exchange, Commodities and Treasury (FIC-T) segment
posted ?981m of net revenues in 2014. The momentum came particularly from an
excellent performance by the Debt platform (strong growth in bonds issues in the
corporate and covered bond segments).
During the course of 2014, Natixis confirmed its positon as the n°1 bookrunner
on the primary bond market in euros with French issuers (Dealogic) and as the
n°1 bookrunner on covered bond issues in euros (Dealogic).
Excluding the ?82m negative impact from the first application of FVA rules,
revenues were up 14% in 4Q14 relative to 4Q13, to ?244m.
Net revenues from Equities rose 3% to ?432m over the full year, including lower
activity in the equity-backed financing segment and robust growth in Derivatives
throughout the year (+28%).
Progress in the New Frontier strategic plan:
Wholesale Banking continued to expand in line with the objectives set out in the
strategic plan, i.e. selective growth coupled with greater efficiency.
Selective growth translated into an acceleration of balance-sheet rotation
through the Originate-to-Distribute model (35% growth in new production for the
business lines concerned between 2013 and 2014 for a limited 3% increase in
outstanding), strong growth in Equity derivatives (revenues up 28% in 2014), and
an increased proportion of revenues derived from arrangement fees reflecting our
increasingly frequent role as a lead-left bookrunner on complex Structured
financing transactions. The continuation of the international rollout (net
revenues up 8% in 2014) also illustrated the Bank's intention to expand on fast-
growing markets.
A number of initiatives contributed to improving efficiency, e.g.
rationalization of the GTB offering, increased liquidity collect and efforts to
merge the equity, credit and economic research teams.
Overall, Wholesale Banking net revenues progressed by 4%, close to the target
set out in the plan, while ROE improved 210bps over the full year.
In accordance with the strategic plan, growth in business was achieved without
any increase in risk-weighted assets, with these even declining during the year.
Investment Solutions
+------------------------------------------------------------------------------+
| in ?m 4Q14 4Q13 4Q14 vs. 4Q13 2014 2014 vs. 2013 |
| ---------------------------------------------------------------------------- |
| Net revenues 772 682 13% 2,818 15% |
| |
| o/w Asset management 599 511 17% 2,136 17% |
| |
| o/w Insurance 134 120 11% 528 16% |
| |
| o/w Private banking 33 37 (10)% 128 3% |
| |
| Expenses (553) (482) 15% (2,004) 12% |
| ---------------------------------------------------------------------------- |
| Gross operating income 219 200 10% 815 25% |
| ---------------------------------------------------------------------------- |
| Provision for credit 2 18 5 |
| losses |
| ---------------------------------------------------------------------------- |
| Pre-tax profit 223 223 stable 817 20% |
| ---------------------------------------------------------------------------- |
| Cost/income ratio 71.6% 70.7% 71.1% |
| ---------------------------------------------------------------------------- |
| ROE after tax((1)) 16.1% 17.9% 15.4% |
+------------------------------------------------------------------------------+
(1) See note on methodology
Investment Solutions revenues progressed by 15% to ?2.818bn over full-year 2014
and by 13% to ?772m in 4Q14 vs. 4Q13.
The cost-income ratio improved by 220bps to 71.1% in 2014. Gross operating
income advanced by a healthy 10% to ?219m in the fourth quarter and by 25% to
?815m over the full year.
Pre-tax profit also made strong progress, climbing 20% to ?817m over the full
year. After-tax ROE (after capital allocation according to Basel 3 rules)
widened by 190bps to 15.4% over 2014 as a whole.
Asset management lifted net revenues by 17% in 4Q14 and by 16% on a constant
exchange rate basis over the full year. Net revenues amounted to ?2.136bn for
2014 as a whole.
Total assets under management climbed 17% from ?629bn to ?736bn during the year.
This growth stemmed from a ?28bn net inflow, ?45bn of positive currency and
structure effects and a ?34bn positive market effect.
Excluding money-market products, 2014 net inflow totaled ?32.5bn, of which ?23bn
from fixed-income products and ?12bn from equity products, with the bulk coming
from the US market. Net inflow was ?4bn in Q414.
Insurance also posted sharp increases in both net revenues (+16%) and gross
operating income (+21%) in 2014. Net revenues reached ?528m over 2014 and were
fuelled by a 25% jump in turnover, which was itself fuelled both by the Life-
insurance and P&C segments (turnover up 32% and 9%, respectively). The life
insurance assets under management totaled ?41.8bn at end-December 2014, 7%
higher than a year earlier.
In Private Banking, net inflow improved to ?1.4bn in 2014 from ?0.3bn a year
earlier. Assets under management rose 10% to ?24.7bn during the year.
Progress in the New Frontier strategic plan:
Within Investment Solutions, progress in implementing the strategic plan was
particularly visible in Asset management business, both in Europe and the US.
In Europe, the development of the multi-affiliate model proceeded in tandem with
efforts to optimize and increase distribution capacity. 2014 benefited from the
ramp-up of H(2)O and new diversified expertise, especially Mirova (SRI). The
France distribution platform was integrated into the NGAM-D international
platform.
Natixis has the project((1)) to acquire 71.2% equity interest in DNCA for ?549m.
This deal would broaden NGAM Europe's expertise and orient it more toward retail
clients and generate higher margins. DNCA would also have scope to expand faster
by leveraging NGAM's distribution platform and support functions. Estimates
point to the deal generating an instantaneous return on investment of 8% and
enhancing Natixis' EPS by around 4% on its 2014 net income (gs).
Following the acquisition of 60% of BPCE Assurances in March 2014, all Insurance
business lines are now grouped together within Natixis. The new partnership with
CNP as from 2016 will help increase the percentage of core-business revenues
derived from Insurance (8% already at the start of 2014).
Overall, Investment Solutions exceeded the targets set out in the New Frontier
plan in terms of inflow, revenue growth and profitability. Its contribution to
total core-business revenues rose and the proportion of capital allocated to
Investment Solutions relative to other business lines increased in line with the
ongoing development of the asset-light model.
1. The transaction is notably subject to the consultation process with employee
representatives, to regulatory approvals and the approval of the Competition
Authority
Specialized Financial Services
+-----------------------------------------------------------------------------+
| in ?m 4Q14 4Q13 4Q14 vs. 4Q13 2014 2014 vs. 2013 |
| --------------------------------------------------------------------------- |
| Net Revenues 324 323 Stable 1,262 1% |
| |
| Specialized financing 192 194 (1)% 739 1% |
| |
| Financial services 132 129 2% 523 stable |
| |
| Expenses (215) (219) (2)% (832) stable |
| --------------------------------------------------------------------------- |
| Gross operating income 109 104 5% 430 2% |
| --------------------------------------------------------------------------- |
| Provision for credit losses (22) (20) 10% (76) (4)% |
| --------------------------------------------------------------------------- |
| Pre-tax profit 86 85 1% 370 8% |
| --------------------------------------------------------------------------- |
| Cost/income ratio 66.3% 67.7% 65.9% |
| --------------------------------------------------------------------------- |
| ROE after tax((1)) 14.9% 14.4% 15.6% |
+-----------------------------------------------------------------------------+
(1) See note on methodology
Revenues from Specialized Financial Services inched up 1% to ?1.262bn in 2014.
Specialized financing activities contributed positively while Financial Services
revenues were stable over the period.
Operating expenses held steady in 2014, with the result that the cost-income
ratio improved 60bps to 65.9%. Gross operating income rose 2% to ?430m over the
full year.
The provision for loan loss declined 4% to ?76m.
After-tax ROE (after capital allocation according to Basel 3 rules) reached
14.9% in 4Q14 and 15.6% in 12M14, a 170bp-improvement vs. 2013.
Specialized financing grew 1% to ?739m over the year, and was fuelled by good
showings in Sureties and guarantees (net revenues up 11%) and Consumer finance
(net revenues up 4%).
Within Financial services, Employees savings schemes and Payments both fared
well. The former expanded sums under management by 6% and the latter cards in
circulation by 19% relative to end-2013.
Progress in the New Frontier strategic plan:
2014 was a year of innovation for Specialized Financial Services, particularly
as regards developments in the digital arena and the intensification of
relations with the Groupe BPCE networks (lease financing) and Natixis clients
(17% increase in factored turnover with Natixis clients).
The introduction in October 2014 of the consumer-loan management platform
developed with BNPP Personal Finance was one of the major components of the
operational efficiency strategy.
This strategy kept operating expenses stable and reduced the cost-income ratio
to below 66%, in line with the objectives of the New Frontier plan.
Another feature of 2014 for SFS was markedly improved profitability, as
witnessed by a 170bp-widening in ROE, in line with the target of at least 16%
for 2017. Lastly, scarce resources were also managed more efficiently, with
risk-weighted assets contracting 5%.
Financial Investments
Data excludes exceptional items((1))
+------------------------------------------------------------------------------+
| |
| |
|In ?m 4Q14 4Q13 4Q14 vs. 4Q13 2014 2014 vs. 2013 |
| |
| |
+------------------------------------------------------------------------------+
|Net Revenues 206 218 (5)% 839 (2)% |
| |
| Coface((2)) 168 177 (5)% 687 (3)% |
| |
| Corporate Data Solutions 21 28 (24)% 83 (17)% |
| |
| Other 17 13 33% 69 42% |
| |
|Expenses (181) (199) (9)% (692) (8)% |
+------------------------------------------------------------------------------+
|Gross Operating Income 25 19 34% 146 39% |
+------------------------------------------------------------------------------+
|Provision for credit losses (4) 3 (10) 45% |
| |
|Other o/w change in value of (8) 2 (50)% |
|goodwill |
+------------------------------------------------------------------------------+
|Pre-tax profit 22 14 60% 138 45% |
+------------------------------------------------------------------------------+
Coface has been 41.2%-owned since July 2014 and is still fully consolidated in
Natixis's books.
Coface's net revenues((2) )rose 5% to ?707m in 2014. Turnover((3)) increased
1.6% to ?1.461bn during the same period.
The combined ratio((4)) improved by 3.8pps to 79.7% in 2014, reflecting a tight
grip on operating expenses and efficient risk management. The cost ratio((4))
declined to 29.3%, while the loss ratio fell to 50.4% (-3.4pps vs. 2013).
Net revenues from Financial Investments were down by 5% in 4Q14 vs. 4Q13 and by
2% in 12M14 vs. 12M13. This decrease reflected the run-off of Corporate Data
Solutions. This was coupled with reductions in expenses of 9% in 4Q14 and 8% in
12M14.
Gross operating income climbed 39% to ?146m in 2014. Pre-tax profit jumped 45%
to ?138m during the same period.
1. See note on methodology
2. On constant perimeter and exchange rates, and excluding exceptional items
3. On constant perimeter and exchange rates
4. Loss ratio on a pro forma basis: policyholder participation is booked
against premiums (turnover) instead of being included in claims expense.
Cost ratio on a pro forma basis: the CVAE levy is booked to tax and not
included in insurance management expenses
Appendices
Comments on methodology
/> 2013 figures are pro forma:
* of the acquisition by Natixis of Groupe BPCE's 60% stake in BPCE Assurances.
The BPCE Assurances acquisition was realized on March 13th 2014 with a
retroactive effect as of January 1st, 2014. 40% of BPCE Assurances capital
is still owned by MACIF and MAIF. The figures used for the pro forma income
statement are based on BPCE Assurances contribution to Groupe BPCE
consolidated accounts reported in 2013.
* of the reclassification of the 15% Natixis share in CACEIS from the
Securities services business (Specialized Financial Services) to the
Corporate Center since 1Q13.
* of the sale of Cooperative Investment Certificates (means the pro forma of
the effective sale on August 6, 2013 of all CCIs hold by Natixis to the
Banques Populaires and the Caisses d'Epargne).
/> Business line performance using Basel 3 standards:
Starting in 2013, the performances of Natixis business lines are presented using
Basel 3 standards. Basel 3 risk-weighted assets are based on CRR-CRD4 rules as
published in June 26th 2013 (including Danish compromise treatment for qualified
entities).
Capital is allocated to Natixis business lines on the basis of 9% of their Basel
3 average risk weighted assets.
Annualized ROTE is computed as follows: net income (group share) - DSN net
interest/average net assets after dividend - hybrid notes - intangible assets -
average goodwill. And, since 3Q13, this ratio include goodwill and intangible
assets by business lines to determinate the ROE ratio of businesses (figures are
pro forma in this presentation).
/> The remuneration rate on normative capital is still 3%.
/> Own senior debt fair-value adjustment calculated using a discounted cash-flow
model, contract by contract, including parameters such as swaps curve, and
revaluation spread (based on the BPCE reoffer curve).
> Exceptional items: the data and commentary contained in this presentation
are based on the income statements of Natixis and of its core businesses, after
restating for the exceptional items detailed on page 3. The income statements of
Natixis and of its core businesses, including these exceptional items (reported
data), are shown in the appendix to this presentation.
4Q14 results: from data excluding exceptional items to reported data
+---------------+
| |
---------------- ----------------------------- | ------------- |
4Q14 FV Adjustment | |
in ?m excl. on own senior Others FVA | 4Q14 |
exceptional debt impact | reported |
items | |
------------------------------ ----------------------------- | ------------- |
Net revenues 1,994 (18) (11) (82) | 1,883 |
| |
Expenses (1,440) | (1,440) |
------------------------------ ----------------------------- | ------------- |
Gross | |
operating 554 (18) (11) (82) | 443 |
income | |
------------------------------ ----------------------------- | ------------- |
Provision for (78) | (78) |
credit losses | |
| |
Associates 9 | 9 |
| |
Gain or loss | |
on other | |
assets / (2) 3 | 1 |
Change in | |
value of | |
goodwill | |
------------------------------ ----------------------------- | ------------- |
Pre-tax 483 (18) (8) (82) | 376 |
profit | |
------------------------------ ----------------------------- | ------------- |
Tax (167) 6 29 | (133) |
| |
Minority (28) | (28) |
interest | |
------------------------------ ----------------------------- | ------------- |
Net income 288 (12) (8) (53) | 215 |
(group share) | |
------------------------------ ----------------------------- | ------------- |
| |
+---------------+
Natixis - Consolidated((1) )
----------------------------------------------------------------- ------- ----------------- ------
4Q14 2014
in ?m 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 vs. 2013 2014 vs.
4Q13 2013
------------------------------------------------------------------------------- ------- ----------------- ------
Net revenues 1,905 1,772 1,742 1,821 1,881 2,032 1,715 1,883 3% 7,240 7,512 4%
Expenses (1,300) (1,320) (1,305) (1,358) (1,325) (1,372) (1,302) (1,440) 6% (5,285) (5,439) 3%
------------------------------------------------------------------------------- ------- ----------------- ------
Gross
operating 605 452 437 462 556 661 413 443 (4) % 1,955 2,073 6%
income
------------------------------------------------------------------------------- ------- ----------------- ------
Provision for (96) (42) (96) (87) (78) (85) (61) (78) (11) (321) (302) (6)%
credit losses %
Associates 5 5 3 7 11 9 11 9 37% 21 40 96%
Gain or loss (14)
on other 2 0 0 15 0 (23) 88 13 % 17 78
assets
Change in (14)
value of 0 0 0 (14) 0 (38) 0 (12) % (14) (51)
goodwill
------------------------------------------------------------------------------- ------- ----------------- ------
Pre-tax 515 414 345 383 488 523 451 376 (2) % 1,658 1,838 11%
profit
------------------------------------------------------------------------------- ------- ----------------- ------
Tax (183) (147) (120) (167) (172) (176) (144) (133) (20)% (617) (624) 1%
Minority 4 (8) (5) (5) (7) (14) (27) (28) (14) (76)
interest
------------------------------------------------------------------------------- ------- ----------------- ------
Net income
(group share) 336 259 221 211 309 333 281 215 2% 1,027 1,138 11%
pro forma
------------------------------------------------------------------------------- ------- ----------------- ------
P3CI & other (47) (47) 34 (10) 0 0 0 0 (70) 0
impacts
Restructuring
costs (net of 0 0 0 (51) 0 0 0 0 (51) 0
tax)
------------------------------------------------------------------------------- ------- ----------------- ------
Reported net
income (group 290 212 255 150 309 333 281 215 43% 907 1,138 25%
share)
------------------------------------------------------------------------------- ------- ----------------- ------
1. See note on methodology
Natixis - Breakdown by Business division in 4Q14
--------------------------------------------------- ------------
in ?m Wholesale Invest. SFS Fin. Corp. Natixis
Banking Solutions Invests. Center reported
------------------------------------------------------------------ ------------
Net revenues 624 772 324 195 (31) 1,883
Expenses (444) (553) (215) (181) (48) (1,440)
------------------------------------------------------------------ ------------
Gross
operating 180 219 109 14 (79) 443
income
------------------------------------------------------------------ ------------
Provision for (48) 2 (22) (4) (7) (78)
credit losses
------------------------------------------------------------------ ------------
Net operating 132 221 88 11 (86) 365
income
------------------------------------------------------------------ ------------
Associates 5 4 0 0 0 9
Other items 0 (3) (2) (12) 17 1
------------------------------------------------------------------ ------------
Pre-tax profit 136 223 86 (1) (68) 376
------------------------------------------------------------------ ------------
Tax (133)
Minority interest (28)
------------------- ------------
Net income (gs) 215
------------------- ------------
Natixis - Breakdown by Business division in 2014
-------------------------------------------- --------- ------ ----------
Wholesale Invest. Fin. Corp. Natixis Natixis
in ?m Banking Solutions SFS Invests. Center excl. GAPC reported
GAPC
------------------------------------------------------- --------- ------ ----------
Net 2,781 2,818 1,262 828 (184) 7,505 6 7,512
revenues
Expenses (1,712) (2,004) (832) (692) (151) (5,391) (48) (5,439)
------------------------------------------------------- --------- ------ ----------
Gross
operating 1,069 815 430 136 (335) 2,114 (41) 2,073
income
------------------------------------------------------- --------- ------ ----------
Provision
for credit (186) 5 (76) (10) (33) (300) (2) (302)
losses
------------------------------------------------------- --------- ------ ----------
Net
operating 883 820 354 125 (368) 1,814 (43) 1,771
income
------------------------------------------------------- --------- ------ ----------
Associates 21 17 0 2 0 40 0 40
Other 0 (20) 15 (51) 82 27 0 27
items
------------------------------------------------------- --------- ------ ----------
Pre-tax 904 817 370 76 (286) 1,881 (43) 1,838
profit
------------------------------------------------------- --------- ------ ----------
Tax (639) 15 (624)
Minority interest (76) 0 (76)
------------------------ --------- -------- ------ ----------
Net income (gs) excl. Net
GAPC 1,166 income (28) 1,138
(gs)
------------------------ --------- -------- ------ ----------
GAPC net of tax (28)
------------------------ ---------
Net income (gs) 1,138
------------------------ ---------
Wholesale Banking
------------------------------------------------- -------- ----------------- ------
4Q14 2014
in ?m 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 vs. 2013 2014 vs.
4Q13 2013
------------------------------------------------------------- -------- ----------------- ------
Net 798 678 739 652 727 757 674 624 (4)% 2,867 2,781 (3)%
revenues
Commercial 96 96 94 102 101 99 99 113 11% 388 412 6%
Banking
Structured 246 263 280 259 290 267 273 273 6% 1,047 1,104 5%
Financing
Capital 475 332 384 304 351 373 322 249 (18)% 1,495 1,295 (13)%
Markets
Fixed
Income & 371 219 273 214 231 247 222 162 (24)% 1,077 863 (20)%
Treasury
Equity 103 113 111 90 120 126 100 86 (4)% 418 432 3%
Other (18) (12) (18) (13) (16) 17 (21) (11) (15)% (61) (30) (51)%
Expenses (432) (414) (415) (396) (420) (433) (414) (444) 12% (1,657) (1,712) 3%
------------------------------------------------------------- -------- ----------------- ------
Gross
operating 367 265 324 256 306 323 260 180 (30)% 1,210 1,069 (12)%
income
------------------------------------------------------------- -------- ----------------- ------
Provision
for credit (82) (72) (71) (88) (52) (61) (24) (48) (45)% (312) (186) (40)%
losses
------------------------------------------------------------- -------- ----------------- ------
Net
operating 284 193 253 168 254 262 236 132 (22)% 898 883 (2)%
income
------------------------------------------------------------- -------- ----------------- ------
Associates 0 0 0 0 6 4 6 5 0 21
Other items 0 0 1 0 0 0 0 0 1 0
------------------------------------------------------------- -------- ----------------- ------
Pre-tax 284 193 254 168 260 266 242 136 (19)% 899 904 1%
profit
------------------------------------------------------------- -------- ----------------- ------
Cost/Income 54.1 61.0 56.2 60.8 57.9 57.3 61.5 71.1
ratio % % % % % % % % 57.8 % 61.6 %
RWA (Basel
3 - in ?bn) 77.8 76.5 74.3 74.5 76.0 77.8 74.7 72.2 (3)% 74.5 72.2 (3)%
Normative
capital 6,950 7,146 7,028 6,830 6,804 6,944 7,102 6,821 stable 6,989 6,918 (1)%
allocation
(Basel 3)
ROE after 10.5 10.1 10.0
tax(1) % 6.9 % 9.3 % 6.3 % % % 9.0 % 5.3 % 8.2 % 8.6 %
(Basel 3)
Investment Solutions
------------------------------------------------- -------- ----------------- ------
4Q14 2014
in ?m 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 vs. 2013 2014 vs.
4Q13 2013
------------------------------------------------------------- -------- ----------------- ------
Net 547 624 594 682 647 710 689 772 13% 2,447 2,818 15%
revenues
Asset 415 458 448 511 488 527 522 599 17% 1,832 2,136 17%
Management
Private 28 29 30 37 31 32 31 33 (10)% 124 128 3%
Banking
Insurance 93 126 117 120 126 139 129 134 11% 456 528 16%
Expenses (415) (451) (445) (482) (475) (493) (483) (553) 15% (1,793) (2,004) 12%
------------------------------------------------------------- -------- ----------------- ------
Gross
operating 132 173 149 200 172 217 206 219 10% 654 815 25%
income
------------------------------------------------------------- -------- ----------------- ------
Provision
for credit 1 (2) 2 18 2 0 0 2 (88)% 19 5 (74)%
losses
------------------------------------------------------------- -------- ----------------- ------
Net
operating 133 172 151 218 174 218 206 221 2% 673 820 22%
income
------------------------------------------------------------- -------- ----------------- ------
Associates 4 3 3 7 4 5 4 4 (37)% 17 17 2%
Other items (2) (6) (2) (1) (2) (10) (6) (3) (12) (20) 67%
------------------------------------------------------------- -------- ----------------- ------
Pre-tax 135 169 151 223 177 213 204 223 stable 678 817 20%
profit
------------------------------------------------------------- -------- -
Unternehmensinformation / Kurzprofil:
Datum: 19.02.2015 - 11:27 Uhr
Sprache: Deutsch
News-ID 372681
Anzahl Zeichen: 65556
contact information:
Town:
Paris
Kategorie:
Business News
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