NATIXIS :THIRD-QUARTER 2016 AND NINE-MONTH 2016 RESULTS
(Thomson Reuters ONE) -
Paris, November 8, 2016
Third-Quarter 2016 and Nine-Month 2016 Results
Restated NET INCOME((1)) UP 14% in 3Q16 to ?315m
8% revenue growth in 3Q16 FUELED BY FINE RESULTS IN CIB
Investment Solutions: slight increase in AuM and good momentum in Insurance
* Asset Management: ?798bn of AuM at September 30, 2016, ?11bn higher than at
end-June 2016. Margins stable in the USA and improved in Europe in 9M16, but
lower earnings contribution compared to high levels in 2015
* Insurance: overall turnover jumped 25% to ?5.5bn in 9M16 compared to 9M15
Corporate & Investment Banking: strong increase of pre-tax profit and ROE((1))
to 11.5% (+410bps vs. 3Q15)
* Global Markets: high levels of activity with a robust performance in Fixed
Income (3Q16 revenues: +39% vs. 3Q15)
* Global Finance & Investment Banking: brisk business in M&A and Structured
Financing
Specialized Financial Services: continuation of strong momentum witnessed since
start of 2016 in Specialized financing while maintening high ROE (14.4% in
3Q16((1)))
Factored turnover up a hefty 56% yoy in 3Q16
CORE-BUSINESS ROE((1)) UP SHARPLY To 11.0% in 3Q16 (+60BPS YOY)
* Natixis' net revenues: up 8% yoy to ?2.1bn in 3Q16, fueled primarily by CIB
(net revenues +15% vs. 3Q15, excluding CVA/DVA) and up 2% in 9M16
* Provision for credit loss on core businesses: 30bps in 3Q16
* Restated net income (group share and excluding the IFRIC 21 impact): up 14%
yoy to ?315m in 3Q16 and 3% yoy to over ?1bn in 9M16, despite a sharply
increased contribution to the SRF
* ROTE((1)) of 9% in 3Q16 and 9.9% in 9M16
FURTHER STRONG CET1 capital GENERATIOn
* CET1 ratio((2)) of 11.6% at September 30, 2016, before factoring in the
dividend
* 104bps of CET1 generated so far in 2016, equivalent to ?1.2bn, of which
?700m above the minimum payout of 50%, distributable in the absence of
acquisitions
* New CET1 capital requirement following the ECB's SREP exercise((3)): 7.75%
in 2017 (phased-in and excluding non-public P2G) compared with a phased-in
CET1 ratio of 11.3% at September 30
transformation AND business EFFICIENCY((4))
Natixis will invest ?220m to promote the industrialization, transformation and
digitalization of its businesses in order to reduce costs by ?250m per year from
end-2019. These efficiency gains will be done at constant business scope.
(1) See note on methodology and excluding IFRIC 21 (2) 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 (3) Subject to confirmation of the
pre-notification received from the ECB (4) Projects are subject to the
consultation process with personnel representative bodies
The Board of Directors examined Natixis' third-quarter 2016 accounts on November
8, 2016.
For Natixis, the main features of 3Q16 were( (1)):
* increases in Natixis' net revenues of 8% and core-business net revenues of
7% vs. 3Q15, to ?2.106bn and ?1.955bn, respectively.
Within the Investment Solutions core business, Asset Management incurred a net
outflow in the US during the quarter, though after recording record inflows in
2014 and 2015.
In Insurance, the rollout of the new Life and Personal Protection offering was
completed in mid-October across all Caisses d'Epargne network. Insurance posted
sharp growth in turnover in 3Q16, driven by both the Life and Non-Life segments.
Robust showings in FIC-T, M&A and financings, particularly in the Aviation,
Export & Infrastructure Finance and Real Estate Finance US fields, propelled a
24% yoy advance in Corporate & Investment Banking net revenues in 3Q16.
In Specialized Financial Services, good commercial performances, especially in
the Factoring and Consumer Finance areas, lifted net revenues from Specialized
Financing by 6%.
The decision to group together at Natixis all Payments activities carried out on
behalf of Groupe BPCE will enable the business to address European markets, to
reap the benefits of new digital business models and deliver greater
competitiveness to the Banques Populaires and Caisses d'Epargne.
* a significant improvement in the cost-income ratio (excluding the IFRIC 21
impact) of 1.8pps yoy to 70.9% in 3Q16,
* a ?69m provision for credit loss, which marked an improvement since the
start of the year,
* a 14% yoy advance in restated net income (group share and excluding the
IFRIC 21 impact) to ?315m,
* reported net income (group share) of ?298m, up 2%,
* a CET1 ratio((2)) of 11.2% at September 30, after factoring in the dividend,
* a leverage ratio of 4.3% at end-September 2016.
Laurent Mignon, Natixis Chief Executive Officer, said: "Natixis reported
markedly-improved results for third-quarter 2016 today, fueled in particular by
robust activity levels in Corporate & Investment Banking. These results are not
only consistent with the main objectives of the New Frontier plan, but also
confirm the adaptability and resilience of our asset-light model. They also
underline the rapid expansion of our Insurance activities and the fine
performances recorded in Specialized Financing lines since the start of 2016.
Several projects were initiated during the third quarter, among which the
implementation of a unified Payments business line within Natixis, in order to
create a powerful player to serve the Group's ambitions, and the set-up of the
main aspects of the Transformation and Business Efficiency program, for which we
intend to invest substantially - particularly in technology - and unlock ?250m
of cost savings as from 2019. And with Natixis preparing to celebrate its
10(th) anniversary in just a few days' time, I would like to take this
opportunity to thank all of our staff for their commitment and work accomplished
over the years. Along with the support of Groupe BPCE, these efforts now ensure
Natixis is a solid bank, fully-devoted to its clients and recognized for the
strength of its expertise, and one that can continue to grow with confidence"
1. See note on methodology
2. 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
1 - Natixis 3Q16 and 9M16 results
1.1 exceptional items((1))
In ?m
3Q16 3Q15 9M16 9M15
Exceptionals
------------------------------------------------------------------- ------------
Exchange rate fluctuations on
DSN in currencies Corporate center (3) (1) (10) 24
(Net revenues)
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SWL litigation (Net revenues) CIB (69) (69)
------------------------------------------------------------------- ------------
Gain from disposal of operating
property assets Corporate center 97 97
(Gain or loss on other assets)
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Disposal of Kompass
International Financial investments (30)
(Gain or loss on other assets)
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Goodwill impairment on Coface Financial investments (75)
(Change in value of goodwill)
------------------------------------------------------------------- ------------
Settlement of litigation 2008 Corporate center (30) (30)
(Cost of risk)
------------------------------------------------------------------- ------------
Impact in income tax (9) 12 (6) 3
Impact in minority interest 44
Impact in net income 16 (19) (19) (32)
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FV adjustment on own senior debt
------------------------------------------------------------------- ------------
Impact in net revenues Corporate center (110) 13 (136) 143
Impact in net income Corporate center (72) 9 (89) 94
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------------------------------------------------------------------- ------------
Total impact in net income (56) (10) (109) 62
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1. See note on methodology
1.2 3Q16 results
Pro forma and excluding exceptional items((1)) In 3Q16 3Q15 3Q16
?m vs. 3Q15
-------------------------------------------------- ----------------- ----------
Net revenues 2,106 1,956 8%
of which core businesses 1,955 1,821 7%
Expenses (1,447) (1,393) 4%
-------------------------------------------------- ----------------- ----------
Gross operating income 659 563 17%
-------------------------------------------------- ----------------- ----------
Provision for credit losses (69) (54) 29%
-------------------------------------------------- ----------------- ----------
Pre-tax profit 601 519 16%
-------------------------------------------------- ----------------- ----------
Income tax (213) (197) 8%
Minority interest (34) (20) 67%
-------------------------------------------------- ----------------- ----------
Net income (gs) - restated 354 301 17%
In ?m 3Q16 3Q15 3Q16
vs. 3Q15
-------------------------------------------------- ----------------- ----------
Restatement of IFRIC 21 impact (39) (26)
-------------------------------------------------- ----------------- ----------
Net income (gs) - restated excl. impact IFRIC 315 275 14%
-------------------------------------------------- ----------------- ----------
ROTE excluding IFRIC 21 impact 9.0% 8.0%
In ?m 3Q16 3Q15 3Q16
vs. 3Q15
-------------------------------------------------- ----------------- ----------
Exceptional items (56) (10)
Reinstatement of IFRIC 21 impact 39 26
-------------------------------------------------- ----------------- ----------
Net income (gs) - reported 298 291 2%
1. See note on methodology
Unless stated otherwise, the commentary that follows refers to pro forma results
excluding exceptional items (see detail p3).
Natixis' net revenues amounted to ?2.106bn in 3Q16, up 8% vs. 2Q15.
Over the same period, core-business net revenues rose 7% to ?1.955bn overall,
with Investment Solutions down by 4%, Corporate & Investment Banking up sharply
by 24% and Specialized Financial Services ahead by 3%.
Net revenues from Financial Investments contracted 36% yoy to ?137m in 3Q16,
mirroring declines in revenues of 31% at Coface and 64% from non-strategic
Corporate Data Solutions activities.
Among non-recurring items in 3Q16, a provision for litigation of ?69m has been
set aside because Société Wallonne de Logement (SWL) served Natixis with
official notice to request withdrawal from its obligations related to a swap
taken out in 2006.
This provision follows on from the ruling handed down by the Mons appeal court
that orders Natixis to cancel the deal under way and return to the counterparty
any amounts received since the operation was implemented. Given that any appeal
in the cassation court does not suspend enforcement of the legal decision, and
in view of the uncertain outcome, a provision has been set aside in light of
this court decision.
We note that no provision had previously been set aside on this litigation, in
view of the arguments on the foundations of the case and the favorable ruling
for Natixis handed down at first instance.
Operating expenses were 4% up yoy to ?1.447bn in 3Q16. This showed up in a
significant 1.8pp-improvement in the cost-income ratio (excluding the IFRIC 21
impact) to 70.9% during the same period.
Again compared to a year earlier, gross operating income progressed by 17% for
Natixis as a whole - reaching ?659m - and by 14% for core
businesses.
The provision for credit loss worked out to ?69m in 3Q16, up 29% compared to
3Q15, but down markedly compared to the first two quarters of 2016, thereby
confirming its return to levels consistent with the targets set out in the New
Frontier plan.
Pre-tax profit climbed 16% yoy to ?601m in 3Q16.
Restated net income (group share) excluding IFRIC 21 and exceptional items
amounted to ?315m in 3Q16, a 14% increase on a year earlier.
Including exceptional items (-?56m net of tax in 3Q16 vs. -?10m in 3Q15) and
IFRIC 21 (+?39m in 3Q16 vs. +?26m in 3Q15), reported net income (group
share) worked out to ?298m in 3Q16, up 2% on a year earlier.
ROTE excluding the IFRIC 21 impact made strong progress in Q316, rising 100bps
yoy to 9.0% for Natixis as a whole, while core-business ROE also advanced 60bps
yoy to 11.0%.
1.3 9M16 results
Pro forma and excluding exceptional
items((1)) 9M16 9M15 9M16 vs. 9M15
In ?m
----------------------------------------------- ----------------- --------------
Net revenues 6,414 6,293 2%
of which core businesses 5,964 5,797 3%
Expenses (4,574) (4,377) 5%
----------------------------------------------- ----------------- --------------
Gross operating income 1,839 1,915 (4)%
----------------------------------------------- ----------------- --------------
Provision for credit losses (245) (195) 26%
----------------------------------------------- ----------------- --------------
Pre-tax profit 1,679 1,751 (4)%
----------------------------------------------- ----------------- --------------
Income tax (608) (695) (13)%
Minority interest (84) (90) (6)%
----------------------------------------------- ----------------- --------------
Net income (gs) - restated 987 967 2%
In ?m 9M16 9M15 9M16 vs. 9M15
----------------------------------------------- ----------------- --------------
Restatement of IFRIC 21 impact 39 26
----------------------------------------------- ----------------- --------------
Net income (gs) - restated excl. impact IFRIC 1,026 992 3%
----------------------------------------------- ----------------- --------------
ROTE excluding IFRIC 21 impact 9.9% 9.6%
In ?m 9M16 9M15 9M16 vs. 9M15
----------------------------------------------- ----------------- --------------
Exceptional items (109) 62
Reinstatement of IFRIC 21 impact (39) (26)
----------------------------------------------- ----------------- --------------
Net income (gs) - reported 879 1,028 (15)%
--------------------------------------------------------------------------------
1. See note on methodology
Unless stated otherwise, the commentary that follows refers to pro forma results
excluding exceptional items (see detail p3).
Natixis' net revenues amounted to ?6.414bn, up 2% vs. 9M15.
During 9M16 and despite a difficult start to the year, core-business revenues
progressed 3% year-on-year to ?5.964bn. This aggregate included contributions of
?2.460bn from Investment Solutions (down 2%), ?2.494bn from Corporate &
Investment Banking (up 8%) and ?1.009bn from Specialized Financial Services (up
4%).
The 26% yoy decline in net revenues from Financial Investments in 9M16 stemmed
from shrinking revenues at Coface (-21%) and from Corporate Data Solutions (-
49%).
Operating expenses totaled ?4.574bn in 9M16, up 5% relative to 9M15. After
adjusting for the contribution to the Single Resolution Fund (?114m in 9M16 vs.
?48m in 9M15), operating expenses increased by 3% compared to a year earlier.
Gross operating income contracted 4% yoy to ?1.839bn.
The provision for credit loss rose 26% to ?245m, primarily due to the provisions
set aside on the Oil & Gas sector in the first half of the year.
Pre-tax profit declined 4% on a year earlier to ?1.679bn. Core-business pre-tax
profit rose 3% to ?2bn in 9M16.
Restated net income excluding exceptional items and IFRIC 21 amounted to
?1.026bn in 9M16, up 3% on a year earlier.
Including exceptional items (-?109m net of tax in 9M16 vs. +?62m in 9M15) and
IFRIC 21 (-?39m in 9M16 vs. -?26m in 9M15), reported net income (group
share) worked out to ?879m vs. ?1.028bn in 9M15.
2 - Financial structure
Natixis' Basel 3 CET1 ratio((1) )worked out to 11.2% at September 30, 2016.
Based on a Basel 3 CET1 ratio((1)) of 11.0% at June 30, 2016, the respective
impacts in the second quarter of 2016 were as follows:
* effect of allocating net income (group share) to retained earnings in 3Q16,
excluding the dividend: +26bps,
* ordinary dividend planned for 3Q16: -16bps,
* RWA, FX and other effects: +13bps.
Basel 3 capital and risk-weighted assets((1)) amounted to ?12.7bn and ?113.1bn,
respectively, at September 30, 2016.
2016 SUPERVISORY REVIEW AND EVALUATION PROCESS
Following the Supervisory Review and Evaluation Process (SREP) performed by the
ECB for 2016, the phased-in capital requirement (CET1 ratio) that Natixis has to
respect was set at 7.75% in 2017((2)), of which 1.25% for the Conservation
buffer and 2% for the Pillar 2 requirement (P2R) (excluding the Pillar 2
guidance (P2G), which is not public). The total capital requirement is thus set
at 11.25% for 2017, excluding P2G. With a phased-in Basel 3 CET1 ratio at 11.3%
and a phased-in total capital ratio of 15.1% as at 30 September 2016, Natixis is
well above the regulatory requirement.
The anticipated level of fully loaded Basel 3 CET1 ratio is 9% in 2019
(excluding the Pillar 2 guidance), given the gradual phasing-in of the
Conservation buffer to 2.5%.
It constitutes the level of CET1 taken into account starting in 2019 for the
restrictions applicable to distributions (Maximum Distributable Amount - MDA).
EQUITY CAPITAL - TIER ONE CAPITAL - BOOK VALUE PER SHARE
Equity capital (group share) totaled ?19.1bn at September 30, 2016, of which
?1.68bn was in the form of hybrid securities (DSNs) recognized in equity capital
at fair value.
Core tier 1 capital (Basel 3 - phased-in) stood at ?12.7bn, and tier 1 capital
(Basel 3 - phased-in) at ?14.5bn.
Natixis' risk-weighted assets totaled ?113.1bn at September 30, 2016 (Basel 3 -
phased-in), breakdown as following:
* Credit risk: ?77.7bn
* Counterparty risk: ?7.9bn
* CVA risk: ?3.5bn
* Market risk: ?11.3bn
* Operational risk: ?12.7bn
Under Basel 3 (phased-in), the CET1 ratio amounted to 11.3%, the Tier 1 ratio to
12.8% and the total ratio to 15.1% at September 30, 2016.
Book value per share was ?5.49 at September 30, 2016 based on 3,135,564,243
shares excluding treasury stock (the total number of shares stands at
3,137,074,580). Net tangible book value per share (after deducting goodwill and
intangible fixed assets) was ?4.34.
LEVERAGE RATIO((3))
The leverage ratio worked out to 4.3% at September 30, 2016.
OVERALL CAPITAL ADEQUACY RATIO
As at September 30, 2016, the financial conglomerate's capital excess was
estimated at more than ?6bn.
1. 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
2. Subject to confirmation of the pre-notification received from the ECB
3. See note on methodology
3 - results by Business line
Investment Solutions
9M16
In ?m 3Q16 3Q15 3Q16 9M16 9M16 vs. 9M15
vs. 3Q15 vs. 9M15 constant exchange
rate
--------------------------------------------------------------------------------
Net revenues 804 840 (4)% 2,460 (2)% (2)%
o/w Asset management 609 666 (9)% 1,858 (4)% (4)%
o/w Insurance 155 141 10% 478 9%
o/w Private banking 34 34 stable 101 (2)%
Expenses (558) (569) (2)% (1,727) stable stable
--------------------------------------------------------------------------------
Gross operating income 246 271 (9)% 733 (6)% (6)%
--------------------------------------------------------------------------------
Provision for credit 0 3 0
losses
--------------------------------------------------------------------------------
Gain or loss on other 0 0 19
assets
--------------------------------------------------------------------------------
Pre-tax profit 249 276 (10)% 759 (4)% (4)%
--------------------------------------------------------------------------------
Cost/Income ratio((1)) 69,8% 68,1% +1,7pp 70,0% +1,3pp
--------------------------------------------------------------------------------
ROE after tax((1)) 12,9% 14,2% (1,3)pp 13,7% (1,9)pp
--------------------------------------------------------------------------------
1. See note on methodology and excluding IFRIC 21 impact
Investment Solutions recorded net revenues of ?804m in 3Q16 and ?2.460bn in
9M16, down by 4% and 2% yoy, respectively. The lower contribution from Asset
Management was part-offset by good momentum in Insurance.
During 3Q16, operating expenses contracted yoy to ?558m, while the cost-income
ratio excluding the IFRIC 21 impact remained below 70.0%.
Gross operating income worked out to ?246m in 3Q16 vs. ?271m in 3Q15.
Pre-tax profit totaled ?249m in 3Q16 (-10% vs. 3Q15) and ?759m in 9M16 (-4% vs.
9M15).
ROE after tax and before the IFRIC 21 impact was 12.9% in 3Q16 and 13.7% in
9M16, down 1.3pps and 1.9pps, respectively, on a year earlier.
Asset Management posted ?609m in revenues in 3Q16, down 9% yoy.
Over 9M16 as a whole, Europe grew revenues 7% yoy to ?492m, buoyed by wider
margins following the consolidation of DNCA. In the US, revenues declined 9% to
?1.134bn in the same period, due to the contraction in average assets under
management.
Overall assets under management amounted to ?798bn at September 30, 2016, an
increase of ?11bn in 3Q16, thanks to a ?24bn positive market effect, which
offset ?8bn of net outflow, a ?4bn negative exchange-rate effect and a ?1bn
negative impact from the run off of Aurora.
The net outflow of ?8bn in 3Q16 was primarily focused on Harris.
Loomis Sayles resisted well in 9M16, helped by a recovery in performances. In
Europe, net inflow amounted to close to ?5bn in 9M16.
In Insurance, all segments grew strongly and helped lift net revenues 10% in
3Q16 and 9% in 9M16.
Overall Insurance turnover (excluding the reinsurance treaty with CNP), advanced
25% year-on-year to reach ?5.5bn in 9M16.
In the Life Insurance segment, excluding the reinsurance treaty with CNP, net
inflow reached ?1.8bn in 9M16, of which close to ?0.9bn stemmed from new
business with the Caisses d'Epargne. Unit-linked policies accounted for 37% of
net inflow during 9M16. AuM rose 7% yoy to ?46.5bn at end-September 2016.
Turnover advanced 9% yoy in the P&C segment and by 9% in the Personal Protection
and Borrower's insurance segments as well in 9M16.
2/2
Corporate & Investment Banking
Data excludes exceptional items((1))
In ?m 3Q16 3Q15 3Q16 9M16 9M16
vs. 3Q15 vs. 9M15
---------------------------------------------------------------------
Net revenues 826 665 24% 2,494 8%
Net revenues excl. CVA/DVA desk 813 706 15% 2,455 4%
o/w Global Markets 397 307 29% 1 285 11%
o/w Global Finance & IB 412 388 6% 1 181 (2)%
Expenses (468) (416) 13% (1,462) 7%
---------------------------------------------------------------------
Gross operating income 358 250 43% 1,032 9%
---------------------------------------------------------------------
Provision for credit losses (50) (36) 41% (175) 24%
---------------------------------------------------------------------
Pre-tax profit 310 217 43% 868 6%
---------------------------------------------------------------------
Cost/Income ratio((2)) 58.0% 64.1% (6.1)pp 58.2% (0.4)pp
---------------------------------------------------------------------
ROE after tax((2)) 11.5% 7.4% +4.1pp 11.4% +1.6pp
---------------------------------------------------------------------
1. See note on methodology
2. See note on methodology and excluding IFRIC 21 impact
Corporate & Investment Banking revenues rose 24% in 3Q16 and 8% in 9M16 compared
to the respective year-earlier periods.
Excluding the CVA/DVA desk, net revenues progressed by 15% yoy to ?813m in
3Q16, fueled by sharp growth in Fixed Income revenues (+39% during the same
period) and a much higher contribution from M&A, driven by Natixis Partners and
Peter J. Solomon (consolidated since June 2016).
Operating expenses rose 13% yoy to ?468m in 3Q16.
Gross operating income advanced 43% in 3Q16 and 9% in 9M16.
The provision for credit loss amounted to ?50m in 3Q16. This marked an
improvement relative to the first two quarters after the provisions set aside on
the Oil and Gas sector.
Pre-tax profit climbed 43% to ?310m in 3Q16. It rose 6% yoy to ?868m in 9M16.
ROE after tax and excluding the IFRIC 21 impact improved 410bps to 11.5% in
3Q16 and by 160bps to 11.4% in 9M16.
Excluding the CVA/DVA desk, Global Markets lifted net revenues by 29% yoy to
?397m in 3Q16.
The momentum came from a marked increase in the FIC-T segment, which was itself
buoyed by brisk Credit activity (+70% in 3Q16 vs. 3Q15) and Interest Rates and
Forex business (+24% in 3Q16 vs. 3Q15).
Derivatives also fared well in 3Q16 and helped to drive a 14% advance in net
revenues in the Equity segment vs. 3Q15.
Global Finance & Investment Banking grew net revenues 6% yoy in 3Q16.
New production amounted to ?8.3bn in 3Q16, up 5% on a year earlier, primarily
thanks to the Aviation, Export & Infrastructure Finance and Real Estate Finance
US segments. In the Global Energy & Commodities segment (excluding trade),
activity levels were restricted by a lack of investments.
New production more than doubled yoy in the Acquisition Finance segment to
nearly ?3bn in 3Q16, with revenues climbing 84%.
Specialized Financial Services
In ?m 3Q16 3Q15 3Q16 9M16 9M16
vs. 3Q15 vs. 9M15
----------------------------------------------------------------------------
Net revenues 325 315 3% 1,009 4%
Specialized financing 203 191 6% 628 7%
Financial services 122 124 (1)% 381 (2)%
Expenses (215) (209) 3% (661) 4%
----------------------------------------------------------------------------
Gross operating income 110 107 3% 348 3%
----------------------------------------------------------------------------
Provision for credit losses (12) (15) (18)% (41) (15)%
Gain or loss on other assets 0 0 31
----------------------------------------------------------------------------
Pre-tax profit 98 92 7% 338 17%
----------------------------------------------------------------------------
Cost/Income ratio((1)) 67.0% 67.1% (0.1)pp 65.2% +0.1pp
----------------------------------------------------------------------------
ROE after tax ((1)) 14.4% 13.5% +0.9pp 17.9% +3.2pp
----------------------------------------------------------------------------
1. See note on methodology and excluding IFRIC 21 impact
Net revenues from Specialized Financial Services rose 3% in 3Q16 and 4% in 9M16
relative to the year-earlier periods. The momentum came from solid performances
in Specialized Financing since the start of the year.
Operating expenses increased at the same pace as revenues, and amounted to ?215m
in 3Q16 and ?661m in 9M16. The result was virtually no change in the cost-income
ratio excluding the IFRIC 21 impact, with the ratio working out to 67.0% in
3Q16 and 65.2% in 9M16.
The provision for credit loss contracted 15% year-on-year to ?41m in 9M16.
Pre-tax profit progressed by 7% in 3Q16 vs. 3Q15. Over 9M16, the increase was
17%, after recognition in "Gain or loss on other assets" of a ?31m capital gain
on a real-estate asset in 2Q16.
After restating for this capital gain, after-tax ROE excluding IFRIC 21 worked
out to 16.3% in 9M16, a 1.6pp-improvement on a year earlier.
Within Specialized Financing, factored turnover climbed 56% in 3Q16 relative to
a year earlier, while Consumer Finance grew the average volume of personal loans
outstanding with the Banques Populaires and Caisses d'Epargne networks by a
sizeable 12% during the same period. Net revenues from Specialized Financing
advanced 7% yoy to ?628m in 9M16.
In Financial Services, assets managed in Employee Savings Schemes exceeded ?24bn
at September 30, 2016, while the Payments line recorded a 9% increase in
electronic banking transactions relative to 3Q15. The decision to group together
at Natixis all Payments activities carried out on behalf of Groupe BPCE will
enable the business to address European markets and to reap the benefits of new
digital business models with the aim of becoming one of the European leaders in
a market deemed strategic by Groupe BPCE.
Financial Investments
Data excludes exceptional items((1))
In ?m 3Q16 3Q15 3Q16 9M16 9M16
vs. 3Q15 vs. 9M15
----------------------------------------------------------------------------
Net Revenues 137 215 (36)% 475 (26)%
Coface 119 173 (31)% 409 (21)%
Corporate Data Solutions 8 23 (64)% 32 (49)%
Other 10 19 (50)% 34 (38)%
Expenses (151) (171) (12)% (466) (10)%
----------------------------------------------------------------------------
Gross Operating Income (14) 44 9 (93)%
----------------------------------------------------------------------------
Provision for credit losses (7) (6) 4% (31)
----------------------------------------------------------------------------
Pre-tax profit (17) 40 (7)
(1) See note on methodology
On a constant exchange-rate basis, Coface's turnover amounted to ?353m in 3Q16,
down 4% on 3Q15. In current exchange-rate terms, it fell 5% to ?349m during the
same period.
The combined ratio net of reinsurance worked out to 105.4% in 3Q16 vs. 81.6% in
3Q15, and comprised a cost ratio of 33.0% and a loss ratio of 72.4% compared to
corresponding ratios of 28.1% and 53.5%, respectively, in 3Q15.
Coface presented "Fit to Win", its new strategic plan including measures to
improve profitability, on September 22, 2016. Across the cycle, Coface is aiming
for a combined ratio of around 83% and an RoATE of around 8% before capital
optimization.
Revenues from Financial Investments were down 36% yoy in 3Q16, including the
non-core Corporate Data Solutions activity.
Gross operating income came out at -?14m in 3Q16 and ?9m in 9M16.
Appendices
Note on methodology:
The results at 09/30/2016 were examined by the board of directors at their
meeting on 8/11/2016.
Figures at 09/30/2016 are presented in accordance with IAS/IFRS accounting
standards and IFRS Interpretation Committee (IFRIC) rulings as adopted in the
European Union and applicable at this date.
2015 figures are presented pro forma:
1. For the reclassification of the contribution to the Single Resolution Fund
to current profit (previously booked under exceptional items). The
contribution is registered under Corporate Center expenses. The 2015
quarterly series have been restated accordingly.
2. For the transfer of some expenses from Corporate Center to SFS. The 2015
series have been restated accordingly.
The 2015 & 1H16 quarterly series have been restated for the change in CIB
organization announced on March 15 2016. The new presentation of businesses
within CIB mainly takes into account the creation of a new business line: Global
Finance & Investment banking housing all financing businesses (structured &
plain vanilla financing), as well as M&A, Equity Capital Markets, and Debt
Capital Markets.
Changes in rules as of January 1, 2016:
The cost of subordination of Tier 2 debt issued, previously allocated to
Corporate Center, is now reallocated to the business lines based on their
normative capital. Application of an accounting change in 2015 due to the
recognition of tax amortization of goodwill under deferred tax liability in the
Investment Solutions division leading to an increase of the normative tax rate,
and conversely to a decrease of the normative capital allocation.
Business line performances using Basel 3 standards:
* 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 on June 26th, 2013 (including the Danish compromise treatment for
qualified entities).
* Natixis' ROTE is calculated by taking as the numerator net income (group
share) excluding DSN interest expenses on preferred shares after tax. Equity
capital is average shareholders' equity group share as defined by IFRS,
after payout of dividends, excluding average hybrid debt, average intangible
assets and average goodwill.
* Natixis' ROE: results used for calculations are net income (group share),
deducting DSN interest expenses on preferred shares after tax. Equity
capital is average shareholders' equity group share as defined by IFRS,
after payout of dividends, excluding average hybrid debt, and excluding
unrealized or deferred gains and losses recognized in equity (OCI).
* ROE for business lines is calculated based on normative capital to which are
added goodwill and intangible assets for the business line. Normative
capital allocation to Natixis' business lines is carried out on the basis of
10% of their average Basel 3 risk-weighted assets. Business lines benefit
from remuneration of normative capital allocated to them. By convention, the
remuneration rate on normative capital is maintained at 3%.
* Net book value: calculated by taking shareholders' equity group share,
restated for hybrids and capital gains on reclassification of hybrids as
equity instruments. Net tangible book value is adjusted for goodwill
relating to equity affiliates, restated goodwill and intangible assets as
follows:
---------------------
In ?m 09/30/2016
---------------------------------------------------------------
Intangible assets 753
Restatement for Coface minority interest (39)
---------------------------------------------------------------
Restated intangible assets 714
---------------------------------------------------------------
------------------
In ?m 09/30/2016
-----------------------------------------------------------------------------
Goodwill 3,503
Restatement for Coface minority interest (165)
Restatement for Investment Solutions deferred tax liability (499)
-----------------------------------------------------------------------------
Restated goodwill 2,839
-----------------------------------------------------------------------------
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).
Leverage ratio: based on delegated act rules, without phase-in except for DTAs
on tax-loss carryforwards and with the hypothesis of a roll-out for non-eligible
subordinated notes under Basel 3 by eligible notes. Repo transactions with
central counterparties are offset in accordance with IAS 32 rules without
maturity or currency criteria. Leverage ratio disclosed including the effect of
intragroup cancelation - pending ECB authorization.
Exceptional items: figures and comments on this release are based on Natixis and
its businesses' income statements excluding non- operating and/or exceptional
items detailed page 3. Natixis and its businesses' income statements including
these items are available in the appendix of this release.
Restatement for IFRIC 21 impact: the cost/income ratio and the ROE excluding
IFRIC 21 impact calculation take into account as of June 30(th) 2016, half of
the annual duties and levies concerned by this new accounting rule. The impact
for the quarter is calculated by difference with the former quarter.
Earnings capacity: net income (group share) restated for exceptional items and
the IFRIC 21 impact.
Expenses: Sum of operating expenses and Depreciation, amortization and
impairment on property, plant and equipment and intangible assets.
3Q16 results: from data excluding exceptional items((1) )to reported data
+------------+
| |
------------- ----------------------------------------------- | ---------- |
FV Exchange Capital | |
3Q16 excl. Adjustment rate SWL gain | 3Q16 |
in ?m exceptional on own fluctuations Litigation property | reported |
items senior on DSN in disposal | |
debt currencies operations | |
----------------------- ----------------------------------------------- | ---------- |
Net 2,106 (110) (3) (69) | 1,924 |
revenues | |
| |
Expenses (1,447) | (1,447) |
----------------------- ----------------------------------------------- | ---------- |
Gross | |
operating 659 (110) (3) (69) | 477 |
income | |
----------------------- ----------------------------------------------- | ---------- |
Provision | |
for credit (69) | (69) |
losses | |
| |
Associates 4 | 4 |
| |
Gain or | |
loss on 7 97 | 104 |
other | |
assets | |
----------------------- ----------------------------------------------- | ---------- |
Pre-tax 601 (110) (3) (69) 97 | 516 |
profit | |
----------------------- ----------------------------------------------- | ---------- |
Tax (213) 38 1 24 (33) | (184) |
| |
Minority (34) | (34) |
interest | |
----------------------- ----------------------------------------------- | ---------- |
Net income | |
(group 354 (72) (2) (45) 64 | 298 |
share) | |
----------------------- ----------------------------------------------- | ---------- |
| |
+------------+
9M16 results: from data excluding exceptional items((1) )to reported data
+------------+
| |
------------- ---------------------------------------------------------- | ---------- |
9M16 excl. FV Exchange Capital | |
non Adjustment rate SWL gain Impairment | 9M16 |
in ?m exceptional on own fluctuations Litigation property in Coface | reported |
items senior on DSN in disposal goodwill | |
debt currencies operations | |
----------------------- ---------------------------------------------------------- | ---------- |
Net 6,414 (136) (10) (69) | 6,198 |
revenues | |
| |
Expenses (4,574) | (4,574) |
----------------------- ---------------------------------------------------------- | ---------- |
Gross | |
operating 1,839 (136) (10) (69) | 1,624 |
income | |
----------------------- ---------------------------------------------------------- | ---------- |
Provision | |
for credit (245) | (245) |
losses | |
| |
Associates 19 | 19 |
| |
Gain or | |
loss on 67 97 | 164 |
other | |
assets | |
| |
Change in | |
value of 0 (75) | (75) |
goodwill | |
----------------------- ---------------------------------------------------------- | ---------- |
Pre-tax 1,679 (136) (10) (69) 97 (75) | 1,486 |
profit | |
----------------------- ---------------------------------------------------------- | ---------- |
Tax (608) 47 4 24 (33) | (567) |
| |
Minority (84) 44 | (40) |
interest | |
----------------------- ---------------------------------------------------------- | ---------- |
Net income | |
(group 987 (89) (7) (45) 64 (31) | 879 |
share) | |
----------------------- ---------------------------------------------------------- | ---------- |
| |
+------------+
1. See note on methodology
Natixis - Consolidated
--------------------------------------------------------- ------- ----------------- ------
3Q16 9M16
in ?m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 vs. 9M15 9M16 vs.
3Q15 9M15
------------------------------------------------------------------- ------- ----------------- ------
Net 2,190 2,301 1,969 2,244 2,063 2,211 1,924 (2)% 6,459 6,198 (4)%
revenues
Expenses (1,553) (1,431) (1,393) (1,578) (1,605) (1,522) (1,447) 4% (4,377) (4,574) 5%
------------------------------------------------------------------- ------- ----------------- ------
Gross
operating 637 870 576 666 458 689 477 (17)% 2,082 1,624 (22)%
income
------------------------------------------------------------------- ------- ----------------- ------
Provision
for credit (78) (64) (83) (66) (88) (88) (69) (17)% (225) (245) 9%
losses
Associates 9 13 8 16 8 7 4 (42)% 30 19 (37)%
Gain or
loss on 0 (30) 2 (3) 29 31 104 (28) 164
other
assets
Change in
value of 0 0 0 0 0 (75) 0 0 (75)
goodwill
------------------------------------------------------------------- ------- ----------------- ------
Pre-tax 568 789 502 614 407 564 516 3% 1,859 1,486 (20)%
profit
------------------------------------------------------------------- ------- ----------------- ------
Tax (239) (312) (190) (230) (172) (211) (184) (3)% (741) (567) (23)%
Minority (42) (27) (20) (68) (34) 28 (34) (90) (40) (55)%
interest
------------------------------------------------------------------- ------- ----------------- ------
Net income
(group 287 450 291 316 200 381 298 2% 1,028 879 (15)%
share)
------------------------------------------------------------------- ------- ----------------- ------
Natixis - Breakdown by Business division in 3Q16
--------------------------------------------------- -------------
in ?m Investment CIB SFS Financial Corporate Natixis
Solutions Investments Center reported
------------------------------------------------------------------ -------------
Net revenues 804 757 325 137 (100) 1,924
Expenses (558) (468) (215) (151) (55) (1,447)
------------------------------------------------------------------ -------------
Gross operating 246 289 110 (14) (155) 477
income
------------------------------------------------------------------ -------------
Provision for 0 (50) (12) (7) 0 (69)
credit losses
------------------------------------------------------------------ -------------
Net operating 246 239 98 (20) (155) 408
income
------------------------------------------------------------------ -------------
Associates 5 3 0 (3) 0 4
Other items (2) 0 0 7 99 104
------------------------------------------------------------------ -------------
Pre-tax profit 249 242 98 (17) (56) 516
------------------------------------------------------------------ -------------
Tax (184)
Minority interest (34)
---------------------------- -------------
Net income (gs) 298
---------------------------- -------------
IFRIC 21 effects by business line
Effect in Expenses
------------------------------------- ----------
in ?m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16
--------------------------------------------------------------------- ----------
Investment Solutions (10) 3 3 3 (11) 4 4 (3) (4)
CIB (33) 11 11 11 (31) 10 10 (11) (10)
Specialized Financial Services (7) 2 2 2 (7) 2 2 (2) (2)
Financial Investments (2) 1 1 1 (2) 1 1 (1) (1)
Corporate center (33) 11 11 11 (57) 1 28 (11) (28)
--------------------------------------------------------------------- ----------
Total Natixis (86) 29 29 29 (107) 18 45 (29) (45)
--------------------------------------------------------------------- ----------
Effect in Net Revenues
------------------------------------- ----------
in ?m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16
--------------------------------------------------------------------- ----------
Specialized Financial Services (2) 1 1 1 (2) 1 1 (1) (1)
(Leasing)
--------------------------------------------------------------------- ----------
Total Natixis (2) 1 1 1 (2) 1 1 (1) (1)
--------------------------------------------------------------------- ----------
Investment Solutions
------------------------------------------------- ----------------------
3Q16 9M16
in ?m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 vs. 9M15 9M16 vs.
3Q15 9M15
------------------------------------------------------------ ----------------------
Net 823 846 840 1,006 825 832 804 (4)% 2,509 2,460 (2)%
revenues
Asset 639 633 666 817 626 623 609 (9)% 1,938 1,858 (4)%
Management
Private 34 36 34 41 34 33 34 flat 103 101 (2)%
Banking
Insurance 140 156 141 146 167 156 155 10% 438 478 9%
Expenses (583) (576) (569) (648) (590) (579) (558) (2)% (1,728) (1,727) flat
------------------------------------------------------------ ----------------------
Gross
operating 240 270 271 357 234 253 246 (9)% 781 733 (6)%
income
------------------------------------------------------------ ----------------------
Provision
for credit (1) 0 3 1 0 0 0 2 0
losses
------------------------------------------------------------ ----------------------
Net
operating 239 270 274 358 234 253 246 (10)% 784 734 (6)%
income
------------------------------------------------------------ ----------------------
Associates 5 7 4 6 4 2 5 16% 16 11 (33)%
Other items (2) (2) (2) (2) 18 (2) (2) (6) 14
------------------------------------------------------------ ----------------------
Pre-tax 242 275 276 362 256 253 249 (10)% 794 759 (4)%
profit
------------------------------------------------------------ ----------------------
Cost/Income
ratio 70.8% 68.1% 67.7% 64.5% 71.6% 69.6% 69.4% 68.9% 70.2%
Cost/Income
ratio
excluding 69.6% 68.5% 68.1% 64.8% 70.2% 70.0% 69.8% 68.7% 70.0%
IFRIC 21
effect
RWA (Basel 14.7 14.3 14.4 15.3 16.4 17.0 17.3 21% 14.4 17.3 21%
3 - in ?bn)
Normative
capital 3,899 4,170 4,666 4,672 4,350 4,381 4,467 (4)% 4,245 4,399 4%
allocation
(Basel 3)
ROE after
tax (Basel 15.1% 17.2% 14.4% 16.6% 13.9% 14.0% 13.1% 15.5% 13.7%
3)((1))
ROE after
tax (Basel
3) 15.8% 17.0% 14.2% 16.4% 14.5% 13.8% 12.9% 15.6% 13.7%
excluding
IFRIC 21
effect((1))
1. Normative capital allocation methodology based on 10% of the average RWA-
including goodwill and intangibles
Corporate & Investment Banking
------------------------------------------- ------ ----------------- ------
3Q16 9M16
in ?m 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 vs. 9M15 9M16 vs.
3Q15 9M15
------------------------------------------------------ ------ ----------------- ------
Net 806 842 665 742 782 887 757 14% 2,313 2,426 5%
revenues
Global 439 405 266 355 407 507 410 54% 1,110 1,324 19%
Markets
FIC-T 306 251 214 264 291 319 291 36% 771 901 17%
Equity 132 158 93 102 123 154 106 14% 383 384 fla
Unternehmensinformation / Kurzprofil:
Datum: 08.11.2016 - 17:35 Uhr
Sprache: Deutsch
News-ID 505660
Anzahl Zeichen: 65566
contact information:
Town:
Paris
Kategorie:
Business News
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"NATIXIS :THIRD-QUARTER 2016 AND NINE-MONTH 2016 RESULTS"
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