Source - GNW

Paris, May 17, 2018
1Q18 results
New Dimension well embarked with:
Reported revenues up +3% at €2.4bn and reported Net income up +15% at €323m

1Q18 marked by market volatility and
an average -15% depreciation of the US dollar againt the euro vs. 1Q17

SOLid growth and improved profitability across our business lines

underlying net revenues(1) and gOI(1) up +8% and +16%, at constant exchange rate
Businesses' underlying roe(1) improving across the board at 16.9%

AWM - Our resolutely active positioning well fitted to volatile markets

Positive momentum for net inflows at +€6bn, particularly marked across long-term high fee strategies with
Retail & Wholesale clients (+€8.1bn)

Significant increase in net revenues: +20% YoY at constant exchange rate (+10% current)

Significant increase in gross operating income: +48% YoY at constant exchange rate (+34% current)

Fee rate increase in both Europe and North America: 31bps overall in 1Q18 (+3.6bps YoY)

CIB - Dynamic activity levels and value creation thanks to our expertise: underlying RoE(1) 17.2%

Net revenues (excl. CVA/DVA desk) up +5% YoY at constant exchange rate

Global markets: Increase in FICT revenues at constant exchange rate largely offsetting a decrease in Equity revenues compared to a historically high 1Q17

Global finance: Net revenues up +16% YoY at constant exchange rate

Investment banking and M&A: Net revenues up +6% YoY at constant exchange rate (+85% in M&A)

Insurance - Solid growth momentum across business lines

Net revenues up +8% YoY in 1Q18

Life insurance(2): €2.9bn premiums in 1Q18 (+5% YoY) of which 35% in unit-linked products

SFS - Strong development in Payments

Net revenues from SFS up +5% YoY in 1Q18, of which +15% in Payments

Payplug and Dalenys : strong increase in business volumes, up +40% YoY

sustainable value creation, financial strength and strong ability to
generate capital

1Q18 underlying net income(1) up +15% YoY to €351m

Underlying RoTE(1) improvement to 15.4% in 1Q18 (+290bps vs. 1Q17)

Basel 3 FL CET1 ratio(3) at 10.7% as at March 31, 2018, including the IFRS 9 FTA of -10bps

~45bps of organic capital generation in 1Q18 (excluding IFRIC 21 and exceptional items)

1Q18: A Promising start to New Dimension

Laurent Mignon, Natixis Chief Executive Officer, said: "Natixis delivered good performances in the first quarter of 2018 with a solid growth momentum and improving profitability across all business lines. These results are fully consistent with the ambitions of our New Dimension strategic plan and demonstrate that the businesses we have chosen, well diversified and creating value, allow Natixis to perform well amidst volatile markets. Over the last 9 years, such a choice of sustainable growth across these businesses has made Natixis what it is today: a solid and growing company dedicated to its clients and the broader economy. I would like to personally thank all our clients for their trust and confidence and to whom Natixis will keep bringing solutions to support their projects. I would also like to thank all the teams for their hard work and commitment over the last 9 years - they can be proud of what they've achieved. New Dimension is now well embarked and I am convinced that François Riahi, the senior management team and all employees will keep on successfully implementing the plan."

(1)   Excluding exceptional items. Excluding exceptional items and the IFRIC 21 impact for cost/income ratio, RoE, and RoTE
(2)   Excluding reinsurance agreement with CNP
(3)   Based on CRR-CRD4 rules published on June 26, 2013, including the Danish compromise - no phase-in


1Q18rEsults

The Board of Directors approved Natixis' accounts for the first quarter of 2018 on May 17, 2018.



€m 1Q18
reported
1Q17
reported
 1Q18
o/w
underlying
1Q18
o/w
exceptionals
 1Q18
 vs. 1Q17
reported
1Q18
vs. 1Q17
reported
constant FX
 1Q18
vs. 1Q17 underlying
1Q18
vs. 1Q17
underlying
constant FX
Net revenues 2,4122,347 2,441(28) 3%7% 4%8%
o/w businesses 2,2812,209 2,281 3%8% 3%8%
Expenses   (1,795) (1,771)   (1,778) (16)   1%5% 2%5%
o/w expenses excluding SRF (1,632)(1,643) (1,616)(16) (1)%3% 0%4%
Gross operating income   618576 663(45) 7%16% 8%16%
Provision for credit losses   (43) (70)   (43)    
Net operating income   574506 619(45) 14%14%
Associates and other items   13 17   13       
Pre-tax profit   587523 632(45) 12%13%
Income tax   (204) (214)   (219) 15     
Minority interests   (60) (28)   (61) 1     
Net income - group share 323280 351(28) 15%15%

Excluding exceptional items1Q181Q174Q17
€mvs. 4Q16
Net income (gs) - underlying 351306 15%
Restatement of IFRIC 21 impact 151 130   
Net income (gs) - underlying excl. IFRIC 21 impact502436 15%

EXCEPTIONALS (€m)   1Q181Q17
Exchange rate fluctuations on DSN in currencies (Net revenues)Corporate center (28) (11)
Transformation & Business Efficiency Investment costs (Expenses)Business lines & Corporate center (14)(1) (9)
Fit to Win investments & restructuring expenses (Expenses)Corporate center (2)  
Exceptional additional Corporate Social Solidarity Contribution
 resulting from agreement with CNP (Expenses)
Insurance   (19)
Total impact on income tax   15 12
Total Impact on minority interests   1  
Total impact on Net income - group share   (28)(26)
  1. o/w €10m in the Corporate center in 1Q18
    NATIXIS   AM   CIB
                                 
                                 
€m  1Q181Q18 
vs. 1Q17
FX
impact
1Q18 
vs. 1Q17
constant FX
 1Q181Q18 
vs. 1Q17
FX
impact
1Q18 
vs. 1Q17
constant FX
  1Q181Q18 
vs. 1Q17
FX
impact
1Q18 
vs. 1Q17
constant FX
 
Net revenues 2,4414%(102)8% 73910%(58)21%   938(3)%(44)1% 
Expenses   (1,778) 2% 57 5%  (491) 1% 40 11%   (562) (1)% 17 2% 
Gross operating income 6638%(45)16% 24833%(18)47%   376(7)%(27)0% 
                                 

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p2)

Natixis

Natixis reported net revenues at €2.4bn in 1Q18, up +4% YoY and +8% at constant exchange rate. Net revenues generated by the businesses improved +3% YoY to reach €2.3bn (+8% at constant exchange rate), including significant rises from Asset & Wealth Management (+20% at constant exchange rate), Insurance (+8%) and Coface (+29%).

Expenses came out at €1.8bn in 1Q18, up +2% YoY but flat excluding the SRF contribution (€162m in 1Q18 vs. €128m in 1Q17). This translates into a 2pp positive jaws effect (4pp excluding SRF) and a 190bps YoY improvement in the underlying cost/income ratio(1) at 66.0%. Gross operating income, at €663m, rose +16% YoY at constant exchange rate (+8% current) vs. 1Q17. Foreign exchange rate moves (EUR/USD averaged 1.23 in 1Q18 vs. 1.07 in 1Q17) resulted in a €45m negative impact on Natixis' GOI in 1Q18.

The cost of risk, at €43m in 1Q18, was significantly down compared to a 1Q17 at €70m. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses' cost of risk worked out to 19bps in 1Q18. Pre-tax profit rose +13% to €632m in 1Q18 vs. 1Q17.

The 1Q18 tax rate reached ~35% (~41% in 1Q17), the first quarter being impacted by IFRIC 21 and the non-deductibility of the SRF and French systemic risk banking tax contributions. The tax rate guidance for 2018 is maintained at around 30%.

Net income (group share), adjusted for IFRIC 21 and excluding exceptional items, came out at €502m in 1Q18, up +15% YoY. Accounting for exceptional items (-€28m impact net of tax in 1Q18) and IFRIC 21 (-€151m impact in 1Q18), the reported net income (group share) increased +15% YoY at €323m in 1Q18.

Natixis delivered a 15.4% underlying RoTE(1) excluding IFRIC 21 impact and the businesses' underlying RoE(1) reached 16.9%, up +290bps and +190bps respectively vs. 1Q17.

Asset & Wealth Management

€m1Q18 1Q17 1Q18
vs. 1Q17
constant
FX
Net revenues77770410%20%
  o/w Asset management73967110%21%
  o/w Wealth management373312%12%
Expenses (528) (519) 2%10%
Gross operating income24818634%48%
Provision for credit losses 0 0    
Associates and other items 0 9    
Pre-tax profit24819528%40%
    
Cost/income ratio(1)67.5%73.2%(5.7)pp 
RoE after tax(1)14.0%11.5%+2.5pp 

1Q18 net revenues from Asset & Wealth Management (AWM) were up a significant +20% YoY at constant exchange rate (+10% current). Net revenues from Asset management reached €739m in 1Q18, up +21% YoY at constant exchange rate, including rises of +17% (+2% current) to €397m in North America and +25% to €228m in Europe. Net revenues from Wealth management were up +12% YoY.

In Asset management, 1Q18 margins excluding performance fees (€65m in 1Q18 vs. €26m in 1Q17) improved +3.6bps YoY to 31bps overall and rose +2.8bps to 15bps in Europe and +1.5bps to 40bps in North America.

Asset management attracted +€6bn of net inflows overall during the quarter, including +€8.1bn of Retail and Wholesale LT net inflows driven by various high fee strategies (average fee rate >60bps(2)) at Harris Associates, Loomis Sayles, H2O, Dorval and DNCA. On the other hand, this dynamic came together with -€2.1bn of Institutional LT net outflows due to the redemption of 3 institutional mandates for ~€5.4bn of AuM, although at a low fee rate of (6bps average). AuM reached €818bn at end-March 2018, of which €406bn in Europe and €399bn in North America. AuM growth this quarter was driven by the combination of net inflows, a -€8bn negative market effect and a -€11bn FX effect. Average AuM at constant exchange rate increased by +10% YoY in Europe (excl. Life insurance) and +14% YoY in North America. Wealth management AuM reached €31.5bn(3).

AWM delivered a +250bps YoY increase in underlying RoE(1) to 14.0% in 1Q18, experienced a significant positive jaws effect, both at constant (10pp) and current (8pp) exchange rate and an underlying cost/income ratio(1) down -570bps.

  1. See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE
  2. Only for +€7.1bn raised by the platforms out of the +€8.1bn of R&W, the rest being raised by the affiliates directly (mainly DNCA in France & Italy and H20)
  3. Including Vega IM, 60% owned by Natixis Wealth Management

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p2)

Corporate & Investment Banking

€m1Q181Q171Q18
vs. 1Q17
constant
FX
Net revenues938971(3)%1%
Net revenues excl. CVA/DVA9379350%5%
     o/w Global markets526567(7)%(4)%
     o/w Global finance 3343127%16%
 o/w IB et M&A83812%6%
Expenses (562) (566) (1)%2%
Gross operating income376404(7)%0%
Provision for credit losses (29) (29)
Associates and other items 6 3   
Pre-tax profit354378(6)%
 
Cost/income ratio(1)57.5%55.5%+2.0pp
RoE after tax(1)17.2%15.7%+1.5pp

Net revenues from Corporate & Investment Banking excluding the CVA/DVA desk at €937m were up +5% at constant exchange rate (flat at current) vs. a strong 1Q17, primarily supported by Global finance (+16%) and M&A (+85%).

Global markets revenues were down -4% YoY at constant exchange rate in 1Q18 vs. a historically high 1Q17. At constant exchange rate, FICT revenues were up +1% YoY (-3% current), driven by Rates offsetting lower client activity in Credit and FX. Despite revenues down -15% YoY at constant exchange rate (-17% current), Equity experienced a sound commercial momentum and new clients acquisition in 1Q18 though the closure of the US and UK cash equity desks following the Natixis/Oddo-BHF partnership announcement notably offsets.

Global finance revenues rose +16% YoY at constant exchange rate in 1Q18 (+7% current), driven by Real assets (+76%) and Energy & natural resources (+13%). New loan production was strong (+25% YoY in 1Q18), especially in US Real estate and Infrastructure. Revenues generated by Investment banking and M&A reached €83m in 1Q18, up +6% YoY at constant exchange rate (+2% current).

CIB delivered a +150bps YoY increase in underlying RoE(1) to 17.2% in 1Q18.

Natixis expands its M&A advisory footprint through strategic investments in Fenchurch Advisory Partners in the UK, Vermilion Partners in China, and Clipperton in France (acquisitions to be closed in 2Q18 of which Vermilion already closed in May).

Insurance

€m1Q18 1Q17 1Q18
vs. 1Q17
Net revenues2041898%
Expenses (118) (109) 8%
Gross operating income86817%
Provision for credit losses 0 0  
Associates and other items 3 4  
Pre-tax profit89855%
   
Cost/income ratio(1)50.9%51.7%(0.8)pp
RoE after tax(1)33.1%27.5%+5.6pp

Net revenues from Insurance increased +8% YoY to reach €204m in 1Q18. Expenses rose +8% YoY to €118m, including a ~€5m increase in the Corporate Social Solidarity Contribution (C3S) which calculation is based on previous year's activity levels (2017 benefiting in full from the take-over of the new life insurance business for the Caisses d'Epargne network vs. 2016). Underlying expenses were up +5% YoY, leading to a 3pp positive jaws effect.

Insurance delivered a +560bps YoY increase in underlying RoE(1) to 33.1% in 1Q18.

Global turnover(2) reached €3.5bn in 1Q18 (+6% YoY), including rises of +6% in Life/Personal protection and of +9% in Property & Casualty. Life insurance net inflows(2) reached €2.0bn in 1Q18, up +7% YoY, o/w 45% in UL products (35% of gross inflows. Life insurance AuM reached €57bn at end-March 2018, of which 23% in the form of unit-linked products. The P&C combined ratio worked out to 92.3% in 1Q18, largely stable vs. 1Q17.

  1. See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE
  2. Excluding the reinsurance agreement with CNP

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p2)

Specialized Financial Services

€m1Q18 1Q17 1Q18
vs. 1Q17
Net revenues3623445%
   Specialized financing2232192%
  Payments938115%
  Financial services46444%
Expenses (244) (232) 5%
Gross operating income1181126%
Provision for credit losses (9) (21)
Associates and other items 0 0  
Pre-tax profit1099120%
 
Cost/income ratio(1)65.5%65.5%0.0pp
RoE after tax(1)14.6%13.6%+1.0pp

Net revenues from Specialized Financial Services were up +5% YoY in 1Q18. This overall increase included growth rates of +2% for Specialized financing, driven by Leasing (+5%), Factoring (+2%) and Consumer financing (+2%), of +15% for Payments and of +4% for Financial services (of which +7% for Employee savings plans).

Within Payments, business volumes generated by Natixis Payment Solutions' recent acquisitions (Dalenys and PayPlug) in Merchant Solutions increased +40% YoY in 1Q18. In the meantime, Prepaid & Managed Solutions revenues grew +26% YoY and the number of card transactions processed in the Services & Processing activity was up +11% YoY in 1Q18. 70% of 1Q18 Payments revenues were realized with Groupe BPCE networks.

SFS expenses increased +5% YoY in 1Q18 but were actually flat at constant scope. The 1Q18 underlying cost/income ratio(1) excluding Payments acquisitions worked out to 64.5%.

The cost of risk materially improved QoQ and YoY to reach €9m in 1Q18.

SFS delivered a +100bps YoY increase in underlying RoE(1) to 14.6% in 1Q18.

Corporate Center

€m1Q18 1Q17 1Q18
vs. 1Q17
Net revenues1591497%
    Coface 17713729%
    Others(17)12
Expenses (326) (317) 3%
    Coface (120)(122)(2)%
    SRF(162)(128)
    Others(44)(67)(34)%
Gross operating income(167)(168)(1)%
Provision for credit losses (5) (20)
Associates and other items 4 1  
Pre-tax profit(168)(187)(10)%

Corporate Center revenues reached €159m in 1Q18, a +7% YoY increase, of which €177m came from Coface (+29% YoY).

Coface's turnover reached €344m in 1Q18, up +2% YoY at constant scope. The combined ratio net of reinsurance improved markedly to 72.5% (92.0% in 1Q17), on the back of reduced claims (loss ratio at 39.8% well below through the cycle average and benefiting from favorable trends in Asia and North America) and a strict cost control as well as higher reinsurance commissions (cost ratio 32.7%).

Corporate Center expenses excluding Coface and the SRF dropped -34% YoYin 1Q18, positively contributing to New Dimension objectives. The SRF final contribution is up €34m YoY.

(1)  See note on methodology and excluding IFRIC 21 impact on the calculation of the cost/income ratio and RoE

Financial structure

Basel 3 fully-loaded
Natixis' Basel 3 fully-loaded CET1 ratio(1) worked out to 10.7% as at March 31, 2018.

  • Basel 3 fully-loaded CET1 capital amounted to €11.7bn
  • Basel 3 fully-loaded RWA amounted to €109.5bn

Based on a Basel 3 fully-loaded CET1 ratio(1) of 10.6% as at December 31, 2017, the respective impacts of 1Q18 were as follows:

  • IFRS 9 First Time Application: -10bps (€127.7m impact on shareholders' equity)
  • Effect of allocating net income (group share) to retained earnings in 1Q18: +29bps
  • Accrued dividend for 1Q18: -16bps
  • RWA and other effects: -1bp

Pro-forma for acquisitions (Fenchurch Advisory Partners, Vermilion Partners, Clipperton, Comitéo) and disposals (Selection 1818, Axeltis) already announced, as well as the irrevocable payment commitments deduction from capital (IPC), Natixis' Basel 3 fully-loaded CET1 ratio(1) stands at 10.5% as at March 31, 2018.

Basel 3 phased-in, regulatory ratios
As at March 31, 2018, Natixis' Basel 3 regulatory (phased-in) capital ratios stood at 10.8% for the CET1, 12.7% for the Tier 1 and 14.8% for the total solvency ratio.

  • Core Tier 1 capital stood at €11.8bn and Tier 1 capital at €13.9bn.
  • Natixis' RWA totalled €109.5bn, breakdown as follows:
    • Credit risk: €76.3bn
    • Counterparty risk: €6.8bn
    • CVA risk: €1.6bn
    • Market risk: €10.0bn
    • Operational risk: €14.8bn

Book value per share
Equity capital (group share) totalled €19.8bn as at March 31, 2018, of which €2.1bn in the form of hybrid securities (DSNs) recognized in equity capital at fair value (excluding capital gain following reclassification of hybrids).

Natixis' book value per share stood at €5.22 as at March 31, 2018 (including planned dividend for 2017) based on 3,136,410,049 shares excluding treasury shares (the total number of shares being 3,138,305,787). The tangible book value per share (after deducting goodwill and intangible assets) was €4.01.

Leverage ratio

The leverage ratio(2) worked out to 4.1% as at March 31, 2018.

Overall capital adequacy ratio
As at March 31, 2018, the financial conglomerate's capital excess was estimated at around €2.9bn.

  1. Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in
  2. See note on methodology

Appendices

Note on methodology:

The results at 31/03/2018 were examined by the board of directors at their meeting on 17/05/2018.
Figures at 31/03/2018 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.

In view of the new strategic plan New dimension, the 2017 quarterly series have been restated for the following changes in business lines organization and in standards for implementation in 4Q17 as if these changes had occurred on 1st January 2017.

The new businesses organization mainly takes into account:

  • The split of Investment Solutions into two new divisions: Insurance and Asset & Wealth Management(1)
  • Within CIB:
    • Global finance and Investment banking(2) are now two separate business lines
    • Creation of Global Securities & Financing (GSF), a joint-venture between FIC and Equity derivatives. The joint-venture includes Securities Financing Group (SFG, previously in FIC) and Equity Finance (previously in Equity). Revenues of GSF are equally split between Equity & FIC
    • Transfer of short term treasury activities run by Treasury & collateral management department from FIC-T in CIB to Financial Management Division in 04/01/2017 in accordance with the French banking law. To ensure comparability, in this presentation CIB refers to CIB including Treasury & collateral management
  • Within SFS, the Payments division is split out of Financial services and reported separately within the SFS business line
  • The removal of the Financial investments division and its inclusion within the Corporate center

The following changes in standards have been included:

  • Increase in capital allocation to our business lines from 10% to 10.5% of the average Basel 3 risk weighted assets
  • Reduction in normative capital remuneration rate to 2% (compared to 3% previously)

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 10.5% 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 2%.
  1. Asset management includes Private equity (2) including M&A business

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 €m31/03/2018
Intangible assets 729
Restatement for Coface minority interest & others (37)
Restated intangible assets692

In €m31/03/2018
Goodwill 3,531
Restatement for Coface minority interests (164)
Restatement for AWM deferred tax liability & others (274)
Restated goodwill3,093

Own senior debt fair-value adjustment: calculated using a discounted cash-flow model, contract by contract, including parameters such as swap curves and revaluation spread (based on the BPCE reoffer curve). Adoption of IFRS 9 standards, on November 22, 2016, authorizing the early application of provisions relating to own credit risk as of FY2016 closing. All impacts since the beginning of the financial year 2016 are recognized in equity, even those that had impacted the income statement in the interim financial statements for March, June and September 2016

Leverage ratio: based on delegated act rules, without phase-in 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 press release are based on Natixis and its businesses' income statements excluding non-operating and/or exceptional items detailed page 2. Figures and comments that are referred to as 'underlying' exclude such exceptional items. Natixis and its businesses' income statements including these items are available in the appendix of this press release.

Restatement for IFRIC 21 impact: The cost/income ratio, the RoE and the RoTfE excluding IFRIC 21 impact calculation takes into by quarter one fourth of the annual duties and levies concerned by this new accounting rule.

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.


Natixis - Consolidated P&L

€m1Q172Q173Q174Q171Q18 1Q18
vs. 1Q17
Net revenues2,3472,4102,2052,5062,412    3%
Expenses (1,771) (1,594) (1,530) (1,737) (1,795)    1%
Gross operating income 576815674769618    7%
Provision for credit losses (70) (67) (55) (65) (43)   (38)%
Associates 7 6 5 8 7  
Gain or loss on other assets 9 18 (1) 22 6  
Change in value of goodwill 0 0 0 0 0    
Pre-tax profit523772623733587    12%
Tax (214) (255) (181) (139) (204)  
Minority interests (28) (29) (59) (76) (60)    
Net income (group share) 280487383518323    15%

Natixis - IFRS 9 Balance sheet

Assets (in €bn) 31/03/201801/01/2018
Cash and balances with central banks 20.9 36.9
Financial assets at fair value through profit and loss(1) 219.0 225.7
Financial assets at fair value through Equity 10.0 10.0
Loans and receivables(1) 138.2 125.1
Debt instruments at amortized cost 1.3 1.0
Insurance assets 98.6 96.9
Accruals and other assets 18.6 18.5
Investments in associates 0.7 0.7
Tangible and intangible assets 1.6 1.6
Goodwill 3.5 3.6
Total512.4520.0

Liabilities and equity (in €bn) 31/03/201801/01/2018
Due to central banks 0.0 0.0
Financial liabilities at fair value through profit and loss(1)  212.1 221.3
Customer deposits and deposits from financial institutions(1) 130.6 135.3
Debt securities 36.2 32.6
Accruals and other liabilities 18.8 17.8
Insurance liabilities 88.2 86.5
Contingency reserves 1.8 1.9
Subordinated debt 3.7 3.7
Equity attributable to equity holders of the parent 19.8 19.7
Minority interests 1.2 1.2
Total512.4520.0

(1) Including deposit and margin call - classification under review

Natixis - 1Q18 P&L by business line

€mAWMCIBInsuranceSFSCorporate1Q18
Centerreported
Net revenues7779382043621312,412
Expenses (529) (563) (118) (245) (339) (1,795)
Gross operating income 24837586117(208)618
Provision for credit losses 0 (29) 0 (9) (5) (43)
Net operating income 24834686108(213)574
Associates and other items 0 6 3 0 4 13
Pre-tax profit24835289108(209)587
        Tax (204)
Minority interests (60)
Net income (gs) 323

Asset & Wealth Management

€m1Q172Q173Q174Q171Q181Q18
vs. 1Q17
Net revenues704743766899777 10%
Asset management (1)671713730857739 10%
Wealth management 3330364237 12%
Expenses (519) (521) (528) (610) (529)  2%
Gross operating income 186222239289248 34%
Provision for credit losses 0 0 0 0 0
Net operating income 186223239289248 34%
Associates 0 0 0 1 0
Other items 9 0 (1) 2 0  
Pre-tax profit195222238291248 27%
Cost/Income ratio 73.6% 70.1% 68.8% 67.9% 68.1%  
Cost/Income ratio excluding IFRIC 21 effect 73.2% 70.2% 69.0% 68.0% 67.5%  
RWA (Basel 3 - in €bn) 10.6 10.2 10.2 11.7 11.5  8%
Normative capital allocation (Basel 3) 3,874 3,828 3,715 3,676 4,077  5%
RoE after tax (Basel 3) (2) 11.3% 12.5% 13.5% 14.0% 13.7%  
RoE after tax (Basel 3) excluding IFRIC 21 effect (2) 11.5% 12.4% 13.4% 13.9% 14.0%  
  1. Asset management including Private equity
  2. Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Corporate & Investment Banking

€m1Q172Q173Q174Q171Q181Q18
vs. 1Q17
Net revenues9711,019775817938(3)%
  Global markets603547363408528(12)%
     FIC-T 388 389 253 288 378 (3)%
     Equity 179 172 103 144 148 (17)%
     CVA/DVA desk 35 (13) 7 (24) 1
  Global finance312343315358334 7%
  Investment banking (1)81122857483 2%
  Other (25)712(24)(7)
Expenses (566) (555) (506) (567) (563) 0%
Gross operating income 404464269249375(7)%
Provision for credit losses (29) (48) (16) (21) (29) (1)%
Net operating income 375416253228346(8)%
Associates 3 3 3 3 4  
Other items 0 0 0 18 3  
Pre-tax profit378418255249352(7)%
Cost/Income ratio 58.3% 54.4% 65.3% 69.5% 60.1%  
Cost/Income ratio excluding IFRIC 21 effect 55.5% 55.4% 66.5% 70.6% 57.7%  
RWA (Basel 3 - in €bn) 64.4 61.3 60.4 59.0 58.9 (9)%
Normative capital allocation (Basel 3) 7,136 6,963 6,623 6,519 6,365 (11)%
RoE after tax (Basel 3)(2) 14.7% 16.5% 10.5% 11.8% 16.1%
RoE after tax (Basel 3) excluding IFRIC 21 effect(2) 15.7% 16.1% 10.2% 11.4% 17.2%  

(1)   Including M&A
(2)   Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles


Insurance

€m1Q172Q173Q174Q171Q181Q18
vs. 1Q17
Net revenues189179176190204 8%
Expenses (129) (102) (99) (109) (118) (8)%
Gross operating income 6077778086 42%
Provision for credit losses 0 0 0 0 0  
Net operating income 6077778086 42%
Associates 4 3 2 4 3
Other items 0 0 0 0 0  
Pre-tax profit6580798589 37%
Cost/Income ratio 68.1% 56.9% 56.2% 57.5% 58.0%  
Cost/Income ratio excluding IFRIC 21 effect 54.9% 61.5% 60.9% 61.9% 51.1%  
RWA (Basel 3 - in €bn) 7.4 7.2 7.4 7.2 7.3 0%
Normative capital allocation (Basel 3) 857 871 849 875 853 0%
RoE after tax (Basel 3)(1) 17.7% 21.6% 22.3% 26.7% 28.6%
RoE after tax (Basel 3) excluding IFRIC 21 effect(1) 25.6% 19.0% 19.6% 24.2% 33.0%  
  1. Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Specialized Financial Services

€m1Q172Q173Q174Q171Q181Q18
vs. 1Q17
Net revenues344347341350362 5%
Specialized financing 219218215210223 2%
 Factoring3939384240 2%
Sureties & financial guarantees 5546524754(2)%
Leasing5461524957 5%
Consumer financing 6665676767 2%
Film industry financing 56566 7%
Payments8183838993 15%
Financial services4446435146 4%
Employee savings  plans2122212623 7%
Securities services2323222523 2%
Expenses (233) (228) (229) (249) (245)  5%
Gross operating income 112118112101117 5%
Provision for credit losses (21) (14) (13) (24) (9) (56)%
Net operating income 901049977108 19%
Associates 0 0 0 0 0  
Other items 0 0 0 0 0  
Pre-tax profit 901049977108 19%
Cost/Income ratio 67.6% 65.8% 67.1% 71.2% 67.7%  
Cost/Income ratio excluding IFRIC 21 effect 65.6% 66.5% 67.7% 71.8% 65.9%  
RWA (Basel 3 - in €bn) 15.2 16.0 15.7 16.7 17.5  15%
Normative capital allocation (Basel 3) 1,961 1,889 1,907 1,958 2,145  9%
RoE after tax (Basel 3)(1) 12.6% 15.1% 14.0% 10.7% 13.5%  
RoE after tax (Basel 3) excluding IFRIC 21 effect(1) 13.6% 14.7% 13.6% 10.3% 14.4%  
  1. Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

Corporate Center

€m1Q172Q173Q174Q171Q181Q18
vs. 1Q17
Net revenues138122146251131(5)%
Coface137152167167177 29%
Others1(30)(21)84(45) 
Expenses (324) (189) (169) (201) (339)  5%
Coface(122)(128)(119)(114)(122)0%
SRF(128)600(162) 27%
Others(74)(66)(50)(87)(54)(27)%
Gross operating income (186)(67)(23)50(208) 12%
Provision for credit losses (20) (5) (26) (20) (5)
Net operating income (206)(72)(49)30(213) 3%
Associates 0 0 0 0 0
Other items 1 18 0 2 3  
Pre-tax profit (205)(54)(49)32(209) 2%

1Q18 results: from data excluding non-operating items to reported data

                   
€m 1Q18 excl.
exceptional

 items
 Exchange rate
fluctuations on
DSN in currencies
Transformation
 & Business

Efficiency
investment
 costs
Fit to Win
investments &
 restructuring
expenses
  1Q18
reported
 
Net revenues2,441 (28)    2,412 
Expenses (1,778)     (14) (2)     (1,795)  
Gross operating income 663 (28)(14)(2)  618 
Provision for credit losses (43)             (43)  
Associates 7            7  
Gain or loss on other assets 6            6  
Pre-tax profit632 (28)(14)(2)  587 
Tax (219)   10 5 1     (204)  
Minority interests (61)       1     (60)  
Net income (group share)351 (18)(9)(1)  323 
          


Regulatory capital in 1Q18 & financial structure - Basel 3 phased-in, €bn

Shareholder's equity group share19.8
Goodwill & intangibles (3.6)
Dividend (1.3)
Other deductions (0.8)
Hybrids restatement in Tier 1(1) (2.2)
CET1 Capital11.8
Additional T1 2.0
Tier 1 Capital13.9
Tier 2 Capital 2.3
Total prudential Capital16.2
(1) Including capital gain following reclassification of hybrids as equity instruments

1Q172Q173Q174Q171Q18
CET1 ratio 10.9% 11.2% 11.4%  10.8%10.8%
Tier 1 ratio 12.8% 13.1% 13.1%  12.9%12.7%
Solvency ratio 15.1% 15.4% 15.3%  14.9%14.8%
Tier 1 capital 14.6 14.7 14.6  14.313.9
RWA EoP 114.1 112.6 111.7  110.7109.5

IFRIC 21 effects by business line

Effect in Expenses
         
€m1Q172Q173Q174Q171Q18
AWM (3) 1 1 1 (4)
CIB (28) 9 9 9 (22)
Insurance    (25)(1)    8(2)   8(2)   8(2) (14)
SFS (6) 2 2 2 (6)
Corporate center (94) 34 30 30 (119)
Total Natixis(156)555050(166)
Effect in Net revenues
         
€m1Q172Q173Q174Q171Q18
SFS (Leasing) (1) 0 0 0 (1)
Total Natixis(1)000(1)
  1. -€10.9m in underlying expenses and -€14.1m in exceptional expenses linked to the additional Corporate Social Solidarity Contribution resulting from agreement with CNP
  2. €3.6m in underlying expenses and €4.7m in exceptional expenses linked to the additional Corporate Social Solidarity Contribution resulting from agreement with CNP

Normative capital allocation and RWA breakdown - 31/03/2018

€bnRWA
EoP
in % of
 the total
Average goodwill & intangiblesAverage capital allocationRoE
 after tax
1Q18
AWM 11.5 12% 2.9 4.1 13.7%
CIB 58.9 62% 0.2 6.4 16.1%
Insurance 7.3 8% 0.1 0.9 28.6%
SFS 17.5 18% 0.4 2.1 13.5%
Total (excl. Corporat center)95.2100%3.513.4 

RWA breakdown (€bn)31/03/2018
Credit risk76.3
Internal approach55.4
Standard approach20.9
Counterparty risk6.8
Internal approach5.9
Standard approach0.9
Market risk10.0
Internal approach4.2
Standard approach5.8
CVA1.6
Operational risk - Standard approach14.8
Total RWA109.5

Fully-loaded leverage ratio
According to the rules of the Delegated Act published by the European Commission on October 10, 2014, including the effect of intragroup cancelation - pending ECB authorization

€bn31/03/2018
Tier 1 capital(1)13.7
Total prudential balance sheet 415.5
Adjustment on derivatives (41.3)
Adjustment on repos(2) (28.2)
Other exposures to affiliates (43.5)
Off balance sheet commitments 36.6
Regulatory adjustments (4.6)
Total leverage exposures334.4
Leverage ratio4.1%

(1) Without phase-in - supposing replacement of existing subordinated issuances when they become ineligible
(2) Repos with clearing houses cleared according to IAS32 standard, without maturity or currency criteria

Net book value as of March 31, 2018

€bn31/03/2018
Shareholders' equity (group share)19.8
Deduction of hybrid capital instruments (2.1)
Deduction of gain on hybrid instruments (0.1)
Distribution (1.2)
Net book value16.4
Restated intangible assets(1) 0.7
Restated goodwill(1) 3.1
Net tangible book value(2)12.6
€ 
Net book value per share5.22
Net tangible book value per share4.01

(1) See note on methodology (2) Net tangible book value = Book value - goodwill - intangible assets

1Q18 Earnings per share

€m31/03/2018
Net income (gs) 323
DSN interest expenses on preferred shares after tax (25)
Net income attributable to shareholders297
Earnings per share (€)0.09

Number of shares as of March 31, 2018

Average number of shares over the period, excluding treasury shares 3,136,293,208
Number of shares, excluding treasury shares, EoP 3,136,410,049
Number of treasury shares, EoP 1,895,738

Net income attributable to shareholders

€m1Q18
 Net income (gs) 323
 DSN interest expenses on preferred shares after tax (25)
 RoE & RoTE numerator297

Natixis RoTE(1)

€m 31/03/2018
Shareholders' equity (group share) 19,790
DSN deduction (2,251)
Dividends provision (1,339)
Intangible assets (692)
Goodwill (3,096)
RoTE Equity end of period 12,411
Average RoTE equity (1Q18) 12,410
1Q18 RoTE annualized9.6%

Natixis RoE(1)

€m 31/03/2018
Shareholders' equity (group share) 19,790
DSN deduction (2,251)
Dividends provision (1,339)
Exclusion of unrealized or deferred gains and losses recognized in equity (OCI) (383)
RoE Equity end of period 15,816
Average RoE equity (1Q18) 15,780
1Q18 RoE annualized7.5%
  1. See note on methodology

Doubtful loans(1)

€bn 31/03/2017
Pro forma
IFRS9
31/03/2018
Under
IFRS9
Provisionable commitments(2) 2.7 2.3
Provisionable commitments / Gross debt 2.2% 1.7%
Stock of provisions(3)  2.0 1.9
Stock of provisions / Provisionable commitments 73% 81%

(1)   On-balance sheet, excluding repos, net of collateral (2) Net commitments include properties that are underlying leasing contracts and for which Natixis is the owner as well as factored loans for which the chargeable counterparties are not in default. (3) Specific and portfolio-based provisions


Disclaimer

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 Insurance 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 local markets; 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.

Included data in this press release have not been audited.

NATIXIS financial disclosures for the first quarter 2018 are contained in this press release and in the presentation attached herewith, available online at www.natixis.com in the "Investors & shareholders" section.

The conference call to discuss the results, scheduled for Friday May18th, 2018 at 9:00 a.m. CET, will be webcast live on www.natixis.com (on the "Investors & shareholders" page).

Contacts:

Investor Relations: [email protected]   Press Relations: [email protected]  
         
Damien Souchet T + 33 1 58 55 41 10   Elisabeth de Gaulle T + 33 1 58 19 28 09
Souad Ed Diaz T + 33 1 58 32 68 11   Olivier Delahousse T + 33 1 58 55 04 47
      Sonia Dilouya T + 33 1 58 32 01 03

www.natixis.com

  





This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: NATIXIS via Globenewswire