First quarter 2012 results
Natixis continues its adjustment to the new environment, accentuates its commercial momentum and records an improvement in its operating performances versus Q4-11
Satisfactory operating results, with good commercial momentum in the three core businesses
Strong growth in gross operating income1 excluding non-operating items2 vs Q4-11 (+22% to €459m)
Rebound in the net revenues of the core businesses3 (+9% vs Q4-11) in a less volatile market environment in Q1-12
Net income (Group share) excluding non-operating items: €339m, up 19% vs Q4-11 and down 30% vs Q1-11
Reported net income (Group share): €185m, including a negative impact of €155m after tax from non-operating items
Further strengthening of the financial structure and ongoing reduction in risk
Program to reduce the consumption of scarce resources4 largely completed: reductions of €5.2bn in Natixis’ risk-weighted assets and of €6.9bn in CIB and GAPC assets to refinance
Increased Core Tier 1 ratio: 10.6% as of March 31, 2012 (+40 basis points5 vs December 31, 2011, under Basel 2.5)
Commutation agreement signed with MBIA, allowing reductions in risk-weighted assets and equivalent (€4.7bn for Groupe BPCE and €0.7bn after guarantee for Natixis) largely before the end of 2012
Further market-share gains for the core businesses
CIB: satisfactory commercial performances and further strengthening of presence in the primary bond market
Investment Solutions: further robust commercial growth for Asset Management in the United States and the Personal Protection business in Insurance
Specialized Financial Services: continued rollout of product offerings in the BPCE networks
The Board reviewed Natixis’ consolidated results for the first quarter of 2012 on May 9, 2012. The market environment improved during the first quarter of 2012 as a result of action by the ECB and liquidity injections linked to longer-term refinancing operations (LTRO), which significantly narrowed credit spreads and reassured investors.
As of March 31, 2012, the Euro Stoxx 50 index was up 7% compared with December 31, 2011, and the Euro Stoxx Banks index had gained 8%. However, economic conditions remain uncertain, especially in Europe, where sovereign risk persists.
Against this backdrop, Natixis improved its operating performances, while pursuing the implementation of its plan to reduce the consumption of scarce resources (capital and liquidity).
Q1-12 was characterized notably by:
- Further market-share gains for Natixis’ core businesses (CIB, Investment Solutions and SFS) and good commercial momentum in a less volatile market, but what nevertheless remained an uncertain economic environment. The net revenues of the core businesses totaled €1,557 million in Q1-12, an increase of 9% compared with Q4-11.
- Natixis’ net revenues, excluding non-operating items and the P3CI impact, were stable
compared with Q1-11, in the context of an ongoing reduction in liquidity requirements. In Q1-2012, the liquidity requirements of the CIB and GAPC were reduced by €4.5 billion compared with December 31, 2011. On a cumulative basis, the reduction stands at €6.9 billion since September 30, 2011.
- Q1-12 net income (Group share), excluding non-operating items, was €339 million, up 19% compared with Q4-11 (up 34% excluding P3CI) and down 30% compared with the high level reported for Q1-11 (down 21% excluding P3CI).
- Natixis’ solvency continued to improve. As of March 31, 2012, the Basel 2.5 (CRD3) Core Tier 1 ratio was 10.6%, denoting the organic generation of 40 basis points of regulatory capital in Q1-12 (adjusting the ratio as of December 31, 2011 to take into account the impact of the P3CI transaction). Since September 30, 2011, Natixis’ risk-weighted assets excluding the CCIs have been reined in by €5.2 billion (at constant exchange rates and excluding CRD3-related increases), compared with a target reduction of €10 billion by end-2013.
Laurent Mignon, CEO of Natixis, said: “Natixis’ good operating results in the first quarter of 2012 confirm the commercial momentum of our three core businesses in a less volatile market environment. We have continued to reduce, as indicated, our risk-weighted assets and the liquidity requirements of our businesses, further reinforcing our solvency in preparation for the transition to Basel III.”
- Excluding GAPC, income from discontinued operations and restructuring costs. Pro forma, see the methodological note in the appendices
- Details in the appendices
- Core businesses: Corporate and Investment Banking, Investment Solutions, Specialized Financial Services
- Capital and liquidity
- Ratio of 10.2% as of December 31, 2011, factoring in the impact of the P3CI transaction implemented on January 6, 2012