First-Quarter 2016 Results

Solid resilience in 1Q16

• Core businesses⁽²⁾: net revenues flat year-on-year at close to €2bn and a limited 4% pre-tax profit decline over the same period
  • • Very sound momentum in Insurance with net revenues up 19% and in Specialized Financial Services, where revenues expanded 6% overall and 11% in Specialized Financing
    • Improved margins and limited net outflows of €1bn in Asset Management
    • Good resilience in Corporate & Investment Banking key franchises, with revenues down only 3% year-on-year. Further solid momentum in the Equity segment   
• Operating expenses virtually flat vs. 1Q15 (+1%), excluding the increase in estimated contribution to the Single Resolution Fund
• Cost of risk for core businesses almost stable year-on-year : 45bps in 1Q16 and 35bps (12 months rolling)
• Net income (gs) reported of €200m including non-operating items and IFRIC 21 impact
• ROE for core businesses excluding IFRIC 21 of 12.1%

scarce resources and balance sheet management in strict accordance with our plan

• Confirmation of the asset-light model with Basel 3 RWA⁽³⁾ 6% lower year-on-year and 2% down on end-2015 
• CET1 ratio of 10.8%⁽⁴⁾ at end-March 2016 with a 30bps generation before distribution
• Leverage ratio⁽²⁾ kept above 4% at end-March 2016

STRATEGic guidances confirmed

• Greater contribution from Investment Solutions to core businesses’ pre-tax profit (46% in 1Q16 vs. 41% in 1Q15)  
• Capacity to deliver a payout ratio of at least 50% and to re-distribute surpluses beyond the CET1 target
• Launch of a Transformation and Business Efficiency project

(1) Excluding IFRIC 21 (2) See note on methodology (3) Based on CRR-CRD4 rules published on June 26, 2013, including the Danish compromise - no phase-in except for DTAs on loss carry-forwards (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 carryforwards and pro forma of additional phase-in of DTAs following ECB regulation 2016/445 and planned acquisition of PJS

The Board of Directors examined Natixis’s first-quarter 2016 accounts on May 9, 2016.

For Natixis, the main features of first-quarter 2016 were⁽¹⁾:

• stable core business revenues of close to €2bn and a decline in group net revenues of only 3% year-on-year. 

Within the Investment Solutions core business, Asset Management recorded limited net outflows of €1bn during the quarter, while margins improved in both the US and Europe. Insurance enjoyed robust momentum, with overall turnover climbing 20% year-on-year to reach €1.8bn (excluding the reinsurance treaty with CNP).

In Corporate & Investment Banking, Structured Financing continued to generate a high proportion of revenues from fee income (37%), and grew new loan production by 3% year-on-year excluding the Global Energy & Commodities segment. Capital markets revenues were fueled by a good showing in Equity Derivatives and solid resilience in Fixed Income thanks to Rates and Forex businesses.

Revenues from Specialized Financial Services increased 6% vs. 1Q15, thanks to solid performances in Leasing, Sureties & Guarantees and Factoring,

• a 3% year-on-year rise in expenses to €1.605bn. They remained well under control, inching up only 1% vs. 1Q15 excluding the increase in estimated contribution to the Single Resolution Fund,
• a core-business provision for credit loss at 45bps, virtually unchanged from a year earlier, 
• earnings capacity (net income (group share) excluding the IFRIC 21 impact) of €311m during the quarter, down 8% year-on-year,

• a reported net income (group share) of €200m,

• a leverage ratio⁽¹⁾ of 4.2% at end-March 2016,

• a CET1 ratio⁽²⁾ of 10.8% at March 31, 2016.

Laurent Mignon, Natixis Chief Executive Officer, said: “Our core businesses fared well this quarter, with revenues holding steady against a highly volatile market backdrop, thanks to our commercial dynamism. Despite a sharp increase in regulatory costs, we safeguarded our profitability and confirmed our ability to deliver a payout ratio of over 50%. In order to cement our asset-light strategy and step up measures to adapt our business lines to more demanding conditions, we unveiled plans for a new organization for Corporate & Investment Banking with a particular emphasis on expanding our origination and distribution capability. We have also begun an in-depth analysis focusing on transforming processes in each of our business lines along with a project geared to operational efficiency”.

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 and planned acquisition of PJS