Paris, February 6, 2020
4Q19 & 2019 results
Delivering growth across the board, increased dividend with reinforced solvency
Increase in reported net income at €371m in 4Q19 and €1,897m in 2019 vs. €181m in 4Q18 and €1,306m in 2018
Cash dividend per share of 0.31€1, up +3% vs. 2018
Operating trends improving throughout the year with a strong 4Q19
BUSINESSES WELL DIVERSIFIED AND ALL GROWING IN 4Q19 AND 2019
UNDERLYING NET REVENUES2 AT €2.5BN IN 4Q19 (+11%3 YOY) AND €9.2BN IN 2019 (+6% YOY)
AWM: 2019 net revenues at an all-time high, back to positive net inflows in 4Q19 and fee rate resilience
Strength of our active asset management model with underlying net revenues2 up +8% YoY in 4Q19 (+7% YoY in 2019), partly driven by high levels of performance fees that reached €265m in 4Q19 (€627m in 2019), coming from multiple affiliates. Revenue growth higher than cost growth both in 4Q19 and 2019 to reach a historically high level in 2019 (including and excluding performance fees)
Positive net inflows on LT products in 4Q19 (~€3bn) both in Europe and North America. Strong AuM growth, up +16% over the year at €934bn
Average fee rate in line with New Dimension target at ~30bps in 4Q19 and 2019
Underlying RoE2 at ~15% in 2019, close to the 2020 New Dimension target
CIB: Positive jaws effect both in 4Q19 and 2019 with activity levels picking up towards year-end
Underlying net revenues2 up +16%3 YoY in 4Q19 primarily driven by Global markets (+40%3 YoY) and with a historically high quarter for Investment banking/M&A. Success of the diversification strategy illustrated by net revenues up +4% in 2019 vs. 2018
Costs under control, down -1% YoY at constant exchange rate in 2019 despite revenue growth
Underlying RoE2 at ~9% in 2019 with a cost of risk above its through-the-cycle average
Insurance: Continued growth and profitability
Underlying net revenues2 up +7% YoY with a positive jaws effect both in 4Q19 and 2019
Underlying RoE2 ~30% in 2019, close to the target set for New Dimension by 2020
Life insurance4: AuM up +14% over 2019 including a +23% growth across unit-linked products
P&C insurance: combined ratio at 91.7% in 2019, better than 2020 guidance of < 94%
Payments: Continued growth with positive jaws, EBITDA5 up +13% YoY in 2019
Underlying net revenues2 up +9% YoY in 2019 with a positive jaws effect
Underlying RoE2 ~10% in 2019
Increase in business volumes from Dalenys & PayPlug, up around +25% vs. 2018
SUSTAINABLE VALUE CREATION AND FINANCIAL STRENGTH
ORDINARY DIVIDEND INCREASE WITH A PAY-OUT RATIO >80%1
Organic capital creation of ~120bps in 2019, of which ~24bps in 4Q19 (~28bps excluding exceptional items)
Basel 3 FL CET1 ratio6 at 11.3% as at December 31, 2019 (+50bps over the year), above our 2020 target of 11.2% and with a cash dividend per share1 of 0.31€ (83% pay-out ratio), up vs. 0.30€ in 2018 and after a 0.48€ special dividend paid in June 2019
Underlying net income2 at €415m in 4Q19 (x2.2 YoY) and €1,370m in 2019 (+3% YoY)
Underlying RoTE2 at 10.8% in 4Q19 and 10.0% in 2019
Figures restated as communicated on April 11, 2019 following the disposal of the retail banking activities. See page 14 for the reconciliation of the restated figures with the accounting view [1] Proposal of a 0.31€ ordinary dividend per share submitted to the approval of the Annual General Meeting on May 20, 2020 2 Excluding exceptional items. Excluding exceptional items and excluding IFRIC 21 for cost/income, RoE and RoTE in 4Q19 (see note on methodology) 3 Excluding the €(259)m non-recurring revenue impact from Asian equity derivatives in 4Q18 4 Excluding reinsurance agreement with CNP 5 Standalone view excluding exceptional items, analytical items and structure charges - see page 19 6 See note on methodology
“In 2019, Natixis recorded very sound results with each of our four businesses growing revenues faster than costs. The fourth quarter of 2019 notably represented Natixis' best-ever quarter in terms of revenue and gross operating income generated. This momentum of successive quarter-on-quarter growth is the result of our unwavering implementation of our asset-light strategy and represents a solid base for us to complete our 2018-2020 strategic plan. 2019 was marked by key strategic milestones: the project to create a leader in the management of life insurance assets with LBPAM, the implementation of the Green Weighting Factor as well as projects being carried out to allow Natixis to reach its 2020 ambition of serving all the customers of Banques Populaires and Caisses d'Epargne on both Life and Non-life insurance. Together with a bolstered robustness and solidity, Natixis will pay a higher ordinary dividend per share of €0.31 to its shareholders, reflecting the strength of its business model.”
François Riahi, Natixis Chief Executive Officer
4Q19 RESULTS
On February 6th, 2020, the Board of Directors examined and approved Natixis’ fourth quarter 2019 results.
| €m | 4Q19 reported | 4Q18 restated | 4Q19 o/w underlying | 4Q18 o/w underlying | 4Q19 vs. 4Q18 restated | 4Q19 vs. 4Q18 underlying | ||||
| Net revenues | 2,503 | 2,040 | 2,534 | 2,024 | 23% | 25% | ||||
| o/w businesses | 2,335 | 1,856 | 2,335 | 1,856 | 26% | 26% | ||||
| Expenses | (1,745) | (1,656) | (1,708) | (1,626) | 5% | 5% | ||||
| Gross operating income | 758 | 383 | 826 | 398 | 98% | 108% | ||||
| Provision for credit losses | (119) | (23) | (119) | (23) | ||||||
| Net operating income | 639 | 361 | 707 | 375 | 77% | 89% | ||||
| Associates and other items | 9 | 58 | 9 | 58 | ||||||
| Pre-tax profit | 648 | 418 | 715 | 432 | 55% | 65% | ||||
| Income tax | (163) | (110) | (185) | (115) | ||||||
| Minority interests | (113) | (127) | (116) | (128) | ||||||
| Net income - group share | 371 | 181 | 415 | 189 | 105% | 119% |
Natixis’ underlying net revenues are up +26% YoY across the businesses with CIB up +74% YoY, AWM up +8% YoY, Insurance up +7% YoY and Payments up +6% YoY. Adjusting net revenues for the 4Q18 non-recurring impact on Asian equity derivatives, top-line growth across Natixis’ businesses reached +10% YoY (o/w +16% in CIB).
Underlying expenses are up +4% YoY at constant exchange rate with a positive jaws effect and a cost/income ratio improvement across all business lines. Expense base reflecting a historically high quarter for net revenues (impact on variable costs) as well as sustained investments in functions to support business growth. The underlying cost/income ratio1 is at 69.5%, down -13.5pp vs. 4Q18.
The underlying gross operating income more than doubled YoY (+26% YoY adjusting net revenues for the 4Q18 non-recurring impact on Asian equity derivatives) to reach a historically high level and absorb an increase in loan loss provisioning compared with a low 4Q18. Cost of risk above through-the-cycle guidance of ~30bps (equivalent to ~€190m for 2020) mainly due to provisioning efforts being made across natural gas producers in the U.S. due to the structural transformation of this sector. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses’ underlying cost of risk worked out to 69bps in 4Q19.
Net income (group share), adjusted for IFRIC 21 and excluding exceptional items reached €368m in 4Q19. Accounting for exceptional items (€(44)m net of tax in 4Q19), and IFRIC 21 impact (+€47m in 4Q19) the reported net income (group share) in 4Q19 is at €371m.
Businesses’ underlying RoE1 reached 13.5% in 4Q19.
Natixis’ underlying RoTE1 reached 10.8% in 4Q19 excl. IFRIC 21 and 12.2% on a normalized cost of risk2.
1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 2 Normalizing the 4Q19 cost of risk at 30bps
2019 RESULTS1
| €m | 2019 restated | 2018 restated | 2019 o/w underlying | 2018 o/w underlying | 2019 vs. 2018 restated | 2019 vs. 2018 underlying | ||||
| Net revenues | 9,196 | 8,749 | 9,177 | 8,632 | 5% | 6% | ||||
| o/w businesses | 8,365 | 7,958 | 8,365 | 7,889 | 5% | 6% | ||||
| Expenses | (6,632) | (6,357) | (6,545) | (6,272) | 4% | 4% | ||||
| Gross operating income | 2,564 | 2,391 | 2,633 | 2,360 | 7% | 12% | ||||
| Provision for credit losses | (332) | (193) | (332) | (122) | ||||||
| Net operating income | 2,232 | 2,199 | 2,301 | 2,238 | 2% | 3% | ||||
| Associates and other items | 713 | 83 | 30 | 83 | ||||||
| Pre-tax profit | 2,945 | 2,281 | 2,331 | 2,321 | 29% | 0% | ||||
| Income tax | (669) | (673) | (612) | (687) | ||||||
| Minority interests | (380) | (303) | (349) | (304) | ||||||
| Net income - group share | 1,897 | 1,306 | 1,370 | 1,330 | 45% | 3% |
Natixis’ underlying net revenues are increasing across all business lines with Payments up +9% YoY, AWM and Insurance up +7% YoY and CIB up +4% YoY. 2019 revenue evolution reflecting an improved momentum throughout the year with 52% of Natixis’ top-line generated during the second semester vs. an average 49% over the last 5 years.
Underlying expenses are well under control and up +2% YoY at constant exchange rate with a positive jaws effect and a cost/income ratio improvement across all business lines. Cost control mainly reflected through CIB expenses, down -1% YoY at constant exchange rate despite revenue growth. The underlying cost/income ratio2 is at 71.3%, down -140bps vs. 2018
The underlying loan loss provisioning increased from a low 2018 on the back of a large single file in 2Q19 and a number of files being provisioned for, mainly in the Energy & Natural Resources space in 2H19. Net revenues adjusted for the cost of risk up +4% YoY in 2019. Net revenues adjusted for the cost of risk up +4% YoY in 2019. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses’ underlying cost of risk worked out to 50bps in 2019 (33bps since the launch of New Dimension).
Net income (group share) excluding exceptional items reached €1,370m in 2019. Accounting for exceptional items (+€527m net of tax in 2019), the reported net income (group share) in 2019 is at €1,897m.
Businesses’ underlying RoE2 reached 12.5% in 2019.
Natixis’ underlying RoTE2 reached 10.0% in 2019 (10.4% adjusted for the disposal of the retail banking activities to BPCE S.A.). Such a level of profitability has been reached in an uncertain geopolitical and economic context that has proved to be volatile over the year, being reminded that the performance of Natixis’ businesses will remain, among other things, sensitive to the evolution of this context over 2020.
1 Figures restated as communicated on April 11, 2019 following the disposal of the retail banking activities. See page 14 for the reconciliation of the restated figures with the accounting view 2 See note on methodology. Excluding exceptional items
4Q19 & 2019 RESULTS
Exceptional items
| €m | 4Q19 | 4Q18 | 2019 | 2018 | ||
| Exchange rate fluctuations on DSN in currencies (Net revenues) | Corporate center | (31) | 16 | 19 | 48 | |
| SWL provision reversal (Net revenues) | CIB | 0 | 0 | (0) | 68 | |
| Transformation & Business Efficiency Investment costs (Expenses) | Business lines & Corporate center | (31) | (27) | (79) | (82) | |
| Fit to Win investments & restructuring expenses (Expenses) | Financial investments | (6) | (3) | (8) | (3) | |
| Legal provision (Provision for credit losses) | CIB | 0 | 0 | 0 | (71) | |
| Disposal of subsidiary in Brazil (Gain or loss on other assets) | CIB | 0 | 0 | (15) | 0 | |
| Capital gain - Disposal retail banking activities (Gain/loss on other assets) | Corporate center | 0 | 0 | 697 | 0 | |
| Total impact on income tax | 22 | 5 | (57) | 14 | ||
| Total impact on minority interests | 2 | 1 | (30) | 1 | ||
| Total impact on net income (gs) | (44) | (8) | 527 | (25) |
€586m positive net impact from the disposal of the retail banking activities in 1Q19: €697m capital gain minus €78m income tax minus €33m minority interests
TRANSFORMATION & BUSINESS EFFICIENCY
Investment costs by reporting line
| €m | 4Q19 | 4Q18 | 2019 | 2018 | |
| AWM | (2) | (9) | (9) | (21) | |
| CIB | (12) | (6) | (27) | (14) | |
| Insurance | (3) | (2) | (6) | (2) | |
| Payments | (2) | (0) | (5) | (0) | |
| Financial Investments | 0 | 0 | 0 | 0 | |
| Corporate center | (12) | (11) | (33) | (45) | |
| Impact on expenses | (31) | (27) | (79) | (82) |
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p5)
Asset & Wealth Management
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | 2019 vs. 2018 constant FX | ||
| Net revenues | 1,109 | 1,032 | 8% | 3,760 | 3,513 | 7% | 4% | ||
| o/w Asset Management1 | 1,061 | 998 | 6% | 3,611 | 3,369 | 7% | 4% | ||
| o/w Wealth management | 48 | 34 | 42% | 149 | 144 | 3% | 3% | ||
| Expenses | (679) | (634) | 7% | (2,483) | (2,322) | 7% | 4% | ||
| Gross operating income | 430 | 398 | 8% | 1,277 | 1,191 | 7% | 5% | ||
| Provision for credit losses | 2 | 0 | (8) | (2) | |||||
| Associates and other items | 2 | 43 | 5 | 39 | |||||
| Pre-tax profit | 434 | 441 | (2)% | 1,274 | 1,228 | 4% | |||
| Cost/income ratio2 | 61.3% | 61.6% | -0.3pp | 66.0% | 66.1% | -0.1pp | |||
| RoE after tax2 | 19.1% | 20.1% | -1.0pp | 14.9% | 16.0% | -1.1pp |
Underlying net revenues from Asset & Wealth Management (AWM) are up +8% YoY in 4Q19 both including and excluding AM performance fees, illustrating the strength of our diversified multi-boutique model which delivered a +7% YoY revenue growth in 2019 to reach a historically high level (even excluding performance fees). Asset management (excl. Employee savings plan) underlying net revenues, including performance fees, are up +4% YoY in North America (€415m) and up +6% YoY in Europe (€459m) in 4Q19 (+2% at €1,647m and +10% at €1,297m in 2019 for North America and Europe respectively). Wealth management net revenues are significantly up YoY in 4Q19 (~€6m of performance fees).
The Asset management overall fee rate excluding performance fees is at ~30bps both in 4Q19 (slightly up QoQ) and 2019, in line with New Dimension target. For European affiliates, it is at ~16bps in 2019 (~17bps in 4Q19) and ~28bps excl. Life Insurance General Accounts (~30bps in 4Q19). For North American affiliates, it is at ~38bps (~37bps in 4Q19) vs. ~40bps in 2018 mainly due to a lower share of average AuM from Harris following the 4Q18 market effect. Performance fees reached €265m in 4Q19 (€627m in 2019) driven by various strategies (global macro, real assets, ESG, equity growth, fixed income) across multiple affiliates.
Asset management net flows on LT products reached ~€3bn in 4Q19 with an improving trend throughout the quarter. In Europe, ~€0.5bn net inflows in 4Q19 with a positive momentum for global macro and ESG strategies largely offset by a ~€3bn single mandate outflow although low-margin. Good start for Thematics AM (€0.7bn AuM at end-December). In North America, ~€3bn net inflows in 4Q19 across both fixed income and equity strategies.
Asset management AuM reached €934bn as at December 31, 2019, up +1% QoQ and +16% YTD. Positive market effect of +€26bn in 4Q19 (mainly December) essentially impacting North American equity strategies and more than offsetting a weaker USD (~€14bn negative FX & perimeter effect). AuM were also impacted in 4Q19 by ~€2bn net outflows on low-margin money-market products. YE19 AuM above their 2018 and 2019 average level both in North America and Europe. Wealth management AuM reached €30.4bn as at December 31, 2019 with €0.5bn net inflows in 2019.
Underlying expenses tracking revenue growth with a slight positive jaws effect both in 4Q19 and 2019.
The underlying gross operating income is up high single-digit both in 4Q19 (+8%) and 2019 (+7%).
The underlying RoE2 reached ~15% for the year, close to New Dimension 2020 target with net income flat vs. 2018 (higher minority interests) and more capital allocated to the business.
1 Asset management including Private equity and Employee savings plan
2 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p5)
Corporate & Investment Banking
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | 2019 vs. 2018 constant FX | ||
| Net revenues | 899 | 518 | 74% | 3,337 | 3,197 | 4% | 2% | ||
| Net revenues excl. CVA/DVA/Other | 901 | 500 | 80% | 3,338 | 3,140 | 6% | 4% | ||
| Expenses | (590) | (553) | 7% | (2,208) | (2,188) | 1% | (1)% | ||
| Gross operating income | 309 | (35) | NR | 1,129 | 1,009 | 12% | 8% | ||
| Provision for credit losses | (118) | (9) | (312) | (103) | |||||
| Associates and other items | 2 | 3 | 10 | 14 | |||||
| Pre-tax profit | 193 | (41) | NR | 827 | 921 | (10)% | |||
| Cost/income ratio1 | 66.5% | 108.3% | NR | 66.2% | 68.4% | -2.2pp | |||
| RoE after tax1 | 8.0% | NR | NR | 8.9% | 10.2% | -1.3pp |
Underlying net revenues are up +16% YoY in 4Q19 adjusting for the 4Q18 €(259)m non-recurring impact on Asian equity derivatives. The growth is primarily driven by Global markets (+40% YoY) and Investment banking/M&A (+14% YoY). Global finance revenues are up +2% YoY in 4Q19 on a strong 4Q18. Underlying net revenue growth for 2019 reached +4% YoY.
Underlying net revenues/RWA2 improving at above 5.8% in 4Q19.
Global markets net revenues are up +40% YoY in 4Q19 adjusting for the 4Q18 €(259)m non-recurring impact on Asian equity derivatives with strong performance from the EMEA region. Underlying net revenues excluding CVA/DVA featured strong resilience over 2019, down a modest -3% YoY adjusted3 despite a challenging 1Q19. FICT net revenues are up +33% YoY in 4Q19 to reach their highest level since 1Q18 and marking the third consecutive quarter of YoY revenue growth amidst improving market conditions following an unfavorable 1Q19. Strong client activity across Rates and Credit. Equity net revenues are multiplied by x2 YoY3 in 4Q19 on a low 4Q18 and largely flat YoY3 in 2019. Benign volatility in 4Q19 leading to low client activity for derivatives. Global finance net revenues are up +2% YoY in 4Q19 and marginally down YoY in 2019 on a historically high basis. 4Q19 revenues growing for syndication across all Real Assets business lines as well as Trade & Treasury Solutions, offsetting a lower contribution from Energy & Natural Resources. Distribution rate on Real Assets at ~60% in 2019. Investment banking and M&A net revenues are up +14% YoY in 4Q19 (+6% YoY in 2019) driven by robust activity across DCM and Acquisition & Strategic Finance.
Strong quarter for M&A boutiques, especially for Fenchurch (#1 UK FIG M&A by deal value and volume, #4 Europe FIG M&A by deal value)4 and PJ Solomon. Azure Capital the most active M&A adviser in Western Australia (13 announced transactions with a value of $1.3bn)5. M&A revenues up +3% YoY at ~€200m with Natixis ranking #5 in France by deal volume4. Proportion of revenues generated from service fees at ~43% in 4Q19 and >40% in 20196.
Underlying expenses are well under control, down -1% YoY at constant exchange rate in 2019 despite a net revenue increase. The 4Q19 +5% YoY expense growth (at constant FX) reflects higher variable staff costs vs. 4Q18 given the +70% revenue expansion (at constant FX).
Underlying cost of risk is up YoY in 4Q19 vs. a very low 4Q18 due to provisioning efforts mainly made across the U.S. natural gas space.
Underlying RoE1 of 8.0% in 4Q19 and 8.9% in 2019. Normalizing for the cost of risk7, the 4Q19 RoE would have reached 10.8% and the 2019 RoE 10.2%.
RWA are slightly down QoQ and up +2% over 2019.
1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q 2 4Q19 annualized net revenues (excl. CVA/DVA desk) on average RWA 3 Adjusting net revenues for the 4Q18 €(259)m non-recurring impact on Asian equity derivatives 4 Source: Mergermarket 5 Source: Business News Western Australia 6 ENR, Real Assets, ASF 7 Normalizing the cost of risk at 30bps
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p5)
Insurance
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | ||
| Net revenues | 216 | 201 | 7% | 846 | 790 | 7% | ||
| Expenses | (123) | (116) | 5% | (472) | (446) | 6% | ||
| Gross operating income | 93 | 85 | 10% | 374 | 344 | 9% | ||
| Provision for credit losses | 0 | 0 | 0 | 0 | ||||
| Associates and other items | 4 | 9 | 10 | 15 | ||||
| Pre-tax profit | 96 | 93 | 3% | 384 | 358 | 7% | ||
| Cost/income ratio1 | 58.9% | 60.3% | -1.4pp | 55.8% | 56.5% | -0.7pp | ||
| RoE after tax1 | 26.0% | 29.8% | -3.8pp | 28.4% | 29.1% | -0.7pp |
Banking view
Underlying net revenues are up +7% YoY both in 4Q19 and 2019 with growth across the board.
Underlying expenses are up +5% YoY in 4Q19 and +6% YoY in 2019, translating into a positive jaws effect and a cost/income ratio improvement, alongside with investments being made, especially on digital tools.
Underlying gross operating income is up +10% YoY in 4Q19 and +9% YoY in 2019.
Underlying RoE1 is above 28% in 2019, impacted by a higher capital allocation (positive OCI development contributing to an increase in book value, risk-weighted under the Danish Compromise).
Insurance view
Global turnover2 reached €3.1bn in 4Q19, up +18% YoY (+6% in 2019 at €12.7bn).
Life and Personal protection: €2.7bn earned premiums2 in 4Q19, up +20% YoY (+6% in 2019).
- Total AuM2 at €68.4bn as at end-December 2019, up +3% QoQ and +14% YTD, driven by €1.4bn of net inflows2 in 4Q19 (€6.0bn in 2019).
- Unit-linked AuM2 at €17.3bn as at end-December 2019, up +5% QoQ and +23% YTD, driven by €0.8bn of net inflows2 in 4Q19 (59% of total net inflows) and €2.5bn in 2019. UL products accounted for 31% of gross inflows in 2019, above the French market3.
- Decrease of profit-sharing rate by ~50bps vs. 2018 and reinforcement by ~20% of the policyholder reserve (PPE)4
P&C: earned premiums above €0.4bn in 4Q19, up +6% YoY (+6% in 2019). The combined ratio reaches 91.7% in 2019
(+0.5pp YoY) and 90.0% in 4Q19 (+1.1pp YoY).
The non-life equipment rate at the end of December is at 26.6% (+1.2pp YoY) for Banques Populaires and at 29.9% (+1.3pp YoY) for Caisses d’Epargne.
1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q 2 Excluding reinsurance agreement with CNP
3 Source: FFA 4 BPCE Vie
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p5)
Payments
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | ||
| Net revenues | 111 | 105 | 6% | 423 | 389 | 9% | ||
| Expenses | (93) | (90) | 4% | (365) | (341) | 7% | ||
| Gross operating income | 18 | 15 | 19% | 57 | 48 | 19% | ||
| Provision for credit losses | (0) | (2) | (2) | (2) | ||||
| Associates and other items | (0) | 0 | 0 | 1 | ||||
| Pre-tax profit | 17 | 13 | 36% | 55 | 47 | 18% | ||
| Cost/income ratio1 | 84.1% | 85.9% | -1.8pp | 86.5% | 87.6% | -1.1pp | ||
| RoE after tax1 | 12.4% | 9.9% | 2.5pp | 10.0% | 9.9% | 0.1pp |
Underlying net revenues up +9% YoY in 2019 and +6% YoY in 4Q19. Payment revenues multiplied by ~1.3x since the launch of New Dimension and with ~40% of 2019 revenues realized with direct clients (+1pp vs. 2018).
- Payment Processing & Services: Steady +6% YoY revenue growth in Natixis Payments’ historical activities in 4Q19 (+5% YoY in 2019). Number of card transactions processed up +8% YoY in 4Q19 (+10% YoY in 2019).
- Merchant Solutions: Solid business volumes generated by Dalenys and PayPlug, up +29% YoY in 4Q19 (+25% YoY in 2019 o/w +83% for PayPlug and +21% for Dalenys). Launch of the card payment in installments solution by PayPlug (with Oney).
- Prepaid & Issuing Solutions: Robust revenue growth in 2019 (+30% YoY) mainly driven by meal voucher (+6% YoY) and Benefits & Rewards (Titres Cadeaux and Comitéo). Number of mobile payments more than x2.5 vs. 2018.
1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p5)
Financial Investments
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | ||
| Net revenues | 188 | 181 | 4% | 772 | 742 | 4% | ||
| Coface | 177 | 165 | 8% | 712 | 678 | 5% | ||
| Other | 10 | 16 | 60 | 64 | ||||
| Expenses | (147) | (136) | 7% | (552) | (524) | 6% | ||
| Gross operating income | 41 | 44 | (7)% | 220 | 218 | 1% | ||
| Provision for credit losses | (1) | 3 | (10) | (1) | ||||
| Associates and other items | 2 | 0 | 7 | 6 | ||||
| Pre-tax profit | 42 | 47 | (11)% | 216 | 223 | (3)% |
The net combined ratio of Coface1 reached 80.4% in 4Q19 vs. 81.4% in 4Q18 (77.7% in 2019 vs. 79.6% in 2018) with a cost ratio moving from 35.9% to 35.6% (from 34.5% in 2018 to 32.7% in 2019) and a loss ratio moving from 45.5% to 44.8% (from 45.1% in 2018 to 45.0% in 2019).
Corporate Center
| €m | 4Q19 | 4Q18 | 4Q19 vs. 4Q18 | 2019 | 2018 | 2019 vs. 2018 | ||
| Net revenues | 11 | (12) | 40 | 1 | ||||
| Expenses | (76) | (96) | (21)% | (464) | (452) | 3% | ||
| SRF | (0) | 0 | (170) | (160) | 6% | |||
| Other | (76) | (96) | (21)% | (294) | (292) | 1% | ||
| Gross operating income | (66) | (109) | (40)% | (424) | (451) | (6)% | ||
| Provision for credit losses | (0) | (15) | 1 | (14) | ||||
| Associates and other items | (0) | 3 | (2) | 8 | ||||
| Pre-tax profit | (67) | (120) | (45)% | (425) | (456) | (7)% |
Underlying net revenues of €40m in 2019 (positive FVA impacts mainly in 1Q19) and €11m in 4Q19.
Underlying expenses excluding SRF down -21% YoY in 4Q19 and largely flat YoY in 2019.
P&L drag at pre-tax profit level reduced by ~€30m in 2019 despite SRF contribution increase.
1 Reported ratios, net of reinsurance
FINANCIAL STRUCTURE
Basel 3 fully-loaded1
Natixis’ Basel 3 fully-loaded CET1 ratio worked out to 11.3% as at December 31, 2019.
- Basel 3 fully-loaded CET1 capital amounted to €11.2bn
- Basel 3 fully-loaded RWA amounted to €99.0bn
Based on a Basel 3 fully-loaded CET1 ratio of 10.8% as at December 31, 2018, the respective 2019 impacts were as follows:
- IFRS 16 & deduction for Irrevocable Payment Commitments: -22bps
- Disposal of retail banking activities: +223bps
- 2019 results: +137bps
- 2019 RWA and other effects: -21bps
- 2019 strategic operations: -21bps
- Special dividend paid in 2019 following the disposal of the retail banking activities: -153bps
- 2019 ordinary dividends: -99bps
As at December 31, 2019, Natixis’ Basel 3 fully-loaded capital ratios stood at 13.1% for the Tier 1 and 15.3% for the Total capital.
Basel 3 phased-in excl. current financial year’s earnings and dividends1
As at December 31, 2019, Natixis’ Basel 3 phased-in capital ratios excl. current financial year’s earnings and dividends stood at 10.4% for the CET1, 12.5% for the Tier 1 and 14.8% for the Total capital.
- Core Tier 1 capital stood at €10.2bn and Tier 1 capital at €12.4bn
- Natixis’ RWA totaled €99.0bn, breakdown as follows:
- Credit risk: €66.3bn
- Counterparty risk: €6.4bn
- CVA risk: €1.3bn
- Market risk: €11.2bn
- Operational risk: €13.7bn
Book value per share
Equity capital (group share) totaled €19.4bn as at December 31, 2019, of which €2.0bn 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 including dividend distribution projected for the fiscal year 2019 stood at €5.17 as at December 31, 2019 based on 3,150,995,283 shares excluding treasury shares (the total number of shares being 3,153,078,482). The tangible book value per share (after deducting goodwill and intangible assets) is €3.89.
Leverage ratio1
The leverage ratio worked out to 4.1% as at December 31, 2019.
Overall capital adequacy ratio
As at December 31, 2019, the financial conglomerate’s excess capital was estimated at around €3.1bn (based on own funds including current financial year’s earnings and projected dividend distribution).
1 See note on methodology
APPENDICES
Note on methodology:
The results at 31/12/2019 were examined and approved by the board of directors at their meeting on 06/02/2020.
Figures at 31/12/2019 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
Changes in Natixis’ account presentation following the disposal of the retail banking activities to BPCE S.A.
- Employee savings plan is reallocated to Asset & Wealth Management
- Film industry financing is reallocated to Corporate & Investment Banking
- Insurance is not impacted
- Payments becomes a standalone business line
- Financial Investments are isolated and include Coface, Natixis Algeria and the private equity runoff activities. The Corporate Center is refocused on Natixis’ holding and ALM functions and carries the Single Resolution Fund contribution within its expenses
Additional impacts on the quarterly series from the disposal of the retail banking activities to BPCE S.A.
- New support function services provided by Natixis to the activities sold (TSA / SLA), as well as the cancellation of services or analytical items that have been made obsolete following such a disposal are factored in
- The reclassification as Net revenues of the residual IT and logistic services that continue to be provided to the activities sold. Such services now being provided to entities that do not fall under Natixis’ scope of consolidation anymore, they have been reclassified as Net revenues instead of expense deductions
- The implementation of introductory fees between the Natixis CIB Coverage and the entities sold
In order to ensure comparability between the 2018 and 2019 quarterly series, these impacts have been simulated retroactively as of January 1st, 2018, even though they only impact the published financial statements as of their implementation date in 2019. These items essentially impact the Corporate Center and more marginally the CIB. The others business lines are unimpacted
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 (the associated tax benefit being already accounted for in the net income following the adoption of IAS 12 amendment). 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 (the associated tax benefit being already accounted for in the net income following the adoption of IAS 12 amendment). 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 based on 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%.
Note on Natixis’ RoE and RoTE calculation: Calculations based on quarter-end balance sheet in 1Q19 to reflect the disposal of the retail banking activities. The €586m net capital gain is not annualized. 2018 RoTE of 10.4% on page 4 adjusted for the disposal of the retail banking activities i.e. as if the operation took effect on January 01, 2018 (vs. 12.0% as reported) with a numerator of €1,233m: €1,330m underlying net income group share as shown on page 14 minus €97m post-tax DSN interest expenses and a denominator of €11,855m: 2018 average equity for RoTE calculation of €12,565m adjusted for the following impacts related to the perimeter sold (+) €586m net capital gain recorded in 1Q19 (-) €1,512m special dividend paid out in 2Q19 (+) €178m goodwill and intangibles (+) €38m other impacts (OCI). Adoption of IAS 12 amendment effective as of 3Q19 (see next slide for additional comments), with no impact on the RoE/RoTE.
Net book value: calculated by taking shareholders’ equity group share (minus distribution of dividends proposed by the Board of Directors and submitted to the approval of the General Shareholders' Meeting on May 28, 2019), 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:
| €m | 31/12/2019 |
| Goodwill | 3,891 |
| Restatement for Coface minority interests | (162) |
| Restatement for AWM deferred tax liability & others | (343) |
| Restated goodwill | 3,386 |
| €m | 31/12/2019 |
| Intangible assets | 717 |
| Restatement for Coface minority interest & others | (48) |
| Restated intangible assets | 669 |
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.
Phased-in capital and ratios excl. current financial year’s earnings and dividends: based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - phased in. Presentation excluding current financial year’s earnings and dividend declared
Fully-loaded capital and ratios: based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in. Presentation including current financial year’s earnings and dividend declared)
Leverage ratio: based on delegated act rules, without phase-in (presentation including 2019 earnings and declared dividend) 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 5. 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 RoTE excluding IFRIC 21 impact calculation in 4Q19 takes into account ¼ of the annual duties and levies concerned by this 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
IAS 12: As of 3Q19, according to the adoption of IAS 12 (income taxes) amendment, the tax benefit on DSN interest expenses previously recorded in the consolidated reserves is now being accounted for in the income statement (income tax line). Previous periods have not been restated with a positive impact of €47.5m in 2019, of which €35.9m recognized in in 3Q19 (€23.8m related to 1H19).
Natixis - Consolidated P&L (restated)
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 2,193 | 2,360 | 2,156 | 2,040 | 2,132 | 2,282 | 2,280 | 2,503 | 23% | 8,749 | 9,196 | 5% | |||
| Expenses | (1,675) | (1,528) | (1,499) | (1,656) | (1,720) | (1,577) | (1,590) | (1,745) | 5% | (6,357) | (6,632) | 4% | |||
| Gross operating income | 518 | 832 | 658 | 383 | 412 | 705 | 689 | 758 | 98% | 2,391 | 2,564 | 7% | |||
| Provision for credit losses | (36) | (41) | (93) | (23) | (31) | (110) | (71) | (119) | (193) | (332) | |||||
| Associates | 7 | 3 | 6 | 13 | 3 | 8 | 3 | 6 | 29 | 21 | |||||
| Gain or loss on other assets | 6 | 4 | (0) | 44 | 682 | (2) | 9 | 3 | 54 | 692 | |||||
| Change in value of goodwill | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
| Pre-tax profit | 495 | 798 | 570 | 418 | 1,066 | 602 | 630 | 648 | 55% | 2,281 | 2,945 | 29% | |||
| Tax | (175) | (234) | (154) | (110) | (215) | (164) | (126) | (163) | (673) | (669) | |||||
| Minority interests | (60) | (57) | (59) | (127) | (86) | (92) | (88) | (113) | (303) | (380) | |||||
| Net income (group share) | 260 | 507 | 358 | 181 | 764 | 346 | 415 | 371 | 105% | 1,306 | 1,897 | 45% |
Figures restated as communicated on April 11, 2019 following the disposal of the retail banking activities. See below for the reconciliation of the restated figures with the accounting view
Natixis - Reconciliation between management and accounting figures
2018
| €m | 2018 underlying | Exceptional items | 2018 restated | Contribution from perimeter sold | 2018 reported | |||
| Net revenues | 8,632 | 116 | 8,749 | 867 | 9,616 | |||
| Expenses | (6,272) | (85) | (6,357) | (466) | (6,823) | |||
| Gross operating income | 2,360 | 31 | 2,391 | 401 | 2,793 | |||
| Provision for credit losses | (122) | (71) | (193) | (22) | (215) | |||
| Associates | 29 | 0 | 29 | 0 | 29 | |||
| Gain or loss on other assets | 54 | 0 | 54 | (0) | 54 | |||
| Pre-tax profit | 2,321 | (40) | 2,281 | 380 | 2,661 | |||
| Tax | (687) | 14 | (673) | (108) | (780) | |||
| Minority interests | (304) | 1 | (303) | (1) | (304) | |||
| Net income (group share) | 1,330 | (25) | 1,306 | 271 | 1,577 |
2019
| €m | 2019 underlying | Exceptional items | 2019 restated | Residual contribution from perimeter sold | 2019 reported | |||
| Net revenues | 9,177 | 19 | 9,196 | 22 | 9,219 | |||
| Expenses | (6,545) | (88) | (6,632) | (22) | (6,655) | |||
| Gross operating income | 2,633 | (69) | 2,564 | (0) | 2,564 | |||
| Provision for credit losses | (332) | 0 | (332) | (0) | (332) | |||
| Associates | 21 | 0 | 21 | 0 | 21 | |||
| Gain or loss on other assets | 9 | 683 | 692 | (0) | 692 | |||
| Pre-tax profit | 2,331 | 614 | 2,945 | (0) | 2,945 | |||
| Tax | (612) | (57) | (669) | 0 | (669) | |||
| Minority interests | (349) | (30) | (380) | 0 | (380) | |||
| Net income (group share) | 1,370 | 527 | 1,897 | (0) | 1,897 |
Natixis - IFRS 9 Balance sheet
| Assets (€bn) | 31/12/2019 | 31/12/2018 |
| Cash and balances with central banks | 21.0 | 24.3 |
| Financial assets at fair value through profit and loss1 | 228.8 | 214.1 |
| Financial assets at fair value through Equity | 12.1 | 10.8 |
| Loans and receivables1 | 119.2 | 96.6 |
| Debt instruments at amortized cost | 1.6 | 1.2 |
| Insurance assets | 108.1 | 100.5 |
| Non-current assets held for sale | 0.0 | 25.6 |
| Accruals and other assets | 15.7 | 16.8 |
| Investments in associates | 0.7 | 0.7 |
| Tangible and intangible assets | 2.1 | 1.1 |
| Goodwill | 3.9 | 3.8 |
| Total | 513.2 | 495.5 |
| Liabilities and equity (€bn) | 31/12/2019 | 31/12/2018 |
| Due to central banks | 0.0 | 0.0 |
| Financial liabilities at fair value through profit and loss1 | 218.3 | 208.2 |
| Customer deposits and deposits from financial institutions1 | 102.4 | 109.2 |
| Debt securities | 47.4 | 35.0 |
| Liabilities associated with non-current assets held for sale | 0.0 | 9.7 |
| Accruals and other liabilities | 18.1 | 17.0 |
| Insurance liabilities | 100.5 | 89.5 |
| Contingency reserves | 1.6 | 1.7 |
| Subordinated debt | 4.0 | 4.0 |
| Equity attributable to equity holders of the parent | 19.4 | 19.9 |
| Minority interests | 1.4 | 1.3 |
| Total | 513.2 | 495.5 |
1 Including deposit and margin call
Natixis - 4Q19 P&L by business line
| €m | AWM | CIB | Insurance | Payments | Financial investments | Corporate Center | 4Q19 reported | |
| Net revenues | 1,109 | 899 | 216 | 111 | 188 | (20) | 2,503 | |
| Expenses | (681) | (602) | (125) | (96) | (153) | (89) | (1,745) | |
| Gross operating income | 428 | 297 | 90 | 15 | 35 | (109) | 758 | |
| Provision for credit losses | 2 | (118) | 0 | (0) | (1) | (0) | (119) | |
| Net operating income | 430 | 179 | 90 | 15 | 34 | (109) | 639 | |
| Associates and other items | 2 | 2 | 4 | (0) | 2 | (0) | 9 | |
| Pre-tax profit | 432 | 181 | 94 | 15 | 35 | (109) | 648 | |
| Tax | (163) | |||||||
| Minority interests | (113) | |||||||
| Net income (gs) | 371 |
Asset & Wealth Management
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 799 | 842 | 841 | 1,032 | 773 | 932 | 945 | 1,109 | 8% | 3,513 | 3,760 | 7% | |||
| Asset Management1 | 762 | 805 | 805 | 998 | 742 | 900 | 908 | 1,061 | 6% | 3,369 | 3,611 | 7% | |||
| Wealth management | 37 | 37 | 36 | 34 | 31 | 32 | 37 | 48 | 42% | 144 | 149 | 3% | |||
| Expenses | (548) | (569) | (584) | (642) | (558) | (605) | (648) | (681) | 6% | (2,343) | (2,492) | 6% | |||
| Gross operating income | 251 | 273 | 257 | 389 | 216 | 327 | 297 | 428 | 10% | 1,170 | 1,268 | 8% | |||
| Provision for credit losses | (0) | (1) | (1) | 0 | 1 | (2) | (8) | 2 | (2) | (8) | |||||
| Net operating income | 251 | 272 | 256 | 390 | 216 | 325 | 289 | 430 | 10% | 1,169 | 1,260 | 8% | |||
| Associates | 0 | 0 | 0 | 2 | 0 | 0 | 0 | 0 | 3 | 1 | |||||
| Other items | (0) | (3) | (2) | 41 | (2) | (2) | 8 | 1 | 37 | 5 | |||||
| Pre-tax profit | 251 | 269 | 255 | 433 | 214 | 323 | 297 | 432 | (0)% | 1,208 | 1,266 | 5% | |||
| Cost/Income ratio | 68.6% | 67.6% | 69.4% | 62.3% | 72.1% | 64.9% | 68.5% | 61.4% | 66.7% | 66.3% | |||||
| Cost/Income ratio excl. IFRIC 21 | 68.1% | 67.7% | 69.6% | 62.4% | 71.6% | 65.1% | 68.7% | 61.5% | 66.7% | 66.3% | |||||
| RWA (Basel 3 - in €bn) | 11.7 | 11.8 | 12.5 | 12.3 | 12.5 | 13.7 | 13.4 | 14.0 | 14% | 12.3 | 14.0 | 14% | |||
| Normative capital allocation (Basel 3) | 4,143 | 4,065 | 4,150 | 4,363 | 4,364 | 4,407 | 4,555 | 4,581 | 5% | 4,180 | 4,477 | 7% | |||
| RoE after tax (Basel 3)2 | 13.7% | 15.2% | 13.9% | 19.6% | 11.5% | 15.1% | 13.3% | 19.0% | 15.7% | 14.8% | |||||
| RoE after tax (Basel 3) excl. IFRIC 212 | 14.0% | 15.1% | 13.8% | 19.5% | 11.8% | 15.0% | 13.3% | 19.0% | 15.7% | 14.8% |
[1] Asset management including Private equity and Employee savings plan
2 Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles
Corporate & Investment Banking
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 944 | 976 | 828 | 518 | 807 | 847 | 784 | 899 | 74% | 3,266 | 3,337 | 2% | |||
| Global markets | 527 | 457 | 334 | 14 | 366 | 419 | 344 | 381 | NR | 1,332 | 1,509 | 13% | |||
| FIC-T | 378 | 299 | 252 | 231 | 251 | 304 | 258 | 306 | 33% | 1,159 | 1,118 | (4)% | |||
| Equity | 148 | 145 | 97 | (219) | 125 | 117 | 94 | 81 | NR | 171 | 417 | 144% | |||
| Excl. cash | 143 | 140 | 97 | (219) | 125 | 117 | 94 | 81 | 162 | 417 | 157% | ||||
| Cash equity | 5 | 4 | (0) | (0) | 0 | 0 | 0 | 0 | 9 | 0 | |||||
| CVA/DVA desk | 1 | 13 | (15) | 2 | (9) | (3) | (8) | (6) | 2 | (26) | |||||
| Global finance1 | 341 | 394 | 341 | 362 | 337 | 333 | 369 | 369 | 2% | 1,438 | 1,408 | (2)% | |||
| Investment banking2 | 82 | 85 | 78 | 126 | 87 | 90 | 73 | 145 | 14% | 372 | 395 | 6% | |||
| Other | (7) | 41 | 74 | 16 | 16 | 6 | (2) | 5 | 123 | 24 | |||||
| Expenses | (566) | (551) | (525) | (559) | (582) | (523) | (527) | (602) | 8% | (2,202) | (2,235) | 1% | |||
| Gross operating income | 378 | 425 | 302 | (41) | 225 | 324 | 256 | 297 | NR | 1,064 | 1,102 | 4% | |||
| Provision for credit losses | (31) | (37) | (98) | (9) | (30) | (104) | (59) | (118) | (174) | (312) | |||||
| Net operating income | 347 | 388 | 204 | (50) | 195 | 219 | 197 | 179 | NR | 890 | 790 | (11)% | |||
| Associates | 4 | 3 | 3 | 3 | 2 | 3 | 2 | 2 | 12 | 10 | |||||
| Other items | 3 | 0 | (0) | 0 | (15) | 0 | (0) | (0) | 3 | (15) | |||||
| Pre-tax profit | 353 | 391 | 207 | (47) | 183 | 222 | 200 | 181 | NR | 904 | 786 | (13)% | |||
| Cost/Income ratio | 60.0% | 56.4% | 63.5% | 107.9% | 72.2% | 61.8% | 67.3% | 67.0% | 67.4% | 67.0% | |||||
| Cost/Income ratio excl. IFRIC 21 | 57.7% | 57.2% | 64.4% | 109.4% | 69.1% | 62.7% | 68.3% | 67.9% | 67.4% | 67.0% | |||||
| RWA (Basel 3 - in €bn) | 59.7 | 61.7 | 61.2 | 61.1 | 62.0 | 61.1 | 62.3 | 62.2 | 2% | 61.1 | 62.2 | 2% | |||
| Normative capital allocation (Basel 3) | 6,435 | 6,416 | 6,676 | 6,631 | 6,634 | 6,740 | 6,734 | 6,768 | 2% | 6,539 | 6,719 | 3% | |||
| RoE after tax (Basel 3)3 | 16.0% | 17.6% | 9.0% | NR | 7.6% | 9.6% | 8.5% | 7.8% | 10.0% | 8.4% | |||||
| RoE after tax (Basel 3) excl. IFRIC 213 | 17.0% | 17.2% | 8.7% | NR | 8.6% | 9.2% | 8.2% | 7.5% | 10.0% | 8.4% |
[1] Including Film industry financing 2 Including M&A 3 Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles
Insurance
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 204 | 193 | 192 | 201 | 218 | 207 | 205 | 216 | 7% | 790 | 846 | 7% | |||
| Expenses | (118) | (108) | (103) | (118) | (125) | (116) | (112) | (125) | 6% | (448) | (478) | 7% | |||
| Gross operating income | 86 | 85 | 89 | 83 | 93 | 92 | 93 | 90 | 9% | 342 | 368 | 8% | |||
| Provision for credit losses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
| Net operating income | 86 | 85 | 89 | 83 | 93 | 92 | 93 | 90 | 9% | 342 | 368 | 8% | |||
| Associates | 3 | 0 | 3 | 9 | 0 | 5 | 1 | 4 | 15 | 10 | |||||
| Other items | 0 | 0 | (0) | 0 | 0 | (0) | 0 | 0 | (0) | (0) | |||||
| Pre-tax profit | 89 | 85 | 92 | 91 | 93 | 96 | 94 | 94 | 3% | 356 | 378 | 6% | |||
| Cost/Income ratio | 58.0% | 56.1% | 53.8% | 58.9% | 57.5% | 55.8% | 54.6% | 58.1% | 56.7% | 56.5% | |||||
| Cost/Income ratio excl. IFRIC 21 | 51.1% | 58.5% | 56.2% | 61.2% | 51.7% | 57.8% | 56.6% | 60.1% | 56.7% | 56.5% | |||||
| RWA (Basel 3 - in €bn) | 7.3 | 7.0 | 7.1 | 7.3 | 8.0 | 7.9 | 8.4 | 8.3 | 14% | 7.3 | 8.3 | 14% | |||
| Normative capital allocation (Basel 3) | 853 | 868 | 828 | 841 | 858 | 942 | 926 | 978 | 16% | 848 | 926 | 9% | |||
| RoE after tax (Basel 3)1 | 28.6% | 26.4% | 30.3% | 30.7% | 29.4% | 28.4% | 27.7% | 26.4% | 29.0% | 27.9% | |||||
| RoE after tax (Basel 3) excl. IFRIC 211 | 33.0% | 24.9% | 28.8% | 29.2% | 33.3% | 27.2% | 26.4% | 25.2% | 29.0% | 27.9% |
1 Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles
Payments
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 93 | 95 | 96 | 105 | 103 | 105 | 103 | 111 | 6% | 389 | 423 | 9% | |||
| Expenses | (79) | (88) | (84) | (90) | (88) | (94) | (93) | (96) | 6% | (341) | (370) | 9% | |||
| Gross operating income | 14 | 7 | 12 | 15 | 16 | 11 | 10 | 15 | 3% | 48 | 52 | 9% | |||
| Provision for credit losses | (0) | (0) | 0 | (2) | (0) | (1) | (1) | (0) | (2) | (2) | |||||
| Net operating income | 14 | 7 | 12 | 13 | 16 | 10 | 9 | 15 | 17% | 46 | 50 | 9% | |||
| Associates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
| Other items | 0 | 1 | 0 | 0 | 0 | 0 | 0 | (0) | 1 | 0 | |||||
| Pre-tax profit | 14 | 8 | 12 | 13 | 16 | 10 | 9 | 15 | 17% | 47 | 50 | 7% | |||
| Cost/Income ratio | 85.2% | 92.2% | 87.6% | 85.7% | 84.8% | 89.6% | 90.1% | 86.1% | 87.6% | 87.6% | |||||
| Cost/Income ratio excl. IFRIC21 | 84.5% | 92.4% | 87.9% | 85.9% | 84.1% | 89.8% | 90.3% | 86.3% | 87.6% | 87.6% | |||||
| RWA (Basel 3 - in €bn) | 1.0 | 1.2 | 1.0 | 1.1 | 1.1 | 1.2 | 1.1 | 1.1 | (1)% | 1.1 | 1.1 | (1)% | |||
| Normative capital allocation (Basel 3) | 295 | 300 | 352 | 332 | 356 | 373 | 385 | 384 | 16% | 320 | 375 | 17% | |||
| RoE after tax (Basel 3)1 | 12.8% | 7.4% | 9.6% | 10.1% | 12.0% | 7.3% | 6.5% | 10.9% | 9.9% | 9.1% | |||||
| RoE after tax (Basel 3) excl. IFRIC 211 | 13.4% | 7.2% | 9.4% | 9.9% | 12.5% | 7.1% | 6.3% | 10.7% | 9.9% | 9.1% |
Standalone EBITDA calculation
Figures excluding exceptional items2
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 2018 | 2019 | |
| Net revenues | 93 | 95 | 96 | 105 | 103 | 105 | 103 | 111 | 389 | 423 | |
| Expenses | (79) | (87) | (85) | (90) | (88) | (94) | (91) | (93) | (341) | (365) | |
| Gross operating income - Natixis reported excl. exceptional items | 14 | 8 | 11 | 15 | 16 | 11 | 13 | 18 | 48 | 57 | |
| Analytical adjustments to net revenues | (1) | (1) | (2) | (1) | (1) | (1) | (1) | (1) | (5) | (6) | |
| Structure charge adjustments to expenses | 5 | 5 | 5 | 5 | 6 | 5 | 5 | 5 | 20 | 22 | |
| Gross operating income - standalone view | 18 | 12 | 14 | 19 | 20 | 15 | 17 | 22 | 63 | 73 | |
| Depreciation, amortization and impairment on property, plant and equipment and intangible assets | 3 | 4 | 4 | 5 | 4 | 4 | 3 | 4 | 16 | 16 | |
| EBITDA - standalone view | 21 | 16 | 18 | 24 | 24 | 19 | 20 | 26 | 79 | 89 |
EBITDA = Net revenues (-) Operating expenses. Standalone view excluding analytical items and structure charges
[1] Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles 2 See page 5
Financial investments
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | 190 | 174 | 197 | 181 | 193 | 196 | 195 | 188 | 4% | 742 | 772 | 4% | |||
| Coface | 177 | 156 | 180 | 165 | 175 | 181 | 178 | 177 | 8% | 678 | 712 | 5% | |||
| Other | 13 | 18 | 17 | 16 | 18 | 15 | 17 | 10 | (34)% | 64 | 60 | (5)% | |||
| Expenses | (130) | (125) | (131) | (140) | (133) | (141) | (133) | (153) | 9% | (526) | (561) | 7% | |||
| Gross operating income | 59 | 49 | 66 | 41 | 60 | 55 | 62 | 35 | (15)% | 215 | 211 | (2)% | |||
| Provision for credit losses | (6) | 1 | 1 | 3 | (2) | (4) | (3) | (1) | (1) | (10) | |||||
| Net operating income | 54 | 50 | 67 | 44 | 58 | 51 | 59 | 34 | (23)% | 214 | 201 | (6)% | |||
| Associates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
| Other items | 2 | 3 | 0 | 0 | 0 | 5 | 0 | 2 | 5 | 7 | |||||
| Pre-tax profit | 56 | 53 | 67 | 44 | 58 | 56 | 59 | 35 | (19)% | 220 | 208 | (5)% | |||
| RWA (Basel 3 - in €bn) | 5.3 | 5.6 | 5.5 | 5.6 | 5.7 | 5.7 | 5.6 | 5.8 | 5% | 5.6 | 5.8 | 5% |
Corporate Center
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 4Q19 vs. 4Q18 | 2018 | 2019 | 2019 vs. 2018 | |||
| Net revenues | (37) | 79 | 3 | 3 | 37 | (5) | 47 | (20) | 49 | 59 | |||||
| Expenses | (232) | (87) | (71) | (107) | (234) | (98) | (77) | (89) | (17)% | (497) | (497) | (0)% | |||
| SRF | (160) | (0) | (0) | 0 | (170) | 0 | 0 | (0) | (160) | (170) | 6% | ||||
| Other | (73) | (86) | (71) | (107) | (64) | (98) | (77) | (89) | (17)% | (337) | (327) | (3)% | |||
| Gross operating income | (269) | (7) | (68) | (104) | (196) | (103) | (29) | (109) | 5% | (448) | (437) | ||||
| Provision for credit losses | 1 | (4) | 4 | (15) | 0 | 1 | 0 | (0) | (14) | 1 | |||||
| Net operating income | (269) | (11) | (63) | (118) | (196) | (102) | (29) | (109) | (8)% | (462) | (437) | ||||
| Associates | 0 | 0 | 0 | 0 | 0 | 0 | (0) | (0) | 0 | 0 | |||||
| Other items | 1 | 2 | 2 | 3 | 699 | (5) | 1 | (0) | 8 | 695 | |||||
| Pre-tax profit | (268) | (9) | (62) | (115) | 503 | (107) | (28) | (109) | (5)% | (453) | 258 | ||||
| RWA (Basel 3 - in €bn) | 9.0 | 9.4 | 8.7 | 7.8 | 7.0 | 7.3 | 8.0 | 7.6 | (3)% | 7.8 | 7.6 | (3)% |
€697m capital gain coming from the disposal of the retail banking activities in 1Q19
4Q19 results: from data excluding non-operating items to reported data
| €m | 4Q19 underlying | Exchange rate fluctuations on DSN in currencies | Transformation & Business Efficiency investment costs | Fit to Win investments & restructuring expenses | Other | 4Q19 reported | ||
| Net revenues | 2 534 | (31) | 2 503 | |||||
| Expenses | (1 708) | (31) | (6) | (1 745) | ||||
| Gross operating income | 826 | (31) | (31) | (6) | 0 | 758 | ||
| Provision for credit losses | (119) | (119) | ||||||
| Associates | 6 | 6 | ||||||
| Gain or loss on other assets | 2 | 0 | 3 | |||||
| Pre-tax profit | 715 | (31) | (31) | (6) | 0 | 648 | ||
| Tax | (185) | 10 | 10 | 2 | (163) | |||
| Minority interests | (116) | 2 | (113) | |||||
| Net income (group share) | 415 | (21) | (22) | (2) | 0 | 371 |
2019 results: from data excluding non-operating items to restated data
| €m | 2019 underlying | Exchange rate fluctuations on DSN in currencies | Transformation & Business Efficiency investment costs | Fit to Win investments & restructuring expenses | Disposal of subsidiary in Brazil | Capital gain - Disposal of retail banking activities | 2019 restated | ||
| Net revenues | 9,177 | 19 | 9,196 | ||||||
| Expenses | (6,545) | (79) | (8) | (6,632) | |||||
| Gross operating income | 2,633 | 19 | (79) | (8) | 0 | 0 | 2,564 | ||
| Provision for credit losses | (332) | (332) | |||||||
| Associates | 21 | 21 | |||||||
| Gain or loss on other assets | 9 | (15) | 697 | 692 | |||||
| Pre-tax profit | 2,331 | 19 | (79) | (8) | (15) | 697 | 2,945 | ||
| Tax | (612) | (6) | 24 | 3 | (78) | (669) | |||
| Minority interests | (349) | 3 | (33) | (380) | |||||
| Net income (group share) | 1,370 | 13 | (55) | (2) | (15) | 586 | 1,897 |
Figures restated as communicated on April 11, 2019 following the disposal of the retail banking activities. See page 14 for the reconciliation of the restated figures with the accounting view
Natixis - 4Q19 capital & Basel 3 financial structure
See note on methodology - Irrevocable Payment Commitment (IPC) deduction disclosed as part of the ratio as of 2Q19
Fully-loaded
| €bn | 31/12/2019 |
| Shareholder’s Equity | 19.4 |
| Hybrid securities(2) | (2.1) |
| Goodwill & intangibles | (3.9) |
| Deferred tax assets | (0.7) |
| Dividend provision | (1.0) |
| Other deductions | (0.5) |
| CET1 capital | 11.2 |
| CET1 ratio | 11.3% |
| Additional Tier 1 capital | 1.8 |
| Tier 1 capital | 12.9 |
| Tier 1 ratio | 13.1% |
| Tier 2 capital | 2.2 |
| Total capital | 15.2 |
| Total capital ratio | 15.3% |
| Risk-weighted assets | 99.0 |
Phased-in excl. current financial year’s earnings and dividends
| €bn | 31/12/2019 |
| Fully-loaded CET1 capital | 11.2 |
| Current financial year’s earnings | (1.9) |
| Current financial year’s accrued dividend | 1.0 |
| CET1 capital | 10.2 |
| CET1 ratio | 10.4% |
| Additional Tier 1 capital | 2.1 |
| Tier 1 capital | 12.4 |
| Tier 1 ratio | 12.5% |
| Tier 2 capital | 2.3 |
| Total capital | 14.7 |
| Total capital ratio | 14.8% |
| Risk-weighted assets | 99.0 |
IFRIC 21 effects by business line
Effect in Expenses
| €m | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 2018 | 2019 | |
| AWM | (4) | 1 | 1 | 1 | (4) | 1 | 1 | 1 | 0 | 0 | |
| CIB | (22) | 7 | 7 | 7 | (24) | 8 | 8 | 8 | 0 | 0 | |
| Insurance | (14) | 5 | 5 | 5 | (13) | 4 | 4 | 4 | 0 | 0 | |
| Payments | (1) | 0 | 0 | 0 | (1) | 0 | 0 | 0 | 0 | 0 | |
| Financial investments | 0 | 0 | 0 | 0 | (0) | 0 | 0 | 0 | 0 | 0 | |
| Corporate center | (119) | 40 | 40 | 40 | (119) | 40 | 40 | 40 | 0 | 0 | |
| Total Natixis | (160) | 53 | 53 | 53 | (161) | 54 | 54 | 54 | 0 | 0 |
Historical figures restated for the disposal of the retail banking activities
Normative capital allocation and RWA breakdown - 31/12/2019
| €bn | RWA EoP | % of total | Goodwill & intangibles 2019 | Capital allocation 2019 | RoE after tax 2019 |
| AWM | 14.0 | 16% | 3.1 | 4.5 | 14.8% |
| CIB | 62.2 | 73% | 0.2 | 6.7 | 8.4% |
| Insurance | 8.3 | 10% | 0.1 | 0.9 | 27.9% |
| Payments | 1.1 | 1% | 0.3 | 0.4 | 9.1% |
| Total (excl. Corp. center and Financial invmts) | 85.6 | 100% | 3.7 | 12.5 |
| RWA breakdown (€bn) | 31/12/2019 |
| Credit risk | 66.3 |
| Internal approach | 53.9 |
| Standard approach | 12.4 |
| Counterparty risk | 6.4 |
| Internal approach | 5.5 |
| Standard approach | 0.9 |
| Market risk | 11.2 |
| Internal approach | 5.8 |
| Standard approach | 5.4 |
| CVA | 1.3 |
| Operational risk - Standard approach | 13.7 |
| Total RWA | 99.0 |
Fully-loaded leverage ratio1
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
| €bn | 31/12/2019 |
| Tier 1 capital(1) | 13.3 |
| Total prudential balance sheet | 407.2 |
| Adjustment on derivatives | (45.3) |
| Adjustment on repos(2) | (26.6) |
| Other exposures to affiliates | (43.5) |
| Off balance sheet commitments | 38.6 |
| Regulatory adjustments | (5.2) |
| Total leverage exposure | 325.2 |
| Leverage ratio | 4.1% |
[1] See note on methodology. 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 at December 31, 2019
| €bn | 31/12/2019 |
| Shareholders’ equity (group share) | 19.4 |
| Deduction of hybrid capital instruments | (2.0) |
| Deduction of gain on hybrid instruments | (0.1) |
| Distribution | (1.0) |
| Net book value | 16.3 |
| Restated intangible assets1 | (0.7) |
| Restated goodwill1 | (3.4) |
| Net tangible book value2 | 12.2 |
| € | |
| Net book value per share | 5.17 |
| Net tangible book value per share | 3.89 |
2019 Earnings per share
| €m | 31/12/2019 |
| Net income (gs) | 1,897 |
| DSN interest expenses on preferred shares adjustment | (138) |
| Net income attributable to shareholders | 1,759 |
| Earnings per share (€) | 0.56 |
Number of shares as at December 31, 2019
| 31/12/2019 | |
| Average number of shares over the period, excluding treasury shares | 3,150,173,517 |
| Number of shares, excluding treasury shares, EoP | 3,150,995,283 |
| Number of treasury shares, EoP | 2,083,199 |
Net income attributable to shareholders
| €m | 4Q19 | 2019 |
| Net income (gs) | 371 | 1,897 |
| DSN interest expenses on preferred shares adjustment | (34) | (138) |
| RoE & RoTE numerator | 337 | 1,759 |
[1] See note on methodology 2 Net tangible book value = Book value – goodwill - intangible assets
RoTE1
| €m | 31/12/2019 |
| Shareholders’ equity (group share) | 19,396 |
| DSN deduction | (2,122) |
| Dividend provision | (977) |
| Intangible assets | (669) |
| Goodwill | (3,386) |
| RoTE Equity end of period | 12,243 |
| Average RoTE equity (4Q19) | 12,398 |
| 4Q19 RoTE annualized with no IFRIC 21 adjustment | 10.9% |
| IFRIC 21 impact | (47) |
| 4Q19 RoTE annualized excl. IFRIC 21 | 9.4% |
| Average RoTE equity (2019) | 12,296 |
| 2019 RoTE annualized excl. IFRIC 21 | 14.3% |
RoE1
| €m | 31/12/2019 |
| Shareholders’ equity (group share) | 19,396 |
| DSN deduction | (2,122) |
| Dividend provision | (977) |
| Unrealized/deferred gains and losses in equity (OCI) | (512) |
| RoE Equity end of period | 15,785 |
| Average RoE equity (4Q19) | 15,929 |
| 4Q19 RoE annualized with no IFRIC 21 adjustment | 8.5% |
| IFRIC 21 impact | (47) |
| 4Q19 RoE annualized excl. IFRIC 21 | 7.3% |
| Average RoE equity (2019) | 15,821 |
| 2019 RoE annualized excl. IFRIC 21 | 11.1% |
Doubtful loans2
| €bn | 30/09/2019 Under IFRS 9 | 31/12/2019 Under IFRS 9 |
| Provisionable commitments3 | 1.9 | 2.0 |
| Provisionable commitments / Gross debt | 1.5% | 1.8% |
| Stock of provisions4 | 1.4 | 1.4 |
| Stock of provisions / Provisionable commitments | 72% | 71% |
[1]See note on methodology. Returns based on quarter-end balance sheet to reflect the disposal of the retail banking activities. The €586m net capital gain is not annualized 2 On-balance sheet, excluding repos, net of collateral 3 Net commitments 4 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 fourth quarter 2019 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 February 7, 2020 at 9:00 a.m. CET, will be webcast live on www.natixis.com (on the “Investors & shareholders” page).
Contacts:
| Investor Relations: | investorelations@natixis.com | Press Relations: | relationspresse@natixis.com | ||
| Damien Souchet | T + 33 1 58 55 41 10 | Daniel Wilson | T + 33 1 58 19 10 40 | ||
| Noemie Louvel | T + 33 1 78 40 37 87 | Vanessa Stephan | T + 33 1 58 19 34 16 | ||
| Souad Ed Diaz | T + 33 1 58 32 68 11 | ||||
Attachment
