NATIXIS :FOURTH-QUARTER 2016 and FULL-YEAR 2016 RESULTS

ARIVA.DE Börsen-Geflüster

Kurse

Natixis -   0,00%

• 139bps of CET1 ratio⁽³⁾ generated since the start of 2016, redistributed in the form of a €1.1bn cash dividend of €0.35⁽¹⁾ per share
• Phased-in CET1 ratio of 10.8% at end-December 2016, well above the ECB's CET1 capital requirement for 2017 (7.75% phased in, excluding non-public P2G)

• Accelerating expansion in 2017 particularly in low capital-intensive businesses (Asset Management, Investment banking and Payment solutions)
• Investor Day for 2018-2020 Strategic plan on November 20, 2017

 (1) Proposal to be submitted to the Annual General Meeting of Shareholders on May 23, 2017 (2) See note on methodology and excluding the IFRIC 21 impact in 4Q16 (3) Based on CRR-CRD4 rules published on June 26, 2013, including the Danish compromise without phase-in except for DTAs on tax-loss carryforwards

The Board of Directors approved Natixis' accounts for full-year 2016 on February 9, 2017.

For Natixis, the main features of 4Q16 were ⁽¹⁾:

• 3% yoy growth in core-business net revenues to €2.141bn.

Within the Investment Solutions core business, Asset Management recorded €2.2bn of net inflow in Europe and a marked slowdown in outflow in the US. The ramp-up of Insurance business lifted Insurance net revenues 16% over the full year.

Strong performances in Global Markets and M&A fueled a 21% increase in net revenues from Corporate & Investment Banking.

In Specialized Financial Services, strong business momentum in Specialized Financing is notably linked to the extension of relations with the Groupe BPCE networks.

• a marked improvement in the provision for credit loss to €60m, which extended the decline observed since the start of the year,
• a 20% yoy advance in restated net income (group share and excluding the IFRIC 21 impact) to €345m,
• core-business ROE of 13.1%, up 150bps yoy,
• a CET1 ratio⁽²⁾ of 11,0% at December 31, 2016, after factoring in the dividend⁽³⁾,
• a leverage ratio of 4.2% at end-December 2016.

Natixis completed the third year of the New Frontier plan with net revenues at €8.7bn and reported net profit (group share) at €1.4bn. The cost of risk declined to 34bps in 2016 from 36bps in 2015 and 38bps in 2014, thereby underlining Natixis' ability to absorb sectoral shocks.

2016 once again underscored Natixis' ability to generate capital and create value for shareholders, as witnessed by a cash dividend⁽³⁾ of €0.35 per share.

Laurent Mignon, Natixis Chief Executive Officer, said: "Despite demanding conditions in 2016, strong commercial dynamics fueled further growth in our core businesses revenues during the year as shown by high activity levels in 4Q16 and sharply improved profitability. In Corporate & Investment Banking, activity levels were robust on capital markets, but also in Investment Banking, thanks notably to the quick ramp-up of our M&A activities through Natixis Partners and PJ Solomon. In Asset Management, overall AuM made progress, despite a minor decline in the US, and margins resisted well. The extensive transformation of all our businesses is gaining pace with the execution of the Transformation and Business Efficiency program and is set to provide us with a stronger platform from which to attain our new strategic goals out to 2020."

1. See note on methodology and excluding the IFRIC 21 impact in 4Q16 for the ROE calculation
2. Based on CRR-CRD4 rules published on June 26, 2013, including the Danish compromise without phase-in except for DTAs on tax-loss carryforwards
3. Proposal to be submitted to the Annual General Meeting of Shareholders on May 23, 2017

1 - Natixis 4Q16 and 2016 results

1.1         exceptional items⁽¹⁾

1. See note on methodology
2. 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

1.2         4Q16 results

1. See note on methodology
    

Unless stated otherwise, the commentary that follows refers to pro forma results excluding exceptional items (see detail p4).

Natixis' net revenues totaled €2.287bn in 4Q16, up 2% vs. 4Q15.

Over the same period, net revenues from core businesses amounted to €2.141bn, a 3% increase on a year earlier, fueled by strong growth in Corporate & Investment Banking and Insurance which grew net revenues by 21% and 16%, respectively.
Within the Investment Solutions core business, net revenue growth in the Insurance segment partly offset the decline in net revenues in Asset Management vs. 4Q15, although the year-earlier period represented a high basis of comparison due to the contribution from performance fees. 
Specialized Financial Services grew net revenues by 2% in 4Q16 vs. 4Q15.
Net revenues from Financial Investments contracted 22% in 4Q16 yoy, due primarily to a 25% decline in Coface's revenues during the period.
Operating expenses rose 4% yoy to €1.633bn in 4Q16. This increase needs to be considered in light of expansion in core businesses.

Gross operating income came out at €653m in 4Q16 vs. €663m in 4Q15.

The provision for credit loss fell 9% yoy to €60m in 4Q16. Expressed in basis points of the loan book, the cost of risk more than halved to 18bps from 41bps during the same period.
For core businesses, the provision for credit loss stood at €37m in 4Q16 and was at its lowest since the launch of New Frontier.

An impairment on deferred tax assets due to cut in corporate tax rate from 2020 was booked on 4Q16, offset by the settlement of tax files, and therefore with no impact on income statement.

The 58% slide in minority interests in 4Q16 vs. 4Q15, stemmed from Coface's much lower contribution to Natixis' earnings and from a fallback in performance fees booked by several European Asset Management affiliates compared to the very high levels recorded in 4Q15.

Restated net income (group share) excluding IFRIC 21 and exceptional items amounted to €345m in 4Q16, a 20% increase on a year earlier.
Including exceptional items (€111m net of tax in 4Q16 vs. €3m in 4Q15) and IFRIC 21 (+€39m in 4Q16 vs.      +€26m in 4Q15), reported net income (group share) worked out to €496m in 4Q16, up 57% on a year earlier.

Core-business ROE, excluding the IFRIC 21 impact, climbed 150bps on 4Q15 to 13.1%.

1.3         2016 results

1. See note on methodology

Unless stated otherwise, the commentary that follows refers to pro forma results excluding exceptional items (see detail p4).

Natixis' net revenues reached €8.7bn for the full year. They rose 2% over the year, including a 3% increase in core-business net revenues to €8.1bn, buoyed by net revenue growth of 11% in Corporate & Investment Banking and Insurance, and 6% in Specialized Financing in 2016.

Net revenues from Financial Investments contracted 25% during the year, mirroring declines in revenues of 22% at Coface and 49% from Corporate Data Solutions.

Operating expenses rose 4% to €6.208bn during the year. After restating for the contribution to the Single Resolution Fund (€114m in 2016 vs. €43m in 2015), they increased 3%.

Gross operating income worked out to €2.493bn vs. €2.578bn in 2015. For core businesses, gross operating income improved 2% to over €2.8bn.  

The provision for credit loss rose 17% to €305m during the year, after being impacted by the provisions set aside on the Oil & Gas sector in 1H16. It declined 27% in the second half compared to the first.

Net income restated for exceptional items amounted to €1.372bn in full-year 2016, up 7% on a year earlier.

Including exceptional items (+€3m net of tax in 2016 vs. +€64m in 2015), reported net income (group share) reached €1.374bn.

2 - Financial structure

Natixis' Basel 3 CET1 ratio⁽¹⁾ worked out to 11.0% at December 31, 2016.

Based on a Basel 3 CET1 ratio of 11.2% at September 30, 2016, the respective impacts in the fourth quarter of 2016 were as follows:

• effect of allocating net income (group share) to retained earnings in 4Q16, excluding the dividend: +44bps,
• planned dividend⁽²⁾ for 4Q16: -58bps,
• RWA, FX and other effects: -10bps.

Basel 3 capital and risk-weighted assets⁽¹⁾ amounted to €12.7bn and €115.5bn, respectively, at December 31, 2016.

EQUITY CAPITAL - TIER ONE CAPITAL - BOOK VALUE PER SHARE

Equity capital (group share) totalled €19.8bn at December 31, 2016, of which €1.7bn was in the form of hybrid securities (DSNs) recognized in equity capital at fair value.

Core tier 1 capital (Basel 3 - phased-in) stood at €12.5bn and tier 1 capital (Basel 3 - phased-in) at €14.2bn.

Natixis' risk-weighted assets totalled €115.5bn at December 31, 2016 (Basel 3 - phased-in), breakdown as following:

• Credit risk: €79.5bn
• Counterparty risk: €7.5bn
• CVA risk: €3.7bn
• Market risk: €11.1bn
• Operational risk: €13.7bn

Under Basel 3 (phased-in), the CET1 ratio amounted to 10.8%, the Tier 1 ratio to 12.3% and the total ratio to 14.5% at December 31, 2016.  

Book value per share, including planned dividend for 2016, was €5.38 at December 31, 2016 based on 3,135,617,574 shares excluding treasury stock (the total number of shares stands at 3,137,074,580). Tangible book value per share (after deducting goodwill and intangible fixed assets) was €4.22.

LEVERAGE RATIO⁽³⁾

The leverage ratio worked out to 4.2% at December 31, 2016.

OVERALL CAPITAL ADEQUACY RATIO

As at December 31, 2016, the financial conglomerate's capital excess was estimated at around than €6bn.

1. Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in except for DTAs on tax-loss carryforwards
2. Proposal to be submitted to the Annual General Meeting of Shareholders on May 23, 2017
3. See note on methodology

3 - results by Business line

Investment Solutions      

1.  See note on methodology and excluding IFRIC 21 impact on 4Q16

Overall, net revenues from Investment Solutions declined only 4% in 2016, thanks to accelerated growth in Insurance business with the networks.
In Insurance, the rollout of the Life and Personal Protection offering across the Caisses d'Epargne network proceeded gradually during the year and was completed in mid-October. 

Since the launch of the New Frontier plan, the compound annual growth rate 2014-2016 of Investment Solutions
core business worked out to 11%.

Operating expenses declined 4% yoy in 4Q16 and 1% in 2016.

Gross operating income worked out to €280m in 4Q16 vs. €357m in 4Q15. Over 2016 as a whole, it was down 11%.

Pre-tax profit totaled €273m in 4Q16 (-25% vs. 4Q15) and €1.031bn in 2016 (-11% vs. 2015).

ROE after tax was 13.3% in 2016. The 2.5pp-drop over the year stemmed partly from the rise in allocated capital in order to develop business lines, in line with the axes of the strategic plan to increase the relative weight of the Investment Solutions core business.

Asset Management posted net revenues of €689m in 4Q16 and €2.547bn in 2016, compared to €817m in 4Q15 and €2.755bn in 2015.

After restating for performance fees, which primarily concerned few European affiliates (€128m in 2016 vs. €241m in 2015), net revenues contracted 4% over the full year.
These lower performance fees explained the 5% decline in revenues in Europe to €737m in 2016. After restating for these fees, revenues advanced 14% in Europe during the same period, buoyed by margin improvement.
In the US, the 9% decrease in revenues in 2016 stemmed from the contraction in average AuM whereas margins resisted well and only narrowed slightly during the year.

Overall assets under management amounted to €832bn at December 31, 2016, an increase of over €30bn during the year, thanks to a €33bn positive market effect and a near €12bn positive exchange-rate effect, which more than offset a negative impact of over €2bn stemming from changes in the scope of consolidation (including a +€5.4bn impact from the consolidation of Ciloger at end-2016) and €12bn of net outflow, most of which in the US.  

In Insurance, overall turnover (excluding the reinsurance treaty with CNP), advanced 32% to €8.0bn during the year. It included increases of 42% in life insurance (excluding the reinsurance treaty with CNP), 9% in property & casualty insurance and 8% in personal protection and borrower's insurance.

In the life insurance segment, net inflow amounted to €2.9bn in 2016 vs. €1.3bn in 2015, with a third of this concerning unit-linked policies. AuM rose 8% during the year to €47.8bn.

Corporate & Investment Banking
Data excludes exceptional items⁽¹⁾

1. See note on methodology and excluding IFRIC 21 impact on 4Q16

In Corporate & Investment Banking, net revenues advanced 11% to €3.391bn in 2016 and 21% (+18% excluding the CVA/DVA desk) in 4Q16 yoy.
Strong revenue growth in 4Q16 was driven by robust momentum in Global Markets (+28% excluding the CVA/DVA desk) and in M&A.

Over the 2014-2016 period, CIB net revenues grew by an annual average of 5.4%, ahead of the 5% target in the strategic plan.

Operating expenses were up 15% yoy in 4Q16 and 9% in 2016. However, with revenues rising at a faster pace, the cost-income ratio improved by 3.4pps yoy to 64.7% in 4Q16 and by 1.0pp to 59.9% in 2016.

Gross operating income climbed 32% yoy in 4Q16 and 14% in 2016.

     The provision for credit loss amounted to €21m in 4Q16, down significantly on 4Q15 and the first two quarters of 2016 which were marked by provisions on the Oil & Gas sector. For 2016 as a whole, the provision for credit loss totaled €195m, down 1% on a year earlier.   
      
     This tight grip on risk helped drive a 51% yoy advance in pre-tax profit in 4Q16. Over the full year, pre-tax profit increased 15% to €1.178bn.

ROE after tax progressed by a healthy 260bps to 11.8% over 2016 as a whole and exceeds the targets set out in the New Frontier plan in November 2013.

CIB's risk-weighted assets have declined every year since the strategic plan was launched and stood at €66.1bn at year-end 2016.

Net revenues from Global Markets, excluding the CVA/DVA desk, climbed 28% yoy in 4Q16 and 15% in 2016. They reached €467m in 4Q16, including contributions of €317m from FIC-T and €150m from Equity.

FIC-T lifted revenues by 20% yoy in 4Q16, buoyed by strong momentum in Credit (+15% vs. 4Q15) and Rates and Forex (+26% vs. 4Q15). In the Fixed Income segment, revenues from the Americas and APAC platforms progressed by 43% and 29% yoy, respectively, in 4Q16.

Equity business lines performed outstandingly in 4Q16, hoisting revenues by 47% yoy, fueled by a 49% increase in Forex revenues during the period.

Net revenues from Global Finance & Investment Banking rose 6% in 4Q16 compared to a year earlier.

New production reached €9.9bn in 4Q16 after progressing by 19% relative to 3Q16, spurred by the Aviation, Export & Infrastructure Finance segment. For full-year 2016, new production declined 13% to €34bn, due notably to slower activity in Global Energy & Commodities (excluding Trade), reflecting a difficult investment backdrop for producers.

M&A revenues advanced 33% yoy to 4Q16 and virtually tripled in 2016, boosted by the successful integration of new franchises, i.e. Natixis Partners (France and Spain) and Peter J. Solomon (USA).

Specialized Financial Services

1. See note on methodology and excluding IFRIC 21 impact on 4Q16

Specialized Financial Services improved net revenues by 2% yoy in 4Q16 and 3% in 2016 as a whole. The momentum came from solid performances in Specialized Financing, where net revenues rose 2% and 6%, respectively, in the same periods, and from the extension of relations with the Groupe BPCE networks.
In Specialized Financing, new business with the networks climbed 17% during the year in the Equipment Leasing segment, while factored turnover with clients of the Caisses d'Epargne also advanced 21%. As for personal loans, new production increased 11% during the year and lifted the loan book to €19bn at year-end. 

Operating expenses were kept in check and rose only 1% yoy in 4Q16 and 3% in 2016. The cost-income ratio, excluding the IFRIC 21 impact, eased by 1.2pps in 4Q16.

With revenues rising faster than expenses, gross operating income increased 5% yoy in 4Q16.

The provision for credit loss decreased 2% to €57m in 2016.

Pre-tax profit progressed 13% to €444m over the full year. It included a €31m capital gain on the sale of a building that was booked in "Gains/losses on other assets" in 2Q16.

After restating for this capital gain, after-tax ROE worked out to 16.2% in 2016, up 1.0pp on a year earlier.

ROE was in line with the 2017 objective established in the New Frontier plan, (>16%), underpinned by virtually stable RWA at end-2016 compared to end-2013 and regular performances by business lines, particularly in Specialized Financing.

Financial Investments     
Data excludes exceptional items⁽¹⁾

(1) See note on methodology

Net revenues from Financial Investments were down 22% yoy in 4Q16 and 25% over full-year 2016.

Most of the decrease came from Coface, which posted €528m in net revenues in 2016 vs. €680m a year earlier.

On a constant exchange-rate basis, Coface's turnover amounted to €349m in 4Q16 and €1.436bn in 2016, down 4% yoy for both periods. On a current exchange-rate basis, turnover was €1.411bn, 5% lower than the €1.490bn recorded in 2015.

The combined ratio net of reinsurance worked out to 97.4% in 2016 vs. 83.1% in 2015, and comprised a cost ratio of 31.9% and a loss ratio of 65.5% compared to corresponding ratios of 30.5% and 52.5%, respectively, in 2015.

Coface ceded its State export guarantees business to BpiFrance at the end of 2016. This service activity was conducted on behalf of the French state.

In consideration of this transfer, Coface received a €75m payment before tax, which was booked in the 2016 accounts. The payment will be used to finance the restructuring costs associated with the Fit-to-Win plan (€39m of which were booked in 4Q16).

The discontinuation of this activity (€53.4m of turnover in 2016) is effective as from January 1, 2017, and is accompanied by the transfer of €26.1m of costs (around 250 FTEs and IT systems).

Appendices

E-Mail-Adresse

Bitte überprüfe deine die E-Mail-Adresse.

Benachrichtigungen von ARIVA.DE
(Mit der Bestellung akzeptierst du die Datenschutzhinweise)

-1

Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink.

Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.

Andere Nutzer interessierten sich auch für folgende News

10:00 - PR Newswire

Moonpig Group Plc - Director Declaration

09:08 - PR Newswire

Cohen & Steers Capital Management - Form 8.3 - Tritax Big Box REIT plc

02:00 - PR Newswire

FirstGroup Plc - Transaction in Own Shares