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2018-11-08 17:39 CET
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NATIXIS :THIRD-QUARTER 2018 AND NINE-MONTH 2018 RESULTS

Paris, November 8, 2018

3Q18 and 9M18 results
Relevance of our strategic choices amidst volatile market
Reported net income up +10% at €422m in 3Q18 and up +15% at €1,324m in 9M18

SOLid growth and improved profitability across our business lines

underlying net revenues[1]: €2.3bn in 3Q18, €7.3bn in 9M18 (+3% and +6% at constant FX)

Businesses' underlying roe1 REACHED 15.4% in 9M18

AWM - Positive net inflows, fee rate and performance fees improving thanks to our active positioning

Positive momentum for net inflows and the fee rate: 8th consecutive quarter of positive net inflows (+€5bn),
together with a fee rate increase >31bps in 3Q18 (+1.4bps vs. 3Q17)

Performance fees up ~+30% YoY in 9M18, and slightly higher in 3Q18 than in 3Q17

Significant growth in underlying gross operating income1: +26% YoY at constant FX in 9M18

Acquisition of Massena Partners in order to reinforce Natixis Wealth Management's positioning across UHNWI[2]

CIB - Underlying RoE1 at 14.4% in 9M18 thanks to our diversified and differentiating expertise

Underlying net revenues1 excl. CVA/DVA desk flat in 3Q18 and in 9M18 at constant exchange rate. Pro forma for the disposal of cash equity activities, increase over these two periods

Global markets: Equity net revenues (excl. cash) up +3% YoY in 3Q18 together with stable FICT net revenues

Global finance: Underlying net revenues1 up +13% YoY at constant FX in 9M18 thanks to our sectorial approach

Insurance - Solid growth momentum

Underlying net revenues1 up +8% YoY in 9M18 (+9% in 3Q18)

Life insurance[3]: €7.5bn premiums in 9M18 (+4% YoY) of which 34% in unit-linked products

SFS - Strong growth dynamic, especially in Payments

Underlying net revenues1 from SFS up +6% YoY in 9M18 (+7% in 3Q18 of which +16% in Payments)

Payments: Increase in business volumes from PayPlug and Dalenys, up +33% YoY in 9M18

sustainable value creation and financial strength

9M18 underlying net income1 up +8% YoY at €1,345m and up +7% YoY in 3Q18 at €438m

Underlying RoTE1 improvement to 14.1% in 9M18 (+190bps vs. 9M17)

Basel 3 FL CET1 ratio[4] at 10.9% as at September 30, 2018, including the financing of MV Credit acquisition for 12bps

9M18: A Promising start to New Dimension

François Riahi, Natixis Chief Executive Officer, said: "Natixis delivered strong results in the first nine months of 2018 with solid growth and profitability improving across all business lines, illustrating the relevance of our strategic choices. Such results are perfectly in line with our New Dimension strategic ambitions. All our teams are and will remain committed to deliver this plan."

3Q18 rEsults

The Board of Directors approved Natixis' accounts for the third quarter of 2018 on November 8, 2018.

 
   


€m   3Q18
reported
3Q17
reported
  3Q18
o/w underlying
3Q18
o/w
exceptionals
  3Q18
 vs. 3Q17
reported
3Q18
vs. 3Q17
reported
constant FX
  3Q18
vs. 3Q17 underlying
3Q18
vs. 3Q17
underlying
constant FX
Net revenues   2,376 2,205   2,302 74   8% 7%   3% 3%
o/w businesses   2,197 2,059   2,128 68   7% 6%   3% 3%
Expenses   (1,615) (1,530)   (1,586) (28)   5% 5%   5% 4%
Gross operating income   761 674   716 45   13% 12%   0% 0%
Provision for credit losses   (102) (55)   (30) (71)            
Net operating income   659 619   685 (26)   7%     4%  
Associates and other items   5 4   5              
Pre-tax profit   665 623   691 (26)   7%     4%  
Income tax   (184) (181)   (193) 9            
Minority interests   (59) (59)   (60) 0            
Net income - group share   422 383   438 (17)   10%     7%  

Natixis' underlying net revenues are up +3% YoY driven by a continued strong momentum in AWM (+7% YoY), Insurance (+9% YoY), Payments (+16% YoY) and Coface (+8% YoY). CIB revenues are up YoY at constant scope (excl. CVA/DVA).

Underlying expenses are up, partly due to FTE increase and continued investments in digital and transformation projects foreseen in the New Dimension plan trajectory. Reported expenses include a ~€10m one-off charge from Ostrum operational efficiency plan while ~€20m of annualized costs from the cash equity are still being borne (until 1H19) with no revenue contribution. The underlying cost/income ratio[5] is up 1.3pp vs. 3Q17 at 71.3%.

The underlying pre-tax profit rose +4% YoY in 3Q18, including a significant reduction in loan loss provisioning, almost halved YoY. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses' underlying cost of risk worked out to 18bps in 3Q18.

The tax rate reached ~28% in 3Q18, down vs. 3Q17. Minority interests are flat YoY.

Net income (group share), adjusted for IFRIC 21 and excluding exceptional items, came out at €388m in 3Q18, up +5% YoY. Accounting for exceptional items (-€17m net of tax in 3Q18) and IFRIC 21 impact (+€50m in 3Q18), the reported net income (group share) increased +10% YoY in 3Q18 at €422m.

Natixis delivered an 11.6% underlying RoTE1 excluding IFRIC 21 impact and the businesses' underlying RoE1 reached 12.6%, up +130bps and +20bps respectively vs. 3Q17. Natixis' earnings per share1 are up +11% YoY in 3Q18.

Natixis reiterates its strategic and financial ambitions communicated to the market on September 12, 2018. In order to accelerate growth and value creation towards and beyond its New Dimension ambitions, Natixis could deploy up to €2.5bn towards investments over 2018-2020 (~€0.4bn already invested). Such investments would primarily be in Asset & Wealth Management (e.g. affiliates to complement the existing offering, expansion in Asia and in alternatives, life insurance assets) and secondarily in Payments, to take part in the consolidation of the industry (e.g. acquisitions, asset combination), and in CIB (e.g. M&A boutiques). On the Insurance side, as stated in the November 2017 New Dimension strategic plan, Natixis would contemplate the takeover of the Non-life new business for Banques Populaires' private customers. Besides, subject to the completion of the project to sell Natixis' retail banking activities to BPCE SA, the payment of a special dividend up to €1.5bn remains Natixis' base case since no material strategic opportunity has been identified to date. Natixis also reiterates what it said in a press release dated October 11, 2018 and confirms that it has no plan for a takeover bid on Ingénico.

9M18 rEsults

 
   

 


€m
  9M18
reported
9M17
reported
  9M18
o/w
underlying
9M18
o/w
exceptionals
  9M18
 vs. 9M17
reported
9M18
vs. 9M17
reported
constant FX
  9M18
vs. 9M17 underlying
9M18
vs. 9M17
underlying
constant FX
Net revenues   7,365 6,961   7,265 100   6% 8%   3% 6%
o/w businesses   6,826 6,555   6,757 68   4% 7%   3% 6%
Expenses   (5,050) (4,895)   (4,989) (61)   3% 5%   3% 5%
o/w expenses excluding SRF   (4,886) (4,773)   (4,825) (61)   2% 5%   2% 4%
Gross operating income   2,315 2,066   2,276 39   12% 16%   3% 6%
Provision for credit losses   (185) (193)   (114) (71)            
Net operating income   2,130 1,873   2,162 (32)   14%     7%  
Associates and other items   25 45   25              
Pre-tax profit   2,155 1,917   2,187 (32)   12%     6%  
Income tax   (654) (650)   (665) 11            
Minority interests   (177) (116)   (177) 0            
Net income - group share   1,324 1,151   1,345 (21)   15%     8%  

Natixis' underlying net revenues are up +6% YoY (at constant exchange rate) across businesses, driven by a strong momentum in AWM (+14% YoY), Insurance (+8% YoY), Payments (+15% YoY) and Coface. CIB revenues are up YoY at constant exchange rate (excl. cash equity and CVA/DVA) on a high 9M17.

Underlying expenses are well under control, translating into a 2pp positive jaws effect at constant exchange rate excluding SRF contribution and despite 9M18 being a period of investments. The underlying cost/income ratio[6] is down 0.2pp vs. 9M17 at 67.9%. The underlying gross operating income is up +6% YoY at constant exchange rate vs. 9M17.

The underlying pre-tax profit is up +6% YoY including a significant improvement in loan loss provisioning, down ~€80m vs. 9M17, reflecting our model. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses' underlying cost of risk worked out to 19bps in 9M18.

The tax rate reached ~30% in 9M18, in line with full-year 2018 guidance and down from ~34% in 9M17. Minority interests are up YoY due to a higher contribution from Coface and some European AM affiliates.

Net income (group share), adjusted for IFRIC 21 and excluding exceptional items, came out at €1.4bn in 9M18, up +8% YoY and equivalent to ~160bps of annual capital generation. Accounting for exceptional items (-€21m net of tax in 9M18) and IFRIC 21 impact (-€50m in 9M18), the reported net income (group share) increased +15% YoY at €1.3bn in 9M18.

Natixis delivered a 14.1% underlying RoTE1 excluding IFRIC 21 impact and the businesses' underlying RoE1 reached 15.4%, up +190bps and +120bps respectively vs. 9M17. The profitability is improving across all business lines.


3q18 & 9M18 rEsults
Exceptional items

€m   3Q18 3Q17   9M18 9M17  
SWL provision reversal (Net revenues) CIB 68     68  
Exchange rate fluctuations on DSN in currencies (Net revenues) Corporate center 5 (26)   32 (86)
Transformation & Business Efficiency investment costs (Expenses) Business lines &
Corporate center
(27) (15)   (61) (35)
Fit to Win investments & restructuring expenses (Expenses) Corporate center (1)     0  
Legal provision (Provision for credit losses) CIB (71)     (71)  
Non-recurring additional Corporate Social Solidarity Contribution resulting from agreement with CNP (Expenses) Insurance         (19)
Total impact on income tax   9 13   11 45
Total Impact on minority interests   0     0  
Total impact on net income (gs)   (17) (28)   (21) (94)

transformation & business efficiency
Investment costs by reporting line

€m 3Q18 3Q17   9M18 9M17
AWM (11)     (12)  
CIB (4) (3)   (9) (3)
Insurance 1 (3)   0 (5)
SFS (2) (1)   (7) (1)
Corporate center (11) (9)   (34) (25)
Impact on expenses (27) (15)   (61) (35)


Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p4)

Asset & Wealth Management

€m   3Q18 3Q17 3Q18
vs. 3Q17
  9M18 9M17 9M18
vs. 9M17
9M18
vs. 9M17
constant FX
Net revenues   818 766 7%   2,413 2,214 9% 14%
  o/w Asset management   782 730 7%   2,303 2,114 9% 14%
  o/w Wealth management   36 36 0%   110 100 11% 11%
Expenses   (554) (527) 5%   (1,631) (1,567) 4% 8%
Gross operating income   264 239 11%   782 647 21% 26%
Provision for credit losses   (1) 0     (2) 0    
Associates and other items   (1) 0     (4) 8    
Pre-tax profit   262 239 10%   777 656 18%  
 

Cost/income ratio[7]
  67.9% 69.0% (1.1)pp   67.5% 70.7% (3.2)pp  
RoE after tax1   14.6% 13.4% +1.2pp   14.6% 12.4% +2.2pp  

                                                                                                                                                                           

Underlying net revenues from Asset & Wealth Management (AWM) are up a significant +14% YoY at constant exchange rate in 9M18, well above the New Dimension target. Asset management underlying revenues increase by +10% YoY at constant exchange rate in North America (€1.2bn) and +22% in Europe (€747m) over 9M18. Wealth management underlying revenues are up +11% YoY in 9M18.

The Asset management fee rate excluding performance fees (€58m in 3Q18 and €177m in 9M18, ~8% of 9M18 AM revenues) stood above 31bps in 3Q18 (+1.4bps YoY and flat QoQ) and rose both in Europe to 16bps (+1.5bps vs. 3Q17 and +0.9bps excl. Life insurance) and North America to 40bps (+0.4bps YoY).

Asset management net inflows reached +€5bn in 3Q18, the 8th consecutive quarter of positive net inflows. Continuation of the 1H18 trend with a positive mix shift and an average fee rate for gross inflows on LT products more than offsetting lower-margin equivalent gross outflows. Diversification, especially towards Alternatives, remains a key asset to navigate market volatility. Success of high-margin strategies at H2O, DNCA (Alpha Bonds) and Loomis (Credit). Net inflows of +€20bn in 9M18, mainly on LT products with notably: Equity strategies: +€9bn, driven by North America (at Harris) ; Fixed Income strategies: +€2bn, driven by Europe (H2O) ; Balanced strategies: +€4bn, driven by Europe (H2O, Ostrum, Seeyond, Dorval).

Asset management AuM reached €861bn as at September 30, 2018 of which €420bn in Europe and €425bn in North America. Over the quarter, AuM progressed through net inflows, a positive market effect of +€6bn, a positive FX impact of +€2bn and a positive scope effect of +€2bn (acquisition of MV Credit in the UK finalized during 3Q18). In 3Q18, average AuM at constant exchange rate increased by +11% YoY in Europe (excl. Life insurance) and by +5% in North America. Wealth management AuM reached €33.8bn[8] with €2.1bn of positive net inflows over 9M18.

The underlying RoE1 of AWM reached 14.6% in 9M18, up +220bps YoY, with a positive jaws effect of 5pp and an underlying gross operating income up +26% YoY at constant exchange rate.

The Ostrum Asset Management operational efficiency plan is expected to generate ~€20m of annual cost saves, to be fully captured at end-2019. 3Q18 reported figures include a ~€10m restructuring charge (no further charge to expect).

Natixis announces the acquisition of Massena Partners, key player across the UHNW space in France. Massena is active across a wide range of asset classes, including alternatives (real estate, private equity, etc.) and features €2.3bn of assets under management. The impact on Natixis' CET1 ratio is estimated at around 5bps and such an acquisition reinforces Natixis Wealth Management's ambitions to refocus on HNW and UHNW clients after the announced disposal of Selection 1818.


Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p4)

Corporate & Investment Banking

€m   3Q18 3Q17 3Q18
vs. 3Q17
  9M18 9M17 9M18
vs. 9M17
9M18
 vs. 9M17
constant FX
Net revenues   753 775 (3)%   2,657 2,765 (4)% (1)%
Net revenues excl. CVA/DVA   768 768 0%   2,657 2,736 (3)% 0%
Expenses   (519) (503) 3%   (1,627) (1,624) 0% 2%
Gross operating income   235 272 (14)%   1,031 1,141 (10)% (6)%
Provision for credit losses   (24) (16)     (92) (94)    
Associates and other items   3 3     12 8    
Pre-tax profit   213 258 (17)%   950 1,054 (10)%  
 

Cost/income ratio[9]
  69.8% 66.1% +3.7pp   60.9% 58.4% +2.5pp  
RoE after tax1   9.1% 10.3% (1.2)pp   14.4% 14.1% +0.3pp  

             
Underlying net revenues from Corporate & Investment Banking (excl. CVA/DVA) are up YoY both in 3Q18 and 9M18 at constant exchange rate excluding the cash equity (€26m contribution in 9M17). Strong performance from Global finance, up +13% YoY at constant exchange rate in 9M18, offsetting Global markets YoY evolution on a high 9M17.

Global markets revenues are up +1% YoY in 3Q18 at constant scope (€9m cash equity contribution in 3Q17), excluding CVA/DVA. FICT revenues are flat YoY in 3Q18 driven by good activity levels across Credit and FX and resilient Rates amidst unfavorable market conditions. Equity revenues are up +3% YoY in 3Q18 at constant scope with cash equity no longer contributing to revenues as of 3Q18 (closure of the US and UK desks in 1Q18 though France still contributing up to July 1st, 2018). 3Q18 saw a strong momentum in equity derivatives, especially in France, balancing challenging market conditions in Asia.

Global finance revenues are up +6% YoY in 3Q18 and +13% at constant exchange rate in 9M18, driven by our sectorial approach. Strong performance across Energy & Natural Resources (+13% YoY in 3Q18) and Real Assets (+11% YoY in 3Q18). Continued dynamic new loan production (+33% YoY in 3Q18) driven by ENR (~x2 YoY) and RA (+21% YoY).

Investment banking and M&A revenues are down -7% YoY in 3Q18 given a soft French/European primary market for ECM. 3Q18 saw a good performance from DCM and low activity levels in M&A though there is a dynamic pipeline for 4Q18.

The proportion of revenues generated from service fees is slightly up in 3Q18 vs. 3Q17[10].

Underlying expenses are well under control and up <2% YoY in 9M18 at constant exchange rate (flat at current exchange rate). Cash equity activities are no longer contributing to the top-line in 3Q18 though ~€20m of annualized costs are still being borne and set to disappear as of 3Q19.

The underlying gross operating income, excluding CVA/DVA, is down mid-single digit in 3Q18 and in 9M18 at constant exchange rate. The underlying cost of risk is improving through our focus on O2D and our solid risk management.

The underlying RoE1 of CIB improved +30bps YoY in 9M18 to 14.4%. RWA are down -1% QoQ and flat YoY. The Net revenues/RWA ratio at 9M18 is in line with the New Dimension 2020 target despite 3Q seasonality.

Natixis reinforces its positioning on ESG through its Green & Sustainable Hub, launched in 2017 which generated €17m[11] revenues in 9M18. In 2018, Natixis has also been named "The most innovative investment bank for climate changes and sustainability" by The Banker and received the Euromoney "#1 Best Credit Research Green Bonds/ESG" prize.


Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p4)

Insurance

€m   3Q18 3Q17 3Q18
vs. 3Q17
  9M18 9M17 9M18
vs. 9M17
Net revenues   192 176 9%   589 544 8%
Expenses   (104) (96) 8%   (329) (306) 8%
Gross operating income   88 80 10%   259 239 9%
Provision for credit losses   0 0     0 0  
Associates and other items   3 2     6 9  
Pre-tax profit   91 82 11%   265 248 7%
Cost/Income ratio[12]   56.7% 56.7% 0.0pp   55.2% 55.5% (0.3)pp
RoE after tax1   28.5% 22.0% +6.5pp   28.9% 23.4% +5.5pp

Underlying net revenues from Insurance are up +9% YoY in 3Q18 and +8% YoY in 9M18 driven by both Life and P&C.

Underlying expenses are up +8% YoY both in 3Q18 and 9M18, the latest 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). Adjusting for this impact, underlying expenses grew by +7% YoY in 9M18, translating into a positive jaws effect.

The underlying gross operating income is up +10% YoY in 3Q18 and +9% in 9M18.

The underlying RoE1 of Insurance improved +650bps YoY to 28.5% in 3Q18 and +550bps in 9M18 to 28.9%, in part driven by the buy-back of BPCE Assurances minorities.

The Global turnover[13] reached €2.7bn in 3Q18, up +7% YoY (9M18 up +4% at €9.3m). Life insurance net inflows2 reached €1.2bn in 3Q18 (+5% YoY) and €4.7bn in 9M18, of which 44% in unit-linked products (34% of gross inflows in 9M18). Life insurance AuM reached €59.9bn as at September 30, 2018, of which 25% in unit-linked products. The P&C combined ratio worked out to 91.6% in 3Q18 and 91.9% in 9M18, improving respectively by -0.7pp YoY and -0.4pp YoY.


Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p4)

Specialized Financial Services

€m   3Q18 3Q17 3Q18
vs. 3Q17
  9M18 9M17 9M18
 vs. 9M17
Net revenues   366 341 7%   1,099 1,032 6%
Specialized financing   225 215 5%   678 652 4%
Payments   96 83 16%   284 247 15%
Financial services   45 43 4%   136 133 3%
Expenses   (246) (228) 8%   (737) (688) 7%
Gross operating income   120 113 6%   362 344 5%
Provision for credit losses   (11) (13)     (17) (49)  
Associates and other items   0 0     0 0  
Pre-tax profit   109 100 9%   345 295 17%
Cost/income ratio[14]   67.9% 67.5% +0.4pp   66.9% 66.5% +0.4pp
RoE after tax1   13.7% 13.8% (0.1)pp   14.4% 14.0% +0.4pp

Underlying net revenues from Specialized Financial Services are up +7% YoY in 3Q18 and +6% YoY in 9M18. Specialized financing revenues increased by +5% YoY in 3Q18, driven by Leasing, Factoring and Film industry financing. Payments revenues are up +15% YoY in 9M18 (~60% driven by the acquisitions made since 2017, ~40% by Natixis' historical payment activities) and +16% in 3Q18. Financial services revenues are up +4% YoY in 3Q18 driven by Employee savings plans (+9% YoY).

Within Payments, business volumes generated by Natixis' recent acquisitions (Dalenys and PayPlug) in Merchant Solutions increased by +25% YoY in 3Q18 and +33% in 9M18. In the meantime, Prepaid & Managed Solutions revenues are up +49% YoY in 3Q18 (+21% at constant scope, i.e. excluding Comitéo) and +36% in 9M18. The Chèque de table® market share reached 18.1% as at end-September 2018 (+0.2pp YoY). The number of card transactions processed in the Services & Processing activity is up +11% YoY in 3Q18. Overall, 25% of 3Q18 Payments revenues have been realized outside Groupe BPCE networks.

Underlying expenses from SFS are up +7% YoY in 9M18 and +2% at constant scope. The underlying cost/income ratio1 excluding Payments acquisitions stands at 66.2% in 3Q18 and 65.2% in 9M18.

The underlying cost of risk remains well under control, down YoY both in 3Q18 and 9M18.

The underlying RoE1 of SFS improved +40bps YoY to 14.4% in 9M18.


Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see detail p4)

Corporate Center

€m   3Q18 3Q17 3Q18
vs. 3Q17
  9M18 9M17 9M18
vs. 9M17
Net revenues   173 172 1%   507 492 3%
Coface   180 167 8%   513 457 12%
Others   (7) 5     (6) 35  
Expenses   (164) (161) 2%   (665) (657) 1%
Coface   (121) (119) 2%   (361) (370) (2)%
SRF   0 0     (164) (122)  
Others   (42) (41) 3%   (141) (165) (15)%
Gross operating income   9 11     (158) (165)  
Provision for credit losses   5 (26)     (3) (51)  
Associates and other items   2 0     11 20  
Pre-tax profit   16 (14)     (150) (196) (24)%

Underlying net revenues from the Corporate Center are up +3% YoY in 9M18 and +1% in 3Q18 driven by Coface (+12% YoY in 9M18 and +8% in 3Q18).

Underlying expenses, excluding Coface and the SRF contribution are down -15% YoY in 9M18, in line with the New Dimension guidance.

The underlying pre-tax profit is €16m in 3Q18. The P&L drag at the pre-tax profit level has been reduced by -24% YoY in 9M18.

COFACE

The turnover reached €1.0bn in 9M18, up +4% YoY[15], driven by record client activity and retention.

The cost ratio at 34.0% in 9M18 is down -1.4pp YoY. Investments are being fully financed by cost savings.

The loss ratio at 45.0% in 9M18 is down -9.4pp YoY. The loss ratio is under control in a normalizing risk environment through strong underwriting.

The net combined ratio[16] at 79.0% in 9M18 is down -10.8pp YoY and is below the "through the cycle target" (~83%).


Financial structure

Basel 3 fully-loaded[17]
Natixis' Basel 3 fully-loaded CET1 ratio worked out to 10.9% as at September 30, 2018.

  • Basel 3 fully-loaded CET1 capital amounted to €12.0bn
  • Basel 3 fully-loaded RWA amounted to €109.6bn

Based on a Basel 3 fully-loaded CET1 ratio of 10.8% as at June 30, 2018, the respective impacts of 3Q18 were as follows:

  • Effect of allocating net income (group share) to retained earnings in 3Q18: +38bps
  • Accrued dividend for 3Q18: -22bps
  • RWA and other effects: +6bps
  • Impacts of the MV Credit acquisition: -12bps

Pro-forma for acquisitions in AWM[18] (WCM, Massena Partners) and disposals in AWM (Selection 1818, Axeltis) already announced, as well as the irrevocable payment commitments deduction from capital (IPC), Natixis' Basel 3 fully-loaded CET1 ratio stands at 10.7% as at September 30, 2018.

Basel 3 phased-in, regulatory ratios1
As at September 30, 2018, Natixis' Basel 3 regulatory (phased-in) capital ratios stood at 10.4% for the CET1, 12.4% for the Tier 1 and 14.3% for the total solvency ratio.

  • Core Tier 1 capital stood at €11.5bn and Tier 1 capital at €13.6bn.
  • Natixis' RWA totaled €109.6bn, breakdown as follows:
    • Credit risk: €77.2bn
    • Counterparty risk: €6.6bn
    • CVA risk: €1.9bn
    • Market risk: €9.1bn
    • Operational risk: €14.8bn

Book value per share
Equity capital (group share) totaled €19.6bn as at September 30, 2018, 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 stood at €5.56 as at September 30, 2018 based on 3,148,010,757 shares excluding treasury shares (the total number of shares being 3,150,288,592). The tangible book value per share (after deducting goodwill and intangible assets) was €4.26.

Leverage ratio1

The leverage ratio worked out to 4.1% as at September 30, 2018.

Overall capital adequacy ratio
As at September 30, 2018, the financial conglomerate's excess capital was estimated at around €2.9bn. Before consideration of current financial year's earnings and dividend accrual (based on a 60% payout ratio), the excess capital was estimated at around €2.3bn.


  1.  

Appendices

Note on methodology:

The results at 30/09/2018 were examined by the board of directors at their meeting on 08/11/2018.
Figures at 30/09/2018 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 considers:

  • The split of Investment Solutions into two new divisions: Insurance and Asset & Wealth Management[19]
  • Within CIB:
    • Global finance and Investment banking[20] 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 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%.

Net book value: calculated by taking shareholders' equity group share (minus dividend declared but not paid yet), 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 €m 30/09/2018
Goodwill 3,804
Restatement for Coface minority interests (162)
Restatement for AWM deferred tax liability & others (290)
Restated goodwill 3,352

In €m 30/09/2018
Intangible assets 773
Restatement for Coface minority interest & others (44)
Restated intangible assets 729

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

Regulatory (phased-in) CET1 capital and ratio: 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 accrued dividend (based on a 60% payout ratio) as of 2Q18, as well as July 2018 employee increase.

Fully-loaded CET1 capital and ratio: 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 accrued dividend (based on a 60% payout ratio) as well as July 2018 employee increase.

Leverage ratio: based on delegated act rules, without phase-in (presentation including current financial year's earnings and accrued dividend based on a 60% payout ratio) 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 RoTE excluding IFRIC 21 impact calculation in 9M18 take into account tree quarters of the annual duties and levies concerned by this accounting rule. The impact for the quarter is calculated by difference with the former quarter.

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

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18     3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 2,347 2,410 2,205 2,506 2,412 2,577 2,376      8%   6,961 7,365    6%
Expenses (1,771) (1,594) (1,530) (1,737) (1,795) (1,640) (1,615)      5%   (4,895) (5,050)    3%
Gross operating income 576 815 674 769 618 936 761      13%   2,066 2,315    12%
Provision for credit losses (70) (67) (55) (65) (43) (40) (102)         (193) (185)    
Associates 7 6 5 8 7 3 6         18 16    
Gain or loss on other assets 9 18 (1) 22 6 4 (1)         27 9    
Change in value of goodwill 0 0 0 0 0 0 0         0 0    
Pre-tax profit 523 772 623 733 587 903 665      7%   1,917 2,155    12%
Tax (214) (255) (181) (139) (204) (266) (184)         (650) (654)    
Minority interests (28) (29) (59) (76) (60) (57) (59)         (116) (177)    
Net income (group share) 280 487 383 518 323 580 422      10%   1,151 1,324    15%

Natixis - IFRS 9 Balance sheet

Assets (in €bn) 30/09/2018 01/01/2018
Cash and balances with central banks 22.9 36.9
Financial assets at fair value through profit and loss[21] 213.3 225.7
Financial assets at fair value through Equity 10.4 10.0
Loans and receivables1 127.2 125.1
Debt instruments at amortized cost 1.3 1.0
Insurance assets 103.3 96.9
Accruals and other assets 17.6 18.5
Investments in associates 0.7 0.7
Tangible and intangible assets 1.7 1.6
Goodwill 3.8 3.6
Total 502.2 520.0

Liabilities and equity (in €bn) 30/09/2018 01/01/2018
Due to central banks 0.0 0.0
Financial liabilities at fair value through profit and loss1 208.3 221.3
Customer deposits and deposits from financial institutions1 115.7 135.3
Debt securities 41.7 32.6
Accruals and other liabilities 18.7 17.8
Insurance liabilities 91.5 86.5
Contingency reserves 1.8 1.9
Subordinated debt 3.7 3.7
Equity attributable to equity holders of the parent 19.6 19.7
Minority interests 1.2 1.2
Total 502.2 520.0


Natixis - 3Q18 P&L by business line

€m AWM CIB Insurance SFS Corporate   3Q18
Center reported
Net revenues 818 822 192 366 179   2,376
Expenses (564) (523) (103) (248) (176)   (1,615)
Gross operating income 253 299 89 117 3   761
Provision for credit losses (1) (96) 0 (11) 5   (102)
Net operating income 253 203 89 107 8   659
Associates and other items (1) 3 3 0 2   5
Pre-tax profit 251 206 92 106 10   665
        Tax   (184)
        Minority interests   (59)
        Net income (gs)   422

Asset & Wealth Management

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 704 743 766 899 777 819 818    7%   2,214 2,413    9%
Asset Management[22] 671 713 730 857 739 782 782    7%   2,114 2,303    9%
Wealth management 33 30 36 42 37 37 36   0%   100 110    11%
Expenses (519) (521) (528) (610) (529) (549) (564)    7%   (1,567) (1,643)    5%
Gross operating income 186 222 239 289 248 269 253    6%   647 771    19%
Provision for credit losses 0 0 0 0 0 (1) (1)       0 (2)    
Net operating income 186 223 239 289 248 268 253    6%   647 769    19%
Associates 0 0 0 1 0 0 0       0 1    
Other items 9 0 (1) 2 0 (3) (2)       8 (5)    
Pre-tax profit 195 222 238 291 248 266 251    5%   656 765    17%
Cost/Income ratio 73.6% 70.1% 68.8% 67.9% 68.1% 67.1% 69.0%       70.8% 68.1%    
Cost/Income ratio excluding IFRIC 21 effect 73.2% 70.2% 69.0% 68.0% 67.5% 67.3% 69.2%       70.7% 68.0%    
RWA (Basel 3 - in €bn) 10.6 10.2 10.2 11.7 11.5 11.6 12.3    20%   10.2 12.3    20%
Normative capital allocation (Basel 3) 3,874 3,828 3,715 3,676 4,077 3,997 4,087    10%   3,806 4,054    7%
RoE after tax (Basel 3)[23] 11.3% 12.5% 13.5% 14.0% 13.7% 15.2% 13.9%       12.4% 14.3%    
RoE after tax (Basel 3) excluding IFRIC 21 effect2 11.5% 12.4% 13.4% 13.9% 14.0% 15.1% 13.8%       12.4% 14.3%    


Corporate & Investment Banking

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 971 1,019 775 817 938 965 822    6%   2,765 2,725   (1)%
Global markets 603 547 363 408 528 457 335   (8)%   1,513 1,319   (13)%
  FIC-T 388 389 253 288 378 299 252   0%   1,029 930   (10)%
  Equity 179 172 103 144 148 145 97       454 390    
o/w Equity excl. cash

 
170 165 95 137 143 140 97    3%   429 381   (11)%
o/w Cash equity

 
10 7 9 7 5 4 0       26 9    
  CVA/DVA desk 35 (13) 7 (24) 1 13 (15)       29 0    
Global finance 312 343 315 358 334 382 335    6%   970 1,051    8%
Investment banking[24] 81 122 85 75 83 85 79   (7)%   288 247   (14)%
Other (25) 7 12 (24) (7) 41 74       (6) 108    
Expenses (566) (555) (506) (567) (563) (549) (523)    3%   (1,627) (1,635)   0%
Gross operating income 404 464 269 249 375 417 299    11%   1,138 1,090   (4)%
Provision for credit losses (29) (48) (16) (21) (29) (39) (96)       (94) (163)    
Net operating income 375 416 253 228 346 378 203   (20)%   1,044 927   (11)%
Associates 3 3 3 3 4 3 3       8 9    
Other items 0 0 0 18 3 0 0       0 3    
Pre-tax profit 378 418 255 249 352 380 206   (19)%   1,052 939   (11)%
Cost/Income ratio 58.3% 54.4% 65.3% 69.5% 60.1% 56.8% 63.6%       58.8% 60.0%    
Cost/Income ratio excluding IFRIC 21 effect 55.5% 55.4% 66.5% 70.6% 57.7% 57.6% 64.5%       58.5% 59.7%    
RWA (Basel 3 - in €bn) 64.4 61.3 60.4 59.0 58.9 60.8 60.4   0%   60.4 60.4   0%
Normative capital allocation (Basel 3) 7,136 6,963 6,623 6,519 6,365 6,346 6,601   0%   6,907 6,437   (7)%
RoE after tax (Basel 3)[25] 14.7% 16.5% 10.5% 11.8% 16.1% 17.3% 9.1%       14.0% 14.1%    
RoE after tax (Basel 3) excluding IFRIC 21 effect2 15.7% 16.1% 10.2% 11.4% 17.2% 17.0% 8.8%       14.1% 14.2%    


Insurance

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 189 179 176 190 204 193 192    9%   544 589    8%
Expenses (129) (102) (99) (109) (118) (108) (103)    4%   (330) (330)   0%
Gross operating income 60 77 77 80 86 85 89    15%   215 259    21%
Provision for credit losses 0 0 0 0 0 0 0       0 0    
Net operating income 60 77 77 80 86 85 89    15%   215 259    21%
Associates 4 3 2 4 3 0 3       9 6    
Other items 0 0 0 0 0 0 0       0 0    
Pre-tax profit 65 80 79 85 89 85 92    16%   224 265    19%
Cost/Income ratio 68.1% 56.9% 56.2% 57.5% 58.0% 56.1% 53.8%       60.6% 56.0%    
Cost/Income ratio excluding IFRIC 21 effect 54.9% 61.5% 60.9% 61.9% 51.1% 58.5% 56.2%       59.0% 55.2%    
RWA (Basel 3 - in €bn) 7.4 7.2 7.4 7.2 7.3 7.0 7.1   (4)%   7.4 7.1   (4)%
Normative capital allocation (Basel 3) 857 871 849 875 853 868 828   (2)%   859 850   (1)%
RoE after tax (Basel 3)[26] 17.7% 21.6% 22.3% 26.7% 28.6% 26.4% 30.3%       20.5% 28.4%    
RoE after tax (Basel 3) excluding IFRIC 21 effect1 25.6% 19.0% 19.6% 24.2% 33.0% 24.9% 28.8%       21.4% 28.9%    


Specialized Financial Services

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 344 347 341 350 362 371 366    7%   1,032 1,099    6%
Specialized Financing 219 218 215 210 223 230 225    5%   652 678    4%
Factoring 39 39 38 42 40 40 39    2%   116 119    2%
Sureties & Financial Guarantees  55 46 52 47 54 50 51   (3)%   153 155    1%
Leasing 54 61 52 49 57 61 63    20%   167 181    8%
Consumer Financing 66 65 67 67 67 67 67   0%   198 201    1%
Film Industry Financing 5 6 5 6 6 11 6    8%   17 22    30%
Payments 81 83 83 89 93 95 96    16%   247 284    15%
Financial Services 44 46 43 51 46 46 45    4%   133 136    3%
Employee savings plans 21 22 21 26 23 23 23    9%   65 68    6%
Securities Services 23 23 22 25 23 23 22   (1)%   68 68   0%
Expenses (233) (228) (229) (249) (245) (250) (248)    9%   (690) (744)    8%
Gross operating income 112 118 112 101 117 121 117    4%   342 355    4%
Provision for credit losses (21) (14) (13) (24) (9) 3 (11)   (21)%   (49) (17)   (65)%
Net operating income 90 104 99 77 108 123 107    8%   294 338    15%
Associates 0 0 0 0 0 0 0       0 0    
Other items 0 0 0 0 0 1 0       0 0    
Pre-tax profit 90 104 99 77 108 124 106    7%   294 338    15%
Cost/Income ratio 67.6% 65.8% 67.1% 71.2% 67.7% 67.4% 67.9%       66.8% 67.7%    
Cost/Income ratio excluding IFRIC 21 effect 65.6% 66.5% 67.7% 71.8% 65.9% 68.0% 68.5%       66.6% 67.5%    
RWA (Basel 3 - in €bn) 15.2 16.0 15.7 16.7 17.5 15.8 15.7   0%   15.7 15.7   0%
Normative capital allocation (Basel 3) 1,961 1,889 1,907 1,958 2,145 2,232 2,084    9%   1,919 2,154    12%
RoE after tax (Basel 3)[27] 12.6% 15.1% 14.0% 10.7% 13.5% 14.9% 13.7%       13.8% 14.1%    
RoE after tax (Basel 3) excluding IFRIC 21 effect1 13.6% 14.7% 13.6% 10.3% 14.4% 14.6% 13.4%       14.0% 14.2%    


Corporate Center

€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   3Q18
vs. 3Q17
  9M17 9M18   9M18
vs. 9M17
Net revenues 138 122 146 251 131 229 179    22%   406 539    33%
Coface 137 152 167 167 177 156 180    8%   457 513    12%
Others 1 (30) (21) 84 (45) 73 (1)       (51) 26    
Expenses (324) (189) (169) (201) (339) (184) (176)    4%   (682) (699)    2%
Coface (122) (128) (119) (114) (122) (116) (122)    3%   (370) (360)   (3)%
SRF (128) 6 0 1 (162) (1) 0       (122) (164)    34%
Others (74) (66) (50) (88) (54) (67) (53)    7%   (190) (175)   (8)%
Gross operating income (186) (67) (23) 50 (208) 45 3       (276) (160)   (42)%
Provision for credit losses (20) (5) (26) (20) (5) (3) 5       (51) (3)    
Net operating income (206) (72) (49) 30 (213) 42 8       (327) (163)   (50)%
Associates 0 0 0 0 0 0 0       1 0    
Other items 1 18 0 2 3 6 2       19 11    
Pre-tax profit (205) (54) (49) 32 (209) 48 10       (307) (152)   (51)%


3Q18 results: from data excluding non-operating items to reported data

                       
€m 3Q18
Underlying
  Exchange rate fluctuations on
DSN in currencies
Transformation
 & Business

Efficiency
investment
 costs
Fit to Win
investments & restructuring
expenses
SWL
provision
 reversal
Legal
provision
    3Q18
Reported
 
Net revenues 2,302   5     68       2,376  
Expenses (1,586)     (27) (1)         (1,615)  
Gross operating income 716   5 (27) (1) 68       761  
Provision for credit losses (30)           (71)     (102)  
Associates 6                 6  
Gain or loss on other assets (1)                 (1)  
Pre-tax profit 691   5 (27) (1) 68 (71)     665  
Tax (193)   (2) 10 0 (19) 20     (184)  
Minority interests (60)       0         (59)  
Net income (group share) 438   3 (18) 0 50 (52)     422  
                       

9M18 results: from data excluding non-operating items to reported data

                       
€m 9M18
Underlying
  Exchange rate fluctuations on
DSN in currencies
Transformation
 & Business

Efficiency
investment
 costs
Fit to Win
investments & restructuring
expenses
SWL
provision
 reversal
Legal
provision
    9M18
Reported
 
Net revenues 7,265   32     68       7,365  
Expenses (4,989)     (61) 0         (5,050)  
Gross operating income 2,276   32 (61) 0 68       2,315  
Provision for credit losses (114)           (71)     (185)  
Associates 16                 16  
Gain or loss on other assets 9                 9  
Pre-tax profit 2,187   32 (61) 0 68 (71)     2,155  
Tax (665)   (11) 21 0 (19) 20     (654)  
Minority interests (177)       0         (177)  
Net income (group share) 1,345   21 (40) 0 50 (52)     1,324  
                       

Regulatory capital in 3Q18 & financial structure - Basel 3 phased-in[28], €bn
As of 2Q18, regulatory reporting excluding current financial year's earnings and accrued dividend (based on a 60% payout) - See note on methodology

Shareholder's equity group share 19.6
Current financial year's earnings (1.3)
Goodwill & intangibles (3.9)
Other deductions (0.8)
Hybrids restatement in Tier 1[29] (2.1)
CET1 Capital 11.5
Additional T1 2.1
Tier 1 Capital 13.6
Tier 2 Capital 2.1
Total prudential capital 15.7
 

  1Q17 2Q17 3Q17 4Q17 1Q18 1Q18
Pro forma
2Q18 3Q18
CET1 ratio 10.9% 11.2% 11.4%  10.8% 10.8% 10.7% 10.6% 10.4%
Tier 1 ratio 12.8% 13.1% 13.1%  12.9% 12.7% 12.5% 12.5% 12.4%
Solvency ratio 15.1% 15.4% 15.3%  14.9% 14.8% 14.6% 14.5% 14.3%
Tier 1 capital 14.6 14.7 14.6  14.3 13.9 13.7 13.7 13.6
RWA EoP 114.1 112.6 111.7  110.7 109.5 109.5 110.1 109.6

IFRIC 21 effects by business line

 
   


€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   9M17 9M18  
AWM (3) 1 1 1 (4) 1 1   (1) (1)  
CIB (28) 9 9 9 (22) 7 7   (9) (7)  
Insurance  (25)[30]  8[31]  84  84 (14) 5 5   (8) (5)  
SFS (6) 2 2 2 (6) 2 2   (2) (2)  
Corporate center (94) 34 30 30 (119) 40 40   (30) (40)  
Total Natixis (156) 55 50 50 (166) 55 55   (50) (55)  
                     
€m 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18   9M17 9M18  
SFS (Leasing) (1) 0 0 0 (1) 0 0   0 0  
Total Natixis (1) 0 0 0 (1) 0 0   0 0  


Normative capital allocation and RWA breakdown - 30/09/2018

€bn RWA
EoP
% of
total
Goodwill & intangibles
9M18
Capital allocation
9M18
RoE
 after tax
9M18
AWM 12.3 13% 2.8 4.1 14.3%
CIB 60.4 63% 0.2 6.4 14.1%
Insurance 7.1 7% 0.1 0.8 28.4%
SFS 15.7 16% 0.4 2.2 14.1%
Total (excl. Corporate center) 95.4 100% 3.5 13.5  

RWA breakdown (€bn) 30/09/2018
Credit risk 77.2
Internal approach 57.3
Standard approach 19.9
Counterparty risk 6.6
Internal approach 5.5
Standard approach 1.1
Market risk 9.1
Internal approach 3.8
Standard approach 5.3
CVA 1.9
Operational risk - Standard approach 14.8
Total RWA 109.6

Fully-loaded leverage ratio[32]
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 30/09/2018
Tier 1 capital1 14.1
Total prudential balance sheet 400.5
Adjustment on derivatives (36.5)
Adjustment on repos[33] (30.1)
Other exposures to affiliates (28.4)
Off balance sheet commitments 38.2
Regulatory adjustments (4.9)
Total leverage exposures 338.9
Leverage ratio 4.1%

Net book value as at September 30, 2018

€bn 30/09/2018  
Shareholders' equity (group share) 19.6
Deduction of hybrid capital instruments (2.0)
Deduction of gain on hybrid instruments (0.1)
Distribution  
Net book value 17.5
Restated intangible assets[34] 0.7
Restated goodwill1 3.4
Net tangible book value[35] 13.4
 
Net book value per share 5.56
Net tangible book value per share 4.26

9M18 Earnings per share

€m 30/09/2018
Net income (gs) 1,324
DSN interest expenses on preferred shares after tax (72)
Net income attributable to shareholders 1,252
Earnings per share (€) 0.40

Number of shares as at September 30, 2018

€m 30/09/2018
Average number of shares over the period, excluding treasury shares 3,140,939,192
Number of shares, excluding treasury shares, EoP 3,148,010,757
Number of treasury shares, EoP 2,277,835


Net income attributable to shareholders
     
 €m 3Q18 9M18  
 Net income (gs) 422 1,324  
 DSN interest expenses on preferred shares after tax (23) (72)  
 RoE & RoTE numerator 399 1,252  

Natixis RoTE[36]  
€m 30/09/2018
Shareholders' equity (group share) 19,616
DSN deduction (2,122)
Dividend provision (751)
Intangible assets (729)
Goodwill (3,352)
RoTE Equity end of period 12,661
Average RoTE equity (3Q18) 12,636
3Q18 RoTE annualized 12.6%
Average RoTE equity (9M18) 12,519
9M18 RoTE annualized 13.3%

Natixis RoE1    
€m 30/09/2018  
Shareholders' equity (group share) 19,616  
DSN deduction (2,122)  
Dividend provision (751)  
Exclusion of unrealized or deferred gains and losses recognized in equity (OCI) (346)  
 
RoE Equity end of period 16,396  
Average RoE equity (3Q18) 16,294  
3Q18 RoE annualized 9.8%  
Average RoE equity (9M18) 16,026  
9M18 RoE annualized 10.4%  


Doubtful loans[37]

€bn 31/12/2017
Pro forma
IFRS9
30/09/2018
Under
IFRS9
Provisionable commitments[38] 2.7 2.3
Provisionable commitments / Gross debt 2.2% 1.8%
Stock of provisions[39] 2.0 1.8
Stock of provisions / Provisionable commitments 73% 80%


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 third 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 November 9th, 2018 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   Benoit Gausseron T + 33 1 58 19 28 09
Souad Ed Diaz
Noemie Louvel
T + 33 1 58 32 68 11
T + 33 1 78 40 37 87
  Olivier Delahousse
Sonia Dilouya
T + 33 1 58 55 04 47
T + 33 1 58 32 01 03
         

www.natixis.com

  



[1] Excluding exceptional items. Excluding exceptional items and the IFRIC 21 impact for cost/income ratio, RoE, and RoTE

[2] Ultra High Net Worth Individuals

3 Excluding reinsurance agreement with CNP

4 See note on methodology

[5] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[6] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[7] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[8] Including Vega IM, 60% owned by Natixis Wealth Management

[9] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[10] ENR, Real Assets, ASF

[11] Business data

[12] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[13] Excluding the reinsurance agreement with CNP

[14] See note on methodology and excluding IFRIC 21 impact for the calculation of the cost/income ratio and the RoE

[15] At constant scope and exchange rate

[16] Reported ratios, net of reinsurance

[17] See note on methodology

[18] Subject to regulatory approvals

[19] Asset management includes Private equity

[20] including M&A business

[21] Including deposit and margin call

[22] Asset management including Private equity

[23] Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

[24] Including M&A

[25] Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

[26] Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

[27] Normative capital allocation methodology based on 10.5% of the average RWA - including goodwill and intangibles

[28] See note on methodology

[29] Including capital gain following reclassification of hybrids as equity instruments

[30] -€10.9m in underlying expenses and -€14.1m in exceptional expenses linked to the additional Corporate Social Solidarity Contribution resulting from agreement with CNP

[31] €3.6m in underlying expenses and €4.7m in exceptional expenses linked to the additional Corporate Social Solidarity Contribution resulting from agreement with CNP

[32] See note on methodology. Without phase-in - supposing replacement of existing subordinated issuances when they become ineligible

[33] Repos with clearing houses cleared according to IAS32 standard, without maturity or currency criteria

[34]See note on methodology

[35] Net tangible book value = Book value - goodwill - intangible assets

[36] See note on methodology

[37] On-balance sheet, excluding repos, net of collateral

[38] 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

[39] Specific and portfolio-based provisions

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