Natixis delivers solid half-year performance despite low equity derivatives activity in Asia

Natixis has reported solid growth and improved profitability across its business lines with underlying net revenues, at €2.5 billion in the second quarter and €5 billion in the first half of 2018, up 5% and 7%, respectively, compared to the same period last year.

However, underlying net revenues from corporate & investment banking (excluding the CVA/DVA desk), at €1.9bn, were flat at constant exchange rate compared to a historically high H1 2017 despite a positive performance from the global finance division which was up 17% in the first half of 2018, according to the bank.

Global markets underlying revenues were down 11% year-on-year while fixed income, commodities & treasury (FICT) revenues dropped 10% compared to the first half of 2017 with a dynamic first quarter followed by one marked by lower activity, according to Natixis. Equity revenues were down 14% y-o-y driven by a soft performance from equity derivatives in Asia in the second quarter and the closure of the US and UK cash equity desks following the Natixis/Oddo-BHF partnership announcement (effective as of July 1, 2018).

Natixis sold 87 structured products worth an estimated €1.6 billion across six European markets in half-year 2018, down from 104 products with a combined sales volume of €2.5 billion during the same period in 2017, according to SRP data. In France the bank was the issuing company behind 44 products (€1.4 billion) which were distributed via, among other, CA Indosuez Wealth, Equitim, Groupama and i-Kapital (compared to €2.1 billion from 51 products during the same period of 2017). The bank's best-selling product, not just in France, but across Europe, was Helios Avril 2028, a 10-year autocallable linked to the Euro iStoxx 70 Equal Weight Decrement 5% Index, which sold €400m during its subscription period.

In the UK, Natixis was the manufacturer behind 25 products distributed via Idad (two products), Mariana (seven), Meteor (15) and Reyker (one) while in Italy nine products worth an estimated €31m were sold year to date. Natixis was also active in Belgium (€8m from three products), Finland (€4m from one product) and Sweden (€3m from five products) during the period.

Natixis' half-year underlying net revenues from asset management reached €1.5 billion, up 18% y-o-y, including rises of 14% to €799m in North America and 27% to €489m in Europe. Asset management attracted €15 billion of net inflows overall during the semester while the first half of 2018 fee rate excluding performance fees reached 31 basis points (bps) and rose to 16bps in Europe and to 40bps in North America.

Assets under management (AUM) stood at €846 billion at end-June 2018 , of which €413 billion in Europe and €419 billion in North America with AUM growth over the semester driven by a combination of net inflows, a -€11 billion negative market effect and a €12 billion positive FX effect. Wealth management AUM reached €32.5 billion, according to the bank.

'Natixis posted solid results in the second quarter, in line with the objectives of our New Dimension strategic plan,' said François Riahi (pictured), chief executive officer, in a statement. 'Our corporate & investment banking businesses continued to record solid revenues and a high level of profitability despite a mixed quarter in global markets due to a high basis of comparison in the second quarter of 2017 and a volatile market environment.'

Click the link to view the full Natixis quarterly and half-year results.

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