Natixis — Groupe BPCE — Debt Investor Presentation (September 2021)
65 slides from Natixis's debt investor presentation, September 2021
Slide 1: Investor Presentation BPCE Inaugural RAC Tier 2
Investor Presentation BPCE Inaugural RAC Tier 2 September 2021
Slide 2: Disclaimer
Disclaimer This presentation has been prepared exclusively by the management of BPCE (the “Company”). This presentation does not contain, constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, or an induceme
Slide 3: Agenda
01 Focus on the RAC Tier 2 Offering A cooperative bank with a diversified business model, leading 02 positions, and strong commitments to society 03 Delivering solid performance based on synergies and moderate risk appetite 04 Operating with robust capital ratios, strong loss-absorbing capacity and
Slide 4: Transaction rationale & investment thesis
Transaction rationale & investment thesis ʘ Groupe BPCE’s inaugural RAC Tier 2 transaction, eligible to S&P’s Total Adjusted Capital (TAC), with an “Intermediate” Equity Content ʘ 20.25NC5.25 and a potential 25NC10 Contingent Tier 2 Capital Subordinated Fixed Rate Resettable Notes (the “Notes”) Tran
Slide 5: Focus on the RAC Tier 2 Offering
01 Focus on the RAC Tier 2 Offering 5
Slide 6: Groupe BPCE's RAC Tier 2 - Investment thesis
Groupe BPCE’s RAC Tier 2 - Investment thesis A large cooperative One of Europe’s leading and most robust banking groups: following Natixis’ minority shareholders banking group with a buyback, Groupe BPCE is the largest privately-held banking institution in Europe diversified business One of the 30 G
Slide 7: Groupe BPCE's RAC Tier 2 - Investment thesis
Groupe BPCE’s RAC Tier 2 - Investment thesis Solid buffer to RAC Tier 2 trigger Strong capital position to be comforted by 2024 targets Current position Requirement 2024 target eq. to €37.7 bn 15.6 % 10.8 % Buffer: CET1 ratio (Jun-21(1)) (Total CET1 requirement, incl. > 15.5 % AT1 shortfall) 475bps
Slide 8: Groupe BPCE's RAC Tier 2 - Summary terms
Groupe BPCE’s RAC Tier 2 - Summary terms Series no.: 2021-20[42] Series no.: 2021-20[46] Issuer BPCE SA Issue Date [●] [October] 2021 Issue Rating (M/S/F) [Baa3 / BBB / A-] (expected) Size EUR [●]m (benchmark) EUR [●]m (benchmark) [●], payable annually from the Issue Date to the First Reset Date ([●
Slide 9: Groupe BPCE's RAC Tier 2 - Comparison of structures
Groupe BPCE’s RAC Tier 2 - Comparison of structures Issue Date [●] [October] 2021 July 15th, 2021 June 3rd, 2014 September 19th, 2013 Issue Rating (M/S/F)(1) [Baa3 / BBB / A-] (expected) - / B+ / - - / BBB- / BBB - / BBB- / BBB- Size EUR [●]m (benchmark) EUR 100m EUR 600m USD 1,000m Coupon [●], paya
Slide 10: Groupe BPCE's RAC Tier 2 - Side-by-side with vanilla Tier 2
Groupe BPCE’s RAC Tier 2 - Side-by-side with “vanilla” Tier 2 2021 Callable 2016 EUR 750m 2015 EUR 750m RAC Tier 2 Bullet Tier 2 Callable Tier 2 Issue Date [●] [October] 2021 April 22nd, 2016 November 30th, 2015 Issue Rating (M/S/F)(1) [Baa3 / BBB / A-] (expected) Baa3 / BBB / A- Baa3 / BBB / A- Siz
Slide 11: A cooperative bank with a diversified business model, leading positions, and strong commitments to society
02 A cooperative bank with a diversified business model, leading positions, and strong commitments to society 11
Slide 12: A large cooperative banking group with a diversified business model (1/2)
A large cooperative banking group with a diversified business model, leading market position and clear business lines (1/2) A structure and governance ensuring a strong commitment to the development of regional and international expertise on a long-term basis and an alignment of interests for all th
Slide 13: A large cooperative banking group with a diversified business model (2/2)
A large cooperative banking group with a diversified business model, leading market position and clear business lines (2/2) One of the 30 Global Systemically Important Banks (G-SIBs) Regional banks #2 banking group in France(2) Contribution to the H1-21 21.5% of market share Gross Operating Income(1
Slide 14: Retail Banking and Insurance: two large networks of regional cooperative banks (1/4)
Retail Banking and Insurance: two large networks of regional cooperative banks with strong brands and a leading position in the French retail market (1/4) 27 million customers served through our branches and digital tools allowing the two large networks to increase cross-selling and deliver solid co
Slide 15: Retail Banking and Insurance: data resources and digital services (2/4)
Retail Banking and Insurance: Increased use of data resources and digital services to serve the needs of our customers and their advisers (2/4) Data resources and digital services serving the needs of our customer advisers H1-21 key figures DATA – AUTOMATION OF THE COLLECTION AND VERIFICATION OF CUS
Slide 16: Retail Banking and Insurance: cornerstone of our ambitions (3/4)
Retail Banking and Insurance: the cornerstone of our ambitions to build market share and offer fee-driven, value-added products through our retail networks (3/4) Breakdown of revenues in Q1-21 Financial Solutions and Expertise 3% H1-21 results(2) 7% 22% Consumer credit NBI €597m 12% Sureties & finan
Slide 17: Retail Banking and Insurance: Payments and Oney Bank (4/4)
Retail Banking and Insurance: Payments and Oney Bank (4/4) Payments H1-21 results(1) Relevant offline and online payment solutions NBI €235m ʘ Focus on end-to-end digital payment services ʘ Invest in technology and solutions niche-oriented Payment CIR(2) 86.4% A forerunner in rolling-out Instant Pay
Slide 18: Global Financial Services/ Asset and Wealth Management
Global Financial Services/ Asset and Wealth Management: global ambitions for our multi-affiliate model focused on active asset management and insurance Funds Assets under management(1) (in €bn) More than 20 specialized investment managers globally committed to a highly active, conviction-led investm
Slide 19: Global Financial Services/ Corporate and Investment Banking
Global Financial Services/ Corporate and Investment Banking: client-centric and solutions-driven, Natixis CIB provides a range of expertise to meet the specific needs of our customers worldwide H1-21 results(2) Becoming the “go-to bank” in selected sectors ʘ Selected international growth NBI €1,859m
Slide 20: Groupe BPCE's commitments to society
Groupe BPCE's commitments to society Fight against climate change confirmed as a key priority for all business lines in new strategic plan BPCE 2024; the Group just joined the Net Zero Banking Alliance Strong commitments Alignment on a "Net Zero" trajectory: the Group has joined the "Net Zero Bankin
Slide 21: Delivering solid performance based on synergies and moderate risk appetite
03 Delivering solid performance based on synergies and moderate risk appetite 21
Slide 22: Groupe BPCE: strong recovery in H1-21
Groupe BPCE: strong recovery in H1-21 driven by commercial momentum and significant decrease in cost of risk Group revenues: €12.5bn, +16.0% vs. H1-20 and +6.4% vs. H1-19 Revenues Retail Banking & Insurance: revenues +7.6% YoY; strong activity in retail banking, Insurance and FSE Global Financial Se
Slide 23: Strategic development
Strategic development Groupe BPCE has engaged a major step in its transformation and the development of its businesses ʘ On February 9th, 2021, Groupe BPCE announced the public tender offer on the 29% Natixis shares the Group didn’t already own, to engage the simplification of its organization ʘ Thi
Slide 24: Q2-21 & H1-21 results - Underlying figures
Q2-21 & H1-21 results - Underlying figures H1-21 net income(1) up to €2.25bn, driven by solid GOI growth and lower cost of risk Underlying figures Q2-21 % Change % Change H1-21 % Change % Change €m vs. Q2-20 vs. Q2-19 vs. H1-20 vs. H1-19 Net banking income 6,334 22.0% 6.6% 12,465 16.0% 6.4% Operatin
Slide 25: H1-21 results - Cost of risk/Asset quality (1/2)
H1-21 results - Cost of risk/Asset quality (1/2) Continued prudent provisioning: cost of risk at €822m in H1-21 Cost of risk(1) S1/S2 S3 45 49 (in bps) 13 34 21 20 23 25 18 21 18 10 36 20 17 26 RB&I(2) 13 19 15 19 5 5 -1 2 163 144 Cost of risk 123 121 124 95 €822m 118 -44.6% vs. H1-20 112 112 65 53
Slide 26: H1-21 results - Cost of risk/Asset quality (2/2)
H1-21 results - Cost of risk/Asset quality (2/2) Asset quality: limited exposures to sensitive sectors Diversified portfolio Exposure to sectors considered to be sensitive Breakdown of Group gross exposure per Corporate and small business Group exposures(2) counterparty at June 30, 2021(1) % % Gross
Slide 27: Operating with robust capital ratios, strong loss-absorbing capacity and high credit ratings
04 Operating with robust capital ratios, strong loss-absorbing capacity and high credit ratings 27
Slide 28: Capital and Loss-absorbing Capacity
Capital and Loss-absorbing Capacity CET1 ratio as of June 30 , 2021 including full impact of the buyback of all Natixis minority shareholders, above 2021 year-end guidance Change in the CET1 Ratio (bps) Organic capital creation = 13bps Requirements Actual levels June 30, 2021 as at +32bps +4bps June
Slide 29: Risk-Weighted Assets
Risk-Weighted Assets Breakdown per business line (in €bn) Breakdown per type of risk(1) (in €bn) 431 440 431 440 13% 12% Other 9% 9% 3% 3% 19% 20% Global Financial Services Operational Risk Retail Banking & 88% 88% Market Risk 68% 68% Insurance Credit Risk Dec. 31, 2020 June 30, 2021 Dec. 31, 2020 J
Slide 30: Own funds
Own funds Reconciliation of shareholders’ equity to total capital Regulatory capital (in €bn) 78.2 77.0 In billions of euros June 30, 2021 Dec. 31, 2020 9.3 8.6 Equity attribuable to equity holders of the parent 76.3 72.7 26.9 27.5 Tier-2 capital Cancelation of hybrid securities(1) in equity - - CET
Slide 31: Capital and Loss-absorbing Capacity: MDA trigger threshold
Capital and Loss-absorbing Capacity Financial structure: MDA trigger threshold Capital Capital Pillar I Pillar II conservation G-SIB Countercyclical Pillar I Pillar II conservation G-SIB Countercyclical 12/31/2020 requirement requirement buffer buffer buffer Total 06/30/2021 requirement requirement
Slide 32: Capital and Loss-absorbing Capacity
Capital and Loss-absorbing Capacity TLAC(1,2) Ratio (as a % of risk-weighted assets) MREL(1,2) Ratio (as a % of risk-weighted assets) 29.5% 25.0% 6.5% 22.9% 19.5% 4.8% 4.8% Eligible Senior Preferred debt Senior Non-Preferred Senior Non-Preferred 2.6% 2.6% Tier 2 Tier 2 Additional Tier 1 Additional T
Slide 33: Groupe BPCE's ratings are among the best in the global banking industry
Groupe BPCE’s ratings are among the best in the global banking industry, based on a robust capital position, well-diversified business model and efficient strategy execution As of June 24, 2021 Senior preferred long-term debt A1 A A+ A+ Outlook Stable Stable Negative Stable Senior non-preferred Baa1
Slide 34: Global and innovative issuer, committed to society
05 Global and innovative issuer, committed to society 34
Slide 35: Groupe BPCE is a global issuer
Groupe BPCE is a global issuer, operating in EMEA, the US and the Asia- Pacific region in several currencies and types of debt instruments ≈68% of the 2021 MLT wholesale funding plan(1) raised(2) MLT wholesale funding: revised 2021 plan and execution YTD(2) ʘ Target: €22bn(1) / Raised YTD(1,2): €14.
Slide 36: Innovation is at the heart of Groupe BPCE's funding policy
Innovation is at the heart of Groupe BPCE’s funding policy ≈€7.1bn BPCE SRI outstanding as of end-June 2021 GREEN SOCIAL €3.7bn AuM 3.5G€ AuM Renewable Energies Human Development: Education, Healthcare and Social Services Green Buildings Local Economic Development Green and Transition Bond I
Slide 37: Liquidity reserves and short-term funding
Liquidity reserves and short-term funding Total liquidity reserves of Groupe BPCE(1) (in €bn) Short-term funding and MLT debt maturing in the short term (in €bn) Coverage ratio of short-term funding + MLT debt maturing in the short-term by liquidity reserves(2) 318 246% 234% 241% 307 297 146 176 145
Slide 38: Additional Information
38 ADDITIONAL INFORMATION @ GROUPE BPCE
Slide 39: Q2-21 & H1-21 results – Restated figures
Q2-21 & H1-21 results – Restated figures Strong jaws effect both in Q2-21 and H1-21 H1-21 net income(1) at €1.9bn Restated figures Q2-21 Q2-20 % Change H1-21 H1-20 % Change €m Net banking income 6,337 5,183 22.3% 12,455 10,726 16.1% Operating expenses (4,151) (3,837) 8.2% (8,806) (8,383) 5.0% o/w ex
Slide 40: Reconciliation of restated data to reported data
Reconciliation of restated data to reported data GROUPE GROUPE BPCE BPCE In millions of euros H1-21 Coface H1-21 H1-20 Coface H1-20 Reported Restated reported restated Net banking income 12,455 12,455 10,726 10,726 Operating expenses (8,806) (8,806) (8,383) (8,383) Gross operating income 3,649 3,649
Slide 41: H1-21 results: reconciliation of alternative performance measures
H1-21 results: reconciliation of alternative performance measures to restated data Net Operating Income Net banking expenses before tax income income - Group share excluding In millions of euros Coface Restated H1-21 results 12,455 (8,806) 2,965 1,851 Revaluation of assets associated with deeply sub
Slide 42: H1-21 results: reconciliation of alternative performance measures
H1-21 results: reconciliation of alternative performance measures to restated data Net Operating Associates Gains or Income Net banking expenses losses on before tax income income other - Group assets share excluding In millions of euros Coface Restated H1-20 results 10,726 (8,383) 101 (130) 829 415
Slide 43: Reconciliation of 2020 data to pro forma data (1/2)
Reconciliation of 2020 data to pro forma data (1/2) Retail banking and Q1-20 Q2-20 Q3-20 Q4-20 Insurance Net Net Net Net In millions of euros Operating Income Operating Income Operating Income Operating Income banking Net income banking Net income banking Net income banking Net income expenses befor
Slide 44: Reconciliation of 2020 data to pro forma data (2/2)
Reconciliation of 2020 data to pro forma data (2/2) Corporate center Q1-20 Q2-20 Q3-20 Q4-20 Net Net Net Net In millions of euros Operating Income Operating Income Operating Income Operating Income banking Net income banking Net income banking Net income banking Net income expenses before tax expens
Slide 45: Exceptional items and IFRIC 21 effects per business line
Exceptional items and IFRIC 21 effects per business line H1-21 RETAIL BANKING GLOBAL CORPORATE GROUPE BPCE & INSURANCE FINANCIAL CENTER In millions of euros SERVICES Impact of exceptional items (33) (43) (99) (175) (excl. Coface) Impact of IFRIC 21 (58) (19) (231) (308) Total impact on Income before
Slide 46: Groupe BPCE: restated quarterly income statement per business line
Groupe BPCE: restated quarterly income statement per business line RETAIL BANKING GLOBAL FINANCIAL CORPORATE GROUPE & INSURANCE SERVICES CENTER BPCE In millions of euros Q2-21 Q2-20pf Q2-21 Q2-20pf Q2-21 Q2-20pf Q2-21 Q2-20pf % Net banking income 4,420 4,010 1,766 1,215 151 (42) 6,337 5,183 22.3% Op
Slide 47: Groupe BPCE: restated quarterly series
Groupe BPCE: restated quarterly series GROUPE BPCE In millions of euros Q1-20pf Q2-20pf Q3-20pf Q4-20pf Q1-21 Q2-21 Net banking income 5,543 5,183 5,511 6,303 6,117 6,337 Operating expenses (4,546) (3,837) (3,905) (4,356) (4,655) (4,151) Gross operating income 997 1,346 1,606 1,947 1,462 2,187 Cost
Slide 48: Cost of risk by business lines
Cost of risk by business lines COST OF RISK(1) (in bps) 49 48 16 17 20 18 25 20 15 33 6 30 22 BP network 5 12 3 18 2 45 37 15 21 5 19 16 41 11 22 7 12 8 14 8 10 CE network 5 -2 45 49 13 21 20 23 25 10 36 18 17 26 20 19 RB&I 5 13 5 -1 163 123 121 124 95 112 112 53 65 47 17 CIB 11 39 9 30 6 8 9 55 49
Slide 49: Retail Banking & Insurance
Retail Banking & Insurance Robust financial performance thanks to strong commercial activity; Large positive jaws effect and decline in the cost of risk Loan outstandings: €628bn, +7.8% YoY On-balance sheet deposits & savings(1): o/w residential mortgages +8.6% YoY €543bn, +6.8% YoY o/w consumer loa
Slide 50: Retail Banking & Insurance - Banques Populaires
Retail Banking & Insurance - Banques Populaires Sharp increase in GOI: +30.1% in H1-21, expenses well under control Loan outstanfings - in €bn - Deposits & savings Production +9.6% +8.9% Retail market – P&C 189 +64% 341 In thousands of contracts 267 313 116 244 19 Off-balance sheet D&S 81 75 2.5 +26
Slide 51: Retail Banking & Insurance - Caisses d'Epargne
Retail Banking & Insurance - Caisses d’Epargne Strong increase in GOI: +9.2% in H1-21 Loan outstanfings - in €bn - Deposits & savings Production +4.7% 489 +6.5% 467 255 338 Retail market – P&C +33% In thousands of contracts 325 134 140 305 10 Off-balance sheet D&S 5.1 Consumer loans 7 61 3.8 +33% 59
Slide 52: Retail Banking & Insurance
Retail Banking & Insurance Deposits & savings (in €bn) Loan outsandings (in €bn) 847.2 Change YoY Change YoY 796.7 +6.3% +7.8% 257.6 627.7 235.6 582.4 +9.4% Sight deposits 210.9 349.4 196.4 +7.4% Passbook savings accounts 321.6 +1.1% Regulated home savings plans 81.4 82.2 +7.8% Term accounts +8.6% R
Slide 53: Retail Banking & Insurance - Financial Solutions & Expertise
Retail Banking & Insurance - Financial Solutions & Expertise Good momentum in commercial activities, all businesses are catching opportunities in the economic turnaround Business activities Breakdown of revenues per business line in H1-21 ʘ Consumer credit: record level of personal loan financing in
Slide 54: Retail Banking & Insurance - Insurance
Retail Banking & Insurance - Insurance Scope: Insurance division of Natixis Solid commercial activity and financials Premiums(1) - in €bn - Life insurance AuMs(1) Share of UL products – H1-21 7.9 +50% +7% YTD +8% YoY share of UL +3pp +2pp 3.7 +79% +12% 5.3 €78.1bn 2.1 1.4 €6.4bn 2.1 1.9 €22bn 28% UL
Slide 55: Retail Banking & Insurance - Payments/ Oney Bank
Retail Banking & Insurance - Payments/ Oney Bank PAYMENTS Scope: Payments division of Natixis Net revenues: +18.5% in H1-21 off a low base related to the lockdown measures in France having impacted the April/May commercial activity in 2020 Underlying figures(1) Q2-21 % Change H1-21 % Change ʘ Paymen
Slide 56: Global Financial Services/ Asset & Wealth Management
Global Financial Services/ Asset & Wealth Management Robust AuM growth and fee rate dynamic Assets under management(1) (in €bn) 35 1,183 AuMs: +3% QoQ with positive net inflows and market effect. Favourable mix Controlling affiliates WCM IM shift notably across European affiliates with faster AuM gr
Slide 57: Global Financial Services/ Corporate and Investment Banking
Global Financial Services/ Corporate and Investment Banking Strong commercial activity and improved cost of risk Net revenues(1) (in €m) Net revenues continue to exhibit solid momentum on the back of a strong 845 929 923 1,852 commercial activity and off a low base due to the H1-20 market conditions
Slide 58: Group internal solidarity & guarantee system call
Group internal solidarity & guarantee system call Internal solidarity and guarantee system defined by law between all affiliated French Regulated Credit Institutions (FRCI) within the group DESCRIPTION BPCE SA has the legal obligation to take all necessary measures to guarantee the liquidity and the
Slide 59: Consolidated balance sheet
Consolidated balance sheet ASSETS LIABILITIES June 30, 2021 Dec. 31, 2020 June 30, 2021 Dec. 31, 2020 (in millions of euros) (in millions of euros) Cash and amounts due from central banks 151,361 153,403 Amounts due to central banks Financial assets at fair value through profit or loss 186,044 196,2
Slide 60: Statement of changes in shareholders' equity
Statement of changes in shareholders' equity Equity attributable to equity In millions of euros holders of the parent December 31, 2020 72,683 Distributions (314) Capital increase (cooperative shares) 118 Impact of acquisitions and disposals on non-controlling interests (minority interests) 1,513 O/
Slide 61: Non-performing loans and impairments
Non-performing loans and impairments June.30, 2021 Dec.31, 2020 In billions of euros Gross outstanding loans to customers and credit institutions 870.3 850.4 O/w S1/S2 outstandings 847.9 828.9 O/w S3 outstandings 22.4 21.5 Non-performing loans/gross outstanding loans 2.6% 2.5% S1/S2 impairments reco
Slide 62: Breakdown of gross exposure as of June 30, 2021
Breakdown of gross exposure as of June 30, 2021(1) Breakdown per geographical region Financial institutions/local governments Central administrations/ Corporate customers Central banks and other sovereign exposures 4% 2% 4%1% 4% 2% 7% 7% 8% 9% 18% 24% 15% 71% 69% 55% France Centralization of regulat
Slide 63: Main issuers in the market
Main issuers in the market Issuer Operator Short-term All instruments, all markets including CDs, ECP, USCP & interbank deposits BPCE / Natixis Natixis Medium & long-term BPCE SFH BPCE Covered Bonds CoFF (SCF) CFF Natixis Pfandbriefbank Natixis Senior Preferred (Unsecured) Public issues BPCE BPCE Pl
Slide 64: Contact list
Contact list BPCE Roland Charbonnel +33 1 58 40 69 30 Head of Group Funding & Investor Relations roland.charbonnel@bpce.fr Jean-Philippe Berthaut +33 1 58 40 69 15 Head of Group Funding jean-philippe.berthaut@bpce.fr François Courtois +33 1 58 40 46 69 Head of Investor Relations francois.courtois@bp
Slide 65: groupebpce.com
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