Natixis — Groupe BPCE — H1 2017 Earnings Presentation
67 slides from Natixis's earnings presentation, Aug 1, 2017
Slide 1: Results for the 2nd quarter and 1st half of 2017
Results for the 2nd quarter August 1, 2017 and 1st half of 2017
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements and comments relating to the objectives and strategy of Groupe BPCE. By their very nature, these forward-looking statements inherently depend on assumptions, project considerations, objectives and expectations linked to future event
Slide 3: All business lines enjoy strong commercial momentum
H1-17 All business lines enjoy strong commercial momentum Income before tax: +13.5%1 vs. H1-16 pf Excellent levels of activity achieved Strong growth in the contribution by the business lines from the CIB division Retail Banking stands up well Retail Banking: high business volumes Income before tax:
Slide 4: Sommaire
Sommaire 1 2 3 4 Results Capital Results of the Conclusion of Groupe adequacy and business lines BPCE liquidity August 1, 2017 Results for the 2nd quarter and 1st half of 2017 4
Slide 5: H1-17 results
H1-17 results Income before tax1: €3.1bn, up by 13.5% H1-17 underlying / Impact of non Impact of non H1-17 H1-16 pf H1-16 pf underlying H1-17 economic and H1-16 pf economic and underlying underlying In millions of euros exceptional items exceptional items % change Net banking income 12,114 -68 12,18
Slide 6: H1-17 results: gross operating income
H1-17 results Gross operating income: 11.5% growth to €3.6bn1 Resilience of Retail Banking revenues H1/H1 change in net banking income (in €m) Low interest-rate environment depressing net interest income and favoring loan renegotiation and early redemption +4.8% Rise in commissions driven by buoyant
Slide 7: Q2-17 results
Q2-17 results Income before tax1: €1.8bn, up by 15.1% Q2-17 underlying / Impact of non Impact of non Q2-17 Q2-16 pf Q2-16 pf underlying Q2-17 economic and Q2-16 pf economic and underlying underlying In millions of euros exceptional items exceptional items % change Net banking income 6,052 -61 6,113
Slide 8: Cost of risk: new decline to 20bps in H1-17
Results of Groupe BPCE Cost of risk: new decline to 20bps in H1-17 Groupe BPCE Cost of risk expressed in basis points2 -6.8% Banque Populaire banks 29 22 29 32 21 22 22 741 707 Cost of risk (€m) 691 excluding exceptional items H1-16 H2-16 H1-17 Caisses d’Epargne 15 14 25 Ratio of non-performing 3.5%
Slide 9: Sommaire
Sommaire 1 2 3 4 Results Capital Results of the Conclusion of Groupe adequacy business lines BPCE and liquidity August 1, 2017 Results for the 2nd quarter and 1st half of 2017 9
Slide 10: Capital adequacy: CET1 ratio up 40bps
Capital adequacy CET1 ratio up 40bps in H1-17 to 14.7%1,2 Change in the CET1 ratio Total capital ratios1 (as a %) Without transitional +19bps 18.5 % 18.7 % measures +35bps -16bps -7bps 18.7 % 18.8 % 4.0 3.8 14.6%2 14.3%1 14.7%1,2 0.4 0.3 CET1 ratio 14.3 14.7 CET1 ratio Retained Issue of Other CET1 r
Slide 11: Capital adequacy: TLAC ratio
Capital adequacy TLAC ratio equal to 20.0%2 at June 30, 2017 over requirement for 2019 Total loss-absorbing capacity1 equal to TLAC ratio (as a % of risk-weighted assets) €78.3bn2 at end-June 2017 Without transitional 19.3% 19.9% Assumptions adopted for the trajectory leading measures to compliance
Slide 12: Liquidity reserves and short-term funding
Liquidity Liquidity reserves and short-term funding at June 30, 2017 Total liquidity reserves of Groupe BPCE1 Coverage ratio of short-term funding + (in €bn) MLT debt maturing in the short term by liquidity réserves2 230 220 168% 164% 158% 196 71 77 61 Short-term funding and MLT debt maturing in the
Slide 13: 2017 wholesale MLT funding plan 102% completed
Liquidity 2017 wholesale medium-long term funding plan 102% completed at June 30, 2017 102% of the 2017 wholesale MLT funding plan completed at June 30, 2017 €20.5bn1 raised for a €20bn plan Structure of MLT funding at June 30, 2017 Average maturity at issue: 7.3 years in line with objectives Averag
Slide 14: Sommaire
Sommaire 1 2 3 4 Results Capital Results of Conclusion of Groupe adequacy and the business BPCE liquidity lines August 1, 2017 Results for the 2nd quarter and 1st half of 2017 14
Slide 15: Contribution of the business lines
Contribution of the business lines Contribution of the business lines to net banking income ROE (in €m) 11,505 12,017 1,668 2,016 68% 9% Retail 1,811 (71%) (10%) Banking 1,656 15% 8,181 8,190 (14%) 17% (14%) H1-16 pf H1-17 14% Investment (14%) Solutions Contribution of the business lines to income b
Slide 16: Retail Banking
Retail Banking Stability in net banking income in H1-17 marked by strong new loan production and a high level of early redemption fees Loan outstandings: +5.2% YoY Deposits & savings and loan outstandings Home loans +5.1%, equipment loans +4.2%, and (in €bn) consumer loans +7.8% +2.4% > New loan pro
Slide 17: Retail Banking: Banque Populaire banks
Retail Banking Banque Populaire banks: growth in customer base and positive momentum in commission income Loan outstandings (in €bn) Deposits & savings (in €bn) Customer base +4.9% New relationships forged with individual customers: +7.9% 238 241 250 +9% in H1-17 (245,400) 71 69 71 191 Principal act
Slide 18: Retail Banking: Caisses d'Epargne
Retail Banking Caisses d’Epargne: buoyant lending activity and growth in commission income Customer base Loan outstandings (in €bn) Deposits & savings (in €bn) Principal active customers aged 25 +1.0% or more: +169,000 (+3.0%) of which +6.9% 401 399 405 128,000 customers using banking services 236 2
Slide 19: Retail Banking: Specialized Financial Services
Retail Banking Specialized Financial Services: good performance from Specialized financing Net revenues: +1.0% vs. H1-16 Contribution to Group results Net revenues of the Specialized financing business: +3% YoY Q2-17/ H1-17/ Q2-16 H1-17 H1-16 Q2-17 Impact on expenses of the centralization of in mill
Slide 20: Retail banking: Other networks
Retail banking Other networks1 Real estate Financing Loan outstandings1,2 Deposits & savings2 Principal entity: Crédit Foncier (in €bn) (in €bn) New loan production of €5.8bn, +34.1% vs. H1-16 > Home loans granted to individual customers: €4.5bn, +44% 96.6 93.2 Decline in outstandings 5.7 5.4 7.9 21
Slide 21: Investment Solutions
Investment Solutions Momentum maintained in Insurance, and confirmed rebound in Asset Management Asset Management Positive net inflows in Europe and the US: Asset Management: Assets under Management €13bn in H1-17 with long-term products Growth maintained through a broad range of production (in €bn)
Slide 22: Corporate & Investment Banking
Corporate & Investment Banking Strong commercial momentum across all activities Global markets1 FIC-T (Foreign Exchange, interest Rate, Commodities & Change in net revenues (in €m) Treasury) Global finance & >Growth in net revenues driven by strong client activities Global markets1 Investment bankin
Slide 23: Sommaire
Sommaire 1 2 3 4 Results Capital Results of the Conclusion of Groupe adequacy and business lines BPCE liquidity August 1, 2017 Results for the 2nd quarter and 1st half of 2017 23
Slide 24: Conclusion
Conclusion H1-17: good performance achieved by the Group’s 3 business divisions with revenues up by 4.8%1, demonstrating the relevance of the diversified universal banking model Retail Banking: –0.4%2 despite the extremely negative impact of low interest rates Investment Solutions: +9.3% CIB: +20.8%
Slide 25: Annexes
Results for the 2nd quarter August 1, 2017 and 1st half of 2017 Annexes
Slide 26: Annexes
Annexes Organizational structure of Groupe BPCE Retail Banking Income statement and quarterly series Consolidated results of Groupe BPCE Banque Populaire and Caisse d’Epargne – quarterly series Notes on methodology Half-yearly changes in net banking income Income statement: reconciliation of consoli
Slide 27: Organizational structure of Groupe BPCE
Annex - Groupe BPCE Organizational structure of Groupe BPCE at June 30, 2017 9 MILLION COOPERATIVE SHAREHOLDERS 100% 100%* 50% 50% BPCE SA 100% 71% * Indirectly through Local Savings Companies. 29% FLOAT August 1, 2017 Results for the 2nd quarter and 1st half of 2017 27
Slide 28: Notes on methodology (1/4)
Annex – Consolidated results of Groupe BPCE Notes on methodology (1/4) Presentation of pro-forma quarterly results The segment information was modified as of Q1-17, with the creation of the Retail Banking division, which includes the Banque Populaire and Caisse d’Epargne retail banking networks, the
Slide 29: Notes on methodology (2/4)
Annex – Consolidated results of Groupe BPCE Notes on methodology (2/4) Net banking income Customer net interest income, excluding regulated home savings schemes, is computed on the basis of interest earned from transactions with customers, excluding net interest on centralized savings products (Livr
Slide 30: Notes on methodology (3/4)
Annex – Consolidated results of Groupe BPCE Notes on methodology (3/4) Capital adequacy Common Equity Tier 1 is determined in accordance with the applicable CRR/CRD IV rules; fully-loaded equity is presented without the application of transitional measures, except for the restatement of deferred tax
Slide 31: Notes on methodology (4/4)
Annex – Consolidated results of Groupe BPCE Notes on methodology (4/4) Liquidity Total liquidity reserves include: >Central bank-eligible assets include: ECB-eligible securities not eligible for the LCR, taken for their ECB valuation (after ECB haircut), securities retained (securitization and cover
Slide 32: H1-17 income statement reconciliation
Annex - Groupe BPCE H1-17 income statement: reconciliation of consolidated data (excluding non-economic and exceptional items) to published consolidated data Net income Net banking Operating Income attributable to Cost of risk income expenses before tax equity holders of the parent in millions of eu
Slide 33: H1-16 pf income statement reconciliation
Annex - Groupe BPCE H1-16 pf income statement: reconciliation of consolidated data (excluding non-economic and exceptional items) to published consolidated data Net income Income attributable to Net banking Operating Cost of risk before tax equity holders income expense of the parent in millions of
Slide 34: Q2-17 income statement reconciliation
Annex - Groupe BPCE Q2-17 income statement: reconciliation of consolidated data (excluding non-economic and exceptional items) to published consolidated data Net income Net banking Operating Income attributable to Cost of risk income expenses before tax equity holders of the parent in millions of eu
Slide 35: Q2-16 pf income statement reconciliation
Annex - Groupe BPCE Q2-16 pf income statement: reconciliation of consolidated data (excluding non-economic and exceptional items) to published consolidated data Net income Income attributable to Net banking Operating Cost of risk before tax equity holders income expense of the parent in millions of
Slide 36: Reconciliation of pro-forma data to published data
Annex - Groupe BPCE Reconciliation of pro-forma consolidated data to published consolidated data Groupe BPCE IFRS9 - IFRS9 - IFRS9 - IFRS9 - Final SRF Final SRF Q1-16 Restatement of Q2-16 Restatement of Q3-16 Restatement of Q4-16 Restatement of contribution Q1-16 pf contribution Q2-16 pf Q3-16 pf Q4
Slide 37: Half-yearly income statement per business line
Annex - Groupe BPCE Half-yearly income statement per business line Corporate & Investment Retail Banking Investment Corporate center Groupe BPCE Solutions Banking in millions of euros H1-17 H1-16 pf H1-17 H1-16 H1-17 H1-16 H1-17 H1-16 pf H1-17 H1-16 pf % Net banking income 8,190 8,181 1,811 1,656 2,
Slide 38: Quarterly income statement per business line
Annex - Groupe BPCE Quarterly income statement per business line Corporate & Investment Retail Banking Investment Corporate center Groupe BPCE Solutions Banking in millions of euros Q2-17 Q2-16 pf Q2-17 Q2-16 Q2-17 Q2-16 Q2-17 Q2-16 pf Q2-17 Q2-16 pf % Net banking income 4,080 4,057 920 832 1,032 88
Slide 39: Income statement: quarterly series
Annex - Groupe BPCE Income statement: quarterly series Groupe BPCE in millions of euros Q1-16 pf Q2-16 pf S1-16 pf Q3-16 pf Q4-16 pf 2016 pf Q1-17 pf Q2-17 S1-17 Net banking income 5,732 6,666 12,398 5,712 6,049 24,158 6,062 6,052 12,114 Operating expenses -4,405 -4,045 -8,449 -3,876 -4,348 -16,673
Slide 40: Consolidated balance sheet
Annex - Groupe BPCE Consolidated balance sheet ASSETS in millions of euros June 30, 2017 Dec. 31, 2016 LIABILITIES in millions of euros June 30, 2017 Dec. 31, 2016 C ash and amounts due from central banks 89,449 83,919 Amounts due to central banks 0 0 Financial assets at fair value through profit or
Slide 41: Goodwill
Annex – Groupe BPCE Goodwill Dec. 31, Acquisitions Other June 30, In millions of euros Impairment Conversion 2016 /Disposals movements 2017 Retail Banking 902 102 0 1 -12 993 entities Natixis 3,495 14 0 -122 -12 3,399 Total 4,397 116 0 -121 0 4,392 Goodwill impairment is recognized under the Corpora
Slide 42: Statement of changes in shareholders' equity
Annex - Financial structure Statement of changes in shareholders' equity Equity attributable In millions of euros to equity holders of the parent December 31, 2016 61,462 Distributions -342 Capital increase (cooperative shares) 600 Income 1,596 Remuneration of super-subordinated notes (TSSDI) -50 Is
Slide 43: Reconciliation of shareholders' equity to Tier-1 capital
Annex - Financial structure Reconciliation of shareholders' equity to Tier-1 capital1 -0.8 In billions of euros +15.7 +4.6 -4.7 -1.6 -1.0 -2.82 +1.0 73,4 73.4 63.0 61,4 61,4 61,3 60,3 58.5 58,5 57,5 57.5 57,5 Equity Cancellation Non-controlling Goodwill EL/Prov Other Common Additional Tier-1 capital
Slide 44: Prudential ratios and credit ratios
Annex - Financial structure Prudential ratios and credit ratios June 30, Dec. 31, Dec. 31, 20171 2016 2015 Total risk-weighted assets €391bn €391bn €391bn Common Equity Tier-1 capital €57.0bn €55.3bn €50.9bn Tier-1 capital €57.9bn €56.6bn €52.2bn Total capital €73.0bn €72.3bn €65.8bn Common Equity T
Slide 45: Breakdown and change in risk-weighted assets
Annex – Financial structure Breakdown and change in risk-weighted assets (in €bn) Breakdown per business line Half-yearly change +3 +3 391 391 -1 391 10% 9% 10% -5 18% 17% 16% 4% 4% 4% 391 391 68% 70% 70% Risk-weighted Retail Investment Corporate & Other Risk-weighted Dec. 31, 2015 Dec. 31, 2016 Jun
Slide 46: Leverage ratio
Annex Leverage ratio1,2 June 30, Dec. 31, In billions of euros 2017 2016 Leverage ratio Tier-1 capital 57.5 57.6 Impact of keeping savings Balance sheet total 1,238.3 1,235.3 deposits centralized with the CDC included in the denominator of the leverage ratio (in force since Jan. 1, 2016) Prudential
Slide 47: Financial conglomerate
Annex Financial conglomerate CRR/CRD IV2 Restatements Financial Financial conglomerate ratio viewpoint conglomerate viewpoint -1.4 Banking CR1 (CRR/CRD IV) Regulatory capital > + Insurance CR1 (Solvency 2) Total capital 73.0 71,473 71,473 71,473 71.6 (in €bn) Transfer from the Basel 3 ratio2 to the
Slide 48: Resolution: Groupe BPCE Single Point of Entry
Resolution Groupe BPCE Single Point of Entry As requested by the European regulations, the Single Resolution Board (SRB) is drafting resolution plans for banking groups of the Banking Union so that any failing institution will have minimum impact on the economy and public finances The SRB has inform
Slide 49: Liquidity: customer loan/deposit ratio
Annex – liquidity Customer loan/deposit ratio1 138% 2 128% 3 126% 4 122% 121% 5 120% 119% Dec. 2011 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Dec. 2016 June 2017 1 Excluding SCF (Compagnie de Financement Foncier, the Group’s société de crédit foncier – a French legal covered bonds issuer) 2 Change in
Slide 50: Retail Banking: half-yearly income statement
Annex – Retail Banking Half-yearly income statement per business line Specialized Financial Banque Populaire banks Caisses d'Epargne Other networks Retail Banking Services in millions of euros H1-17 H1-16 pf % H1-17 H1-16 pf % H1-17 H1-16 % H1-17 H1-16 pf % H1-17 H1-16 pf % Net banking income 3,203
Slide 51: Retail Banking: quarterly income statement
Annex – Retail Banking Quarterly income statement per business line Specialized Financial Banque Populaire banks Caisses d'Epargne Other networks Retail Banking Services in millions of euros Q2-17 Q2-16 pf % Q2-17 Q2-16 pf % Q2-17 Q2-16 % Q2-17 Q2-16 pf % Q2-17 Q2-16 pf % Net banking income 1,597 1,
Slide 52: Retail Banking: quarterly series
Annex – Retail Banking Quarterly series Retail Banking in millions of euros Q1-16 pf Q2-16 pf H1-16 pf Q3-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 H1-17 Net banking income 4,124 4,057 8,181 4,008 4,102 16,291 4,110 4,080 8,190 Operating expenses -2,844 -2,692 -5,535 -2,614 -2,828 -10,977 -2,844 -2,720 -5,
Slide 53: Banque Populaire and Caisses d'Epargne quarterly series
Annex – Retail Banking Banque Populaire banks and Caisses d’Epargne – quarterly series Banque Populaire banks in millions of euros Q1-16 pf Q2-16 pf H1-16 pf Q3-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 H1-17 Net banking income 1,582 1,583 3,165 1,539 1,590 6,295 1,606 1,597 3,203 Operating expenses -1,113
Slide 54: Retail banking: change in half-year net banking income
Retail banking Change in the absolute value of half-year net banking income Banque Populaire banks (in €m) Caisses d’Epargne (in €m) H1/H1 H1/H1 +1.2% change -0.6% change (in €m) (in €m) 3,637 3,578 3,616 3,203 74 129 3,165 3,130 113 +55 64 89 51 +38 1,412 1,391 1,443 1,167 1,231 +31 1,172 +59 1,962
Slide 55: Banque Populaire: customer deposits & savings
Annex - Retail Banking Banque Populaire network: customer deposits & savings (in €bn) 249.7 238.0 241.3 % change June 2017/ 76.1 63.9 69.6 June 2016 Demand deposits +19.0% Passbook savings accounts +5.5% 45.4 45.9 47.9 Regulated home savings +5.5% plans 18.7 19.1 19.7 Term accounts -15.8% 31.9 29.8
Slide 56: Banque Populaire: customer loan outstandings
Annex - Retail Banking Banque Populaire network: customer loan outstandings (in €bn) 190.8 182.2 176.8 % change 106.7 June 2017/ 101.3 97.4 June 2016 Home loans +9.5% Consumer loans +11.9% 8.2 8.7 7.8 12.5 12.9 13.9 Short-term credit facilities +11.4% Equipment loans +4.3% 54.7 55.4 57.0 Other ns To
Slide 57: Caisse d'Epargne: customer deposits & savings
Annex - Retail Banking Caisse d'Epargne network: customer deposits & savings (in €bn) 401.1 399.4 405.2 % change 58.1 59.5 63.8 June 2017/ June 2016 Demand deposits +9.8% 122.5 Passbook savings accounts +1.0% 120.3 123.7 Regulated home savings +3.9% plans 54.4 55.6 Term accounts -13.1% 56.5 BPCE bon
Slide 58: Caisse d'Epargne: customer loan outstandings
Annex - Retail Banking Caisse d'Epargne network: customer loan outstandings (in €bn) 244.8 236.0 229.1 % change 148.8 June 2017/ 142.7 June 2016 138.5 Home loans +7.4% Consumer loans +6.4% Short-term credit facilities +12.5% 14.0 14.9 14.0 8.6 9.2 9.6 Equipment loans +5.5% Other ns 62.4 64.5 65.8 To
Slide 59: SFS quarterly series
Annex – Retail Banking SFS – Quarterly series (*) Specialized Financial Services in millions of euros Q1-16 Q2-16 H1-16 Q3-16 Q4-16 2016 Q1-17 Q2-17 H1-17 Net banking income 343 341 684 325 341 1,350 344 347 691 Operating expenses -225 -220 -446 -215 -220 -880 -232 -227 -459 Gross operating income 1
Slide 60: Other networks quarterly series
Annex – Retail Banking Other networks – Quarterly series Other networks in millions of euros Q1-16 pf Q2-16 pf H1-16 pf Q3-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 H1-17 Net banking income 346 348 695 356 380 1,431 344 335 680 Operating expenses -251 -225 -476 -218 -240 -933 -255 -227 -482 Gross operating
Slide 61: Investment solutions quarterly series
Annex – Investment solutions Quarterly series Investment Solutions in millions of euros Q1-16 Q2-16 H1-16 Q3-16 Q4-16 2016 Q1-17 Q2-17 H1-17 Net banking income 825 832 1,656 804 904 3,364 891 920 1,811 Operating expenses -590 -579 -1,169 -558 -623 -2,350 -645 -620 -1,266 Gross operating income 234 2
Slide 62: Corporate & Investment Banking quarterly series
Annex – Corporate & Investment Banking Quarterly series Corporate & Investment Banking in millions of euros Q1-16 Q2-16 H1-16 Q3-16 Q4-16 2016 Q1-17 Q2-17 H1-17 Net banking income 782 887 1,668 757 896 3,322 984 1,032 2,016 Operating expenses -512 -482 -994 -468 -569 -2,032 -563 -552 -1,114 Gross op
Slide 63: Corporate center quarterly series
Annex - Corporate center Quarterly series Corporate center in millions of euros Q1-16 pf Q2-16 pf H1-16 pf Q3-16 pf Q4-16 pf 2016 pf Q1-17 pf Q2-17 H1-17 Net banking income 2 890 892 142 147 1,181 77 20 98 Operating expenses -459 -293 -751 -235 -327 -1,314 -512 -244 -756 Gross operating income -457
Slide 64: Risks: non-performing loans and impairment
Annex – Risks Groupe BPCE: non-performing loans and impairment In millions of euros June 30, 2017 Dec. 31, 2016 Dec. 31, 2015 Gross outstanding customer loans 682,006 679,176 629,775 O/w non-performing loans 23,091 23,427 23,098 Non-performing/gross outstanding loans 3.4 % 3.4% 3.7% Impairment recog
Slide 65: Risks: breakdown of commitments at June 30, 2017
Annex – Risks Breakdown of commitments at June 30, 2017 Breakdown of commitments Breakdown of commitments to Corporates per counterparty per economic sector Finance & Insurance 13.0% 5% Real estate rentals 11.6% Energy 10.1% 27% 8% Real estate 9.7% Holding companies & diversified 8.0% 4% Services 4.
Slide 66: Risks: geographical breakdown of commitments
Annex – Risks Geographical breakdown of commitments at June 30, 2017 Central administrations/central Institutions banks and other sovereign Corporates exposures 6% 1% 6% 1% 1% 16% 4% 4% 9% 10% 15% 17% 45% 67% 67% 31% France Centralization of regulated savings Europe excluding North & Asia/Oceania Af
Slide 67: August 1, 2017 Results for the 2 nd quarter and 1 st half of
August 1, 2017 Results for the 2nd quarter and 1st half of 2017 67