Natixis — Groupe BPCE — H1 2018 Earnings Presentation
65 slides from Natixis's earnings presentation, Aug 2, 2018
Slide 1: Results for the 2nd Quarter and 1st Half of 2018
RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018 AUGUST 2, 2018
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: Results for the 1st Half of 2018
RESULTS FOR THE 1ST HALF OF 2018 Attributable net income1,2: €2bn in H1-18, up 3.6% ʘ 2%1,3 revenue growth driven by the increase in commission income A diversified Commissions generated by the BP and CE retail banking networks: +4.5%4 in H1-18 recurring Revenues posted by Asset & Wealth Managem
Slide 4: Contents
CONTENTS 1 Results of the Group 2 Capital adequacy and liquidity of the Group 3 Results of the business lines 4 Conclusion 4 RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018
Slide 5: H1-18 Results
H1-18 RESULTS 2%1,3 growth in revenues driven by the increase in commission income H1-18 -0.1pp Impact of non- underlying Constant H1-18 H1-17 68.7% H1-18 economic and / H1-17 FX underlying underlying 68.6% exceptional items underlying in millions of euros % change % change Net banking income 12,251
Slide 6: Q2-18 Results
Q2-18 RESULTS Good quarter with net income attributable to equity holders of the parent 1,2 rising +6.4% to €1bn -0.6pp Impact of non- Q2-18 underlying Constant 69.0% Q2-18 Q2-17 / Q2-17 68.4% Q2-18 economic and FX underlying underlying underlying exceptional items in millions of euros % change % ch
Slide 7: H1-18 Results - Revenues
H1-18 RESULTS - REVENUES Growth in commission income and Insurance and development of synergies within the Group (in €m) +4.5% 2,793 Development of the BP & CE network 2,673 commissions1 Bancassurance business model Revenue synergies worth €126m as at June 30, +17.7%2 Asset & Wealth 1,596 2018, 64%
Slide 8: H1-18 Results - Cost of Risk
H1-18 RESULTS - COST OF RISK Cost of risk maintained at a low level Groupe BPCE cost of risk1 (in €m) Cost of risk, in bps2 Banque Populaire banks 22 24 22 22 21 27 21 27 366 372 Caisses d’Epargne 325 317 269 259 14 12 14 15 10 20 10 15 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Retail Banking and Insuranc
Slide 9: Transformation of the Group
TRANSFORMATION OF THE GROUP Project1 to integrate the activities and expertise of Crédit Foncier A project1 creating value for BPCE by allowing the Group to offer banking services previously inaccessible to customers within Crédit Foncier A solution ensuring the long-term Business Activity Entity ho
Slide 10: Contents
CONTENTS 1 Results of the Group 2 Capital adequacy and liquidity of the Group 3 Results of the business lines 4 Conclusion 10 RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018
Slide 11: Capital Adequacy
CAPITAL ADEQUACY High levels of capital adequacy and loss-absorbing capacity: TLAC ratio target defined in the TEC 2020 strategic plan already achieved Change in the CET1 ratio1 (in bps) Impact in H1-18 of 2 one-off effects on the CET1 +37bps +16bps ratio: 15.4% 15.3% 15.2% 15.2% ʘ First-time applic
Slide 12: Liquidity
LIQUIDITY 84% of the wholesale medium-/long-term funding plan completed as at July 5, 2018 Structure of MLT funding as at July 5, 2018 Target: wholesale MLT funding plan to be completed in 2018 equal to €22bn ʘ Unsecured bond segment: approximately 70% Unsecured bond issues 69% Of which €4bn-5bn i
Slide 13: Contents
CONTENTS 1 Results of the Group 2 Capital adequacy and liquidity of the Group 3 Results of the business lines 4 Conclusion 13 RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018
Slide 14: H1-18 Results by Business Line
H1-18 RESULTS Strong growth dynamics in Asset & Wealth Management Retail Banking & Insurance Asset & Wealth Management (in €m) (in €m) % change at constant FX (% change at current FX) Net banking income1 Gross operating income Net banking income Gross operating income -1.1% -1.6% +17.7% 8,559 8,464
Slide 15: Retail Banking & Insurance
RETAIL BANKING & INSURANCE Good level of results, income before tax3,4 stable at €2.4bn Loan outstandings: +4.8% year-on-year Loan outstandings - in €bn - Deposits & Savings ʘ Home loans: +5.5%; equipment loans: +7.8% +2.9% +4.8% Off-balance sheet ʘ New loan production in excess of €52bn, down -24.4
Slide 16: Banque Populaire banks - Positive jaws effect
RETAIL BANKING & INSURANCE Banque Populaire banks - Positive jaws effect Loan outstandings - in €bn - Deposits & Savings Customer base +4.7% (change year-on-year) +6.2% 265 Off-balance sheet 253 D&S 203 ʘ Principal active customers: +85,800, +2.3% 74 74 Centralized ʘ Private banking and Wealth Manag
Slide 17: Caisses d'Epargne - Operating expenses under tight control
RETAIL BANKING & INSURANCE Caisses d’Epargne - Operating expenses under tight control Loan outstandings - in €bn - Deposits & Savings Customer base +6.1% +1.9% (change year-on-year) 408 416 Off-balance sheet 246 261 D&S 133 135 ʘ Principal active individual customers: +72,000, +1.1% Centralized ʘ Pr
Slide 18: SFS - Strong growth in Payments business
RETAIL BANKING & INSURANCE SFS - Strong growth in Payments business Payments: revenues up +15% year-on-year (of which approximately 60% was driven by acquisitions made in 2017) ʘ Merchant Solutions: business volumes generated by recent acquisitions (Dalenys and PayPlug) up +37% in H1-18 ʘ Prepaid &
Slide 19: Insurance - Sustained commercial activity
RETAIL BANKING & INSURANCE Scope: Insurance division of Natixis Insurance - Sustained commercial activity across all business lines Life1 and Personal protection insurance Premiums1 Life insurance AuM1 ʘ €5.8bn in earned premiums in H1-18, up +2% year-on-year (in €bn) (in €bn) ʘ Total Assets under M
Slide 20: Other networks
RETAIL BANKING & INSURANCE Other networks1 Loan outstandings2 - in €bn - Deposits & Savings Crédit Foncier ʘ Slower rate of new loan production against a background of 5.4 5.2 persistently low interest rates and strong competition 8.2 8.8 Total new loan production in H1-18: €4.7bn, including €3.4b
Slide 21: Asset & Wealth Management - Quarterly net inflows at 3-year high
ASSET & WEALTH MANAGEMENT Quarterly net inflows at a 3-year high Asset & Wealth Management: H1-18 net inflows reached €15bn, Assets under management (in €bn) of which €10bn in Q2-18, the 7th consecutive quarter of positive net inflows +15 +12 ʘ Europe: net inflows of €7bn in Q2-18, chiefly driven by
Slide 22: Asset & Wealth Management - Fee rate and revenue growth
ASSET & WEALTH MANAGEMENT Continued increase in fee rate and solid revenue growth Net revenues: up +17.7% vs. H1-17 (at constant exchange rates) % Constant FX % H1-18 Q2-18 Change N-1 % change N-1 Change N-1 Asset management in millions of euros ʘ Overall fee rate (excluding performance fees) > 31bp
Slide 23: Corporate & Investment Banking
CORPORATE & INVESTMENT BANKING Sustainability led by expertise and selective diversification Global Markets Net revenues2: Global markets, Net revenues down -11%1 year-on-year, compared to a high H1-17 Global finance & Investment banking both for FICT and Equity (in €m) FICT 1,986 ʘ Net revenues dow
Slide 24: Corporate & Investment Banking - ROE up 1pp
CORPORATE & INVESTMENT BANKING Sustained value creation with a ROE up 1pp year-on-year at 17% Net revenues flat vs. H1-17 (excluding CVA/DVA desk, at constant exchange rates) % Constant FX % H1-18 Q2-18 Change N-1 % change N-1 Change N-1 in millions of euros ʘ Strong performance from Global Finance
Slide 25: Contents
CONTENTS 1 Results of the Group 2 Capital adequacy and liquidity of the Group 3 Results of the business lines 4 Conclusion 25 RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018
Slide 26: Conclusion: TEC 2020 Strategic Plan
RESULTS FOR THE 1ST HALF OF 2018 Conclusion TEC 2020 STRATEGIC PLAN1: OFF TO A GOOD START TEC 2020 strategic plan1: H1-18 Financial targets REVENUES €12.2bn2 > €25bn In 2020 (full year) COMMISSIONS: BP/CE (EXCL. ERF3) 4.5%4 ~ 3% 2017 / 2020 compound annual growth rate COST/INCOME RB&I ≈ 65.9% RB&I ≈
Slide 27: Annexes
RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018 ANNEXES AUGUST 2, 2018
Slide 28: Contents
ANNEXES Contents Organizational structure of Groupe BPCE Retail Banking & Insurance ʘ Income statement and quarterly series Consolidated results of Groupe BPCE ʘ Banque Populaire and Caisse d’Epargne – ʘ Notes on methodology quarterly series ʘ Income statement: reconciliation of alternative performa
Slide 29: Organizational structure of Groupe BPCE
ANNEXES Organizational structure of Groupe BPCE at June 30, 2018 9 million cooperative shareholders 100% 100%* 50% 50% BPCE SA 100% 71% * Indirectly through Local Savings Companies 29% FLOAT 29 RESULTS FOR THE 2ND QUARTER AND 1ST HALF OF 2018
Slide 30: Notes on methodology (1/4)
ANNEXES Notes on methodology (1/4) Presentation of the pro-forma quarterly results Non-economic and exceptional items ʘ The segment information has been modified as of Q4-17 in ʘ The non-economic and exceptional items and the reconciliation of accordance with the presentation of the business lines i
Slide 31: Notes on methodology (2/4)
ANNEXES Notes on methodology (2/4) Net banking income Business line performance presented using Basel 3 standards ʘ Customer net interest income, excluding regulated home savings schemes, is computed on the basis of interest earned from ʘ The accounting ROE of Groupe BPCE is the ratio between the tr
Slide 32: Notes on methodology (3/4)
ANNEXES Notes on methodology (3/4) Capital adequacy ʘ Common Equity Tier 1 is determined in accordance with the ʘ This amount is comprised of the following 4 items: applicable CRR/CRD IV rules; fully-loaded equity is presented Common Equity Tier 1 in accordance with the applicable without the appl
Slide 33: Notes on methodology (4/4)
ANNEXES Notes on methodology (4/4) Liquidity ʘ Total liquidity reserves comprise the following: Customer deposits are subject to the following adjustments: Central bank-eligible assets include: ECB-eligible securities Addition of security issues placed by the Banque Populaire not eligible for th
Slide 34: H1-18 results: reconciliation of alternative performance measures
ANNEXES H1-18 results: reconciliation of alternative performance measures to published data Net income Income Net banking income Operating expenses Cost of risk attributable to equity before tax holders of the parent in millions of euros H1-18 results 12,251 -8,841 -576 2,966 1,643 Non-economic item
Slide 35: H1-17 pf results: reconciliation of alternative performance measures
ANNEXES H1-17 pf results: reconciliation of alternative performance measures to published data Net income Income Net banking income Operating expenses Cost of risk attributable to equity before tax holders of the parent in millions of euros H1-17 pf results 12,114 -8,700 -699 2,888 1,596 Non-economi
Slide 36: Q2-18 results: reconciliation of alternative performance measures
ANNEXES Q2-18 results: reconciliation of alternative performance measures to published data Net income Income Net banking income Operating expenses Cost of risk attributable to equity before tax holders of the parent in millions of euros Q2-18 results 6,241 -4,235 -317 1,744 1,038 Non-economic items
Slide 37: Q2-17 pf results: reconciliation of alternative performance measures
ANNEXES Q2-17 pf results: reconciliation of alternative performance measures to published data Net income Income Net banking income Operating expenses Cost of risk attributable to equity before tax holders of the parent in millions of euros Q2-17 pf results 6,052 -4,136 -324 1,690 978 Non-economic i
Slide 38: Half-yearly income statement per business line
ANNEXES Groupe BPCE: Half-yearly income statement per business line Retail Banking and Asset and Wealth Wholesale Banking Corporate center Groupe BPCE Insurance Management in millions of euros H1-18 H1-17 pf H1-18 H1-17 pf H1-18 H1-17 pf H1-18 H1-17 pf H1-18 H1-17 % Net banking income 8,468 8,562 1,
Slide 39: Quarterly income statement per business line
ANNEXES Groupe BPCE: Quarterly income statement per business line Retail Banking and Asset and Wealth Wholesale Banking Corporate center Groupe BPCE Insurance Management in millions of euros Q2-18 Q2-17 pf Q2-18 Q2-17 pf Q2-18 Q2-17 pf Q2-18 Q2-17 pf Q2-18 Q2-17 % Net banking income 4,292 4,260 819
Slide 40: Groupe BPCE: Quarterly series
ANNEXES Groupe BPCE: Quarterly series Groupe BPCE in millions of euros Q1-17 pf Q2-17 H1-17 Q3-17 Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 6,062 6,052 12,114 5,688 5,918 23,720 6,010 6,241 12,251 Operating expenses -4,564 -4,136 -8,700 -3,980 -4,418 -17,098 -4,606 -4,235 -8,841 Gross operatin
Slide 41: Consolidated balance sheet under IFRS
ANNEXES Consolidated balance sheet under IFRS 9 ASSETS (in €m) June 30, 2018 Jan. 1, 2018 LIABILITIES (in €m) June 30, 2018 Jan. 1, 2018 Cash and amounts due from central banks 91,735 94,697 Amounts due to central banks 0 0 Financial assets at fair value through profit or loss 213,581 212,496 Financ
Slide 42: Statement of changes in shareholders' equity
ANNEXES Statement of changes in shareholders' equity Equity attributable to equity holders of the parent In millions of euros December 31, 2017 64,029 IFRS 9 impact -1,553 st January 1 , 2018 62,476 Distributions -335 Capital increase (cooperative shares) 395 Income 1,643 Remuneration of super-subor
Slide 43: Changes in regulatory capital and fully-loaded ratios
ANNEXES Financial structure: changes in regulatory capital and fully-loaded ratios Reconciliation of shareholders' equity to total capital1,2 Regulatory capital1,2 (in €bn) June 30, 2018 Dec. 31, 2017 74.3 74.8 in billions of euros 14,4 14.5 Tier-2 capital Equity attributable to equity holders of th
Slide 44: Phased-in prudential ratios and credit ratings
ANNEXES Financial structure: phased-in prudential ratios and credit ratings June 30, 20181,2 Dec. 31, 2017 Dec. 31, 2016 LONG-TERM CREDIT RATINGS (AUGUST 2, 2018) Total risk-weighted assets €395bn €386bn €391bn A outlook positive Common Equity Tier-1 capital €60.5bn €59.0bn €55.3bn Tier-1 capital €6
Slide 45: SREP
ANNEXES SREP Capital requirement / SREP 2017 (as a %) Pillar 2 Requirement 19.1% Phased-in 2018 G-SIB buffer Total surplus of 695bps 3.7 Tier 2 Phased-in 2018 capital conservation buffer Tier 2 surplus of Additional Tier 1 0.1 164bps Pillar 1 12.13% CET1 surplus of 531bps 2.00 Tier 2 0.12 1.38 Addit
Slide 46: Risk-weighted assets
ANNEXES Risk-weighted assets Breakdown per business line (in €bn) Breakdown per type of risk1 (in €bn) (at current exchange rates) 386 395 Other 9% 386 395 10% 15% 10% 10% 15% 3% 3% 3% 3% Corporate & Investment Banking Operational risk Asset & Wealth Market risk 73% Management 87% 87% 72% Credit ris
Slide 47: Leverage ratio
ANNEXES Leverage ratio1 June 30, 2018 Dec. 31, 2017 In billions of euros Tier-1 capital 60.6 59.7 Deduction of irrevocable payment commitments -0,6 - Tier-1 capital restated3 60.0 59.7 Balance sheet total 1,287.0 1,241.7 Prudential restatements -103.7 -81.1 Prudential balance sheet total2 1,183.3 1,
Slide 48: Financial conglomerate
ANNEXES Financial conglomerate CRR/CRD IV2 Restatements Financial viewpoint conglomerate viewpoint Financial conglomerate ratio -1.5 Banking CR1 Total capital (CRR/CRD IV) (in €bn) 75.3 73,8 73,8 73,8 73.8 Regulatory + capital > Insurance CR1 (Solvency 2) 1 2 3 - Restatements applied +3.9 49.6 1 shi
Slide 49: Liquidity reserves and short-term funding
ANNEXES Liquidity reserves and short-term funding Total liquidity reserves of Groupe BPCE1 Short-term funding and MLT debt maturing (in €bn) in the short term (in €bn) 174% 169% 230 158% 223 214 71 81 83 27 12 22 66 64 119 120 58 101 Dec. 31, 2016 Dec. 31, 2017 June 30, 2018 93 73 78 ST MLT Coverage
Slide 50: Retail Banking & Insurance: half-yearly income statement
ANNEXES Retail Banking & Insurance: half-yearly income statement Banque Populaire Banks Caisses d'Epargne Specialized Financial Services Insurance Other networks Retail Banking and Insurance in millions of euros H1-18 H1-17 pf % H1-18 H1-17 % H1-18 H1-17 % H1-18 H1-17 pf % H1-18 H1-17 % H1-18 H1-17
Slide 51: Retail Banking & Insurance: quarterly income statement
ANNEXES Retail Banking & Insurance: quarterly income statement Specialized Financial Retail Banking and Banque Populaire Banks Caisses d'Epargne Insurance Other networks Services Insurance in millions of euros Q2-18 Q2-17 % Q2-18 Q2-17 % Q2-18 Q2-17 % Q2-18 Q2-17 pf % Q2-18 Q2-17 % Q2-18 Q2-17 pf %
Slide 52: Retail Banking & Insurance: quarterly series
ANNEXES Retail Banking & Insurance: quarterly series Retail Banking and Insurance in millions of euros Q1-17 pf Q2-17 pf H1-17 pf Q3-17 pf Q4-17 pf 2017 pf Q1-18 Q2-18 H1-18 Net banking income 4,302 4,260 8,562 4,078 4,043 16,683 4,176 4,292 8,468 Operating expenses -2,975 -2,824 -5,799 -2,717 -2,97
Slide 53: Banque Populaire banks and Caisses d'Epargne quarterly series
ANNEXES Retail Banking & Insurance: Banque Populaire banks and Caisses d’Epargne quarterly series Banque Populaire Banks in millions of euros Q1-17 pf Q2-17 H1-17 pf Q3-17 Q4-17 pf 2017 pf Q1-18 Q2-18 H1-18 Net banking income 1,609 1,598 3,207 1,564 1,524 6,294 1,586 1,641 3,226 Operating expenses -
Slide 54: Retail Banking & Insurance: change in net banking income
ANNEXES Retail Banking & Insurance: change in net banking income Banque Populaire banks (in €m) Caisses d’Epargne (in €m) +0.6% -3.9% Change Change 3,616 3,475 3,207 3,226 -72 129 -50 57 89 39 1,443 +66 1,284 1,509 1,231 +53 59 93 20 -18 2,057 -168 1,828 1,810 1,889 -13 H1-17pf H1-18 H1-17pf H1-18 5
Slide 55: Banque Populaire network
ANNEXES Retail Banking & Insurance: Banque Populaire network Deposits & Savings (in €bn) Loan outstandings (in €bn) Change YoY Change YoY +4.7% +6.2% 260.6 264.6 252.6 202.8 191.0 197.2 82.0 83.8 +10.2% Demand deposits 76.1 +8.1% Home loans +7.3% Passbook savings accounts 115.3 +9.5% Consumer loans
Slide 56: Caisse d'Epargne network
ANNEXES Retail Banking & Insurance: Caisse d’Epargne network Deposits & Savings (in €bn) Loan outstandings (in €bn) Change YoY Change YoY 408.1 412.4 416.0 +1.9% +6.1% 63.8 68.6 71.8 Demand deposits +12.5% 254.6 261.2 246.3 +1.6% Passbook savings 123.7 122.7 125.7 accounts +7.8% Home loans +1.4% Reg
Slide 57: SFS quarterly series
ANNEXES Retail Banking & Insurance: SFS quarterly series Specialized Financial Services in millions of euros Q1-17 Q2-17 H1-17 Q3-17 Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 344 347 691 341 350 1,382 362 371 733 Operating expenses -233 -228 -461 -229 -249 -939 -245 -250 -495 Gross operating i
Slide 58: Insurance quarterly series
ANNEXES Retail Banking & Insurance: Insurance quarterly series Insurance in millions of euros Q1-17 pf Q2-17 pf H1-17 pf Q3-17 pf Q4-17 2017 Q1-18 pf Q2-18 H1-18 Net banking income 189 179 368 176 190 734 204 193 397 Operating expenses -129 -102 -231 -99 -109 -439 -118 -108 -226 Gross operating inco
Slide 59: Other networks quarterly series
ANNEXES Retail Banking & Insurance: Other networks quarterly series Other networks in millions of euros Q1-17 Q2-17 H1-17 Q3-17 Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 344 335 680 279 229 1,187 311 326 637 Operating expenses -255 -227 -482 -182 -242 -907 -235 -225 -460 Gross operating income
Slide 60: Asset & Wealth Management: quarterly series
ANNEXES Asset & Wealth Management: quarterly series Asset & Wealth Management in millions of euros Q1-17 pf Q2-17 pf H1-17 pf Q3-17 pf Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 704 743 1,448 766 899 3,113 777 819 1,596 Operating expenses -519 -521 -1,039 -528 -610 -2,178 -529 -549 -1,078 Gross
Slide 61: Corporate & Investment Banking: quarterly series
ANNEXES Corporate & Investment Banking: quarterly series Corporate & Investment Banking in millions of euros Q1-17 pf Q2-17 pf H1-17 pf Q3-17 pf Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 971 1,019 1,990 775 817 3,581 938 965 1,904 Operating expenses -566 -555 -1,121 -506 -567 -2,194 -564 -549
Slide 62: Corporate center: quarterly series
ANNEXES Corporate center: quarterly series Corporate center in millions of euros Q1-17 pf Q2-17pf H1-17 pf Q3-17 pf Q4-17 2017 Q1-18 Q2-18 H1-18 Net banking income 86 29 115 68 159 342 119 165 284 Operating expenses -504 -236 -741 -230 -261 -1,232 -580 -317 -897 Gross operating income -419 -207 -626
Slide 63: Non-performing loans and impairment
ANNEXES Non-performing loans and impairment June 30, 2018 Jan. 1, 2018 In billions of euros Gross outstanding loans to customers and credit institutions 750.7 730.1 O/w S3 outstandings 22.8 23.2 Non-performing/gross outstanding loans 3.0% 3.2% S3 impairment recognized 10.1 10.5 Impairment recognized
Slide 64: Breakdown of commitments at June 30, 2018
ANNEXES Breakdown of commitments at June 30, 2018 Breakdown per counterparty Breakdown per geographical region 6% Financial institutions/local Central administrations/Central banks and 28% government market other sovereign exposures 8% 6% 1% 9% 5% 1% 1% 15% 4% €1,158bn 14% 15% 7% 47% 1% 69% 31% 31%
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