Natixis — Groupe BPCE — H1 2014 Earnings Presentation
67 slides from Natixis's earnings presentation, Jul 31, 2014
Slide 1: Results for the 2nd quarter and 1st half of 2014
Results for the 2nd quarter and 1st half of July 31, 2014 2014
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: Strong first half of 2014: net income up 10.4% to €1.7bn
Strong first half of 2014: net income attributable to equity holders of the parent up 10.4% vs. H1-13 to €1.7bn1 Banque Populaire and Caisse d’Epargne networks +9.6% year-on-year growth in on-balance sheet savings2 and good life insurance performance Good commercial +5.6% year-on-year growth in loan
Slide 4: Initial results of the implementation of the new strategic plan (2014-2017)
Initial results of the implementation of the new strategic plan (2014-2017) Revenue and cost synergies Rollout of measures as of June 30, 2014 globally ahead of the 2017 linearized targets: €127m in additional revenue synergies between the Banques Populaires banks, the Caisses d’Epargne and Natixis
Slide 5: Contents
Contents 1 2 3 4 5 Results of Capital Results of Strategic Conclusion Groupe adequacy the plan BPCE and business liquidity lines July 31, 2014 Results for the 2nd quarter and 1st half of 2014 5
Slide 6: Q2-14 results of Groupe BPCE
Q2-14 results of Groupe BPCE Income before tax generated by the core business lines: €1.5bn, +11.3% vs. Q2-13 Core business Results Q2-14 /Q2-13 pf Q2-14 /Q2-13 pf Q2-14 lines2 In millions of euros % change % change Q2-14 Net banking income1 6,015 4.3% 5,529 2.9% Operating expenses -4,108 2.1% -3,63
Slide 7: H1-14 results of Groupe BPCE
H1-14 results of Groupe BPCE Robust growth in net income attributable to equity holders of the parent1 in H1-14: +10.4% Results H1-14 /H1-13 pf Core business H1-14 /H1-13 pf In millions of euros H1-14 lines2 % change % change H1-14 Net banking income1 11,868 3.6% 11,005 3.2% Operating expenses -8,08
Slide 8: Cost of risk remaining at a moderate level
Results of Groupe BPCE Cost of risk remaining at a moderate level Cost of risk in bp1 44 40 48 42 39 37 Banque Populaire banks Average cost of risk of approximately 40bp since H2-13 Caisses d’Epargne 29 26 27 29 27 27 Stability in cost of risk since H2-13 Commercial Banking & Insurance 34 36 32 29 2
Slide 9: Contents
Contents 1 2 3 4 5 Results of Capital Results of Strategic Conclusion Groupe adequacy the plan BPCE and business liquidity lines July 31, 2014 Results for the 2nd quarter and 1st half of 2014 9
Slide 10: Capital adequacy strengthened in Q2-14
Capital adequacy and liquidity Capital adequacy strengthened in Q2-14 + 17pb + 3pb 10.9 % 11.1 % 10.4 % Common equity Tier-1 Common equity Tier-1 Retained Q2-14 earnings Other changes Common equity Tier-1 ratio under Basel 3 ratio under Basel 3 ratio under Basel 3 Dec. 31, 2013 March 31, 2014 June 3
Slide 11: Reinforced liquidity situation
Capital adequacy and liquidity Reinforced liquidity situation Group’s customer loan-to-deposit ratio1 Change in 147% 138% method2 Group's customer loan-to-deposit ratio1: 132% 125% as at June 30, 2014 124% 125% 128% Dec. 2010 Dec. 2011 Dec. 2012 Dec. 2013 June 2014 Liquidity reserves: €165bn as at J
Slide 12: MLT funding plan already completed
Capital adequacy and liquidity MLT funding plan already completed, helping to achieve the target of 100 % of LCR, 6 months ahead of time 101% of the 2014 MLT plan completed MLT funding plan completed at July 18, 2014 as of July 18, 2014 €30.3bn raised out of the €30bn plan Average maturity at issue:
Slide 13: Contents
Contents 1 2 3 4 5 Results of Capital Results of Strategic Conclusion Groupe adequacy the plan BPCE and business liquidity lines July 31, 2014 Results for the 2nd quarter and 1st half of 2014 13
Slide 14: Commercial Banking & Insurance
Results of the business lines Commercial Banking & Insurance Results Q2-14 /Q2-13 pf H1-14 /H1-13 pf Q2-14 % change H1-14 % change In millions of euros Net banking income 3,743 -0.4% 7,532 1.8% Net banking income1 3,743 0.0% 7,532 2.3% Banque Populaire banks1 1,624 0.8% 3,243 3.3% Caisses d’Epargne1
Slide 15: Commercial Banking & Insurance: strong commercial momentum
Results of the business lines Commercial Banking & Insurance: strong commercial momentum in all businesses, notably in the insurance business On-balance sheet deposits & savings1 and Commercial activities of the BP and CE retail loan outstandings (in €bn) networks +5.6% Deposits & savings: strong gr
Slide 16: Banque Populaire banks
Results of the business lines Banque Populaire banks: well-balanced growth in financing and deposit- taking activities Unless specified to the contrary, all changes are vs. June 30, 2013 Deposits & savings1 and loan outstandings Customer base (in €bn) +6.0% of active individual customers using banki
Slide 17: Caisses d'Epargne
Results of the business lines Caisses d’Epargne: strong growth in on-balance sheet savings with a focus on longer-term products Unless specified to the contrary, all changes are vs. June 30, 2013 Customer base Deposits & savings1 and loan outstandings (in €bn) Individual customers using banking serv
Slide 18: Insurance and Other networks: Insurance, BPCE IOM and Banque Palatine
Results of the business lines Insurance and Other networks: Insurance, BPCE IOM and Banque Palatine Unless specified to the contrary, all changes are vs. June 30, 2013 Insurance1 Business activity indicators Life insurance: › Gross new inflows of €2.2bn in Q2-14 (+25%) and of €4.9bn in H1-14 (+38%);
Slide 19: Insurance and Other networks: Real-estate Financing
Results of the business lines Insurance and Other networks: Real-estate Financing1 Loan outstandings2 (in €bn) – Core businesses Business activity in the quarter: aggregate new loan production of €2.4bn in Q2-14, stable 82 83 84 vs. Q2-13 and recovering vs. Q1-14 32 33 34 Individual customers: new l
Slide 20: Core business lines of Natixis: Wholesale Banking, Investment Solutions, SFS
Results of the business lines Core business lines of Natixis: Wholesale Banking, Investment Solutions, SFS 1 Pro forma results Q2-14 /Q2-13 pf H1-14 /H1-13 pf Q2-14 H1-14 In millions of euros % change % change 1 Net banking income 1,822 12.8% 3,510 9.8% 1 Wholesale Banking 794 17.0% 1,520 8.3% Inves
Slide 21: Core business lines of Natixis: significant increase in profitability
Results of the business lines Core business lines of Natixis: significant increase in profitability Wholesale Banking: gross operating income Change in net revenues of the core business +36%1 vs. Q2-13 lines (in €m)1 Growth in net revenues chiefly driven by the capital markets businesses and interna
Slide 22: Wholesale Banking: significant rise in H1-14 revenues and profitability
Results of the business lines Wholesale Banking: significant rise in H1-14 revenues and profitability Figures excluding exceptional items Financing activities Change in net revenues (in €m) Structured finance Financing activities Capital markets1 >New loan production: €6.3bn in Q2-14 and €11.7bn in
Slide 23: Investment Solutions: strong commercial momentum
Results of the business lines Investment Solutions: strong commercial momentum in all business lines and sharp improvement in profitability Asset management: AuM (in €bn) Asset management €17bn net inflows overall in H1-14 (€18bn excluding money +16.2 market funds) +8.4 +2.0 >Almost €15bn from the c
Slide 24: SFS: good level of activity with Groupe BPCE networks
Results of the business lines SFS: good level of activity with Groupe BPCE networks Business activity indicators Q2-14 Q2-14/Q2-13 % change Specialized financing Consumer finance Outstandings in €bn (end of period) 16.2 11.5% Factoring Leasing >Factored turnover: +5% vs. Q2-13 Outstandings in €bn (e
Slide 25: Equity interests
Equity interests1 Results Q2-14 /Q2-13 H1-14 /H1-13 Q2-14 H1-14 In millions of euros % change % change Net banking income 420 -4.9% 823 -3.8% Operating expenses -350 -1.1% -687 -2.5% Gross operating income 70 -20.3% 136 -10.0% Cost of risk -3 ns -5 ns Income before tax 74 -16.0% 138 -11.4% 1 The ‘Eq
Slide 26: Equity interests
Equity interests Turnover (in €m) Coface On a like-for-like basis Turnover: increase of +1% in Q2-14 and of (Fx and perimeter) almost 2% in H1-14 +1.8% Risk management under tight control +1.1% Loss ratio1: 50.9% in H1-14, down more than 5pts compared with H1-13 Cost ratio1: 26.9% in H1-14 729 742 E
Slide 27: Contents
Contents 1 2 3 4 5 Results of Capital Results of Strategic Conclusion Groupe adequacy the plan BPCE and business liquidity lines July 31, 2014 Results for the 2nd quarter and 1st half of 2014 27
Slide 28: Revenue and cost synergies
2014-2017 Strategic Plan “Growing differently” Revenue and cost synergies Contribution to revenue synergies Per business line €127m of revenue synergies achieved at June 30, 2014 17% Consumer finance 2017 target of additional revenues between the 45% Other SFS Banques Populaires banks, the Caisses d
Slide 29: Main achievements in H1-14
2014-2017 Strategic Plan “Growing differently” Main achievements in H1-14 Offering taken out digitally and customers Let’s create leading banks for one-to-one and subscribing to online banking services online relations 2017 target: 2017 target: > 80% > 80% Innovation at the service of our customers:
Slide 30: A renewed partnership with CNP Assurances
2014-2017 Strategic Plan “Growing differently” Groupe BPCE: a fully-fledged bancassurer: a renewed partnership with CNP Assurances A renewed insurance partnership starting from January 1st, 2016 Expiration at December 31,2015 of existing distribution agreements Principles of a renewed insurance part
Slide 31: Contents
Contents 1 2 3 4 5 Results of Capital Results of Strategic Conclusion Groupe adequacy the plan BPCE and business liquidity lines July 31, 2014 Results for the 2nd quarter and 1st half of 2014 31
Slide 32: Conclusion
Conclusion A robust Pursuit of the An active role 2014-2017 earnings base: momentum for played in strategic plan increased capital financing the “Growing net income adequacy and economy: differently”: attributable to enhanced equity holders of liquidity: annual growth initial the parent: of 5.6%4 ac
Slide 33: Annexes
Results for the 2nd quarter July 31, 2014 and the 1st half of 2014 Annexes
Slide 34: Annexes contents
Annexes Groupe BPCE Wholesale Banking, Investment Solutions Organizational structure of Groupe BPCE and SFS Income statement per business line Income statement Income statement Consolidated balance sheet Equity interests Income statement Financial structure Goodwill Corporate center Statement of cha
Slide 35: Organizational structure of Groupe BPCE
Annex - Groupe BPCE Organizational structure of Groupe BPCE July 31, 2014 Results for the 2nd quarter and 1st half of 2014 35
Slide 36: Quarterly income statement
Annex - Groupe BPCE Quarterly income statement Groupe BPCE In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 5,728 5,585 5,834 5,850 5,958 Operating expenses -4,022 -3,912 -4,256 -3,977 -4,108 Gross operating income 1,706 1,672 1,578 1,873 1,850 Cost / income ratio 70.2% 70.1% 73
Slide 37: Quarterly income statement per business line
Annex - Groupe BPCE Quarterly income statement per business line Wholesale Banking, Commercial Investment Corporate Banking & Solutions & Total core businesses Equity interests Groupe BPCE center Insurance Specialized Financial Services In millions of euros Q2-14 Q2-13 pf Q2-14 Q2-13 pf Q2-14 Q2-13
Slide 38: Interim income statement per business line
Annex - Groupe BPCE Interim income statement per business line Wholesale Banking, Commercial Investment Corporate Banking & Solutions & Total core businesses Equity interests Groupe BPCE center Insurance Specialized Financial Services In millions of euros H1-14 H1-13 pf H1-14 H1-13 pf H1-14 H1-13 pf
Slide 39: Consolidated balance sheet
Annex - Groupe BPCE Consolidated balance sheet ASSETS in millions of euros June 30, 2014 Dec. 31, 2013 LIABILITIES in millions of euros June 30, 2014 Dec. 31, 2013 C ash and amounts due from central banks 60,984 60,410 Amounts due to central banks 1 0 Financial assets at fair value through profit or
Slide 40: Goodwill
Annex - Groupe BPCE Goodwill Dec. 31, Acquisitions/ Other June 30, in millions of euros Impairment Conversion 2013 Disposals movements 2014 Commercial Banking 904 -2 902 and Insurance entities Natixis 2,555 5 -39 9 25 2,555 Equity interests 709 145 -1 853 Total 4,168 150 -39 7 24 4,310 Goodwill impa
Slide 41: 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, 2013 51,339 Distributions -398 Capital increase (cooperative shares) 636 Income 1,664 Remuneration of deeply subordinated notes -112 Changes
Slide 42: Prudential ratios and credit ratings
Annex - Financial structure Prudential ratios and credit ratings BASEL 31 BASEL 2.5 June 30, March Dec. 31, Dec. 31, 20141 31, 2014 2013 2012 Total risk-weighted assets €404bn €407bn €369bn €381bn Common Equity Tier-1 capital €45.0bn €44.3bn €42.0bn €40.9bn Tier-1 capital €49.2bn €48.5bn €47.3bn €46
Slide 43: Commercial Banking and Insurance quarterly income statement
Annex - Commercial Banking and Insurance Quarterly income statement Commercial Banking & Insurance (*) In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 3,759 3,677 3,850 3,789 3,743 Operating expenses -2,495 -2,434 -2,523 -2,471 -2,498 Gross operating income 1,264 1,244 1,327 1,
Slide 44: Commercial Banking and Insurance quarterly income statement per business line
Annex - Commercial Banking and Insurance Quarterly income statement per business line (*) Insurance & Other Commercial Banking & Banques Populaires Caisses d'Epargne networks Insurance In millions of euros Q2-14 Q2-13 pf % Q2-14 Q2-13 pf % Q2-14 Q2-13 pf % Q2-14 Q2-13 pf % Net banking income 1,621 1
Slide 45: Commercial Banking and Insurance interim income statement per business line
Annex - Commercial Banking and Insurance Interim income statement per business line (*) Insurance & Other Commercial Banking & Banques Populaires Caisses d'Epargne networks Insurance In millions of euros H1-14 H1-13 pf % H1-14 H1-13 pf % H1-14 H1-13 pf % H1-14 H1-13 pf % Net banking income 3,239 3,1
Slide 46: Banque Populaire banks and Caisses d'Epargne quarterly income statement
Annex - Commercial Banking and Insurance Quarterly income statement Banque Populaire banks and Caisses d’Epargne Banques Populaires In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 1,612 1,559 1,623 1,618 1,621 Operating expenses -1,076 -1,040 -1,051 -1,058 -1,067 Gross operatin
Slide 47: Banque Populaire network: customer deposits & savings
Annex - Commercial Banking and Insurance Banque Populaire network: customer deposits & savings (in €bn) 213.0 203.2 207.1 50.3 % change 46.3 52.8 Q2-14 / Q2-13 Demand deposits +8.6% 43.0 42.6 42.3 Passbook savings accounts +1.0% 15.6 Regulated home savings 14.9 15.2 +4.4% plans 26.8 29.7 25.0 Term a
Slide 48: Banque Populaire network: customer loan outstandings
Annex - Commercial Banking and Insurance Banque Populaire network: customer loan outstandings (in €bn) 165.5 168.3 162.0 % change Q2-14 / Q2-13 87.4 88.7 83.4 Mortgage loans +6.4% Consumer loans and +12.8% short-term credit facilities 17.6 17.2 19.9 Equipment loans +0.7% Other ns 53.7 54.2 54.1 Tota
Slide 49: Caisse d'Epargne network: customer deposits & savings
Annex - Commercial Banking and Insurance Caisse d’Epargne network: customer deposits & savings (in €bn) 370.5 377.1 367.2 43.2 37.3 40.7 % change Q2-14 / Q2-13 Demand deposits +15.6% 137.4 131.9 131.9 Passbook savings accounts -4.0% Regulated home savings +9.2% 44.3 plans 40.5 42.1 13.6 16.8 18.0 Te
Slide 50: Caisse d'Epargne network: customer loan outstandings
Annex - Commercial Banking and Insurance Caisse d’Epargne network: customer loan outstandings (in €bn) 206.2 200.9 192.6 % change Q2-14 / Q2-13 120.2 124.3 114.5 Mortgage loans +8.5% Consumer loans and +4.0% short-term credit facilities Equipment loans +2.0% 19.3 19.3 20 Other ns 57.8 56.6 Total loa
Slide 51: Insurance and Other networks quarterly income statement
Annex - Commercial Banking and Insurance Quarterly income statement Insurance and Other networks (*) Insurance & Other networks In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 374 379 419 365 394 Operating expenses -254 -255 -286 -255 -267 Gross operating income 121 124 133 111
Slide 52: Wholesale Banking, Investment Solutions and SFS quarterly income statement
Annex - Wholesale Banking, Investment Solutions and SFS Quarterly income statement per business line Wholesale Banking, Investment Solutions & Specialized Financial Services In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 1,616 1,642 1,657 1,688 1,785 Operating expenses -1,071
Slide 53: Wholesale Banking, Investment Solutions and SFS per business line
Annex - Wholesale Banking, Investment Solutions and SFS Quarterly income statement per business line Wholesale Banking, Specialized Financial Investment Solutions & Wholesale Banking Investment Solutions Services Specialized Financial Services In millions of euros Q2-14 Q2-13 pf % Q2-14 Q2-13 pf % Q
Slide 54: Wholesale Banking and Investment Solutions quarterly income statement
Annex - Wholesale Banking, Investment Solutions and SFS Quarterly income statement per business line Wholesale Banking Investment Solutions In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 678 739 652 727 757 Net banking income
Slide 55: Wholesale Banking, Investment Solutions and SFS interim income statement
Annex - Wholesale Banking, Investment Solutions and SFS Interim income statement per business line Wholesale Banking, Specialized Financial Investment Solutions & Wholesale Banking Investment Solutions Services Specialized Financial Services In millions of euros H1-14 H1-13 pf % H1-14 H1-13 pf % H1-
Slide 56: Equity interests quarterly income statement
Annex – Equity interests Quarterly income statement Equity interests In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income 442 398 466 403 420 Operating expenses -354 -338 -386 -337 -350 Gross operating income 88 60 80 66 70 Cost of risk -1 -9 3 -2 -3 Income before tax 89 51 50 64 74
Slide 57: Corporate center quarterly income statement
Annex – Corporate center Quarterly income statement Corporate center In millions of euros Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net banking income -89 -132 -139 -29 9 Operating expenses -101 -77 -250 -67 -125 Gross operating income -190 -209 -389 -97 -116 Cost of risk -11 -27 -21 -22 -34 Income before tax -
Slide 58: Non-performing loans and impairment
Annex - Risks Groupe BPCE: non-performing loans and impairment In millions of euros June 30, 2014 Dec. 31, 2013 Dec. 31, 2012 Gross outstanding customer loans 619,580 590,704 586,479 O/w non-performing loans 23,227 23,330 21,921 Non-performing / gross outstanding loans 3.7% 3.9% 3.7% Impairment reco
Slide 59: Breakdown of commitments as at June 30, 2014
Annex - Risks Breakdown of commitments as at June 30, 2014 Breakdown of commitments Breakdown of commitments to Corporates by counterparty and Professionals by industrial sector 6% Real estate rental 16,6% Finance Insurance 12,3% 9% Real estate 7,7% 26% Energy 6,9% Holding companies & diversified 6,
Slide 60: Geographical breakdown of commitments as at June 30, 2014
Annex - Risks Geographical breakdown of commitments as at June 30, 2014 Institutions Sovereigns Corporates 5% 1% 1% 3% 4% 6% 16% 22% 9% 20% 15% 68% 42% 69% 19% France Centralized savings Europe excluding France North & South America Asia / Oceania Africa & the Middle East July 31, 2014 Results for t
Slide 61: Sensitive exposures: Recommendations of the Financial Stability Forum
Annex - Sensitive exposures Recommendations of the Financial Stability Forum Foreword Contents With the exception of the summary provided on the CDO (Collateralized Debt Obligations) next page, the following information is based on CMBS (Commercial Mortgage-backed Securities) the scope of consolidat
Slide 62: Summary of sensitive exposures
Annex - Groupe BPCE FSF report at June 30, 2014 Summary of sensitive exposures Total Total Groupe BPCE Natixis in billions of euros (excl. Natixis) June 30, March 31, 2014 2014 Net exposure CDOs of ABS (Asset-backed Securities) 0 0.2 0.2 0.1 US residential market Net exposure 0.9 1.1 2.0 2.0 Other a
Slide 63: Other CDOs (unhedged)
Annex - Sensitive exposures (excluding Natixis) Other CDOs (unhedged) Gross Net exposure Change in Other Net exposure exposure In millions of euros March 31, value changes June 30, June 30, 2014 Q2-14 Q2-14 2014 2014 Portfolio at fair value through 36 - -36 0 5 profit or loss Portfolio at fair value
Slide 64: CMBS
Annex - Sensitive exposures (excluding Natixis) CMBS Gross Net exposure Change in Other Net exposure exposure In millions of euros March 31, value changes June 30, June 30, 2014 Q2-14 Q2-14 2014 2014 Portfolio at fair value through 1 0 0 1 1 profit or loss Portfolio at fair value through 17 0 0 17 1
Slide 65: RMBS
Annex - Sensitive exposures (excluding Natixis) RMBS Breakdown of residual Net Change in Other Net Gross exposure by rating UK RMBS portfolio exposure exposure exposure value changes in millions of euros March 31, Q2-14 Q2-14 June 30, June 30, 35% 2014 2014 2014 Portfolio at fair value through AAA 0
Slide 66: Protections acquired
Annex - Sensitive exposures (excluding Natixis) Protections acquired Credit enhancers (monoline) Protection acquired from credit enhancers by Crédit Foncier for financial assets is in the form of financial guarantees (and not CDS) and represents a guarantee attached to the enhanced asset Accordingly
Slide 67: Results for the 2nd quarter and 1st half of 2014
July 31, 2014 Results for the 2nd quarter and 1st half of 2014 67