Natixis — Groupe BPCE — Q3 2010 Earnings Presentation
54 slides from Natixis's earnings presentation, Nov 9, 2010
Slide 1: Results for the 3rd quarter and first 9 months of 2010
November 9, 2010 Results for the 3rd quarter and first 9 months of 2010
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: Key messages
Key messages Third quarter of 2010 Group net income of €837m (+ 87% vs Q3-09) > 5% growth in net banking income (NBI) of core business lines (€5bn vs. €4.8bn in Q3-09) > Improvement in cost/income ratio: 69.9% vs. 73% in Q3-09 > Significant decline in cost of risk in Q3-10 : €245m vs. €588m in Q3-09
Slide 4: Contents
Contents 1. Results of Groupe BPCE 2. Results of the core business lines 3. Financial structure 4. Annexes NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 4
Slide 5: Quarterly results: recurrence of core business lines quarterly results
1. Quarterly results Recurrence of core business lines quarterly results Core Core Q3-10/ business business Q3-10/ in millions of euros Q3-10 Q3-09 Q3-09 lines* lines* Q3-09 Q3-10 Q3-09 Net banking income 5,461 5,434 = 5 036 4,806 + 5% Operating expenses -3,815 -3,966 - 4% -3 238 -3,208 + 1% Gross o
Slide 6: Results for the first 9 months of 2010
1. Results for the first 9 months of 2010 Return to profitability confirmed Core Core 9M-10/ business business 9M-10/ in millions of euros 9M-10 9M-09 9M-09 lines* lines* 9M-09 9M-10 9M-09 Net banking income 17,407 15,128 + 15% 15,433 14,059 + 10% Operating expenses -11,753 -12,007 - 2% -9,896 -9,77
Slide 7: Net banking income of the core business lines
1. Net banking income of the core business lines 5% growth in the revenues of the core business lines Active participation to finance the economy in millions of euros Contribution of core + 5% business lines to Q3-10 net banking income: €5bn + 1% 5 036 4 806 3 601 3 649 28 % + 15% + 12% 1 205 1 387
Slide 8: Cost of risk
1. Cost of risk 65 Cost of risk (in basis points*) 49 51 46 43 39 39 Networks 34 32 32 31 > Stability of cost of risk for 27 Banques Populaires the 2 networks at Q3-10 20 20 22 Cost of risk of 2 vs. Q2-10 and Q3-09 (en €m) 232 338 277 232 228 networks Caisses d’Epargne Q3-09 Q4-09 Q1-10 Q2-10 Q3-10
Slide 9: Workout Portfolio Management (GAPC)
1. Workout Portfolio Management (GAPC) 5th consecutive quarter free of any significant negative impact on the group’s results within the framework of the ongoing pursuit of the risk mitigation policy GAPC: reduction in the risk profile along with an improved valuation of structured assets > Winding
Slide 10: Net income attributable to equity holders of the parent
1. Net income attributable to equity holders of the parent 43% increase in net income from the core business lines 924 in millions of euros 698 648 561 226 87 1 Q3-09 Q3-10 -48 Commercial Banking CIB, Total core Equity and Insurance Investment business lines interests Solutions and SFS Commercial Ba
Slide 11: 2010-2013 strategic plan: Together
1. 2010-2013 strategic plan: “Together” Principal achievements in Q3-10 Finalization of the sale of Société Marseillaise de Crédit (SMC) to Crédit du Nord, for a total of €872m > If account is taken of the cash dividend (€29 million) paid by SMC to BPCE in May earlier this year, BPCE will have recei
Slide 12: Contents
Contents 1. Results of Groupe BPCE 2. Results of the core business lines 3. Financial structure 4. Annexes NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 12
Slide 13: Commercial Banking and Insurance: Key messages
2. Commercial Banking and Insurance Key messages Banque Populaire banks et Caisses d’Epargne Positive growth in the customer base across all the priority customer targets defined in the Strategic Plan Sustained mobilization of the networks for the financing of all customer categories > Individual cu
Slide 14: Commercial Banking and Insurance: Banque Populaire banks
2. Commercial Banking and Insurance Banque Populaire banks Growth in the customer base Loan outstandings (in €bn) > ‘Principal bank’ customers: +1%* > Active established professionals: +1%* > Active corporate customers: +3%* + 5% 144 Continued buoyant growth in lending activities: +5% 135 + 3% 138 I
Slide 15: Commercial Banking and Insurance: Caisses d'Epargne
2. Commercial Banking and Insurance Caisses d’Epargne Loan outstandings (in €bn) Continued growth in the number of active customers > Individual ‘principal bank’ customers receiving services (+ 4%*), professionals (+ 6%*), corporates (+ 8%*) > Capture of new corporate customers: +32% in commercial f
Slide 16: Contribution to Group net income up 24% vs. Q3-09
2. Commercial Banking and Insurance Contribution to Group net income up 24% vs. Q3-09 Net banking income: stable* vs. Q3-09 Banque Populaire banks: +1%* vs. Q3-09 in millions of euros +1% Caisses d’Epargne: stable* vs. Q3-09 Interest margin: slight contraction due to volume effect 3 601 3 649 in a l
Slide 17: CIB, Investment Solutions and SFS
2. CIB, Investment Solutions and SFS Strong growth in the contibution from core business lines of Natixis to Group net income Net banking income in millions of euros > Corporate and Investment Banking • Structured finance: revenues +22% vs. Q3-09, with new production of €3.3bn three times higher tha
Slide 18: Contents
Contents 1. Results of Groupe BPCE 2. Results of the core business lines 3. Financial structure 4. Annexes NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 18
Slide 19: Robust financial structure: Risk weighted assets
3. Robust financial structure Risk weighted assets Risk weighted assets trend (in €bn) Risk weighted assets: €403 bn* -6% vs. June 30, 2010 > 20% fall in Natixis’ risk weighted assets during the quarter 427 4 14 409 4 11 4 14 403 > 67% relate to Commercial Banking & Insurance vs. 61% in Q2-10 306/30
Slide 20: Robust financial structure: Capital adequacy
3. Robust financial structure Capital adequacy Change in Core Tier one and Tier One ratios Tier 1 capital: €39.5 Md since June 30, 2010 following reimbursement of €2.4bn to French State as of June 30, 2010 + 0.4 % > Redemption of €1.8bn + 0.2 % + 0.1 % (€1.2bn on August 6, 2010 and €0.6bn - 0.4 % on
Slide 21: Impact of the new Basel regulations on the Common equity Tier 1 ratio
3. Groupe BPCE: impact of the new Basel regulations on the Common equity Tier 1 ratio The following figures are given for illustrative purposes only. The final impact will depend on the definitive version of the regulations And its terms of application as well as on changes in the Groupe BPCE balanc
Slide 22: Robust financial structure: Liquidity
3. Robust financial structure Liquidity Marginal dependence of the Banque Populaire banks and Caisses d’Epargne on the financial 2010 MLT funding structure markets > 84% of customer loans financed by customer deposits at September 30, 2010 Bond issues placed in the BP and CE networks 14% Obligations
Slide 23: Contents
Contents 1. Results of Groupe BPCE 2. Results of the core business lines 3. Financial structure 4. Annexes NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 23
Slide 24: Annexes
4. Annexes Groupe BPCE CIB, Investment Solutions and SFS > Organizational structure of Groupe BPCE > Quarterly income statement per business line > Quarterly income statement per business > Income statement for the first 9 months line of the year per business line > Income statement for the first 9
Slide 25: Organizational structure of Groupe BPCE
4. Annex - Groupe BPCE Organizational structure of Groupe BPCE NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 25
Slide 26: Quarterly income statement per business line
4. Annex - Groupe BPCE Quarterly income statement per business line CIB, Workout Investment Commercial portfolio Solutions & Equity banking & Total core businesses management Groupe BPCE Specialized interests Insurance & other Financial businesses Services In millions of euros Q3-10 Q3-09 Q3-10 Q3-0
Slide 27: Income statement for the first 9 months per business line
4. Annex - Groupe BPCE Income statement for the first 9 months of the year per business line CIB, Workout Investment Commercial portfolio Solutions & Equity banking & Total core businesses management Groupe BPCE Specialized interests Insurance & other Financial businesses Services In millions of eur
Slide 28: Consolidated balance sheet
4. Annex - Groupe BPCE Consolidated balance sheet NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 28
Slide 29: Statement of changes in shareholders' equity
4. Annex - Groupe BPCE Statement of changes in shareholders' equity Equity attributable to in millions of euros equity holders of the parent December 31, 2009 43,988 Distribution -475 BP and CE - capital increase 1,313 Income 2,782 Remuneration of undated super-subordinated notes -320 Changes in gai
Slide 30: Reconciliation of shareholders' equity to Tier-1 capital
4. Annex - Financial structure Reconciliation of shareholders’ equity to Tier-1 capital in billions of euros - 7.4 + 2.9 - 6.7 + 8.5 - 2.5 - 0.2 44.9 39.5 Equity Cancellation Minority Goodwill Other Deductions TSS* Total attributable to of TSS interests** & intangibles restatements (50%) Tier-1 capi
Slide 31: Prudential ratios and credit ratings
4. Annex - Financial structure Prudential ratios and credit ratings Sept. 30, June 30, Dec. 31, 2010* 2010 2009 Credit risk 360 Md€ 373 Md€ 357 Md€ Market risk 13 Md€ 24 Md€ 24 Md€ Operational risk 30 Md€ 31 Md€ 30 Md€ Total risk-weighted assets 403 Md€ 427 Md€ 411 Md€ Tier-1 capital 39.5 Md€ 41.0 M
Slide 32: Commercial Banking and Insurance: Quarterly income statement
4. Annex - Commercial Banking and Insurance Quarterly income statement Insurance, Banques Populaires Caisses d'Epargne * Real estate financing International & Other Commercial banking & Insurance Networks In millions of euros Q3-10 Q3-09 % Q3-10 Q3-09 % Q3-10 Q3-09 % Q3-10 Q3-09 % Q3-10 Q3-09 % Net
Slide 33: Commercial Banking and Insurance: Income statement for the first 9 months
4. Annex - Commercial Banking and Insurance Income statement for the first 9 months of the year * Insurance, Banques Populaires Caisses d'Epargne Real estate financing * International & Commercial banking & Insurance Other Networks In millions of euros 9M-10 9M-09 % 9M-10 9M-09 % 9M-10 9M-09 % 9M-10
Slide 34: Banque Populaire network: loan outstandings
4. Annex - Commercial Banking and Insurance Banque Populaire network: loan outstandings (in €bn) + 4.5% 144.3 138.1 6,9 7,1 71,5 66,9 Consumer loans Real estate loans Short-term credit fac. Equipment loans % change 10.0 9,7 Other Consumer loans -2.0% Real estate loans +6.8% 48,8 50,3 Short-term cred
Slide 35: Banque Populaire network: savings deposits
4. Annex - Commercial Banking and Insurance Banque Populaire network: savings deposits (in €bn) 176.2 + 2.0% 179.7 37.8 40.0 Demand deposits Regulated home 14.9 14.5 savings plans Passbook savings % change 26.5 27.7 accounts Term accounts, PEP Demand deposits +5.8% 22.6 25.2 Employee savings 2.4 Reg
Slide 36: Caisse d'Epargne network: loan outstandings
4. Annex - Commercial Banking and Insurance Caisse d'Epargne network: loan outstandings (in €bn) + 11.8% 147.9 10.4 132.3 9.5 Consumer loans 87.1 Real estate loans 78.1 Short-term credit fac. Equipment loans % change Other 7.2 Consumer loans +10.0% 6.2 Real estate loans +11.6% 35.0 40.3 Short-term c
Slide 37: Caisse d'Epargne network: savings deposits
4. Annex - Commercial Banking and Insurance Caisse d'Epargne network: savings deposits (in €bn) 326.7 + 2.5% 334.8 27.1 31.3 Demand deposits 35,0 36.8 Regulated home savings plans Passbook savings 118,0 117.2 % change accounts Demand deposits +15.6% Term accounts, PEP 18.2 17.2 Regulated home +5.2%
Slide 38: CIB, Investment Solutions and SFS: Quarterly income statement
4. Annex - CIB, Investment Solutions and SFS Quarterly income statement per business line CIB, Investment CIB Investment Solutions SFS Solutions & Specialized Financial In millions of euros Q3-10 Q3-09 % Q3-10 Q3-09 % Q3-10 Q3-09 % Q3-10 Q3-09 % Net banking income 675 607 11% 483 391 24% 229 207 11%
Slide 39: CIB, Investment Solutions and SFS: 9-month income statement
4. Annex - CIB, Investment Solutions and SFS Income statement for the first 9 months of the year per business line CIB, Investment CIB Investment Solutions SFS Solutions & Specialized Financial In millions of euros 9M-10 9M-09 % 9M-10 9M-09 % 9M-10 9M-09 % 9M-10 9M-09 % Net banking income 2 296 1 99
Slide 40: Equity interests: Income statement for the first 9 months
4. Annex – Equity interests Income statement for the first 9 months of the year Coface & Private Other Groupe Nexity Foncia Equity interests Equity investments (1) In millions of euros 9M-10 9M-09 9M-10 9M-09 9M-10 9M-09 9M-10 9M-09 9M-10 9M-09 Net banking income 610 604 436 408 568 173 46 2 1 660 1
Slide 41: Workout Portfolio Management and Other Businesses: Quarterly income statement
4. Annex - Workout Portfolio Management and “Other Businesses” - Quarterly income statement Workout Workout portfolio Corporate portfolio management & center management other businesses In millions of euros Q3-10 Q3-09 Q3-10 Q3-09 Q3-10 Q3-09 Net banking income 37 25 -122 146 -85 171 Operating expen
Slide 42: Workout Portfolio Management and Other Businesses: 9-month income statement
4. Annex - Workout Portfolio Management and “Other Businesses” – Income statement for the first 9 months of the year Workout Workout portfolio Corporate portfolio management & center management other businesses In millions of euros 9M-10 9M-09 9M-10 9M-09 9M-10 9M-09 Net banking income 206 -1 934 10
Slide 43: Groupe BPCE: non-performing loans and impairment
4. Annex - Risks Groupe BPCE: non-performing loans and impairment Sept. 30, June 30, March 31, in millions of euros 2010 2010 2010 Gross outstanding customer loans 565,464 556,103 543,551 O/w non-performing loans 20,614 20,998 20,618 Non-performing/gross outstanding loans 3.6% 3.8% 3.8% Impairment r
Slide 44: Networks: non-performing loans and impairment
4. Annex - Risks Networks: non-performing loans and impairment Banques Populaires (aggregated) Sept. 30, June 30, March 31, in millions of euros 2010 2010 2010 Gross outstanding customer loans 149,715 149,120 146,491 O/w non-performing loans 7,465 7,516 7,321 Non-performing/gross outstanding loans 4
Slide 45: Breakdown of commitments at Sept. 30, 2010
4. Annex - Risks Breakdown of commitments at Sept. 30, 2010 Breakdown of commitments Breakdown of commitments to Companies and Professionals per counterparty per industrial sector 30% Transportation 2 .1% Tourism-Hotels-Catering 2 .1% Electrical and mec. Construction 2 .1% 8% Communications 2 .2 % 7
Slide 46: Geographical breakdown of commitments at Sept. 30, 2010
5. Annex - Risks Geographical breakdown of commitments at Sept. 30, 2010 Banks Sovereigns Corporates 85% 27% 62% 17% 53% 1% 16% 15% 8% 6% 5% 4% 1% France France France Other EU countries North & South America North & South America North & South America Other EU countries Other EU countries Asia/Ocea
Slide 47: VaR
5. Annex - VaR The risks of Groupe BPCE managed using VaR are chiefly held by Natixis VaR Natixis A mettre à jour VaR: Natixis group at Sept. 30, 2010: €18m VaR: -5% vs. December 31, 2009 NOVEMBER 9, 2010 RESULTS FOR THE 3rd QUARTER AND FIRST 9 MONTHS OF 2010 47
Slide 48: Sensitive exposures (excluding Natixis): Foreword
4. Annex – Sensitive exposures (excluding Natixis) Recommendations of the Financial Stability Forum Foreword With the exception of the summary on the next page, the information contained in the following pages is based on the scope of consolidation of Groupe BPCE (excluding Natixis) For specific det
Slide 49: FSF report at September 30, 2010: Summary of sensitive exposures
4. Annex - Groupe BPCE FSF report at September 30, 2010 Summary of sensitive exposures Groupe BPCE Total Total in millions of euros Natixis (excl. Natixis) Sept. 30, 10 June 30, 10 Net exposure ABS CDOs (US residential market) 7 619 626 735 Net exposure Other at-risk CDOs 1,449 3,356 4,805 5,176 Net
Slide 50: Sensitive exposures: Other CDOs (unhedged)
4. Annex - Sensitive exposures (excluding Natixis) Other CDOs (unhedged) Net Changes in Other Net Gross in millions of euros exposure value changes exposure exposure June 30, 10 Q3-10 Q3-10 Sept. 30, 10 Sept. 30, 10 Portfolio at fair value through profit or loss 216 -25 -40 151 347 Portfolio at fair
Slide 51: Sensitive exposures: CMBS
4. Annex - Sensitive exposures (excluding Natixis) CMBS Net Changes in Other Net Gross in millions of euros exposure value changes exposure exposure June 30, 10 Q3-10 Q3-10 Sept. 30, 10 Sept. 30, 10 Portfolio at fair value through profit or loss 8 0 0 8 9 Portfolio at fair value through 89 -5 0 84 9
Slide 52: Sensitive exposures: RMBS
5. Annex - Sensitive exposures (excluding Natixis) RMBS Net Changes in Other Net Gross in millions of euros exposure value changes exposure exposure June 30, 10 Q3-10 Q3-10 Sept. 30, 10 Sept. 30, 10 Portfolio at fair value through profit or 4 0 0 4 5 loss Portfolio at fair value through 958 -33 32 9
Slide 53: Sensitive exposures: Protection acquired
5. Annex - Sensitive exposures (excluding Natixis) Protection acquired Credit enhancers (monoline) Protection acquired from credit enhancers by Crédit Foncier de France are not included for the appraisal of hedged instruments (valued at zero) In this respect, they do not therefore reflect exposure t
Slide 54: Sensitive exposures: LBO financing
5. Annex - Sensitive exposures (excluding Natixis) LBO financing Breakdown by industry Net exposure at Sept. 30, 2010: €2,904m (vs. €2,811m at June 30, 2010) > Provision: €196m 5.8 % 4.3% 4.2% 1.4% 18.6% Exposure exclusively comprised of shares not intended for sale 38.4% 27.3% Average commitment pe