Natixis — Groupe BPCE — Q1 2018 Earnings Presentation
67 slides from Natixis's earnings presentation, May 17, 2018
Slide 1: Results for the 1st Quarter of 2018
RESULTS FOR THE 1ST QUARTER OF 2018 MAY 17, 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 Quarter of 2018
RESULTS FOR THE 1ST QUARTER OF 2018 Thanks to the new growth drivers in the Insurance and Payments businesses that boost our commission-earning activities and despite the persistent impact of low interest rates on the net interest income of the BP and CE retail banking networks, the Retail Banking &
Slide 4: Contents
CONTENTS 1 Results of Groupe BPCE 2 Capital adequacy and liquidity 3 Results of the business lines 4 Conclusion 4 RESULTS FOR THE 1ST QUARTER OF 2018
Slide 5: Q1-18 Results
Q1-18 RESULTS Net income attributable to equity holders of the parent 1,2: €955m, +0.9% Q1-18 Impact of non underlying Constant +0.7pp Q1-18 Q1-17 pf / Q1-17 pf change Q1-18 economic and underlying underlying 69.0% exceptional items underlying 68.3% In millions of euros % change % change Net banking
Slide 6: Strong growth in the contribution from Asset & Wealth Management
Q1-18 RESULTS Strong growth in the contribution from Asset & Wealth Management Retail Banking and insurance Asset & Wealth Management (in €m) (in €m) % at constant FX (% at current FX) Net banking income1 (NBI) Gross operating income (GOI) -3.0% NBI GOI -7.5% +20.2% +47.8% 4,312 4,180 (+10.3%) (+33.
Slide 7: Significant decline in the cost of risk
Q1-18 RESULTS Significant decline in the cost of risk Groupe BPCE cost of risk1 (in €m) Cost of risk in bps2 IAS 39 IFRS 9 IAS 39 IFRS 9 Banque Populaire banks 28 23 22 22 21 27 21 Caisses d’Epargne 366 372 325 18 15 14 15 20 269 259 10 10 Retail Banking and Insurance Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 2
Slide 8: Contents
CONTENTS 1 Results of Groupe BPCE 2 Capital adequacy and liquidity 3 Results of the business lines 4 Conclusion 8 RESULTS FOR THE 1ST QUARTER OF 2018
Slide 9: Extremely high level of capital adequacy and loss-absorbing capacity
CAPITAL ADEQUACY Extremely high level of capital adequacy and loss-absorbing capacity Change in the CET1 ratio1 (in bps) Impact in Q1-18 of 2 one-off effects + 14bps on the CET1 ratio 15.4% 15.2% + 13bps 15.2%3 15.1%2,3 ʘ First-time application of IFRS 9: -17bps - 17bps - 17bps - 4bps -12bps ʘ Deduc
Slide 10: Liquidity
LIQUIDITY 66%1 of the wholesale medium-/long-term funding plan completed Structure of MLT funding at April 30, 2018 €22bn wholesale MLT funding plan to be completed in 2018 ʘ Unsecured bond segment: approximately 70% 71% Unsecured bond issues Of which €4bn-5bn in senior non-preferred debt ʘ Covere
Slide 11: Contents
CONTENTS 1 Results of Groupe BPCE 2 Capital adequacy and liquidity 3 Results of the business lines 4 Conclusion 11 RESULTS FOR THE 1ST QUARTER OF 2018
Slide 12: Development of new growth drivers: Insurance and Payments
RETAIL BANKING AND INSURANCE Development of new growth drivers: Insurance and Payments Loan outstandings - in €bn - Deposits & savings Loan outstandings: +4.8% year-on-year ʘ Home loans +5.7%, equipment loans +7.4% +4.8% +3.5% 548 ʘ New loan production of almost €26bn in Q1-18, -28.4% 523 672 696 Of
Slide 13: Retail Banking and Insurance: Resilient results performance
RETAIL BANKING AND INSURANCE Resilient results performance: limited decline in income before tax2,3 to €1.2bn in Q1-18 Net banking income: -3.0%1 year-on-year Net banking income1 per sub-division (in €m) ʘ Aggregate net banking income1 of the BP & CE retail banking networks: -3.8% year-on-year 4,312
Slide 14: Banque Populaire banks
RETAIL BANKING AND INSURANCE Banque Populaire banks Loan outstandings - in €bn - Deposits & savings Customer base +5.3% Off-balance sheet +6.5% D&S 246 259 ʘ Principal active customers: +93,700, +2.5% 187 199 71 73 Centralized ʘ Private banking and Wealth Management customers: +22,000, +6.2% regulat
Slide 15: Caisses d'Epargne
RETAIL BANKING AND INSURANCE Caisses d’Epargne Loan outstandings - in €bn - Deposits & savings Customer base +6.4% +2.5% 404 414 Off-balance sheet ʘ Principal active individual customers: +103,400, +1.6% 242 257 D&S ʘ Private banking and Wealth Management customers: +15,900, +3.8% 132 135 Centralize
Slide 16: SFS – Faster pace of growth enjoyed by the Payments business
RETAIL BANKING AND INSURANCE SFS – Faster pace of growth enjoyed by the Payments business Payments (Natixis Payment Solutions): year-on-year revenue growth of 15% (≈ 2/3 of which are derived from acquisitions made in 2017) ʘ Merchant Solutions: business volumes generated by the new acquisitions of N
Slide 17: Insurance – Good level of profitability
RETAIL BANKING AND INSURANCE Scope: Natixis Insurance division Insurance – Good level of profitability Life1 and Personal protection insurance Premiums1 Life funds1 ʘ €3.2bn in earned premiums in Q1-18, +6% year-on-year (in €bn) (in €bn) ʘ Total Assets under Management at €57bn as at end-March 2018;
Slide 18: Other networks
RETAIL BANKING AND INSURANCE Other networks1 Loan outstandings2 - in €bn - Deposits & savings Crédit Foncier ʘ Slower rate of new loan production against a background of 5.5 5.0 persistently low interest rates and strong competition 8.2 8.7 Total new loan production during the quarter: €2.2bn, inc
Slide 19: Asset management: good activity levels amidst market volatility
ASSET & WEALTH MANAGEMENT Asset management: good activity levels amidst market volatility Asset management: assets under management (in €bn) Assets under management: €818bn at end-March 2018 Average Q1-18 positions at constant exchange rates: +6 ʘ +10% in Europe (excluding Life insurance) -11 -8 ʘ +
Slide 20: Strong growth momentum with gross operating income up 34%
ASSET & WEALTH MANAGEMENT Strong growth momentum with gross operating income up +34%, despite an unfavorable FX effect Net revenues: up +20.2% vs. Q1-17 (at constant exchange rates) Constant % Q1-18 Q1-17 pf change Change N-1 in millions of euros % change N-1 Asset Management Net banking income 777
Slide 21: Solid growth in Global Finance, resilient Global Markets
CORPORATE & INVESTMENT BANKING Solid growth in Global Finance, resilient Global Markets activity Global Markets Global Markets net revenues1 (in €m) 4% year-on-year decline in net revenues (excluding CVA/DVA), % change % change down from a historically high Q1-17, especially in Equity current FX con
Slide 22: Corporate & Investment Banking: Increased pace of value creation
CORPORATE & INVESTMENT BANKING Increased pace of value creation Net revenues: up +5% building on a high level in Constant % Q1-17 (excluding CVA/DVA, at constant exchange rates) Q1-18 Q1-17 change Change N-1 in millions of euros % change N-1 ʘ Global Finance: +16% Net banking income 938 971 -3.3% 1.
Slide 23: Contents
CONTENTS 1 Results of Groupe BPCE 2 Capital adequacy and liquidity 3 Results of the business lines 4 Conclusion 23 RESULTS FOR THE 1ST QUARTER OF 2018
Slide 24: Conclusion
RESULTS FOR THE 1ST QUARTER OF 2018 Conclusion Q1-18: good start to the 2018/2020 strategic plan June 1st, 2018: Change in governance Laurent Mignon to become Chairman of Groupe BPCE’s Management Board François Riahi to become CEO of Natixis Continuity in the Group’s strategy and in the pursuit of t
Slide 25: Annexes
RESULTS FOR THE 1ST QUARTER OF 2018 ANNEXES MAY 17, 2018
Slide 26: Annexes Contents
ANNEXES Contents Organizational structure of Groupe BPCE Retail Banking & Insurance IFRS 9 – First-time application ʘ Income statement and quarterly series ʘ Summary of impacts ʘ Banque Populaire and Caisse d’Epargne – ʘ Application of IFRS 9 by Groupe BPCE quarterly series ʘ IFRS 9: Summary of clas
Slide 27: Organizational structure of Groupe BPCE at March 31, 2018
ANNEXES Organizational structure of Groupe BPCE at March 31, 2018 9 million cooperative shareholders 100% 100%* 50% 50% BPCE SA 100% 71% * Indirectly through Local Savings Companies 29% FLOAT 27 RESULTS FOR THE 1ST QUARTER OF 2018
Slide 28: IFRS 9: Summary of impacts
ANNEXES IFRS 9: Summary of impacts ʘ The principal impacts of the first-time application of IFRS 9 Financial Instruments concern the new financial assets impairment model ʘ The application of this standard results in a €2.1bn increase in impairment for credit risk, raising this item to €14.4bn from
Slide 29: Application of IFRS 9 by Groupe BPCE
ANNEXES Application of IFRS 9 by Groupe BPCE ʘ The Group also elected to apply in advance, as of fiscal 2016, the recognition in other comprehensive income of revaluation adjustments related to changes in own credit risk on liabilities measured at fair value ʘ As of January 1, 2018, Groupe BPCE bega
Slide 30: IFRS 9: summary of classification principles
ANNEXES IFRS 9: summary of classification principles Debt instrument: loans and receivables, bonds Equity instrument What type of financial asset is concerned? What are the Solely Payments of Non-SPPI characteristics of Principal and Interest its contractual (SPPI) Non-basic debt cash flows? Basic d
Slide 31: Comparison between the IAS / IFRS impairment principles
ANNEXES Comparison between the IAS 39 / IFRS 9 impairment principles Performing, not sensitive Perf., sensitive In default IAS 39 Sector Collective Specific provisions provisions provisions Stage 1 Stage 2 Stage 3 Expected Credit Loss (ECL) at 1 yr. ECL at maturity ECL at maturity IFRS 9 In the even
Slide 32: Balance sheet assets: principal reclassifications
ANNEXES Balance sheet assets: principal reclassifications Insurance activity investments IAS 39 assets Reclassifications ʘ Grouping together of insurance assets on a dedicated line 169.8 Financial assets at Financial assets at fair value through profit or loss 145.9 fair value through Available-for-
Slide 33: Balance sheet liabilities: principal reclassifications
ANNEXES Balance sheet liabilities: principal reclassifications IAS 39 liabilities Reclassifications Insurance activity liabilities ʘ Grouping together of insurance liabilities on a 92.1 dedicated line; this chiefly concerns the technical Amounts due to credit institutions 83.0 provisions of insuranc
Slide 34: Impact of the first-time application of IFRS 9: provisions
ANNEXES Impact of the first-time application of IFRS 9: provisions FTA impact of IFRS 9 on outstanding provisions (in €bn) €14.4bn Stage 1 €12.3bn +2.1 1.3 Collective provisions 2.1 Stage 2 1.4 -1.4 +1.3 IAS 39 Individual 12,3 Stage 3 10.6 11,0 11,0 11.0 provisions Part du groupe 0.3 IAS 37 Outstand
Slide 35: Impact of IFRS 9: shareholders' equity
ANNEXES Impact of the first-time application of IFRS 9: shareholders' equity FTA impact of IFRS 9 on Shareholders' equity (in €bn) +1.4 €71.2bn -1.3 -2.1 €69.5bn +0.5 7.2 7.1 Attributable to 72,6 Attributable to equity holders 71,3 equity holders of the parent 69,2 62,4 of the parent 64.0 62.4 Share
Slide 36: 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 37: 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 38: 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 39: Notes on methodology (4/4)
ANNEXES Notes on methodology (4/4) Liquidity ʘ Total liquidity reserves comprise the following: Customers’ 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
Slide 40: Reminder: new segment information starting in Q4-17
ANNEXES Reminder: new segment information starting in Q4-17 Business divisions Corporate center division RETAIL ASSET & CORPORATE & CORPORATE BANKING & WEALTH INVESTMENT CENTER INSURANCE MANAGEMENT BANKING Banque Populaire banks Asset Management Global markets Corporate center Including private equi
Slide 41: Q1-18 results: reconciliation to published data
ANNEXES Q1-18 results: reconciliation of data (excluding non-economic and exceptional items) 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 Q1-18 results 6,010 -4,606 -259 1,222 605 N
Slide 42: Q1-17 pf results: reconciliation to published data
ANNEXES Q1-17 pf results: reconciliation of data (excluding non-economic and exceptional items) 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 Q1-17 pf results 6,062 -4,564 -375 1,198
Slide 43: Quarterly income statement per business line
ANNEXES Quarterly income statement per business line Retail Banking and Asset & Wealth Corporate & Corporate center Groupe BPCE Insurance Management Investment Banking in millions of euros Q1-18 Q1-17 pf Q1-18 Q1-17 pf Q1-18 Q1-17 pf Q1-18 Q1-17 pf Q1-18 Q1-17 pf % Net banking income 4,174 4,299 777
Slide 44: Quarterly series: Groupe BPCE
ANNEXES Quarterly series Groupe BPCE Q1-17 pf Q2-17 pf Q3-17 Q4-17 2017 Q1-18 in millions of euros Net banking income 6,062 6,052 5,688 5,918 23,720 6,010 Operating expenses -4,564 -4,136 -3,980 -4,418 -17,098 -4,606 Gross operating income 1,498 1,916 1,707 1,500 6,621 1,404 Cost / income ratio 75.3
Slide 45: Statement of changes in shareholders' equity
ANNEXES Statement of changes in shareholders' equity Equity attributable to equity holders of the parent En millions d’euros December 31, 2017 64,029 IFRS 9 impact -1,553 st January 1 , 2018 62,476 Capital increase (cooperative shares) 591 Income 605 Remuneration of super-subordinated notes (TSSDI)
Slide 46: 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) March 31, 2018 Dec. 31, 2017 74.3 73.7 in billions of euros Equity attributable to equity holders of the 14,4 14.3 Tier-2 capit
Slide 47: Phased-in prudential ratios and credit ratings
ANNEXES Financial structure: phased-in prudential ratios and credit ratings March 31, 20181,2 Dec. 31, 2017 Dec. 31, 2016 LONG-TERM CREDIT RATINGS (MAY 17, 2018) Total risk-weighted assets €391bn €386bn €391bn A outlook positive Common Equity Tier-1 capital €59.6bn €59.0bn €55.3bn Tier-1 capital €60
Slide 48: SREP
ANNEXES SREP Capital requirement / SREP 2017 (as a %) Pillar 2 Requirement 19.0% Phased-in 2018 G-SIB buffer Total surplus of 687bps 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 523bps 2.00 Tier 2 0.12 1.38 Addit
Slide 49: Risk-weighted assets
ANNEXES Risk-weighted assets Breakdown per business line (in €bn) Breakdown per type of risk1 (in €bn) (at current exchange rates) 391 386 391 386 Other 10% 9% 10% 10% 3% 3% 15% 15% 3% 3% Corporate & Investment Banking Operational risk Asset & Wealth 87% 87% Market risk 72% 73% Management Credit ris
Slide 50: Leverage ratio
ANNEXES Leverage ratio1 March 31, 20183 Dec. 31, 2017 In billions of euros Tier-1 capital 59.1 59.7 Balance sheet total 1,265.2 1,241.7 Prudential restatements -101.1 -81.1 Prudential balance sheet total2 1,164.1 1,160.6 Adjustments related to exposure to derivatives4 -36.5 -36.6 Adjustments related
Slide 51: Financial conglomerate
ANNEXES Financial conglomerate CRR/CRD IV2 Restatements Financial viewpoint conglomerate viewpoint Financial conglomerate ratio -1.6 Banking CR1 Fonds propres (CRR/CRD IV) globaux 74.2 72,6 72,6 72,6 72.6 Regulatory + (en Md€) capital > Insurance CR1 (Solvency 2) 1 2 3 - Restatements applied +3.9 49
Slide 52: 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% 167% 230 158% 214 217 71 83 80 27 18 22 66 59 119 112 58 101 12/31/2016 12/31/2017 03/31/2018 93 73 78 ST MLT Coverage ratio of
Slide 53: 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 Q1-18 Q1-17 pf % Q1-18 Q1-17 pf % Q1-18 Q1-17 pf % Q1-18 Q1-17 pf % Q1-18 Q1-17 pf % Q1-18
Slide 54: Retail Banking & Insurance: quarterly series
ANNEXES Retail Banking & Insurance: quarterly series Retail Banking and Insurance Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 4,299 4,258 4,077 4,039 16,673 4,174 Operating expenses -2,974 -2,822 -2,717 -2,977 -11,491 -2,933 Gross operating income 1,325 1,436
Slide 55: 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 Q1-17 pf Q2-17 pf Q3-17 Q4-17 2017 Q1-18 in millions of euros Net banking income 1,606 1,597 1,562 1,519 6,284 1,584 Operating expenses -1,118 -1,077 -1,074 -1,149 -4,418 -1,118 G
Slide 56: 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) -5.6% -1.4% Change 1,815 1,713 Change 1,606 1,584 -33 64 44 20 -24 31 721 +29 623 649 750 +27 27 38 1 -36 1,041 -109 912 876 932 -11 Q1-17pf Q1-18 Q1-17 pf Q1-18 56 RESULTS FOR T
Slide 57: Retail Banking & Insurance: Banque Populaire network
ANNEXES Retail Banking & Insurance: Banque Populaire network Deposits & savings (in €bn) Loan outstandings (in €bn) Change YoY Change YoY +5.3% +6.5% 259.3 259.5 246.3 197.2 199.0 +12.1% Demand deposits 186.8 82.0 81.5 +9.0% Home loans 72.7 +7.2% Passbook savings accounts +10.4% Consumer loans 110.7
Slide 58: Retail Banking & Insurance: Caisse d'Epargne network
ANNEXES Retail Banking & Insurance: Caisse d’Epargne network Deposits & savings (in €bn) Loan outstandings (in €bn) Change YoY Change YoY 412.4 414.3 +2.5% +6.4% 404.3 61.9 68.6 69.4 +12.1% Demand deposits 253.3 257.3 241.8 +1.8% Passbook savings 122.5 122.7 124.7 accounts +8.2% Home loans +1.8% Reg
Slide 59: SFS quarterly series
ANNEXES Retail Banking & Insurance: SFS quarterly series Specialized Financial Services Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 344 347 341 350 1,382 362 Operating expenses -233 -228 -229 -249 -939 -245 Gross operating income 112 118 112 101 443 117 Cost /
Slide 60: Insurance quarterly series
ANNEXES Retail Banking & Insurance: Insurance quarterly series Insurance Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 189 179 176 190 734 204 Operating expenses -129 -102 -99 -109 -439 -118 Gross operating income 60 77 77 80 295 86 Cost / income ratio 68.1% 56.
Slide 61: Other networks quarterly series
ANNEXES Retail Banking & Insurance: Other networks quarterly series Other networks Q1-17 pf Q2-17 pf Q3-17 Q4-17 2017 Q1-18 in millions of euros Net banking income 344 335 279 229 1,187 311 Operating expenses -255 -227 -182 -242 -907 -235 Gross operating income 90 108 97 -14 280 76 Cost / income rat
Slide 62: Asset & Wealth Management: quarterly series
ANNEXES Asset & Wealth Management: quarterly series Asset & Wealth Management Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 704 743 766 899 3,113 777 Operating expenses -519 -521 -528 -610 -2,178 -529 Gross operating income 186 222 239 289 936 248 Cost / income
Slide 63: Corporate & Investment Banking: quarterly series
ANNEXES Corporate & Investment Banking: quarterly series Corporate & Investment Banking Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 971 1,019 775 817 3,581 938 Operating expenses -566 -555 -506 -567 -2,194 -563 Gross operating income 404 464 269 249 1,387 375
Slide 64: Corporate center: quarterly series
ANNEXES Corporate center: quarterly series Corporate center Q1-17 pf Q2-17 pf Q3-17 pf Q4-17 2017 Q1-18 in millions of euros Net banking income 88 31 69 163 352 121 Operating expenses -505 -238 -230 -263 -1,236 -581 Gross operating income -417 -206 -161 -100 -884 -459 Cost of risk -41 -25 -23 -74 -1
Slide 65: Non-performing loans and impairment
ANNEXES Non-performing loans and impairment March 31, 2018 Jan. 1, 2018 In billions of euros Gross outstanding loans to customers and credit institutions 739.7 730.1 O/w S3 outstandings 22.3 23.2 Non-performing/gross outstanding loans 3.0% 3.2% S3 impairment recognized 10.1 10.5 Impairment recognize
Slide 66: Breakdown of commitments at March 31, 2018
ANNEXES Breakdown of commitments at March 31, 2018 Breakdown per counterparty Breakdown per geographical region 6% Financial institutions/local Central administrations/Central banks and 27% government market other sovereign exposures 8% 1% 6% 9% 5% 1% 1% 15% 4% €1,149bn 14% 19% 7% 47% 1% 65% 31% 31%
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