Natixis — Groupe BPCE — 9M 2017 Earnings Presentation
65 slides from Natixis's earnings presentation, Nov 7, 2017
Slide 1: Results for the 3rd quarter and first 9 months of 2017
Results for the 3rd quarter November 7, 2017 and first 9 months 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: A foundation of robust fundamentals for the start of the new strategic plan
A foundation of robust fundamentals for the start of the new strategic plan Dynamic business lines Strong base of income (9M-17) Contribution of Retail Banking activities to income Retail Banking: buoyant business activities before tax3 records a limited decline to €3.3bn Expansion of the customer b
Slide 4: Contents
Contents 1 2 3 4 Results of Capital Results of the Conclusion Groupe adequacy and business lines BPCE liquidity November 7, 2017 Results for the 3rd quarter and first 9 months of 2017 4
Slide 5: 9M-17 results
9M-17 results Income before tax1 +5.3% to €4.6bn 9M-17 underlying Impact of non Impact of non / 9M-16 pf 9M-16 pf 9M-17 economic and 9M-17 underlying 9M-16 pf economic and underlying underlying In millions of euros exceptional items exceptional items % change Net banking income 17,802 -98 17,900 18,
Slide 6: 9M-17 results
9M-17 results 4.1% growth in gross operating income to €5.4bn1 Limited decline in the revenues posted by Retail banking activities Net interest income impacted by the interest Change in net banking income, 9M-16 9M-17 (in €m) rate environment Decline in early loan redemption in Q3-17 Commissions dri
Slide 7: Q3-17 results
Q3-17 results Attributable net income1,2 equal to €838m in Q3-17 Q3-17 underlying Impact of non Impact of non / Q3-16 pf Q3-16 pf Q3-17 economic and Q3-17 underlying Q3-16 pf economic and underlying underlying In millions of euros exceptional items exceptional items % change Net banking income 5,688
Slide 8: Low cost of risk in Q3-17
Results of Groupe BPCE Low cost of risk in Q3-17 Groupe BPCE Cost of risk expressed in basis points2 -8.0% Banque Populaire banks 27 22 32 21 22 22 21 1,044 Cost of risk (€m) 960 9M-16 9M-17 Caisses d’Epargne 16 13 25 Ratio of non-performing 3.5% 3.3% 17 14 15 10 loans/gross loan outstandings Retail
Slide 9: Contents
Contents 1 2 3 4 Results Capital Results of the Conclusion of Groupe adequacy business lines BPCE and liquidity November 7, 2017 Results for the 3rd quarter and first 9 months of 2017 9
Slide 10: Capital adequacy: CET1 ratio up 70bps
Capital adequacy CET1 ratio up 70bps in 9M-17 to 15.0%1,2 Change in the CET1 ratio Total capital ratios1 (as a%) Without transitional +26bps 18.5% 19.0% measures +56bps -9bps -5bps 18.7% 19.1% 4.0 3.8 15.0%1,2 15.0%2 14.3%1 0.4 0.3 CET1 Ratio 14.3 15.0 CET1 ratio Retained Issue of Other CET1 ratio I
Slide 11: Capital adequacy: TLAC ratio
Capital adequacy TLAC ratio equal to 20.3%2 at September 30, 2017 over requirement for 2019 TLAC ratio (as a % of risk-weighted assets) Total loss-absorbing capacity1 equal to Without €79.1bn2 at end-September 2017 transitional 19.3% 20.2% measures Assumptions adopted for the trajectory leading 20.3
Slide 12: Liquidity
Liquidity Liquidity reserves and short-term funding at September 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 230 172% 168% 213 158% 196 71 74 61 Short-term funding and MLT debt maturing i
Slide 13: Liquidity: 2017 funding plan 107% completed
Liquidity 2017 wholesale medium-/long-term funding plan 107% completed at September 30, 2017 107% of the 2017 wholesale MLT funding plan Structure of MLT funding at September 30, 2017 completed at September 30, 2017 €21.3bn1,2 raised out of a €20bn plan Average maturity at issue: 7.2 years Average r
Slide 14: Contents
Contents 1 2 3 4 Results Capital Results of Conclusion of Groupe adequacy and the business BPCE liquidity lines November 7, 2017 Results for the 3rd quarter and first 9 months of 2017 14
Slide 15: Strong growth in the contribution from the CIB division
Strong growth in the contribution from the CIB division Contribution of the business lines to net banking income (in €m) ROE1 17,643 17,144 2,494 2,803 2,460 2,750 68% 9% Retail (71%) (10%) Banking 16% (14%) 16% 12,190 12,090 (15%) 9M-16 pf 9M-17 15% Investment (14%) Solutions Contribution of the bu
Slide 16: Retail Banking
Retail Banking Contribution to income before tax2,3 records a limited decline to €3.3bn in 9M-17 Loan outstandings: +5.3% year-on-year Deposits & savings and loan outstandings Home loans +5.2%, equipment loans +4.8% and (in €bn) consumer loans +10.7% +3.3% >New loan production in excess of €96bn in
Slide 17: Retail Banking: Banque Populaire banks
Retail Banking Banque Populaire banks: revenues driven by strong commercial momentum and a sustained rise in commissions Loan outstandings (in €bn) Deposits & savings (in €bn) Customer base +5.6% New relationships forged with individual customers: +8.1% 239 241 252 +2.2% in 9M-17 (340,900) 69 71 193
Slide 18: Retail Banking: Caisses d'Epargne
Retail Banking Caisses d’Epargne: slight decline in revenues; growth in customer base, rise in commissions and reduced operating expenses2 Customer base Loan outstandings (in €bn) Deposits & savings (in €bn) Principal active customers aged 25 or +2.2% more: +177,400, +3.3%, of which +6.9% +121,500 c
Slide 19: Retail Banking: Specialized Financial Services
Retail Banking Specialized Financial Services: robust commercial activity in Q3-17 Contribution to Group results Net banking income: +4.8% vs. Q3-16 Q3-17/ Increase in net revenues generated by the Specialized 9M-17/ Q3-16 9M-17 9M-16 Q3-17 Financing business: +6% driven by the sureties & financial
Slide 20: Retail Banking: Other networks
Retail Banking Other networks1 Loan outstandings1,2 Deposits & savings2 Crédit Foncier (in €bn) (in €bn) New loan production equal to €8.3bn in 9M-17, +28.7% vs. 9M-16 pf 95.6 92.0 > Home loans granted to individual customers: €6.5bn, +34% 5.7 5.3 22.0 21.6 Decline in outstandings owing to the level
Slide 21: Investment Solutions
Investment Solutions Continued strong performance in Asset Management and Insurance Asset management Asset Management: Assets under Management Increase in fee rate (excluding performance fees) in Q3-17 (in €bn) and 9M-17 +42 Net positive inflows of €5bn (excluding money market funds) in Q3-17, chief
Slide 22: Corporate & Investment Banking
Corporate & Investment Banking ROE improved to 15% in 9M-17 despite a less buoyant Q3-17 Global markets1 Change in net revenues (in €m) FIC-T (Fixed Income, Commodities & Treasury) >Despite a downturn in Q3-17 vs. Q3-16 (high basis of Global finance & Global markets1 Investment banking comparison),
Slide 23: Contents
Contents 1 2 3 4 Results Capital Results of the Conclusion of Groupe adequacy and business lines BPCE liquidity November 7, 2017 Results for the 3rd quarter and first 9 months of 2017 23
Slide 24: Conclusion
Conclusion Good performance achieved by the Group’s business lines with 2.8%1 growth in revenues in 9M-17, testifying to the relevance of its diversified universal banking model Retail banking: -1.3%2 despite the unfavorable impact of low interest rates Investment Solutions: +11.8% CIB: +12.4% Attri
Slide 25: Annexes
Results for the 3rd quarter November 7, 2017 and first 9 months of 2017 Annexes
Slide 26: Annexes contents
Annexes Organizational structure of Groupe BPCE Retail Banking 9-month income statement and quarterly series per Consolidated results of Groupe BPCE business line Notes on methodology Banque Populaire and Caisse d’Epargne – quarterly series Income statement: reconciliation of consolidated data 9-mon
Slide 27: Organizational structure of Groupe BPCE
Annex - Groupe BPCE Organizational structure of Groupe BPCE at September 30, 2017 9 MILLION COOPERATIVE SHAREHOLDERS 100% 100%* 50% 50% BPCE SA 100% 71% * Indirectly through Local Savings Companies. 29% FLOAT November 7, 2017 Results for the 3rd quarter and first 9 months 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: 9M-17 income statement reconciliation
Annex - Groupe BPCE 9M-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: 9M-16 pf income statement reconciliation
Annex - Groupe BPCE 9M-16 pf 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 in millions of euros of the
Slide 34: Q3-17 income statement reconciliation
Annex - Groupe BPCE Q3-17 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: Q3-16 pf income statement reconciliation
Annex - Groupe BPCE Q3-16 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 expenses of the parent in millions of
Slide 36: Reconciliation of pro-forma to published consolidated 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: 9-month income statement per business line
Annex - Groupe BPCE 9-month income statement per business line Corporate & Investment Retail Banking Investment Corporate center Groupe BPCE Solutions Banking in millions of euros 9M-17 9M-16 pf 9M-17 9M-16 9M-17 9M-16 9M-17 9M-16 pf 9M-17 9M-16 pf % Net banking income 12,090 12,190 2,750 2,460 2,80
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 Q3-17 Q3-16 pf Q3-17 Q3-16 Q3-17 Q3-16 Q3-17 Q3-16 pf Q3-17 Q3-16 pf % Net banking income 3,900 4,008 940 804 787 757
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 Q3-16 pf 9M-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 Q3-17 9M-17 Net banking income 5,732 6,666 5,712 18,110 6,049 24,158 6,062 6,052 5,688 17,802 Operating expenses -4,405 -4,045 -3,876 -12,325 -4,34
Slide 40: Consolidated balance sheet
Annex - Groupe BPCE Consolidated balance sheet September 30, September 30, ASSETS in millions of euros Dec. 31, 2016 LIABILITIES in millions of euros Dec. 31, 2016 2017 2017 C ash and amounts due from central banks 90,689 83,919 Amounts due to central banks 0 0 Financial assets at fair value through
Slide 41: Goodwill
Annex – Groupe BPCE Goodwill Dec. 31, Acquisitions Other Sept. 30, In millions of euros Impairment Conversion 2016 /Disposals movements 2017 Retail Banking 902 103 -1 0 -11 993 entities Natixis 3,495 14 0 -177 12 3,344 Total 4,397 117 -1 -177 1 4,337 Goodwill impairment is recognized under the Corpo
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 -354 Capital increase (cooperative shares) 1,095 Income 2,527 Remuneration of super-subordinated notes (TSSDI) -71
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 +15.4 +4.6 -4.7 -1.2 -1.1 -2.92 +1.0 74,2 74.2 63.9 62,7 62,7 62,6 61,5 59.6 59,6 58,6 58.6 58,6 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 Sept. 30, Dec. 31, Dec. 31, 20171 2016 2015 Total risk-weighted assets €390bn €391bn €391bn Common Equity Tier-1 capital €58.1bn €55.3bn €50.9bn Tier-1 capital €59.0bn €56.6bn €52.2bn Total capital €73.8bn €72.3bn €65.8bn Common Equity
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 Change over the 9-month period +2 +3 0 391 391 390 -6 10% 11% 12% 18% 17% 16% 4% 4% 4% 391 390 68% 68% 69% Risk-weighted Retail Investment Corporate & Other Risk-weighted Dec. 31, 2015 Dec.
Slide 46: Leverage ratio
Annex Leverage ratio1,2 Sept. 30, Dec. 31, In billions of euros 2017 2016 Leverage ratio Tier-1 capital 58.6 57.6 Impact of keeping savings Balance sheet total 1,241.7 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 73.8 72,4 72,4 72,4 72.4 (in €bn) Transfer from the Basel 3 ratio2 to the 1 2 3
Slide 48: Liquidity: customer loan/deposit ratio
Annex – liquidity Customer loan/deposit ratio1 138% 2 128% 3 126% 4 121% 5 120% 121% 119% Dec. 2011 Dec. 2012 Dec. 2013 Dec. 2014 Dec. 2015 Dec. 2016 Sept. 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 49: Retail Banking 9-month income statement
Annex – Retail Banking 9-month income statement per business line Specialized Financial Banque Populaire banks Caisses d'Epargne Other networks Retail Banking Services in millions of euros 9M-17 9M-16 pf % 9M-17 9M-16 pf % 9M-17 9M-16 % 9M-17 9M-16 pf % 9M-17 9M-16 pf % Net banking income 4,765 4,70
Slide 50: 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 Q3-17 Q3-16 pf % Q3-17 Q3-16 pf % Q3-17 Q3-16 % Q3-17 Q3-16 pf % Q3-17 Q3-16 pf % Net banking income 1,562 1,
Slide 51: Retail Banking quarterly series
Annex – Retail Banking Quarterly series Retail Banking in millions of euros Q1-16 pf Q2-16 pf Q3-16 pf 9M-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 Q3-17 9M-17 Net banking income 4,124 4,057 4,008 12,190 4,102 16,291 4,110 4,080 3,900 12,090 Operating expenses -2,844 -2,692 -2,614 -8,149 -2,828 -10,977 -2,
Slide 52: 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 Q3-16 pf 9M-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 Q3-17 9M-17 Net banking income 1,582 1,583 1,539 4,705 1,590 6,295 1,606 1,597 1,562 4,765 Operating exp
Slide 53: Change in the 9-month net banking income
Annex - Retail banking Change in the 9-month net banking income Banque Populaire banks1 (in €m) Caisses d’Epargne (in €m) +1.3% -1.7% change 5,425 change (in €m) 5,335 (in €m) 4,765 120 4,705 175 119 +38 +55 81 2,103 2,148 1,751 1,839 +88 +45 -83 -227 3,241 2,866 3,014 2,784 9M-16 9M-17 9M-16 9M-17
Slide 54: Banque Populaire: customer deposits & savings
Annex - Retail Banking Banque Populaire network: customer deposits & savings (in €bn) 252.2 238.8 241.3 % change Sept. 2017 / 78.1 65.7 69.6 Sept. 2016 Demand deposits +19.0% Passbook savings accounts +8.1% 45.5 45.9 49.1 Regulated home savings +5.1% 18.9 19.1 plans 19.9 30.3 Term accounts -14.5% 29
Slide 55: Banque Populaire: customer loan outstandings
Annex - Retail Banking Banque Populaire network: customer loan outstandings (in €bn) 193.5 182.2 179.0 % change Sept. 2017 / Sept. 2016 108.8 101.3 Home loans +9.6% 99.2 Consumer loans +12.3% Short-term credit facilities +7.8% 8.0 8.2 8.9 Equipment loans +5.6% 12.9 13.7 12.7 Other ns Total loans +8.
Slide 56: Caisse d'Epargne: customer deposits & savings
Annex - Retail Banking Caisse d'Epargne network: customer deposits & savings (in €bn) % change 410.5 401.6 399.4 Sept. 2017 / Sept. 2016 57.3 65.4 59.5 Demand deposits +14.1% Passbook savings accounts +1.7% 122.7 124.8 Regulated home savings 120.3 +3.1% plans Term accounts -7.5% 55.2 55.6 56.9 BPCE
Slide 57: Caisse d'Epargne: customer loan outstandings
Annex - Retail Banking Caisse d'Epargne network: customer loan outstandings (in €bn) 236.0 248.6 232.5 % change Sept. 2017 / 151.6 Sept. 2016 140.8 142.7 Home loans +7.7% Consumer loans +5.9% Short-term credit facilities +13.3% 14.0 15.1 14.2 Equipment loans +5.3% 8.6 9.2 9.8 Other ns 63.1 64.5 66.6
Slide 58: SFS quarterly series
Annex – Retail Banking SFS – Quarterly series (*) Specialized Financial Services in millions of euros Q1-16 Q2-16 Q3-16 9M-16 Q4-16 2016 Q1-17 Q2-17 Q3-17 9M-17 Net banking income 343 341 325 1,009 341 1,350 344 347 341 1,032 Operating expenses -225 -220 -215 -661 -220 -880 -232 -227 -228 -686 Gross
Slide 59: Other networks quarterly series
Annex – Retail Banking Other networks – Quarterly series Other networks in millions of euros Q1-16 pf Q2-16 pf Q3-16 pf 9M-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 Q3-17 9M-17 Net banking income 346 348 356 1,051 380 1,431 344 335 279 958 Operating expenses -251 -225 -218 -693 -240 -933 -255 -227 -182 -66
Slide 60: Investment Solutions quarterly series
Annex – Investment Solutions Quarterly series Investment Solutions in millions of euros Q1-16 Q2-16 Q3-16 9M-16 Q4-16 2016 Q1-17 Q2-17 Q3-17 9M-17 Net banking income 825 832 804 2,460 904 3,364 891 920 940 2,750 Operating expenses -590 -579 -558 -1,727 -623 -2,350 -645 -620 -624 -1,890 Gross operati
Slide 61: Corporate & Investment Banking quarterly series
Annex – Corporate & Investment Banking Quarterly series Corporate & Investment Banking in millions of euros Q1-16 Q2-16 Q3-16 9M-16 Q4-16 2016 Q1-17 Q2-17 Q3-17 9M-17 Net banking income 782 887 757 2,426 896 3,322 984 1,032 787 2,803 Operating expenses -512 -482 -468 -1,462 -569 -2,032 -563 -552 -50
Slide 62: Corporate center quarterly series
Annex - Corporate center Quarterly series Corporate center in millions of euros Q1-16 pf Q2-16 pf Q3-16 pf 9M-16 pf Q4-16 pf 2016 pf Q1-17 Q2-17 Q3-17 9M-17 Net banking income 2 890 142 1,034 147 1,181 77 20 61 159 Operating expenses -459 -293 -235 -987 -327 -1,314 -512 -244 -238 -993 Gross operatin
Slide 63: Risks: non-performing loans and impairment
Annex – Risks Groupe BPCE: non-performing loans and impairment In millions of euros Sept. 30, 2017 Dec. 31, 2016 Dec. 31, 2015 Gross outstanding customer loans 691,636 679,176 629,775 O/w non-performing loans 22,527 23,427 23,098 Non-performing/gross outstanding loans 3.3% 3.4% 3.7% Impairment recog
Slide 64: Breakdown of commitments at September 30, 2017
Annexe – Risques Breakdown of commitments at September 30, 2017 Breakdown of commitments Geographical breakdown of commitments per counterparty Central administrations / Financial institutions/ central banks and other local government market sovereign exposures 5% 27% 8% 6% 1% 1% 1% 10% 14% 9% 4% €1
Slide 65: Results for the 3rd quarter and first 9 months of 2017
November 7, 2017 Results for the 3rd quarter and first 9 months of 2017 65