Natixis reports €17bn H1 net inflow to investment solutions business

Natixis’s investment solutions business recorded a net inflow of €8.4bn for the second quarter of 2014 and €17bn for H1 2014 as a whole, with private banking registering net new money of €500m in Q2 and close to €1bn for H1, according to the bank’s half-year results.

The French banking group said revenues from equities which houses its equity derivatives business advanced 12% in Q2 2014 versus Q2 2013, with contributions coming from all business lines and particularly from Europe. The bank also said that the rollout of its equity derivatives activities is making progress, with the advisory business also faring well in Q2 2014.

“Revenues in all our businesses also made strong progress both in France and internationally, while synergies generated with the Groupe BPCE networks are ahead of target,” said Laurent Mignon, Natixis's chief executive. “The combination of strong performances from our core businesses and improved operational efficiency means our results are ahead of the schedule laid out in the strategic plan.”

SRP data
According to the SRP database, Natixis has marketed 11 structured products so far this year including six structured notes for international investors, three medium term notes in the US market and two life insurance structures in France. This compares with 21 structures marketed by the French group in 2013 in the US market (16 products) and France (five products).

Natixis has been rebuilding its equity derivatives/structured products business over the past year following the appointment of Selim Mehrez as global head of equity derivatives, in Paris, in January. Mehrez reports to Luc François, the bank’s head of global wholesale banking markets.

Other recent senior appointments at Natixis include Eric Le Brusq, formerly global head of equity and commodity derivative sales at BNP Paribas in Paris, who was appointed global head of equity derivatives sales at Natixis in London in March; Sam Rosenberg as head of sales solutions, Americas; Asra Abdulaziz, who joined as Europe, Middle East & Africa (EMEA) head of sales, also in London; and Tobias Heitmeier, as head of sales for Germany and Austria.

In addition, in a recent interview, Samuel Plagnard, head of global markets structuring, Asia Pacific, at Natixis in Hong Kong, told SRP that the bank is also planning to increase the headcount of its Japanese business by 50% following an increased target revenue for the bank’s operations in Japan for 2017 of $11bn.

Core businesses
In investment solutions, the bank reported that all business lines enjoyed robust levels of business and increase in both revenues and profitability. Q2 2014 revenues came out at €710m, up 14% versus Q2 2013, while expenses rose 9% to €493m in the same period. The cost-income ratio improved significantly to 69.4% in Q2 2014, down 2.8pps versus Q2 2013.

Gross operating income extended the trend observed in Q1 2014, and climbed 26% to €217m versus Q2 2013. Pre-tax profit jumped 26% to €213m in Q2 2014 and ROE widened by 340bps to 15.8% relative to Q2 2013.

In asset management, the bank grew revenues 15% and gross operating income 20% in 2Q14. In H1 2014, net inflow amounted to €17.1bn, including €10bn from the US retail platform. AUM were up 18% in the US relative to a year earlier and, at €334bn, equalled the amount under management in Europe at end-June 2014. All in all, AUM totalled €680bn at end-June 2014 vs. €653bn a quarter earlier. €8.4bn of this increase stemmed from net inflows, €2bn from currency effects and €16.2bn from market effects.

In insurance, the bank’s net revenues rose 10% to €139m in Q2 2014 versus Q2 2013 and 21% in H1 2014 (data presented pro forma of the integration of BPCE Assurances since Q1 2014); while in private banking, net inflow doubled to €0.9bn in Q1 2014 versus H1 2013, with AUM reaching €24bn at end-June 2014.

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Natixis reports €17bn H1 net inflow to investment solutions business