Natixis has reported robust momentum and revenues in its core investment solutions, asset management and life insurance businesses, where revenues advanced 12% to €7.878bn in 2015. Revenues in each of the three core businesses grew either in line with or faster than objectives in its New Frontier plan, the bank said. All three businesses recorded high levels of inflows together "with improved product mixes preserving current and future margins". In corporate & investment banking (CIB), revenue growth was primarily fuelled by the performance of the bank's structured financing and equities segments.
'Concerning high value-added activities, both equity derivatives and structured financing marked the year with strong momentum, the former thanks to a broader range of solutions and the latter through a strong performance in acquisitions and infrastructure financing,' stated the bank in its 2015 results report. The bank also reported that CIB continued to expand in line with the objectives set out in the New Frontier Plan including the expansion of international platforms, growth on high value-added activities and rollout of the asset-light model. Internationally, new investments expanded Natixis' operations in the Apac and Americas regions where revenues climbed 35% and 28%, respectively during the year.
"The rollout of our asset-light model - a core component of our strategy - drove strong growth in our investment solutions divisions, both in asset management, which had a record year, and insurance," stated Laurent Mignon (pictured), Natixis chief executive officer, in a statement.
During Q4 2015, Natixis launched its first dedicated climate index, the NXS Climate Optimum Prospective index, which was developed as a new composite smart beta strategy of low-carbon stocks designed to be used as the underlying of index-linked products; and licensed the S&P 500 Low Volatility Target Beta Index for product development in the US market. The French bank also expanded its UK footprint by joining the Structured Products Association (UKSPA) in November.
Natixis which is the corporate, investment, insurance and financial services arm of Groupe BPCE, the second-largest banking group in France, has been rebuilding its equity derivatives and structured products since 2014, and its return to the market has been noticeable through subsidiary Natixis Structured Products, which has acted as the bond provider for 13 structured notes sold to international investors in 2015.
Natixis's activity in the global retail structured products market has been marginal this year as the focus of the French bank has been on rebuilding its equity derivatives. This year it has marketed 42 products across markets and the bank has over 240 live products across jurisdictions, of which 145 were marketed in its domestic market and four in the UK.
In 2015, the French bank made further senior appointments, including Bertrand Delarue, who joined as global head of structuring and financial engineering, strategic equity transactions in Paris; and Sébastien Lafosse, who joined Natixis as head of US investment solutions sales in New York, replacing Scott Pangbourne.
The bank reported a revenue growth of 30% on current exchange rates and 21% on constant exchange rates, in investment solutions which houses its structured products business, in 4Q15. Year on year, Natixis' investment solutions revenues climbed 25% on current exchange and rates and 13% on constant exchange rates.
In asset management, the bank reported net inflows of €3bn in 4Q15, including contributions of +€6bn in Europe and -€3bn in the US "amid a tough environment for mutual funds". Over the year, net inflow reached €33bn, including over €20bn collected in Europe and €12bn in the US.
AUM in asset management rose 9% to €801bn, while net revenues climbed 36% to €817m in 4Q15 (+24% on constant exchange rates) and reached €2.755bn for the whole of 2015, up 29% on current exchange rates and 13% on constant exchange rates compared to a year earlier. 'Expansion in asset management is also being driven by a rising contribution from the centralised distribution platform, which is leveraging an integrated solution-based approach to build a global and diversified relationship with clients' stated the bank. All in all, gross inflow from the centralised distribution platform amounted to €91bn in 2015 excluding MMF.
In the insurance segment, the bank's overall turnover rose 1% to €6.1bn in 2015, with net inflows totalling €1.3bn for full-year 2015, of which 44% came from unit-linked policies. Assets under management increased 5% to €44.1bn year-on-year, with 19% concerning unit-linked policies.
Natixis stated that in the life insurance segment, a prudent approach was taken to policyholder revaluation rates in 2015 (-0.3pp) in order to preserve current and future margins. As a result, the percentage of customers of the two networks equipped with non-life products rose significantly (+1pp to 21.4% for Banques Populaires and +1.7pp to 24.7% for Caisses d'Epargne).
Click here to view the Natixis 2015 and 4Q15 results.
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