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Natexis Banques Populaires

First-half 2002. Natexis Banques Populaires. Natexis Banques Populaires. Change. H1 02. H1 01. EURm. vs. H1 01. vs. H2 01. I ncome statement (Natexis Banques Populaires) (1).

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Natexis Banques Populaires

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  1. First-half 2002 Natexis Banques Populaires

  2. Natexis Banques Populaires

  3. Change H1 02 H1 01 EURm vs. H1 01 vs. H2 01 Income statement (Natexis Banques Populaires) (1) • Net banking income (total) 879 960 - 8% - o/w Core businesses (1) 894 932 - 4% + 2%o/w Other - 15 + 28 • Operating expense - 613 - 589 + 4% - 4% • Gross operating income 266 371 - 28% + 10% • Provisions for loan losses - 86 - 86 - - 13% • Operating income 181 285 - 37% + 27% (1) o/w provisions for loan losses charged against net banking income - 63 - 37

  4. Change H1 02 H1 01 EURm vs. H1 01 vs. H2 01 • Operating income 181 285 - 37% + 27% • Income from companies at equity 1 8 • Net gains on disposals of fixed assets 13 3 • Income before exceptional items and tax 194 296 - 34% + 30% • Exceptional items - 15 - 2 • Tax - 52 - 77 - 32% • Amortization of goodwill - 17 - 10 • Exceptional charge - 19 - • Net reversal from fund for general banking risks + 19 - • Minority interests - 20 - 31 - 35% • Net income 90 175 - 49% - 22% Income statement (Natexis Banques Populaires) (2)

  5. - 1% 353 349 336 + 19% + 11% - 8% + 3% - 34% 160 149 146 145 144 134 131 127 121 99 91 87 80 29 19 Corporate & Specialized Capital Markets Private Equity Banking, Asset International Financing Financial and Management & Banking Technology Insurance Services H1 01 H2 01 H1 02 Net banking income by business line • In EURm

  6. + 3% 70.1 67.8 + 1% Specialized financing + 4% Corporate lending Corporate & International Banking + 2% Other financing* Average outstanding loans and commitments • In EURbn(on- and off-balance sheet) * Asset financing, acquisition financing, trade finance, commodity financing

  7. Employeesavings plans 15% + 4.4 - 1.9 Managed funds55% 72.4 Private assetmanagement 3% 69.9 Valuation Long-term 20% Net new money Internationalestateplanning 2% Money market 35% Real estatemanagement 1% Insurance 24% EUR 72.4bnat June 30, 02 Assets under management • In EURbn

  8. Number of employees (FTE)*: 7,902 at June 30, 2002 H1 02 H1 01 EURm Change Operating expenses and Employees • Operating expenses 613 589 + 4% • Payroll costs 323 317 + 2% • Other expenses, depreciation and amortization 290 272 + 6% • Cost/income ratio 69.7% 61.3% * Permanent and fixed term contracts

  9. Gross operating income Provisions for loan losses Gross operating income and provisionsfor loan losses • In EURm

  10. June 30, 02 Dec. 31, 01 EURbn • Specific provisions + Industry and country risk provisions + Fund for general banking risks • Risk-weighted assets 3.3% 3.4% Credit risk - Coverage of non-performing loans • Total loans 56.6 53.4 • Non-performing loans 1.68 1.63 • Non-performing loans as % of total 3.0% 3.1% • Specific provisions 1.01 1.00 • Provision rate 60.3% 61.3%

  11. Credit risks 51.7 51.5 Corporate & International Banking 37.4 38.6 Specialized Financing 4.8 4.8 Other 9.5 8.6 Market risks 5.7 5.6 Total risk-weighted assets 57.4 57.1 June 30, 02 Dec. 31, 01 EURbn Risk-weighted assets

  12. Interim net income • In EURm

  13. H1 02 2001 • Earnings per share (1) EUR 4.1 EUR 6.7 • NAV per share (2) EUR 79.1 EUR 84.6(excluding goodwill) NAV per share (2) EUR 85.3 EUR 87.6 • ROE 5.1% (3) 9.2% (3) EPS and ROE (1) Based on average number of shares (43,333,000 in 2001 and 44,314,000 in first-half 2002) (2) Based on number of shares at period-end (44,314,352 at December 31, 2001 and 45,088,995 at June 30, 2002) (3) Annualized basis

  14. Investment Banking18% Investment Banking10% EUR 21m EUR 163m Services25% EUR 54m EUR 291m EUR 444m Services33% EUR 137m Financing49% Financing65% Income before exceptionals by core business Net banking income Income before exceptionals (1) (1) Income before exceptional items and tax, excluding investment incomefrom proprietary portfolios

  15. June 30, 02 Dec. 31, 01 EURm Regulatory capital • Regulatory capital (1) 5,736 5,602 • Tier One 3,981 4,135 • o/w Fund for General Banking Risks 244 263 • o/w preferred stock 474 512 • Tier Two and Tier Three 1,755 1,467 • Risk-weighted assets 57,357 57,102 • Tier One ratio 6.9% (2) 7.2% (1) Bank for International Settlements definition (2) 7% following the July 2002 acquisition of Coface and the preferred stock issue

  16. Natexis Banques Populaires CAC 40 07/02/01 08/01/01 08/31/01 09/30/01 10/30/01 11/29/01 12/29/01 01/28/02 02/27/02 03/29/02 04/28/02 05/28/02 06/27/02 07/27/02 08/26/02 Ownership structure and share price • Ownership structure at June 30, 2002 • Banque Fédérale des Banques Populaires 74.7% • Public and other shareholders 25.3% o/w employees 4.7% o/w DZ Bank 2.0% Source : Datastream

  17. External growth operations

  18. External growth operations 1 - COFACE

  19. Coface: transaction overview (1) Main stages • Starting point: NBP owns 19.14% of Coface • March 29: NBP agrees to purchase Scor's 35.26% interestin Coface • June 26: NBP acquires Crédit Agricole's interest in Coface • NBP owns 21.72% of Coface • July 4: Coface shares purchased from Scor • NBP owns 56.64% of Coface • July 19: NBP launches simplified cash offer for remaining Coface shares  At the close of the offer period (August 2) Natexis Banques Populaires owns 98.04% of Coface's capital and 98.63%of the voting rights

  20. Coface: transaction overview (2) Total cost of the transaction • Offer price ( = price paid to Scor): EUR 60.55 • Number of shares purchased: • from Crédit Agricole S.A.: 360,926 • from SCOR: 4,554,848 • shares tendered to the offer: 5,401,950 • Total cost for Natexis Banques Populaires: EUR 624m

  21. Coface: accounting impact (1) Consolidation method • Up to June 30, 2002, Coface S.A. accounted for by the equity method • From July 1, 2002, Coface and its subsidiaries fully consolidated Full-year impact on Natexis Banques Populaires income statement (basis: 2001 figures)(1) • Incremental net banking income: EUR 434m • Incremental gross operating income: EUR 63m • Incremental income before exceptional items and tax: EUR 58m • Incremental net income: EUR 17m (1) Including carrying cost, goodwill amortization, effect of change in consolidation method

  22. Coface: accounting impact (2) Treatment of goodwill • Goodwill: EUR 74m, amortized over 10 years • Effect of fair value adjustment to original interest:+ EUR 50m credited to reserves Impact on Natexis Banques Populaires balance sheet (basis: balance sheet at December 31, 2001) • Total assets: + 2% Coface: EUR 2.2bn / NBP: EUR 110.3bn

  23. Coface: synergies (1) Opportunities identified by joint working groups:4 main opportunities in the short-term • To sell Coface products and services via the Banques Populaires Group networks: • Receivables management services, through a new Banques Populaires Group offer based on the Coface @rating solution • Cross-selling of Unistrat or Globalliance policiesby Natexis Banques Populaires • Marketing of the Coface offer by the Banques Populaires partner networks in Europe (DZ Bank in Germany, ÖVAG in Austria) • To develop, in France, the Banques Populaires Group's offer in: • Credit insurance, with an offering targeted at VSME/SMEs marketed under the Banque Populaire brand • Export and multi-domestic factoring, drawing on Coface's international resources in the areas of recovery and local collection management

  24. Coface: synergies (2) • To move up a gear in international development, in: • Factoring: by developing a common strategy around Coface's experience in multi-channel distribution and Factorem's experiencein managing very large volumes of invoices. Priority markets: Germany, Italy, UK, Spain • International development advice for SMEs by extending the Pramex network, backed up by the Coface international network,and rebranding part of the Pramex offer under the Coface name • To pool resources, in areas using similar techniques:credit insurance and factoring Estimated incremental revenues: EUR 130m (in 2007)

  25. Coface: first steps in the integration process • Changes in the composition of the Coface Board to reflect new ownership structure (shareholders' meetingto be called) • Adoption by Coface of the corporate governance rules applied by Natexis Banques Populaires and the Group • Enhanced management reporting, by including Cofacein the Natexis Banques Populaires management reporting system as from October 2002

  26. External growth operations 2 - ARNHOLD & S. BLEICHROEDER

  27. A& S. Bleichroeder: overview of the company • A & S. Bleichroeder ("ASB"), based in the US, is a wholly-owned subsidiary of A & S. Bleichroeder Holdings,a family-owned company • ASB offers a full range of equities brokerage and corporate finance services to a client base made up of institutions, companies and high net worth individuals • Number of staff: 230 (including 15 analysts) 2001 net banking income: USD 77m • ASB has a long-standing presence on Wall Street and has been consistently profitable. It represents a good strategic fitwith Natexis Banques Populaires' capital markets business: • ASB is a specialist in European equities • Its business approach represents a good fit with that of Natexis Capital

  28. A& S. Bleichroeder: strategic rationalefor the acquisition (1) • ASB fits in well with Natexis Banques Populaires' strategy: • Internationalization • Development of the Capital Markets business's corporate client-base • ASB will join the Capital Markets business line, as part of the Equities business currently organized around Natexis Capital • ASB will be renamed Natexis Bleichroeder.Natexis Capital and Natexis Bleichroeder will have the same Chief Executive • Risks will be managed on a centralized basis • Measures will be taken to retain and motivate key ASB personnel

  29. A& S. Bleichroeder: strategic rationalefor the acquisition (2) • ASB will add to the growth potential of the Equities business: • Increased placing capacity in international markets for: • block sales negotiated on behalf of the Group's corporate clientsand European institutional investors • primary market transactions, helping the Group to win a bigger shareof new issues • Enhanced international equities research capability for US and European institutional investors • Increased trade execution capacity, covering the majority of the world's stock markets

  30. A& S. Bleichroeder: timetable and terms • July 1, 2002: acquisition agreement signed • Closing, following the Natexis Banques Populaires shareholders' meeting scheduled for December 2002 • Acquisition price: USD 105m to be paid in Natexis Banques Populaires shares • The new shares will be issued at a price equal to the averageof the closing prices quoted over the fifteen trading days precedingthe date of publication of the notice of shareholders' meeting • Acquisition will be accounted for by the pooling of interests method • Goodwill (USD 100m) written off to reserves

  31. Appendices

  32. Corporate & International Banking Core business: Financing Net banking income H1 02 = EUR 349m (up 4%) • Healthy increase in net banking income: • Robust growth in financing activity, helped by sustained development of value-added financing (asset, real estate, commodity financing, trade finance) • Slight decline in payment media and other banking service revenues, on a high basis of comparison in first-half 2001(impact of lower interest rates on float contribution) • Controlled growth in risk-bearing assets: • Average loans: EUR 63.1bn (up 6%)Risk-weighted assets at June 30, 2002: EUR 37.4bn (down 3%) • Further efficiency gains: • Cost/income ratio: 43% vs. 44% in first-half 2001 Period-on-period changes based on first-half 2001

  33. Specialized Financing Core business: Financing Net banking income H1 02 = EUR 91m (up 5%) • Factoring • Factored receivables up 2% • Net banking income down 8% to EUR 46m due to lower factoring fees and interest income • Factoring receivables at June 30, 2002 stable at EUR 1.8bn • Real estate and equipment leasing • Modest increase in average financing to EUR 5.2bn • Net banking income up 23% to EUR 45m, reflecting higher average margins and realized gains, which offset a small increase in loss provisions • Cost/income ratio: 47% (46% in first-half 2001) Period-on-period changes based on first-half 2001

  34. Capital markets Core business: Investment Banking Net banking income H1 02 = EUR 144m • Equities • Primary and secondary markets activities continue to be affected by the weak stock market conditions • AQ Euro 100 ranking: No. 1 European financial analysis team(Q1 and Q2 2002) • Acquisition of New York-based broker A & S. Bleichroeder • Fixed Income, Foreign Exchange and Derivatives • International development : • Out of 25 mandates for bond issues, 13 were from foreign issuers (Italy, Germany, etc.) • Origination and sales team set up in London • Development of financial engineering business: • Elixir securitization conduit launched (2 mandates) • Substantial rise in net banking income from Forex operations (up 50%) thanks to strong growth in written currency options • Own account trading:US-based ABM Corp. (mortgage-backed securities) achieved good results but net banking income at Natexis Arbitrage (equities and convertibles) contracted sharply Period-on-period changes based on first-half 2001

  35. EURm H1 01 H1 02 Private Equity Core business: Investment Banking Net banking income H102 = EUR 19m • Private portfolio • New investments 38 63 • Disposals (sale price) 49 123 • Managed assets, net of provisions 780 800 including unrealized gains (a) • Managed private equity funds • New investments 53 70 • Disposals (sale price) 19 64 • External capital under management excluding Euromezzanine (b) 720 720 • Total managed assets (a + b) 1,500 1,520 Unrealized gains at Dec. 31, 01: EUR 187m at June 30, 02: EUR 183m

  36. Banking, Financial and Technology Services Core business: Services Net banking income H1 02 = EUR 131m • Banking services • Net banking income up 12% to EUR 34m • Rapid expansion of SIT mass processing and electronic banking • Financial services • Net banking income down 11% to EUR 87m • 2.6 million portfolios • EUR 323bn in custody, up 5% • LineBourse: 29,300 accounts • Sharp drop in trade execution volume • Private account services • Steady business growth Period-on-period changes based on first-half 2001

  37. Asset Management Core business: Services Net banking income H1 02 = EUR 160m (up 7%) • Assets under management up 4% to EUR 72.4bn • Fund management • Money market funds: 20% growth in assets under management • Long-term funds: assets under management down 10% • Multimanager funds have got off to a good start • Employee savings plans: Interépargne has consolidated its leadership in France (market share: 21%) • 2 million accounts managed, up 12% • 11,500 clients, up 26% • Insurance: • 5% growth in assets under management and small rise in numberof life policies to 3.4 million Period-on-period changes based on first-half 2001

  38. Services Holding companies and conglomerates Aerospace, defense, electronics Energy Mechanical and electrical engineering Financial services, insurance Retailing Food Real estate Manufacturing Audivisual, publishing, cinema, advertising Construction and civil engineering Government Pharmaceuticals, healthcare International trade, commodities Telecoms (2) Consumer goods Local government services Tourism, hotels, leisure Other Credit risk, by client industry Corporate & International Banking loan book (1) (1) EUR 57.1bn (on- and off-balance sheet)(2) Telecoms industry = 0.8%, Telecoms services = 2.1%

  39. Asia and Oceania 2.8% France 73.5% Africa/Middle East 1.4% Latin America 1.7% North America 8.7% Rest of Europe 2.9% Other European Economic Area countries 9.0% Credit risk, by geographic area Corporate loans (1) (1) EUR 65.3bn (on- and off-balance sheet) including specialized financing

  40. The Banques Populaires Group

  41. Highlights of first-half 2002 (1/2) • A good overall performance • Further growth in net banking income • Ongoing investment in streamlining and growth projects • Moderate increase in provisions for loan losses • Limited decline in operating income • Cost/income ratio one of the lowest in France • Excellent results from the local banking business • Net banking income up 8% • Growth in fee and commission income • Additional branches opened

  42. Highlights of first-half 2002 (2/2) • Financing, Investment and Service Bank(Natexis Banques Populaires) • Higher net banking income from Financing and Service businesses • Sharp fall in contribution from Private Equity • Negative impact of impairment provisions on equities portfolios • Pre-tax income down on first-half 2001 but up on the second half • Stronger consolidated financial position • New external growth initiatives • Crédit coopératif • Coface • Natexis Bleichroeder

  43. H1 02 H1 01 Change EURm Consolidated income statement (Banques Populaires Group) • Net banking income 2,859 2,826 + 1% • Operating expense - 1,943 - 1,824 • Gross operating income 915 1,002 - 9% • Provisions for loan losses - 213 - 198 • Operating income 702 804 - 13% • Income from companies at equity 2 6 • Net gains on disposals of fixed assets 28 52 • Income before exceptional items and tax 732 862 - 15% • Exceptional items - 39 - 48 • Tax - 297 - 257 • Amortization of goodwill 16 18 • Net charge to fund for general banking risks - 37 - 66 • Minority interests - 49 - 79 • Net income 326 429 - 24%

  44. 2,859 2,826 Natexis Banques Populaires 30% Local banking Financing InvestmentBanking 15% 5% 10% Services 70% Interest margin Fees and commissions Net banking income in EURm Net banking income by business Net Banking Income

  45. + 7% 105.7 101.5 99.1 Privateindividuals Corporate &small businesses Other Outstanding loans (balance sheet) in EURbn Lending activities

  46. + 4% + 4% 74.6 86.4 87.0 71.7 72.4 83.5 Life insurance Corporate &small businesses Employee savings plans Private individuals Managedfunds(BPAM) Other Other Deposits* Savings products Managed savings • In EURbn * Carried in the banks' balance sheets

  47. June 30, 02 Dec. 31, 01 Financial position and ROE (Banques Populaires Group) • Regulatory capital* (EURm) 13,237 12,501 • Tier One 10,007 9,590 • o/w Fund for General Banking Risks 1,810 1,774 • Tier Two and Tier Three 3,230 2,911 • Risk-weighted assets (EURbn) 125.1 120.8 • Provisions** / Risk-weighted assets 5.0% 5.1% • Tier One ratio 8.0% 7.9% • ROE 9.5% 13.2% * Bank for International Settlements definition** Specific provisions + general provisions + fund for general banking risks

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