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4Q20 & 2020 results Paris Stock Exchange:KN

27 min read

Paris, February 09, 2021

4Q20 & 2020 results

4Q20 underlying net income1 at its highest level in more than two years,
despite a cost of risk that remains elevated

Positive net income in 2020 despite the COVID-19 context

2020 reported net income at +€101m and +€517m underlying1

4Q20 underlying net income1 at +€442m in 4Q20, 4Q20 underlying RoTE1 at 11.3%

Basel 3 FL CET1 ratio2 at 11.6% +330bps above regulatory requirements and
including a cash dividend of 0.06€ per share3, in line with ECB recommendations

STRONG REBOUND IN BUSINESS ACTIVITY

BUSINESSES’ UNDERLYING NET REVENUES1 AT €2.2BN IN 4Q20 AND €7.4BN IN 2020

AWM: Strong revenue generation and flow dynamics thanks to diversified strategies

Underlying net revenues1 excl. H2O AM up +21% YoY at constant FX in 4Q20 and flat YoY in 2020. 4Q20 net revenues notably benefiting from €210m of asset management performance fees (mainly DNCA and Mirova), demonstrating the diversification of the model

Natixis Investment Managers’ AuM up +6% QoQ at constant perimeter. AuM at €1,117bn4 as at end-December 2020

Positive asset management net inflows of ~€11bn4 in 4Q20 with a positive momentum across North America, Europe and Private equity

Asset management fee rate at ~38bps in 4Q20 excl. Ostrum AM, up +0.7bps QoQ

CIB: Higher net revenues, strong cost discipline and cost of risk improvement in 4Q20

Underlying net revenues1 up +2% YoY at constant exchange rate in 4Q20, reaching their highest quarterly level of the year (-15% YoY decline in net revenues in 2020, notably impacted by the dividend mark-downs in 1H20). Significant QoQ increase in net revenues coming from the financing activity as well as Investment banking/M&A. M&A revenues at ~€210m in 2020 vs. ~€130m in 2017

Underlying expenses1 well under control, down -5% YoY at constant FX in both 4Q20 (positive jaws) and 2020

Cost of risk improving vs. 3Q20, although still at elevated levels at 94bps of outstandings in 4Q20 and 128bps over 2020

Insurance: 2020 financial targets exceeded

Underlying net revenues1 up +8% YoY in both 4Q20 and 2020, translating into a similar CAGR over 2017-2020

Underlying RoE1 at ~33% in both 4Q20 and 2020 vs. a target set at ~30%

Payments: Net revenue growth in both 4Q20 and 2020 despite the impact of lockdowns

Underlying net revenues1 up +3% YoY in 4Q20 and +2% YoY in 2020

Underlying RoE1 >10% in 4Q20 and ~9% in 2020 despite lower activity related to the COVID-19 context

FINANCIAL STRENGTH

Underlying net income1 at +€442m in 4Q20 (+€323m reported) and +€517m in 2020 (+€101m reported). Underlying RoTE1 at 11.3% in 4Q20 and 3.0% in 2020

Basel 3 FL CET1 ratio2 at 11.6% as at December 31, 2020 (+40bps vs. 3Q20 proforma) including a €0.06 cash dividend per share3, in line with ECB recommendations. Ratio standing +330bps above regulatory requirements and +140bps above current target of 10.2%

Figures restated as communicated on April 20, 2020 following the announced sale of a 29.5% stake in Coface. See page 16 for the reconciliation of the restated figures with the accounting view[1] Excluding exceptional items. Excluding exceptional items and excluding IFRIC 21 in 4Q for cost/income, RoE and RoTE 2 See note on methodology 3 Proposal of a 0.06€ ordinary dividend per share submitted to the approval of the Annual General Meeting on May 28, 2021 4 €1,135bn AuM including H2O AM. Net inflows excluding H2O AM

Natixis recorded its best results in over two years in the fourth quarter of 2020, despite a cost of risk that remained elevated, as our business activity rebounded strongly enabling us to achieve positive net income over the full year.These good results demonstrate the agile nature of our business model and the unwavering commitment of our teams to serving our clients.

In Asset & Wealth Management core revenues grew strongly in the fourth quarter while assets under management reached a new high of over 1.1 trillion euros as our diversified model continued to perform. Our Corporate & Investment Banking business notched up its best quarter of the year with M&A revenues that are notably well ahead of our targets, a very tight management of costs and an improving cost of risk. Natixis Assurances, which in 2020 achieved its ambition of becoming a fully-fledged insurer at the service of the Banque Populaire and Caisse d’Epargne banks, grew revenues by 8% year-on-year both in the fourth quarter and over the full year. Our Payments business continued to expand its activities in the fourth quarter despite the lockdown measures in place in France.

Natixis has shown, through these results and its solid financial position, its capacity to create sustainable value for all its stakeholders and has furthermore proposed to restart dividend payments. With these solid foundations, Natixis is in a strong position to continue to support its clients and to launch, by the summer, an ambitious new strategic plan.

Nicolas Namias, Natixis Chief Executive Officer

4Q20 RESULTS

On February 09th, 2021, the Board of Directors examined Natixis’ fourth quarter 2020 results and approved the 2020 accounts.

€m   4Q20
restated
4Q19
restated
4Q20 vs. 4Q19
restated
  4Q20
o/w underlying
4Q19
o/w underlying
4Q20 vs. 4Q19 underlying 4Q20 vs. 4Q19 underlying
constant FX
Net revenues   2,230 2,326 (4)%   2,271 2,356 (4)% (1)%
o/w businesses   2,243 2,335 (4)%   2,243 2,335 (4)% (2)%
Expenses   (1,571) (1,606) (2)%   (1,510) (1,575) (4)% (2)%
Gross operating income   659 719 (8)%   761 781 (3)% 0%
Provision for credit losses   (159) (119)     (159) (119)    
Net operating income   500 600 (17)%   602 662 (9)%  
Associates and other items   (26) 7     9 7    
Pre-tax profit   474 607 (22)%   611 669 (9)%  
Income tax   (130) (153)     (157) (172)    
Other (incl. minority interests)   (21) (84)     (12) (82)    
Net income – group share   323 371 (13)%   442 415 6%  

Underlying net revenue evolution highlighting Natixis’ rapid recovery under normalizing market conditions with all businesses delivering YoY growth at constant exchange rate (excl. H2O AM). Underlying net revenues excl. H2O AM are up +8% YoY (+11% at constant exchange rate).

Underlying expenses are down -4% YoY reflecting the ongoing cost discipline across the board and particularly strong delivery in CIB (-7% YoY). The underlying cost/income ratio1 stands at 68.8% in 4Q20 vs. 69.1% in 4Q19. The underlying gross operating income excl. H2O AM is up +35% YoY.

The underlying cost of risk has improved QoQ although still at elevated levels. Expressed in basis points of loans outstanding (excluding credit institutions), the businesses’ underlying cost of risk worked out to 94bps in 4Q20 (o/w ~60% of COVID-19 related impacts such as IFRS9, fraudulent credit files and airlines).

Minority interests are down YoY due to AM performance fees geared towards affiliates in which Natixis owns a higher share.

Net income (group share), adjusted for IFRIC 21 and excluding exceptional items reached €395m in 4Q20. Accounting for exceptional items (€(118)m net of tax in 4Q20) and IFRIC 21 impact (€47m in 4Q20) the reported net income (group share) in 4Q20 is at €323m.

Natixis’ underlying RoTE1 reached 11.3% in 4Q20 excl. IFRIC 21 (vs. 10.8% in 4Q19).

1See note on methodology. Excluding exceptional items and excluding IFRIC 21
A cost of risk sensitivity test has been carried out with data as at end-December 2020. This would notably include the projection of a ~6% increase in the 2021 French GDP and severe assumptions across sectors of expertise incl. oil price ~$45/bbl. and significant haircuts to asset prices on real assets (e.g. ~45% for aircrafts and ~20-25% for real estate). In such a scenario, the FY21 cost of risk could reach a level comprised between ~70bps and ~90bps, potentially improving progressively vs. 2020.

Natixis’ exposure to the Oil & Gas sector stood at ~€10.0bn of net EAD1 (Exposure at Default) as at 31/12/2020 (~60% Investment Grade) of which ~€0.7bn across US independent producers and service companies which have a more limited absorption capacity of lower oil price. As at 31/12/2020, the exposure to Aviation stood at ~€3.8bn of net EAD1, was well diversified across more than 30 countries (none of which exceeding 25% of the exposure), secured for ~80% and majority Investment Grade. The exposure to Tourism & Leisure stood at ~€1.9bn of net EAD as at 31/12/2020, with ~95% being in the EMEA region, geared towards industry leaders.

Main observable impacts from the COVID-19 context in 2020 (excluding items classified as exceptional, see page 6)2

€m   1Q20 2Q20 3Q20 4Q20   2020
Net revenues   (288) (106) 59 107   (226)
Seed money portfolio mark-downs AWM (32) (17) 18 60   30
 – Listed   (34) 25 16 30   36
 – Unlisted   2 (42) 3 31   (6)
Dividend mark-downs on equity products CIB (130) (143) 1 (11)   (283)
CVA/DVA impact CIB (55) 1 26 43   16
FVA impact Corporate Center (71) 53 14 15   10
Cost of risk CIB (115) (210) (190) (95)   (610)
Total pre-tax profit impact   (403) (316) (131) 12   (836)
               
CET1 capital   (507) 342 104 336   275
OCI   (389) 299 70 294   274
PVA   (118) 43 34 42   1
Risk-weighted assets (€bn)   3.2 6.7 (4.4) (0.5)   4.9
Credit RWA   1.7 0.9 (0.6) 0.2   2.1
 – RCF drawdowns & new money3   1.7 0.4 (0.4) 0.0   1.7
 – State-guaranteed loans3   0.0 0.5 (0.2) 0.2   0.4
Market RWA   1.0 6.0 (3.4) (1.7)   1.9
CVA RWA   0.5 (0.2) (0.4) 1.0   0.9
Total CET1 ratio impact (bps)   (90)bps (40)bps 60bps 20bps   (45)bps

P&L: All net revenues that had been indicated as recoverable upon market conditions have now been recovered (seed money, XvA).

Capital: All CET1 capital impacts that had been indicated as recoverable upon market conditions have now been recovered (OCI, PVA). The full-year CET1 ratio impact from the COVID-19 context is estimated at ~(45)bps (Credit and Market RWA).

1 Energy & Natural Resources + Real Assets perimeters 2 Not exhaustive. Seed money data have been restated in 4Q to better reflect management view 3 Management data, gross. ~€0.4bn RWA impact from state-guaranteed loans as at end 4Q20 o/w ~€0.1bn related to the guarantee not being effective yet as at 31/12/20

2020 RESULTS

€m   2020
restated
2019
restated
2020 vs. 2019
restated
  2020
o/w underlying
2019
o/w underlying
2020 vs. 2019 underlying 2020 vs. 2019 underlying
constant FX
Net revenues   7,306 8,485 (14)%   7,405 8,466 (13)% (12)%
o/w businesses   7,360 8,365 (12)%   7,374 8,365 (12)% (11)%
Expenses   (5,828) (6,115) (5)%   (5,727) (6,036) (5)% (4)%
Gross operating income   1,478 2,369 (38)%   1,678 2,430 (31)% (30)%
Provision for credit losses   (851) (330)     (851) (330)    
Net operating income   626 2,039 (69)%   827 2,100 (61)%  
Associates and other items   (48) 706     23 23    
Pre-tax profit   579 2,745 (79)%   850 2,123 (60)%  
Income tax   (204) (616)     (260) (556)    
Other (incl. minority interests)   (274) (233)     (73) (197)    
Net income – group share   101 1,897 (95)%   517 1,370 (62)%  

Underlying net revenues are down -13% YoY in 2020 (-12% at constant exchange rate). They are reflecting a cumulative €(283)m impact from dividend mark-downs across Equity (CIB) due to corporates’ 2019 dividend cancellation and the related sharp moves of dividend future curves. All the other lumpy items directly or indirectly linked to the COVID-19 context that had been identified as recoverable upon market conditions have been recovered as at end-December.

Underlying expenses are down -5% YoY (-4% at constant exchange rate), demonstrating Natixis’ ability to adjust to its environment through the cost flexibility embedded in the Asset management multiboutique model (-6% YoY) and ongoing cost discipline across the organization (e.g. CIB down -5% YoY, Corporate Center down -24% YoY excl. SRF). The underlying cost/income ratio1 stands at 77.3% in 2020 vs. 71.3% in 2019. The underlying gross operating income excl. H2O AM is down -16% YoY.

The underlying cost of risk reflects the COVID-19 context (~€610m related impacts). Expressed in basis points of loans outstanding (excluding credit institutions), the businesses’ underlying cost of risk worked out to 128bps in 2020 (o/w ~70% of COVID-19 related impacts such as IFRS9, fraudulent credit files and airlines) and is consistent with the outcome of the sensitivity analysis run with 1Q20 results.

Minority interests are down YoY due to AM performance fees geared towards affiliates in which Natixis owns a higher share.

Net income (group share) excluding exceptional items reached €517m in 2020. Accounting for exceptional items (€(416)m net of tax in 2020) the reported net income (group share) in 2020 is at €101m.

Natixis’ underlying RoTE1 reached 3.0% in 2020 (vs. 10.0% in 2019).

1See note on methodology. Excluding exceptional items

4Q20 & 2020 RESULTS
Exceptional items

€586m positive net impact from the disposal of the retail banking activities in 1Q19: €697m capital gain minus €78m income tax minus €33m minority interests

€m   4Q20 4Q19   2020 2019
Exchange rate fluctuations on DSN in currencies (Net revenues) Corporate center (41) (31)   (86) 19
Contribution to the Insurance solidarity fund (Net revenues) Insurance 0 0   (14) 0
Real estate management strategy (Expenses)1 Business lines &
Corporate center
(23) 0   (31) 0
Transformation & Business Efficiency Investment costs (Expenses) Business lines &
Corporate center
(35) (31)   (67) (79)
Impact of Liban default on ADIR Insurance (Associates) Insurance (9) 0   (23) 0
AM affiliate management (Gain or loss on other assets & Expenses)2 AWM (29) 0   (51) 0
Disposal of subsidiary in Brazil (Gain or loss on other assets) CIB 0 0   0 (15)
Capital gain – Disposal retail banking (Gain or loss on other assets) Corporate center 0 0   0 697
Coface Fit to win (Other incl. minority interests)3 Coface 0 (6)   0 (8)
Coface capital loss (Other incl. minority interests)3 Coface 0 0   (146) 0
Coface residual stake impairment (Other incl. minority interests)3 Coface (10) 0   (57) 0
Total impact on income tax   27 22   56 (57)
Total impact on minority interests   2 2   2 (30)
Total impact on net income (gs)   (118) (44)   (416) 527

Breakdown of Transformation & Business Efficiency Investment costs by businesses

€m 4Q20 4Q19   2020 2019
AWM (20) (2)   (43) (9)
CIB (8) (12)   (11) (27)
Insurance 0 (3)   0 (6)
Payments (2) (2)   (5) (5)
Corporate center (5) (12)   (8) (33)
Impact on expenses (35) (31)   (67) (79)

1 Of which Corporate Center €(22)m in 4Q20 and €(29)m in 2020, Payments €(1)m in 4Q20 and €(2)m in 2020 2 Of which €(26)m in Gain or loss on other assets and €(3)m in Expenses in 4Q20 3 For financial communication purposes, as of 4Q20, all impacts related to Coface are shown in the P&L line “Other incl. minority interests”. From an accounting standpoint the 2020 Coface capital loss is classified in “Gain or loss on other assets” and the 2020 Coface residual stake impairment in “Associates”. See page 16 for the reconciliation with the accounting view

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see details page.6)

Asset & Wealth Management

€m   4Q20 4Q19 4Q20
vs. 4Q19
4Q20
vs. 4Q19
constant FX
  2020 2019 2020
vs. 2019
2020
vs. 2019
constant FX
Net revenues   1,003 1,109 (10)% (7)%   3,225 3,760 (14)% (13)%
o/w Asset Management1   912 1,031 (12)% (9)%   2,948 3,511 (16)% (15)%
o/w Employee savings plan   30 29 0% 0%   99 100 (1)% (1)%
o/w Wealth management   61 48 26% 26%   178 149 19% 19%
Expenses   (673) (679) (1)% 3%   (2,341) (2,483) (6)% (5)%
Gross operating income   330 430 (23)% (22)%   884 1,277 (31)% (30)%
Provision for credit losses   (7) 2       (27) (8)    
Associates and other items   (1) 2       (7) 5    
Pre-tax profit   322 434 (26)%     850 1,274 (33)%  
Cost/income ratio2   67.2% 61.3% 5.9pp     72.6% 66.0% 6.6pp  
RoE after tax2   19.2% 19.1% 0.1pp     11.7% 14.9% (3.2)pp  

AWM excluding H2O AM

€m   4Q20 4Q19 4Q20
vs. 4Q19
4Q20
vs. 4Q19
constant FX
  2020 2019 2020
vs. 2019
2020
vs. 2019
constant FX
Net revenues   1,012 870 16% 21%   3,095 3,138 (1)% (0)%
o/w Asset Management1   921 792 16% 21%   2,818 2,889 (2)% (1)%
o/w Employee savings plan   30 29 0% 0%   99 100 (1)% (1)%
o/w Wealth management   61 48 26% 26%   178 149 19% 19%
Expenses   (663) (643) 3% 7%   (2,288) (2,383) (4)% (3)%
Gross operating income   348 226 54% 61%   807 755 7% 8%
Provision for credit losses   (7) 2       (27) (8)    
Associates and other items   (1) 2       (7) 5    
Pre-tax profit   341 230 48%     773 753 3%  

AWM gross operating income excl. H2O AM is up +54% YoY in 4Q20 and +7% YoY in 2020 (evolutions at current FX). Positive jaws for AM excl H2O AM in 4Q20 due to strong revenue generation (+16% YoY) and cost control (-10% YoY on non-comp. expenses). Regarding 2020, net revenues are stable YoY at constant exchange rate despite the COVID-19 context, demonstrating the benefits of a diversified multiboutique model. AM perf. fees reached €210m in 4Q20 mainly coming from DNCA and Mirova. 2020 perf. fees excl. H2O AM >9% of AM net revenues. 4Q20 WM perf. fees at €15m (+€9m YoY).

Asset management overall fee rate excluding performance fees at ~25bps in 4Q20 and ~38bps excl. Ostrum AM (+0.7bps QoQ). Fee rate at ~34bps (+0.1bps QoQ) for North American affiliates and at ~39bps for European affiliates excl. Ostrum AM (-0.5bps QoQ), which fee rate stands at ~4bps.

Asset management AuM are up +6% QoQ at constant perimeter (+€177bn impact from LBP AM integration) with net inflows and a positive market effect (+€59bn) more than offsetting a negative FX impact of €(20)bn (USD depreciation). As at end-December 2020, AuM reached €1,117bn excl. H2O AM and €1,135 incl. H2O AM. Strong performance of Harris Associates’ products with AuM up from ~$76bn as at end-March 2020 to ~$104bn as at end-December 2020, up >60% excluding outflows driven by market effects. AM net inflows reached ~€11bn in 4Q20. North American affiliates (~€4bn net inflows) continue to exhibit strong momentum across fixed income and growth equity strategies while Mirova remains the first gatherer of net new money on LT products in Europe. Strong demand for private assets across the board notably for AEW (real estate) in both North America and Europe and Vauban (infrastructure).
1 Asset management including Private equity 2 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see details page 6)

Corporate & Investment Banking

€m   4Q20 4Q19 4Q20
vs. 4Q19
4Q20
vs. 4Q19
constant FX
  2020 2019 2020
vs. 2019
2020
vs. 2019
constant FX
Net revenues   894 899 (1)% 2%   2,803 3,337 (16)% (15)%
Net revenues excl. CVA/DVA/Other   853 901 (5)% (3)%   2,793 3,338 (16)% (16)%
Expenses   (546) (590) (7)% (5)%   (2,088) (2,208) (5)% (5)%
Gross operating income   347 309 12% 16%   715 1,129 (37)% (36)%
Provision for credit losses   (152) (118)       (819) (312)    
Associates and other items   3 2       10 10    
Pre-tax profit   198 193 3%     (94) 827 (111)%  
Cost/income ratio1   62.2% 66.5% (4.3)pp     74.5% 66.2% 8.3pp  
RoE after tax1   7.9% 8.0% (0.1)pp     (1.1)% 8.9% (10.0)pp  

Underlying net revenues are on an upward trend with 4Q20 being the highest quarter of the year and with a +2% YoY growth at constant exchange rate vs. 4Q19.

Global markets: FICT revenues are at €252m in 4Q20, down YoY notably due to a lower contribution from Rates/FX and with stable Credit despite a high base effect. 2020 FICT revenues in line with their 2019 level. Equity revenues are at €127m in 4Q20 on the back of favorable market conditions and a strong rebound in commercial activity. EQD repositioning implemented towards end-4Q20.

Global finance: Net revenues are at €347m in 4Q20, highest quarter of the year although below a historically high 4Q19. The QoQ evolution is driven by higher portfolio revenues from Real assets, notably in Infrastructure.

Investment banking/M&A: Investment banking revenues are benefiting from strong activity levels in ECM, up both QoQ and YoY in 4Q20. M&A revenues are reaching ~€210m in 2020 (+6% YoY) i.e. above New Dimension target and vs. ~€130m in 2017.

Underlying expenses are down -7% YoY in 4Q20 (+6pp positive jaw effect) and down -5% YoY in 2020, demonstrating a continued strong discipline on costs.

The underlying cost of risk improved QoQ although remained at elevated levels. The exposure to O&G US independent producers has been further reduced to ~€0.7bn as at end-December (vs. ~€1.1bn one year ago and ~€0.8bn as at end-September), on track to reach ~€0.4bn by end-2021 and nil by end-2022.

1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see details page 6)

Insurance

€m   4Q20 4Q19 4Q20
vs. 4Q19
  2020 2019 2020
vs. 2019
Net revenues   232 216 8%   915 846 8%
Expenses   (123) (123) 1%   (491) (472) 4%
Gross operating income   109 93 17%   424 374 13%
Provision for credit losses   0 0     0 0  
Associates and other items   5 4     6 10  
Pre-tax profit   114 96 18%   430 384 12%
Cost/income ratio1   55.3% 58.9% (3.6)pp   53.6% 55.8% (2.2)pp
RoE after tax1   33.0% 26.0% 7.0pp   32.9% 28.4% 4.5pp

Underlying net revenues are up +8% YoY in 4Q20 and 2020, translating into a 2017-2020 CAGR of +8%, above New Dimension target of ~7%.

Underlying cost/income ratio1 at 55.3% in 4Q20 and 53.6% in 2020, improving by 3.6pp and 2.2pp respectively vs. prior year periods. Positive jaw effect of +7pp in 4Q20 and +4pp in 2020.

Underlying RoE1 at 33.0% in 4Q20 and 32.9% in 2020, up from 26.0% in 4Q19 and 28.4% in 2019. The 2020 New Dimension target of ~30% has been exceeded.

From a commercial standpoint: €8.1bn gross inflows2 and €3.6bn net inflows2 for Life insurance in 2020 of which €2.2bn and €1.0bn respectively in 4Q20. Share of unit-linked products in the gross inflows2 increasing sharply to ~35% across the two Groupe BPCE networks vs. ~31% in 2019. P&C premium growth of +2% YoY in 4Q20 and +5% YoY in 2020.

1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q 2 Excluding reinsurance agreement with CNP
Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see details page 6)

Payments

€m   4Q20 4Q19 4Q20
vs. 4Q19
  2020 2019 2020
vs. 2019
Net revenues   115 111 3%   431 423 2%
Expenses   (100) (93) 8%   (384) (365) 5%
Gross operating income   14 18 (19)%   46 57 (19)%
Provision for credit losses   1 (0)     2 (2)  
Associates and other items   0 (0)     0 0  
Pre-tax profit   15 17 (14)%   49 55 (11)%
Cost/income ratio1   87.6% 84.1% 3.5pp   89.2% 86.5% 2.7pp
RoE after tax1   10.1% 12.4% (2.3)pp   8.5% 10.0% (1.5)pp

Underlying net revenues are up YoY in both 4Q20 and 2020 despite the two lockdown periods in France: March-May and November-December:

  • Payment Processing & Services: Net revenues are up +3% YoY in 4Q20 and +4% YoY in 2020 despite a number of card transactions processed slightly down vs. 2019. Contactless transactions are accounting for more than 40% of transactions in 4Q20. Implementation of the Group Payment Program through the ramp-up of the first pilots (Caisses d’Epargne) on a new non-card platform;
  • Merchant Solutions: PayPlug strongly benefited from its positioning across small and medium-sized merchants seeking to diversify their distribution channels towards online (business volumes x2.2 YoY in 4Q20 and x2.3 YoY in 2020) and with a strong acceleration within Groupe BPCE retail networks (business volumes x6.9 YoY in 2020). Dalenys continued to exhibit good business volume growth at +25% YoY in 4Q20 (+16% YoY in 2020);
  • Prepaid & Issuing Solutions (Benefits Solutions): Issuing volumes for the Reward activities (Titres Cadeaux) are up +15% YoY in 4Q20 and +3% YoY for meal vouchers. Strong inflection on the Comitéo marketplace activity reflecting latest commercial successes.

Underlying RoE1 at 10.1% in 4Q20 and 8.5% in 2020 (10.0% in 2019).

1 See note on methodology. Excluding exceptional items and excluding IFRIC 21 in 4Q

Unless specified otherwise, the following comments and data refer to underlying results, i.e. excluding exceptional items (see details page 6)

Corporate Center

€m   4Q20 4Q19 4Q20
vs. 4Q19
  2020 2019 2020
vs. 2019
Net revenues   28 21     31 101  
Expenses   (67) (90) (26)%   (423) (508) (17)%
SRF   (0) (0)     (165) (170) (3)%
Other   (67) (90) (26)%   (257) (338) (24)%
Gross operating income   (39) (69) (44)%   (391) (407) (4)%
Provision for credit losses   (1) (2)     (8) (8)  
Associates and other items   2 (0)     14 (2)  
Pre-tax profit   (38) (71) (47)%   (385) (417) (8)%

Underlying net revenues are embedding a positive €15m FVA (Funding Value Adjustments) impact in 4Q20. The €(71)m adjustment taken in 1Q20 has now been fully reversed with normalizing market conditions leading to a cumulative €10m positive impact over 2020 (vs. +€17m in 2019).

Underlying expenses are down more than -20% YoY in both 4Q20 and 2020 (excl. SRF), notably reflecting cost saving efforts being carried out across the board.

FINANCIAL STRUCTURE

Basel 3 fully-loaded1
Natixis’ Basel 3 fully loaded CET1 ratio worked out to 11.6% as at December 31, 2020.

  • Basel 3 fully loaded CET1 capital amounted to €12.1bn
  • Basel 3 fully loaded RWA amounted to €105.0bn

Main 4Q20 CET1 capital impacts:

  • +€442m related to the underlying net income group share
  • €(118)m related to exceptional items
  • €(189)m related to the projected dividend
  • +€294m related to OCI evolution on securities
  • +€42m related to the Prudent Value (PVA) evolution
  • +€70m related to software intangibles
  • €(191)m related to other effects (e.g. foreign exchange impacts)

Main 4Q20 RWA impacts:

  • +€5.2bn from Credit risk RWA incl. impact from TRIM Corporates
  • €(1.7)bn from Market RWA
  • +€1.0bn from CVA RWA
  • €(0.1)bn from other impacts

As at December 31, 2020 Natixis’ Basel 3 fully loaded capital ratios stood at 13.2% for the Tier 1 and 15.2% for the Total capital.

Proforma for the estimated 2021 regulatory impacts related to TRIM Banks and SA-CCR (~20bps cumulative negative impact post mitigation) as well as the impacts coming from Natixis’ sales of a 29.5% stake in Coface (+15bps) and 50.01% in H2O AM (+10bps, transaction agreement signed off for a sale to the company’s management), Natixis’ Basel 3 fully-loaded CET1 ratio would stand at 11.6%.

Basel 3 phased-in incl. current financial year’s earnings and dividends1
As at December 31, 2020, Natixis’ Basel 3 phased-in capital ratios incl. current financial year’s earnings and dividends stood at 11.6% for the CET1, 13.5% for the Tier 1 and 15.6% for the Total capital.

  • Core Tier 1 capital stood at €12.1bn and Tier 1 capital at €14.2bn
  • Natixis’ RWA totaled €105.0bn, breakdown as follows:
    • Credit risk: €69.0bn
    • Counterparty risk: €7.6bn
    • CVA risk: €2.3bn
    • Market risk: €13.1bn
    • Operational risk: €13.0bn

Book value per share
Equity capital (group share) totaled €19.2bn as at December 31, 2020, of which €2.0bn in the form of hybrid securities (DSNs) recognized in equity capital at fair value (excluding capital gain following reclassification of hybrids).

Natixis’ book value per share stood at €5.37 as at December 31, 2020 based on 3,151,936,839 shares excluding treasury shares (the total number of shares being 3,155,951,502). The tangible book value per share (after deducting goodwill and intangible assets) is €4.14.

Leverage ratio1

The leverage ratio worked out to 4.6% as at December 31, 2020.

Overall capital adequacy ratio
As at December 31, 2020, the financial conglomerate’s excess capital was estimated at around €3.0bn.

     1 See note on methodology

APPENDICES

Note on methodology:

The results at 31/12/2020 were examined by the board of directors at their meeting on 09/02/2021 which approved the 2020 accounts.

Figures at 31/12/2020 are presented in accordance with IAS/IFRS accounting standards and IFRS Interpretation Committee (IFRIC) rulings as adopted in the European Union and applicable at this date

Press release dated 20/04/2020 “Preparation of the 1Q20 Financial Communication” – amended below for subsequent developments

The 2019 quarterly series have been updated following the February 25, 2020 announcement regarding the sale by Natixis of a 29.5% stake in Coface to Arch Capital Group. This announcement notably translates into the following:

  • Natixis losing exclusive control over Coface in the first quarter of 2020 and the recognition of a capital loss at the date of such a loss of control of €112m based on the 2020 original sale price of €10.70 per share. An additional €34m capital loss was recognized in 3Q20 to reflect the fact that the price of the transaction was revised down to €9.95 per share;
     
  • Application of the IAS 28 standard “Investments in associates and joint ventures” to the residual stake held by Natixis in Coface. For financial communication purposes, the Financial investments division no longer exists. For financial communication purposes, as of 4Q20, all impacts related to Coface are shown in the P&L line “Other incl. minority interests”;
     
  • In addition, the value of the retained stake (accounted for under the equity method) was impacted by a €57m impairment due to the drop in the value of Coface related to the context prevailing at December 31, 2020. For financial communication purposes, these two items – capital loss and residual stake impairment – are being classified as exceptional items since the first quarter of 2020;
     
  • The prudential treatment applied to Natixis’ stake in Coface resulted in a ~€2bn risk-weighted asset release in the first quarter 2020. Upon closing of the transaction, ~€1.4bn of additional risk-weighted assets should be released i.e. ~€3.5bn in total;
     
  • The remaining Financial investments, namely Natixis Algeria as well as the private equity activities managed in run-off, are no longer isolated and are reallocated to the Corporate center, which, as a reminder, gathers the holding and the centralized balance sheet management functions of Natixis.

             
The equity method value of Coface will be re-assessed every quarter depending, among other, on the evolution of the economic context and any change in such a value will be reflected in the P&L line “Other incl. minority interests”.

Business line performances using Basel 3 standards:

  • The performances of Natixis business lines are presented using Basel 3 standards. Basel 3 risk-weighted assets are based on CRR-CRD4 rules as published on June 26th, 2013 (including the Danish compromise treatment for qualified entities).
     
  • Natixis’ RoTE is calculated by taking as the numerator net income (group share) excluding DSN interest expenses (the associated tax benefit being already accounted for in the net income following the adoption of IAS 12 amendment). Equity capital is average shareholders’ equity group share as defined by IFRS, after payout of dividends1, excluding average hybrid debt, average intangible assets and average goodwill
     
  • Natixis’ RoE: Results used for calculations are net income (group share), deducting DSN interest expenses (the associated tax benefit being already accounted for in the net income following the adoption of IAS 12 amendment). Equity capital is average shareholders’ equity group share as defined by IFRS, after payout of dividends1, excluding average hybrid debt, and excluding unrealized or deferred gains and losses recognized in equity (OCI)
     
  • RoE for business lines is calculated based on normative capital to which are added goodwill and intangible assets for the business line. Normative capital allocation to Natixis’ business lines is carried out on the basis of 10.5% of their average Basel 3 risk-weighted assets. Business lines benefit from remuneration of normative capital allocated to them. By convention, the remuneration rate on normative capital is maintained at 2%

      

Note on Natixis’ RoE and RoTE calculation: Returns based on quarter-end balance sheet in 1Q20 to reflect the announced disposal of a 29.5% stake in Coface.

[1]In line with ECB recommendations, the 2019 dividend has been reintegrated into Natixis’ capital and no dividend accrual has been carried out over 9M20 – see press release dated 31/03/2020. Dividend proposal for FY20 deducted from capital as of 4Q20
Net book value: calculated by taking shareholders’ equity group share (minus distribution of dividends proposed by the Board of Directors but not yet approved by the General Shareholders’ Meeting1), restated for hybrids and capital gains on reclassification of hybrids as equity instruments. Net tangible book value is adjusted for goodwill relating to equity affiliates, restated goodwill and intangible assets as follows:

€m 31/12/2020
Goodwill 3,533
Restatement for AWM deferred tax liability & others (320)
Restated goodwill 3,213
€m 31/12/2020
Intangible assets 665
Restatement for AWM deferred tax liability & others (8)
Restated intangible assets 658

Own senior debt fair-value adjustment: calculated using a discounted cash-flow model, contract by contract, including parameters such as swap curves and revaluation spread (based on the BPCE reoffer curve). Adoption of IFRS 9 standards, on November 22, 2016, authorizing the early application of provisions relating to own credit risk as of FY16 closing

Phased-in capital and ratios incl. current financial year’s earnings and dividends: based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise – phased in. Presentation including current financial year’s earnings and accrued dividend1

Fully loaded capital and ratios: based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise – without phase-in. Presentation including current financial year’s earnings and accrued dividend1

Leverage ratio: based on delegated act rules, without phase-in (presentation including current financial year’s earnings and accrued dividend1) and with the hypothesis of a roll-out for non-eligible subordinated notes under Basel 3 by eligible notes. Repo transactions with central counterparties are offset in accordance with IAS 32 rules without maturity or currency criteria. Leverage ratio disclosed including the effect of intragroup cancelation – pending ECB authorization

Exceptional items: figures and comments on this press release are based on Natixis and its businesses’ income statements excluding non-operating and/or exceptional items detailed page 6. Figures and comments that are referred to as ‘underlying’ exclude such exceptional items. Natixis and its businesses’ income statements including these items are available in the appendix of this press release

Restatement for IFRIC 21 impact: the cost/income ratio, the RoE and the RoTE excluding IFRIC 21 impact calculation in 4Q20 takes into account ¼ of the annual duties and levies concerned by this accounting rule

Earnings capacity: net income (group share) restated for exceptional items and the IFRIC 21 impact

Expenses: sum of operating expenses and depreciation, amortization and impairment on property, plant and equipment and intangible assets

IAS 12: As of 3Q19, according to the adoption of IAS 12 (income taxes) amendment, the tax benefit on DSN interest expenses previously recorded in the consolidated reserves is now being accounted for in the income statement (income tax line). Previous periods have not been restated with a positive impact of €47.5m in 2019, of which €35.9m recognized in 3Q19 (€23.8m related to 1H19).

[1]In line with ECB recommendations, the 2019 dividend has been reintegrated into Natixis’ capital and no dividend accrual has been carried out over 9M20 – see press release dated 31/03/2020. Dividend proposal for FY20 deducted from capital as of 4Q20
Natixis – Consolidated P&L (restated)

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 1,957 2,100 2,102 2,326 1,750 1,564 1,762 2,230   (4)%   8,485 7,306   (14)%
Expenses (1,597) (1,448) (1,465) (1,606) (1,582) (1,292) (1,383) (1,571)   (2)%   (6,115) (5,828)   (5)%
Gross operating income 360 653 637 719 167 272 379 659   (8)%   2,369 1,478   (38)%
Provision for credit losses (31) (109) (70) (119) (193) (289) (210) (159)       (330) (851)    
Associates 3 8 3 6 (8) 1 2 (1)       21 (6)    
Gain or loss on other assets 682 (7) 9 1 (0) 4 (20) (25)       685 (42)    
Change in value of goodwill 0 0 0 0 0 0 0 0       0 0    
Pre-tax profit 1,015 545 579 607 (34) (13) 152 474   (22)%   2,745 579   (79)%
Tax (201) (149) (114) (153) (13) (5) (56) (130)       (616) (204)    
Other (incl. minority interests) (50) (50) (49) (84) (157) (39) (57) (21)       (233) (274)    
Net income – group share 764 346 415 371 (204) (57) 39 323   (13)%   1,897 101   (95)%

Figures restated as communicated on April 20, 2020 following the announced sale of a 29.5% stake in Coface. See below for the reconciliation of the restated figures with the accounting view

Natixis – Reconciliation between management and accounting figures

2019

M€ 2019
sous-jacent
  Eléments exceptionnels   2019
retraité
Retraitement Coface Contribution résiduelle du périmètre cédé
(ex SFS)
2019
publié
Produit Net bancaire 8 466    19   8 485  712  22 9 219
Charges -6 036   – 79   -6 115 – 517 – 22 -6 655
Résultat brut d’exploitation 2 430   – 60   2 369  195  0 2 564
Coût du risque – 330    0   – 330 – 2  0 – 332
Mise en équivalence  21    0    21  0  0  21
Gain ou pertes sur autres actifs  2    683    685  7  0  692
Résultat avant impôt 2 123    622   2 745  200  0 2 945
Impôt – 556   – 60   – 616 – 53  0 – 669
Autres (incl. intérêts minoritaires) – 197   – 36   – 233 – 147  0 – 380
Résultat net – pdg 1 370    527   1 897     1 897

Natixis – IFRS 9 Balance sheet

Assets (€bn) 31/12/2020 31/12/2019
Cash and balances with central banks 30.6 21.0
Financial assets at fair value through profit and loss1 210.4 220.5
Financial assets at fair value through Equity 13.2 12.1
Loans and receivables1 112.6 119.2
Debt instruments at amortized cost 1.9 1.6
Insurance assets 112.7 108.1
Non-current assets held for sale 0.7 0.0
Accruals and other assets 6.8 7.6
Investments in associates 0.9 0.7
Tangible and intangible assets 1.9 2.1
Goodwill 3.5 3.9
Total 495.3 496.8
     
Liabilities and equity (€bn) 31/12/2020 31/12/2019
Due to central banks 0.0 0.0
Financial liabilities at fair value through profit and loss1 208.5 210.2
Customer deposits and deposits from financial institutions1 114.2 102.4
Debt securities 35.7 47.4
Liabilities associated with non-current assets held for sale 0.1 0.0
Accruals and other liabilities 7.8 9.8
Insurance liabilities 104.2 100.5
Contingency reserves 1.6 1.6
Subordinated debt 3.9 4.0
Equity attributable to equity holders of the parent 19.2 19.4
Minority interests 0.2 1.4
Total 495.3 496.8

2019 restated
1 Including deposit and margin call

Natixis – 4Q20 P&L by business line

€m AWM CIB Insurance Payments Corporate Center   4Q20
restated
Net revenues 1,003 894 232 115 (13)   2,230
Expenses (696) (555) (123) (103) (94)   (1,571)
Gross operating income 307 339 109 12 (107)   659
Provision for credit losses (7) (152) 0 1 (1)   (159)
Net operating income 300 187 109 13 (108)   500
Associates and other items (27) 3 (4) 0 2   (26)
Pre-tax profit 273 190 105 13 (106)   474
          Tax   (130)
          Other (incl. minority interests)   (21)
      Net income (gs)   323

Asset & Wealth Management

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 773 932 945 1,109 774 704 744 1,003   (10)%   3,760 3,225   (14)%
Asset Management1 742 900 908 1,061 733 668 704 942   (11)%   3,611 3,047   (16)%
Wealth management 31 32 37 48 41 36 40 61   26%   149 178   19%
Expenses (558) (605) (648) (681) (579) (537) (575) (696)   2%   (2,492) (2,387)   (4)%
Gross operating income 216 327 297 428 195 167 169 307   (28)%   1,268 838   (34)%
Provision for credit losses 1 (2) (8) 2 1 (11) (10) (7)       (8) (27)    
Net operating income 216 325 289 430 195 156 159 300   (30)%   1,260 811   (36)%
Associates 0 0 0 0 0 0 0 0       1 1    
Other items (2) (2) 8 1 (2) (3) (23) (27)       5 (55)    
Pre-tax profit 214 323 297 432 194 153 137 273   (37)%   1,266 757   (40)%
Cost/Income ratio 72.1% 64.9% 68.5% 61.4% 74.8% 76.3% 77.3% 69.4%       66.3% 74.0%    
Cost/Income ratio excl. IFRIC 21 71.6% 65.1% 68.7% 61.5% 74.3% 76.4% 77.4% 69.6%       66.3% 74.0%    
RWA (Basel 3 – in €bn) 12.5 13.7 13.4 14.0 14.0 14.1 14.4 14.1   0%   14.0 14.1   0%
Normative capital allocation (Basel 3) 4,364 4,407 4,555 4,581 4,604 4,623 4,602 4,585   0%   4,477 4,603   3%
RoE after tax (Basel 3)2 11.5% 15.1% 13.3% 19.0% 9.0% 8.6% 6.9% 15.5%       14.8% 10.0%    
RoE after tax (Basel 3) excl. IFRIC 212 11.8% 15.0% 13.3% 19.0% 9.2% 8.5% 6.8% 15.4%       14.8% 10.0%    

[1] Asset management including Private equity and Employee savings plan
2 Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles

Corporate & Investment Banking

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 807 847 784 899 688 519 703 894   (1)%   3,337 2,803   (16)%
Global markets 366 419 344 381 279 106 276 423   11%   1,509 1,085   (28)%
     FIC-T 251 304 258 306 367 279 216 252   (18)%   1,118 1,114   (0)%
     Equity 125 117 94 81 (32) (174) 34 127   58%   417 (45)   (111)%
     CVA/DVA desk (9) (3) (8) (6) (55) 1 26 43       (26) 16    
Global finance1 337 333 369 369 302 326 325 347   (6)%   1,408 1,300   (8)%
Investment banking2 87 90 73 145 104 100 94 126   (13)%   395 424   7%
Other 16 6 (2) 5 2 (12) 8 (3)       24 (5)    
Expenses (582) (523) (527) (602) (557) (477) (510) (555)   (8)%   (2,235) (2,099)   (6)%
Gross operating income 225 324 256 297 130 42 193 339   14%   1,102 704   (36)%
Provision for credit losses (30) (104) (59) (118) (194) (275) (199) (152)       (312) (819)    
Net operating income 195 219 197 179 (64) (232) (6) 187   5%   790 (115)   (114)%
Associates 2 3 2 2 2 2 2 3       10 10    
Other items (15) 0 (0) (0) 0 0 0 (0)       (15) (0)    
Pre-tax profit 183 222 200 181 (61) (230) (4) 190   5%   786 (105)   (113)%
Cost/Income ratio 72.2% 61.8% 67.3% 67.0% 81.1% 91.8% 72.6% 62.1%       67.0% 74.9%    
Cost/Income ratio excl. IFRIC 21 69.1% 62.7% 68.3% 67.9% 76.9% 93.6% 73.9% 63.1%       67.0% 74.9%    
RWA (Basel 3 – in €bn) 62.0 61.1 62.3 62.2 65.4 69.2 65.4 69.7   12%   62.2 69.7   12%
Normative capital allocation (Basel 3) 6,634 6,740 6,734 6,768 6,757 7,120 7,171 6,942   3%   6,719 6,998   4%
RoE after tax (Basel 3)3 7.6% 9.6% 8.5% 7.8% (2.8)% (9.5)% (0.2)% 8.0%       8.4% (1.2)%    
RoE after tax (Basel 3) excl. IFRIC 213 8.6% 9.2% 8.2% 7.5% (1.6)% (9.9)% (0.6)% 7.6%       8.4% (1.2)%    

[1] Including Film industry financing 2 Including M&A
3 Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles

Insurance

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 218 207 205 216 221 228 220 232   8%   846 901   6%
Expenses (125) (116) (112) (125) (134) (117) (117) (123)   (2)%   (478) (491)   3%
Gross operating income 93 92 93 90 87 112 103 109   20%   368 410   12%
Provision for credit losses 0 0 0 0 0 0 0 0       0 0    
Net operating income 93 92 93 90 87 112 103 109   20%   368 410   12%
Associates 0 5 1 4 (11) (2) (1) (4)       10 (17)    
Other items 0 (0) 0 0 0 (0) 0 (0)       0 0    
Pre-tax profit 93 96 94 94 76 110 102 105   12%   378 393   4%
Cost/Income ratio 57.5% 55.8% 54.6% 58.1% 60.6% 51.1% 53.1% 53.2%       56.5% 54.5%    
Cost/Income ratio excl. IFRIC 21 51.7% 57.8% 56.6% 60.1% 53.9% 53.2% 55.4% 55.3%       56.5% 54.5%    
RWA (Basel 3 – in €bn) 8.0 7.9 8.4 8.3 7.6 7.6 8.1 8.8   7%   8.3 8.8   7%
Normative capital allocation (Basel 3) 858 942 926 978 965 896 893 941   (4)%   926 924   (0)%
RoE after tax (Basel 3)1 29.4% 28.4% 27.7% 26.4% 20.7% 34.2% 32.1% 30.8%       27.9% 29.3%    
RoE after tax (Basel 3) excl. IFRIC 211 33.3% 27.2% 26.4% 25.2% 25.0% 32.7% 30.5% 29.3%       27.9% 29.3%    

1Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles

Payments

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 103 105 103 111 113 86 117 115   3%   423 431   2%
Expenses (88) (94) (93) (96) (94) (96) (98) (103)   7%   (370) (391)   6%
Gross operating income 16 11 10 15 18 (10) 19 12   (22)%   52 39   (25)%
Provision for credit losses (0) (1) (1) (0) 2 0 (0) 1       (2) 2    
Net operating income 16 10 9 15 20 (10) 19 13   (16)%   50 42   (17)%
Associates 0 0 0 0 0 0 0 0       0 0    
Other items 0 0 0 (0) 0 0 0 0       0 0    
Pre-tax profit 16 10 9 15 20 (10) 19 13   (16)%   50 42   (17)%
Cost/Income ratio 84.8% 89.6% 90.1% 86.1% 83.8% 111.7% 83.9% 89.5%       87.6% 90.9%    
Cost/Income ratio excl. IFRIC21 84.1% 89.8% 90.3% 86.3% 83.2% 111.9% 84.1% 89.7%       87.6% 90.9%    
RWA (Basel 3 – in €bn) 1.1 1.2 1.1 1.1 1.1 1.2 1.1 1.1   2%   1.1 1.1   2%
Normative capital allocation (Basel 3) 356 373 385 384 391 403 414 405   5%   375 403   8%
RoE after tax (Basel 3)1 12.0% 7.3% 6.5% 10.9% 14.3% -6.6% 12.9% 8.6%       9.1% 7.3%    
RoE after tax (Basel 3) excl. IFRIC 211 12.5% 7.1% 6.3% 10.7% 14.7% -6.7% 12.7% 8.4%       9.1% 7.3%    

Standalone EBITDA calculation
Figures excluding exceptional items2

  1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
Net revenues 103 105 103 111 113 86 117 115
Expenses (88) (94) (91) (93) (94) (93) (97) (100)
Gross operating income – Natixis reported excl. exceptional items 16 11 13 18 19 (7) 20 14
Analytical adjustments to net revenues (1) (1) (1) (1) (1) (1) (1) (1)
Structure charge adjustments to expenses 6 5 5 5 6 6 6 6
Gross operating income – standalone view 20 15 17 22 24 (2) 25 19
Depreciation, amortization and impairment on property, plant and equipment and intangible assets 4 4 3 4 4 4 5 5
EBITDA 24 19 20 26 28 2 30 24

EBITDA = Net revenues (-) Operating expenses. Standalone view excluding analytical items and structure charges

[1] Normative capital allocation methodology based on 10.5% of the average RWA-including goodwill and intangibles 2 See page 6

Corporate Center

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   4Q20
vs. 4Q19
  2019 2020   2020
vs. 2019
Net revenues 55 10 64 (10) (46) 27 (22) (13)       120 (54)    
Expenses (244) (110) (84) (102) (217) (66) (82) (94)   (8)%   (540) (460)   (15)%
SRF (170) 0 0 (0) (163) (2) (0) (0)       (170) (165)   (3)%
Other (74) (110) (84) (102) (54) (64) (82) (94)   (8)%   (371) (294)   (21)%
Gross operating income (188) (100) (20) (112) (263) (39) (105) (107)   (4)%   (421) (514)    
Provision for credit losses (1) (3) (2) (2) (2) (4) (1) (1)       (8) (8)    
Net operating income (190) (103) (22) (114) (265) (43) (106) (108)   (5)%   (429) (522)    
Associates (0) 0 (0) (0) 0 (0) 0 0       0 0    
Other items 699 (5) 1 (0) 2 7 3 2       695 14    
Pre-tax profit 509 (108) (21) (114) (263) (36) (103) (106)   (7)%   266 (508)    
RWA (Basel 3 – in €bn) 8.8 9.2 9.8 9.4 9.1 9.3 9.8 9.6   1%   9.4 9.6   1%

€697m capital gain coming from the disposal of the retail banking activities in 1Q19

Md€ 1T19 2T19 3T19 4T19 1T20 2T20 3T20 4T20
Coface RWA (en Bâle 3) 3.9 3.8 3.8 4.0 1.9 1.9 1.8 1.8

4Q20 results: from data excluding non-operating items to reported data

€m 4Q20
underlying
  Exchange rate fluctuations on DSN in currencies Real estate management strategy  Transformation & Business Efficiency Investment costs AM affiliate management Impact of Liban default on ADIR Insurance Coface residual stake impairment   4Q20
restated
Net revenues 2,271   (41)             2,230
Expenses (1,510)     (23) (35) (3)       (1,571)
Gross operating income 761   (41) (23) (35) (3) 0 0   659
Provision for credit losses (159)                 (159)
Associates 8           (9)     (1)
Gain or loss on other assets 1         (26)       (25)
Pre-tax profit 611   (41) (23) (35) (29) (9) 0   474
Tax (157)   12 7 10 (2)       (130)
Other (incl. minority interests) (12)       0 2   (10)   (21)
Net income – group share 442   (29) (16) (25) (29) (9) (10)   323

Figures restated as communicated on April 20, 2020 following the announced sale of a 29.5% stake in Coface. See page 16 for the reconciliation of the restated figures with the accounting view

2020 results: from data excluding non-operating items to reported data

€m 2020
underlying
  Contribution to the Insurance solidarity fund Exchange rate fluctuations on DSN in currencies Real estate management strategy  Transformation & Business Efficiency Investment costs Impact of Liban default on ADIR Insurance AM affiliate management Coface
capital loss
Coface residual stake impairment   2020
restated
Net revenues 7,405   (14) (86)               7,306
Expenses (5,727)       (31) (67)   (3)       (5,828)
Gross operating income 1,678   (14) (86) (31) (67) 0 (3) 0 0   1,478
Provision for credit losses (851)                     (851)
Associates 17           (23)         (6)
Gain or loss on other assets 6             (48)       (42)
Pre-tax profit 850   (14) (86) (31) (67) (23) (51) 0 0   579
Tax (260)   4 26 9 19   (2)       (204)
Other (incl. minority interests) (73)         0   2 (146) (57)   (274)
Net income – group share 517   (10) (60) (21) (48) (23) (51) (146) (57)   101

Natixis – 4Q20 capital & Basel 3 financial structure
See note on methodology

Fully loaded          

€bn 31/12/2020
Shareholder’s Equity 19.2
Hybrid securities(2) (2.1)
Goodwill & intangibles (3.6)
Deferred tax assets (0.7)
Dividend provision (0.2)
Other deductions (0.5)
CET1 capital 12.1
CET1 ratio 11.6%
Additional Tier 1 capital 1.7
Tier 1 capital 13.8
Tier 1 ratio 13.2%
Tier 2 capital 2.1
Total capital 15.9
Total capital ratio 15.2%
Risk-weighted assets 105.0

Phased-in incl. current financial year’s earnings and dividends

€bn 31/12/2020
CET1 capital 12.1
CET1 ratio 11.6%
Additional Tier 1 capital 2.1
Tier 1 capital 14.2
Tier 1 ratio 13.5%
Tier 2 capital 2.1
Total capital 16.3
Total capital ratio 15.6%
Risk-weighted assets 105.0

IFRIC 21 effects by business line
Effect on expenses

€m 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20   2019 2020
AWM (4) 1 1 1 (4) 1 1  1   0 0
CIB (24) 8 8 8 (28) 9 9  9   0 0
Insurance (13) 4 4 4 (15) 5 5  5   0 0
Payments (1) 0 0 0 (1) 0 0  0   0 0
Corporate center (119) 40 40 40 (113) 38 38  38   0 0
Total Natixis (161) 54 54 54 (161) 54 54  54   0 0

Normative capital allocation and RWA breakdown – 31/12/2020

€bn RWA
EoP
% of
total
Goodwill & intangibles
2020
Capital allocation 2020 RoE
after tax
2020
AWM 14.1 15% 3.1 4.6 10.0%
CIB 69.7 74% 0.2 7.0 (1.2)%
Insurance 8.8 9% 0.1 0.9 29.3%
Payments 1.1 1% 0.3 0.4 7.3%
Total (excl. Corp. Center & Coface) 93.7 100% 3.7 12.9  
RWA breakdown (€bn) 31/12/2020
Credit risk 69.0
Internal approach 58.7
Standard approach 10.3
Counterparty risk 7.6
Internal approach 6.8
Standard approach 0.8
Market risk 13.1
Internal approach 7.1
Standard approach 6.0
CVA 2.3
Operational risk – Standard approach 13.0
Total RWA 105.0

Fully loaded leverage ratio1
According to the rules of the Delegated Act published by the European Commission on October 10, 2014, including the effect of intragroup cancelation – pending ECB authorization

€bn 31/12/2020
Tier 1 capital1 14.2
Total prudential balance sheet 383.2
Adjustment on derivatives (38.4)
Adjustment on repos2 (18.9)
Other exposures to affiliates (53.1)
Off balance sheet commitments 43.0
Regulatory adjustments (4.9)
Total leverage exposure 310.9
Leverage ratio 4.6%

[1]See note on methodology. Without phase-in – supposing replacement of existing subordinated issuances when they become ineligible
2Repos with clearing houses cleared according to IAS32 standard, without maturity or currency criteria
Net book value as at December 31, 2020

€bn 31/12/2020
Shareholders’ equity (group share) 19.2
Deduction of hybrid capital instruments (2.0)
Deduction of gain on hybrid instruments (0.1)
Distribution (0.2)
Net book value 16.9
Restated intangible assets1 (0.7)
Restated goodwill1 (3.2)
Net tangible book value2 13.0
 
Net book value per share 5.37
Net tangible book value per share 4.14

2020 Earnings per share

€m 31/12/2020
Net income (gs) 101
DSN interest expenses on preferred shares adjustment (119)
Net income attributable to shareholders (19)
Earnings per share (€) (0.01)

Number of shares as at December 31, 2020

  31/12/2020
Average number of shares over the period, excluding treasury shares 3,151,319,957
Number of shares, excluding treasury shares, EoP 3,151,936,839
Number of treasury shares, EoP 4,014,663

Net income attributable to shareholders

€m 4Q20 2020
 Net income (gs) 323 101
 DSN interest expenses on preferred shares adjustment (27) (119)
 RoE & RoTE numerator 296 (19)

[1] See note on methodology 2Net tangible book value = Book value – goodwill – intangible assets

RoTE1

€m 31/12/2020
Shareholders’ equity (group share) 19,229
DSN deduction (2,122)
Dividend provision (189)
Intangible assets (658)
Goodwill (3,213)
RoTE Equity end of period 13,047
Average RoTE equity (4Q20) 12,972
4Q20 RoTE annualized with no IFRIC 21 adjustment 9.1%
IFRIC 21 impact (47)
4Q20 RoTE annualized excl. IFRIC 21 7.7%
Average RoTE equity (2020) 13,238
2020 RoTE annualized excl. IFRIC 21 (0.1)%

RoE1

€m 31/12/2020
Shareholders’ equity (group share) 19,229
DSN deduction (2,122)
Dividend provision (189)
Unrealized/deferred gains and losses in equity (OCI) (614)
   
RoE Equity end of period 16,303
Average RoE equity (4Q20) 16,311
4Q20 RoE annualized with no IFRIC 21 adjustment 7.3%
IFRIC 21 impact (47)
4Q20 RoE annualized excl. IFRIC 21 6.1%
Average RoE equity (2020) 16,806
2020 RoE annualized excl. IFRIC 21 (0.1)%

Doubtful loans

€bn 30/09/2020 31/12/2020  
 
Gross customer loans outstanding 71.6 69.3  
 – Stage 1+2 67.2 65.7  
 – Stage 3 4.4 3.6  
Stock of provisions 1.8 1.4  
% of Stage 3 loans 6.1% 5.2%  
Stock of provisions / Gross customer loans 2.5% 2.0%  

[1]See note on methodology. Returns based on quarter-end balance sheet in 1Q20 to reflect the announced disposal of a 29.5% stake in Coface
Disclaimer

This media release may contain objectives and comments relating to the objectives and strategy of Natixis. Any such objectives inherently depend on assumptions, project considerations, objectives and expectations linked to future and uncertain events, transactions, products and services as well as suppositions regarding future performances and synergies.

No Insurance can be given that such objectives will be realized. They are subject to inherent risks and uncertainties, and are based on assumptions relating to Natixis, its subsidiaries and associates, and the business development thereof; trends in the sector; future acquisitions and investments; macroeconomic conditions and conditions in Natixis’ principal local markets; competition and regulation. Occurrence of such events is not certain, and outcomes may prove different from current expectations, significantly affecting expected results. Actual results may differ significantly from those implied by such objectives.

Information in this media release relating to parties other than Natixis or taken from external sources has not been subject to independent verification, and Natixis makes no warranty as to the accuracy, fairness, precision or completeness of the information or opinions herein. Neither Natixis nor its representatives shall be liable for any errors or omissions, or for any prejudice resulting from the use of this media release, its contents or any document or information referred to herein.

Included data in this press release have not been audited.

NATIXIS financial disclosures for the fourth quarter 2020 are contained in this press release and in the presentation attached herewith, available online at www.natixis.com in the “Investors & shareholders” section.

The conference call to discuss the results, scheduled for February 10, 2021 at 8:15 a.m. CET, will be webcast live on www.natixis.com (on the “Investors & shareholders” page).

Contacts:

Investor Relations: [email protected]   Press Relations: [email protected]

 

   
           
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Noemie Louvel T + 33 1 78 40 37 87   Vanessa Stephan T+ 33 1 58 19 34 16  
      Sonia Dilouya-Berthaut T+ 33 1 58 32 01 03  

www.natixis.com

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