Natixis suffers its third straight quarter of losses
Natixis suffers its third straight quarter of losses
By Adrian Cox
Published: February 26 2009 19:34 | Last updated: February 26 2009 19:34
Natixis, the French investment bank, announced a third straight quarter of losses on Thursday, as its two biggest shareholders finalised their merger under pressure from the French government.
The company said net losses were €1.62bn ($2bn) in the fourth quarter, exceeding analysts’ expectations and bringing the deficit for the year to €2.8bn. It also put aside €375m in loan provisions for client funds invested with Bernard Madoff, the US financier facing charges of securities fraud.
Natixis was hit by a wave of losses as the financial crisis bit in the second half of last year, particularly after the collapse of Lehman Brothers. Its fate has been under the political spotlight as Banque Populaire and Caisse d’Epargne, with a combined 70 per cent stake in the bank, held merger talks that would pave the way for government funding that will help shore up Natixis’ finances.
The company’s shares rose 8.7 per cent to €1.133 after the combination was confirmed on Thursday.
The shares have fallen about 95 per cent since Banque Populaire and Caisse d’Epargne combined their investment banking and asset management businesses, and floated them as Natixis, in 2006.
It plans to split the investment banking division into two parts. The loss-making parts of its investment banking division will form one separate unit, after being stung by a €1.6bn net loss after writedowns on structured credit portfolios and trading losses in the fourth quarter alone.
The group will focus on the corporate investment banking divison, which generated a €153m profit. It will scrap risky proprietary trading, and ventures in Asia and the US, to concentrate on simple services for clients. It will also step up its foreign exchange and commodities trading businesses.
“Thanks to the strong, sometimes drastic, adaptation measures taken rapidly to cut costs and reduce risks, combined with its solid capital structure and backing by a powerful group, Natixis weathered the very difficult times that the banking industry has experienced since September 2008,” the company said.
It has already embarked on a cost-cutting drive, which includes axing 800 jobs.
Caisse d’Epargne reported a €2bn loss for last year on Thursday, while Banque Populaire said it had a €468m loss.
Copyright The Financial Times Limited 2009
Print articleEmail a
Votes:31
Comments: 0