Natixis Third-Quarter Profit Falls 59% on Own-Debt Charge

Natixis (KN) SA, the investment-banking unit of France’s second-largest lender by branches, said third- quarter profit fell 59 percent as a charge related to its own debt outweighed a rebound in trading revenue.

Net income fell to 142 million euros ($181 million) from 344 million euros a year earlier, the Paris-based bank said in an e-mailed statement today. That missed the 154 million-euro average estimate of four analysts surveyed by Bloomberg.

Natixis and its parent, Groupe BPCE, entered Europe’s sovereign-debt crisis with smaller risks compared with French rivals. Credit Agricole SA, France’s third-largest bank by market value, last week posted a 2.85 billion-euro quarterly loss tied to the sale of its Greek unit Emporiki Bank.

Natixis booked a 181 million-euro pretax accounting charge stemming from the theoretical cost of buying back its own debt as market prices fluctuate. So-called credit valuation adjustments require banks to book losses when the value of their debt rises, and gains when it declines, on the theory that a loss, or profit, would be realized were the bank to repurchase that debt.

Revenue from Natixis’s capital-markets business more than doubled to 329 million euros as the interest-rate, foreign exchange, commodities and treasury activities “turned in satisfactory performances,” the bank said.

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.