Natixis Falls in Paris After Citi Cuts Stock Rating to ‘Neutral’

Natixis (KN) SA dropped in Paris trading after it reported a decline in second-quarter earnings and Citigroup Inc. analysts downgraded the stock.

Natixis, the investment-banking and asset-management unit of France’s second-largest bank by branches, fell as much as 7 percent after posting a 29 percent decline in pro-forma net income to 248 million euros ($329 million). Pretax profit from corporate and investement banking fell 6 percent as capital-markets revenue plunged 16 percent.

The stock was down 2.8 percent at 3.83 euros by 10:49 a.m., paring this year’s gains to 50 percent and giving the company a market value of 11.9 billion euros. BNP Paribas SA (BNP), France’s largest bank by market value, has risen 14 percent in 2013 while Societe Generale SA (GLE), the country’s No. 2 bank, has advanced 18 percent.

Citigroup’s London-based analysts Florent Nitu and Kinner Lakhani downgraded Natixis to neutral from buy “on valuation grounds,” they said in a note to clients today. Natixis’s announcement in February of plans to pay a 2 billion-euro exceptional dividend “appears now well priced in,” they said.

Natixis’s pro-forma figures exclude costs related to the decision to sell back holdings in Banques Populaires and Caisses d’Epargne, its parents. Natixis will make the exceptional dividend payment to shareholders on Aug. 19 after completing the sale of the holdings yesterday.

Natixis will book third-quarter gains of about 150 million euros from the transaction, offsetting costs incurred in the first part of the year, Chief Executive Laurent Mignon said by phone yesterday.

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

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