Natixis Jumps as Net Beats Estimates, U.S. Inflows Coming BackBy
Harris and other U.S. fund units returning to inflows: CEO
Quarterly profit at corporate and investment bank rose 51%
Natixis SA jumped in Paris trading as the French bank posted a fourth-quarter profit that beat estimates on higher investment-banking revenue and said inflows are returning to its U.S. asset-management units.
Net income climbed 57 percent to 496 million euros ($529 million), surpassing the 347 million-euro average estimate of five analysts surveyed by Bloomberg. U.S. fund-management units including Harris Associates and Loomis Sayles should return to net inflows this year, Chief Executive Officer Laurent Mignon said in an interview with Bloomberg Television on Friday.
Natixis, a unit of consumer lender Groupe BPCE, is the French bank with the highest exposure to the dollar as a proportion of its total sales, according to Citigroup Inc. analysts. Last year, it expanded in the U.S. mergers-and-acquisitions market by taking control of Peter J. Solomon, a New York-based advisory firm. Natixis’s 2016 profitability was in line with its targets and it plans to pay a dividend of 35 cents per share.
“We have a strategy to be an asset-light company,” Mignon said in the interview. “We distribute most earnings we generate.”
The company is seeking 250 million euros annual if cost savings from the end of 2019 while investing in new technology and will announce new financial targets at an investor day in November. Natixis hired Jean Raby, a former head of Goldman Sachs Group Inc.’s Paris office, as chief of its asset management, private banking and private equity businesses, taking over from Pierre Servant who will still be a member of the senior management team and an adviser to the firm.
Natixis climbed as much as 4.6 percent and was up 3.1 percent by as of 11:20 a.m., the biggest jump in the 44-member EURO STOXX Banks Index. The stock has gained 35 percent over the past 12 months, giving the company a market value of about 17 billion euros.
Earnings from corporate and investment banking rose 51 percent to 309 million euros, Natixis said. Equities trading revenue jumped 47 percent, buoyed by equity derivatives, while fixed-income sales benefited from “strong growth” in the Americas and the Asia-Pacific region.
Higher trading income and one-time gains partly related to the Coface SA unit more than offset a 25 percent drop in earnings at the investment-solutions unit. Asset management outflows stopped in the fourth quarter.