Natixis shares soar on ownership overhaul

Mon Feb 18, 2013 6:08am EST

* Shares reach highest level since July 2011

* Analysts eye similar structure at Credit Agricole

* Asset management acquisitions possible

By Christian Plumb

PARIS, Feb 18 (Reuters) - Shares in Natixis rose as much as 24 percent on Monday, a day after the French investment bank said it would simplify its finances by selling its stake in the network of cooperative lenders which controls it, paving the way for higher dividends.

The bank, rescued in the financial crisis in 2009 through a government-backed merger of its retail cooperative parents, has since been undergoing a gradual restructuring aimed at selling off risky assets.

The sale of the 20 percent stake in the regional savings banks controlled by the BPCE group will trigger a 2 billion-euro ($2.7 billion) special dividend later this year. It should also boost Natixis's regulatory capital under Basel III solvency rules, analysts said.

"The transaction makes financial sense via improvement in efficiency and profitability and simplification of group structure while returning significant capital to shareholders," Citi analysts said.

Natixis's share price was up 24 percent at 3.52 euros by 1050 GMT, the highest level since July 2011, with volumes triple the 90-day average.

Some analysts said the sale could also put pressure on larger rival Credit Agricole, which has a similar 25 percent stake in its own allied group of savings banks, to do something similar.

"It is safe to say it's a direct challenge to Credit Agricole," said Yannick Naud, a portfolio manager at Glendevon King Asset Management in London.

But some others poured cold water on such talk, citing key differences between the two groups' structures and the fact that the regional banks that Credit Agricole owns a stake in are more profitable than the BPCE banks.

"If Credit Agricole did something similar their earnings would fall 17 percent," said Exane analyst Guillaume Tiberghien.

Natixis will unload the stake by selling 12 billion euros in investment certificates through which it owned a fifth of Banques Populaires and Caisses d'Epargne.

The certificates will then be cancelled. BPCE will remain a 72 percent stakeholder in Natixis.

BPCE and Natixis plan to unveil a new three-year strategic business plan in the second half of the year, Natixis executives said.

Natixis also reported a 40 percent drop in fourth-quarter net income to 181 million euros - hit by accounting adjustments on the value of its own debt - and said it would pay out a regular dividend of 10 euro cents a share.

Longer term, the sale of the BPCE certificates will also clear the way for Natixis to regularly pay out dividends of around 50 percent of earnings starting with those from 2013.

Natixis's chairman Francois Perol said in a conference call on Sunday that the restructuring could eventually clear the way for acquisitions by its asset management arm, which has 591 billion euros of assets under management as of year-end.

Natixis's other main businesses are corporate lending and specialised financial services like consumer credit. ($1=0.7490 euros) (Editing by Greg Mahlich)