LONDON, Feb 25 (IFR) - Natixis is considering pulling out of
cash equities in order to concentrate on more profitable parts
of its investment bank, following similar moves by some of its
larger rivals, including Nomura, after years of weak volumes and
Natixis plans to announce a strategic overhaul
planned for 2014-17 in the second half of this year and an exit
from cash equities is one of the options on the table, Olivier
Perquel, a member of the senior management committee for
corporate banking, told IFR.
"Like the whole banking industry, we are facing a tough
decision with respect to cash equities," he said.
"Cash equities is not a core franchise for us, but we need
the product to have continuity with clients. That is an open
question for us and we will study it closely in the upcoming
months as part of the launch of our next strategic plan for
Profit at the investment bank declined by 9% in the fourth
quarter from a year earlier to EUR159m. Its equities division
brought in EUR95m of the total EUR682m during the quarter,
bringing in far less than its fixed-income and structured
In September, Nomura said it plans to close much of its
international equities business in response to a decline in
trading volumes and increased competition from electronic
trading platforms which have increasingly grabbed trades and
eaten into brokers' margins. Electronic platforms now attract
about two-thirds of trading in Europe, up from nothing as
recently as 2000.
Natixis is going through some major changes, having decided
to sell 20% of its shares in a network of savings banks
connected to its parent company BPCE, triggering a EUR2bn
dividend to shareholders. After the payout, its Basel III Core
Tier 1 ratio will be 9.2%. Bankers touted the move as Natixis
simplifying its structure into one that would enable it to
operate more efficiently.
Perquel emphasised that no decisions had been taken on the
equity franchise yet, but that he envisaged the firm becoming
more international and focusing more on its core businesses of
structured finance, debt capital markets, commodities and
"The other big push I can anticipate is the international
side," he said.
"We have a slightly bigger international franchise than
people think, 50% of our business is generated outside of
France. We'll invest in our American and Asian platforms, and
obviously develop our EMEA platform as well. As a sense of our
commitment there, we have taken very strong team members to run
both the US and Asia."
The members he referred to were Stephane About, chief
executive officer for the Americas platform, and Francois Riahi,
chief executive officer of the Asia-Pacific platform.
"We will invest in our core businesses, including structured
finance and specific assets like commodities and
infrastructure," he said. The other major franchise is DCM,
which we will definitely continue to promote through our debt
platform which performed well and did extremely well in the
Natixis ranks second in the league table of financial
institution bonds issued in euros so far this year with eight
deals under its belt. In the fourth quarter of 2012, fixed
income and treasury at Natixis had revenues of 189, a 2%
increase from a year ago.