* Receives $300 mln to settle MBIA suit, still takes 48 mln
* CEO says environment "less favorable" since mid-March
* Core Tier 1 at 10.6 pct end-March, better than rivals
* CIB pretax profit down 36 pct but up vs Q4
By Matthieu Protard and Christian Plumb
PARIS, May 9 French bank Natixis
posted a less-than-expected 30 percent drop in quarterly
earnings on Wednesday as increasing asset management revenues
helped offset writedowns on Greek sovereign bonds and an
accounting adjustment on its own debt.
Natixis, an investment bank and asset manager controlled by
unlisted cooperative lender BPCE, reported first-quarter net
profit excluding exceptional items of 339 million euros ($438.4
million), down from 483 million in the year-ago period.
Analysts at Societe Generale had forecast profit at 315
million euros, while Oddo Securities had forecast 231 million.
Revenue fell 4 percent to 1.669 billion euros, the bank
Natixis was rescued from near-collapse during the 2008
financial crisis by a government-backed merger of its retail
It has since cut a swathe through its balance sheet, getting
a head-start on the race to build capital that is sweeping
across the industry.
The bank's core Tier 1 capital ratio under Basel 2.5
methodology - a key measure of its ability to absorb losses -
was 10.6 percent at end-March, higher than those of bigger
rivals BNP Paribas and Societe Generale.
Natixis said it had signed an agreement with U.S. bond
insurer MBIA Inc in which the bank received $300 million
in return for dropping out of a lawsuit challenging MBIA's 2009
The settlement, which will result in a 4.7 billion euro
reduction in the BPCE group's risk-weighted assets, still forced
it to take a 48 million euro charge against pretax profits.
It also wrote down 19 million euros on Greek debt.
Pretax profit at the bank's core corporate and investment
bank fell 36 percent from a year ago but surged 48 percent from
a depressed fourth quarter.
Natixis Chief Executive Laurent Mignon told reporters on a
conference call that the bank had benefited from "much less
volatile market conditions" than in the year-ago quarter but
added that the market had been less favorable since mid-March.
Revenues in the corporate and investment bank were down 11
percent to 760 million euros, compared with a strong year-ago
quarter, while asset management revenues rose 12 percent to 411
Natixis had the biggest slice of a shrinking market in
managing bond issues in the quarter, with $16.1 billion or 15
percent of the market, according to Thomson Reuters data.
The bank's shares have gained 8.1 percent so far this year,
outperforming the European sector, which is down 2.2
percent over the same period.
That heady performance, though trimmed drastically over the
last month, is a tribute to the restructuring efforts of
Chairman Francois Perol, a former aide to President Nicolas
Sarkozy, who was drafted in three years ago to drain the
lender's swamp of risky toxic assets and better integrate it
with unlisted retail parent group BPCE.