Natixis swings to a loss, hikes provisions on coronavirus, frauds

PARIS (Reuters) - French investment bank Natixis CNAT.PA on Wednesday reported a 204 million euros loss in the first quarter and dropped its 2020 targets as the coronavirus crisis hit its equity trading revenue and caused it to raise provisions for credit losses sixfold.

Natixis also postponed the presentation of its new business plan to next year as a result of the outbreak and said it was working on cost savings measures and portfolio reviews in 2020.

The loss is a fresh blow to chief executive Francois Riahi who has been trying strengthen governance and risk controls at its asset management business, after one of its units suffered outflows due to concerns over illiquid holdings.

Revenues were down 11% to 1.75 billion euros ($1.89 billion) in the first quarter, while provisions for credit losses rose to 193 million euros from 31 million euros a year ago.

Aside from the economic slowdown that led to the spike in charges, Natixis also mentioned “some frauds” in its statement, without giving further details.

“The current COVID-19 crisis is strong and its economic consequences remain uncertain. In such a context, we have decided to push back the announcement of our next strategic plan until the end of 2021,” Riahi said in a statement.

Natixis, an active bank in equity derivatives, follows in the wake of peers BNP Paribas and Societe Generale in seeing its equity trading revenue wiped out in the first quarter due to increased hedging costs and dividend cancellations by companies.

It also cited a negative impact on its net income from a capital loss following the sale of a stake in credit insurer Coface. Excluding the Coface effect, the loss would have stood at 87 million euros.

Reporting by Maya Nikolaeva, Editing by Sarah White