Stock of Natixis SA on Monday posted its biggest gain in 3 ½ years in Paris trading after the French financial giant announced a 2 billion-euro ($2.67 billion) exceptional payment to shareholders.
Shares of Natixis, the investment-banking unit of France’s second-largest bank by branches, surged as much as 30 percent, the biggest intraday gain since August 2009, and were 29 percent higher at 3.66 euros by 4:14 p.m. in Paris. The distribution amounts to 65 cents a share, and comes on top of a proposed dividend of 10 cents a share for 2012.
“Natixis is radically positioning itself as a shareholder-friendly bank,” Florent Nitu and Kinner Lakhani, analysts at Citigroup Inc. in London, wrote in a note Monday as they upgraded the stock to buy from neutral.
Natixis plans to sell back holdings valued at 12.1 billion euros to French regional lenders Banques Populaires and Caisses d’Epargne, which jointly form its parent, Groupe BPCE, the Paris-based companies said Sunday. The sale of the stakes, held in the form of cooperative investment certificates, will simplify BPCE’s structure and increase Natixis’s capital at a time when regulators are pushing lenders to hold more reserves.
Natixis’s core tier 1 capital ratio under Basel III rules will increase, on a proforma basis, to 9.2 percent as of Jan. 1, 2013, from 9 percent.
“We can do it now because the group’s solvency and profitability allow it,” said Francois Perol, chairman of both BPCE and Natixis, on a call with journalists Sunday. No delisting is planned and the operations have no connection with the French government’s planned law to segregate investment banks’ proprietary trading, he said.
At Natixis, proprietary trading represents about 1 percent of its corporate- and investment-banking revenue, compared with about a third in 2007, Perol said.
Natixis expects to complete the operations “over the summer,” Chief Executive Officer Laurent Mignon said in an interview with Bloomberg Television Monday. While the bank plans to develop through “internal growth,” it may seek “opportunistic” acquisitions in asset management, Mignon said.
Natixis reported a 40 percent slump in fourth-quarter net income from a year earlier to 181 million euros, and a 42 percent drop in full-year profit to 901 million euros.
The lender, which had the biggest net losses of any French bank in the financial crisis following the collapse of Lehman Brothers Holdings Inc., has been profitable every quarter since mid-2009 as it benefited from a guarantee from BPCE on risky assets. Natixis reduced risk-weighted assets by 44 percent since the end of 2008 as its parent reimbursed funds to the state.
In 2012, Natixis got a 6.9 billion-euro bond refinancing from BPCE to meet higher capital requirements on its cooperative investment certificates. Natixis last year paid 268 million euros in interest to BPCE on the bonds, while profit coming from the retail-banking networks fell 58 percent to 134 million euros, according to its website.
By repaying the bonds and selling back the stakes, Natixis will get a capital boost of about 2.3 billion euros, mostly used for the exceptional payment, Mignon said.
Natixis was created in 2006, integrating 20 percent stakes in the French regional networks to provide it with a source of profits steadier than its investment-banking operations. At the end of 2012 BPCE owned 72 percent of Natixis, according to the company’s website.
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