Private Banking Does Well at New French Group

Nick Parmee

19 March 2007

Newly-formed French financial services group Natixis reported profits more than doubled to €229 million in its private equity and private banking business line. Private equity was the main contributor, with revenues of €354 million ($472 million), an increase of 74 per cent on what was seen as a good showing in 2005. Disposal gains hit a record level of more than €400 million gross. Assets under management totalled €3.2 billion, with half managed for third parties. Despite the strong level of disposals in 2006 (twice the 2005 amount), the stock of unrealised capital gains remained high at €180 million, reflecting the portfolio’s regeneration capacity, the bank said. The private banking business consists of Compagnie 1818, Banque Privée Saint Dominique and Natixis Private Banking Luxembourg. Assets under management totalled €15.5 billion at end 2006. In the asset management business line, net income group share jumped by 39 per cent to €266 million. Assets under management totalled €583 billion, an increase of 13 per cent at constant exchange rates. This makes Natixis a major player in the asset management sector worldwide, the bank claims. Assets under management are split about two-thirds/one-third between Europe - mostly in France - and the US. Net new money was €30 billion in 2006, an increase of 19 per cent. A strategy of diversifying into higher-margin products continued with the development of alternative and structured products, where AuMs rose by more than €5 billion. Natixis was created through the combination in 2006 of the corporate and investment banking and services activities of the Banque Populaire and Caisse d’Epargne groups. The financial information relating to 2005 and 2006 is stated on a proforma basis, and reflects the situation that would have arisen if the merger transactions had taken place on 1 January 2005.