Dominique Ferrero Chief Executive Officer
Morgan Stanley Conference – London, April 2, 2009 2008 Highlights
Solid business performance in a financial crisis context:
Increasing client business for CIB
Business Good resilience of the asset management division
Increased cross-selling between Services and the shareholders networks
2008 results hard-hit by the crisis:
Very strong market decline post-Lehman Results Sharp rise in cost of risk New writedowns in Q4-08 Underlying net income approximately €1 billion, excluding segregated assets
Drastic adaptation measures:
Crisis CIB full transformation and management renewal adaptation Cost-cutting plan extended
Close management of capital: disposal of non-strategic assets (CACEIS) and risk-weighted asset measures reduction, on a constant methodology basis
Capital structure maintained
(1) Capital Tier one ratio : 8.2% (1) Tier one ratio : higher than 9% (proforma of the second tranche of SPPE and of the ongoing structure divestment project)
Corporate deleveraging policy pursued (funded positions)
Morgan Stanley Conference 2 Strategic overview
Merger underway between Groupe Banque Populaire and Groupe Caisse d’Epargne xxx Merger of the Creation of the 2nd largest French banking group xxx parents Predominantly retail banking oriented, a diversified portfolio of other business lines (including Natixis) xxx (1) Cumulated 2008 NBI of the two groups: €19bn
xxx
Radical transformation of the CIB
The “New” Focus on client-related business CIB Product range adapted to respond to the new environment Tighter international presence
Pursuit of controlled growth strategy
Asset management: Confirmation of multi-boutique model (one of the Top 15 asset managers Other divisions worldwide)
Receivables management: ongoing rollout of all business lines in international markets
Services: development of business flows with the BP and CE networks
Management of €31bn(1) of RWA on run-off basis
Segregate assets managed on a run-off basis as they no longer correspond to Natixis’ new strategic GAPC choices
Externalize segregated assets gradually through a Workout Portfolio Management, in an attempt to optimize trade-offs between quick returns and asset price
(1) Excluding impact of the crisis / (2) As at December 31, 2008 Morgan Stanley Conference 3 Merger of the parents
Structure of the merger New group metrics(1)
` Creation of a common central body equally owned by the Banque Populaire and Caisse d’Epargne Groups (target: July / September 09) BP CEP BP+CEP
` €5bn Government contribution in the form of preferred shares Cooperative 3.4 millions 3.7 millions 7.1 millions (€3bn) and super subordinated perpetual bonds (€2bn) shareholders ` Scope : Clients 7.8 millions 26 millions 33.8 millions Integration of Natixis and retail banking and insurance stakes into new central body Employees 43,700 51,200 94,900
The two Groups’ other stakes will be lodged in holding Branches 3,391 4,780 8,171 companies owned by the networks Savings outstandings* €182bn €355bn €537bn
Benefits for Natixis Credit outstandings €139bn €298bn €437bn
` Simplified operation with a single shareholder GBP GCE GBP+GCE ` Backed by a single powerful group ` Dynamic business momentum in retail banking NBI €7.3bn €8.4bn €15.7bn B positive effect for Natixis: Tier 1 ratio 9.3%(2) 9.2%(3) 9.4%(4)
as supplier of products and services to the networks LT rating A+ / Aa3 A+ / Aa3 via cooperative investment certificates (CCI) - consolidation of 20% of the regional banks results * on- and off-balance sheet deposits ` Enhanced visibility for the new combine on international financial markets
The merger between the central bodies of Groupe Banque Populaire and Groupe Caisse d’Epargne will give birth to the second largest French banking group
(1) 2008 figures – source: Banks’ annual reports / (2) Banques Populaires aggregated accounts / (3) 8.3% excl. floor effect and 0.9% linked to the impacts of IRBA CEP advanced method (4) Including support of the French government Morgan Stanley Conference 4 Consolidated income statements
Natixis Natixis excluding GAPC
` NBI: €2.934bn ` Revenues: a decline limited to 7.5% in an ` Operating expenses(1): unfavorable context
-10%(2) vs.2007 due to the decrease of payroll fees ` Profitability: a positive result despite significant impact of crisis and a level of costs in the process ` Underlying net income: -€2.622bn of adjustment
Cost-income ratio: -1 pt vs 2007 Main impacts of financial crisis in Q4-08 Cost of risk: Credit market dislocation: ¤ very significant impact on the CIB (especially in Q4-08) NBI: -€356m / Cost of risk: -€122m ¤ rise of credit risk cost in financing activities Counterparty defaults: -€789m in cost of risk Equity and interest-rate complex derivatives (volatility and correlations): -€1,017m in NBI
€m 2007 2008 €m 2007 2008
Net banking income 6,043 2,934 Net banking income 6,907 6,386
Gross operating income 902 -1,754 Gross operating income 1,961 1,873
Cost of risk -244 -1,817 Cost of risk -70 -970
Associates 672 484 Associates 672 484
Net underlying income 1,130 -2,622 Net underlying income 1,906 987
Net income 1,101 -2,799 Net income 1,877 810
(1) Excluding restructuring costs Morgan Stanley Conference 5 Net banking income of divisions
€m 2007 2008 Q4-07 Q4-08
“New” CIB 2,574 2,857 N.A. (1) 879
Asset Management 1,710 1,358 469 330
Private Equity and Private Banking 511 191 111 -52
Services 1,466 1,477 370 350
Receivables Management 925 800 248 116
Total NBI excluding GAPC 7,186 6,683 -7%
GAPC -864 -3,452 N.A. (1) -1,335
` Good performances of the “New” CIB
` Strong resilience of AM and Services
` Tough times in Private equity and Receivables Management
(1) NBI CIB global Q4-07: -€692m
Morgan Stanley Conference 6 The “New” CIB: NBI 08: €2,857m Profile and international presence Net income 08: €370m
“New” CIB: profile
Product range adapted Focus on client-related Tighter international to the new environnement business presence
Structured finance Corporate tier one (France, Southern Sharp reduction in Asia and in the US Simple capital market products Europe) allowing for cross–selling which has Marginal offices closed Corporate mid cap (France) proved itself in times of crisis Development projects placed on the Financial institutions (Europe) back burner Simple investment products Structured finance clients Equity group, highly de-risked, by the pooling of simple derivatives and (International) brokerage activities
“New” CIB: international presence
The Americas Europe Asia Middle-East
Structured finance Financing, particularly structured Financing, particularly structured Client-oriented capital market finance finance operations (forex, interest rates, commodities) Client oriented market operations Sale of simple capital market products (Corporate, financial institutions) allowing for cross-selling with Intermediation/primary equity markets corporate clients (interest rates, forex, Plan centered on teams in London, Securitization (advisory, restructuring) Frankfurt, Madrid, Milan, Moscow and commodities) Energy sector client base, financial Dubai (backed by specialized teams Access to equity markets institutions, financial sponsors in Paris)
Morgan Stanley Conference 7 The “New” CIB: NBI 08: €2,857m Estimated financial results and main projects Net income 08: €370m
Financials in average cycle 1 Focus and develop client-oriented activities
` Fast growth of client contributions in capital market operations ` Estimated NBI: €2.5 to €3 billion ` Priority target: increase cross-selling growth, in particular simple capital market products such as interest-rate, forex, commodities ` Cost-income ratio: 61 to 63 % hedging and bonds
` ROE: 8 to 12 % Capitalize on our recognized expertise in 2 structured finance and further develop forex and commodity market operations
NBI breakdown ` Continue to grow our international client base (commodities, transport financing, project finance) ` Forex: strengthen our international organization and our cross-selling with financing operations, considering the sharp rise recorded in 2008, Average €bn 2008 especially in the United States. cycle ` Commodity Markets: merge into the fixed-income business line to offer Corporate and Institutional 0.5 0.5 / 0.6 clients an extended range of products and continue with the strong Investors (plain vanilla) growth recorded in 2008, particularly on OTC derivatives. Debt & Financing (structured) 1.0 1.0 / 1.2
Capital Markets 1.1 1.2 / 1.4 3 Strengthen information systems Total Business lines 2.6 2.7 / 3.2
Miscellaneous (including CPM) 0.3 -0.2 ` 2008: capital market operations information systems integrated ` 2009: financing systems redesigned – reduce the number of systems, Total 2.9 2.5 / 3.0 improve information quality, reorganize the department (front to back) – appreciable savings expected as from 2011 ` At the same time, investments to reinforce control systems will continue (stress tests, worldwide homogenization) Morgan Stanley Conference 8 Asset management: NBI 08: €1,358m Net income 08: €208m Ambition to become a global player confirmed AuM: €447bn
A Franco-American player … 1 In an unfavorable environment, revenues sustained by:
` Natixis Global Asset Management: one of the leading world players ` Enhanced competitiveness in core management products (euro, fixed- income products) A broad range of innovative and results-driven asset classes and management styles ` An improved positioning in targeted areas of expertise and high- margin solutions:
Recognized brands (NAM, Loomis Sayles & Co, Harris Growth equity, structured management, SRI, absolute performance Associates, AEW) Quantitative and alternative management (Alpha Simplex, Caspian Private Equity with NPE, hedged equity with Gateway acquired in 2007, etc.) ` A growth strategy embracing all world markets
… with a proven business development model Strengthening the international platform for institutional clients
Cooperation with major distributors and wealth managers (Merrill Lynch, UBS, etc.) ` A multi-specialist and multi-subsidiary model 32% 34% 38% 39% Strengthening of distribution in Asia adapted to the growth of open architecture
` A distribution platform that can be easily adapted to tap new high-potential markets in Europe, Asia and Middle-East 2 Optimized use of the various development levers ` A high degree of retail expertise in the two domestic markets, France and the USA, that can be extended to international markets ` Channeling internal resources (seed money) into subsidiaries and new teams ` A capacity to attract talent and build multi-expertise teams ` Targeted acquisitions and production or distribution partnerships, notably in Asia (joint venture with China Investment Bank)
Morgan Stanley Conference 9 Services: NBI 08: €1,477m Continued strategy of profitable growth Net income 08: €342m
Dual expertise 1 Enhanced offering to clients of retail networks
` Competitive and innovative offerings for retail ` Increased distribution of the product range to the two shareholder banking clients networks: consumer credit, borrower insurance and guaranteeing of home loans for Banque Populaire Group, employee savings for Specialized finance (leasing, consumer credit) Caisse d’Epargne Group Insurance and sureties (life, death/disability, non-life, financial sureties and guaranties) ` Creation of a Specialized Finance business line: leasing and consumer credit Employee benefit planning (employee savings, collective insurance, service vouchers) ` Development of service offering in international markets: Pramex
International services (Pramex, Algeria)
` Comprehensive and high-performance 2 Robust revenue growth sustained by: technological solutions for banks and institutionals Roll-out of new products: health insurance, home help pay checks, etc. Securities (custody, depositary banking, fund ` administration) ` Expansion of client base: Payments (e-money, transactions) own activity: multi-channel approach in life insurance, etc.
by supporting the shareholder networks in France (HSBC regional banks notably in consumer credit, leasing, factoring and employee savings) or international markets
Strong client levers in liaison with CIB’s Coverage (employee benefit planning, securities)
` Deployment of the offering across the Caisse d’Épargne and Banque Populaire networks 3 Maintenance of a high level of productivity
` Open platforms: providing Securities and/or ` Completion of IT and organizational projects (insurance and Payments services to other networks (Barclays, consumer credit) HSBC, etc.) ` Synergies obtained as a result of merging the Securities platforms (in each of the two retail and institutional sub-business lines) Morgan Stanley Conference 10 Receivables management: NBI 08: €800m Continuing medium-term growth potential Net income 08: €71m
An expert in Receivables Management A business line with growth potential despite a 1 more difficult short-term environment reflected in a higher loss ratio ` Genuine competitive advantages
Comprehensive service offering more diversified than that ` Activities driven by long-term world growth of competitors ` Strong growth potential of the US and Asian markets Access to a larger client base, particularly through factoring
Density of worldwide distribution network ` Less price pressure
` Recognized profitable growth
Revenue growth above that of competitors since 2004 2 Targeted development lines
Sharply rising penetration rate across the Group (networks, Natixis client bases) ` Development of factoring, the main contributor to the growth of the business line ` International expansion across all business lines with emphasis on the development of credit insurance outside A comprehensive offering Europe
Business Solvency and marketing information information No. 5 in the world 3 Finalization of tool sharing Credit Debt collection service management No. 5 in the world ` Tightening of cost control: deployment of IT platforms by Credit Protection against client default risks business line insurance No. 3 in the world ` Pursuit of generation of synergies between business lines (risk management, data production, cross-disciplinary sales forces) Receivables management financing service Factoring No. 6 in the world
Public sector Management on behalf of the State of export credit procedures guaranties (canvassing insurance, forex insurance, etc.)
Morgan Stanley Conference 11 NBI 08: €191m Private equity and Private banking: Net income 08: -€10m Continued growth in a less favorable short-term context
1 Positions in private equity maintained
` Sustained leadership position in the small-cap segment ` Development of the mid-cap segment (€150-500m) ` Increased diversification in order to consolidate the revenue base:
France/International
Proprietary/Third party
Development capital / LBOs / Venture capital / Funds of funds
` Satisfactory level of capital gains generated in 2008, but rise in level of provisions in 2nd half of 2008 and fall in unrealized capital gains
Private banking / Wealth management: capitalizing on the asset-gathering potential of a unique 3-network 2 positioning
` Confirmation of the 3-point business model: Wealth management (especially Natixis’ client bases), SME clients of the Banque Populaire and Caisse d’Epargne networks and IFAs via the CFP ` Growth of capital inflows sought in each of the business line’s development lines ` Development of the activity in international markets by accompanying network clients who have moved abroad and Natixis clients ` Rationalization of the business line (merger of the French entities) and generation of synergies
Morgan Stanley Conference 12 GAPC: Objectives, ressources and actions
Objectives Resources
` Segregate assets managed on a run-off basis as they To manage those segregated activities, a team set up no longer correspond to Natixis’ new strategic choices with the following distinctive features:
Either, for lack of synergies with the other businesses ` Dedicated: to enable other teams to focus on developing Or because the profit generated does not compensate for the target businesses and make it easier to determine capital or cash tied in objectives Or because their profile no longer corresponds to Management’s strategy ` Relatively small: to limit management fees
` Externalize segregated assets gradually through a ` Expert: top level profiles to handle an important task Workout Portfolio Management, in an attempt to optimize trade-offs between quick returns and asset ` New for the most part: to guarantee and streamline price change management
Current organization Risk management
` Scope determined ` New limits set in order to reduce risks in each portfolio
` Target structure presented to employee ` Quick depreciation of funds-linked structured products representatives (net cash at risk down by €3.2 billion in Q4-08) ` Sale and quick depreciation of assets (€1.820bn in Q4-08 ` Managers in charge of the segregated portfolios and €750m since January 1, 2009) determined ` Gradual hedging of open positions on derivatives ` Run-off targets determined per portfolio (interest rate, equity, credit) to:
return to a before crisis VaR level, despite higher market volatility
Morgan Stanley Conference 13 GAPC: Financials & Scope
Financials Scope
€bn Dec. 31, 08 ` NBI: largely impacted by markdowns, of which: Notional Type of assets VaR (net of RWA Comments (nature of portfolios) in €m ABS CDOs and RMBS with subprime underlying: -€1.202bn provisions) 52% IG Spread widening: -€1.033bn ABS CDOs (1) (2) 1.4 of which 3% > AA Value adjustment on monoline: -€1.269bn 94% IG Other CDOs (2) 3.7 of which 82% > AA Cost of risk 94% IG ` RMBS and Covered Bonds 11.3 Structured credit portfolios of which 84% > AA Madoff fraud: -€375m 99% IG CMBS 1.1 12.3 of which 91% > AA Collective provision on Monoline risks: -€162m 97% IG Other ABS 1.1 of which 78% > AA Collective provision on CDPC risks: -€144 85% IG Hedged assets 25.0 of which 80% > AA 98% IG €m 2007 2008 Corporate credit portfolio 7.0 1.0 of which 73% > AA Net banking income -864 -3,452 Complex derivatives (credit) 12.7 (3) 5.9 Complex derivatives Gross operating income -1,059 -3,627 25.9 4.7 (interest rate) Complex derivatives Cost of risk -174 -847 6.1 1.3 (equity) Associates - - Funds-linked structure Cash at risk 5.7 products 5.5 Net underlying income -776 -3,609 TOTAL 31.0 (1) ABS CDOs with subprime underlying assets not hedged Net income -776 -3,609 (2) Including commuted assets (CIFG) (3) Includes a counterparty risk on CDPC: €9.7 billion notional (MtM exposure of €2.6 billion)
The segregated credit portfolios include both non-risky and risky assets, most of which are investment grade rated Today, 88% are investment grade rated, 78% of which are AAA and AA The valuation methods used do not reflect the extreme illiquidity of the current market situation but they do reflect the valuation at closing of potential losses on underlying assets at maturity
Morgan Stanley Conference 14 Transversal actions: Capital structure (1/2)
Decreasing risk-weighted assets Forecasts (on a constant methodology basis)
` Credit risks: - 7% over Q4-08, despite unfavorable ` The positive effect expected from change to advanced effect of the overall decline of counterparty ratings method (-€10 to -€15 billion) should offset the negative ` Market risks: +7% over Q4-08, at constant procycle effect of Basel II methodology, due to extreme market volatility ` The natural assets decrease in GAPC should bring risk- weighted assets down to €25 billion at the end of 2010
€bn 163.1 156.9 160.0 RWA by division 150.8 10,5 Impact of change of market risk method Market risks 18.8 19.0 16.3 16,3 (€12.5bn) 20.4 Operational 10.5 9.7 10.5 “New” CIB 102.5 risks 8.7 (1) 124,0 GAPC 31.0 130.5 121.6 Credit risks 128.5 124.0 Asset Management 3.9
PEPB 6.4
Services 10.5
Receivables Management 7.1 (Credit risks at (128.5) (124.0) (126.0) (116.7) constant dollar) Corporate Centre 1.7
March 31, 2008 June 30, 2008 Sept. 30, 2008 Dec. 31, 2008 Total 163.1 Basel II standards (1) excluding securitizations deducted from capital Morgan Stanley Conference 15 Transversal actions: Capital structure (2/2)
Solvency ratios Tier one capital at December 31, 2008
€bn ` Equity, group share(1): €15.6bn +0.7 -3.3 ` French banking sector rescue plan -1.3 +5.1 -3.2 December 2008: issue of perpetual super subordinated bonds, subscribed up to €1.9 billion by the central bodies to 15.6 reflect the issue subscribed by SPPE with BFBP and CNCE 13.4 nd 9.6 H1-09: possible access to a share of the 2 tranche by SPPE via its two shareholders (form to be determined)
` Solvency ratios(1): Equity Minority Regulatory CCI Core T1 CCI T1 (group share) interests restatements deductions capital Hybrids deductions capital Tier one ratio: 8.2% and deductions nd (3) Tier one ratio (proforma 2 tranche SPPE and ongoing assets divestment projects): superior to 9% Core Tier one ratio: 5.9% Changes in Tier one capital over Q4-08 Core Tier one ratio (taking into account ongoing divestment projects): in the range of 6.3% €bn ` Per share data(1): +1.9 Book value: 5.37€ -1.6 -0.6 +0 (2) Number of shares: 2,908,137,693 (of which 12,713,642 treasury shares) 13.7 13.4
(1) at Dec. 31, 2008 (2) including +€0.2 billion for credit institutions (held by more than 10% by Natixis) and CCIs and -€0.2 billion for T1 capital Q4-08 U Equity and reg. U 50% Hybrids T1 capital shares in securitization Sept. 30, 2008 results restatements deductions(1) SPPE Dec 31, 2008 (3) Based on the assumption of a minimum share of 0.5% of risk weighted assets allocated to Natixis Morgan Stanley Conference 16 Conclusion
` With a financial crisis of such extraordinary magnitude, Natixis has decided to focus its resources on its client bases and its long-standing expertise to provide a solid and recurring income basis in all its business lines.
` Thanks to the strong, sometimes drastic (CIB), adaptation measures taken rapidly to cut costs and reduce risks combined with its solid capital structure and backing by a powerful group (Groupe Banque Populaire + Groupe Caisse d’Epargne), Natixis weathered the very difficult times that the banking industry has experienced since September 2008.
Morgan Stanley Conference 17 Appendices Merger of the parents: Merger scenario
20 17 Banques Caisses Populaires 50 % 50 % d’Epargne
New central body
BFBP subsidiaries CNCE subsidiaries
BFBP holding •CNP (17.7%) CNCE holding company •Océor company •SMC •GCE Assurances (46.4%) •SAS SIBP (hors VBI) •DV Holding (17%) •CFF •Foncia •BCP France & Lux. (30%) •Nexity •VBI •Meilleur Taux •Other 72 % •Other subsidiaries subsidiaries CCI - 20 % CCI - 20 %
28 %
FLOAT
Morgan Stanley Conference 19 Merger of the parents: The second largest French banking group
Retail banking NBI(1) Number of retail banking clients (millions)(1)
16.6 33.8 13.2 26 26
7.4 7.1 7.1 6 5.8 13.3 9.4 7.8 6.2
CA+LCL GCE+GBP GCE CM-CIC SG BNPP GBP GCE+GBP GCE CA+LCL CM-CIC SG GBP BNPP
Two complementary networks – a balanced presence Number of branches in France(1) Penetration by client base(2) as a % 37 33
29 9100
24 7708 25 22 21 20
17
14 13 13 5148 12 4770 10 10 10 9 9 9 9 8 8 6 5 2997 2938 2200 {a} {b} {c}
CECE CA CM LCL SG BNPP CICBP BP Dominante Particuliers Dominante Pros / PME {a} : Particuliers – {b} : Professionnels – {c} : PME<100 personnes CA+LCL GCE+GBP CM-CIC GCE SG GBP BNPP (1) 2007 data - source: Credit institutions’ activity reports / (2) in number of active accounts - source: Banque de France, CSA, TNS Sofres survey of companies and banks in 2007 Morgan Stanley Conference 20 Natixis Group: Consolidated income statement: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 1,366 186 1,154 228 2,934
NBI of business divisions 1,430 282 1,230 288
Expenses -1,258 -1,238 -1,098 -1,094 -4,687
Gross operating income 108 -1,052 56 -866 -1,754
Cost of risk -93 -281 -454 -988 -1,817
Operating income 15 -1,332 -399 -1,854 -3,570
Equity method 107 193 116 68 484
Gains or losses on other assets 9 2 -1 -15 -5
Change in value of goodwill 0 1 -1 -72 -73
Income before taxes 130 -1,136 -285 -1,872 -3,163
Income taxes -5 209 87 323 614
Minority interests -20 -36 -23 6 -73
Net underlying income, group share 105 -964 -221 -1,543 -2,622
Income from discontinued operations 0 0 0 0 -
Net restructuring income 0 70 0 0 70
Net restructuring expenses -37 -123 -13 -74 -247
Net income, group share 69 -1,017 -234 -1,617 -2,799
Cost-income ratio 92% - 95% -
Average equity 16,175 15,059 15,610 15,909
End of period CAD/CRD assets (in € bn)(1) 157 151 160 163
Current ROE (after tax) 2,6% - - -
(1) CAD assets (Basel I) until Q4-07 and CRD (Basel II) from Q1-08 Morgan Stanley Conference 21 Asset Management: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 317 371 340 330 1,358
Expenses -240 -261 -232 -233 -965
Gross operating income 77 110 108 97 393
Cost of risk -1 4 -38 -20 -56
Income before taxes 78 117 73 67 335
Net underlying income, group share 49 67 44 49 208
Cost-income ratio 76% 70% 68% 71% 71%
Allocated capital 222 215 204 215 214
Annualized ROE (after taxes) 88% 125% 86% 91% 97%
Morgan Stanley Conference 22 Services: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 383 405 339 350 1,477
Insurance and sureties 92 108 77 72 349
Specialized financing 48 54 55 50 206
Employee benefit planning 24 30 19 27 99
Payments 43 39 41 45 168
Securities 167 165 139 144 615
International services 8 10 10 11 40
Expenses -243 -247 -227 -239 -955
Gross operating income 139 158 113 112 522
Cost of risk -1 -5 -7 -7 -21
Income before taxes 149 155 108 104 516
Net underlying income, group share 102 99 70 71 342
Cost-income ratio 64% 61% 67% 68% 65%
Allocated capital 1,959 1,946 2,012 1,996 1,978
Annualized ROE (after taxes) 21% 20% 14% 14% 17%
Morgan Stanley Conference 23 Receivables Management: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 244 229 211 116 800
Credit insurance 127 111 89 -12 315
Factoring 55 59 69 64 247
Information and credit management 46 40 37 49 172
Public-sector procedures 16 19 16 16 67
Expenses -176 -170 -169 -180 -696
Gross operating income 68 59 42 -64 104
Cost of risk -4 -4 -16 -4 -28
Income before taxes 66 58 30 -52 102
Net underlying income, group share 45 40 15 -29 71
Cost-income ratio 72% 74% 80% 156% 87%
Allocated capital 1,180 1,225 1,234 1,263 1,225
Annualized ROE (after taxes) 15.1% 13.2% 4.7% - 6%
Morgan Stanley Conference 24 Private Equity and Private banking: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 90 94 59 -52 191
Private Equity 62 63 33 -78 80 Private Banking 28 31 25 26 110 Expenses -43 -43 -41 -43 -170 Gross operating income 46 52 18 -94 21 Cost of risk 0 -1 -11 -1 -13 Income before taxes 46 51 6 -94 9 Net underlying income, group share 33 28 -3 -68 -10 Cost-income ratio 48% 45% 70% - 89% Allocated capital 316 384 357 404 365 Annualized ROE (after taxes) 41.5% 29% - -
Private equity: assets under management
€m Dec. 31, 2007 March 31, 2008 June 30, 2008 Sept. 30, 2008 Dec. 31, 2008 Own funds
Investments 68 99 161 159 19
Transfer at sales price 88 38 200 160 26 Assets under management 1,704 1,701 1,964 1,966 1,942
Third-party funds
Investments 97 86 70 97 87
Transfer at sales price 75 28 48 67 35
Assets under management 1,933 1,933 2,124 2,124 2,099
Morgan Stanley Conference 25 “New” CIB: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income 686 731 562 879 2,857
Coverage 125 131 122 142 522
Debt and financing 210 214 277 275 976
Capital markets 228 434 141 215 1,019
Other 123 -49 21 247 341
Expenses -485 -475 -327 -370 -1,657
Gross operating income 201 256 235 508 1,200
Cost of risk -75 -43 -265 -270 -653
Income before taxes 126 213 -31 222 530
Net underlying income, group share 86 143 -12 153 370
Morgan Stanley Conference 26 GAPC: Income statement of divisions: quarterly data
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income -289 -1 548 -280 -1 335 -3,452
Expenses(1) -44 -44 -44 -44 -175
Gross operating income -333 -1 592 -324 -1 378 -3,627
Cost of risk -13 -160 -62 -612 -847
Income before taxes -346 -1 752 -386 -1 990 -4,474
Net underlying income, group share(2) -254 -1 418 -324 -1 613 -3,609
(1) 2008 operating expenses broken down evenly by quarter (2) 2008 taxes: difference between the taxes of CIB in its former scope and the normative taxes for the CIB pérenne Morgan Stanley Conference 27 Impact of the crisis on revenues GAPC breakdown / “New” CIB
M EUR Q1-08 Q2-08 Q3-08 Q4-08 2008
Workout Portfolio Management -511 -1 492 -346 -1,417 -3,766
RMBS / ABS CDOs with subprime underlying -116 -606 -246 -234 (1) -1,202
Other CDO
CMBS Spread widening -254 -105 -23 -651 -1,033
Miscellaneous *
Value adjustment on monoline -164 -789 -263 -53 -1,269
Value adjustment on CDPC - - - -17 -17
Complex derivatives (equity and interest rate) -126 - - -712(2) -838
Revaluation of issuer spread +149 +8 +186 +250 +593
“New” CIB 103 -15 5 +134 227
Syndication writedowns -24 -15 +8 -11 -42
Equity derivatives - - -56 -305 -361
CPM 127 - 53 +360 +540
Other - - - +90 +90
TOTAL -408 -1,507 -342 -1,283 -3,540
* Correlation trading (1) including €59m for commuted subprime ABS of CDOs (2) Complex equity and rate derivates
Morgan Stanley Conference 28 Impact of the crisis on cost of risk GAPC breakdown / “New” CIB
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
WORKOUT PORTFOLIO MANAGEMENT -12 -172 -15 -511 -710
Collective provision on monoline risks - -162 - - -162
Collective provision on CDPC risks -12 -10 - -122 -144
Lehman Brothers -15 -14 -29
Madoff fraud - - - -375 -375
“New” CIB - - -167 -400 -567
File CS - - - -317 -317
Lehman Brothers - - -128 -29 -157
Icelandic banks - - -39 -54 -94
TOTAL -12 -172 -182 -911 -1,277
Morgan Stanley Conference 29 Other: Income statement of divisions: quarterly data
Retail banking (economic contribution)
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Equity method accounting (20%) 87 156 86 60 389
Accretion profit 26 32 27 19 104
Reevaluation surpluses -14 -5 -4 -20 -43
Contribution equity method accounting 99 183 109 58 449
o/w Banques Populaires 34 100 49 20 203
o/w Caisses d’Epargne 65 83 59 38 245
Taxes on CCIs -16 -21 -16 -15 -67
Restatement -23 -27 -24 -23 -96
Contribution to Natixis net income 61 135 69 20 285
Corporate center
€m Q1-08 Q2-08 Q3-08 Q4-08 2008
Net banking income -64 -96 -76 -60
Expenses -27 1 -59 15
Gross operating income -91 -95 -135 -46
Cost of risk 1 -70 -56 -74
Income before taxes -54 -119 -158 -152
Net underlying income, group share -16 -58 -79 -127
Morgan Stanley Conference 30 Balance sheet: Quarterly data
Doubtful loans: quarterly series
€ Dec. 31, 2007 March 31, 2008 June 30, 2008 Sept. 30, 2008 Dec. 31, 2008
Doubtful loans €1.15bn €1.14bn €1.31bn €1.54bn €2.05bn
Share of doubtful loans(1) 1.3% 1.3% 1.4% 1.5% 1.9%
Individual risk(1) €703m €685m €802m €917m €1,404m
Collective provision(1) €793m €797m €947m €1,014m €921m
Coverage rate excl. collective provisions(1) 61% 60% 61% 60% 69%
(1) Excluding credit institutions
Capital structure: quarterly series
€bn Dec. 31, 2007 March 31, 2008 June 30, 2008 Sept. 30, 2008 Dec. 31, 2008
Tier one ratio 8.3% 8.0% 8.5% 8.6% 8.2%
Capital adequacy ratio 10.2% 10.4% 11.0% 10.8% 10.2%
Tier one equity 11.7 12.6 12.9 13.8 13.4
Equity, group share 16.9 16.3 15.1 18.5 15.6
End of period weighted risks 141.3 156.9 150.8 159.8 163.1
Total assets 520 550 528 529 556
(1) anticipated deduction of 50% of CCIs Basel I Basel II standards standards(1)
Morgan Stanley Conference 31 IAS 39 transfers (1/2)
Method - Details
` Restated assets:
Consist of non-hedged assets
Concern mainly risk exposures (US and European RMBS, CLO)
Are included in the workout portfolio management sector (GAPC - Gestion Active des Portefeuilles Cantonnés)
` Date of transfer: October 1, 2008
` Accounting process
Restated at fair value on October 1, 2008
` Restated assets are all transferred to the loans and receivables portfolio
Assets held for trading ¼ Loans and receivables
Assets held for sale (AFS) ¼ Loans and receivables
Morgan Stanley Conference 32 IAS 39 Transfer (2/2)
Reclassified portfolios and impact of the new valuations
` Financial assets at fair value through profit and loss (trading) ¼ Loans and Receivables
Markdowns Markdowns Fair value transferred to L&R before transfer after transfer
8,813-95 -12
` Financial assets available for sale (AFS) ¼ Loans and Receivables
Markdowns Markdowns Fair value transferred to L&R before transfer after transfer
2,764-285 -58
` Total Equity and income impact related to transfers: Markdowns Markdowns Fair value transferred to L&R before transfer after transfer + €310m 11,577-380 -70
Morgan Stanley Conference 33