(Updates with CEO comments, details)
PARIS, Feb 13 (Reuters) - French investment bank Natixis
reported an unexpected rise in quarterly net profit as
a one-off gain linked to the U.S. tax reform and stronger
revenue growth in asset management helped offset a widespread
It struck a positive note on the investment banking business
at the start of the year, saying that current market volatility
helps boost client activity and that it "will not end this
"Volatility is a factor that creates uncertainty for clients
and makes them want to cover risks," chief executive Laurent
Mignon told journalists during a call.
"We see a level of activity since the beginning of the year
that should be positively impacted by this".
Natixis, majority owned by retail banking group BPCE, said
fourth-quarter net income rose 5 percent to 518 million euros
($640.35 million). Analysts had expected a 22 percent fall in
profits to 386 million euros, according to a Reuters poll.
"The 4Q17 tax rate notably benefited from a 100 million
euros positive impact from the U.S. tax reforms (write-down of
deferred tax liabilities)," the bank said in a statement.
Natixis derives 35 to 40 percent of its pre-tax profit from
the United States and its CEO said that the recent tax reform
encouraged the bank to continue to develop in the U.S. dollar
Natixis is betting on insurance, asset management and the
payments business to achieve higher returns, and plans to focus
its investment banking activities on industries including energy
and natural resources, aviation, infrastructure and real estate.
Its revenues fell 1 percent in the fourth quarter to 2.51
billion euros, while revenue from asset and wealth management
grew 22 percent to 899 million euros helped by higher margins in
Europe and North America.
Non-banking activities, such as asset management, insurance
and payments will account for 49 percent of overall revenue in
2020 compared to 44 percent in 2017, as the bank continues its
shift to operations that are less prone to tougher rules on
Mignon added that market volatility that brings a downside
correction for prices of assets could be a negative factor for
passive asset management. However, high volatility on the back
of uncertain market direction could prove beneficial for active
($1 = 0.8089 euros)
(Reporting by Maya Nikolaeva and Matthieu Protard; Editing by
Sudip Kar-Gupta and Adrian Croft)
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