Natixis SA received a guarantee from its parent covering about 35 billion euros (US$50 billion) in risky assets and said it may return to profit in the third quarter, driving the stock up as much as 43 percent.
BPCE, which controls 72 percent of the Paris-based bank, agreed to absorb most of the losses that might stem from its structured credit holdings in exchange for a premium that will cost Natixis about 48 million euros a year over 10 years, Natixis chief executive officer Laurent Mignon told journalists on a conference call yesterday.
Mignon also said Natixis may return to profit in the current quarter following five straight losses.
“When you look at the operational performance in the second quarter, it’s not an unrealistic objective,” he said.
The bank’s main shareholders, Groupe Banque Populaire and Groupe Caisse d’Epargne, completed a merger last month, creating BPCE, France’s second-biggest retail banking network by branches behind Credit Agricole SA.
The merger was also aimed at helping shore up Natixis, which has reported the biggest net losses of any French bank from the global financial crisis.
Natixis had an 883 million euros loss in the second quarter, compared with a 1.02 billion euros loss a year earlier, the bank said in a statement yesterday.
Natixis was up 31 percent, to 3.04 euros by 9:44am in Paris trading yesterday, bringing the gain this year to 142 percent.
The company first sold shares to the public in December 2006 at 19.55 euros apiece.
Francois Perol, French President Nicolas Sarkozy’s appointee to head the combined bank, became Natixis’s chairman in April. Perol picked Mignon, formerly a managing partner at Oddo & Cie, to replace Dominique Ferrero as CEO in May.
BPCE received a total 7 billion euros from the state, more than any other French bank.
BPCE may start to reimburse the government funds at the end of next year, Perol said.
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