February 15, 2018 / 12:15 PM / 7 months ago

Credit Agricole's markets side outperforms Natixis

LONDON, Feb 15 (IFR) - Investment banking revenues from France’s Natixis and Credit Agricole were weaker in the last quarter of 2017, confirming that US banks dominated the primary markets and advisory areas during the period.

The top five players – JP Morgan, Citigroup, Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley – reported an average 49% year-on-year rise in equity capital markets fees and a 19% increase in revenues from debt capital markets. M&A fees were up 6% in the same period.

Natixis and Credit Agricole said their investment banking fees were down for the last three months of 2017, by 12% to €74m and 14% to €62m, respectively. That was in line with compatriot Societe Generale, which reported an 11% decline to €527m.

SG also includes revenues from financing in that pot, in addition to straight deal fees. The other two French banks were more resilient here; Natixis said revenues from global finance rose 12% year-on-year to €358m and Credit Agricole’s equivalent division saw an 11% increase to €277m.

There was more divergence between the two French lenders on the markets side. Natixis reported revenues across its fixed income and equities desks down 14% to €408m, in line with the market, but Credit Agricole was more resilient, seeing revenues up 1% at €462m.

Credit Agricole highlighted a good performance in credit and securitisation but said the low volatility seen during the period had affected its rates and FX businesses. Low volatility also hit BNP Paribas, whose FICC revenues were down 29% to €592m. SG only saw a 7% drop to €515m.

Natixis chief executive Laurent Mignon said he was optimistic the recent heightened volatility will help the bank’s markets business.

“Volatility is a factor that creates uncertainty for clients and makes them want to cover risks. We see a level of activity since the beginning of the year that should be positively impacted by this,” he said.

Both banks said the new accounting rules, IFRS 9, forcing banks to recognise losses on loans as soon as they anticipate them, would crimp their assets. Natixis said it would cut its CET1 ratio by 15bp to 10.5%, and Credit Agricole said its CET1 ratio would take a 30bp hit to 14.6%. (Reporting by Christopher Spink)

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