PARIS (Reuters) - French bank Natixis (CNAT.PA) said on Sunday it would simplify its finances by shedding a 20 percent stake in BPCE, a network of cooperative lenders which controls it, paving the way for higher dividends in the future.
Natixis said it would sell 12 billion euros ($16.02 billion) in investment certificates through which it owned a fifth of parent company BPCE to BPCE and its cooperative shareholders.
BPCE and Natixis plan to unveil a new three-year strategic business plan in the second half of the year, Natixis executives said.
The move to restructure its ties with BPCE group, one of France’s largest cooperative lenders, will allow Natixis to pay out a 2 billion euro one-time special dividend to shareholders, worth 0.65 euro a share, the bank said in a statement.
The bank, which was rescued from near-collapse during the 2008 financial crisis by a government-backed merger of its retail cooperative parents, has been undergoing a multi-year restructuring plan aimed at selling off risky assets.
“The device of the CCI certificates had become very complex,” BPCE Chairman Francois Perol told journalists in a conference call. “Natixis’ risk profile is such that something originally conceived as a stabiliser is no longer necessary.”
Natixis shares have gained 11 percent so far this year, outperforming the European banking sector .SX7P, which is up 7.7 percent over the same period.
The plan could further boost the shares given that it will reduce complexity and create “something more palatable for investors to understand,” said Yannick Naud, a portfolio manager at Glendevon King Asset Management in London.
But he said as a fixed income investor, he saw reasons to be concerned about the deal, saying that it would make Natixis “slightly more risky.”
“You’re losing that 20 percent stake in a very stable business,” he said, referring to the stake to be sold in the retail cooperative banks known for their stability and steady earnings.
“It will be interesting to see it’s the start of a trend in France,” he added. He cited Credit Agricole (CAGR.PA), which like Natixis is the listed arm of a network of cooperative banks, as a lender that could contemplate a similar transaction.
Natixis also reported a 40 percent drop in fourth quarter net income to 181 million euros - hit by accounting adjustments on the value of its own debt - and said it would pay out a regular dividend of 10 cents a share.
Longer term, the sale of the BPCE certificates will also clear the way for Natixis to regularly pay out dividends of around 50 percent of earnings starting with those from 2013.
Perol said the restructuring could eventually clear the way for acquisitions by its asset management arm, which has 591 billion euros of assets under management as of year-end.
“It’s an area in which we regularly look for potential external growth opportunities so it’s absolutely possible that in the future something like that could happen,” he said, adding that no talks were underway at present.
Natixis’ other main businesses are corporate lending and specialised financial services like consumer credit.
Natixis and BPCE, which is not listed, had originally planned to announce quarterly results on Thursday, but moved up the announcement to Sunday because of confidentiality concerns “and the risk of leaks concerning the transaction,” Perol said.
JPMorgan advised on the planned transaction, which must be approved by the boards of the various regional savings banks that comprise BPCE, and then by shareholders sometime toward the beginning of summer, with completion likely in early August.
($1 = 0.7490 euros)
Reporting by Christian Plumb and Matthias Blamont; Editing by Alison Williams and Nick Zieminski