PARIS (Reuters) - French bank Natixis (CNAT.PA) said on Wednesday it planned to sell several specialized finance businesses to its parent, unlisted French cooperative lender BPCE, and use part of the 2.7 billion euros ($3.1 billion) in proceeds for acquisitions.
“This planned transaction would give Natixis further financial firepower to invest in its differentiating asset-light business lines – primarily asset management,” Chief Executive Francois Riahi said in a statement.
Natixis said the deal would leave it with a war chest of 2.5 billion euros for acquisitions over the 2018-2020 period, up from 1 billion euros previously earmarked, although it currently has no specific new deals in the works.
The bank has already spent 400 million euros of that amount on two acquisitions earlier this year, its CEO said.
The French investment bank said it intends to pay shareholders a special dividend of 1.5 billion euros after the deal is closed during the first quarter next year if it doesn’t find acquisition opportunities.
Natixis said the sale of assets will allow BPCE to widen the range of services it offers to its retail customers, while Natixis will beef up its profile as an investment bank.
Natixis will narrow its focus to asset management, wealth management, investment banking, payment services and insurance. It intends to make acquisitions in all those businesses, except for insurance.
If Natixis were to identify acquisition targets after the special dividend is paid to shareholders, BPCE would back it with capital if needed, BPCE’s Chief Executive Laurent Mignon said in a conference call with journalists.
Mignon, Natixis’ CEO until June, is also chairman of the investment bank’s supervisory board.
The assets to be sold to BPCE are consumer financing, factoring, leasing, sureties and guarantees, and securities services businesses.
Following the transaction, Natixis expects to raise its target for return on tangible equity in 2020 to between 14 percent and 15.5 percent from a previous target of between 13 percent and 14.5 percent.
The bank will also lift its core equity tier one ratio to 11 percent from 10.5 percent at the end of the second quarter as it will keep 500 million euros in capital.
Reporting by Inti Landauro; Editing by Leigh Thomas, Mark Potter and Jan Harvey