French bank Natixis said on Monday that problems in the US subprime mortgage market would have a limited impact on the group, helping its shares recover from a near 10 percent fall last week. Natixis has a 2.5 percent stake in German bank IKB, which risks major losses over the current crisis in the US subprime mortgage sector.
But the French bank said IKB's problems would have little impact on Natixis. "The current difficulties facing the German bank will have no impact or only a very limited impact on Natixis' income statement," Natixis said in a statement.
Natixis shares closed down 9.9 percent on Friday, but its reassurances over the subprime issue helped the stock recover from last week's losses. The shares were up 8 percent at 14.85 euros by 0738 GMT after earlier rising as much as 9.5 percent to 15.05 euros.
In March, Natixis shares fell sharply after the bank revealed it had a $1.4 billion exposure to the subprime sector, but Natixis said on Monday it had since significantly reduced its exposure to the US subprime market.
"Overall, the current upheaval in the US subprime market has had a negative impact of around 2 percent on the corporate and investment banking division's half-year net banking income, offset by revenue growth in other corporate and investment banking activities," Natixis said.
Natixis was formed at the end of last year following a merger of some of the main businesses of French mutual banks Banque Populaire and Groupe Caisse d'Epargne, including their investment banking divisions.
The bank has a stock market value of roughly 20 billion euros ($27.4 billion), far below that of larger French rivals BNP Paribas, Societe Generale and Credit Agricole.
Natixis said its first-half results due on August 30 would confirm its "positive outlook" and added it was on track to achieve a 2007 target of around 2.15 billion euros in underlying net profit. It said the IKB stake was recognised at less than 30 million euros in its financial statements. Natixis also said its two main shareholders, Caisse d'Epargne and Banque Populaire, were considering increasing their stake as a sign of confidence in the bank.
It also confirmed it had asked France's AMF stock market regulator to carry out an enquiry into its recent share price performance. Natixis shares remain the worst performing French bank stock so far this year.
Based on latest prices, Natixis shares have fallen by around 30 percent since the start of 2007, underperforming BNP Paribas, SocGen and Credit Agricole. The DJ Stoxx European bank sector has fallen around 6 percent over the same period.
Comments
Comments are closed.