Populaires enjoyed significant growth via the acquisitions of Coface and Arnhold & S. Bleichroeder, as well as through closer partnership ties with DZ Bank, unleashing substantial synergies.
In July 2002, a sales portal went on line, bolstering client relations across the board.
Populaires business line are now housed under the same roof. For instance, in mid-2002, teams from the Asset Management and Insurance business line moved into the Rives de Seine site along Quai de la Rapée, and the Private Equity team moved to the
Bank’s growing internationalization by seeking out candidates willing to relocate, who speak several languages and can lead teams both in France and abroad. It also means refreshing the age pyramid and setting up succession plans with a view to replacing executives who will be retiring in the next five years.
coface has direct operations in 56 countries: – europe: austria, belgium, bulgaria, croatia, czech republic, denmark, estonia, france, germany, hungary, ireland, italy, latvia, lithuania, netherlands, norway, portugal, poland, romania, russia, slovakia, slovenia, spain, sweden, switzerland, turkey, ukraine, united kingdom
Gobain Pont-à-Mousson to arrange guarantees and issue confirmed documentary credits in connection with a USD300 million contract to lay pipes supplying drinking water to Abu Dhabi.This shows strong recognition of Natexis Banques
The bulk of specialized financing business is contributed by the Banque Populaire Group network.
German companies. In France, Natexis Lease reinforced its position among large corporations, winning a number of major real estate lease financing contracts such as with Thalès, Aldi,
Natexis LLD aims to have a pool of 1,500 leased vehicles by the end of 2003.
Française des Sociétés Financières). At EUR8.8 billion, factored receivables were slightly down on 2001.
Net Banking Income stood at EUR91 million, or 1.03% of revenues.These healthy results testify to
EUR55 million in net banking income EUR1.5 billion worth of assets under management EUR235 million worth of investments
For 2003, the Capital Markets business has set as its goal to significantly increase Net Banking Income, by stepping up its sales drive, helped by increased international synergies. At the same time, a new organization structure will be put in place to help the business react more swiftly to changing market trends and foster a keener understanding of the product offering.
As well as offering valuable decision-making aids for investors, the Credit Research unit continued to develop its rating advisory services among clients in France and other European countries. In particular, a major contract was won from the
ABS conduit for residential mortgage-backed commercial paper programs. And the Bank also co-arranged the first residential mortgage securitization for an Italian cooperative bank.
Private Equity invested a total of EUR235 million compared with EUR285 million in 2001.This amount broke down as follows across the company’s business units: EUR90 million for Growth Capital,
Placing all of the Bank's private equity subsidiaries under the umbrella of Natexis Private Equity has unleashed new synergies through the sharing of financial and industry expertise and the pooling of share-swap and cross-shareholding opportunities.
The subsidiaries have retained their management independence under the new structure, which federates the strengths of the Natexis Banques
Banking Services business. The interbank check image exchange project was successfully completed. The leading issuer in the French interbank teleclearing system (source: G-SIT),
Gemini Ernst & Young, opens up new growth avenues for the Bank. Building on LineBanque’s success,Natexis Banques Populaires will be able to offer the market a comprehensive personal online banking system by the end of 2003.Three financial institutions, including two new clients from the insurance industry, are expected to be the first to put this tool to use.
Banking Luxembourg S.A. Together they count some 1,200 employees and are mostly all subject to highly specific regulations.
The Bank has retooled its monitoring system and set up special employee training sessions in addition to those routinely offered. At the same time, back office and other procedures to prevent money laundering have also been stepped up.
Management decisions made in the event of a possible crisis situation, reconciling international expansion with secure information systems, and measuring operational risks.
Numerous musical events were organized to mark this watershed year in the life of the Foundation. In
Natexis Banques Populaires places prime importance on regularly publishing high quality financial information. In 2002, the Financial Communications department stepped up its efforts to inform analysts, investors and private shareholders.
Shareholder Relations teams also met private shareholders at the Actionaria Trade Fair which was held in Paris in November 2002 at the Palais des Congrès, and at the Lundis de la Bourse event organized in conjunction with LineBourse (the
Meeting was held to approve the Company and consolidated financial statements, appoint new members to the Board of Directors as discussed above and authorize the Company to trade in its own stock; ■ the second meeting, of an extraordinary nature, was held in December to approve an external growth operation involving the transfer by a US company of shares in its New York brokerage subsidiary, in return for approximately 1.4 million shares in the Company issued for this purpose, providing it with 3% of the capital stock of Natexis Banques Populaires; a restructuring operation involving the absorption of a real-estate subsidiary was also presented for approval.
Philippe Dupont BOD 2007 Chairman of the Chairman and CEO meeting of Board of Directors, of Banque Fédérale 11/25/97 Director des Banques Populaires
Steve Gentili AGM of 2005 Director Chairman of 05/23/02 BRED Banque Populaire
Alain Jacquier BOD meeting 2007 Director Chairman of Banque of 11/25/97 Populaire Bourgogne
US dollar exchange rate fluctuations, forms part of a risk management policy aimed at optimizing the risk/return ratio of weighted outstandings.
Factoring inflows are similar to last year (EUR8.84 billion compared to EUR8.88 billion), but potential inflows from new contracts fell to EUR3.1 billion from EUR3.7 billion in 2001. In addition, the factoring commission rate continues to fall on new contracts, due to significant pressure from competitors and the increasing importance of products sold to major companies.
Factoring activity Net Banking Income fell 8% in 2002 to EUR91.4 million: ■ factoring commission fell 6% to EUR54 million, despite steady factored revenues year-on-year. The French market has witnessed a gradual erosion in commission rates charged for a number of years now; ■ financing commission fell 10% to EUR42.6 million, due to both a fall in outstandings (down 5%) and income from demand deposits.
The other divisions did not record any major changes: stable net charge to Specialized Financing provisions
In 2002, calculations of the impact of historic shocks (notably the crash of 1987, Gulf war, 1997 Asian crisis), performed each month, did not identify any movements in portfolio values significantly greater than the value at risk.
This centralization enables the optimized management of liquidity transformation risk thanks to precise knowledge of the different gaps. A range of limits was approved by the ALM Committee. In conjunction with Financial Management, the Capital Markets division also monitors regulatory limits (short-term liquidity ratio and permanent resources ratio) and internal prudential ratios validated by the ALM Committee.
These risks are measured by the relationship between available capital and the level of capital required to cover counterparty and capital market risks.
Total issues during the year 214,676 3,420 2,021 1,714 145 50
Corporate information At Natexis Banques Populaires level (parent company), employee statistics show that 357 employees joined the Company during 2002, including 184 job creations and 81 employees transferred from the Banque Populaire regional banks.
– at the same time, Crédit Maritime became an affiliate of Banque Fédérale des Banques Populaires. Under the terms of the agreement, Banque Fédérale des Banques Populaires took the place of Caisse Centrale de Crédit Coopératif as the central body of the Crédit Maritime establishments. This agreement will enable the Banque Populaire Group to target customers involved in maritime businesses.
Auditors’ report on agreements involving members of the Board of Directors of the Company 137
Total assets 133,400 110,354 113,131 of which institutional activities 1,475 1,519 1,877 consolidated financial statements at december 31
Deferred income, accrued charges and other liabilities 14 13,956 12,366 13,866 of which institutional activities 108 106 119
1.1 – Scope of consolidation The Natexis Banques Populaires (NBP) consolidated financial statements include the financial statements of Natexis Banques Populaires and its main subsidiaries.
Only those subsidiaries providing a material contribution are consolidated. The materiality of a subsidiary is not determined with respect to numerical thresholds but based on a qualitative appraisal of the relevance of its contribution to the Group financial statements. As such, IT logistic subsidiaries are included in the scope of consolidation due to their material impact on the split of consolidated general expenses between payroll costs and other operating expenses.
1.9 – Adjustments and inter-company transactions Prior to consolidation, the statutory financial statements of companies included in the scope of consolidation are restated to bring them into line with the Group accounting policies described below.
1.12 – Notes to the financial statements Unless otherwise stated, the figures shown in the notes are in millions of euro.
A – Securities transactions (trading account securities, securities held for sale, debt securities held for investment)
In accordance with French banking regulations, unrealized losses on such securities are not provided, except where there is an intention to dispose of the securities in the short term, in which case the provision covers market risks, and the charge is recorded in Net gains/(losses) on disposals of fixed assets, or there is a risk of counterparty failure, in which case the charge is recorded within Provisions for loan losses and country risks; ■ treasury stock: own shares are purchased for four purposes: the regularization of the stock market price by trading against market trends, as part of stock market interventions, to accompany external growth operations and for allotment to Group employees under stock purchase option schemes or via corporate savings schemes.
In accordance with the letter issued by the General Secretariat of the Banking Commission dated October 21, 1997, non-operating real-estate assets, whether occupied or leased-out, have been provided on a caseby -case basis to cover all risks of unrealized capital loss.
Where perpetual subordinated notes are treated as equivalent to debt instruments repayable as to principal, each coupon payable is apportioned between effective repayment of principal and an effective interest cost, which is included in the income statement under Interest expense.
(2) Including unconsolidated investments in financial institution affiliates 56 65 31
(2) Movements in other provisions between 2000 and 2001 consist of utilizations in the amount of EUR14 million (Y2K, euro, employee IT hardware) and reclassifications to other balance sheet headings in the amount of EUR31 million (primarily provisions for tax payable).
16 – Long-term subordinated debt in EUR millions 2002 2001 2000
(1) Reserves, retained earnings, consolidation differences, revaluation reserves, translation reserves and consolidated net income attributable to the Group.
Hedging transactions (micro and macro-hedging) 247,368 145,767 81,718 Management of trading positions 396,482 446,934 426,683
28 – Other net banking income in EUR millions 2002 2001 2000
(2) Total gross compensation paid to members of the Natexis Banques Populaires Executive Management Committee during their term of office during the period, including to the Chairman, the Chief Executive Officer and the Deputy Chief Operating Officer (see Note 35 A). Number of Executive Management Committee members: 11 in 2002; 12 in 2001; 11 in 2000.
ADG COFACE ALLGEMEINE DEBITOREN GESELLSCHAFT Information and debt management services 75 74 (5) (5) (5) (5)
ALLGEMEINE KREDIT COFACE Credit insurance and services 100 98 (5) (5) (5) (5)
BANQUE PRIVEE SAINT DOMINIQUE Private asset management 100 100 100 100 99 99
COFACERATING.FR Information and debt management services 100 98 (5) (5) (5) (5)
NATEXIS FINANCE Merger advisory services 100 100 100 100 100 100
GRAYDON HOLDING Information and debt management services 28 27 (5) (5) (5) (5)
PRAMEX INTERNATIONAL International commerce promotion and operations (15) (15) (15) (15) 26 26
The Coface group is fully consolidated in the second half of 2002. (6) Buy-out of minority interests (10%) bringing the Group interest to 100% (7) After a partial asset transfer to Natexis Capital Marchés Primaires, now Natexis Bleichroeder, Natexis Capital was absorbed by Natexis Banques Populaires on November 29, 2001 (8) Produced by the hive-down of Natexis Interépargne (9) Buy-out of minority interests (49.91%), bringing the Group interest to 100%
Total liabilities and shareholders’ equity 131,669 110,354 113,131 of which institutional activities 1,667 1,726 2,175
During 2002, capital stock was impacted by the following two major transactions: ■ the EGM of December 6, 2002 approved the acquisition of Arnhold & S. Bleichroeder.This resulted in an increase in capital stock of EUR22.4 million and additional paid-in capital of EUR83.4 million; ■ the conversion of the remaining perpetual subordinated securities convertible into shares issued in May 1996, not converted as of December 31, 2001, resulted in an increase in capital stock of EUR27.5 million and additional paid-in capital of EUR86.4 million.
All other transactions involving Natexis Banques Populaires shareholders’ equity are presented in Note 3.
(**) The capital stock was made up of 44,314,352 shares of EUR16 par value each as of December 31, 2001 and of 47,442,837 shares of EUR16 par value each as of December 31, 2002. Natexis Banques Populaires held treasury stock of EUR2 million as of December 31, 2000, EUR47 million as of December 31, 2001 and EUR73 million as of December 31, 2002.
SOCIETE FINANCIERE BFCE 5 / 7 rue de Monttessuy - 75007 PARIS EUR92,308 EUR44,962 99.99%
These financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statements, based on our audit.
The dividend shall fall due for payment on May 26, 2003.
This authorization is granted for a period of five years from the date of this meeting and shall take effect on the date of the next Board of Directors’ meeting deciding the utilization of this authorization. As of this date it shall replace the authorization granted by the 10th resolution adopted by the Annual General Meeting of May 30, 2000, and authorized amounts unused under this resolution shall lapse as of this date.
Ninth resolution: authorization for the Board of Directors to issue securities conferring entitlement to the capital stock with retention of preferential subscription rights Overview: The ninth to twelfth resolutions ask shareholders to authorize the Board of Directors to perform stock issues, on one or more occasions and at its own initiative.
Decide that the total amount of all capital stock issues performed immediately and/or in the future pursuant to this authorization may not exceed one hundred and fifty million euros par value, plus, where appropriate, the par value of additional shares issued to protect, in accordance with the law, the rights of bearers of securities conferring entitlement to shares.
Subject to the approval of the thirteenth and fourteenth resolutions, and deliberating in accordance with the rules of quorum and majority governing Extraordinary General Meetings, shareholders hereby decide to amend Article 3 of the bylaws as follows: “Article 3 – Capital stock
Number of shares receiving dividends 15,463,177 33,213,635 42,719,392 44,314,352 47,442,837 * Exclusive of tax credit, differs depending on the beneficiary. ** This proposal will be submitted for approval to the Annual General Meeting of May 22, 2003.
Bleichroeder Holdings Inc. (“ASB”), under which Natexis Banques Populaires acquired the entire capital stock of Arnhold & S. Bleichroeder Inc., a company incorporated under New York State law, for a consideration of USD105 million, payable in Natexis Banques Populaires shares.
The Natexis Banques Populaires Extraordinary General Meeting held on December 6, 2002 approved all provisions of the aforementioned contribution, together with the valuation of the contribution performed by ASB. A Natexis Banques Populaires capital stock increase was approved in the amount of EUR22,417,312, through the creation of 1,401,082 fully paid-up shares with a par value of EUR16 each, issued in consideration of the contribution in kind described above.
We have audited in accordance with professional standards applicable in France the Company financial statements for fiscal years 2000 and 2001, approved by the Board of Directors. We expressed an unqualified opinion on such financial statements.
VI. Information on recent changes and outlook for the future Page 86
Natexis Banques Populaires 4-6 Throgmorton Avenue GB – London EC2N 2PP
Hong Kong Natexis Banques Populaires 12th Floor, Citic Tower 1 Tim Mei Avenue Central – Hong Kong
In a press release of the same day the European Union Commission indicated that (extract): “According to the agreement reached today, the guarantee in favour of CDC IXIS will be phased out progressively. The phase-out schedule provides for a transitional period, which lasts until 23 January 2007 4 years after the Commission proposed that the guarantee should be abolished. During this period, the existing guarantee may remain in place for operations which mature before 23 January 2017. After 23 January 2007 no new instruments will be initiated under the guarantee.
Other members CDC IXIS (appointed 3 November 1998) Represented by Daniel Lebègue (resigned 17/02/2003) Chief Executive Officer of Caisse des dépôts et consignations*
Directors’ fees were paid to members of the Supervisory Board in proportion to their rate of attendance at meetings of the Board and the two Specialised Committees(2). However, in accordance with internal regulations, Supervisory Board members representing Caisse des dépôts Group do not receive directors’ fees for attending meetings in the exercise of their responsibilities within CDC IXIS Capital Markets.
Over-the-counter interest-rate derivatives trading The progress made by our interest-rate and hybrid (forex and credit) derivatives activities in Paris, London, Frankfurt, New York and Tokyo again accelerated in 2002, both in terms of volumes and profitability.
The Company ranks among the top five global players in structured products based on alternative funds, thanks to its strong presence in Europe, the business links established with US funds and the multiplication of public debt issues in Japan.
Advisory services developed further 2002 was a very busy year for advisory business. A wide variety of assignments were undertaken, the most notable examples being: • a capital increase with a priority subscription period in November 2002 on behalf of Compagnie des Alpes; •market transactions on behalf of several other companies, which were eventually postponed due to poor market conditions; • advising Caisse des dépôts et consignations on its investments in Vivendi Environnement in June and December 2002; •helping C3D in its search for an industrial partner for EGIS; •different projects involving various regional components of the Caisses d’Epargne Group.
Against a backdrop of widespread market declines and high volatility, demand for structured products remained robust throughout the year. Thanks to the partnership with Caisses d’Epargne Group within Compagnie Financière EULIA (the Alliance), we were able to respond quickly to requests from the Caisses d’Epargne network for this type of savings product.
A broader offering At the same time, CDC IXIS Capital Markets continued its longstanding efforts to broaden its offering of structured products and thereby place itself among the select few institutions capable of covering the full range of markets and product segments. This strategy paid off by enabling the Group to maintain or enhance its business in all sections of its offering.
The regulatory liquidity ratio stood at 174% at year-end 2002 versus 148% a year earlier. It remained above the regulatory minimum
The fundamental indicator is a parametric VaR which breaks down overall risk into its different factors with respect to the positions held in portfolios. As regards options risk, the parametric VaR is progressively complemented by a VaR calculated using simulation techniques based on a Monte Carlo-type method that takes into account the portfolio ’s non-linear characteristics with respect to the different factors of risk.
The following two charts show the results of this exercise carried out for fixed-income and foreign exchange, and for equities. They verify that the number of times daily results (shown on the inverse scale) exceeded potential losses as defined by the VaR indicator, was effectively below the number of excursions permitted by the statistical limit (in this case, 2 or 3 excursions beyond this limit are permitted for 250 data items).
The credit risk portfolio is also subject to an annual review of counterparty limits, again in accordance with CRBF regulation 97-02. This monitoring process is then completed by regular revisions by country and economic sector.
CDC FINANCE-CDC IXIS SA F Member of Executive Board (since 29 May 2002); Head of Capital Markets and Financing
CIF EUROMORTGAGE SA F Member of Supervisory Board GIMAR FINANCE SCA F Permanent representative of CDC IXIS Capital Markets on the Supervisory Board ECUREUIL INVESTISSEMENTS SICAV F Member of Board of Directors
(resigned 21 February 2002) EMERGENCE EURO POSTE SICAV F Permanent representative of CDC on the Board of Directors
IXIS AEW EUROPE (EX-CDC IXIS IMMO) SA F Member of Board of Directors (since 25 November 2002; previously permanent representative of CDC Finance-CDC IXIS on the Supervisory Board)
Director’s fees received in 2002 in exchange for responsibilities exercised within CDC IXIS Capital Markets: nil 2002 MR RAYMOND KIRSCH
CNCEP SA F Member of Supervisory Board CREDIT LOGEMENT SA F Permanent representative of CDC on the Board of Directors
Director’s fees received in 2002 in exchange for responsibilities exercised within CDC IXIS Capital Markets: nil 2002 MR PHILIPPE WAHL
Bonds and other fixed-income securities 4 44,203 34,321 36,452 Equities and other variable-income securities 4 3,956 3,801 3,269
GAIN OR LOSS ON MARKETABLE SECURITIES AND EQUIVALENT PORTFOLIOS 22 951 722 (17)
Trading securities Trading securities, as defined by regulation 90-01, correspond to variable and fixed-income securities that are purchased or sold with the intention of being resold or repurchased in the short term. At the time of acquisition, the securities are recorded at acquisition price.
3.5 Market value Where market prices of instruments or valuation parameters are not officially listed, alternative valuation methods are used.
Securities received under repurchase agreements (1) 35 013.57 37,814.24 Accrued interest 213.20 157.80
EQUITIES AND OTHER VARIABLE-INCOME SECURITIES 3,111.17 844.95 3,956.12 2,971.62 829.00 3,800.62
Bonds, including accrued interest 1,230.48 18.02 - Non-euro currencies 265.15 11.33
Allocations to provisions for: Risks on complex transactions - Other risk provisions - -
Counterparties Counterparties Other Total Total weighted at 0% weighted counterparties 31/12/2002 31/12/2001
Other commissions – – Regulatory reserves – – Subordinated perpetual securities (19.67) (25.01) General expenses (29.69) (35.00)
COMMITMENTS ON SECURITIES Securities sold with a repurchase of transfer option - - Other commitments received 1,782 1,830 1,896
2.6 Securities issued Accrued interest expenses are credited to the accrued debt account and debited to the profit & loss statement.
Accrued interest expenses are credited to an accrued debt account and debited to the profit & loss statement.
1.6. Financial year The financial year begins on 1 January and ends on 31 December.
•a second agreement signed on 14 June 2002 and covering the 2002, 2003 and 2004 financial years
In addition, a Group regulatory profit-sharing agreement was signed on 30 October 2002, further to which €1.34m was paid out to CDC IXIS Capital Markets’ employees in respect of financial year 2001.