A scenario which was ultimately not accepted

Aasian image of most of the other banks, the fourth quarter of 2008 should be red for Natixis. According to our information, the losses should be included between 500 million and EUR 1 billion between October and December, and they would be 1.5 to 2 billion euros throughout the year. Several sources, these new losses could make a new capital injection necessary prior to the presentation of the results by late February. The Bank did not want to make comment.

In the second half of 2008, Natixis has already been recapitalised two times. In September of first, via the capital increase of EUR 3.7 billion. Then, in December, the Bank has in fact benefited from the entire envelope of EUR 2 billion received by its two shareholders mutual benefit in the first instalment of hybrid securities by the State.

A new injection of public money now seems increasingly likely, always at the level of the shareholders. The new tranche of 10.5 billion euros that the State will bring in the banks in the first quarter should be an opportunity for mutual benefit both to again relieve their subsidiary.

Madoff losses

As his sisters, the Bank has indeed suffered from greater volatility of markets on the end of the year. She accused the Madoff losses. But it is also still a substantial asset risk amount. She announced in mid-December have bred his own account in credit investment activities and structured credit in a specific structure. According to the company, 19 billion euros of weighted assets were accommodated, but the nominal amount of the assets at risk was not given.

However, according to several sources, the amount total, nominal and notional portfolios and risk positions roughly rather 70 billion euros. 19 Billion of risk-weighted exposure housed in the structure of cantonment, 12 come from own account in credit activities and correspond to a nominal exhibition of nearly $ 49 billion euros (in ABS, CMBS, CLO...). More than 70 are so-called "synthetic" positions, so very illiquid (more than 35 billion euros). Essentially corresponds to assets and positions in Europe acquired in early 2007.

This figure of 49 billion be added about a dozen of billion (nominal) from the funds of funds activity, i.e. fundraising "hedge funds", which is notably housed Madoff exposure. According to our information, these assets must partially be made to the structure of cantonment, which should increase the size. 10 Billion of additional assets are inherited from the capital markets activities. In this portfolio, there are different types of assets and positions.

Insufficient own funds

The finance and investment (BFI) of Natixis Bank guaranteed liquidity of funds in the activity of management of assets in the summer 2007, by buying assets, for more than 1 billion euros. Natixis also guaranteed land bond ("covered bonds") of some banks European and us in euros, today illiquid, that the Bank had to keep on their balance sheet. There is also a portfolio of enhanced ABS, of approximately EUR 1 billion. Finally is the portfolio of products including the nominal value has no meaning, but that risk (VaR) If is increased strongly in the fourth quarter, with consumption of own funds should therefore increase.

Natixis considered end of 2008, to transfer a part of this portfolio (today partly based) to institutional investors (banks or "hedge funds"), that it would itself funded. A scenario which was ultimately not accepted. Assets housed in the structure were allocated 1.6 billion euros of capital approximately. An amount which seems modest, to concerned nominal exposures. "As we see the accumulated losses and the loss potential that exists, it is impossible that own funds are sufficient," note a close source.