Chapter 618 Natixis Bank

According to statistics, the four major commercial banks in France have suffered losses due to the subprime mortgage crisis, which have exceeded 25 billion euros!

The four major commercial banks are BNP Paribas, Société Générale, Credit Agricole and Natixis Bank.

Among them, BNP Paribas has suffered the smallest losses. As early as June this year, BNP Paribas’ public data showed that its losses had just reached 2.3 billion euros. However, with the subsequent outbreak of a new wave of subprime mortgage crisis, their losses have also increased. It has exceeded 5 billion euros, which is why they need to receive a government bailout of 5.1 billion euros.

However, the other three banks also criticized this. After all, BNP Paribas suffered the smallest loss, but received a bailout from the government, and they each need to find a way to survive.

Take Industrial Bank for example. The Industrial Bank fraud case discovered in January this year alone caused them a loss of 4.9 billion euros. Including other losses, Industrial Bank currently conservatively estimates that it has lost at least more than 6 billion euros!

In order to meet the relevant capital adequacy ratio requirements, Industrial Bank obtained approximately 5.5 billion euros in funds through capital increase and share expansion, and was finally able to breathe a sigh of relief.

In addition to Industrial Bank, Crédit Agricole and Natixis Bank also suffered heavy losses, and they are also seeking capital injections one after another.

"We participated in the share expansion financing of Industrial Bank and Credit Agricole Bank. We heard that Natixis Bank issued a large number of additional shares to William Weber Capital in order to obtain funds..."

"William Weber Capital?"

After hearing Arnaud's words, Barron asked deliberately.

"Yes, it is an investment company related to the Weber family. I heard that they made a lot of money through short selling. Such a company is simply harming society. I think Natixis Bank should not accept investment from this company. "

Well, after hearing Arnault complaining like this to his face, Barron didn't say much. What would he feel like if he knew that the boss behind William Weber Capital was himself...

…

"We have reached an agreement with Natixis Bank to inject 4.5 billion euros into them and acquire 30% of their shares, becoming the second largest shareholder of this bank..."

Next, Barron met Ashley Weber, CEO of William Weber Capital.

As Arnaud Lagardère mentioned before, as the fourth largest commercial bank in France, Natixis Bank suffered heavy losses in this crisis and was in urgent need of capital injection. Therefore, taking advantage of this opportunity, William Weber Capital participated during their financing.

Natixis Bank is one of the largest commercial banking groups in France. It was formed in 2006 by the merger of subsidiaries of the French Caissement Bank Group and the Banque Populaire Group. Financial investment banking has always been the main source of income for Natixis Bank, accounting for almost all of them. half of net profit.

However, due to the impact of the subprime mortgage crisis, according to data disclosed by Natixis Bank, in the second quarter of this year alone, Natixis Bank's losses increased by nearly 1.5 billion euros...

The impact of this subprime mortgage crisis on the French banking industry can be seen from one data. Compared with the same period last year, the market value of BNP Paribas has shrunk by more than 40%, the market value of Société Générale has dropped by more than 55%, and the market value of Credit Agricole Bank has shrunk by more than 40%. The reduction is close to that of ixis Bank, and its market value has shrunk by a full 65%!

The most critical thing is that because of the losses in this subprime mortgage crisis, the capital adequacy ratios of these banks are already insufficient - according to the "Basel Accord", which is the basic standard for international banking supervision, the target standard ratio of commercial banks' capital adequacy ratios is 8%.

In order to achieve qualified capital adequacy ratios, these banks have successively carried out financing plans starting from Industrial Bank in March this year.

BNP Paribas received capital injections from the government, and Industrial Bank and Credit Agricole Bank both raised funds through additional issuances to shareholders. As for Natixis Bank, the decline in market value was too "ferocious". There are precedents for Industrial Bank and Credit Rural Bank. The internal financing plan was ultimately not approved and could only seek external financing...

Why do you say that?

Take Industrial Bank as an example. How did they increase capital and expand shares?

According to its capital increase and share expansion plan, shareholders of Industrial Bank have the priority to subscribe for one new share for every four Industrial Bank shares they hold. In the end, they issued 116 million new shares and received more than 5.5 billion euros in funds.

The most important thing is that the issue price of their new shares was 47.5 euros, while the share price of Industrial Bank at that time was 77.72 euros, which also means that they issued the new shares at a discount rate of nearly 40%...

Of course, because their new share issuances were mainly to existing shareholders, they did not cause much dissatisfaction. Instead, their shareholders actively subscribed, which also showed that their investors still had confidence in them.

Rural Credit Bank's capital increase and share expansion plan are somewhat similar to Industrial Bank's plan, except that the issuance price of new shares does not have such a high discount rate, but there is still a discount rate of about 20%.

By the time Wilhelm Weber Capital entered into negotiations with Natixis, their market value had fallen to less than 11.5 billion euros - a year earlier, Natixis' market value had been as high as 32.5 billion euros.

Because of the urgent need for funds, Natixis Bank made some concessions to William Weber Capital and finally agreed to William Weber Capital's condition of purchasing 30% of its total share capital after the additional issuance at a price of 4.5 billion euros.

So far, William Weber Capital has become the second largest shareholder of Natixis Bank, the fourth largest commercial bank in France, second only to the French Public Bank Group, which holds about 35% of its shares.

"Although our capital injection has temporarily alleviated the lack of funds of Natixis Bank, according to the requirements, they also need to improve the mortgage conditions for personal mortgage loans and lay off a certain degree of employees to make their business conditions healthier and more stable."

It can be said that Ashley Weber looks very high-spirited now, which is understandable. After all, being able to become the second largest shareholder of Natixis Bank and the shareholding ratio between it and its controlling shareholder is only 5% apart, it also means that William Weber Capital has a great voice in Natixis Bank.

The reason why William Weber Capital was able to acquire a stake in Natixis Bank was mainly because it had previously made a profit of 2.5 billion euros from NM Rothschild Bank through a bet, and then made huge profits by shorting the French stock market, especially the bank stocks.

In addition to the investment in Natixis Bank, William Weber Capital still has a considerable surplus in its account...

"Don't worry about the future. I think the impact of the crisis will continue, so you just need to increase your stake in Natixis Bank when the time is right. In addition, is there any movement on the Rothschild family's side?"

Hearing Barron's question, Ashley shook her head and said:

"At the beginning, they secretly investigated me, but I didn't give them a chance. But now, I'm afraid they don't have so much time to keep an eye on me. LCF Rothschild Group is already a little overwhelmed, and their investment losses are not small."

"We still need to be more cautious, Ashley. Although the Rothschild family is not as good as before, they can be passed down to the present, and they will not be that simple."

Ashley Weber shrugged:

"I will pay attention, Your Highness."