A senior Asia executive at Natixis has left the bank following a €260 million ($295 million) hit caused largely by the sale of leveraged equity derivatives products in Asia.
Nicolas Reille, head of global market sales and financial engineering in Asia, left earlier this week, according to a person familiar with the matter. Reille was one of the key executives behind the bank’s push into Asian structured products.
A Natixis spokeswoman in Hong Kong declined to comment. Reille could not be reached for comment.
A relative latecomer to the Asian structured products market, Natixis’s expansion in the region gathered momentum in 2016 when it was able to capitalise on retrenchment by rivals that had suffered losses in an equity rout the previous year. Still, the bank’s equity franchise in Asia was dwarfed by the likes of Credit Suisse and UBS, and Natixis turned to leveraged products such as the Kospi3 to gain market share.
Created by Natixis in 2017 in conjunction with Korea’s KRX exchange, Kospi3 is a 1.5-times leveraged version of the Kospi 200, combining 100% daily returns of the Kospi equity benchmark with 50% daily returns of the Kospi 200 futures index. The product was a big hit with investors, but began to unravel in the second half of 2018 when equity markets soured. Announcing its woes in late December, Natixis blamed a “deficient” hedging strategy related to “some specific products traded with clients in Asia”. This is understood to be a reference to autocallable bonds, including the Kospi3.
Prior to joining Natixis, Reille spent a number of years helping to set up a series of e-commerce ventures. He also previously worked for rival French bank Societe Generale.