Natixis reports €407 million in crisis damage

Paris-based investment bank Natixis lost €407 million in the third quarter of the year, according to results released yesterday.

The bank's US bond insurance subsidiary, CIFG, lost €120 million in the three months to September 30 as its credit default swap holdings lost value. The investment banking arm also suffered, making a €238 million net loss, including €138 million losses from proprietary trading and €58 million in securitisation - the cessation of the bank's US securitisation business in the US cost it another €66 million.

Natixis has a total of €1.5 billion exposure to US subprime loans. It has cut its direct exposure from $1.5 billion at the end of 2006 to zero, but still holds €258 million of unsecuritised loans, €887 million of residential mortgage-backed securities (of which €98 million are rated A or below), and a €356 million portfolio of collateralised debt obligations based on asset-backed securities that are linked to subprime loans.

Overall, the bank reported net income up 2% to €5.6 billion, driven by strong performances in its corporate and asset management arms.

See also: French banks act to save bond insurer CIFG
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