Anne-Christine Champion

Anne-Christine Champion outlines the corporate and investment bank’s plans for diversification and transformation to Marie Kemplay.

This interview took place prior to the Russian invasion of Ukraine.

“We are now the corporate and investment bank of the fifth-largest bank in Europe, and the way we describe ourselves and our strategy is much clearer,” says Anne-Christine Champion, co-head of Natixis Corporate and Investment Banking (CIB), six months after the bank was delisted as part of the project to fully integrate it into French banking group BPCE (Banque Populaire and Caisse d’Epargne).

The bank, which had been publicly listed since December 2006, delisted after BPCE took its ownership stake from 71.7% to a full 100% in July 2021. The acquisition had the aim of bringing Natixis’s underlying businesses into a simplified BPCE corporate structure, providing a stronger foundation for growth.

factbox 

  • 2020: Co-head of Natixis Corporate and Investment Banking
  • 2019: Global head of real assets, Natixis Corporate and Investment Banking
  • 2016: Global head of distribution and portfolio management, Natixis Corporate and Investment Banking
  • 2012: Global head of infrastructure and projects, Natixis Corporate and Investment Banking

Natixis CIB is now grouped together with the group’s asset management business, Natixis Investment Managers, within BPCE’s global financial services (GFS) division, managed by GFS CEO Nicolas Namias, and accounts for around a third of the group’s revenues.

Building momentum

Ms Champion firmly believes that her business has been significantly empowered by the organisational changes. She is pleased with the progress the bank made during 2021, when revenues of €3.7bn were 32% up on 2020, and believes that this has provided a solid foundation to build on.

“The pandemic [created] challenges for us, particularly in certain areas, but we were able to make a strong recovery,” she says. Natixis CIB notably struggled with losses in equity derivatives in 2020, due to many companies cancelling dividends in the wake of the Covid-19 outbreak. In response, the bank shifted its approach, and although it is still very active in equity derivatives markets, it has lowered the risk profile of its products. Equity revenues for 2021 hit €427m compared to a loss of €48m in 2020.

M&A strength

Mergers and acquisitions (M&A), leveraged finance and debt capital markets are three other areas where the bank has delivered a strong performance. In M&A, the bank delivered €371m in revenue last year, compared to less than €10m in 2014. Ms Champion credits this success to Natixis CIB’s multi-boutique model. She says: “In recent years we have taken majority stakes in a number of well-established M&A boutiques that are very well-known and have a strong presence in their respective markets.” For instance, in France it has Natixis Partners; in the US, Solomon Partners; and in the UK, Fenchurch Advisory Partners. There are seven affiliate agencies in total at present.

“This is a model that we want to keep growing,” she says, in terms of supporting organic growth at these existing institutions, as well as being open to further new opportunities if they arise. The model has also included creating partnerships, including last year with Tyndall Group in Chile, to gain exposure to the Latin American markets as well as with LBBW in Germany. “Growth in this area also supports our broader CIB activities, so for instance our leveraged finance markets have also been boosted by the developments in our M&A business,” Ms Champion says.

Selective diversification

Now, she says, the broader focus is “to keep investing” in support of its key growth objectives, announced under BPCE’s 2024 strategic plan in July 2021. This includes diversifying its client base, its geographic focus and areas of sectoral expertise. “It will be selective diversification,” she says. “I believe that is important. So, geographically, we will grow adjacently from where we already have a significant presence and strong franchises.” Ms Champion highlights that 55% of Natixis CIB’s revenue is already generated outside of France, and the aim is to increase that to 60% via growth in the US, Asia-Pacific (particularly in Australia, China and south-east Asia more broadly), the Middle East and European markets outside of France.

She also highlights that Natixis CIB has expanded its key sectors of focus from four to eight (energy, metals and mining, real estate, transport, technology and telecoms, environment, healthcare and insurance). This again reflects a considered and deliberate approach to its diversification efforts. For instance, one of its new industry groups will be focused on healthcare, an area where the bank is already active, says Ms Champion. “We already had a track record in this sector, for instance our real estate team in healthcare infrastructure or our leveraged finance team operating within the laboratories sector. This industry group allows us to expand beyond that.”

She also flags the synergy between the strategy of the M&A boutiques, which have been hiring a number of healthcare-focused M&A bankers, and the activities within the main CIB. Similarly, in relation to the bank’s energy industry group, it has previously been active within the oil and gas, and renewables markets, so the new industry group brings those two franchises together “to support clients in a strategic way in their energy transition”.

At the core of Natixis CIB’s approach is delivering high levels of quality for clients. As she explains: “Performance, expertise and innovation is how we pitch ourselves to clients.”

Sustainable DNA

Another pillar of BPCE’s strategic plan is committing to supporting the transition to a more sustainable economy. This is both within its own operations, but perhaps more crucially in how it supports its client to achieve the transition to a net-zero economy. This is an area in which Natixis CIB has long been active, both in terms of supporting clients with sustainability-linked capital raising via bonds or loans, for instance, as well as offering more strategic support and advice.

In terms of decarbonising its own portfolio, Natixis CIB has the added advantage of being able to use its ground-breaking green-weighting factor, which it launched in 2019, to interrogate its own performance. The green-weighting factor is a tool that enables Natixis CIB to give an environmental rating to loans and other transactions it is involved in, looking at the environmental credentials of the asset or project being financed, or the borrower itself for general purpose financings. The ratings are on a seven-point scale starting from dark green to dark brown, and have the effect of promoting greener deals in the decision-making process.

Specifically, Natixis CIB has a target to ensure that its loan portfolio is in line with the objective of minimising global temperature increases to 2.5 degrees Celsius by 2024 and 1.5 degrees by 2050. The green-weighting factor enables it to analyse its activities and shift its exposure as needed.

Ms Champion acknowledges the difficulty in supporting clients in areas such as metals and mining while also achieving its objectives on energy transition, but she believes it is vital not to shy away from these challenges, saying: “Exclusion cannot be the only answer in approaching environmental, societal and corporate governance challenges.” She believes the Covid-19 pandemic has accelerated the focus on transition across industries.

“At the centre of these efforts is the need to identify the right key performance indicators (KPIs) for each business, in each particular sector, in ensuring it is able to take — and evidence — meaningful steps towards transition,” she says. “We are well placed to provide that advice. We have, for instance, acted as a sustainability coordinator for a number of clients, helping them to define their sustainability framework.” Ms Champion believes that defining the right KPIs is crucial to avoiding greenwashing. “We need to support our clients, but we also need to ensure that the requirements they are working to are robust and credible.”

Natixis CIB formed its green and sustainable hub in 2017 as a centre of expertise in sustainability issues, and it continues to be an important centre of innovation and knowledge development for the bank. Particularly as this is an area of the market that has become more competitive. “One cannot just rest on what one has already done,” she explains. “Our mindset prioritises innovation and continually developing our expertise, for instance in emerging areas and technologies like hydrogen.”

Investing to grow

Ms Champion is also keen to emphasise the broader changes the bank is undergoing within the ‘transform’ pillar of its strategic plan, “to change the way we are doing business to be more robust and improve our time to market. We are investing in technology, infrastructure and in our talent.” She points to several recent senior hires, as well as plans to recruit junior bankers to support their growth.

More broadly, Ms Champion says that Natixis CIB’s choice of strategic diversification is fully aligned with this agenda, as not only does it bring the usual risk-reduction benefits of a more diversified approach, it also means the bank is more squarely focused on areas where it can add value. “We are investing in the areas where we can grow,” she says.

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