Rebirth of England.

Chapter 618 Natixis Bank
According to statistics, the losses suffered by the four major commercial banks in France due to the subprime mortgage crisis have exceeded 250 billion euros!
The four major commercial banks are BNP Paribas, Societe Generale, Crédit Agricole and Natixis.

The bank that suffered the smallest loss among them is BNP Paribas. As early as June this year, according to public data, its losses had just reached 6 billion euros. However, with the subsequent outbreak of a new wave of the subprime mortgage crisis, their losses have exceeded 23 billion euros, which is why they need to accept 50 billion euros in government aid.

However, the other three banks also had complaints about this. After all, BNP Paribas suffered the smallest losses but received government assistance, while they each needed to find ways to survive.

Take the Industrial Bank for example. The Industrial Bank fraud case discovered in January this year alone caused them a loss of 1 billion euros. Combined with other losses, it is conservatively estimated that the Industrial Bank has lost at least more than 49 billion euros!
In order to meet the relevant capital adequacy requirements, Industrial Bank obtained approximately 55 billion euros in funds through capital increase and share expansion, and finally breathed a sigh of relief.

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

"We participated in the equity financing of Industrial Bank and Agricultural Credit Bank. I heard that Natixis Bank issued a large number of shares to William Weber Capital in order to obtain funds..."

"William Weber Capital?"

Hearing Arno'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 by short selling. Such a company is simply endangering society. I think Natixis Bank should not accept investment from this company."

Well, after hearing Arnault's complaints, Barron didn't say much. He wondered how he would feel if he knew that he was the boss behind William Weber Capital...

……

"We have reached an agreement with Natixis Bank to inject 45 billion euros into them, acquire 30% of their shares, and become the second largest shareholder of the bank..."

Next, Barron met with 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 urgently needed capital injection. Therefore, taking this opportunity, William Weber Capital participated in 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 Caisse des dépôts et dépôts Groupe and the Banque Populaire Group. Financial investment banking has always been the main source of income for Natixis Bank, accounting for almost half of their net profit.

However, due to the impact of the subprime mortgage crisis, according to the data released by Natixis Bank, in the second quarter of this year alone, Natixis Bank's losses increased by nearly 15 billion euros...

One piece of data can show the impact of the subprime mortgage crisis on the French banking industry. Compared with the same period last year, the market value of BNP Paribas has shrunk by more than 40%, the market value of Societe Generale has decreased by more than 55%, the market value of Crédit Agricole has decreased by nearly 60%, and the market value of Natixis Bank 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 ratio is 8%.

In order to achieve the qualified capital adequacy ratio, these banks, starting with Industrial Bank in March this year, have successively implemented financing plans.

BNP Paribas received a capital injection from the government, while Societe Generale and Credit Agricole both raised funds by issuing additional shares to shareholders. As for Natixis, because its market value fell too "violently", and with the precedents of Societe Generale and Credit Agricole, its internal financing plan was ultimately not approved, and it could only seek external financing...

Why do you say that?
Take Industrial Bank as an example, how did they increase their capital and expand their shares? According to their capital increase and share expansion plan, Industrial Bank shareholders have the priority right to subscribe for 4 new share for every 1 shares of Industrial Bank they hold. In the end, they issued 1.16 million new shares and obtained more than 55 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 Societe Generale was 77.72 euros at the time, which means that they issued the new shares at a discount rate of nearly 40%...

Of course, since their new share issuance is mainly aimed at existing shareholders, it did not cause much dissatisfaction. Instead, it prompted their shareholders to subscribe actively, which also showed that their investors still have confidence in them.

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

When William Weber Capital entered into negotiations with Natixis, their market value had fallen to less than 115 billion euros - a year ago, Natixis' market value was as high as 325 billion euros.

Also because of the urgent need for funds, Natixis Bank made some concessions to William Weber Capital and finally agreed to the conditions that William Weber Capital would purchase new shares accounting for 45% of its total share capital after the increase for 30 billion euros.

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

"Although our capital injection has temporarily alleviated Natixis's lack of funds, they still need to improve the mortgage conditions for personal mortgage loans and make some layoffs to make their operations healthier and more stable."

It can be said that Ashley Webb looks very high-spirited now, which is understandable. After all, she can become the second largest shareholder of Natixis Bank, and the shareholding ratio between her and its controlling shareholder is only 5% lower. It also means that William Webb Capital has great say 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 25 billion euros from a bet against NM Rothschild Bank, and then made huge profits by shorting the French stock market, especially bank stocks.

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

"There is no need to rush. I think the impact of the crisis will continue, so I just need to increase my stake in Natixis Bank when the time is right. In addition, is there any movement from the Rothschild family?"

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

"At first, they secretly investigated me, but I didn't give them the chance. But now, I'm afraid they don't have the time to keep an eye on me. The LCF Rothschild Group is already struggling to take care of itself, and their investment losses are not small."

"We still need to be more cautious, Ashley. Although the Rothschild family is not as powerful as before, they have been able to survive until now, so they are not that simple either."

Ashley Weber shrugged:

"I will pay attention, Your Highness."

(End of this chapter)