Natixis examined risk executive’s share sale

Bloomberg

Officials at one of France’s biggest lenders have moved to quell internal concerns about a stock disposal by its chief risk officer just one month before the bank disclosed a large trading loss, people familiar with the matter said.
Senior officials at Natixis SA addressed employees’ questions about the trade at a series of meetings this month, according to the people, who requested anonymity. The bank said it found no wrongdoing.
The timing of the sale by Pierre Debray had raised concerns about the strength of Natixis’s compliance procedures, one of the people said.
Debray, a member of the senior management committee at Paris-based Natixis, sold stock worth about 166,000 euros ($188,000) on November 14, when the bank’s shares were trading at 5.13 euros, according to a November 16 filing. After Natixis revealed the loss in December, the shares fell for five straight trading days to 3.94 euros on December 27, the lowest in more than two years.
Natixis, the fourth-largest listed bank in France, has taken market share from rivals in recent years, in part by expanding in markets such as Asia. As markets around the world tumbled in the final months of the year, the firm flagged on November 9 that it was “facing challenging market conditions in some geographies in Asia.’’ It later revealed losses and provisions of nearly $300 million related to South Korean products called autocallables on December 18.
The shares have recovered their losses since then, and were trading at 4.55 euros in Paris. Natixis shares fell 38 percent in 2018, one of the worst performers in the 39-member Bloomberg Europe Banks and Financial Services Index. Senior executives overseeing risk typically know about losses incurred on trading positions as soon as they happen.
“It’s a credibility factor for management,” said Peter Hahn, a professor at the London Institute of Banking and Finance.