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France’s Natixis suspends senior trader in New York

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Via Financial Times

French bank Natixis, which has been shaken by questions over its business model and risk management, has suspended a senior trader at its New York subsidiary.

Jean-Baptiste Jacquet, a trader at the lender’s New York equity-derivatives business, has been suspended pending an internal investigation into how he managed and recorded his trades. 

The news of Mr Jacquet’s suspension was first reported by Bloomberg and confirmed by people familiar with the matter. Mr Jacquet could not immediately be reached for comment. 

According to his LinkedIn profile, Mr Jacquet has most recently led two of the bank’s US equity derivatives businesses.

Natixis shares closed down near 4 per cent in Paris, having fallen 22 per cent in the past 12 months.

Natixis said on Tuesday evening that “the case . . . is a purely internal procedure that is by no means related to a P&L loss and has no impact whatsoever on Natixis’s clients or businesses”.

The news adds to concerns about the bank’s risk management business, which has swelled over the past year. This has led chief executive François Riahi to reinforce risk controls and appoint new risk officers, including in the US.

Late last year Natixis, which is majority owned by French mutual group BPCE, disclosed a €260m loss linked to South Korean derivatives. 

In June, confidence in the bank’s multi-boutique asset-management model, which involves taking majority stakes in smaller fund management and advisory boutiques, was hit by revelations about one of its funds.

The FT reported that H2O, a London-based fund manager that is a subsidiary of Natixis Investment Managers, had put more than €1bn of investor money into illiquid bonds linked to Lars Windhorst, a German financier with a history of legal troubles.

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An internal audit into what happened at H2O is expected to be concluded in the coming weeks, said people familiar with the matter.

Earlier this month Mr Riahi, who took over in June of last year having been head of the investment bank, unveiled measures aimed at reinforcing its risk management for a “more comprehensive view into current [and] evolving risks at the level of each affiliate”. 

The bank also appointed a new chief risk officer, Olivier Vigneron, who was most recently chief risk officer for Europe, the Middle East and Africa with JPMorgan, and appointed Stéphane Morin as chief risk officer US, a newly created role. 

Despite the concerns around its model, Natixis reported net profit of €415m in the third quarter.

However, its revenues from equities trading fell 14 per cent compared with the same quarter the previous year to €336m, despite a “good performance from the US”, according to the bank.

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