LONDON (MarketWatch) -- Shares in Natixis surged by more than 35% Wednesday after the French investment bank said its parent group had agreed to guarantee around 35 billion euros ($50.1 billion) of its assets.

The announcement came as the bank also said its second-quarter net loss narrowed to 883 million euros from 1.02 billion euros and that it is targeting a return to profit in the second half of the year
The guarantee from BPCE, which holds around 72% of Natixis /quotes/comstock/23r!pkn (FR:KN 3.05, +0.75, +32.39%) , will lift the bank's Tier 1 capital ratio, a key measure of financial strength, by 1.5 percentage points.
BPCE was formed earlier this year by the merger of Natixis' two main shareholders, Banque Populaire and Caisse d'Epargne, to create one of the country's biggest retail banks.
Shares in Natixis jumped 34% in early Paris trading, adding around 2.3 billion euros to its market value. The stock had been suspended all of Tuesday after a report in Les Echos newspaper that BPCE would provide a guarantee.
The stock has more than doubled since the start of the year, but is still down around 80% from a peak in early 2007.
The guarantee covers around 85% of the risky assets that Natixis had previously transferred to a separate portfolio.
Natixis said it took a further write-down of 866 million euros on the assets before the guarantee was agreed and added that its investment banking unit also took provisions of 748 million euros to cover other exposures, including real-estate loans and leverage buyout financing.
The bank's narrower net loss of 883 million euros in the second quarter was helped by a tax benefit.
On a continuing operations basis the group swung to a net loss of 212 million euros from a profit of 382 million euros a year earlier as net banking income fell 22% to 1.28 billion euros.