CREDIT AGRICOLE SA: Fourth quarter and full-year 2023 - VERY GOOD
RESULTS IN 2023
VERY GOOD RESULTS IN 2023 |
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2023 |
CRÉDIT AGRICOLE S.A. |
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CRÉDIT AGRICOLE GROUP |
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Stated |
Underlying |
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Stated |
Underlying |
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Revenues |
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€25,180m+12.0% 12M/12M |
€24,563m+9.5% 12M/12M |
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€36,492m+4.8% 12M/12M |
€35,641m+3.8% 12M/12M |
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Costs excl. SRF |
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-€13,632m +8.1% 12M/12M |
-€13,618m+8.9% 12M/12M |
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-€21,464m+5.7% 12M/12M |
- €21,450m+6.6% 12M/12M |
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Gross Operating Income |
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€11,039m+19.6% 12M/12M |
€10,436m+12.5% 12M/12M |
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€14,408m+5.2% 12M/12M |
€13,572m+1.3% 12M/12M |
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Cost of risk |
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-€1,777m +1.8% 12M/12M |
-€1,693m +9.2% 12M/12M |
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-€2,941m +1.7% 12M/12M |
-€2,856m +5.9% 12M/12M |
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Net income group share |
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€6,348m+19.6% 12M/12M |
€5,923m+11.0% 12M/12M |
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€8,258m +3.3% 12M/12M |
€7,647m-1.5% 12M/12M |
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C/I ratio (excl. SRF) |
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54.1%-1.9 pp 12M/12M |
55.4%-0.3 pp 12M/12M |
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58.8% +0.5 pp 12M/12M |
60.2%+1.5 pp 12M/12M |
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2023/2022 changes are pro-forma IFRS 17
NET INCOME AT RECORD LEVEL WITH STRONG
GROWTH
- Performance
driven by strong revenue growth across all business lines,
supported by development projects.
- All financial
indicators in line with, or ahead of, MTP Ambitions 2025 trajectory
-
Cost/income ratio of 55.4% (underlying excluding
SRF), below the MTP ceiling of 58%
- RoTE of
12.6% (underlying), above the MTP target of 12%
- CASA
phased-in CET1 ratio 11.8%, above the MTP target of
11%
- GCA
phased-in CET1 17.5% (820 bps>SREP)
2023 DIVIDEND REFLECTING THIS VERY GOOD
PERFORMANCE
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Increased to €1.05/share (+24% vs. 2022 dividend
excluding 2019 catch-up)
- Tripled
in 9 years
Q4-23 MARKED BY WEATHER-RELATED CLAIMS AFTER AN
ESPECIALLY HIGH Q4-22
- Stable
revenues in Q4/Q4, up +9.1% excluding Insurance, impacted
this quarter by very high weather-related claims and an
IFRS 17 base effect
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Controlled increase in recurring costs of +3.7%
Q4/Q4
- Cost of
risk in line with previous quarters
STRENGTHENED AND STEPPED-UP CLIMATE STRATEGY,
PRESENTED AT THE CLIMATE WORKSHOP
- Increased
commitment to the transition to low-carbon energy sources
- Expanded
ambitions to decarbonise our portfolios (Net Zero)
- Improvement of
CASA’s CDP rating from B to A-, translating our progress regarding
Climate strategy
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Dominique Lefebvre, Chairman of SAS Rue La
Boétie and Chairman of the Crédit Agricole S.A. Board of
Directors “Crédit Agricole Group posted very strong earnings
in 2023, three quarters of which will be retained and reinvested
into the economy to support the major social
transitions". |
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Philippe Brassac,Chief Executive Officer of
Crédit Agricole S.A. “Our strong earnings for 2023
(€8.3 billion) and the fourth quarter (€1.7 billion), while
obviously impacted by a large number of weather-related claims,
demonstrated once again that our business model is sound and
useful." |
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This press release comments on the results of
Crédit Agricole S.A. and those of
Crédit Agricole Group, which comprises the
Crédit Agricole S.A. entities and the
Crédit Agricole Regional Banks, which own 59.7% of
Crédit Agricole S.A. Please see the appendices to this
press release for details of specific items, which are restated in
the various indicators to calculate underlying income. All 2022
figures are presented on a pro forma basis under IFRS 17.
Crédit Agricole Group
Roll-out of the strategic plan
The universal banking model ensures steady, high growth
in revenues
Crédit Agricole S.A.’s model offers
constantly renewed potential for organic growth. This model is
based on three pillars: customer acquisition, customer equipment
and the development of new offers. Gross customer capture amounted
to 1.9 million new customers in 2023, growing the customer base by
191,000 customers over the year. Customer equipment is growing
steadily across our various offers. For instance, our market share
in household loans stood structurally at 30%1 and this is helping
to drive market share in our other offerings. These currently stand
at 30% in asset management2, 28% in payment services3, 22% in
individual death and disability insurance4, 19% in creditor
insurance4, 15% in life insurance4, 7% in property and casualty
insurance4, and 4% in property services. Lastly, in line with our
universal banking model, we are steadily expanding our customer
offers: CA Transitions et Energies (CATE) and CA Santé et
Territoires (CAST) business lines have recently been rolled out to
industrialise the financing of renewable energy projects as well as
the production and supply of electricity, and to offer solutions to
improve access to healthcare and support for the elderly.
This model is complemented by a steady stream of
acquisitions and partnerships, through the consolidation of
Crédit Agricole S.A.’s business lines in their markets to
build the universal bank. In 2023, Crédit Agricole S.A.’s
external growth focused on six main areas of development. First,
private banking and asset servicing increased in scale thanks to
the current transaction with Degroof Petercam5 and the acquisition
in August 2023 of the European operations of RBC Investor Services.
In addition, the Specialised Financial Services division developed
a comprehensive mobility offering: the joint venture Leasys,
created with Stellantis to become the European leader in long-term
car rental; 100% of CA Auto Bank was acquired, in order
to develop partnerships with smaller manufacturers and with
independent distributors; six European subsidiaries of ALD and
LeasePlan were acquired; and lastly, CA Mobility Services
was formed, to create 20 service offers by 2026, mainly through the
acquisition of a minority stake in WATEA6, the creation of a joint
venture with Opteven7 and the acquisition of a stake in HiFlow.
Moreover, CACF reached a milestone in 2023, with one million
vehicles financed in Europe. This figure confirms CACF’s momentum
in the mobility market. At the same time, the insurance business
line extended its distribution network through new commercial
partnerships: a non-life and credit insurance distribution
agreement in Italy between Crédit Agricole Assurances and Banco
BPM8 and a partnership between Pacifica and Renault (Mobilize
Financial Services) in car insurance. Furthermore,
Crédit Agricole S.A. is structuring its property services
operations via the acquisition of Casino’s property management
activities, and is stepping up its digitalisation and innovation
thanks to its acquisition of a stake in Worklife9 and, in payment
services, its partnership with Wordline10. On 22 January 2024,
Crédit Agricole S.A. announced its acquisition of a 7%
minority stake in Worldline. Lastly, to support the transitions in
the new CATE and CAST business lines,
Crédit Agricole S.A. acquired minority stakes of 40% in
R3 (energy transition consultancy) and 43% in Selfee (energy
production and supply). In addition,
Crédit Agricole Assurances acquired majority stakes of
93% in Omedys and 86% in Medicalib (see further below).
These two pillars of
Crédit Agricole S.A.’s universal banking model ensure
steady, high growth in revenues. From 2017 to 2023, revenues grew
every year, in every environment.
Progress of the Customer Project
To roll out the Customer Project road maps were
drawn up for the two new business lines, CA Transitions &
Energies and CA Santé et Territoires.
First, CA Transitions & Energies is
structured around two activities: on the one hand, transition
advisory services for private individuals (via J'écorénove mon
logement), corporates and public authorities (via R3), and on the
other hand, the production and short circuit supply of renewable
electricity, in cooperation with local players, supported by an
investment offer and a financing offer. In this regard, the
following targets were set: the structuring and distribution of
nearly €19 billion in financing for renewable energy projects by
2030, the production of 2 GW of installed capacity by 2028 from
assets held by Crédit Agricole, and the supply of 500 GWh by
2026, equivalent to the annual consumption of 196,000
inhabitants11. Second, CA Santé et Territoires is organised into
two industrial platforms serving the Group: access to healthcare,
and “ageing well”. With respect to access to healthcare,
Crédit Agricole S.A. aims to meet primary healthcare
needs throughout France at all times. Targeted acquisitions
(Omedis, a solution for assisted remote consultations, and
Medicalib, a solution for connecting patients and paramedics for
home care services) were carried out to structure the customer
offer. As for “ageing well”, Crédit Agricole S.A. aims to
anticipate and support society's adaptation to ageing through
accommodation services and other solutions.
In addition, progress on the customer project
was reflected in increased customer satisfaction and greater
digitalisation. The Net Promoter Score of the Regional banks was up
among professionals, corporates and high net worth customers.
Crédit Agricole has become the preferred bank of French
entrepreneurs12, LCL was recognised for its Customer Service13 and
CA Italia topped the Net Promoter Score ranking14. At the same
time, the proportion of digital customers at regional banks is high
(76.9%)15) and growing (+8.7 percentage points over the last three
years). LCL has deployed a digital journey for insurance
subscriptions and 12% of its sales are made in “selfcare”. Lastly,
BforBank's new commercial launch took place in September 2023. The
increase in customer satisfaction and digitalisation was reflected
in the customer acquisition figures. Since the launch of the
Medium-Term Plan, net customer capture stood at 573,000, against a
target of one million new customers for the entire duration of the
Plan.
Climate strategy
New strong commitments in line with existing
commitments were announced at the climate workshop held on 14
December 2023.
Crédit Agricole Group announced that
it would focus and strengthen its support for renewable and
low-carbon energies, in particular reflected by two targets:
multiplying by 3 the annual structuring by CATE of renewable energy
financing in France between 2020 and 2030, thus bringing cumulative
financing to €19 billion by 2030; and a 80% increase in
Crédit Agricole CIB’s exposure to low-carbon energies
between 2020 and 2025, i.e. €13.3 billion in 2025 (vs. a
target of +60% announced at the end of 2022). The
Crédit Agricole Group is also stepping up its fossil fuel
divestment, in particular with the announcement that it will halt
all new fossil fuel development projects and implement a selective
approach to supporting energy providers. The Group will also
accelerate the reduction of financed emissions in the oil and gas
sector by -75% from 2020 levels by 2030 (compared with the -30%
reduction initially announced for 2022).
Crédit Agricole has also made commitments
in 10 sectors that account for 60% of the Group's outstandings and
75% of global emissions, with the publication of Net Zero
trajectories in eight sectors: oil and gas, automotive,
electricity, commercial real estate, aviation, shipping, steel and
cement; and measures to support trajectories in residential real
estate and agriculture.
Achieving these targets is supported by
collective action to incorporate these commitments into the Group's
activities: in its offers, by driving the expansion of the Group’s
range of services and expertise; in its processes, by managing
carbon as a scarce resource, accounted for in budgeting processes,
risk policies and lending decisions; and in its reporting, by the
transparent and annual disclosure of the progress on its
decarbonisation trajectories.
Group activity
Commercial activity saw a
decline in lending in France, offset by the excellent performances
of the other business lines.
In 2023, gross customer capture
stood at 1.9 million retail banking customers, while the
customer base grew by +191,000 customers. The slowdown in
retail banking activity in France translated into a lacklustre loan
production in retail banking in France. Between
the third quarter and fourth quarters of 2023, production was
stable at regional banks (-1.4%) and down at LCL (-6.6%). In
consumer finance, production was stable compared
with the fourth quarter of 2022, as the increased selectivity in
the loan application process was maintained.
At the same time, corporate and investment
banking, asset management, insurance and international retail
banking activities once again enjoyed very good momentum this
quarter. Corporate and Investment Banking posted a
record performance for the quarter and for 2023. It continued to
hold leading positions, ranking 2nd in green, social and
sustainable bond issuance16 in euros, and 2nd in issuances of all
euro bonds worldwide17. Asset management was
driven by strong inflows (€26 billion in 2023, of which €19 billion
in the fourth quarter of 2023), taking assets under management
beyond the €2,000 billion mark. Insurance was also
boosted by a record unit-linked rate of 50.2% of gross inflows in
this quarter; the property and casualty insurance equipment rate
increased to 43.1% for the Regional Banks (+0.5 percentage
point compared to the fourth quarter of 2022), 27.5% for LCL
(+0.4 percentage point) and 18.8% for CA Italy
(+2.0 percentage points); property and casualty insurance
premium income increased by +7.6% compared to the fourth quarter of
2022; and death and disability insurance activity was strong
(premium income rose by +10.6% compared to the fourth quarter of
2022). Lastly, for CA Italy, loan production continued to
recover strongly, increasing by +32.3% in Italy compared with the
third quarter of 2023.
Lastly, loans outstanding in retail banking, at
€876 billion18, grew further by 2.5% compared with the fourth
quarter of 2022. Customer savings in the retail banking balance
sheet, amounting to €823 billion19, increased again in this
quarter by +2.0% compared to September 2023, of which +1.5% for the
Regional Banks, +3.9% for LCL and 1.8% for CA Italy.
Group results
In the fourth
quarter of 2023,
Crédit Agricole Group’s stated
net income Group share came to
€1,724 million, down -23.2% compared to the
fourth quarter of 2022.
The specific items for the
quarter had a combined impact of +€86 million on net
income Group share and included +€69 million in
recurring accounting items and +€17 million in non-recurring
items. The recurring items mainly correspond to the reversal of the
Home Purchase Saving Plans provision of +€63 million
(+€5 million for LCL, +€4 million for the Corporate
Centre and +€55 million for the Regional Banks); the other
recurring items (+€6 million) are split between the issuer spread
portion of the FVA20 and secured lending (+€4 million) and
loan book hedging (+€1 million). The non-recurring items relate to
the ongoing reorganisation of the Mobility activities21 in the SFS
division (+€17 million).
Restated from these specific items,
Crédit Agricole Group’s underlying
net income Group share22 amounted to
€1,638 million, down -27.5% compared with the
fourth quarter of 2022.
Crédit Agricole Group – Stated and Underlying results Q4-2023
and Q4-2022
€m |
Q4-23stated |
Specific items |
Q4-23underlying |
Q4-22stated |
Specific items |
Q4-22underlying |
∆ Q4/Q4stated |
∆ Q4/Q4underlying |
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Revenues |
8,769 |
93 |
8,677 |
8,852 |
(63) |
8,914 |
(0.9%) |
(2.7%) |
Operating
expenses excl.SRF |
(5,682) |
4 |
(5,686) |
(5,283) |
(84) |
(5,199) |
+7.5% |
+9.4% |
SRF |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Gross operating income |
3,088 |
97 |
2,991 |
3,568 |
(147) |
3,715 |
(13.5%) |
(19.5%) |
Cost of
risk |
(762) |
- |
(762) |
(753) |
- |
(753) |
+1.1% |
+1.1% |
Equity-accounted entities |
73 |
- |
73 |
97 |
(8) |
105 |
(24.7%) |
(30.5%) |
Net income on
other assets |
(19) |
- |
(19) |
(13) |
- |
(13) |
+45.4% |
+45.4% |
Change in
value of goodwill |
2 |
12 |
(9) |
- |
- |
- |
n.m. |
n.m. |
Income before tax |
2,382 |
109 |
2,274 |
2,899 |
(155) |
3,054 |
(17.8%) |
(25.5%) |
Tax |
(455) |
(23) |
(432) |
(436) |
176 |
(612) |
+4.3% |
(29.4%) |
Net income
from disconted or held-for-sale ope. |
(10) |
- |
(10) |
(27) |
(14) |
(13) |
(63.2%) |
(24.3%) |
Net income |
1,918 |
86 |
1,832 |
2,435 |
7 |
2,428 |
(21.3%) |
(24.6%) |
Non
controlling interests |
(194) |
- |
(194) |
(190) |
(20) |
(170) |
+2.1% |
+13.9% |
Net income Group Share |
1,724 |
86 |
1,638 |
2,246 |
(13) |
2,258 |
(23.2%) |
(27.5%) |
Cost/Income ratio excl.SRF (%) |
64.8% |
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65.5% |
59.7% |
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58.3% |
+5.1 pp |
+7.2 pp |
In the fourth quarter of 2023, total
underlying revenues amounted to €8,677 million,
down -2.7% compared to the fourth quarter of 2022, due to the Asset
Gathering business line (-23.3%), in which the Insurance business
line was impacted by the very high weather-related claims compared
with a positive Q4-22, as well as by an IFRS 1723 base effect,
and the French Retail Banking business line (-4.7%) due to the
increase in refinancing costs and customer resources. This was
partly offset by the steady increase in the loan production rate
and by gains from macro-hedging. Revenues from the other business
lines rose: Specialised Financial Services (+23.9%), boosted by the
line-by-line integration of CA Auto Bank24 since the second quarter
of 2023 and the takeover of ALD and Leaseplan activities in six
European countries25 since the third quarter of 2023; International
Retail Banking was up 9.2%, with a higher net interest margin over
the period as a result of the rise in interest rates; the Large
Customers division posted revenues up +8.6%, driven by a high level
of revenues in CIB and the integration of ISB26 in Asset
Servicing.
Underlying operating expenses
excluding the SRF (Single Resolution Fund) were
-€5,686 million, up +9.4% compared to the
fourth quarter of 2022. This increase is primarily due to
the higher recurring costs of the business lines (staff costs and
variable compensation, mainly in Retail Banking, International
Retail Banking and LCL). It also reflects a scope effect of +€192
million linked to the consolidation of CA Auto Bank within the
Specialised Financial Services division (+€83 million), ISB
activities within the Asset Servicing division (+€100 million) and
the first integration of CATE (+€9 million) into the Corporate
Centre division. Lastly, it also reflects non-recurring items, i.e.
a 2022 base effect and other exceptional items. Overall, the Group
posted an underlying cost/income ratio excluding
SRF of 65.5%, up +7.2 percentage points versus the
fourth quarter of 2022, and an underlying gross operating
income of €2,991 million, down -19.5% over the same
period.
The underlying cost of credit
risk increased moderately, to -€762 million, an
increase of +1.1% compared to the fourth quarter of 2022, when it
stood at -€753 million. The expense of -€762 million in the
fourth quarter of 2023 breaks down into a -€27 million provision
for performing loans (levels 1 and 2) compared with a -€50 million
provision in the fourth quarter of 2022, a -€669 million provision
for proven risk (level 3), compared with -€741 million in the
fourth quarter of 2022 (which included provisions for a specific
loan), and finally a -€66 million provision for other risks
corresponding mainly to legal provisions. The provisioning levels
were determined by taking into account several weighted economic
scenarios, as in previous quarters, and by applying adjustments on
sensitive portfolios. The weighted economic scenarios for the
fourth quarter were updated, with a favourable scenario (French GDP
at +1.2% in 2024, +1.6% in 2025) and an unfavourable scenario
(French GDP at +0.1% in 2024 and +0.7% in 2025). The
cost of credit risk on outstandings27
over a rolling four-quarter period stood at
25 basis points, which is in line with the 25 basis
point assumption of the Medium-Term Plan. It stands at
26 basis points on a quarterly annualised basis28.
Underlying pre-tax income stood at
€2,274 million, a year-on-year decrease of -25.5%
from fourth quarter 2022. The underlying pre-tax income included
the contribution from equity-accounted entities
for €73 million (down -30.5%, mainly due to the line-by-line
consolidation of CA Auto Bank, formerly FCA Bank) and net income on
other assets, which came to €-19 million this quarter. The
underlying tax charge fell
-29.4% over the period.
Underlying net income before
non-controlling interests was down -24.6% to
€1,832 million. Non-controlling interests rose +13.9%. Lastly,
underlying net income Group share came to
€1,638 million, down -27.5% compared with the fourth
quarter of 2022.
Crédit Agricole Group – Stated and underlying results, 2023 and
2022 |
|
€m |
2023stated |
Specific items |
2023underlying |
2022stated |
Specific items |
2022underlying |
∆ 2023/2022stated |
∆ 2023/2022underlying |
|
|
|
|
|
|
|
|
|
Revenues |
36,492 |
851 |
35,641 |
34,804 |
480 |
34,324 |
+4.8% |
+3.8% |
Operating expenses
excl.SRF |
(21,464) |
(14) |
(21,450) |
(20,304) |
(174) |
(20,130) |
+5.7% |
+6.6% |
SRF |
(620) |
- |
(620) |
(803) |
- |
(803) |
(22.8%) |
(22.8%) |
Gross operating income |
14,408 |
837 |
13,572 |
13,698 |
306 |
13,392 |
+5.2% |
+1.3% |
Cost of risk |
(2,941) |
(84) |
(2,856) |
(2,892) |
(195) |
(2,697) |
+1.7% |
+5.9% |
Equity-accounted
entities |
263 |
(39) |
302 |
419 |
(8) |
427 |
(37.2%) |
(29.4%) |
Net income on other
assets |
88 |
89 |
(1) |
28 |
- |
28 |
x 3.1 |
n.m. |
Change in value of
goodwill |
2 |
12 |
(9) |
- |
- |
- |
n.m. |
n.m. |
Income before tax |
11,821 |
814 |
11,007 |
11,253 |
103 |
11,150 |
+5.0% |
(1.3%) |
Tax |
(2,748) |
(203) |
(2,545) |
(2,647) |
59 |
(2,706) |
+3.8% |
(5.9%) |
Net income from
discounted or held-for-sale ope. |
(3) |
- |
(3) |
121 |
80 |
40 |
n.m. |
n.m. |
Net income |
9,071 |
611 |
8,459 |
8,727 |
242 |
8,484 |
+3.9% |
(0.3%) |
Non-controlling
interests |
(813) |
(0) |
(813) |
(729) |
(7) |
(722) |
+11.4% |
+12.5% |
Net income Group Share |
8,258 |
611 |
7,647 |
7,997 |
236 |
7,762 |
+3.3% |
(1.5%) |
Cost/Income ratio excl.SRF (%) |
58.8% |
|
60.2% |
58.3% |
|
58.6% |
+0.5 pp |
+1.5 pp |
Over the full year 2023,
stated net income Group share amounted to €8,258 million,
versus €7,997 million for full year 2022, an increase of
+3.3%.
Specific items for 2023 had a
positive impact of +€611 million on
stated net income Group share and were composed of
+€331 million in recurring accounting items and +€280 million
in non-recurring items. The recurring items mainly correspond to
the reversal of the Home Purchase Saving Plans provision for
+€360 million, as well as the accounting volatility items of
the Large Customers division (the DVA for -€11 million and
loan book hedging for -€18 million). The non-recurring items
are related to the reorganisation of the Mobility activities29 of
the Specialised Financial Services division (+€176 million)
and the reversal of provision for the Cheque Image Exchange fine
(+€104 million).
Excluding specific items,
underlying net income Group share amounted
to €7,647 million, down -1.5%
compared with full year 2022.
Underlying revenues totalled
€35,641 million, up +3.8% compared
with 2022. This increase was due to very high revenues across all
the business lines in the Asset Gathering
division, the line-by-line integration of CA Auto Bank in
the Specialised Financial Services division, a
very high level of revenues in the Large Customers
division and the higher net interest margin in the
International Retail Banking division; by
contrast, revenues in the French Retail Banking
division were affected by the lower interest margin.
Underlying operating expenses
excluding SRF amounted to -€21,450 million, up +6.6% compared
with 2022, mainly including the scope effect relating to the
line-by-line consolidation of CA Auto Bank within the
Specialised Financial Services division since the second quarter of
2023, the consolidation of the operations of ISB within the Asset
Servicing division since the third quarter of 2023, and the first
consolidation of CATE into the Corporate Centre division in the
fourth quarter of 2023. The remainder of the increase was due to
higher staff costs in an inflationary environment, variable
compensation linked to business performance, and higher IT
expenses. The underlying cost/income ratio excluding
SRF was 60.2%, up +1.5 percentage points compared with
that of 2022. The SRF totalled -€620 million in 2023, down
-22.8% compared to 2022.
Underlying gross operating
income totalled €13,572 million, up +1.3% compared
with 2022.
The underlying cost of risk was
-€2,856 million (including -€220 million in cost of risk
on performing loans (Stages 1 and 2), -€2,554 million in cost
of proven risk (stage 3) and -€82 million in other risks, i.e.
an increase of +5.9% compared with 2022.
In 2023, risk indicators confirmed the
high quality of Crédit Agricole Group’s assets and risk
coverage level. The diversified loan book is mainly geared
towards home loans (46% of gross outstandings) and corporates (32%
of gross outstandings). Loan loss reserves amounted to
€20.7 billion (€11.1 billion for Regional Banks), 42% of
which represented provisioning of performing loans (48% for
Regional Banks). The loan loss reserves for performing loans have
increased at Group level by +€3.3 billion since the fourth
quarter of 2019. The prudent management of these loan loss reserves
has enabled the Crédit Agricole Group to have one of the
best30 overall coverage ratios for doubtful loans (82.6% at the end
of December 2023) among the largest European banks.
Underlying income before tax,
discontinued operations and non-controlling interests came to
€11,007 million, down slightly by -1.3% compared with 2022. The tax
charge was €2,545 million, down by -5.9%, with an underlying
effective tax rate of 23.8%.
Underlying
net income Group share thus came to
€7,647 million, down by -1.5% compared with
2022.
NB: Unless mentioned otherwise, the results by
business will be commented on the basis of the stated results.
Regional banks
In 2023, gross customer capture was
positive with +1.1 million new customers31. The customer
base of the Regional Banks was marked by the high percentage of
customers using their current accounts as their main account, at
76.1%32 (up 2 percentage points over the last three years), and by
the high proportion of digital customers, at 76.9%33. The payment
card stock was up by +1.7% year-on-year, 14.8% of which was made up
of premium cards. Lastly, the equipment rate for property
and casualty insurance was 43.1% at end-December 2023, up
+0.5 percentage point compared with September
2022.Loan production was down -28.6% compared to
the fourth quarter 2022, and -1.4% compared to the third quarter
2023. The drop was sharp for home loans (-40.8% compared to the
fourth quarter 2022, and -15.9% compared to the third quarter
2023). Conversely, the home loan production rate increased by
42 basis points compared with the third quarter of 2023. The
average rate for 20-25 year lending was 4.32% in the first week of
January 2024. Loan outstandings stood at
€646.2 billion at end-December 2023 (+2.4% compared with
end-December 2022 and +0.2% compared with end-September 2023),
driven by the corporate market (+2.6% compared with the fourth
quarter of 2022).Total customer assets rose by
+3.9% year on year to €888.0 billion at end-December 2023.
This growth was mainly driven by on-balance sheet deposits, which
reached €595.8 billion at end-December 2023, up +3.3% compared
with end-December 2022. Compared with end-September 2023,
on-balance sheet deposits rose by +1.5%, driven by an +18.3%
increase in term deposits and, to a lesser extent, passbook
accounts (+2.2%). Outflows from demand deposits stabilised (-3.4%)
compared with end-September 2023. Off-balance sheet customer assets
totalled €292.2 billion at end-December 2023, up +5.0%
year-on-year, driven by net inflows, particularly on unit-linked
bonds, and positive market effects.In the fourth
quarter of 2023, the stated revenues of the Regional Banks
including SAS Rue La Boetie’s dividend amounted to
€3,223 million, down -4.0% from fourth quarter 2022. Net
interest margin was down -31.8%34 compared with the fourth quarter
of 2022, and -10.6% compared with the third quarter of 202335,
penalised by higher refinancing costs, partially offset by
increased loan yields and macro-hedging gains. Portfolio revenues
increased in the fourth quarter of 2023, reflecting positive market
effects. Fee and commission income remained on a positive trend, at
+6.5%, thanks to strong momentum in payment and insurance.
Operating expenses were down by -2.0% compared
with the fourth quarter of 2022, due to a base effect in the fourth
quarter of 2022 that notably included a donation to combat
illiteracy for €35 million and the costs of transforming CAGIP
for €30 million; growth in recurring expenses was therefore
only -0,0%36. As a result, gross operating income
was down -9.8% compared with the fourth quarter of 2022.
The cost of risk was up +3.9% compared with the
fourth quarter of 2022 to -€322 million. Risk indicators
remained stable, with a cost of risk/outstandings of 18 basis
points, a non-performing loans ratio of 1.8% (or +0.1 percentage
points compared with the third quarter of 2023) and a high coverage
ratio of 96.5% (-1.1 percentage points compared with the third
quarter of 2023). The net income Group share of
the Regional Banks was €349 million in the fourth quarter of
2023, down -16.9% compared to the fourth quarter of 2022.
The Regional banks’ contribution to the results of
Crédit Agricole Group amounted to
€336 million37 (-23.5% compared with
the fourth quarter of 2022) in stated net income Group share in the
fourth quarter of 2023, with revenues of €3,227 million
(-5.0%) and a cost of risk of -€321 million (+4.6%).In
2023, revenues including the SAS Rue La Boétie dividend
amounted to €14,792 million, down -4.7% compared with 2022.
Net interest margin, excluding the reversal of Home Purchase
Savings Plans provisions, was down -27.6% over the full year to
€4,482 million at the end of 2023. It was adversely affected
by higher refinancing costs, which rose faster than the gradual
repricing of new loan production. Portfolio revenues were up due to
the positive market effect, and fee and commission income came to
€7,277 million, up +3.7% in 2023. Operating expenses posted a
controlled increase of +2.1% in 2023. Gross operating
income was down as a result by-15.4% over 2023 to
€5,061 million. The cost of risk remained
stable over the full year, rising by +1.3% to €1,155 million.
The Regional Banks’ net income Group share,
including SAS Rue La Boétie’s dividend, amounted to
€3,386 million, down -15.9% over the full year
2023.The Regional banks’ contribution to the results of
Crédit Agricole Group in 2023 amounted to
€1,756 million (-32.6%) in stated net income Group share, with
revenues of €13,259 million (-6.3%) and a cost of risk of
-€1,152 million (+1.4%).
Crédit Agricole S.A.
Results
Crédit Agricole S.A.’s Board of
Directors, chaired by Dominique Lefebvre, met on 7 February
2024 to examine the financial statements for the fourth quarter of
2023.
Crédit Agricole S.A. – Stated and underlying results, Q4-2023
and Q4-2022
€m |
Q4-23stated |
Specific items |
Q4-23underlying |
Q4-22stated |
Specific items |
Q4-22underlying |
∆ Q4/Q4stated |
∆ Q4/Q4underlying |
Revenues |
6,040 |
19 |
6,021 |
5,967 |
(63) |
6,029 |
+1.2% |
(0.1%) |
Operating
expenses excl.SRF |
(3,710) |
4 |
(3,714) |
(3,231) |
(20) |
(3,211) |
+14.8% |
+15.7% |
SRF |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Gross
operating income |
2,330 |
24 |
2,307 |
2,735 |
(83) |
2,818 |
(14.8%) |
(18.1%) |
Cost of risk |
(440) |
- |
(440) |
(443) |
- |
(443) |
(0.7%) |
(0.7%) |
Equity-accounted
entities |
61 |
- |
61 |
80 |
(8) |
88 |
(24.3%) |
(31.3%) |
Net income on
other assets |
(17) |
- |
(17) |
(10) |
- |
(10) |
+61.3% |
+61.3% |
Change in value
of goodwill |
2 |
12 |
(9) |
- |
- |
- |
n.m. |
n.m. |
Income
before tax |
1,937 |
35 |
1,902 |
2,362 |
(91) |
2,453 |
(18.0%) |
(22.5%) |
Tax |
(369) |
(4) |
(365) |
(323) |
160 |
(483) |
+14.1% |
(24.5%) |
Net income from
discounted or held-for-sale ope. |
(10) |
- |
(10) |
(27) |
(14) |
(13) |
n.m. |
n.m. |
Net
income |
1,558 |
32 |
1,527 |
2,012 |
55 |
1,957 |
(22.6%) |
(22.0%) |
Non-controlling
interests |
(224) |
(0) |
(224) |
(228) |
(30) |
(199) |
(2.1%) |
+12.4% |
Net
income Group Share |
1,334 |
31 |
1,303 |
1,784 |
25 |
1,758 |
(25.2%) |
(25.9%) |
Earnings
per share (€) |
0.36 |
0.01 |
0.35 |
0.49 |
0.01 |
0.48 |
(25.2%) |
(26.1%) |
Cost/Income ratio excl. SRF (%) |
61.4% |
|
61.7% |
54.2% |
|
53.3% |
+7.3 pp |
+8.4 pp |
In the fourth quarter of
2023, Crédit Agricole S.A.’s stated
net income Group share amounted to
€1,334 million,
a decline of -25.2% compared to the fourth quarter of
2022.
Specific items for the quarter
had a cumulative impact of +€31 million on net income Group
share, and included recurring accounting items for
+€14 million and non-recurring items for +€17 million.
The recurring items mainly correspond to the reversal of the Home
Purchase Savings Plans provision of +€8 million
(+€4 million for LCL and +€4 million for the Corporate
Centre); the other recurring items – the issuer spread portion of
the FVA38 and secured lending (+€4 million) and loan book
hedging (+€1 million) – offset each other. The non-recurring
items relate to the ongoing reorganisation of the Mobility
activities39 in the SFS division (+€17 million).
Excluding specific items,
underlying net income Group share40 stood at
€1,303 million, down -25.9% compared with the
fourth quarter of 2022.
Underlying revenues totalled
€6,021 million, stable at -0.1% compared with the fourth
quarter of 2022, but up +9.1% excluding the Insurance business
line. Excluding Insurance, revenue growth was driven by all
business lines: Asset Management was up +2.1%,
driven by financial income and stable management fees; revenues
from the Large Customers division were up +8.5%,
thanks to a good level of CIB revenues (+1.1%) compared with an
already-high fourth quarter 2022, and revenues from Asset Servicing
(+39.9%), driven by the integration of RBC IS Europe’s European
activities41; revenues from the Specialised Financial
Services division were up +23.9%, boosted by the
integration of CA Auto Bank42 and the takeover of the activities of
ALD and LeasePlan in six European countries43 since the third
quarter of 2023; CACF’s margin rate was up between the fourth and
third quarters of 2023; revenues from the French Retail
banking division rose by +4.2%44 driven by a +3.5%
increase in the net interest margin and a +4.9% increase in fee and
commission income; revenues from the International Retail
banking division were up +8.7%, with a +4.4% increase for
CA Italy, driven by growth in NIM, and a +22.5%45 increase for
Poland, Egypt and Ukraine. Revenues from the
Insurance business line were down -47.3% compared
with the fourth quarter of 2022 pro forma IFRS 17 data,
accounted for by a -€262 million decline due to the high level
of weather-related claims during the quarter compared with a more
positive fourth quarter 2022, and a -€205 million decline due
to the base effect of IFRS 1746 and other factors.
Underlying operating expenses
stood at -€3,714 million, an increase of +15.7%, or an
increase of -€503 million compared with the fourth quarter of
2022, of which +3.7% was for recurring business line expenses (i.e.
an increase of -€141 million, of which around
-€103 million for staff costs and variable compensation,
mainly in the Large Customers, International Retail Banking and LCL
divisions). This change includes a scope effect of
-€192 million, linked to the consolidation of
CA Auto Bank within the Specialised Financial Services
division (-€83 million), the consolidation of RBC IS Europe
activities within the Asset Servicing division (-€100 million)
and the first integration of Crédit Agricole Transitions
& Énergies within the Corporate Centre division
(-€9 million). In addition, there were non-recurring effects
of approximately -€187 million, including around
-€97 million for 2022 base effect47, around -€89 million
for other non-recurring items48 and a foreign exchange impact of
+€18 million.
The underlying cost/income ratio
excluding SRF in the fourth quarter of 2023 thus stood at
61.7%, an improvement of +8.4 percentage points compared
with the fourth quarter of 2022.
Underlying gross operating
income stood at €2,307 million, or -18.1%.
As at 31 December 2023, risk indicators confirm
the high quality of Crédit Agricole S.A.’s assets
and risk coverage level. The diversified loan book is
mainly geared towards home loans (27% of gross outstandings) and
corporates (43% of Crédit Agricole S.A. gross
outstandings). The Non-Performing Loans ratio was down slightly
compared with the previous quarter and remained low at 2.6%
(-0.1 percentage point). The coverage ratio49 was high at
70.8%, up +0.1 percentage points over the quarter.
Loan loss reserves50 amounted to
€9.6 billion for Crédit Agricole S.A., down -2.7%
compared with end-September 2023. Of those loan loss reserves, 35%
were for performing loan provisioning compared with 22% at
end-2019. Loan loss reserves for performing loans were up by
€1.4 billion compared with end-2019.
The underlying cost of credit
risk was stable at -€440 million (i.e. -0.7% compared
with the fourth quarter of 2022, when it stood at
-€443 million). The -€440 million expense in the fourth
quarter of 2023 consists of a small provision on performing loans
(Stages 1 and 2) for -€0.8 million (compared with a reversal
of +€53 million in the fourth quarter of 2022), a provision of
-€373 million for proven risk (Stage 3 – compared with
-€521 million in the fourth quarter of 2022), and lastly, a
provision of -€66 million for other risks, corresponding
mainly to legal provisions. The provisioning levels were determined
by taking into account several weighted economic scenarios, as in
previous quarters, and by applying adjustments on sensitive
portfolios. The weighted economic scenarios for the fourth quarter
were updated, with a favourable scenario (French GDP at +1.2% in
2024, +1.6% in 2025) and an unfavourable scenario (French GDP at
+0.1% in 2024 and +0.7% in 2025). The cost of risk relative to
outstandings on a four quarter rolling basis51 stood at
33 basis points, i.e. in line with the assumption of
the Medium-Term Plan of 40 basis points and 34 basis
points on an annualised quarterly basis52.
The underlying contribution of
equity-accounted entities came to €61 million
(-31.3% compared with the fourth quarter of 2022) and net
income on other assets was -€17 million
(-€7 million compared with the fourth quarter of 2022); the
changes in these two income statement categories were impacted by a
scope effect with the line-by-line consolidation of
CA Auto Bank within the Specialised Financial Services
division.
Underlying pre-tax income stood
at €1,902 million, down -22.5% compared with the fourth
quarter of 2022.
The underlying effective tax
rate was 19.7% and the underlying tax charge was
-€365 million, down -24.5% compared with the fourth quarter of
2022. Net income from discontinued or held-for-sale
operations was -€10 million, compared with
-€13 million in the fourth quarter of 2022.
Underlying net income before
non-controlling interests was accordingly down -22.0% to
€1,527 million. Non-controlling interests
amounted to -€224 million, up +12.4% year on year.
Underlying
net income Group share was down -25.9%
compared with the fourth quarter of 2022 at
€1,303 million.
Underlying earnings per share (pro-forma
IFRS 17) in the fourth quarter of 2023 came to €0,35,
or -26.1%, compared to the fourth quarter of 2022.
Crédit Agricole S.A. – Stated and underlying results, 2023 and
2022
|
|
|
|
|
|
|
|
|
€m |
2023stated |
Specific items |
2023underlying |
2022stated |
Specific items |
2022underlying |
∆ 2023/2022stated |
∆ 2023/2022underlying |
Revenues |
25,180 |
617 |
24,563 |
22,491 |
68 |
22,423 |
+12.0% |
+9.5% |
Operating
expenses excl.SRF |
(13,632) |
(14) |
(13,618) |
(12,614) |
(110) |
(12,504) |
+8.1% |
+8.9% |
SRF |
(509) |
- |
(509) |
(647) |
- |
(647) |
(21.3%) |
(21.3%) |
Gross
operating income |
11,039 |
603 |
10,436 |
9,231 |
(42) |
9,273 |
+19.6% |
+12.5% |
Cost of risk |
(1,777) |
(84) |
(1,693) |
(1,746) |
(195) |
(1,551) |
+1.8% |
+9.2% |
Equity-accounted
entities |
197 |
(39) |
235 |
371 |
(8) |
379 |
(46.9%) |
(37.9%) |
Net income on
other assets |
85 |
89 |
(4) |
15 |
- |
15 |
x 5.5 |
n.m. |
Change in value
of goodwill |
2 |
12 |
(9) |
- |
- |
- |
n.m. |
n.m. |
Income
before tax |
9,546 |
580 |
8,966 |
7,871 |
(245) |
8,116 |
+21.3% |
+10.5% |
Tax |
(2,201) |
(153) |
(2,047) |
(1,806) |
150 |
(1,956) |
+21.8% |
+4.7% |
Net income from
discounted or held-for-sale ope. |
(3) |
- |
(3) |
121 |
80 |
40 |
n.m. |
n.m. |
Net
income |
7,343 |
427 |
6,916 |
6,186 |
(15) |
6,201 |
+18.7% |
+11.5% |
Non-controlling
interests |
(995) |
(2) |
(992) |
(879) |
(17) |
(863) |
+13.1% |
+15.1% |
Net
income Group Share |
6,348 |
425 |
5,923 |
5,306 |
(32) |
5,338 |
+19.6% |
+11.0% |
Earnings
per share (€) |
1.94 |
0.14 |
1.80 |
1.68 |
(0.01) |
1.69 |
+15.6% |
+6.5% |
Cost/Income ratio excl.SRF (%) |
54.1% |
|
55.4% |
56.1% |
|
55.8% |
-1.9 pp |
-0.3 pp |
In 2023, the stated net income
Group share was €6,348 million, an all-time high and up
sharply by +19.6% compared with 2022, boosted by all development
projects.
Specific items for 2023
had a positive impact of +€425 million on
stated net income Group share and comprise +€188 million
in recurring accounting items and +€237 million in
non-recurring items. The recurring items mainly correspond to the
reversal of the Home Purchase Savings Plans provision for
+€216 million, as well as the accounting volatility items of
the Large Customers division (the DVA for -€11 million and
loan book hedging for -€18 million). The non-recurring items
are related to the reorganisation of the Mobility activities53 of
the Specialised Financial Services division (+€176 million)
and the reversal of the provision for the Cheque Image Exchange
fine (+€62 million).
Excluding specific items,
underlying net income Group share reached
€5,923 million, up +11.0% compared
with 202254.
Underlying earnings per share stood at
€1.80 per share for the full year 2023, up +6.5% compared
with 2022.
Underlying55
RoTE, which is calculated on the basis of an
annualised underlying net income Group share56 and IFRIC charges
linearised over the year, net of annualised
Additional Tier 1 coupons (return on equity Group share
excluding intangibles) and restated for certain volatile items
recognised in equity (including unrealised gains and/or losses),
came to 12.6% for 2023, stable from the full year
2022 (12.6%).
Underlying revenues were
up +9.5% compared with the full year 2022, driven
by all business lines. Underlying operating
expenses excluding SRF were up +8.9%. The cost/income
ratio excluding SRF was 55.4%, an improvement of 0.3 percentage
point compared with that of 2022 and below the Medium-Long Term
Plan target. The SRF for the period came to -€509 million, or
-21.3% compared with the full year 2022. Underlying
gross operating income totalled
€10,436 million, up +12.5% compared with the full year 2022.
The cost of risk increased by +9.2% over the
period, to -€1,693 million, versus -€1,551 million for
the full year 2022. Lastly, the results of the
equity-accounted entities decreased by -37.9%, due to the
line-by-line consolidation of CA Auto Bank since the
second quarter of 2023.
Analysis of the activity and the results of
Crédit Agricole S.A.’s divisions and business
lines
Activity of the Asset Gathering division
In the fourth quarter of 2023, assets under
management in the Asset Gathering (AG) division stood at
€2,564 billion, up +2.9% compared to end-September 2023,
thanks to net inflows and positive market effects this quarter
(+€72.9 billion). Net inflows for the quarter amounted to
+€19.4 billion for the division, mainly due to
+€19.5 billion in net inflows for Amundi and
+€0.5 billion in net inflows for Savings/Retirement, while
Wealth Management recorded a slight outflow (-€0.6 billion).
In addition, the deconsolidation of Lyxor Inc. created a scope
effect in the amount of -€20.0 billion this quarter. Over the
year, assets under management also rose by +6.2% due to a positive
market effect (+€144.9 billion), with positive year-on-year
net inflows (+€23.9 billion) and strong inflows into
unit-linked bond products. Excluding double counting, assets under
management stood at €2,285 billion at 31 December 2023,
up +6.8% compared to 31 December 2022.
The Insurance activity
(Crédit Agricole Assurances) generated
fourth-quarter total premium income of €9.5 billion, up +12.4%
compared with the fourth quarter of 2022, driven by higher premium
income in Savings/Retirement, and in Death and Disability, Creditor
and Group insurance. Premium income for the whole of 2023 reached a
record €37.2 billion, up 4.5% from 2022.
In Savings/Retirement, premium
income for the fourth quarter of 2023 amounted to €7.1 billion
(up +13.6% from the fourth quarter of 2022), driven in particular
by the acquisition of a large group retirement contract. The
unit-linked rate rose by 5.9 percentage points compared with the
fourth quarter of 2022, to 50.2%. Excluding the group retirement
contract mentioned previously, the unit-linked rate in gross
inflows would be 45.5%. Net inflows amounted to €0.5 billion
this quarter; the positive net inflows from unit-linked contracts
(+€1.8 billion) were unable to offset the net outflows of the
euro funds (-€1.3 billion). For the full year 2023, premium
income amounted to €26.4 billion, up +4.4% from the full year
2022, driven by the unit-linked bond products and group retirement
insurance.
Assets (savings, retirement and
death and disability) stood at the record level of
€330.3 billion, up year-on-year by +€8,9 billion, i.e.
+2.8%. Unit-linked contracts stood at a record 28.9% of assets, up
+3.3 percentage points year-on-year, buoyed by the successful
marketing of unit-linked bond products and favourable financial
markets.
The average policyholders’ deferred
profit-sharing rate on Predica’s euro-denominated policies
stood at 2.80%57 at the end of 2023, up +50 cents year-on-year
(after a +106 cent increase in 2022). Lastly, the Policy
Participation Reserve (PPE58) amounted to €9.8 billion at
31 December 2023, representing 4.5% of total euro
outstandings.
Property and casualty insurance
activity was dynamic, with premium income of €1.1 billion in
the fourth quarter of 2023, up +7.6% compared to fourth quarter
2022. In 2023, total premium income was €5.7 billion, up +9.1%
compared with the full year 2022. At the end of December 2023, the
portfolio of property and casualty policies totalled nearly
15.8 million59, a +3.5% increase over one year. The equipment
of individual customers in the banking networks of
Crédit Agricole Group increased compared with
end-December 2022 for all networks: 43.1%, or +0.5 percentage
point for Regional Banks, 27.5%, or +0.4 percentage point for
LCL, and 18.8% for CA Italy including Creval’s customer base,
or +2.0 percentage points. The combined ratio stood at
97.1%60, up 1.8 percentage points year-on-year, with the fourth
quarter of 2023 having been heavily impacted by weather-related
claims, while the discount rate remained stable.
In Death & Disability/Creditor/Group
insurance, premium income for the fourth quarter of 2023
stood at €1.3 billion, up +10.6% from the fourth quarter of
2022, thanks to the growth of premium income in death &
disability (up +4.0%) and group insurance (+34.7%). Premium income
from creditor insurance was up 10.1%, driven by the increase in
Regional Banks and LCL backing rates, and single premiums in
international markets. For the full year 2023, total premium income
was €5.1 billion, up +8.3% compared with the full year
2022.
The fourth quarter for the asset management
market in Europe was characterized by high risk aversion, resulting
in modest inflows, mainly in treasury products, and strong outflows
in active management, which passive management was unable to
offset.
Against this backdrop, Asset Management
(Amundi) posted strong net inflows, in particular for
treasury and bond products, passive management and Asia, in both
the Retail and Institutional segments.
Assets under management reached
€2,037 billion at 31 December 2023, up +3.2% compared
with 30 September 2023 and +7.0% compared with
31 December 2022.
By customer segment,
Retail recorded positive inflows of
+€1.1 billion, marked as in the previous
quarters by high risk aversion, but posting a good level of
activity in partner networks in France and internationally
(+€1.1 billion), and +€0.5 billion in the third-party
distributor segment. In China, Amundi BOC recorded net outflows
-€0.4 billion. Over the year, inflows were driven by the
French networks and third-party distributors, while the
international networks, excluding Amundi BOC, posted balanced
inflows amid competition from BTP Valore in Italy, despite the
success of bond funds at maturity.
The Institutional segment
recorded strong inflows, at +€12.0 billion,
driven by Treasury (+€7.0 billion), in particular for
Corporates. MLT inflows were positive thanks to a new mandate
awarded to CA&SG insurers (+€4 billion), despite the
continued withdrawals from euro-denominated policies. Over the
year, activity was characterized by the rebound in inflows for
treasury products, while inflows for MLT assets were positive
thanks to bonds and liabilities, despite continued outflows from
euro-denominated policies.
Lastly, JVs61 recorded positive inflows across
all countries, at +€6.3 billion, thanks to the continued
growth of the Indian JV, SBI MF and inflows from Amundi NH (South
Korea); the stabilisation of the Chinese JV ABC-CA (China,
+€0.9 billion excluding Channel Business activity), thanks to
positive inflows from mutual funds. As with the quarter, the full
year in this segment was characterized by continued inflows for SBI
MF (India) in active management, a good level of activity in active
management and treasury products for Amundi NH in South Korea, and
outflows from low-margin institutional mandates in China.
In Wealth
Management62, assets
under management (CA Indosuez Wealth Management and LCL Private
Banking) were stable at €197.5 billion at the end of December
2023 (including €135.1 billion for Indosuez Wealth
Management), and were up +1.6% compared with the end of September
2023, as positive market impacts offset outflows at LCL.
Results of the Asset Gathering division
The 2023 data for the Insurance business line,
and therefore the data for the Asset management and Savings
business line, are compared with 2022 pro forma IFRS 17
data.
In the fourth quarter of 2023,
the Asset Gathering division generated revenues
amounting to €1,555 million, down -22.9% compared with the
fourth quarter of 2022 due to weather events in the fourth quarter
that impacted Insurance activity, while revenues from Asset
Management were resilient due to management fee and commission
income as well as financial income; revenues from Wealth Management
are falling slightly.
Costs excluding SRF were up +11.2% due mainly to
an increase in the cost of insurance (2022 base effect and an
increase in IT costs). Thus, the cost/income ratio excluding SRF
stood at 46.7%, up +14.3 percentage points compared to
the fourth quarter of 2022. Gross operating income stood at
€828 million, down -39.2% compared with the fourth quarter of
2022. Taxes totalled -€173 million, a decrease of -57.2%. The
net income Group share of Asset Gathering stood at
€546 million, down -36.2% compared with the fourth quarter of
2022. Between the fourth quarter of 2023 and the fourth quarter of
2022, net income Group share was up in Asset
Management (+4.1%) and down in the Insurance (-47.0%) and Wealth
Management (-55.9%) business lines, due to initial costs related to
the Degroof Petercam transaction and various non-recurring
items.
In 2023, the Asset Gathering
division generated revenues of
€6,688 million, up +6.8% compared with 2022, boosted by
positive contributions from all business lines. Costs excluding SRF
were up +3.0%. As a result, the cost/income ratio excluding SRF
stood at 43.0%, down -1.6 percentage points compared with
the full year 2022. Gross operating income came to
€3,808 million, up +10.0% compared with the full year 2022.
Taxes totalled -€872 million, down -7.3%. The net
income Group share of the Asset Gathering division
stood at €2,541 million, up by +11.4% compared with the full
year 2022, for all the division’s business lines: asset management
(+8.6%), insurance (+12.6%) and wealth management (+12.5%).
For the full year 2023, the Asset Gathering
division contributed 38% of the underlying net income Group share
of Crédit Agricole S.A.’s core businesses (excluding
Corporate Centre division) and 26% of the underlying revenues
excluding the Corporate Centre division.
As at 31 December 2023, equity allocated to the
division amounted to €12.4 billion, including
€10.6 billion for Insurance, €1.3 billion for Asset
Management, and €0.6 billion for Wealth Management. The
division’s risk weighted assets amounted to €52.9 billion,
including €33.6 billion for Insurance, €13.4 billion for
Asset Management and €5.9 billion for Wealth Management.
The underlying
RoNE (return on normalised equity) stood at 23.6%
at 31 December 2023.
Insurance results
In the fourth quarter of 2023,
revenues from insurance activities amounted to
€521 million, down -47.3% compared with the fourth quarter of
2022 pro forma IFRS 17, impacted by a high level of weather-related
claims during the quarter compared with a favourable fourth quarter
of 2022 (- €262 million) and an IFRS 1763 / other base effect (~ -
€205 million).
This quarter’s revenues were generated mainly
from Savings/Retirement at €588 million64, personal protection
at €188 million65 and property and casualty insurance at
-€30 million66.
Gross operating income came to
€447 million, and tax was -€79 million. The net
income Group share was €335 million, down -47.0%
compared with the fourth quarter of 2022 pro forma
IFRS 17.
The contractual service margin, or CSM, amounted
to €23.8 billion at 31 December 2023, up 9.5% compared with 31
December 2022. This reflected a CSM on new business higher than the
CSM allocation in net income, in a positive market environment for
Savings/Retirement. The CSM allocation factor67 on stock was 8.5%
for the full year 2023.
For the full year 2023,
revenues from insurance reached €2,543 million, up by +11.7%
compared with the full year 2022, and down slightly by -2.3%
excluding the IFRS 17 base effect68, which notably reflected
high claims (storms and floods) at the end of 2023. Gross operating
income was up +10.4% compared to the full year 2022. Meanwhile, the
tax charge for 2023 was down -18.1%, mainly due to a base effect in
2022. As a result, net income Group share came to
€1,653 million, up +12.6% compared with the full year
2022.
Insurance contributed 25% of the underlying net
income Group share of Crédit Agricole S.A.’s core
businesses (excluding the Corporate Centre division) at
end-December 2023 and 10% of their underlying revenues.
Crédit Agricole Assurances also
demonstrated its strength and resilience, with a high Solvency 2
prudential ratio of 214% at 31 December 2023, up 10 percentage
points compared with end-2022 and down 8 percentage points compared
with 30 June 2023.
Asset management results
In the fourth quarter of 2023,
revenues totalled €786 million, up 2.1%
compared with the fourth quarter of 2022, due to the resilience of
management fee and commission income, higher financial income
boosted by rising short-term interest rates, and a good level of
performance fees despite the ESMA regulatory impact. Operating
expenses excluding SRF amounted to
-€435 million, up +2.7% compared with the fourth quarter of
2022, and were kept under control despite the inflationary
environment through ongoing productivity efforts and the full
achievement of Lyxor synergies. As a result, the
cost/income ratio excluding SRF was 55.3%.
Gross operating income was up +1.4% compared with
the fourth quarter of 2022. The contribution from equity-accounted
entities, comprising the contribution from the Amundi joint
ventures in Asia, stood at €29 million, up +20.5% from the
fourth quarter of 2022, while the tax charge amounted to
-€89 million, an increase of +2.0%. Lastly,
net income Group share increased by +4.1% to
€195 million.
For the full year 2023, revenues were high
(€3,122 million,) and growing (+2.2%), driven as in the fourth
quarter by financial income (€80 million vs. -€48 million
for the full year 2022) and Amundi Technology revenues (+23.6% to
€60 million); net management fee and commission income was
down slightly in an environment characterized by risk aversion;
performance fees were down even more sharply, by -28.0%
(€123 million vs. €171 million).
Operating expenses excluding
SRF were under control, down -1.5% (+1.9% excluding Lyxor
integration costs in 2022) and benefited from further productivity
efforts and Lyxor synergies. The cost/income ratio
excluding SRF stood at 55.7%, an improvement of
2.1 percentage points compared with the full year 2022.
As a result, gross operating income was up +7.4% compared with the
full year 2022. The net income of equity-accounted entities
increased by +15.7%. In total, net income Group share for the full
year stood at €760 million, up +8.6%.
Asset management contributed 11% to the
underlying net income Group share of
Crédit Agricole S.A.’s core businesses (excluding the
Corporate Centre division) at end-December 2023 and 12%
of their underlying revenues.
Wealth management
results69
Revenues from wealth management
in the fourth quarter of 2023, although down -4.1% compared with
the fourth quarter of 2022, remained high, at €247 million,
due mainly to strong fee and commission income (+9% compared with
the fourth quarter of 2022). Costs excluding SFR
amounted to €217 million, an increase of +6.5%, mainly
impacted by transaction costs on the Degroof-Petercam project and
non-recurring items. The cost/income ratio rose by
+8.7 percentage points over three months to 87.6%. Gross operating
income dropped -43.8% to €31 million. Excluding costs related
to the Degroof-Petercam transaction and non-recurring items, gross
operating income amounted to +€46.9 million, down -5.0%
compared with the third quarter of 2023 and -13.9% compared with
the fourth quarter of 2022.
The net income Group share
stood at €15 million, down -55.9% compared with the fourth
quarter of 2022.
For the full year 2023, revenues from wealth
management exceeded one billion euros to reach
€1,023 million, up +10.1% compared with the full year 2022.
Expenses excluding SRF were up +6.9%. Gross operating income thus
rose by +25.7% to €195 million. As a result, net income Group
share in 2023 climbed +12.5% to €127 million. For the full
year 2023, the cost/income ratio excluding SRF was 80.6%, an
improvement of -2.3 percentage points compared with the
full year 2022.
Wealth management contributed 2% of
Crédit Agricole S.A.’s business lines underlying net
income Group share. (Excluding the Corporate Centre division)
at end-December 2023 and 4% of their underlying revenues.
Activity of the Large Customers division
Corporate and Investment
Banking (CIB) and Asset
Servicing confirmed their strong momentum this
quarter.
In the fourth quarter,
underlying revenues70 from
Corporate and Investment banking (CIB) came to
€1,452 million, up slightly by +1.1% compared with the fourth
quarter of 2022. The increase was driven by
Financing activities, with underlying revenues of
€860 million, up +4.4% compared with the fourth quarter of
2022, thanks to high commercial banking revenues (+6.8% compared
with the fourth quarter of 2022), driven by Cash management and
Telecoms activities. Structured finance revenues were up +0.7% on
the fourth quarter of 2022, confirming the strong business
momentum, particularly in Shipping and Power. Underlying revenues
from Capital Markets and Investment Banking were
down -3.2% compared with the fourth quarter of 2022, to
€592 million. Revenues from FICC were down -3.1% compared with
the fourth quarter of 2022, due to an adverse base effect, but this
quarter’s revenues remained high, driven by structured interest
rate products and securitisation. In the investment banking
segment, the fourth quarter was characterized by a good performance
of structured equities.
For the full year 2023, underlying
revenues71 from Corporate and
Investment banking (CIB) were up +7.1% compared with 2022,
to €6,140 million. The increase was driven by Capital
Markets and Investment Banking, whose underlying revenues
came to €2,968 million, up sharply by +12.7% compared with
2022, mainly attributable to FICC revenues, which were buoyed by
structured interest rate products, primary credit and
securitisation. Investment banking revenues were up over the year,
reflecting the good performance of structured equities.
Financing activities posted underlying revenues of
€3,173 million, up +2.3% on 2022, attributable to strong
growth of +7.1% in revenues from structured finance, with
increasing revenues across all product lines. Commercial banking
revenues were stable compared with 2022, and benefited from a good
performance on Cash management and Telecoms.
Corporate and Investment Banking posted
leading positions in syndicated loans (#2 in
France72 and #3 in EMEA73) and for bond issues (#2 All bonds in EUR
Worldwide74 and #2 Green, Social & Sustainable bonds in EUR75).
Corporate and Investment Banking gained positions in
euro-denominated bond issues, moving up from 5th place in 2021 to
3rd place in 2022, and to 2nd place in 2023. Average regulatory
VaR stood at €13.2 million in the fourth
quarter of 2023, down from the €15.6 million recorded in the
third quarter of 2023, reflecting changes in positions and the
financial markets. It remained at a level that reflected
prudent risk management.
In the fourth quarter 2023, assets under
custody and assets under administration of asset servicing
(CACEIS) rose by +15.4% and +51.9%, respectively, compared
with the fourth quarter of 2022, reflecting the consolidation of
ISB’s assets76, good business momentum, and a positive market
effect. Assets under custody were up as a result
by +4.5% at end-December 2023 compared with end-September 2023,
reaching €4.718 billion. Assets under
administration were up +1.5% at end-December 2023 compared
with end-September 2023, reaching €3,299 billion. In addition,
settlement/delivery volumes rose by +39%
(excluding ISB) in the fourth quarter of 2023 compared with the
fourth quarter of 2022.
Results of the Large Customers division
In the fourth quarter of 2023,
the revenues of the Large Customers division
reached €1,935 million, up +13.0% compared with the fourth
quarter of 2022, reflecting the effect of the ISB consolidation77
into Asset Servicing and the strong performance of Corporate and
Investment banking driven by financing activities.
Operating expenses excluding SRF were up compared
with the fourth quarter of 2022 (+20.8%), with the impact of the
consolidation of ISB, as well as staff costs and IT investments
supporting the development of the business lines. As a result, the
division’s gross operating income was down from
the fourth quarter of 2022 to €726 million. The division
recorded an overall net provision for cost of risk
of -€39 million in the fourth quarter of 2023, compared with a
provision of -€15 million in the fourth quarter of 2022.
Pre-tax income totalled €691 million, stable
over the period (-0.2%). The tax charge was -€129 million.
Lastly, net income Group share reached
€525 million in the fourth quarter of 2023, compared with
income of €499 million in the fourth quarter of 2022.
For the full year 2023, the
revenues of the Large Customers division amounted
to €7,779 million, or +10.9% compared with 2022.
Operating expenses excluding SRF rose +15.4%
compared with 2022 to €4,507 million, largely related to staff
costs and IT investments as well as the impact of the consolidation
of ISB. SRF expenses fell sharply by -29.4%
compared with 2022. Therefore, gross operating
income for 2023 amounted to €2,960 million, an
increase of +11.0% over 2022. The cost of risk
ended 2023 with a net provision of -€120 million, compared
with a provision of -€251 million in 2022, which factored in
the impact of the Ukraine-Russia war. As a result, the business
line’s contribution to underlying net income Group
share was €2,011 million, a strong increase of +17.6%
compared with 2022.
The business line contributed 38% of the
underlying net income Group share of
Crédit Agricole S.A.’s core businesses (excluding the
Corporate Centre division) at end-December 2023 and 26% of the
underlying revenues excluding the Corporate
Centre.
At 31 December 2023, the capital
allocated to the business line was €12.8 billion and
its risk weighted assets were
€134.9 billion.
The business line’s underlying
RoNE (return on normalised equity) stood at 16.9%
at end-December 2023.
Corporate and Investment banking
results
In the fourth quarter of 2023,
revenues from Corporate and Investment Banking
totalled €1,460 million, the highest recorded for a fourth
quarter. This figure was up +6.3% compared with the fourth quarter
of 2022, with growth this quarter driven by Financing activities.
Operating expenses excluding SRF rose by +8.9% to
-€848 million, mainly due to a negative base effect on taxes,
the increase in variable compensation linked to the activity’s
performance, as well as to human and IT investments to support the
development of the business lines. Gross operating
income was up by +2.9% compared to the fourth quarter of
2022, totalling €611 million. The cost/income ratio excluding
SRF was 58.1%, unfavorable change of
+1.4 percentage points over the period. The cost
of risk recorded a slight net provision of
-€32 million compared with a provision of -€12 million in
the fourth quarter of 2022. Lastly, pre-tax income
in the fourth quarter of 2023 stood at €580 million, versus
€582 million in the fourth quarter 2022. The tax charge was
-€99 million. Altogether, the underlying
net income Group share came to
€470 million in fourth quarter 2023, an increase of +7.0% over
fourth quarter 2022.
For the full-year 2023,
revenues were up +6.3% to €6,101 million
compared with 2022. This figure exceeded €6 billion for the
first time and reached its highest level ever for a single year.
Expenses excluding SRF rose +10.7%, mainly due to
staff costs including the adjustment of variable compensation to
the activity, and IT costs to support the development of the
business lines. The contribution to the SRF fell
significantly by -29.5% to -€271 million in 2023. As a result,
gross operating income of €2,485 million was
up sharply (+6.6% compared with 2022.) The cost of
risk recorded a provision of -€111 million in 2023,
compared with -€248 million in 2022, which included the
prudential provisioning of Russian exposures (provision of
-€374 million on performing loans in Russia in 2022). The tax
charge came to -€578 million, a +12.1% increase in line with
activity growth. All in all, net income Group
share for the full year 2023 stood at a record level of
€1,754 million for 2023, an increase of +14.6% over the
period.
Risk weighted assets at end-December
2023 were down -€5.3 billion compared with
end-December 2022, and -€3.2 billion compared with
end-September 2023 to €124.9 billion. This decline over the
year can be explained by a positive foreign exchange impact,
controlled consumption in financing activities, the normalisation
of market risk, which has returned to pre-crisis levels in Russia
and Ukraine, and by the ongoing improvement in credit portfolio
quality.
Asset servicing results
In fourth quarter 2023, the
revenues of Asset Servicing were up a strong
+39.9% compared with the fourth quarter of 2022 to
€475 million. This growth was mainly due to the consolidation
of ISB78,79; it was also driven by growth in fee and commission
income attributable to the increase in assets and the initial
synergies with ISB. Interest margin was stable compared with the
third quarter of 2023, but higher than in the fourth quarter of
2022. Operating expenses excluding SRF increased
by +62.6% to -€360 million. They also reflect the impact of
the consolidation of ISB, and include -€25.4 million in
integration costs relative to the acquisition of ISB. Gross
operating income was down -2.9% to €114 million in the fourth
quarter of 2023. The cost/income ratio excluding SRF thus came to
75.9% and to 70.6% excluding ISB integration costs, an adverse
change of +5.3 percentage points compared with the fourth
quarter of 2022. The quarter also recorded €5 million in
income from equity-accounted entities. The latter figure now
includes the contribution of Uptevia since the first quarter of
2023. Net income thus totalled €81 million,
down -8.1% compared with the fourth quarter of 2022. Adjusted
for the €26 million share of non-controlling interests, the
business line’s contribution to net income Group
share totalled €55 million in the fourth quarter of
2023, or -8.3% compared with the fourth quarter of 2022.
Revenues for 2023 were 31.5%
higher than in 2022, reflecting the consolidation of ISB, strong
commercial momentum, particularly in terms of fee and commission
income, and a higher interest margin. Expenses excluding
SRF were up +31.7%, and include -€39.5 million in integration
costs relating to the acquisition of ISB, while SRF costs
fell sharply by -28.3%. This resulted in a very strong 41.2%
increase in gross operating income compared with
2022. Net income was thus up by +42.4%. In the
end, the contribution of the business line to net income
Group share in 2023 was €257 million, representing a
+43.3% increase compared with 2020.
The full consolidation of ISB
is planned by the end of 2025 with legal mergers of the entities
and customer migrations scheduled for 2024.
Specialised financial services activity
In the fourth quarter of 2023,
the commercial production of
Crédit Agricole Consumer Finance
(CACF) amounted to €12.1 billion, stable compared with the
fourth quarter of 2022, reflecting the continued selectivity in the
loan granting process. The automotive channel accounted for 53%80
of quarterly production. For the full year 2023,
loan origination was up +5.4%, driven by growth in the Automotive
channel (+17%). Moreover, this year CACF reached a milestone in
2023, with one million vehicles financed in Europe. This figure
confirms CACF’s momentum in the mobility market. Finally, the
customer rate at origination continued to rise,
posting a +39 basis points increase compared to the third quarter
of 2023. CACF’s outstandings stood at
€113 billion at end-December 2023, up +1.8% year-on-year.
Outstandings at the automotive entities amounted to
€44.7 billion, or 40% of total outstandings, of which
€27.581 billion at Crédit Agricole Auto Bank.
Leasys’ contribution to December 2023 outstandings was
€7.5 billion (100%).
As a reminder, in 2023, the business performance
of Specialised financial services activity and in particular of
CACF was marked by the reorganisation of the “Mobility” activities
of which: (1) the implementation of the agreement between CACF and
Stellantis, effective since the beginning of April 2023, resulting
in the finalisation of the creation of the 50/50 Leasys joint
venture with Stellantis and the 100% takeover of CA Auto Bank
(formerly FCA Bank) and Drivalia (car rental, car sharing); (2) the
acquisition by CACF, since the beginning of August 2023, of ALD and
LeasePlan activities in six European countries, representing a
total fleet of more than 100,000 vehicles (including 30,000
vehicles taken over by Leasys and 70,000 by CA Auto Bank) and total
outstandings of €1.7 billion, and (3) the creation of CA
Mobility Services to propose 20 service offers by 2026, mainly
through the acquisition of a minority stake in WATEA by Crédit
Agricole Leasing & Factoring, the creation of a joint venture
with Opteven and the acquisition of a stake in HiFlow.
In addition, Agilauto Partage, a joint
subsidiary of Crédit Agricole Consumer Finance and Crédit Agricole
Leasing & Factoring, has launched the Crédit Agricole Group's
rural car-sharing service. This new electric mobility service is
part of the Crédit Agricole Group's societal project to accelerate
the essential transformations of society by offering innovative
solutions adapted to the needs of all. In addition, since January
1, 2024, Sofinco Auto Moto Loisirs has joined forces with CA Auto
Bank France to create the future leader in mobility financing in
France. The new CA Auto Bank France aims to reach 3.2 billion euros
in production by 2026. Finally, Leasys, the 3rd largest player in
the European market, is aiming to reach 1 million vehicles by
2026.
The business performance of
Crédit Agricole Leasing & Factoring
(CAL&F) was strong in the fourth quarter of 2023 and
was reflected by market share gains in France in factoring and
equipment leasing82. Commercial production in
factoring was buoyant over the quarter, up +22.8% compared
to the fourth quarter of 2022, across all segments and with
significant deals in France. Factoring
outstandings rose by +8.5% compared to the fourth quarter
of 2022, thanks to the increase in factored revenue to a record
level of €32 billion, driven by France and Germany. For the
year 2023, factored revenue amounted to €121 billion, up
+5.1% billion compared to 2022. Commercial leasing
production increased by +3.5% compared to the fourth
quarter of 2022, driven by the renewable energy market in France
and by production in Poland. Leasing outstandings
rose +7.9% year-on-year, both in France and internationally, to
reach €18.9 billion at end-December 2023 (of which
€15 billion in France and €3.9 billion
internationally).
Specialised Financial Services results
Net income Group share for the
fourth quarter of 202383 and for the year 202384
for the Specialised Financial Services business line was positively
impacted by the reorganisation of CACF’s “Mobility” activities.
In the fourth quarter of 2023,
revenues from Specialised Financial Services were
up +23.9% compared to the fourth quarter of 2022 to
€880 million, of which €196 million related to CA Auto Bank’s
contribution to the division’s quarterly revenue. Expenses
excluding SRF came to -€449 million, i.e. an increase of
+24.9%, of which -€78 million related to CA Auto Bank. As a
result, gross operating income increased by +22.9%
to €431 million, and the cost/income ratio
excluding SRF stood at 51% (+0.4 percentage points). Cost
of risk increased by +26.6% to -€184 million,
including a -€25 million contribution from CA Auto Bank over
the quarter. The fall in net income from equity-accounted
entities, of -41.6% compared to the fourth quarter of 2022
to €40 million, and the positive impact of +€12 million
on the change in value of goodwill are linked
exclusively to the elements of the reorganisation of CACF’s
Mobility activities. The tax charge stood at
-€53 million, down -13.3% compared to the fourth quarter of
2022, with a slight rise of +1.6% excluding one-off items for the
quarter83. Net income Group share amounted to
€217 million, up +19.3% over the period. Excluding one-off
items in the quarter83, net income stood at €200 million,
stable (+1%) compared to the fourth quarter of 2022.
For the year 2023,
revenues from Specialised Financial Services
increased by +29.3% to €3,597 million, driven by good
performance of CAL&F (+8.0% compared to the year 2022) and
higher revenues for CACF (+35.9% compared to 2022) thanks to the
strategic pivot initiated this year around Mobility, including the
100% consolidation of CA Auto Bank, the takeover of ALD/LeasePlan
activities and the creation of CA Mobility Services. Excluding
one-off items for the year 202384, the division’s
revenue amounted to €3,297 million, an
increase of +18.5% over the period. Expenses excluding
SRF rose by +15.9% compared to 2022, mainly due to
increased staff costs, IT expenses and scope effect. The
cost/income ratio excluding SRF remained low at 51.9%, an
improvement of -5.4 percentage points compared to 2022.
The SRF contribution came to -€29 million
over the year 2023, a decrease of -15.7% compared to the same
period of 2022. The cost of risk amounted to
-€870 million over the year 2023, an increase of +63.3%
compared to 2022 (+47.4% excluding one-off items84 ). In addition
to the scope effect linked to the 100% consolidation of CA Auto
Bank, the increase in the cost of risk over the year is due to the
increase in provisions for proven risk. The contribution of
equity-accounted entities was down -57.9% (-46.6%
restated for one-off items84) compared to 2022. The tax
charge excluding one-off items84 stood at
-€214 million (+2.1% compared to 2022). Net income
Group share amounted to €751 million, up +13.4%
compared to 2022, but down -11.9% excluding one-off items for the
year 202384, due mainly to the increase in the cost of risk over
the period.
The business line contributed 10% to the
underlying net income Group share of
Crédit Agricole S.A.’s core businesses (excluding
Corporate Centre division) over 2023 and 13% to underlying
revenues excluding Corporate Centre division.
At 31 December 2023, the equity
allocated to the division was €6.5 billion and its
risk weighted assets were €68.9 billion.
Underlying RoNE (Return on
Normalised Equity) stood at 10.1% at 31 December 2023.
Consumer finance results
In the fourth quarter of 2023,
revenues amounted to €690 million, up +30.4%
compared to the fourth quarter of 2022, benefiting from the
consolidation of CAAB85 and an increase in production margin
compared to the third quarter of 2023, driven by the increase in
the customer rate as well as the stabilisation of the cost of
refinancing. Expenses excluding SRF came to
-€350 million, an increase of +33.6%, mainly due to the
consolidation of CA Auto Bank. Excluding scope effect, expenses
were under control at +3.6% compared to the fourth quarter of 2022.
As a result, gross operating income rose by +27.2%
to €341 million, while the cost/income ratio excluding SRF
stood at 50.6%, an improvement of +1.2 percentage points.
Cost of risk was -€170 million in the
fourth quarter of 2023, an increase of +39.1%85 compared to the
same period in 2022 but continued its normalisation from the third
quarter of 2023. The annualised cost of credit
risk on outstandings stands at 121 bps86. The Non
Performing Loans ratio and the coverage ratio were respectively
4.0% (stable versus September 2023) and 80.8% (versus 82.4% at
end-June 2023). Net income from equity-accounted
entities fell by -39.4% compared to the fourth quarter of
2022 (-45.9% excluding one-off items for the quarter87 to
€41 million, including a contribution of €17 million from
Leasys. The change in value of goodwill was
€12 million over the quarter and corresponds to the badwill
linked to the reorganisation of the Mobility activities.
The tax charge amounted to -€35 million, -31%
compared to the same period in 2022. Excluding specific items, the
tax charge amounted to -€51 million in the fourth quarter of
2023, a decrease of -16%. Finally, net income Group
share totalled €168 million (+24.4%). Excluding
specific items linked to the reorganisation of CACF’s Mobility
activities87, it totalled €150 million, flat (-0.2%) compared
to the fourth quarter of 2022.
In 2023, the specific items
affecting Consumer Finance were linked to the reorganisation of
CACF’s Mobility activities88. Stated revenues
amounted to €2,889 million (+35.9%). Restated for one-off
items88, they amounted to €2,589 million, up +21.8% compared
to 2022, driven by the consolidation of CA Auto Bank, which more
than offset the negative impact of the increase in refinancing
costs on the production price. Stated costs
excluding SRF amounted to -€1,291 million (+19.7%). Restated
for one-off items88, expenses were up +18.4% compared to 2022 and
stable at constant scope. The SRF contribution came to
-€13 million (-17.7% compared to 2022). The
cost/income ratio excluding one-off items88 and
excluding FRU improved by -1.4 percentage points compared to 2022,
at 49.3%. Consequently, excluding one-off items88, gross
operating income was up +25.9% compared to 2022. The
cost of risk totalled -€808 million (+68.2%
for the year 2023). Restated for one-off items88, the cost of risk
stood at €723 million, up +50.6% compared to 2022. Excluding
scope effect, the cost of risk continued to normalise. The
cost of risk89 relative
to outstandings stood at 121 basis points at
end-December 2022 (-4 basis points compared to
2022). The contribution of equity-accounted
entities amounted to €134 million, -56.5% compared to
2022 and -45.5% restated for one-off items88. Income on
other assets amounted to €78 million. This line is
mainly composed of specific items. Excluding these items,
income on other assets stood at -€11 million
for the year 2023. Finally, the tax charge was
stable for the year excluding one-off items88. Non-controlling
interests were down -26.3% to -€79 million compared to 2022.
Thus, stated net income Group share for the year
2023 totalled €675 million (+16.6%). Restated for
one-off items88, net income for 2023 amounted to €499 million,
down -16.1% compared to 2022.
Leasing & Factoring
results
In the fourth quarter of 2023,
revenues totalled €189 million, up +5%
compared to the fourth quarter of 2022, driven mainly by leasing.
Factoring revenues remained stable over the quarter, the positive
volume effect having been offset by a fall in the average price.
Expenses excluding SRF were under control with a
moderate rise of +1.7% compared to the fourth quarter of 2022,
mainly linked to the increase in salaries in Poland and the
resources allocated to support development in Germany and Italy.
The cost/income ratio excluding SRF stood at
52.4%, an improvement of -1.7 percentage points compared
to the third quarter of 2022. As a result, gross operating
income totalled €90 million, up +8.9% compared to the
fourth quarter of 2022. The cost of risk amounted
to -€14 million for the quarter, or -39.3% compared to the
same period in 2022, mainly due to a high base effect for proven
risk in the fourth quarter of 2022. As a result, net income
Group share was €49 million, up +4.8% compared to the
fourth quarter of 2022.
For 2023,
revenues amounted to €708 million, up +8.0%
compared to 2022, driven by the strong momentum of factoring
activities, particularly in France, and the increase in leasing
volumes in Poland. Expenses excluding SRF stood at
-€364 million, representing a controlled rise of +4.6%
compared to 2022, mainly linked to salary adjustments and support
for growth in Poland, as well as good control of IT expenses over
the year. The SRF contribution came to -€18 million in 2023
(-14.0% compared with 2022). Gross operating
income was up +14% compared to 2022, to €311 million.
The cost/income ratio excluding SRF stood at
53.9%, an improvement of 1.7 percentage points compared
to the year 2022. The cost of risk was
-€63 million, an increase of +18.6% over the period, mainly
due to the strengthening of provisions for proven risk in France
and Italy. Net income Group share
was €176 million, up +2.8% compared to the year 2022.
Crédit Agricole S.A. Retail Banking
activity
In Crédit Agricole S.A.’s
Retail Banking business in France, loan production
reflected the market trend and continued to slow amid rising
interest rates, particularly at LCL. However, customer capture
remained buoyant, with insurance equipment rate.
Retail banking activity in France
For French Retail Banking, loan
production at LCL was down -31.1% compared to the
fourth quarter of 2022, linked to the overall slowdown of the
market due to the tightening of monetary conditions and with a base
effect linked to a high level of production in 2022. In
Professionals market, production was down -14.0% compared to the
fourth quarter of 2022, -11.0% in the Corporates market and -50.5%
in the Home Loans market, against a backdrop of a slowdown in the
French market (-38% in home loan production according to the Banque
de France, October 2023/October 2022), while lending rates for home
loans continued to rise (increase of +46 basis points between the
third and fourth quarters of 2023). Rate at signing was 4.41%
(first week of January 2023). Outstanding loans totalled
€168.8 billion at end December 2023, up +2.7% from end
December 2022, of which +3.4% for home loans, +3.8% for loans to
professionals, +0.5% for corporate loans and +0.5% for consumer
finance. Customer assets, which stood at €247.6 billion at
end-September 2023, were also up, by +5.3% compared to end-December
2022, driven by on-balance sheet deposits (+7.0%) linked to growth
in term deposits (+94% compared to end-December 2022, +22.0%
compared to end-September 2023) and passbook accounts/ remunerated
sight deposits (+9.3% compared to end-December 2022, but up
slightly at +1.7% compared to end-September 2023), with off-balance
sheet savings also up compared to end-December 2022 (+2.2%), driven
by positive market effects.
For the full year 2023, gross
customer capture stood at 331,000 new customers and net customer
capture came in at 41,000 customers. The equipment rate for car,
multi-risk home, health, legal, all mobile phones or personal
accident insurance rose year-on-year by +0.4 percentage point
compared to the fourth quarter of 2022 to stand at 27.5% at end
December 2023.
Retail banking activity in Italy
The business of Retail banking in
Italy remained buoyant in the fourth quarter of 2023, thus
confirming the momentum for the whole of 2023. Gross customer
capture for the year 2023 reached 175,000 new customers, while the
customer base grew by 58,000 customers. The equipment rate for
property and casualty insurance90 continued to rise
(+2.0 percentage points compared with the fourth quarter 2022
including Creval) to stand at 18.8%.
Crédit Agricole Italy was the Italian
universal bank with the highest Net Promoter Score in 202391,
confirming the high level of satisfaction of its customers.
In parallel, loan outstandings at CA Italy
stood at €61.192 billion at end December 2023, up +2.8%
compared with end December 2022, contrasting with the downward
trend in the Italian market93. The increase in business loan
outstandings was also particularly strong, up +6% compared to
end-December 2022, driven by very dynamic production, which rose by
+38% compared to the fourth quarter of 2022. The average rate on
total outstanding loans continued to rise, up +42 basis points
compared to the third quarter of 2023.
Finally, customer assets stood at
€115.8 billion at end-December 2023, up +3.5% compared to
end-December 2022. In particular, on-balance sheet deposits
improved by +5.4% compared with end-December 2022, mainly driven by
term savings. Off-balance sheet deposits were up +1.1% compared to
end-December 2022, despite competition from Italian sovereign
debt.
Crédit Agricole Group activity in
Italy94
The Group’s business lines in Italy continued to
grow in 2023. They served 6 million customers at end-December
2023, and the Group’s market share stood at 5%95 in Italy at
end-2023.
The Group's business lines were ranked 2nd in
consumer finance96, 3rd in asset management97 and 4th in life
bancassurance.98
Loans outstanding were stable at
€100 billion at end-December 2023, up +1% for the year. Total
customer assets stood at €331 billion at the end of 2023, up
+4.4% compared to the end of 2022.
International Retail Banking activity excluding
Italy
The scope of this division at end-December 2023
included Egypt, Poland and Ukraine. The controlling interest in
Crédit du Maroc was sold in the fourth quarter of 2022, after its
classification under IFRS 5 in the first quarter of 2022 (disposal
of 63.7%, with the residual 15% stake recognised under
IFRS 5).
For International Retail Banking
excluding Italy, commercial activity was extremely brisk
in Poland and Egypt.
The International Retail Banking business in
Poland, Egypt and Ukraine had loan outstandings of
€7.3 billion at end-December 2023, up +6.5% compared to
end-December 2022, mainly driven by Poland and Egypt. Total
customer assets stood at €11.9 billion, up
+15.2% compared to end-December 2022.
At constant exchange rates, in Poland
and Egypt, loan outstandings were sharply up +9.5%
compared with end December 2022. Customer savings rose +12% over
the same period at constant exchange rates. In
Poland, loan outstandings increased by +7%
compared to December 2022, with very buoyant activity for all
segments (loan production +37% compared to the fourth quarter of
2022). On-balance sheet deposits grew by +4.0%. In
Egypt, loan outstandings rose by +22% at constant
exchange rates compared with end December 2022, driven by a sharp
increase in production. Strong growth was recorded in on-balance
sheet deposits, up +39% at constant exchange rates compared with
end December 2023.
The surplus of deposits for
loans in Poland and Egypt amounted to €2.6 billion at
31 December 2023, and reached €4.1 billion when including
the Ukraine scope99.
As at 31 December 2023, the Retail
banking business line contributed 22% to the net income
Group share of Crédit Agricole S.A.’s core businesses
(excluding Corporate Centre division) and 30% to underlying
revenues excluding Corporate Centre.
As at 31 December 2023, the equity
allocated to the division was €9.6 billion, including
€5.0 billion for French retail banking and €4.6 billion
for International retail banking. Risk weighted assets for the
business line totalled €102 billion including
€53.1 billion for French retail banking and €48.9 billion
for International retail banking.
French retail banking results
In the fourth quarter of 2023,
LCL’s revenues were up +4.9% compared to the
fourth quarter of 2022, at €959 million100. Excluding the
reversal of the Home Purchase Savings Plans provision, revenues
were up +4.2% compared to the fourth quarter of 2022, at
€953 million. The net interest margin, excluding the reversal
of the Home Purchase Savings Plans provision, was slightly up from
the fourth quarter of 2022 (+3.5%), and up +1.3% on the previous
quarter, supported by the gradual repricing of loans and a strong
contribution from macrohedging, but continued to be penalised by
the increase in the cost of customer resources and refinancing. Fee
and commission income showed strong momentum this quarter (+4.9%),
driven by life and non-life insurance. Expenses excluding
SRF increased by +12.7% to -€654 million, and were
penalised on the one hand by a base effect in Q4 2022 linked to
non-recurring tax items, and on the other by non-recurring specific
items in Q4 2022 amounting to -€32 million relating to
provisions for human resources (provisions for paid leave), real
estate and IT. The increase in recurring expenses was less
significant, at +6.0%, and was driven by higher staff costs and IT
expenses. The cost/income ratio excluding SRF deteriorated by +4.7
percentage points to 68.2% for this quarter. Gross operating
income rose by +8.8% to €305 million. The cost of
risk continued to normalise, at -€96 million, up
+23.0% compared to the fourth quarter of 2022, and +37.8% compared
to the third quarter of 2023. The cost of credit risk on
outstandings101 stood at 18 basis points. The coverage
ratio stood at 61.6% at the end of December, down
-0.4 percentage point this quarter compared to the end of
September 2023. The non-performing loans ratio was 2.0% at end
December 2023, up +0.1 percentage point compared to end
September 2023. Finally, net income Group share
stood at €162 million, a decrease of -18.4% compared to the
fourth quarter of 2022.
For the year 2023, LCL’s
revenues were stable compared to 2022, at €3,850 million, due
to the contraction in the net interest margin (-6.4%) against a
backdrop of higher refinancing and funding costs, offset by an
increase in fee and commission income (+4.5%), particularly for
life and property and casualty insurance and payment instruments.
Expenses excluding SRF showed a moderate increase (+3.3%), driven
mainly by staff costs, and the cost/income ratio excluding SRF
remained under control (+2.0 percentage points) at 62.2%, in line
with LCL’s MTP target of below 65%. As a result, gross operating
income fell by -3.5% and the cost of risk rose by +27.1%, linked to
the normalisation of credit risk. All in all, the business line’s
contribution to net income Group share stood at €835 million
and was down -7.1%.
In the end, the business line contributed 12% to
the underlying net income Group share of
Crédit Agricole S.A.'s core businesses (excluding the
Corporate Centre division) in 2023 and 15% to underlying
revenues excluding the Corporate Centre.
LCL’s underlying return on normalised equity
(RoNE) stood at 14.2% on 31 December 2023.
International Retail Banking
results102
In the fourth quarter of 2023,
International Retail Banking revenues totalled
€974 million, up +8.7% (+11% at constant exchange rates)
compared with the fourth quarter of 2022, driven mainly by the rise
in the net interest margin against a backdrop of rising interest
rates. Operating expenses remained under control
despite the inflationary environment, coming in at
-€627 million, or +5.8% compared with the fourth quarter 2022,
+6.0% at constant exchange rates. Gross operating
income totalled €347 million, up +14.3% (+19.9% at
constant exchange rates) for the period. Cost of
risk amounted to -€102 million, down -46% compared to
fourth quarter 2022. Net income Group share of
International Retail Banking was €103 million at end-2023, versus
€150 million at end-2022. Note that the amounted stated for
2022 included a tax gain related to “affrancamento” at
CA Italy which had an impact on net income Group share of
+€114 million. This was partially offset by an additional
provision of -€14 million for Crédit du Maroc.
For 2023, International
Retail Banking revenues rose by +19.7% to
€3,949 million (+13.7% at constant exchange rates). This increase
was driven by the strong performance of the net interest margin
during the period, in line with the very positive interest rate
environment. Costs excluding SRF remained under
control, despite inflationary pressures, at -€2,118 million, a
slight increase from 2022 at current (+2.5%) and constant (+0.9%)
exchange rates. These benefited from a base effect with Creval
integration costs adjusted to underlying in 2022 for -€30 million.
The SRF totalled €40 million for the year, up +4.9% compared to
2023. Gross operating income totalled
€1,791 million, up +50% (+34.2% at constant exchange rates).
Cost of risk fell by -33.7% to -€464 million
compared with 2022. This was mainly due to the prudential
provisioning for Ukraine risk, which was restated to underlying
income for the first quarter of 2022.103 In total, net
income Group share of International Retail
Banking amounted to €703 million, versus €273 million in
2022. Lastly, it should be noted that an affrancamento-related tax
gain boosted net income Group share in Italy by €114 million.
This was partially offset by a -€14-million provision recognised
against Crédit du Maroc.104
For the full year 2023, the International Retail
Banking business line contributed 10% to the underlying net income
Group share of Crédit Agricole S.A.’s core businesses
(excluding Corporate Centre) and 15% to underlying revenues
excluding Corporate Centre.
Italian retail banking
results
In fourth quarter 2023,
Crédit Agricole Italy’s
revenues stood at €714 million, up +4.4% from
fourth quarter 2022. Higher interest rates continued to shore up
net interest margin, which had a positive impact on the average
rate of total loans stock (+42 basis points versus third quarter
2023, after +34 basis points in the third quarter versus
second quarter 2023). However, net interest margin for fourth
quarter 2023 was slightly lower than for third quarter 2023.
Operating expenses excluding SRF rose +3.3%
compared with the fourth quarter 2022 to -€499 million, driven
by staff costs. Gross operating income increased (+7.1%) from
fourth quarter 2022 to stand at €214 million. Cost of
risk amounted to -€96 million in the fourth quarter,
down -26.5% compared to the fourth quarter of 2022, including
-€90 million for proven risk and a reversal of
+€13 million in provisioning for performing loans. Cost of
risk on outstandings105 stood at 64 basis points106, up
9 basis points compared to the third quarter of 2023. The Non
Performing Loans ratio was 3.5%, down slightly from the third
quarter 2023 (-0.1 percentage point). The coverage ratio
stands at 69.7% (+0.3 percentage point compared with the third
quarter 2023). Pre-tax income amounted to €121 million in the
quarter, a year-on-year rise of +68.9%. The tax charge was
-€38 million. Note that in fourth quarter 2022, a
non-recurring tax gain related to “affrancamento” in Italy was
recognised and restated in underlying income in the amount of
+€146 million. CA Italy’s net income Group
share thus amounted to €64 million, down -57.4% compared
with the fourth quarter of 2022. Excluding the affrancamento tax
gain, net income Group share increased significantly during the
period by +77.7%.
For full-year 2023,
revenues for
Crédit Agricole Italy rose +18.7% to
€3,018 million. This sharp increase was largely due to the
strong performance of the net interest margin during the year, in
line with higher interest rates. Operating expenses
excluding SRF were under control in an inflationary
environment at €1,662 million, up slightly by +2% compared to 2022,
and up +3.9% once adjusted for the Creval integration costs of -€30
million recorded in 2022. The SRF totalled €40 million for the
year, up +4.9% compared to 2023. Gross operating
income stood at €1,316 million, an increase of +50.4%
versus 2022 (+45.4% after adjustment for the Creval integration
costs in 2022). Cost of risk increased slightly by +5.8% from 2022
to -€330 million. Cost of risk/outstandings was
55 basis points107, the coverage ratio remained high at
69.7% (+0.3 percentage points for the quarter), and the
non-performing loans ratio fell by -0.1 percentage points to 3.5%.
Pre-tax income amounted to €990 million for the quarter, a
year-on-year rise of +73%. The tax charge was -€296 million.
Note that in 2022, a non-recurring tax gain related to Italy’s
affrancamento was recognised and restated in underlying income in
the amount of +€146 million in the fourth quarter. Net
income Group share for CA Italy was €540 million, up
24.7% compared to 2022. Excluding the affrancamento tax gain, net
income Group share increased significantly during the period by
+69%.
CA Italy’s underlying RoNE (return on
normalised equity) was 17.7% at 31 December 2023.
Results for Crédit Agricole Group in
Italy108
In 2023, underlying
net income Group share of entities in Italy was
€1,043 million, a sharp increase of 22% compared to 2022.
This reflects the business lines’ strong momentum, with CA Italy’s
net interest margin making a bigger contribution this year. The
breakdown by business line is as follows: Retail Banking 52%;
Specialised Financial Services 24%; Asset Gathering and Insurance
15%; and Large Customers 9%. Lastly, Italy’s contribution to net
income Group share of Crédit Agricole S.A. in full-year 2023 was
15%.
International Retail Banking results –
excluding Italy109
In the fourth quarter of 2023,
revenues for International Retail Banking
excluding Italy totalled €260 million, up +22.5%
(+32.2% at constant exchange rates) compared to the fourth quarter
of 2022. The growth in revenues is sharp in Poland (+31% and +23%
at constant exchange rates) and Egypt (+17% and +58.8% at constant
exchange rates) driven by a higher net interest margin.
Operating expenses amounted to €128 million, up
+17% compared to fourth quarter 2022 (+18.2% at constant exchange
rates). Gross operating income amounted to
€132 million, an increase of +28.5% (+49% at constant exchange
rates) compared to the fourth quarter of 2022. Cost of
risk totalled -€6 million, a sharp decrease of
-89.3%. Furthermore, at end December 2023, the coverage ratio for
loan outstandings remained high in Poland and Egypt, at 126% and
116% respectively. In Ukraine, the local coverage ratio remains
prudent. In total, International Retail Banking excluding
Italy contributed €38 million to net income Group share,
compared to net income Group share of -€1 million in fourth
quarter 2022. Note that in 2022, a provision of -€14 million had
been recognised against Crédit du Maroc110 and
reclassified to specific items. Excluding this effect, net income
Group share almost tripled during the period.
In 2023,
revenues for International Retail Banking
excluding Italy totalled €931 million, up +23.1% (+43.2%
at constant exchange rates) compared to 2022, driven by the
increase in the net interest margin in Poland and Egypt and a lower
cost of risk. Operating expenses excluding SRF
showed a moderate rise for the year of 4.4% (+12.7% at constant
exchange rates) against inflationary pressures and came in at
-€456 million. As a result, gross operating
income amounted to €475 million, an increase of
+48.8% (+93.6% at constant exchange rates) compared to 2022.
Cost of risk stood at -€134 million, a
decrease of -65.4% compared with 2022, which had been impacted by
the provisioning of -€195 million for Ukraine, adjusted to
underlying income for the first quarter of 2022. Income
from discontinued operations totalled -€3 million at
end 2023. As a reminder, in 2022 a provision of -€14 million was
recognised against Crédit du Maroc110 and reclassified to
specific items. The contribution of International Retail Banking
excluding Italy to net income Group share was €163
million in 2023 (versus -€160 million in 2022, impacted for the
most part by provisioning for Ukraine), a highest historical
level.
The underlying RoNE (return on normalised
equity) of International Retail Banking excluding Italy stood at
24.6% at 31 December 2023.
Corporate Centre results
The “internal margins” effect at the time of the
consolidation of the insurance activities at the
Crédit Agricole level was accounted through the Corporate
Centre, contributing to a further reduction in the cost/income
ratio of Crédit Agricole S.A. The quarterly impact of
internal margins was -€215 million for revenues and +€215 million
for expenses; the impact for full-year 2023 was -€822 million for
revenues and +€822 million for expenses.
The underlying net income Group share of the
Corporate Centre was -€-218 million in fourth quarter
2023, down -€117 million from fourth quarter 2022.
The contribution of the Corporate Centre division can be analysed
by distinguishing between the “structural” contribution
(-€219 million) and other items (-€1 million). The
contribution of the “structural” component
decreased by -€50 million from fourth quarter 2022 and can be
broken down into three types of activity:
- The
activities and functions of the Corporate Centre of the
Crédit Agricole S.A. corporate entity. This
contribution amounted to -€238 million in fourth quarter 2023,
down -€57 million, including a negative tax impact of -€72 million
due to a base effect in fourth quarter 2022.
- Non-core
businesses, such as CACIF (private equity),
CA Immobilier, BforBank and, since fourth quarter 2023,
Crédit Agricole Transition & Energies, are
equity-accounted. Their contribution totalled +€18 million in
fourth quarter 2023, an increase of €6 million.
- Group
support functions. Their contribution amounted to
+€1 million this quarter (relatively unchanged compared with
fourth quarter 2022).
The contribution of “other
items” was down -€67 million from fourth quarter 2022,
including an unfavourable tax impact of -€51 million, also due to a
base effect in fourth quarter 2022.Over 2023, the net income Group
share of the Corporate Centre division was -€593 million, a
deterioration of -€15 million compared with 2022. The
structural component contributed -€699 million, and other
items of the division recorded a positive contribution of
+€106 million over the year 2023.The contribution of the
“structural” component increased by +€186 million from 2022
and can be broken down into three types of activity:
- The activities
and functions of the Corporate Centre of the
Crédit Agricole S.A. corporate entity. This contribution
amounted to -€919 million, up +€34 million compared to 2022.
- Non-core
businesses, such as CACIF (private equity), CA Immobilier,
BforBank and, since fourth quarter 2023,
Crédit Agricole Transition & Energies: their
contribution of +€207 million was up +€156 million compared to
2022.
- Group support
functions: their contribution was +€13 million, down -€4
million compared with the contribution in 2022.
The contribution of “other items” stood at €106
million, down -€171 million compared to 2022.
The underlying net income Group share of the
Corporate Centre division was -€810 million over 2023, in line
with MTP target of -€800 million.
As at 31 December 2023, risk weighted assets
were €28.9 billion.
* *
*
Financial strength
Crédit Agricole Group
As of 31 December 2023, the
phased-in Common Equity Tier 1 (CET1) ratio of
Crédit Agricole Group was 17.5%, unchanged from end
September 2023. Consequently, Crédit Agricole Group had a
substantial buffer of 8.2 percentage points between the
level of its CET1 ratio and the SREP requirement of 9.3%,111 which
is the largest SREP gap among European G-SIBs112. The fully loaded
CET1 ratio is 17.4%.
During the fourth quarter 2023:
- The CET1 ratio benefited from an
impact of +18 basis points related to retained
earnings, which exceeds the organic growth of the business
lines,
- Changes in risk weighted assets
related to business line organic growth impacted
the Group’s CET1 ratio by -9 basis points, which corresponds to an
increase in the business lines’ risk weighted assets including
foreign exchange (of which +€0.7 billion for the Regional
Banks),
For the full year, the phased-in
CET1 was relatively unchanged with
retained earnings generating +100 basis points in
the face of organic business-line growth of -72
basis points, an impact of Group acquisitions and partnerships of
-9 basis points, and a methodology and other effects of +1 basis
points. The Group’s equity transactions also had an adverse impact
on the Group's CET 1 ratio this year of -23 basis points. This
corresponds mainly to the anticipation since third quarter 2023 of
the impact of the purchase by SAS Rue la Boétie of
Crédit Agricole S.A. shares (-17 basis points).
The phased-in Tier 1 ratio
stood at 18.5% and the phased-in total ratio was 21.1% at end
December 2023.
The phased-in leverage ratio
stood at 5.5%, well above the regulatory requirement of 3.5%. In
addition to the minimum requirement of 3% in effect since
1 January 2023, and only for global systemically important
institutions (G-SII), a leverage ratio buffer will be added,
defined as half of the G-SII buffer of the entity, which amounts to
0.5% for the Crédit Agricole Group.
Risk weighted assets for the
Crédit Agricole Group amounted to €609.9 billion, up
by +€4.4 billion compared to 30 September 2023.
Organic growth in the business lines (including
exchange rates) contributed +€5.4 billion to this change,
including +€0.7 billion in risk-weighted assets for the
regional banks, while methodology and regulatory
effects had a positive effect this quarter of
-€1.0 billion related to model and data revisions in the SFS
and Large Customer divisions.
Maximum Distributable Amount (MDA and
L-MDA) trigger thresholds
The transposition of Basel regulations into
European law (CRD) introduced a restriction mechanism for
distribution that applies to dividends, AT1 instruments and
variable compensation. The Maximum Distributable Amount (MDA, the
maximum sum a bank is allowed to allocate to distributions)
principle aims to place limitations on distributions in the event
the latter were to result in non-compliance with combined capital
buffer requirements.
The distance to the MDA trigger is the lowest of
the respective distances to the SREP requirements in CET1 capital,
Tier 1 capital and total capital.
At 31 December 2023,
Crédit Agricole Group posted a buffer of
742 basis points above the MDA trigger, i.e.
€45 billion in CET1 capital.
At 31 December 2023,
Crédit Agricole S.A. posted a buffer of
323 basis points above the MDA trigger, i.e.
€13 billion in CET1 capital.
Failure to comply with the leverage ratio buffer
requirement would result in a restriction of distributions and the
calculation of a maximum distributable amount (L-MDA).
At 31 December 2023,
Crédit Agricole Group posted a buffer of
196 basis points above the L-MDA trigger, i.e.
€40 billion in Tier 1 capital.
TLAC
Crédit Agricole Group must comply with
the following TLAC ratio requirements at all times:
- a TLAC ratio
above 18% of risk weighted assets (RWA), plus – in accordance with
EU directive CRD 5 – a combined capital buffer requirement
(including, for the Crédit Agricole Group, a 2.5% capital
conservation buffer, a 1% G-SIB buffer and the counter-cyclical
buffer set at 0.42% for the CA Group at 31/12/23). Considering the
combined capital buffer requirement, the
Crédit Agricole Group must adhere to a TLAC ratio of
above 21.9%;
- a TLAC ratio of
above 6.75% of the Leverage Ratio Exposure (LRE).
The Crédit Agricole Group’s
2025 target is to maintain a TLAC ratio greater than or equal to
26% of RWA excluding eligible senior preferred debt.
At 31 December 2023,
Crédit Agricole Group’s TLAC ratio stood
at 26.9% of RWA and 8.0% of leverage ratio exposure,
excluding eligible senior preferred
debt113, which is well above the
requirements. The TLAC ratio, expressed as a percentage of
risk-weighted assets, fell by 20 basis points over the quarter,
reflecting the increase in RWAs over the period. Expressed as a
percentage of leverage exposure (LRE), the TLAC ratio was down
20 basis points compared with September 2023.
The Group thus has a TLAC ratio excluding
eligible senior preferred debt that is 500 basis points higher,
i.e. €30 billion, than the current requirement of 21.9% of
RWA.
For full-year 2023, €6.5 billion equivalent
was issued in the market (senior non-preferred and Tier 2 debt) on
top of the €1.25 billion of AT1. At end December, the amount of
Crédit Agricole Group senior non-preferred securities
taken into account in the calculation of the TLAC ratio was
€28.9 billion.
MREL
The required minimum levels are set by decisions
of resolution authorities and then communicated to each
institution, then revised periodically. Since 1 January 2022, the
Crédit Agricole Group has to meet a minimum total MREL requirement
of:
- 21.04% of RWA,
plus – in accordance with EU directive CRD 5 – a combined
capital buffer requirement (including, for the Crédit Agricole
Group, a 2.5% capital conservation buffer, a 1% G-SIB buffer and
the counter-cyclical buffer set at 0.42% for the CA Group at
31/12/23). Considering the combined capital buffer requirement, the
Crédit Agricole Group must adhere to a total MREL ratio
of above 25.0%;
- 6.02% of the
LRE.
At 31 December 2023,
Crédit Agricole Group had a MREL ratio of 32.1%
of RWA and 9.5% of leverage exposure, well above the total
MREL requirement.
An additional subordination requirement to TLAC
(“subordinated MREL”) is also determined by the resolution
authorities and expressed as a percentage of RWA and LRE, in which
senior debt instruments are excluded, similar to TLAC, which ratio
is equivalent to the subordinated MREL for the
Crédit Agricole Group. At 31 December 2023, this
subordinated MREL requirement for the
Crédit Agricole Group did not exceed the TLAC
requirement.
The distance to the maximum distributable amount
trigger related to MREL requirements (M-MDA) is the lowest of the
respective distances to the MREL, subordinated MREL and TLAC
requirements expressed in RWA.
At 31 December 2023,
Crédit Agricole Group had a buffer of
500 basis points above the M-MDA trigger, taking into
account the TLAC requirement applicable at 31 December 2023,
i.e. €30 billion of CET1 capital.
From 1 January 2024,
Crédit Agricole Group will be required to comply with the
following MREL requirements:
- Total MREL:
21.71% of RWA (plus a combined capital buffer requirement) and
6.13% of leverage ratio exposure.
- Subordinated
MREL: 17.14% of RWA (plus a combined capital buffer requirement)
and 6.13% of leverage ratio exposure.
Crédit Agricole S.A.
At 31 December 2023,
Crédit Agricole S.A.’s solvency ratio was higher than the
Medium-Term Plan target, with a phased-in Common Equity
Tier 1 (CET1) ratio of 11.8%, stable compared to
30 September 2023. Crédit Agricole S.A. therefore
had a substantial buffer of 3.6 percentage points between the
level of its CET1 ratio and the 8.2% SREP requirement. The fully
loaded CET1 ratio is 11.7%.
During the fourth quarter 2023:
- The CET1 ratio
benefited this quarter from a positive impact of +10 basis points
linked to retained earnings. This impact
corresponds to net income Group share, net of AT1 coupons (+32
basis points) and the proposed dividend of €1.05 for the year
(including euro 29 cents for the quarter). This in turn has an
impact of -22 basis points, which includes -6 basis points related
to the impact of the dividend in excess of 50%, the pay-out on 2023
attributable stated income coming to 54%.for 2023
- The change in
risk-weighted assets due to organic growth in the business
lines impacted the CET1 ratio by -8 basis points.
This included an increase of +€2.9 billion in the business lines’
risk-weighted assets, concentrated in the Specialised Financial
Services division for +€1.5 billion related to CA Auto Bank and a
seasonal effect on CAL&F, in the Retail Banking division in
France for +€0.8 billion, and in the Corporate Centre division for
+€2.9 billion impacted this quarter by a temporary foreign
exchange position with a view to an USD AT1 call in January 2024.
This growth in risk-weighted assets was somewhat offset by the
Large Customers division for -€3.6 billion, benefiting from a
positive foreign exchange impact and a decrease in risk-weighted
assets in Capital market activities.
- The
methodology and regulatory effects had a
favourable impact on the CET1 ratio of +2 basis points and on the
OCI and Other of -4 basis points, which included
-9 basis points for the Crédit Agricole S.A. share
buyback program launched in the fourth quarter, offsetting the
employee share issue in the third quarter of 2023.
For the full year, the phased-in
CET1 was up +53 basis points with retained
earnings generating +66 basis points in the face of organic
business-line growth of -48 basis points, an impact of Group
acquisitions and partnerships of -10 basis points, and methodology
and other effects of +45 basis points. This last variation is due
in particular to the positive impact of IFRS 17 in first quarter
(+31 basis points) and the discontinuation of insurance goodwill in
the third quarter (+15 basis points). The phased-in
leverage ratio was 3.8% at end-December 2023, down
-20 basis points from 30 September 2023 and above the 3%
requirement.
The phased-in Tier 1 ratio
stood at 13.2% and the phased-in total ratio at 17.2% this
quarter.
Risk weighted assets for
Crédit Agricole S.A. amounted to €387.5 billion at
end of December 2023, up by +€3.6 billion compared to 30
September 2023. The business lines’ contribution
(including foreign exchange impact) was +€4.7 billion, which
included an increase in risk-weighted assets of +€1.6 billion
in the Retail Banking division, +€1.5 billion the Specialised
Financial Services division and +€2.9 billion in the Corporate
Centre division. This was partially offset by a positive effect on
the Large Customers division amounting to -€3.6 billion. The
equity-accounted value of insurance also contributed to
risk-weighted assets in the amount of +€1.8 billion (including
OCI-related effects). Methodology and other effects had a positive
impact of -€1.0 billion, mainly due to model and data
revisions in the SFS and Large Customer divisions.
Liquidity and Funding
Liquidity is measured at
Crédit Agricole Group level.
In order to provide simple, relevant and
auditable information on the Group’s liquidity position, the
banking cash balance sheet’s stable resources surplus is calculated
quarterly.
The banking cash balance sheet is derived from
Crédit Agricole Group’s IFRS financial statements. It is
based on the definition of a mapping table between the Group’s IFRS
financial statements and the sections of the cash balance sheet and
whose definition is commonly accepted in the marketplace. It
relates to the banking scope, with insurance activities being
managed in accordance with their own specific regulatory
constraints.
Further to the breakdown of the IFRS financial
statements in the sections of the cash balance sheet, netting
calculations are carried out. They relate to certain assets and
liabilities that have a symmetrical impact in terms of liquidity
risk. Deferred taxes, fair value impacts, collective impairments,
short-selling transactions and other assets and liabilities were
netted for a total of €56 billion at end-December 2023.
Similarly, €129 billion in repos/reverse repos were eliminated
insofar as these outstandings reflect the activity of the
securities desk carrying out securities borrowing and lending
operations that offset each other. Other nettings calculated in
order to build the cash balance sheet — for an amount totalling
€177 billion at end-December 2023 — relate to derivatives,
margin calls, adjustment/settlement/liaison accounts and to
non-liquid securities held by the Corporate and Investment banking
division (CIB) and are included in the “Customer-related trading
assets” section.
Note that deposits centralised with Caisse des
Dépôts et Consignations are not netted in order to build the cash
balance sheet; the amount of centralised deposits
(€97 billion at end-December 2023) is booked to assets
under “Customer-related trading assets” and to liabilities under
“Customer-related funds”.
In a final stage, other restatements reassign
outstandings that accounting standards allocate to one section,
when they are economically related to another. As such, Senior
issuances placed through the banking networks as well as financing
by the European Investment Bank, the
Caisse des Dépôts et Consignations and other
refinancing transactions of the same type backed by customer loans,
which accounting standards would classify as “Medium long-term
market funds”, are reclassified as “Customer-related funds”.
Note that for Central Bank refinancing
transactions, outstandings related to the T-LTRO (Targeted
Longer-Term Refinancing Operations) are included in “Long-term
market funds”. In fact, T-LTRO 3 transactions are similar to
long-term secured refinancing transactions, identical from a
liquidity risk standpoint to a secured issue.
Medium to long-term repurchase agreements are
also included in “Long-term market funds”.
Finally, the CIB’s counterparties that are banks
with which we have a commercial relationship are considered as
customers in the construction of the cash balance sheet.
Standing at €1,698 billion at
31 December 2023, the Group’s banking cash balance sheet shows
a surplus of stable funding resources over stable
application of funds of €190 billion, up
€12 billion compared with end September 2023 after repayment
of TLTROs in December (€11 billion).
Total TLTRO 3 outstandings for
Crédit Agricole Group amounted to €26.8 billion114
at 31 December 2023, down -€11 billion115, which were
repaid during the quarter. It should be noted, with regard to the
position in stable resources, that internal management excludes the
temporary surplus of stable resources provided by the increase in
T-LTRO 3 outstandings in order to secure the Medium-Term Plan’s
target of €110 billion to €130 billion, regardless of the
repayment strategy.
Furthermore, given the excess liquidity, the
Group remained in a short-term lending position at 31 December 2023
(central bank deposits exceeding the amount of short-term net
debt).
Medium-to-long-term market resources
were €263 billion at 31 December 2023, up
+€1 billion compared to end-September 2023. Issues of senior
preferred and senior non-preferred debt offset the repayment of
T-LTRO 3 in December 2023.
They included senior secured debt of
€98 billion, senior preferred debt of €111 billion,
senior non-preferred debt of €32 billion and Tier 2
securities amounting to €22 billion.
The Group’s liquidity reserves, at
market value and after haircuts, amounted to €445 billion at
31 December 2023, up +€26 billion compared with
30 September 2023.
They covered short-term net debt more than two
times over (excluding the replacements with Central Banks).
This increase in liquidity reserves mainly
reflects the increase in the self-subscribed CA FH SFH
programme and the sharp rise in customer inflows redeposited with
central banks.
Crédit Agricole Group also continued
its efforts to maintain immediately available reserves (after
recourse to ECB financing). Central bank eligible non-HQLA assets
after haircuts amounted to €136 billion.
Credit institutions are subject to a threshold
for the LCR ratio, set at 100% on 1 January 2018.
At 31 December 2023, average
year-on-year LCR ratios were 144.3% for
Crédit Agricole Group and 142.7% for
Crédit Agricole S.A., respectively. The
end-of-month LCR ratios were 140.8% for
Crédit Agricole Group (representing a surplus of
€88.4 billion) and 142.3% for Crédit Agricole S.A.
(representing a surplus of €81.1 billion). They were higher
than the Medium-Term Plan target (around 110%).
In addition, the NSFR of
Crédit Agricole Group and Crédit Agricole S.A.
exceeded 100%, in accordance with the regulatory
requirement applicable since 28 June 2021 and above the Medium-Term
Plan target (>100%).
The Group continues to follow a prudent policy
as regards medium-to-long-term refinancing, with a
very diversified access to markets in terms of investor base and
products.
In 2023, the Group’s main issuers raised
the equivalent of
€58.4 billion116,117 in
medium-to-long-term debt through the open market, 45% of
which was issued by Crédit Agricole S.A. In particular,
the following amounts are noted for the Group:
-
Crédit Agricole CIB issued €15 billion in structured
format;
-
Crédit Agricole Consumer Finance issued
€7.0 billion in the form of ABS securitisations and
€2.5 billion equivalent in EMTN issues through
Crédit Agricole Auto Bank (CAAB);
-
Crédit Agricole Leasing and Factoring issued
€350 billion in ABS securitisations;
-
CA Italy issued €1 billion at 6-year senior secured
format in June;
-
Crédit Agricole next bank (Switzerland) issued a
350 million Swiss francs in senior secured format in
2023;
-
Crédit Agricole Assurances issued a 10-year Tier 2 for
€500 million and made a tender offer on two subordinated perpetual
issues (FR0012444750 & FR0012222297) for €500 million in
October.
The Group’s medium-to-long-term financing can be
broken down into the following categories:
-
€16.2 billion in secured financing;
-
€23.2 billion in plain-vanilla unsecured financing;
-
€15 billion in structured financing;
-
€4.1 billion in long-term institutional deposits and CDs.
In addition, €27.8 billion was raised
through off-market issuances, split as follows:
-
€20.3 billion from banking networks (the Group’s retail
banking or external networks);
-
€6.1 billion from supranational organisations or financial
institutions;
-
€1.4 billion from national refinancing vehicles (including the
credit institution CRH).
In 2023, Crédit Agricole S.A.
raised the equivalent of
€26.2 billion118,119
through the open market:
The bank raised the equivalent of
€26.2 billion, of which €4.8 billion in senior
non-preferred debt, €1.7 billion in Tier 2 debt,
€12.2 billion in senior preferred debt and €7.5 billion
in senior secured debt. The financing comprised a variety of
formats and currencies:
-
€8.5 billion120;
-
5.85 billion US dollars (€5.5 billion equivalent);
-
1.3 billion pounds sterling (€1.4 billion equivalent);
-
177 billion Japanese yen121 (€1.2 billion equivalent);
-
0.6 billion Swiss francs (€0.6 billion equivalent);
-
0.9 billion Australian dollars (€0.6 billion equivalent);
-
0.9 billion Singapore dollars (€0.6 billion equivalent);
-
1.0 billion Hong-Kong dollars (€0.1 billion equivalent);
-
2.0 billion Chinese Yuan (€0.3 billion equivalent).
Since the beginning of the year,
Crédit Agricole S.A. MLT issued 54% of its refinancing in
currencies other than EUR122,123.
Note that on 3 January 2023,
Crédit Agricole S.A. issued a PerpNC6 AT1 bond for
€1.25 billion at an initial rate of 7.25%.
The 2024 MLT market funding programme was set at
€26 billion, of which €17 billion was in senior preferred
or senior secured debt and €9 billion in senior non-preferred
or Tier 2 debt. The programme was 35% completed at 31 January
2024.
On 2 January 2024,
Crédit Agricole S.A. issued a PerpNC6.2 AT1 bond for
€1.25 billion at an initial rate of 6.5%.
Finally, Crédit Agricole updated its Green
Bond Framework in November 2023 and has since carried out two
market issues in green format (in senior non-preferred and senior
secured format) for a total amount of €2.5 billion.
Economic and financial
environment
2023 retrospective
In 2023, the advanced economies showed
unexpected resilience thanks to a range of shock absorbers, used to
varying degrees, that included savings accumulated during the Covid
pandemic, sound private balance sheets, a tight labour market,
investment spurred by public policy and lower sensitivity to
interest rate shock. These economies withstood persistently high
inflation, severe monetary tightening and a disappointing recovery
in China better than had been expected. They also continued to
develop against a global backdrop of major geopolitical
uncertainties, such as the ongoing war in Ukraine and the emergence
of the Israeli-Palestinian conflict in October.
In the United States, in
addition to surprisingly solid support from copious savings and the
stimulus of President Biden's industrial policy, the key factor to
this resilience was lower interest rate sensitivity. While growth
continued to slow during the first half of the year (with
annualised quarterly variations down to 2.1%), in the second half
of the year it proved unexpectedly robust given the monetary
tightening. As a result of the recovery in the second and third
quarters (4.9% then 3.3% on an annualised quarterly basis), growth
in 2023 averaged out at 2.5% (versus 1.9% in 2022). This good
result was due to the resilience of consumer services and goods
(contributing around one point and one-half point to growth
respectively), in turn attributable to a sustained rise in real
disposable income (4.2% on average) and a slightly lower savings
rate (4% in the last quarter). Growth also got a boost from public
spending and net external demand (with contributions to growth of
almost 0.7 and 0.6 points respectively), but was hampered by
private investment and supplies (resulting in the subtraction of
0.2 and 0.3 points respectively). Thanks to lower energy and food
costs, headline inflation continued to decline (3.4% in the 12
months to December 2023 versus 6.5% one year earlier). This was
despite a more limited decline in core inflation (3.9% in the 12
months to December 2023 versus 5.7% one year earlier). The Personal
Consumption Expenditure index, the gauge used by the Federal
Reserve, confirmed the disinflation trend, even though core
inflation was persisting.
Inflation in the euro zone
spiralled in 2022 due to the rise in gas prices linked to the war
in Ukraine, but it has since cooled considerably thanks to lower
energy costs and a drop in food prices. Headline inflation fell
significantly (from 9.2% in December 2022 to 2.9% in December
2023), while core inflation (excluding energy and unprocessed
foods) remained more volatile (up by 3.9% in December 2023 versus
6.9% one year earlier). In December, the biggest contributor to the
annual inflation rate was services (around +1.7 percentage points),
while energy was a negative contributor (around -0.7 percentage
points). Household consumption, hit hard by high inflation,
initially stalled growth but then picked up in the second half of
the year. In the third quarter, the negligible contribution of
investment and net external demand coupled with the negative
contribution of supplies overshadowed the positive contribution of
household consumption. As a result, GDP fell by 0.1% during the
quarter but remained relatively flat for the full year. This annual
stagnation was the result of difficulties in Germany (-0.4% over
the full year), in contrast to a moderate rise in Italy (0.1%) and
a more marked increase in France (0.6%) and especially in Spain
(1.8%). After a stagnant fourth quarter, the average growth rate
for the euro zone is expected to be 0.5% in 2023. With regard to
France, annual growth is expected to be 0.9% in 2023.
The central banks have remained
on high alert against a backdrop of activity that has been robust
in the United States and less depressed than feared in the euro
zone, resilient labour markets and inflation still far from the 2%
targets. Disinflation, which had fallen mechanically as a result of
the positive base effects of energy and food prices, slowed,
raising fears of price-wage spirals and more marked and lasting
second-round effects. This led the Federal Reserve and the ECB to
further strengthen their stance in combating inflation. Having
raised the target range for the federal funds interest rate by 425
basis points in 2022 to 4.25%-to-4.50%, the Federal
Reserve maintained its monetary tightening, albeit less
aggressively (100 basis points, taking the upper bound to 5.50% in
July 2023). It also continued the quantitative tightening begun in
June 2022 (non-reinvestment of securities reaching maturity). The
ECB carried on with its own monetary tightening
with increases totalling 200 basis points, having raised its key
rates by 250 basis points in 2022. This put refinancing and deposit
rates at 4.50% and 4% respectively from September 2023 onwards.
After expanding its balance sheet (targeted longer-term refinancing
transactions or TLTROs, the asset purchase programme or APP, and
the pandemic emergency purchase programme or PEPP), the ECB
continued its quantitative tightening (end of net asset purchases,
TLTRO repayments) with the aim, all things being equal, of
absorbing excess liquidity. The ECB nevertheless decided to
continue to reinvest PEPP roll-off until the first half of 2024 –
slightly longer than expected – before tapering it down and
stopping it altogether at the end of 2024.
With regard to the bond
markets, 2023 can be roughly divided into three parts. The
markets began the year on an overly optimistic scenario that called
for strong, sustained recovery in the Chinese economy, rapid
normalisation of inflation and the imminent end of monetary
tightening. Pressures on bonds (2- and 10-year swap rates) eased
overall, despite a severe jolt in March linked to a disruption
affecting the US banking system (bankruptcies of three US regional
banks that were particularly exposed to new technologies and
property). Persistent inflation, higher oil prices (OPEC's decision
to cut production) and ongoing monetary tightening meant that
market expectations failed to materialise and interest rates once
again started on an upward trajectory before the central banks
opted for monetary status quo in September. The hope that the
tightening would finally come to an end, or at least ease quickly,
fuelled a downward movement in interest rates.
Despite a fall at year-end, US 2-year (4.25% at
end-December 2023) and 10-year (3.90%) Treasury yields rose
significantly in 2023: at 4.60% and 3.95% respectively, average
rates were up by 160 and 100 basis points, accentuating the
inversion of the curve for the full year. There was also a massive
rise in European Treasury yields. German 2-year and 10-year yields
averaged 2.90% and 2.45% respectively (up 215 and 130 basis
points). At year-end, the Bund stood at around 2%, a year-on-year
decline of almost 40 basis points. Although France's spread
stabilised during the year at around 50 basis points above the
Bund, spreads in Italy and Spain (95 and 170 basis points above the
Bund respectively) contracted.
The equity markets, meanwhile, recorded a
stellar performance, driven by more resilient growth and falling
inflation, overshadowing a troubled global context and deferred
monetary easing. With all bets on a soft landing, risk appetite was
generally maintained, despite a tense and uncertain geopolitical
climate, as reflected in average index gains (S&P 500 +24%,
Eurostoxx 50 +17%, CAC 40 +14%). Lastly, the euro appreciated very
slightly on average (+3%) against the dollar, which itself
appreciated against the yen (+7%) and the yuan (+5%).
2024 Outlook
Although the advanced economies proved
unexpectedly resilient in 2023, they are gearing down, each at
their own speed – slowly but surely. While they are not collapsing,
neither is inflation any time soon. That said, uncertainty remains
high, not least because of the conflicts in Ukraine and the Middle
East, and downside risks are weighing on our growth scenario.
In the United States, although the hit from
aggressive monetary tightening is undergoing a relatively long
delay (which was underestimated), it is not without pain: the
effects are just slower to spread – and longer-lasting. With growth
still positive, albeit below potential, it appears the US economy
will stay afloat until the middle of 2024 before the impact of
rising interest rates makes a bigger dent through debt refinancing.
Our central scenario calls for a recession as 2024 flows into 2025,
but a shallow one. This is because businesses – and above all
households – are on solid financial ground. In addition, consumers
should do well in a labour market where the “imbalance” favours
supply and any cooling would result in a slight rise in
unemployment. They will also benefit from lower inflation, which
should dip below 3% in second quarter 2024 – even if service prices
stay higher. Our scenario assumes headline inflation of 2.4% and
core inflation of 2.7% at the end of 2024, levels to which they
would remain close throughout 2025. In terms of average growth, our
scenario assumes a measurable decline in 2024 (1.6% after 2.5% in
2023) followed by a further dip in 2025 (to just 0.5%), despite an
acceleration forecast at the end of the period due to interest rate
cuts.
While the slowdown in the euro
zone is dramatic, it will be buffered by the
disinflationary process, which leaves room for a soft landing on a
downward growth trend. However, negative factors (higher real
interest rates, a structural competitiveness shock linked to
energy, a deeply uncertain external environment) are setting the
euro zone economy on course for lower growth than its
pandemic-weakened potential. Some of the positive factors that have
allowed European growth to dip without collapsing – despite
inflation that is abating but still high, and the acute impacts of
monetary tightening – will still be at work in 2024. Above all,
employment and wages are holding up well at the expense of
productivity and unit labour costs.
With a delay in transmission of 12 to 18 months
after the last rate hike in September 2023, monetary transmission
will continue to be deployed in 2024, squeezing the growth rate of
total investment: it should remain positive (0.9% in 2024 and 1.8%
in 2025), but well below the 2014-2019 average. The recovery in
domestic demand will be driven for the most part by a pick-up in
private consumption (1.1% in 2024 and 1.3% in 2025). A small,
temporary increase in the unemployment rate (6.7% in 2024 and 6.6%
in 2025, after 6.6% in 2023) would not derail this upturn, which is
based on an increase in the wage bill and its purchasing power.
Households will also be able to draw on substantial accumulated
savings, which would no longer be built up as a precaution, just as
soon as the disinflation momentum helps improve confidence. By
contrast, budgets will become increasingly restrictive as all
support packages (Covid and energy) are permanently withdrawn in
2024.
Growth is therefore expected to stand at 0.7% in
2024 before recovering to 4.1% in 2025. Average headline inflation
(year-on-year) is expected to reach 2.8% in 2024 and 2.5% in 2025.
This very “soft” growth scenario is based on a recovery in consumer
spending that is itself justified by flatter but still positive job
creation, sustained wage growth, continued (albeit slower)
disinflation and, ultimately, improved confidence indicating a
reduction in precautionary savings. However, this scenario is
surrounded by downside risks: the “switch” to a recession scenario
does not require an external shock, but rather a simple deviation
from the favourable assumptions on which we based our central
scenario (continued disinflation, easing of financing terms, brisk
business activity and employment, and increased wage purchasing
power).
As for France, the scenario
assumes a “story” whose pieces are essentially those of the
scenario drawn up for the euro zone: continued recovery in
consumption in 2024 that should remain robust in 2025 (lower
inflation, rising wages, slight drop in savings rate), modest
decline in business investment before a recovery when financial
terms ease (end-2024 and into 2025), and a fairly positive
contribution from net external demand. Growth is expected to reach
1% in 2024 and 1.3% in 2025, from 0.9% in 2023.
A year after China abandoned
its zero-Covid policy, growth remains hobbled by structural issues,
and stimulus policies are unable to generate the confidence
necessary to stabilise and recover. The Chinese economy is
operating below potential. It still suffers from a chronic lack of
domestic demand, reflected in non-existent inflation. China is
facing deflation and a serious real estate crisis, as well as an
ageing population, an accumulation of precautionary savings and
high domestic debt. Taken together, it calls to mind late-1980s
Japan and its "lost decade”. China's 2024 growth target is expected
to be officially announced in March and should be between 4.5% and
5.0%. It is more likely that the government will adopt a more
prudent and conservative approach with a target of around 4.5%, to
avoid the political risk of “missing the target”. Our 2024 forecast
is around this level, at 4.4%.
In terms of monetary policy,
patience will be called for. While the major central banks seem to
have finished hiking their key rates, they are not done with
inflation yet. The quick and mechanical decline of headline
inflation is likely to be followed by tougher – possibly stickier –
core inflation. In the United States, the Federal Reserve wants to
see inflation, which is gauged by the PCE (Personal Consumption
Expenditure) index, fall permanently below 3% before it will ease
its monetary policy. In the euro zone, the risk of demand fuelling
inflation has passed. But the wages-to-inflation transmission
channel is still open, and the risk of second-round effects cannot
be totally ruled out.
In our scenario, inflation rates would slowly
converge towards the central banks’ “comfort zones” (which are
still unclear) but would still be higher than the 2% targets. These
inflation forecasts call for a prudent monetary easing scenario. In
terms of cutting key rates, the markets’ expectations seem
“aggressive”.
Our US scenario includes a 25
basis point drop – but not until July 2024. This reduction will be
gradual, with another 25 basis point cut in November, putting the
Fed funds rate’s upper bound at 5% at the end of 2024. The
predicted drop in growth could give the Fed room to accelerate its
cuts in 2025. The upper bound is likely to be 3.50% at the end of
2025 – a threshold the Fed may struggle to move below, with
inflation stuck above its target and a neutral interest rate that
could top its previous mark.
As for the ECB, it is
forecasting a deceleration in wages and will wait for this to play
out. It is expected to continue to monitor unit profits to ensure
that future wage rises will be absorbed by margins and not passed
on to selling prices. Its first rate cut (25 basis points) is
therefore not expected until September 2024. This would be followed
by five cuts of 25 basis points each until the ECB reaches its
neutral rate, with a deposit rate at 2.50%, in second quarter 2025.
By the end of 2025, this policy would put the refinancing and
deposit rates at 2.75% and 2.50% respectively, with a tightening of
the rate corridor.
Just as with monetary policy, our
long-term interest rate scenario is one of
“guarded optimism”. Between inflation, growth and the need to not
ease financial terms too quickly, everything urges the central
banks to be patient and points to a scenario of moderate decline in
long-term rates once the series of key rate cuts has begun.
In the United States, our scenario has Treasury
yields declining when the Fed makes its first cuts. It also calls
for a ten-year yield of about 4% by the end of 2024. In the euro
zone, our forecast for government bond yields does not “clear up”
until the second half of 2024. Our scenario is of a cumulative
reduction of 75 basis points in 2024 in the ECB's key rates,
starting in September. This should usher the bond markets into a
phase of decline and moderate steepening. The Bund yield is
expected to be around 2.60% at the end of 2024, after rising during
the first half of the year. Ten-year Treasury yields would approach
3.30% in France and 4.60% in Italy.
Appendix 1 – Specific items,
Crédit Agricole Group and
Crédit Agricole S.A.
Crédit Agricole
Group – Specific items, Q4-23, Q4-22, 2023 and
2022
|
|
Q4-23 |
Q4-22 |
|
2023 |
2022 |
€m |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
|
|
|
|
|
|
|
|
|
|
|
DVA (LC) |
|
6 |
4 |
(24) |
(18) |
|
(15) |
(11) |
(19) |
(14) |
Loan portfolio
hedges (LC) |
|
2 |
1 |
(38) |
(28) |
|
(24) |
(18) |
21 |
16 |
Home Purchase
Savings Plans (LCL) |
|
6 |
5 |
- |
- |
|
58 |
43 |
34 |
26 |
Home Purchase
Savings Plans (CC) |
|
5 |
4 |
- |
- |
|
236 |
175 |
53 |
39 |
Home Purchase
Savings Plans (RB) |
|
74 |
55 |
- |
- |
|
192 |
142 |
412 |
306 |
Reclassification of
held-for-sale operations - NBI (IRB) |
|
- |
- |
- |
- |
|
- |
- |
0 |
0 |
Mobility activities
reorganisation (SFS) |
|
- |
- |
- |
- |
|
300 |
214 |
- |
- |
Exceptional
provisioning on moratoria Poland (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(21) |
(17) |
Check Image
Exchange penalty (CC) |
|
- |
- |
- |
- |
|
42 |
42 |
- |
- |
Check Image
Exchange penalty (LCL) |
|
- |
- |
- |
- |
|
21 |
21 |
- |
- |
Check Image
Exchange penalty (RB) |
|
- |
- |
- |
- |
|
42 |
42 |
- |
- |
Total
impact on revenues |
|
93 |
69 |
(63) |
(46) |
|
851 |
650 |
480 |
355 |
Creval integration
costs (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(30) |
(18) |
Lyxor integration
costs (AG) |
|
- |
- |
- |
- |
|
- |
- |
(59) |
(31) |
CAGIP
Transformation costs (CC) |
|
- |
- |
(20) |
(15) |
|
- |
- |
(20) |
(15) |
Mobility activities
reorganisation (SFS) |
|
4 |
3 |
- |
- |
|
(14) |
(10) |
- |
- |
CAGIP
Transformation costs (RB) |
|
- |
- |
(30) |
(22) |
|
- |
- |
(30) |
(22) |
Donation for
illiteracy (RB) |
|
- |
- |
(35) |
(26) |
|
- |
- |
(35) |
(26) |
Reclassification of
held-for-sale operations - Costs (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(0) |
(0) |
Total
impact on operating expenses |
|
4 |
3 |
(84) |
(63) |
|
(14) |
(10) |
(174) |
(111) |
Mobility activities
reorganisation (SFS) |
|
- |
- |
- |
- |
|
(85) |
(61) |
- |
- |
Provision for own
equity risk Ukraine (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(195) |
(195) |
Total
impact on cost of credit risk |
|
- |
- |
- |
- |
|
(85) |
(61) |
(195) |
(195) |
CACF/Stellantis
transformation costs (SFS) |
|
- |
- |
(8) |
(16) |
|
- |
- |
(8) |
(16) |
Mobility activities
reorganisation (SFS) |
|
- |
- |
- |
- |
|
(39) |
(39) |
- |
- |
Total
impact equity-accounted entities |
|
- |
- |
(8) |
(16) |
|
(39) |
(39) |
(8) |
(16) |
Mobility activities
reorganisation (SFS) |
|
- |
- |
- |
- |
|
89 |
57 |
- |
- |
Total
impact on Net income on other assets |
|
- |
- |
- |
- |
|
89 |
57 |
- |
- |
Mobility activities
reorganisation (SFS) |
|
12 |
12 |
- |
- |
|
12 |
12 |
- |
- |
Total
impact on change of value of goodwill |
|
12 |
12 |
- |
- |
|
12 |
12 |
- |
- |
Mobility activities
reorganisation (SFS) |
|
- |
3 |
- |
- |
|
- |
3 |
- |
- |
"Affrancamento /
reallineamento" gain (IRB) |
|
- |
- |
146 |
126 |
|
- |
- |
146 |
126 |
Total
impact on tax |
|
- |
3 |
146 |
126 |
|
- |
3 |
146 |
126 |
Capital gain La
Médicale (AG) |
|
- |
- |
- |
- |
|
- |
- |
101 |
101 |
Reclassification of
held-for-sale operations Crédit du Maroc (IRB) |
|
- |
- |
(14) |
(14) |
|
- |
- |
(14) |
(14) |
Reclassification of
held-for-sale operations (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(7) |
(10) |
Total
impact on Net income from discounted or held-for-sale
operations |
|
- |
- |
(14) |
(14) |
|
- |
- |
80 |
77 |
Total impact of specific items |
|
109 |
86 |
(23) |
(13) |
|
814 |
611 |
330 |
236 |
Asset gathering |
|
- |
- |
- |
- |
|
- |
- |
42 |
70 |
French Retail banking |
|
80 |
59 |
(64) |
(48) |
|
312 |
248 |
382 |
283 |
International Retail banking |
|
- |
- |
132 |
112 |
|
- |
- |
(121) |
(128) |
Specialised financial services |
|
16 |
17 |
(8) |
(16) |
|
263 |
176 |
(8) |
(16) |
Large customers |
|
8 |
6 |
(63) |
(46) |
|
(39) |
(29) |
2 |
1 |
Corporate centre |
|
5 |
4 |
(20) |
(15) |
|
277 |
216 |
32 |
24 |
* Impact before tax and before non-controlling interests
Crédit
Agricole S.A. – Specific items,
Q4-23, Q4-22, 2023 and 2022
|
|
Q4-23 |
Q4-22 |
|
2023 |
2022 |
€m |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
|
|
|
|
|
|
|
|
|
|
|
DVA (LC) |
|
6 |
4 |
(24) |
(18) |
|
(15) |
(11) |
(19) |
(14) |
Loan portfolio
hedges (LC) |
|
2 |
1 |
(38) |
(28) |
|
(24) |
(18) |
21 |
15 |
Home Purchase
Savings Plans (FRB) |
|
6 |
4 |
- |
- |
|
58 |
41 |
34 |
24 |
Home Purchase
Savings Plans (CC) |
|
5 |
4 |
- |
- |
|
236 |
175 |
53 |
39 |
Reclassification of held-for-sale operations - NBI (IRB) |
|
- |
- |
- |
- |
|
- |
- |
0 |
0 |
Mobility
activities reorganisation (SFS) |
|
- |
- |
- |
- |
|
300 |
214 |
- |
- |
Check Image
Exchange penalty (CC) |
|
- |
- |
- |
- |
|
42 |
42 |
- |
- |
Check Image
Exchange penalty (LCL) |
|
- |
- |
- |
- |
|
21 |
20 |
- |
- |
Exceptional
provisioning on moratoria Poland (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(21) |
(17) |
Total
impact on revenues |
|
19 |
14 |
(63) |
(45) |
|
617 |
464 |
68 |
48 |
CAGIP
Transformation costs (CC) |
|
- |
- |
(20) |
(13) |
|
- |
- |
(20) |
(13) |
Mobility
activities reorganisation (SFS) |
|
4 |
3 |
- |
- |
|
(14) |
(10) |
- |
- |
Creval
integration costs (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(30) |
(16) |
Reclassification of held-for-sale operations - Costs (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(0) |
(0) |
Lyxor
integration costs (AG) |
|
- |
- |
- |
- |
|
- |
- |
(59) |
(30) |
Total
impact on operating expenses |
|
4 |
3 |
(20) |
(13) |
|
(14) |
(10) |
(110) |
(60) |
Provision for own equity risk Ukraine (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(195) |
(195) |
Mobility
activities reorganisation (SFS) |
|
- |
- |
- |
- |
|
(85) |
(61) |
- |
- |
Total
impact on cost of credit risk |
|
- |
- |
- |
- |
|
(85) |
(61) |
(195) |
(195) |
CACF/Stellantis transformation costs (SFS) |
|
- |
- |
(8) |
(16) |
|
- |
- |
(8) |
(16) |
Mobility
activities reorganisation (SFS) |
|
- |
- |
- |
- |
|
(39) |
(39) |
- |
- |
Total
impact equity-accounted entities |
|
- |
- |
(8) |
(16) |
|
(39) |
(39) |
(8) |
(16) |
Mobility
activities reorganisation (SFS) |
|
- |
- |
- |
- |
|
89 |
57 |
- |
- |
Total
impact Net income on other assets |
|
- |
- |
- |
- |
|
89 |
57 |
- |
- |
Mobility
activities reorganisation (SFS) |
|
12 |
12 |
- |
- |
|
12 |
12 |
- |
- |
Total
impact on change of value of goodwill |
|
12 |
12 |
- |
- |
|
12 |
12 |
- |
- |
Mobility
activities reorganisation (SFS) |
|
- |
3 |
- |
- |
|
- |
3 |
- |
- |
"Affrancamento
/ reallineamento" gain (IRB) |
|
- |
- |
146 |
114 |
|
- |
- |
146 |
114 |
Total
impact on tax |
|
- |
3 |
146 |
114 |
|
- |
3 |
146 |
114 |
Reclassification of held-for-sale operations (IRB) |
|
- |
- |
- |
- |
|
- |
- |
(7) |
(10) |
Capital gain
La Médicale (AG) |
|
- |
- |
- |
- |
|
- |
- |
101 |
101 |
Reclassification of held-for-sale operations Crédit du Maroc
(IRB) |
|
- |
- |
(14) |
(14) |
|
- |
- |
(14) |
(14) |
Total
impact on Net income from discounted or held-for-sale
operations |
|
- |
- |
(14) |
(14) |
|
- |
- |
80 |
77 |
Total impact of specific items |
|
35 |
31 |
41 |
25 |
|
580 |
425 |
(18) |
(32) |
Asset gathering |
|
- |
- |
- |
- |
|
- |
- |
42 |
71 |
French Retail banking |
|
6 |
4 |
- |
- |
|
79 |
61 |
34 |
24 |
International Retail banking |
|
- |
- |
132 |
100 |
|
- |
- |
(121) |
(138) |
Specialised financial services |
|
16 |
17 |
(8) |
(16) |
|
263 |
176 |
(8) |
(16) |
Large customers |
|
8 |
6 |
(63) |
(45) |
|
(39) |
(28) |
2 |
1 |
Corporate centre |
|
5 |
4 |
(20) |
(13) |
|
277 |
216 |
32 |
26 |
* Impact before tax and before non-controlling
interests
Appendix 2 –
Crédit Agricole Group: income statement by business
line
Crédit Agricole Group – Contribution by business line,
Q4-23 and Q4-22
|
Q4-23 (stated) |
€m |
RB |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,227 |
959 |
1,000 |
1,550 |
880 |
1,936 |
(782) |
8,769 |
Operating expenses excl. SRF |
(2,485) |
(654) |
(646) |
(726) |
(449) |
(1,209) |
488 |
(5,682) |
SRF |
- |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
742 |
305 |
353 |
824 |
431 |
727 |
(294) |
3,088 |
Cost of risk |
(321) |
(96) |
(98) |
(4) |
(184) |
(39) |
(20) |
(762) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
(0) |
- |
(0) |
29 |
40 |
5 |
- |
73 |
Net income on other assets |
(1) |
0 |
2 |
(5) |
(11) |
(1) |
(4) |
(19) |
Income before tax |
420 |
209 |
258 |
843 |
288 |
692 |
(328) |
2,382 |
Tax |
(85) |
(39) |
(104) |
(172) |
(53) |
(130) |
128 |
(455) |
Net income from discont'd or held-for-sale ope. |
(0) |
- |
(10) |
- |
- |
- |
- |
(10) |
Net income |
336 |
170 |
144 |
671 |
235 |
562 |
(200) |
1,918 |
Non controlling interests |
0 |
0 |
(24) |
(123) |
(18) |
(25) |
(4) |
(194) |
Net income Group Share |
336 |
170 |
120 |
548 |
217 |
537 |
(204) |
1,724 |
|
Q4-22 (stated) |
€m |
RB |
LCL |
AG |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,396 |
915 |
2,021 |
916 |
710 |
1,712 |
(819) |
8,852 |
Operating expenses excl. SRF |
(2,530) |
(581) |
(653) |
(610) |
(359) |
(1,000) |
450 |
(5,283) |
SRF |
- |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
866 |
334 |
1,368 |
306 |
351 |
712 |
(369) |
3,568 |
Cost of risk |
(307) |
(78) |
(11) |
(190) |
(145) |
(15) |
(7) |
(753) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
0 |
- |
24 |
1 |
68 |
4 |
(0) |
97 |
Net income on other assets |
(1) |
3 |
(4) |
1 |
(2) |
(9) |
(1) |
(13) |
Income before tax |
558 |
259 |
1,377 |
118 |
271 |
693 |
(377) |
2,899 |
Tax |
(120) |
(51) |
(405) |
106 |
(61) |
(156) |
250 |
(436) |
Net income from discont'd or held-for-sale ope. |
(0) |
- |
3 |
(28) |
(3) |
1 |
0 |
(27) |
Net income |
439 |
208 |
975 |
196 |
207 |
537 |
(127) |
2,435 |
Non controlling interests |
(0) |
(0) |
(112) |
(28) |
(26) |
(28) |
3 |
(190) |
Net income Group Share |
439 |
208 |
863 |
168 |
182 |
510 |
(123) |
2,246 |
Crédit Agricole Group – Contribution by business line, 2023 and
2022
|
2023 (stated) |
€m |
RB |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
13,259 |
3,850 |
4,040 |
6,693 |
3,597 |
7,780 |
(2,728) |
36,492 |
Operating expenses excl. SRF |
(9,702) |
(2,396) |
(2,189) |
(2,874) |
(1,673) |
(4,507) |
1,877 |
(21,464) |
SRF |
(111) |
(44) |
(40) |
(6) |
(29) |
(312) |
(77) |
(620) |
Gross operating income |
3,446 |
1,410 |
1,811 |
3,813 |
1,896 |
2,961 |
(928) |
14,408 |
Cost of risk |
(1,152) |
(301) |
(463) |
(5) |
(871) |
(120) |
(28) |
(2,941) |
Equity-accounted entities |
9 |
- |
1 |
102 |
130 |
21 |
- |
263 |
Net income on other assets |
5 |
21 |
3 |
(10) |
71 |
2 |
(5) |
88 |
Change in value of goodwill |
- |
- |
- |
- |
12 |
- |
(9) |
2 |
Income before tax |
2,308 |
1,130 |
1,353 |
3,900 |
1,237 |
2,865 |
(971) |
11,821 |
Tax |
(551) |
(256) |
(425) |
(868) |
(306) |
(691) |
350 |
(2,748) |
Net income from discontinued or held-for-sale operations |
(0) |
- |
(3) |
1 |
(0) |
- |
- |
(3) |
Net income |
1,756 |
874 |
924 |
3,033 |
931 |
2,174 |
(621) |
9,071 |
Non controlling interests |
(0) |
(0) |
(145) |
(466) |
(79) |
(118) |
(4) |
(813) |
Net income Group Share |
1,756 |
874 |
780 |
2,566 |
851 |
2,056 |
(625) |
8,258 |
|
2022 (stated) |
€m |
RB |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
14,156 |
3,851 |
6,290 |
3,373 |
2,782 |
7,012 |
(2,660) |
34,804 |
Operating expenses excl. SRF |
(9,441) |
(2,321) |
(2,791) |
(2,131) |
(1,443) |
(3,905) |
1,727 |
(20,304) |
SRF |
(156) |
(69) |
(7) |
(38) |
(34) |
(442) |
(56) |
(803) |
Gross operating income |
4,560 |
1,462 |
3,492 |
1,204 |
1,304 |
2,665 |
(989) |
13,698 |
Cost of risk |
(1,137) |
(237) |
(17) |
(701) |
(533) |
(251) |
(17) |
(2,892) |
Equity-accounted entities |
5 |
- |
88 |
2 |
308 |
15 |
- |
419 |
Net income on other assets |
24 |
8 |
(3) |
7 |
2 |
(8) |
(2) |
28 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
3,452 |
1,232 |
3,560 |
513 |
1,081 |
2,421 |
(1,008) |
11,253 |
Tax |
(845) |
(300) |
(948) |
(67) |
(222) |
(592) |
328 |
(2,647) |
Net income from discontinued or held-for-sale operations |
(0) |
- |
127 |
(7) |
0 |
- |
0 |
121 |
Net income |
2,607 |
932 |
2,739 |
439 |
860 |
1,830 |
(680) |
8,727 |
Non controlling interests |
(1) |
(0) |
(422) |
(113) |
(109) |
(91) |
6 |
(729) |
Net income Group Share |
2,606 |
932 |
2,318 |
327 |
751 |
1,739 |
(674) |
7,997 |
Appendix 3 –
Crédit Agricole S.A. : results by business
line
Crédit Agricole S.A. – Contribution by business line, Q4-23 and
Q4-22
|
Q4-23 (stated) |
€m |
AG |
LC |
SFS |
FRB (LCL) |
IRB |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
1,555 |
1,935 |
880 |
959 |
974 |
(262) |
6,040 |
Operating expenses excl. SRF |
(726) |
(1,209) |
(449) |
(654) |
(627) |
(44) |
(3,710) |
SRF |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
828 |
726 |
431 |
305 |
347 |
(306) |
2,330 |
Cost of risk |
(4) |
(39) |
(184) |
(96) |
(102) |
(14) |
(440) |
Equity-accounted entities |
29 |
5 |
40 |
- |
(0) |
(12) |
61 |
Net income on other assets |
(5) |
(1) |
(11) |
0 |
2 |
(3) |
(17) |
Income before tax |
848 |
691 |
288 |
209 |
246 |
(345) |
1,937 |
Tax |
(173) |
(129) |
(53) |
(39) |
(103) |
128 |
(369) |
Net income from discontinued or held-for-sale operations |
- |
- |
- |
- |
(10) |
- |
(10) |
Net income |
675 |
562 |
235 |
170 |
134 |
(217) |
1,558 |
Non controlling interests |
(130) |
(37) |
(18) |
(8) |
(31) |
(1) |
(224) |
Net income Group Share |
546 |
525 |
217 |
162 |
103 |
(218) |
1,334 |
|
Q4-22 (Stated) |
€m |
AG |
LC |
SFS |
FRB (LCL) |
IRB |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
2,016 |
1,712 |
710 |
915 |
896 |
(283) |
5,967 |
Operating expenses excl. SRF |
(653) |
(1,000) |
(359) |
(581) |
(593) |
(45) |
(3,231) |
SRF |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
1,363 |
712 |
351 |
334 |
303 |
(327) |
2,735 |
Cost of risk |
(11) |
(15) |
(145) |
(78) |
(189) |
(4) |
(443) |
Equity-accounted entities |
24 |
4 |
68 |
- |
1 |
(16) |
80 |
Net income on other assets |
(4) |
(9) |
(2) |
3 |
1 |
0 |
(10) |
Income before tax |
1,371 |
693 |
271 |
259 |
115 |
(347) |
2,362 |
Tax |
(403) |
(156) |
(61) |
(51) |
106 |
241 |
(323) |
Net income from discontinued or held-for-sale operations |
3 |
1 |
(3) |
- |
(28) |
0 |
(27) |
Net income |
971 |
537 |
207 |
208 |
194 |
(106) |
2,012 |
Non controlling interests |
(117) |
(38) |
(26) |
(9) |
(44) |
5 |
(228) |
Net income Group Share |
855 |
499 |
182 |
199 |
150 |
(100) |
1,784 |
Crédit Agricole S.A. – Contribution by business line, 2023 and
2022
|
2023 (stated) |
€m |
AG |
LC |
SFS |
FRB (LCL) |
IRB |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
6,688 |
7,779 |
3,597 |
3,850 |
3,949 |
(683) |
25,180 |
Operating expenses excl. SRF |
(2,874) |
(4,507) |
(1,673) |
(2,396) |
(2,118) |
(64) |
(13,632) |
SRF |
(6) |
(312) |
(29) |
(44) |
(40) |
(77) |
(509) |
Gross operating income |
3,808 |
2,960 |
1,896 |
1,410 |
1,791 |
(825) |
11,039 |
Cost of risk |
(5) |
(120) |
(870) |
(301) |
(464) |
(17) |
(1,777) |
Equity-accounted entities |
102 |
21 |
130 |
- |
1 |
(58) |
197 |
Net income on other assets |
(10) |
2 |
71 |
21 |
3 |
(3) |
85 |
Change in value of goodwill |
- |
- |
12 |
- |
- |
(9) |
2 |
Income before tax |
3,894 |
2,864 |
1,237 |
1,130 |
1,332 |
(911) |
9,546 |
Tax |
(872) |
(690) |
(306) |
(256) |
(422) |
346 |
(2,201) |
Net income from discontinued or held-for-sale operations |
1 |
- |
(0) |
- |
(3) |
- |
(3) |
Net income |
3,024 |
2,174 |
931 |
874 |
906 |
(565) |
7,343 |
Non-controlling interests |
(483) |
(162) |
(79) |
(39) |
(204) |
(28) |
(995) |
Net income Group Share |
2,541 |
2,011 |
852 |
835 |
703 |
(593) |
6,348 |
|
2022 (stated) |
€m |
AG |
LC |
SFS |
FRB (LCL) |
IRB |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
6,261 |
7,013 |
2,782 |
3,851 |
3,299 |
(715) |
22,491 |
Operating expenses excl. SRF |
(2,791) |
(3,905) |
(1,443) |
(2,321) |
(2,067) |
(87) |
(12,614) |
SRF |
(7) |
(442) |
(34) |
(69) |
(38) |
(56) |
(647) |
Gross operating income |
3,463 |
2,666 |
1,304 |
1,462 |
1,194 |
(859) |
9,231 |
Cost of risk |
(17) |
(251) |
(533) |
(237) |
(700) |
(9) |
(1,746) |
Equity-accounted entities |
88 |
15 |
308 |
- |
2 |
(43) |
371 |
Net income on other assets |
(3) |
(8) |
2 |
17 |
7 |
0 |
15 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
3,532 |
2,423 |
1,081 |
1,242 |
504 |
(910) |
7,871 |
Tax |
(941) |
(592) |
(222) |
(300) |
(66) |
315 |
(1,806) |
Net income from discontinued or held-for-sale operations |
127 |
- |
0 |
- |
(7) |
0 |
121 |
Net income |
2,718 |
1,831 |
860 |
941 |
432 |
(596) |
6,186 |
Non-controlling interests |
(436) |
(120) |
(109) |
(42) |
(159) |
(13) |
(879) |
Net income Group Share |
2,282 |
1,711 |
751 |
899 |
273 |
(609) |
5,306 |
Appendix 4 – Data per share
Crédit Agricole S.A. – Earnings p/share, net book value p/share and
RoTE |
Crédit
Agricole S.A. – data per share |
|
|
|
|
|
|
(€m) |
|
Q4-2023 IFRS17 |
Q4-2022 IFRS4 |
|
2023 IFRS17 |
2022 IFRS4 |
|
|
|
|
|
|
|
Net income Group
share - stated |
|
1,334 |
1,557 |
|
6,348 |
5,437 |
- Interests on
AT1, including issuance costs, before tax |
|
(233) |
(85) |
|
(463) |
(412) |
NIGS
attributable to ordinary shares - stated |
[A] |
1,101 |
1,472 |
|
5,885 |
5,025 |
Average number
shares in issue, excluding treasury shares (m) |
[B] |
3,028 |
3,025 |
|
3,029 |
2,989 |
Net earnings per share - stated |
[A]/[B] |
0.36 € |
0.49 € |
|
1.94 € |
1.68 € |
Underlying net
income Group share (NIGS) |
|
1,303 |
1,531 |
|
5,923 |
5,468 |
Underlying NIGS
attributable to ordinary shares |
[C] |
1,070 |
1,446 |
|
5,460 |
5,056 |
Net earnings per share - underlying |
[C]/[B] |
0.35 € |
0.48 € |
|
1.80 € |
1.69 € |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(€m) |
|
|
|
|
31/12/23 IFRS17 |
31/12/22 IFRS4 |
Shareholder's
equity Group share |
|
|
|
|
71,086 |
64,633 |
- AT1
issuances |
|
|
|
|
(7,220) |
(5,989) |
- Unrealised
gains and losses on OCI - Group share |
|
|
|
|
1,074 |
3,536 |
Net book value (NBV), not revaluated, attributable to
ordin. sh. |
[D] |
|
|
|
61,760 |
59,005 |
- Goodwill &
intangibles** - Group share |
|
|
|
|
(17,347) |
(18,395) |
Tangible NBV (TNBV), not revaluated attrib. to ordinary
sh. |
[E] |
|
|
|
44,413 |
40,610 |
Total shares in
issue, excluding treasury shares (period end, m) |
[F] |
|
|
|
3,029.2 |
3,023.6 |
NBV per share ,
after deduction of dividend to pay (€) |
[D]/[F] |
|
|
|
20.4 € |
19.5 € |
+ Dividend to pay
(€) |
[H] |
|
|
|
1.05 € |
1.05 € |
TNBV per share,
after deduction of dividend to pay (€) |
[G]=[E]/[F] |
|
|
|
14.7 € |
13.4 € |
TNBV per sh.,
before deduct. of divid. to pay (€) |
[G]+[H] |
|
|
|
15.7 € |
14.5 € |
*
dividend proposed to the Board meeting to be paid |
|
|
|
|
|
**
including goodwill in the equity-accounted entities |
|
|
|
|
|
|
|
|
|
|
|
|
(€m) |
|
|
|
|
2023 IFRS17 |
2022 IFRS4 |
Net income Group
share - stated |
[K] |
|
|
|
6,348 |
5,437 |
Impairment of
intangible assets |
[L] |
|
|
|
0 |
0 |
Stated NIGS
annualised |
[N] = ([K]-[L]-[M])*4/4+[M] |
|
|
|
6,348 |
5,437 |
Interests on
AT1, including issuance costs, before tax, annualised |
[O] |
|
|
|
-463 |
-412 |
Stated result
adjusted |
[P] = [N]+[O] |
|
|
|
5,885 |
5,025 |
Tangible NBV
(TNBV), not revaluated attrib. to ord. sh. - avg (3) |
[J] |
|
|
|
43,281 |
40,028 |
Stated ROTE
adjusted (%) |
= [P] / [J] |
|
|
|
13.6% |
12.6% |
Underlying Net
income Group share |
[Q] |
|
|
|
5,923 |
5,468 |
Underlying NIGS
annualised |
[R] = ([Q]-[M])*4/4+[M] |
|
|
|
5,923 |
5,468 |
Underlying NIGS
adjusted |
[S] = [R]+[O] |
|
|
|
5,460 |
5,056 |
Underlying ROTE
adjusted(%) |
= [S] / [J] |
|
|
|
12.6% |
12.6% |
****** including assumption of dividend for the current
exercise |
|
|
|
0.0% |
0.0% |
(1) Average of the NTBV not revalued
attributable to ordinary shares calculated between 31/12/2022 and
31/12/2023
(2) ROTE calculated on the basis of an
annualised net income Group share and linearised IFRIC costs over
the year
Alternative Performance
Indicators124
NBV Net Book Value not
re-evaluated
The Net Book Value not re-evaluated corresponds
to the shareholders’ equity Group share from which the amount of
the AT1 issues, the unrealised gains and/or losses on OCI Group
share and the pay-out assumption on annual results have been
deducted.
NBV per share Net Book Value per share -
NTBV per share Net Tangible Book Value per shareOne of the
methods for calculating the value of a share. This represents the
Net Book Value divided by the number of shares in issue at end of
period, excluding treasury shares.
Net Tangible Book Value per share represents the
Net Book Value after deduction of intangible assets and goodwill,
divided by the number of shares in issue at end of period,
excluding treasury shares.
EPS Earnings per ShareThis is
the net income Group share, from which the AT1 coupon has been
deducted, divided by the average number of shares in issue
excluding treasury shares. It indicates the portion of profit
attributable to each share (not the portion of earnings paid out to
each shareholder, which is the dividend). It may decrease, assuming
the net income Group share remains unchanged, if the number of
shares increases.
Cost/income ratioThe
cost/income ratio is calculated by dividing operating expenses by
revenues, indicating the proportion of revenues needed to cover
operating expenses.
Cost of
risk/outstandingsCalculated by dividing the cost of credit
risk (over four quarters on a rolling basis) by outstandings (over
an average of the past four quarters, beginning of the period). It
can also be calculated by dividing the annualised cost of credit
risk for the quarter by outstandings at the beginning of the
quarter. Similarly, the cost of risk for the period can be
annualised and divided by the average outstandings at the beginning
of the period.
Since the first quarter of 2019, the
outstandings taken into account are the customer outstandings,
before allocations to provisions.
The calculation method for the indicator is
specified each time the indicator is used.
Doubtful loanDefaulting loan.
The debtor is considered to be in default when at least one of the
following two conditions has been met:
- a payment
generally more than 90 days past due, unless specific circumstances
point to the fact that the delay is due to reasons independent of
the debtor’s financial situation.
- the entity
believes that the debtor is unlikely to settle its credit
obligations unless it avails itself of certain measures such as
enforcement of collateral security right.
Impaired loanLoan which has
been provisioned due to a risk of non-repayment.
MRELThe MREL (Minimum
Requirement for Own Funds and Eligible Liabilities) ratio is
defined in the European “Bank Recovery and Resolution Directive”
(BRRD). This Directive establishes a framework for the resolution
of banks throughout the European Union, with the aim to provide
resolution authorities with shared instruments and powers to
pre-emptively tackle banking crises, preserve financial stability
and reduce taxpayers’ exposure to losses. Directive (EU) 2019/879
of 20 May 2019 known as “BRRD2” amended the BRRD and was transposed
into French law by Order 2020-1636 of 21 December 2020.
The MREL ratio corresponds to an own funds and
eligible liabilities buffer required to absorb losses in the event
of resolution. Under BRRD2, the MREL ratio is calculated as the
amount of eligible capital and liabilities expressed as a
percentage of risk weighted assets (RWA), as well as a leverage
ratio exposure (LRE). Are eligible for the numerator of the total
MREL ratio the Group’s regulatory capital, as well as eligible
liabilities issued by the central body and the Crédit Agricole
network affiliated entities, i.e. subordinated notes, senior
non-preferred debt instruments and certain senior preferred debt
instruments with residual maturities of more than one year.
Impaired (or doubtful) loan coverage
ratio This ratio divides the outstanding provisions
by the impaired gross customer loans.
Impaired (or doubtful) loan
ratio This ratio divides the impaired gross customer
loans on an individual basis, before provisions, by the total gross
customer loans.
TLACThe Financial Stability
Board (FSB) has defined the calculation of a ratio aimed at
estimating the adequacy of the bail-in and recapitalisation
capacity of Global Systemically Important Banks (G-SIBs). This
Total Loss Absorbing Capacity (TLAC) ratio provides
resolution authorities with the means to assess whether G-SIBs have
sufficient bail-in and recapitalisation capacity before and during
resolution. It applies to Global Systemically Important Banks, and
therefore to Crédit Agricole Group. The TLAC ratio
requirement was transposed into European Union law via CRR2 and has
been applicable since 27 June 2019.
The Group’s regulatory capital as well as
subordinated notes and eligible senior non-preferred debt with
residual maturities of more than one year issued by
Crédit Agricole S.A. are eligible for the numerator of
the TLAC ratio.
Net income Group shareNet
income/(loss) for the financial year (after corporate income tax).
Equal to net income Group share, less the share attributable to
non-controlling interests in fully consolidated subsidiaries.
Underlying Net income Group
shareThe underlying net income Group share represents the
stated net income Group share from which specific items have been
deducted (i.e., non-recurring or exceptional items) to facilitate
the understanding of the company’s actual earnings.
Net income Group share attributable to
ordinary shares The net income Group share attributable to
ordinary shares represents the net income Group share from which
the AT1 coupon has been deducted, including issuance costs before
tax.
RoTE Return on Tangible
EquityThe RoTE (Return on Tangible Equity) measures the
return on tangible capital by dividing the Net income Group share
annualised by the group’s NBV net of intangibles and goodwill. The
annualised Net income Group share corresponds to the annualisation
of the Net income Group share (Q1x4; H1x2; 9Mx4/3) excluding
impairments of intangible assets and restating each period of the
IFRIC impacts in order to linearise them over the year.
Disclaimer
The financial information on
Crédit Agricole S.A. and Crédit Agricole Group
for the fourth quarter and full year 2023 comprises this press
release, a presentation and the attached appendices which are
available on the website:
https://www.credit-agricole.com/en/finance/financial-publications.
This press release may include prospective
information on the Group, supplied as information on trends. This
data does not represent forecasts within the meaning of EU
Delegated Act 2019/980 of 14 March 2019 (Chapter 1, Article 1,
d).
This information was developed from scenarios
based on a number of economic assumptions for a given competitive
and regulatory environment. Therefore, these assumptions are by
nature subject to random factors that could cause actual results to
differ from projections. Likewise, the financial statements are
based on estimates, particularly in calculating market value and
asset impairment.
Readers must take all these risk factors and
uncertainties into consideration before making their own
judgement.
Applicable standards and
comparability
The figures presented for the twelve-month
period ended 31 December 2023 have been prepared in accordance with
IFRS as adopted in the European Union and applicable at that date,
and with prudential regulations currently in force. The Statutory
Auditor’s audit work on the financial consolidated statements is
under way.
Unless stated otherwise, all figures presented
in this presentation for the year 2022 are in proforma
IFRS 17.
Note: The scopes of consolidation of the
Crédit Agricole S.A. and Crédit Agricole Groups
have not changed materially since the
Crédit Agricole S.A. 2022 Universal Registration Document
and its A.01 update (including all regulatory information about the
Crédit Agricole Group) were filed with the AMF (the
French Financial Markets Authority).
The sum of values contained in the tables and
analyses may differ slightly from the total reported due to
rounding.
At 30 June 2023,
Crédit Agricole Auto Bank is the name of the new
entity formed from the takeover of 100% of FCA Bank by
Crédit Agricole Consumer Finance.
Crédit Agricole Auto Bank is fully consolidated in
the Crédit Agricole S.A. consolidated financial
statements.
At 30 June 2023, Leasys is the new joint
subsidiary between CACF and Stellantis. This entity is consolidated
using the equity accounted method in the
Crédit Agricole S.A. consolidated financial
statements
At 30 September 2023,
Crédit Agricole Consumer Finance finalised the
acquisition of ALD and LeasePlan activities in six European
countries. The acquisition is being carried out by Drivalia, a
Crédit Agricole Auto Bank subsidiary, and
Leasys.
At 30 September 2023, the acquisition of RBC
Investor Services in Europe, excluding Jersey and UK entities, was
complete. The entity has been renamed CACEIS Investor Services Bank
(“ISB”). ISB is included in the scope of consolidation of
Crédit Agricole S.A. as a subsidiary of CACEIS.
Financial Agenda
3 May
2024 Publication
of the 2024 first quarter results22 May
2024 General
Meeting in Orléans1 August
2024 Publication
of the 2024 second quarter and the first half year results6
November
2024 Publication of
the 2024 third quarter and first nine months results
Contacts
CREDIT AGRICOLE PRESS CONTACTS
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BaratOlivier Tassain |
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Mathilde
Durand |
+ 33 1 57 72 19
43 |
mathilde.durand@credit-agricole-sa.fr |
Bénédicte
Gouvert |
+ 33 1 49 53 43
64 |
benedicte.gouvert@ca-fnca.fr |
CRÉDIT AGRICOLE S.A. INVESTOR RELATIONS
CONTACTS
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Equity investor relations: |
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33 1 57 72 03 75 |
jean-yann.asseraf@credit-agricole-sa.fr
fethi.azzoug@credit-agricole-sa.fr |
Joséphine
Brouard |
+ 33 1 43 23 48
33 |
joséphine.brouard@credit-agricole-sa.fr |
Oriane Cante |
+ 33 1 43 23 03
07 |
oriane.cante@credit-agricole-sa.fr |
Nicolas
Ianna |
+ 33 1 43 23 55
51 |
nicolas.ianna@credit-agricole-sa.fr |
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+ 33 1 57 72 07
93 |
leila.mamou@credit-agricole-sa.fr |
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59 |
anna.pigoulevski@credit-agricole-sa.fr |
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Wiriath |
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52 |
annabelle.wiriath@credit-agricole-sa.fr |
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27 |
rhita.alamihassani@credit-agricole-sa.fr |
Gwenaëlle
Lereste |
+ 33 1 57 72 57
84 |
gwenaelle.lereste@credit-agricole-sa.fr |
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de Kercadio |
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32 |
florence.quintindekercadio@credit-agricole-sa.fr |
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See all our press releases at: www.credit-agricole.com -
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1 Market share in household loans and related loans LCL and CR
at end Sept. 23- Banque de France survey2 Market share for UCITS in
France at end December 2023 across all customer segments3 Banque de
France OSMP 2023 reports (2022 data)4 Internal data5 Signing of an
agreement for the acquisition of a majority stake 6 Digital fleet
management tool on monthly subscription7 Extended warranty8 In
addition to the acquisition of a stake of 9.9% in the capital of
Banco BPM in 20229 Employee benefits management tool10 Creation of
a joint venture to develop innovative commercial offers11
Equivalent to the population of of Reims, France12 Ipsos13 BVA
202314 Source: Doxa survey October 202315 Percentage of individual
customers aged 18 and over with an active demand deposit account,
who have synchronised their account with Ma Banque at least once or
who have visited the new Crédit Agricole on-line customer
portal during the month.16 Bloomberg17 Refinitiv18 Comprising
€646 billion for the Regional Banks, €169 billion for LCL
and €61 billion for CA Italy19 Comprising €596 billion
for the Regional Banks, €162 billion for LCL and €66 billion
for CA Italy20 DVA (Debt Valuation Adjustment)21
Specific (one-off) items impacted the fourth quarter of 2023 for
the SFS division and for CACF as follows: +€17m in net income Group
share, of which +€4m on operating expenses, +€12m on badwill and
+€1m on tax. As a reminder, the impact on net income Group share
was +€140m in Q2-23 and €19m in Q3-2322 See Appendixes for more
details on specific items. 23 IFRS 17 base effect: i.e. after
restatement of the 2022 base effect, which did not take into
account the investment management decisions implemented at the end
of 2022 (segregation of equity and derisking the portfolio).24 CA
Auto Bank scope effect Q4-23: Revenues €196m, expenses -€83m, cost
of risk -€25m25 Integration of ALD Leaseplan activities in Portugal
and Luxembourg into Leasys, and integration of ALD Leaseplan
activities in Ireland, Norway, the Czech Republic and Finland into
CAAB.26 Impact on RBC IS Europe revenues Q4-23: +€111m27
The cost of risk relative to outstandings (in basis points) on a
four quarter rolling basis is calculated on the cost of risk of the
past four quarters divided by the average outstandings at the start
of each of the four quarters28 The cost of risk relative to
outstandings (in basis points) on an annualised basis is calculated
on the cost of risk of the quarter multiplied by four and divided
by the outstandings at the start of the quarter29
Specific (one-off) items impacted the 2023 net income of the SFS
division and CACF as follows: +€176m in net income Group share (of
which €300m on revenues, -€14m on operating expenses, -€85m on the
cost of risk, -€39m on the net income of equity-accounted entities;
+€89m on gains from other assets, +€12m on badwill and -€87m on
tax).
30 Source: Analysis based on 31/12/2023
reporting on customer loans, Stage 3 outstandings and Stage 1, 2
and 3 provisions for Crédit Agricole SA, Groupe Crédit Agricole,
Banco Santander, BNP Paribas, Deutsche Bank, ING, UBS, Groupe BPCE
and Unicredit and at 30/09/2023 for Société Générale, Standard
Chartered, Barclays, and HSBC.31 The customer base grew by +7,000
new customers in 202332 Percentage of demand deposits of individual
customers aged 18 or over with more than 120 flows over the past 12
months, calculated based on all customers33 Percentage of
individual customers aged 18 or over with an active demand deposit
account, with at least one synchronisation on Ma Banque or who have
visited the new Crédit Agricole En Ligne customer portal
during the month.34 Excluding the reversal of home purchase savings
plans provisions in the amount of €74 million in the fourth
quarter of 202335 Excluding the reversal of home purchase savings
plans provisions in the amount of €118 million in the third
quarter of 2023 and €74 million in the fourth quarter of
202336 Excluding Q4-22 base effects and the integration of Hyperion
37 The €349 million difference with net income Group share is
due to the integration of CAMCA and the consolidation accounting
restatements within the Crédit Agricole Group. 38 DVA
(Debt Valuation Adjustment)39 Specific
(one-off) items impacted the fourth quarter of 2023 for the SFS
division and for CACF as follows: +€17m in net income Group share,
of which +€4m on operating expenses, +€12m on badwill and +€1m on
tax. As a reminder, the impact on net income Group share was +€140m
in Q2-23 and €19m in Q3-23.
40 Underlying, excluding specific items. See
Appendixes for more details on specific items. 41 Impact on
RBC IS Europe revenues in Q4-23: +€111m42 Impact on CA
Auto Bank revenues in Q4-23: +€196m43 Integration of ALD Leaseplan
activities in Portugal and Luxembourg into Leasys, and integration
of ALD Leaseplan activities in Ireland, Norway, the Czech Republic
and Finland into CAAB.44 +4.9% taking into account the reversal of
the Home Purchase Savings Plans provision of €6m45 Change at
current exchange rates; +32.2% at constant exchange rates46 Q4-22
base effect not taking into account investment management decisions
implemented at the end of 2022, i.e. segregation of equity and
derisking the portfolio.47 Of which positive tax effects48 Of which
impact of the French Court of Cassation decision on paid leave
calculation, IT decommissioning, ISB integration costs and costs
linked to the Degroof Petercam transaction
49 Provisioning rate calculated with
outstandings in Stage 3 as denominator, and the sum of the
provisions recorded in Stages 1, 2 and 3 as numerator.50 Loan loss
reserves on proven risk and on performing loans IFRS 9
51 The cost of risk relative to outstandings (in
basis points) on a four quarter rolling basis is calculated on the
cost of risk of the past four quarters divided by the average
outstandings at the start of each of the four quarters 52 The cost
of risk relative to outstandings (in basis points) on an annualised
basis is calculated on the cost of risk of the quarter multiplied
by four and divided by the outstandings at the start of the
quarter53 Specific (one-off) items impacted the 2023
net income of the SFS division and CACF as follows: +€176m in net
income Group share (of which €300m on revenues, -€14m on operating
expenses, -€85m on the cost of risk, -€39m on the net income of
equity-accounted entities; +€89m on gains from other assets, +€12m
on badwill and -€87m on tax).
54 Underlying, excluding specific items. See
Appendixes for more details on specific items55 See details on the
calculation of the business lines’ ROTE (return on tangible equity)
and RONE (return on normalised equity)56 The annualised underlying
net income Group share corresponds to the annualisation of the
underlying net income Group share (Q1x4; H1x2; 9Mx4/3) by restating
each period for IFRIC impacts to linearise them over the year57 up
to 3.85% for the Anaé policy, which has a unit-linked share of
>50% and a management fee of 0.5%.58 Scope “Life France”
59 Scope: Property & Casualty in France and
abroad60 Combined ratio of P&C (Pacifica) including discounting
and excluding reverse discounting: (claims + operating expenses +
fee and commission income)/premiums, net of reinsurance; net
combined ratio excluding the effects of discounting and reverse
discounting in 2023 was 100.7%.61 Net inflows include assets under
advisory, assets sold and funds of funds, and take into account
100% of the Asian JVs’ net inflows; for Wafa Gestion in Morocco,
net inflows reflect Amundi’s share in the JV’s capital.62 LCL
Private Banking and Indosuez Wealth Management63 Base effect T4-22
excluding management decisions taken at the end of 202264 Amount of
allocation of CSM and RA, including funeral guarantees65 Amount of
allocation of CSM and RA 66 Net of cost of reinsurance, excluding
financial results67 CSM allocation factor = CSM allocation in
P&L / [Opening CSM + stock changes + New Business].68
IFRS 17 base effect: i.e. after restatement of the 2022 base
effect, which did not take into account the investment management
decisions implemented at the end of 2022 (segregation of equity and
derisking the portfolio).69 Indosuez Wealth Management scope70The
specific items of CIB had an impact of +€7.8 million in the
fourth quarter of 2023 and comprised the DVA (the issuer spread
portion of the FVA, and secured lending) amounting to
+€6.0 million and loan book hedging totalling
-€1.8 million, vs. -€62.6 million in the fourth quarter
of 2022.71The specific items of CIB had an impact of
-€38.9 million for the full year 2023 and comprised the DVA
(the issuer spread portion of the FVA, and secured lending)
amounting to -€14.6 million and loan book hedging totalling
-€24.3 million. +€1.9 million over 2022.72 Refinitiv73
Refinitiv74 Refinitiv75 Bloomberg76 RBC Investor Services in Europe
became CACEIS Investor Services Bank (“ISB”) and has been
consolidated since Q3-2023, excluding the UK entities, for which
closing is expected in the coming quarters77 Impacts of the
consolidation of ISB on Q4-2023: revenues +€111.3m, operating
expenses -€100.1m and net income Group share -€4.8m78 RBC Investor
Services in Europe became CACEIS Investor Services Bank (“ISB”) and
has been consolidated since Q3-2023, excluding the UK entities, for
which closing is expected in the coming quarters79 Impacts of the
consolidation of ISB on Q4-2023: revenues +€111.3m, operating
expenses -€100.1m and net income Group share -€4.8m80
CA Auto Bank, automotive JVs and auto activities of other
entities81 CAAB outstandings, including those managed by Drivalia82
Source ASF: equipment leasing 12.9%, factoring 17.4%83 Specific
(one-off) items impacted the fourth quarter of 2023 for the SFS
division and for CACF as follows: +€17m in net income Group share,
of which +€4m on operating expenses, +€12m on badwill and +€1m on
tax. As a reminder, the impact on net income Group share was +€140m
in Q2-23 and €19m in Q3-23.84 Specific (one-off) items impacted the
2023 net income of the SFS division and CACF as follows: +€176m in
net income Group share (of which €300m on revenues, -€14m on
operating expenses, -€85m on the cost of risk, -€39m on the net
income of equity-accounted entities; +€89m on gains from other
assets, +€12m on badwill and -€87m on tax).85 Contribution of CA
Auto Bank over the forth quarter 2023: excluding one-off items,
contribution of +€62m to net income Group share, of which +€196m on
revenues, -€83m on operating expenses, -€25m on the cost of risk86
Annualised cost of risk as a share of outstandings (in basis
points) calculated on the basis of the cost of risk for the quarter
multiplied by 4 divided by the outstandings at the beginning of the
quarter 87 Specific (one-off) items impacted the fourth quarter of
2023 for the SFS division and for CACF as follows: +€17m in net
income Group share, of which +€4m on operating expenses, +€12m on
badwill and +€1m on tax. As a reminder, the impact on net income
Group share was +€140m in Q2-23 and €19m in Q3-23.88 Specific
(one-off) items impacted the 2023 net income of the SFS division
and CACF as follows: +€176m in net income Group share (of which
€300m on revenues, -€14m on operating expenses, -€85m on the cost
of risk, -€39m on the net income of equity-accounted entities;
+€89m on gains from other assets, +€12m on badwill and -€87m on
tax).89 Contribution of CA Auto Bank over the year 2023: excluding
one-off items, contribution of +€194m to net income Group share, of
which +€575m on revenues, -€217m on operating expenses, -€78m on
the cost of risk, -€76 on tax.
90 Car, home, legal, all mobile phones, or personal accident
insurance91 Source: Doxa study October 202392 Net of POCI
outstandings93 Source: Abi Monthly Outlook, January 24: -3.9%
December/December for all loans94 At 31 December 2023, this scope
corresponds to the aggregation of all Group entities present in
Italy: CA Italy, CACF (Agos, Leasys, CA Auto Bank), CAA (CA
Vita, CACI, CA Assicurazioni), Amundi,
Crédit Agricole CIB, CAIWM, CACEIS95 In number of
branches96 Assofin publication, 31/12/2022 (excluding credit
cards)97 Assets under management Source: Assogestioni, 30/11/202398
Production. Source: IAMA, 30/04/202399 Excess liquidity in Ukraine
deposited mainly with the Central Bank in Ukraine and bearing
average interest of 17% in the fourth quarter 2023100 Including
reversal of home purchase savings plans provision for €6m101 Over a
rolling four quarter period102 At 31 December 2023 this scope
includes the entities CA Italy, CA Polska, CA Egypt and CA
Ukraine.103 Provisions of -€195 million for Ukraine risk, adjusted
to underlying income for Q1-2022104 Control of Crédit du Maroc was
sold in fourth quarter 2022 after the transition to IFRS 5 in first
quarter 2022 (disposal of 63.7%, with the remaining 15% stake being
recognised under IFRS 5).
105 Over a rolling four quarter period.106 Cost
of risk on outstandings stands at 55 basis points when referring to
annualised quarterly basis107 Cost of risk/outstandings (annualised
quarterly basis points) 64 bps.108 At 31 December 2023, this scope
corresponds to the aggregation of all Group entities present in
Italy: CA Italy, CACF (Agos, Leasys, CA Auto Bank), CAA (CA
Vita, CACI, CA Assicurazioni), Amundi,
Crédit Agricole CIB, CAIWM, CACEIS109 The Crédit du Maroc
entity has been classified under IFRS 5 since the first quarter of
2022 and the disposal of the controlling interest (63.7%) took
place in the fourth quarter of 2022. The remaining 15% is to be
sold within 18 months.. 110 Control of Crédit du Maroc was
sold in fourth quarter 2022 after the transition to IFRS 5 in first
quarter 2022 (disposal of 63.7%, with the remaining 15% stake being
recognised under IFRS 5).111 At 31 December 2023, stability of
countercyclical buffer (to 42bps at 31/12/2023 from 43bps at
30/09/2023)112 Based on public data of the 11 European G-SIBs as at
31/12/2023 for CAG, BNPP, BPCE, Deutsche Bank, ING, Santander, UBS
and as at 30/09/2023 for Barclays, HSBC, Société Générale and
Standard Chartered. CASA data at 31/12/2023. Distance to SREP or
requirement in CET1 equivalent.113 As part of its annual
resolvability assessment, Crédit Agricole Group has chosen to
waive the possibility offered by Article 72ter(3) of the Capital
Requirements Regulation (CRR) to use senior preferred debt for
compliance with its TLAC requirements in 2023.114 Including CA Auto
Bank115 Including CA Auto Bank116 Gross amount before buy-backs and
amortisations117 Excl. AT1 issuances118 Gross amount before
buy-backs and amortisations119 Excl. AT1 issuances120 Excl. senior
secured debt121 Excl. senior secured debt122 Excl. senior secured
debt123 Excl. AT1 issuances124 APMs are financial indicators not
presented in the financial statements or defined in accounting
standards but used in the context of financial communications, such
as underlying net income Group share or RoTE. They are used to
facilitate the understanding of the company’s actual performance.
Each APM indicator is matched in its definition to accounting
data.
- EN_CASA_PR_2023-Q4_Results
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