Credit Agricole Sa: First Quarter 2020 Results - Crédit Agricole
absorbs the Covid-19 impact and is mobilised for the economy
First Quarter 2020 Results
Montrouge, May 6th 2020
Crédit Agricole absorbs the Covid-19 impact and is
mobilised for the
economy
Crédit Agricole Group* |
Underlying revenues1Q1: €8,378m
+0.7% Q1/Q1 |
Underlying net income Group
share1Q1: €981m -31.6%
Q1/Q1 |
CET1 ratio 15.5% -0.4pp Mar/Dec
+6.6pp above the SREP2 |
- Q1 stated net income Group share:
€908m (-32.8% Q1/Q1); stated revenues €8,366m
(+2.1% Q1/Q1)
- Strong momentum across all business lines in Q1,
production impacted by the crisis in March: increase in
outstandings (+7% retail loans in France and
Italy, +2.1% consumer finance managed loans, +2% life insurance,
+3.5% asset management); gross retail customer capture France and
Italy: 416,000 customers since the start of 2020.
- Increase in cost of risk (at €930m, x3.3
Q1/Q1), driven primarily (61% of the increase) by
provisioning on performing loans (€398m in Q1). Annualised cost of
risk on outstandings 40bp (x3.1 Q1/Q1); Stable NPL ratio (2.4%),
increase in coverage ratio (84.3%, +1.7pp vs. Dec. 19). Loan loss
reserves: €19.5bn.
- Very strong solvency (buffer to SREP
requirements increased from 6.2pp to 6.6pp).
- Mobilisation of the Group’s structural strengths to
assist its clients through the crisis: all services fully
operational (9 out of 10 branches are reachable), acceleration of
technological innovations (remote claims management),
strong social commitment by the Group (>€70m in
donations via solidarity funds).
- Voluntarily supporting public authorities' strategy
over the crisis: €3.6bn loan moratoria granted to
corporates and more than 81,000 applications
(€13.5bn) in state-guaranteed loans processed as at 21/04;
€10bn aid programme at CA Italia; €210m cooperative support
mechanism for professional multi-risk insurance policyholders.
- Regional Banks: underlying net income1
under French accounting standards €583m (-22.3% Q1/Q1), underlying
net income 1 €321m (-51.7% Q1/Q1). Strong underlying activity
revenues. Increase in cost of risk (x5.5) linked to 68.5% of the
performing loans provisioning; annualised cost of risk on
outstandings still low (23bp).
.* Crédit Agricole S.A. and 100% of Regional Banks. |
Crédit Agricole S.A. |
Underlying revenues1Q1:
€5,137m+4.8% Q1/Q1 |
Underlying
GOI1Q1:
€1,583m +7.9% Q1/Q1 |
Underlying net income Group
share1Q1: €652m -18.1%
Q1/Q1 |
CET1 ratio 11.4% -0.7pp Dec/Sept,
+3.5pp above the SREP3 |
- Stated result: €638m (-16.4% Q1/Q1); stated
revenues: €5,200m (+7.1% Q1/Q1), stated GOI: €1,586m (+11.7%
Q1/Q1)
- Increase in underlying GOI (+7.9% Q1/Q1),
thanks to revenue resilience (+4.8%), despite the decrease in the
fair value through profit and loss in insurance, and to control of
expenses excluding IFRIC 21 (+2.5%);
- Increase in cost of risk (at €621m, x2.8
Q1/Q1), driven primarily (56% of the rise) by provisioning
on performing loans (€223m in Q1). Annualised cost of risk on
outstandings 61bp (x2.6 Q1/Q1); Stable NPL ratio (3.1%), increase
in coverage ratio (72.4%, +2.3pp vs. Dec. 19); loan loss reserves:
€9.6bn.
- CET1 ratio down (-0.7pp) to 11.4%, including
the unwinding of 35% of the Switch mechanism (-44pb), the impact of
the allocation of the 2019 dividend to reserves following the ECB’s
recommendation (+60bp) and the impact of adverse market effects on
OCI reserves on securities portfolios (-33bp).
Buffer to requirements in Q1 at
3.5pp.
- Underlying EPS: Q1-2020 €0.17, -25.0%
Q1/Q1.
- Liquidity indicators up (€338bn in reserves at
31/03/20, increase by €40bn vs. 31/12/20).
|
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 55.9% of Crédit Agricole S.A. Please see p.23 onwards of
this press release for details of specific items, which are
restated in the various indicators to calculate underlying income.
A reconciliation between the stated income statement and the
underlying income statement can be found from p.3 for
Crédit Agricole Group and from p.7 for
Crédit Agricole S.A.
Crédit Agricole
Group
Voluntarily supporting the public authorities,
consistently with our Raison d’Etre, to help our customers go
through the crisis.
Since the start of the current health crisis,
the management, the employees, the representatives have done
everything possible to ensure all the banking and insurance
services remain available. 88% of Regional Bank branches (93% for
LCL branches) are reachable. The number of unique monthly users of
the Group’s apps in France and Italy has reached 7.7 million, a 20%
increase over the first quarter of 2019. Crédit Agricole has
increased the pace of its technological innovations, setting up
solutions specifically to handle the crisis (of which electronic
signature of the state-guaranteed loan and remote management of
claims and damages). In addition, remote work has been rolled out
on a huge scale (more than 50,000 simultaneous online connections)
with maximum security.
In the face of the crisis, the Group has
reaffirmed its societal commitment, which underpins its raison
d’être: “Working every day in the interests of its customers and
society”. Support has been provided to healthcare workers,
vulnerable populations and for research, through donations of
medical equipment for example. The “Loop” and “J’aime mon
territoire” platforms were created at the Regional Banks. On 8
April, the Group set up a -€20 million solidarity fund for the
elderly and caregivers. As early as 23 March, the insurance
business lines had put €39.2 million into the solidarity fund set
up by the French authorities to help very small enterprises and
independent workers in sectors particularly hard hit by the crisis.
On 18 March, Crédit du Maroc made an -€8 million contribution
to the national solidarity fund, while on 31 March, Crédit Agricole
Italia donated €2 million to the Italian Red Cross and Italian
hospitals. In total, more than €70 million have been donated via
solidarity funds..
To support its customers in a context of
economic crisis related to COVID-19, Crédit Agricole Group aligned
itself with the public authorities’ strategy, by taking targeted
measures in place for all customer categories. On March 6th, Crédit
Agricole Group announced a six-month moratorium on loan
repayments for corporate customers and SMEs and small
businesses whose business would have been impacted by
COVID-19, to address their cash flow problems. On 29 April, 335,000
moratoria were granted, for an amount of €3.4 billion of uncalled
maturities, with no penalties or additional fees. In addition, in
equipment leasing, 50,000 loan maturities were postponed for a
total of 500 million euros and 2,000 for property leasing
representing a total of 150 million euros. In terms of cost of
risk, the introduction of the moratorium does not automatically
imply that the debtor will be requalified. There can, however, be a
qualification as default/forbearance or a change in the original
Bucket, pursuant to Group rules. In addition, uncalled maturities
are simply moved forward, so the impact on RWA is
insignificant.
The French government also announced the
introduction on 25 March of the state-guaranteed
loans (Prêts Garantis par l’Etat) to meet the cash flow
requirements of businesses impacted by the coronavirus crisis. For
eligible companies, the loan is typically capped at 25% of company
revenues. As at 30 April 2020, a total of 126,000 applications had
been received by the Group for an amount of €19.5 billion (of which
88.5% of the requests concern professionals/farmers, 11.5%
corporates).
The Group is providing specific support for SMEs
and small businesses, farmers and very small enterprises. A
€210-million cooperative support mechanism was set up on 22 April
for policyholders with professional multi-risk insurance with
business interruption. On 21 April, Crédit Agricole Italia devoted
€6 billion to supporting companies, of which €4 billion in loans
(up to €25,000) and €2 billion in liquidity facilities. For
farmers, the Group set up the 0% state-guaranteed loan with no fees
and granted loan repayment holidays, also without fees.
Measures were also introduced for individual
customers. In Italy, moratoria were granted for an amount of €4
billion on loans to SMEs and individuals for a period of six
months, renewable. CA Consumer Finance also deferred loan
maturities as at 31 March in the amount of €29 million.
The Group’s commercial activity was
buoyant in Q1 2020. Asset management AuMs were up (+3.5%), as were
those of life insurance (+€6.5 billion, or +2%); unit-linked
contract net inflows were also up (+40% Q1/Q1, +69% Q1/Q4); loans
increased +7% in the Retail networks in France and Italy (excluding
state-guaranteed loans); and consumer finance outstandings rose by
2.1%.
Gross customer capture was strong, with
416,000 new customers captured since the start of the year, and a
25,000 increase in the customer base. Lastly, commercial activity
in capital markets was buoyant in order to meet customer needs in
terms of hedging and bonds. The Group’s revenues were nevertheless
impacted by COVID-19 in March 2020. Production fell since the
beginning of the month, mainly in home loans and consumer finance,
despite the resilience of the net interest margin. Fee and
commission income related to market volatility increased,
offsetting the decline in other types of fee and commission income
(insurance and banking). Depreciations (mostly reversible) were
also observed, due to unfavourable market conditions (decrease in
fair value through profit and loss in insurance and asset
management, and in the investment portfolio in asset management and
in the Regional Banks).
Group results
In the first quarter of
2020, Crédit Agricole Group’s
stated
net income Group share came to
€908 million versus €1,350 million in
the first quarter of 2019. The specific
items recorded this quarter generated a negative
net impact of -€73 million on net income Group
share.
Excluding these specific items, the
underlying net income Group share4 was
€981 million, down -31.6% compared to first
quarter 2019. This decline was mainly due to the effects of the
COVID-19 crisis.
Crédit Agricole Group: Consolidated results, Q1-2020 and
Q1-2019
In €m |
Q1-20stated |
Specific items |
Q1-20underlying |
Q1-19stated |
Specific items |
Q1-19underlying |
Q1/Q1stated |
Q1/Q1underlying |
|
|
|
|
|
|
|
|
|
Revenues |
8,366 |
(12) |
8,378 |
8,196 |
(126) |
8,323 |
+2.1% |
+0.7% |
Operating expenses excl.SRF |
(5,548) |
(70) |
(5,478) |
(5,277) |
- |
(5,277) |
+5.1% |
+3.8% |
SRF |
(454) |
- |
(454) |
(422) |
- |
(422) |
+7.7% |
+7.7% |
Gross operating income |
2,363 |
(82) |
2,445 |
2,497 |
(126) |
2,623 |
(5.4%) |
(6.8%) |
Cost of risk |
(930) |
- |
(930) |
(281) |
- |
(281) |
x
3.3 |
x
3.3 |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Equity-accounted entities |
91 |
- |
91 |
95 |
- |
95 |
(4.6%) |
(4.6%) |
Net income on other assets |
5 |
- |
5 |
10 |
- |
10 |
(49.4%) |
(49.4%) |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Income before tax |
1,530 |
(82) |
1,612 |
2,321 |
(126) |
2,448 |
(34.1%) |
(34.2%) |
Tax |
(481) |
7 |
(487) |
(848) |
41 |
(889) |
(43.3%) |
(45.2%) |
Net income from discont'd or
held-for-sale ope. |
(0) |
- |
(0) |
(0) |
- |
(0) |
x
102.2 |
x
102.2 |
Net income |
1,048 |
(75) |
1,124 |
1,473 |
(85) |
1,558 |
(28.8%) |
(27.9%) |
Non controlling interests |
(140) |
2 |
(142) |
(123) |
- |
(123) |
+14.2% |
+15.8% |
Net income Group Share |
908 |
(73) |
981 |
1,350 |
(85) |
1,435 |
(32.8%) |
(31.6%) |
Cost/Income ratio excl.SRF (%) |
66.3% |
|
65.4% |
64.4% |
|
63.4% |
+1.9 pp |
+2.0 pp |
|
|
|
|
|
|
|
|
|
Net income Group Share excl. SRF |
1,334 |
(73) |
1,407 |
1,754 |
(85) |
1,839 |
(23.9%) |
(23.5%) |
In the first quarter of 2020, underlying
revenues increased by +0.7% over the
first quarter of 2019 to €8,378 million, and fell by
-3.3% for the business lines excluding the
Corporate Centre. Revenue resilience against this backdrop was due
to sustained commercial momentum during the quarter, with gross
capture of 416,000 new customers and an increase in the customer
base of 25,000 customers in 2020 in Retail banking in France and
Italy. Loan production remained solid, with +7% growth (excluding
State-Guaranteed Loans) in those same networks (+7.1% for the
Regional Banks). In asset management and insurance,
outstandings were up despite market conditions. Commercial activity
was also buoyant in capital markets in order to meet customer needs
in hedging and bond issuances. Nevertheless, revenues were impacted
by the COVID-19 health crisis in March. As a consequence of
unfavourable market conditions, depreciations, mostly reversible,
were observed: the decrease in the valuation of assets at fair
value through profit and loss in insurance and in asset management,
and the impact on investment portfolios in asset management and in
the Regional Banks. Net interest margin proved resilient
despite a drop in production at the end of March, particularly for
home loans and consumer finance. Regarding fees and commissions
income, the situation was contrasted: fees and commissions income
related to market volatility increased (LCL +6.3%, particularly
transfer fees, Regional Banks +4.8%), offsetting the decline in
other types of commissions (insurance and banking). Consequently,
the Regional Banks and Asset gathering business lines suffered
the most, recording decreases of -7.3%/-€255 million and
-8.7%/-€127 million respectively. The Specialised financial
services business line also declined, by -5.0%/-€34 million.
Business lines that recorded growth were Large customers and Retail
banking in France (excluding the Regional Banks) with
increases in underlying revenues of +8.8%/+€120 million and
+2.2%/+€20 million respectively.
Underlying operating expenses
were up +3.8% compared to the first quarter of
2019, in line with IT investments in the Regional Banks under the
Group Project and Medium-Term Plan, and the impact of taxes on the
Crédit Agricole S.A. business lines, especially Asset gathering and
Specialised financial services. Several business lines showed
positive jaws effects, which was the case of LCL and Crédit
Agricole Corporate and Investment Bank in particular. The
underlying cost/income ratio excluding SRF stood at 65.4%,
down 2.2 percentage points compared to the first
quarter of 2019.
Underlying gross operating
income thus fell to €2,445 million compared to first
quarter 2019 (-6.8%).
The cost of credit risk rose
significantly (x3.3 compared to first quarter 2019) as a result of
provisioning on outstanding performing loans related to COVID-19
for all business lines (no significant change in Bucket 3). It
stood at €930 million at end-March 2020, versus €281 million at
end-March 2019. Asset quality remained high: the NPL ratio was
stable at 2.4% at end-March 2020, while the coverage ratio stood at
84.3%, up 1.7 percentage points for the quarter, for loan loss
reserves of €19.5 billion. Starting in the first quarter of 2020,
the context and uncertainties related to the global economic
conditions have gradually been taken into account and the expected
effect of public measures have been incorporated to anticipate
future risks. Provisioning levels have been established to reflect
the sharp decline in the environment (flat rate adjustments for the
retail banking portfolios and for corporates portfolios and
specific additions for some targeted sectors: tourism, automotive,
aerospace, retail textile, energy, supply chain). This increase in
provisioning on performing loans explains 61% of the increase in
the cost of risk on outstandings5 in the first quarter of
2020. It stood at 40 basis points annualised, x3.1 versus
first quarter 2019 and almost x2 versus the previous quarter. Cost
of risk of Buckets 1 and 2 stood at €398 million, compared to a
reversal of 87 million euros over the previous quarter. The cost of
risk of Bucket 3 at €516 million was down slightly compared to the
previous quarter (€602 million).
Underlying pre-tax income stood at
€1,612 million, a year-on-year decrease of -34.2%.
The underlying tax charge
fell -45.2% during the period. The
underlying tax rate dropped by -5.8 percentage points to
32.1%, mainly in line with the decrease of tax rate in France since
the beginning of 2020. Accordingly, underlying net income
before non-controlling interests was down -27.9% and
underlying net income was down -31.6% compared to first quarter
2019.
Specific items in this quarter
(-€73 million impact on net income Group share) comprised
solidarity donations in connection with the COVID-19 crisis for
-€66 million in operating expenses (-€38 million as a contribution
to the French government’s solidarity fund for Crédit Agricole
Assurances, -€10 million for Crédit Agricole S.A. and
-€10 million for the Regional Banks as a contribution to the
financing of the protection of the elderly, -€8 million as a
contribution to the solidarity fund in Morocco for Crédit du
Maroc). This had an impact of -€62 million on net income Group
share. To this can be added the Santander and Kas Bank integration
costs incurred by CACEIS (-€4 million in operating expenses/-€2
million in net income Group share, and recurring accounting
volatility items with a net negative impact of -€9 million on
net income Group share, namely DVA (Debt Valuation Adjustment, i.e.
gains and losses on financial instruments related to changes in the
Group’s issuer spread), plus the Funding Valuation Adjustment (FVA)
portion associated with the change in the issuer spread, which is
not hedged, totalling -€14 million, the hedge on the Large
customers loan book for +€83 million, and the change in the
provision for home purchase savings plans for -€79
million. In the first quarter of 2019, specific items had a
net negative impact of -€85 million on net income Group
share; they included only recurring accounting volatility
items such as the Debt Valuation Adjustment (DVA, i.e. gains and
losses on financial instruments related to changes in the Group’s
issuer spread) amounting to -€6 million, the hedge on the
Large Customers loan book for
-€14 million,
and the change in the provision for home purchase savings
schemes in the amount of -€64 million.
Regional Banks
The current health crisis began
to impact the Regional Banks’ commercial activity in March 2020 (in
particular, loans were down -12.5% and new non-life policies were
down -39.5%). Nevertheless, commercial momentum was
generally good over the full quarter with an increase in
outstanding loans of +7.1% versus the first
quarter of 2019 (€527.4 billion). This increase was related to the
sharp rise in home loans (+7.8%,
€323.5 billion in outstandings) and business
loans (+11.9%, €86.6 billion in outstandings). Since
the COVID-19 crisis, demand deposits have risen
significantly (+15.1% to €172.4 billion), while off-balance
sheet deposits have fallen by -1.7% to €260.1 billion.
This decrease was related to securities and transferable securities
whose outstandings fell by -10.3% and -9.8% respectively. Life
insurance AuM continued to rise (+1.3%), as did on-balance
sheet deposits (+7.3%) to stand at €470.4 billion. Lastly,
gross customer capture continued to grow (+296,000
customers), while the customer base has been
increasing in 2020 (+18,000 additional customers).
In the first quarter of 2020,
the Regional Banks’ underlying revenues stood
at €3,235 million, down from the first quarter of 2019
(-7.3%). This was due to a drop in portfolio
revenues during the period because of end-of-quarter
valuations based on international standards. The impact is more
moderate on French standards. By contrast, underlying
activity revenues are still strong, with a rise in
fee and commission income (+4.8%) and in brokerage margin. The
underlying cost of risk recorded an increase
(x5.5) linked to 68.5% of the performing loans
provisioning (+€176m at the Q1-20). Ultimately,
underlying net income Group share for the
Regional Banks (€321 million) fell by 51.7%. Based on
French standards, underlying net income
Group share stood at €583 million (-22.3% compared to
first quarter 2019).
The performance of the other
Crédit Agricole Group business lines is described in
detail in the section of this press release on
Crédit Agricole S.A.
Dominique Lefebvre, Chairman of SAS Rue La
Boétie and Chairman of Crédit Agricole S.A.’s Board of
Directors, commented on the Group’s first quarter 2020 results
and activity as follows: “ The Group is solid, able to withstand
the impacts of Covid-19 and to mobilize, with determination, in
order to support the economy and its customers. From the start, we
have been offering solutions, consistently with the public support
mechanisms in which we are fully taking part, such as debt
moratoria or a cooperative support mechanism for SME policyholders,
which will allow us to create a bridge for our economy, from a
pre-crisis to a post-crisis state. This is the expression of our
usefulness. We experience it each day, with our teams and with our
customers”.
Crédit Agricole
S.A.
Increase in underlying GOI
(+7.9%), decrease in underlying net income
(-18.1%)
- Stated result: €638m (-16.4% Q1/Q1); stated
revenues: €5,200m (+7.1%); stated GOI: €1,586m (+8.6%)
- Increase in underlying GOI (+7.9% Q1/Q1) attributed to revenue
resilience (+4.8%), despite the decrease in fair value through
profit and loss in insurance, and to control of expenses, excluding
IFRIC 21 (+2.5%); positive jaws effect at LCL (+3.6pp) and in
Large customers (+1.9pp);
- Decrease in underlying income (-18.1%) due to the increased
cost of credit risk (x2.8) and impact of market valuations at 31
March.
Strong sales in Q1 in all
business lines, interrupted by the crisis in
March
- Q1/Q1 increase in AuM (+3.5%), life insurance (+2%), loan
outstandings at LCL (homes +8.5%, SMEs and small businesses, and
corporates +7.1%), and consumer finance outstandings (+2.1%);
- Increase in unit-linked contract net inflows (+40% Q1/Q1).
Continued growth momentum in property and casualty and personal
protection;
- Continued momentum in customer capture (+86,000 business and
individual customers in 2020 at LCL);
- Robust commercial activity in capital markets and prudent risk
management (moderate VaR at €11m).
Increased cost of risk due to
provisioning on performing loans
- Balanced sector and geographical exposure (no
Corporates sector represents more than 4% of total exposures);
- Stable NPL ratio (3.1%), well covered risks
(coverage ratio 72.5%); loan loss reserve of €9.6bn);
- In accordance with IFRS9, review of bucket 1 and 2 provisioning
in order to take into account the downturn in the environment, as
well as the expected effect of public measures: increased in cost
of risk (€621m, x2.8 Q1/Q1), mainly driven (56%) by provisioning on
performing loans (€223m in Q1)
- Cost of risk/outstandings 61bp.
Very strong level of solvency,
including the unwinding of 35% of the switch
- CET1 ratio down (-0.7pp) to 11.4%, including
the unwinding of 35% of the Switch guarantee mechanism (-44bp), the
impact of the allocation of the 2019 dividend to reserves following
the ECB’s recommendation (+60bp), and the impact of adverse market
effects on OCI reserves on securities portfolios (-33bp).
Buffer to requirements in Q1 remains at 3.5pp.
- Underlying earnings per share : Q1-2019 €0.17,
-25.0% Q1/Q1;
- RWAs impacted by robust commercial activity and support
for customers impacted by the crisis (+€24bn, of which
€11.9bn related to unwinding of 35% of the Switch mechanism,
+€5.5bn related to regulatory impacts on securitisation and €11.2bn
to business line growth).
Increase in liquidity
indicators
- €338 billion reserves as of 31 March, increasing by
€40bn vs 31 December 2019
- Increase in LCR: 132.8%6
- 67% of the €12bn MLT market funding programme completed at
end-April. Two benchmark issues in April (€2bn senior secured and
€1.5bn senior non-preferred).
Crédit Agricole S.A.’s Board of Directors, chaired
by Dominique Lefebvre, met on 5 May 2020 to examine the financial
statements for the first quarter of 2020.
Crédit Agricole S.A. : Consolidated
resultats,Q1-2020 and Q1-2019
In €m |
Q1-20stated |
Specific items |
Q1-20underlying |
Q1-19stated |
Specific items |
Q1-19underlying |
Q1/Q1stated |
Q1/Q1underlying |
|
|
|
|
|
|
|
|
|
Revenues |
5,200 |
63 |
5,137 |
4,855 |
(48) |
4,903 |
+7.1% |
+4.8% |
Operating expenses excl.SRF |
(3,254) |
(60) |
(3,194) |
(3,104) |
- |
(3,104) |
+4.8% |
+2.9% |
SRF |
(360) |
- |
(360) |
(332) |
- |
(332) |
+8.6% |
+8.6% |
Gross operating income |
1,586 |
3 |
1,583 |
1,419 |
(48) |
1,467 |
+11.7% |
+7.9% |
Cost of risk |
(621) |
- |
(621) |
(225) |
- |
(225) |
x
2.8 |
x
2.8 |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Equity-accounted entities |
90 |
- |
90 |
85 |
- |
85 |
+5.8% |
+5.8% |
Net income on other assets |
5 |
- |
5 |
23 |
- |
23 |
(77.4%) |
(77.4%) |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
n.m. |
n.m. |
Income before tax |
1,060 |
3 |
1,057 |
1,302 |
(48) |
1,350 |
(18.6%) |
(21.7%) |
Tax |
(261) |
(17) |
(243) |
(394) |
14 |
(409) |
(33.9%) |
(40.4%) |
Net income from discont'd or
held-for-sale ope. |
(0) |
- |
(0) |
(0) |
- |
(0) |
n.m. |
n.m. |
Net income |
799 |
(15) |
813 |
908 |
(34) |
941 |
(12.0%) |
(13.6%) |
Non controlling interests |
(161) |
1 |
(162) |
(145) |
1 |
(146) |
+10.9% |
+10.9% |
Net income Group Share |
638 |
(14) |
652 |
763 |
(33) |
796 |
(16.4%) |
(18.1%) |
Earnings per share (€) |
0.17 |
(0.00) |
0.17 |
0.22 |
(0.01) |
0.23 |
(23.2%) |
(25.0%) |
Cost/Income ratio excl. SRF (%) |
62.6% |
|
62.2% |
63.9% |
|
63.3% |
-1.4 pp |
-1.1 pp |
|
|
|
|
|
|
|
|
|
Net income Group Share excl. SRF |
964 |
(14) |
978 |
1,070 |
(33) |
1,103 |
(9.9%) |
(11.4%) |
Results
In the first quarter of
2020, Crédit Agricole S.A.’s
stated
net income Group share amounted to
€638 million versus €763 million in the
first quarter of 2019. The specific
items recorded this quarter generated a negative
net impact of -€14 million on net income Group
share.
Excluding these specific items, the
underlying net income Group share7 was
€652 million, down -18.1% compared to first
quarter 2019. This decline was mainly due to the increase of the
cost of risk, related to the provisioning of performing loans in
the crisis context.
Specific items in this quarter
(-€14 million impact on net income Group share) comprised
solidarity donations in connection with the COVID-19 crisis for
-€56 million in operating expenses (-€38 million contributed to the
French government’s solidarity fund for Crédit Agricole Assurances,
-€10 million contributed to the financing of the protection of the
elderly for Crédit Agricole S.A., and -€8 million
contributed to the solidarity fund in Morocco for Crédit du Maroc).
The impact on net income Group share was -€52 million (-€38
million, -€10 million and -€4 million respectively). To this can be
added the Santander and Kas Bank integration costs incurred by
CACEIS (‑€4 million in operating expenses/-€2 million in net income
Group share) and recurring accounting volatility items with a net
positive impact of +€40 million on net income Group share,
namely DVA (Debt Valuation Adjustment, i.e. gains and losses on
financial instruments related to changes in the Group’s issuer
spread), plus the Funding Valuation Adjustment (FVA) portion
associated with the change in the issuer spread, which is not
hedged, totalling -€14 million, the hedge on the Large
customers loan book for +€81 million, and the change in the
provision for home purchase savings plans for -€27
million. In the first quarter of 2019, specific items had a
net negative impact of -€33 million on net income Group
share; they included only recurring accounting volatility
items such as the Debt Valuation Adjustment (DVA, i.e. gains and
losses on financial instruments related to changes in the Group’s
issuer spread), amounting to -€6 million, the hedge on the
Large Customers loan book for -€14 million, and the
change in the provision for home purchase savings schemes
in the amount of -€13 million.
Business line results were affected, in March,
by the first impacts of the COVID-19 crisis in the first quarter of
2020. Underlying net income Group share of
business lines8 was down -23.1%. This sharp decline was
primarily due to the impact on cost of risk of the provisioning on
outstanding performing loans – up in all business lines – related
to the COVID-19 crisis. Despite a drop in net income Group share of
-10.4%/-€24 million and -21.7%/-€44 million, the Large customers
and Retail banking business lines posted increases in gross
operating income of +11.7% and +3.1% respectively. This was due to
continued brisk business and operating efficiency efforts in both
business lines. Net income Group share for the Asset gathering
business line was down -21.3%/-€97 million, mainly due to the
impact of significant market effects on insurance and asset
management at the end of the quarter. Net income Group share for
the Specialised financial services business line was down
-44.2%/-€86 million, essentially due to a slowdown in
business. By adding the improvement of the negative
contribution by +€106m of the Corporate center, related to positive
effect this quarter of the intragroup transactions in a volatile
market environment, the underlying net income Group share is down
-18.1%.
In the first quarter of 2020, underlying
revenues stood at €5,137 million (+4.8%). The business
lines recorded a limited decline in their revenues, -1% for the
period, reflecting continued commercial momentum in the first
quarter of 2020, interrupted in March by the impact of the COVID-19
crisis. Revenues were driven by the Large customers business line
(+8.6%) and Retail banking (+0.8%). Commercial momentum in capital
markets was sustained throughout the quarter in order to meet
customers’ hedging needs in a context of high volatility. This
momentum offset the slowdown in financing activities. In Asset
servicing, there was an impact from the scope effects of recent
acquisitions. Buoyant revenues in Retail banking reflected the
continued growth in loans and inflows over the quarter, as well as
the high level of fee and commission income, especially on
transaction fees. The Asset gathering business line recorded a drop
in its revenues of -10.1% for the period. While activity was
resilient in asset management and outflows were limited, the
business line was nevertheless heavily impacted by negative market
effects on insurance revenues (largely reversible impact of fair
value through profit and loss and regulatory technical provisions).
The Specialised financial services business line saw its revenues
impacted (-5%) by the downturn in business for revolving loans in
the consumer finance segment and factoring.
Underlying operating expenses excluding
SRF were up +2.9% during the period. Restated for all
IFRIC 21 expenses during the period (these amounted to €535
million for the quarter versus €489 million for first quarter 2019,
i.e. an increase of +9.4%, including +8.6% for the SRF alone), the
increase was limited to +2.5%. Both Retail banking and Large
customers business lines posted positive jaws (respectively +0.1
percentage point, of which +3.6 percentage points for Retail
banking in France and +0.1 percentage point for Italy, and +1.9
percentage points). Retail banking posted a decrease in expenses of
-0.7% (-1.4% in France and -1.9% in Italy), which led to an
increase in the cost/income ratio of 1.0 percentage point to 64.6%
(2.4 for France taking it to 65.8% and 0.1 for Italy taking it to
62.7%). The Large customers business line posted an increase in the
cost/income ratio of 0.6 percentage points, including 1.0 for
Corporate and Investment banking. The increase in expenses in Asset
servicing was primarily due to scope effects related to the latest
acquisitions. The Asset gathering business line recorded controlled
expenses that were up +1.9%, explained by CA Assurances taxes
(+18.4%); excluding this effect, operating charges are down for
asset management and stable in insurance. The Specialised financial
services business line posted a moderate increase in expenses
(+2.9%) primarily related to a consumer finance tax effect.
Overall, the underlying cost/income ratio excluding
SRF stood at 62.2% for first quarter 2020, an
improvement of 1.1 percentage points over the period.
Underlying gross operating
income was therefore up +7.9% from first
quarter 2019 (+11.7% for Large customers, +3.0% for Retail banking,
-14.1% for Specialised financial services and -23.4% for Asset
gathering).
The cost of risk was up sharply
(x2.8/-€396 million to -€621 million, versus
-€225 million in first quarter 2019), largely due to
outstanding performing loan provisioning related to the COVID-19
crisis in all business lines (no significant change in Bucket
3).
The analysis of the cost of credit risk attests
to the asset quality (NPL ratio stable at 3.1%) and good risk
coverage (coverage ratio at 72.4%, up +2.7 points of percentage
compared to December 2019, for a level of loan loss reserves of
€9.6 billion). Starting in the first quarter of 2020, the context
and uncertainties related to the global economic conditions were
gradually taken into account and the expected effect of public
measures were incorporated to anticipate future risks. Provisioning
levels were been established to reflect the sharp decline in the
environment (flat rate adjustments for the retail banking
portfolios and for corporates portfolios and specific additions for
some targeted sectors: tourism, automotive, aerospace, retail
textile, energy, supply chain). This increase in provisioning
explains 56% of the increase in the cost of risk, which was
multiplied by 2.8 since first quarter 2019. Cost on risk on
outstandings9 in the first quarter of 2020 stood at 61 basis points
annualised, x2.6 versus first quarter 2019 and almost x2
versus the previous quarter. The -€621 million charge for the
quarter consisted of cost of risk of Buckets 1 and 2 at -€223
million (versus +€184 million of reversal in the previous quarter)
and of cost of risk of Bucket 3 at -€382 million, sharply down
compared to previous quarter (-€531 million). The four business
lines that contributed the most to the cost of risk show similar
variations. LCL’s cost of risk stood at -€101 million (x2.3
compared to first quarter 2019, when it was at a very low level),
with its cost of risk relative to outstandings9 increasing to 31
basis points annualised (versus 20 basis points in the previous
quarter and 15 basis points in first quarter 2019); CA Italia
showed an increase of +23.5%, with its cost of risk relative to
outstandings9 increasing to 74 basis points annualised (versus 56
points in fourth quarter 2019 and 61 basis points first quarter
2019); and Crédit Agricole Consumer Finance posted a +70.3%
increase in its cost of risk to -€164 million compared to the
first quarter of 2019, with a cost of risk relative to
outstandings9 increasing to 180 basis points annualised (versus 129
basis points in fourth quarter 2019 and 111 basis points in first
quarter 2019). Lastly, in financing activities, the cost of risk
for the quarter stood at -€103 million, versus a reversal of +€6
million in first quarter 2019. The cost of risk relative
to outstandings9 for financing activities therefore increased to 51
basis points annualised (versus 22 basis points in fourth quarter
2019 and -2 basis points in first quarter 2019).
The contribution of equity-accounted
entities was up +5.8% to
€90 million, reflecting, in particular, the solid performance
of the Asian Joint Ventures in asset management for the quarter and
the upturn in activity in China in terms of consumer finance in
March.
Underlying income10 before tax,
discontinued operations and non-controlling interests thus
decreased by -21.7% to €1,057 million. The
underlying effective tax rate stood at
25.2%, down -7.1 percentage points
compared to first quarter 2019, while the underlying tax
charge fell -40.1% to -€243 million. The 2020 first quarter tax
rate is notably impacted by the decrease of the tax rate in France
since January 1st 2020 (32.02% instead of 34.43%) and by the
favourable effect of international subsidiaries which have a lower
tax rate than in France. The underlying net income
before non-controlling interests was therefore down
-13.6%.
Net income attributable to
non-controlling interests increased (+10.9%) to €162
million, primarily due to the appearance of non-controlling
interests in favour of Santander in asset servicing.
Underlying
net income Group share was down
-18.1% from first quarter 2019 to €652
million.
Activity
Business remained buoyant throughout the
quarter, thanks to the positive performance of outstandings and
production at the start of the year, to sustained customer capture
and to strong commercial activity in capital markets.
Activity nevertheless slowed down considerably in March due
to the economic impact of COVID-19. Production fell, particularly
for home loans and consumer finance. Fees and commissions income
related to market volatility increased, offsetting the decline in
other types of fees and commissions (insurance and
banking).
- In Savings/Retirement, outstandings (savings,
retirement and death & disability) were up +2.2% compared to
March 2019 at €298.6 billion, including €63.9 billion in
unit-linked contracts, up 0.3% year-on-year. Unit-linked contracts
accounted for 21.4% of outstandings, down -1.4 percentage point
compared to fourth quarter 2019. Premium income reached €5.9
billion for first quarter 2020 (down -25.0% compared to first
quarter 2019), and the total net inflows is down by €2.0 billion
compared to first quarter 2019. The quarter was characterised by
outflows in euros (-€1 billion) and high net inflows in unit-linked
contracts (+1.7 billion). UL contracts accounted for 41.3% of gross
inflows in the quarter, up +16.3 percentage points
compared to first quarter 2019 and +7.9 percentage points
compared to the previous quarter. The solvency of Crédit Agricole
Assurances is at a comfortable level, exceeding 234%, well above
the upper limit of our control range 160%-200%.
- In Property and Casualty insurance,
Crédit Agricole Assurances continued its growth momentum,
with premium growth of +7.0% in the first quarter of 2020, driven
by continued strong growth in France (+7.2%). Pacifica recorded a
net increase of +120,000 contracts over the quarter, reaching
nearly 14.2 million contracts at end-March 2020. The equipment rate
for individual customers11 increased in the LCL networks (25.2% at
end-March 2020, i.e. a +0.8 percentage point increase since
March 2019) and the Regional Banks network (41.0% at
end-March 2020, i.e. a +1.4 percentage point increase
since March 2019), as well as in CA Italia (15.7% at end-March
2020, i.e. a +1.6 percentage point increase since March 2019). The
combined ratio continued to be well managed at 95.0%, a slight
increase of +0.4 percentage points year-on-year. In Death
& disability/Creditor/Group, revenues reached nearly
€1,089 million in the quarter, up +7.8% compared to the same period
in 2019, driven by growth in all three business segments.
- Asset management (Amundi) recorded limited net
outflows during the quarter (-€3.2 billion) at a time of
unprecedented crisis, while inflows amounted to +€2.4 billion for
MLT Retail (excluding JV) and +€9.7 billion from joint ventures.
Outflows for institutional customers stood at -€15.3 billion in
connection with treasury products and derisking.
Assets under management remained at a high level at
€1,527 billion at end-March 2020, up +3.5% compared to end-March
2019, despite continuing uncertainty in the global
environment.
- Retail banking showed good resilience in terms
of commercial activity. Despite a drop in loan production for LCL
(-5.8% as compared to the first quarter 2019) and steady production
for CA Italia (-0.8% on home loans), retail banking continued to
turn in satisfactory growth rates for loans outstanding. In France,
the increase for LCL was +7.8% compared to end-March 2019, driven
primarily by home loans (+8.5%) and the SME and small businesses
and corporates markets (+7.1%), while in Italy, the increase for CA
Italia was +4.0%, driven by loans to individuals (+4.9%) and to
corporates and SMEs (+4.3%), for International Retail Banking
excluding Italy, the increase was +3.9%, notably driven by Egypt
(+10%12), Ukraine (+4%12), Morocco (+4%12), and Poland (+3%12). In
France, renegotiations on LCL housing loans reached a high level
(€0.9 billion in outstanding in the first quarter of 2020, versus
€1.0 billion in the fourth quarter of 2019), but was still well
below the high point of the fourth quarter of 2016 (€5.2 billion).
Off-balance sheet deposits were impacted by negative market
effects, particularly for LCL, which suffered a drop in its
off-balance sheet savings (-3.1%), especially on securities and
UCITS (-13.9%), and, to a lesser extent, for CA Italia (+1.2%).
On-balance sheet deposits, on the other hand, saw growth in all
markets and were up +8.3% compared to March 2019 for LCL in France
as a result of the increase in personal savings driven by demand
deposits (+15.1%) and passbooks (+4.4%). For CA Italia, on-balance
sheet deposits were up +5.2%, driven mostly by corporate deposits,
while for all International Retail banking excluding Italy they
were up +5.7%, driven by Poland (+5.2%12), Morocco (+4.6%12) and
Ukraine (+24.6%12). Gross customer capture continued to trend
upwards at LCL with +86 000 customers since the beginning of 2020,
and a net increase in its customer base of +12 000 new
customers. The equipment rate for property and casualty insurance
for LCL rose by 0.8 percentage point year-on-year standing at
25.2%. Lastly, CA Italia recorded the first covered bond issue of
the year in the Italian market in 2020 in the amount of €1.25
billion.
- In the Specialised financial services business
line, Crédit Agricole Consumer Finance
production amounted to €9.6
billion, a -13% decline since the first quarter of 2019,
due to the health crisis which began to impact commercial activity
in March. In France and Italy,
production was down -10% and -12% respectively, while the
contribution of the Regional Banks
and LCL showed some resilience (-4.4% and +0.8%
respectively). By contrast, business in China took
off again in March (with 16,800 new contracts at GAC Sofinco versus
3,200 in February). Assets under management and
consolidated outstandings increased year-on-year
by +2.1% and +3.3% respectively, to stand at
€91.4 billion and €34.8
billion respectively. Meanwhile, CAL&F turned in a
strong performance in the first quarter of 2020,
despite the impacts of the health crisis, which became apparent in
March. Commercial factoring production was
up sharply from the first quarter of 2019 (+56.2%
to €2.5 billion), both in France (+42.8% to
€1.7 billion) and abroad (+92.6% to
€0.8 billion). Against this backdrop, factored
revenues increased over the period (+1.7% to €19.2
billion). Commercial leasing production reached
€1.3 billion (up +9.2% since the first quarter of 2019) while
leasing outstandings came in at
€15.1 billion, up +2.6%
year-on-year.
- Activity in the Large customers
business line was good overall, with revenues
up in first quarter 2020 to €1,484 million (+8.6%
from first quarter 2019). Underlying revenues for corporate and
investment banking amounted to €1,202 million, an increase of
+4.8%. Revenues for capital markets and investment banking rose to
€603 million (+13.7% from first quarter 2019), due
to strong commercial activity under highly volatile market
conditions. To support customers, at end-March corporate and
investment banking allowed the drawing down of credit lines at a
rate of 32% (versus 18% at end-February), making new bond issues
possible from mid-March. At 23 April, total amount withdraw from
existing credit lines was €10.6 billion of which more 70% was
converted into deposits. Within the capital markets and investment
banking, Fixed Income Credit and Change (FICC) business line
achived a very stong performance (low volatile daily results,
strong commercial momentum) which shows the prudent risk management
and the quality of the customer franchise. The regulatory VaR -
average 60 days – is in moderate increase at €11.4 million in
average in first quarter 2020, compare to €9.8 million in fourth
quarter 2019, but remains at a low level. After a less buoyant
start to the year and despite good activity at the end of the
quarter, revenues from financing activities decreased slightly
(-2.9% from first quarter 2019) to €600 million
and this, in the absence of major deals. Structured financing
recorded a drop in activity (-5.7%) due as much to a slowdown in
the economy as to the still-limited impacts of the crisis.
Meanwhile, revenues in commercial banking held steady (-0.7%),
despite a tailing off in the syndicated loan market in the EMEA
region. The bank nevertheless maintained its fifth-place ranking in
the EMEA syndicated loans market. Lastly, Asset servicing (CACEIS)
posted good levels of assets under custody (€3,667 billion at
end-March 2020, up +32.1% year-on-year) and assets under
administration (€1,833 billion, up +3.1% year-on-year) in this
quarter. These increases reflect on the one hand the consolidation
of the assets of Kas Bank and Santander Securities Services (“S3”)
(+ € 845 billion in AuC and + € 124 billion in AuA) and on the
other hand a significant increase the volume effect on the assets
held thanks to the acquisition of new large customers, which offset
an unfavorable market effect (-6% on AuC and -4% on AuA versus
March 2019).
Analysis of the results of Crédit Agricole
S.A.’s divisions and business lines
Asset gathering
The Asset gathering (AG) division posted
underlying Net income Group share of €356 million,
down -21.3% from first quarter 2019. The division
contributed 47% of underlying Net income Group share of the
Crédit Agricole S.A. business divisions (excluding the
Corporate Centre division) in first quarter 2020 and 26% of
underlying revenues also excluding the Corporate Centre.
Insurance
Underlying revenues were down -18.7%, notably
experiencing unfavourable market effects, related to fair value
impacts in results for €246m and to regulatory technical reserves
in unit linked contracts for €60m, partially offset by the increase
in the recognition level of the investment margin. Underlying
charges increased by +6.5%, mainly due to tax effects (+18.5%).
Excluding that effect, underlying charges remained unchanged. Note
that for this quarter there was a €38 million contribution to
Fédération Française de l’Assurance (classified in specific items)
for the self-employed and VSBs particularly affected by the crisis.
Thus, the underlying cost/income ratio excluding SRF was 48.8%
(+11.5 percentage points compared to first quarter 2019) and the
underlying gross operating income decreased by -33.5% from first
quarter 2019. The tax charge for first quarter 2020 decreased by
-53.4% to €52 million, due to a lower gross operating income and a
lower French tax rate. Finally, the contribution of the Insurance
business line to underlying Net income Group share was down -28.4%
from first quarter 2020.
Asset management
Underlying revenues were down -7.0% to €594
million in first quarter 2020. Net management revenues were up
(+5.1%), despite a difficult market environment, driven by higher
management fee and commission income (+1.7%) and a doubling of
performance fee and commission income. Financial revenues were
affected by the market downturn in March (mark-to-market valuation
of the investment portfolio) and were -€61 million in first quarter
2020. Underlying expenses decreased by -1.9% to €334 million,
notably thanks to the latest synergies related to the integration
of Pioneer and to the adjustment of variable compensation.
Underlying gross operating income decreased by -13.5% and the
underlying cost/income ratio excluding SRF was 56.3%, down 2.9
percentage points. The contribution of equity-accounted entities,
comprising in particular income from Amundi’s joint ventures in
Asia, was up by +9.1%. Corporate income tax was down -20.4% to €69
million this quarter. In conclusion, the business line contribution
to underlying net income Group share was down by -17.6% to €127
million.
Wealth management
Underlying revenues were up by +6.4% to €215
million in first quarter 2020, driven by transaction revenues, due
to the effect of high market volatility. Underlying expenses
remained under control (+3.2%) and reached €185 million in
first quarter 2020, as a result improving the underlying
cost/income ratio excluding SRF by 2.6 percentage points to 86.3%.
Underlying gross operating income increased by +34.4% (€26
million). Corporate income tax remained low at €1.4 million,
notably related to the improved Swiss rate. Lastly, the business
line contribution to underlying Net income Group share was up by
+81.9% to €25 million in first quarter 2020.
Retail banking
French retail banking
Underlying revenues were up by +2.2% to €889
million in first quarter 2020. They were driven by the increase in
fees and commissions income (+6.3%) due to the increased activity
in securities transactions; conversely net interest margin was down
by -1.3%. In relation to an LCL operational efficiency policy,
expenses were down by -1.4% to €585 million in first quarter
2020, which led to an improved underlying cost/income ratio
excluding SRF by 2.4 percentage points to 65.8%. Underlying gross
operating income was up by +9.4% to €269 million, but was offset by
a strong increase in the cost of risk, by -€101 million in
first quarter 2020. The increase includes €40 million in
bucket 1 and 2 additions to provisions notably in relation to the
consequences of COVID-19. Lastly, the underlying net income Group
share was down by -16.8% to €103 million in
first quarter 2020.
International retail
banking
Underlying revenues of International retail
banking are stable (-0.9%) standing at 670 million euros in the
first quarter of 2020. Expenses excluding SRF are stable as well
(+0.3%), but SRF do increase by +4.6%. Hence, the underlying gross
operating income decreases by -3.4%. In relation with the Covid-19
provisioning policy, the cost of risk increases by +30.3% as
compared to first quarter 2019, now standing at -115 million euros.
Lastly, the underlying net income Group share of International
retail banking stands at 56 million euros, i.e. a drop by -29,6% as
compared to the first quarter of 2019.
Italy
Underlying revenues were down by -1.8% to €444
million in first quarter 2020. Net interest margin was down by -4%
due to the effect of the renegotiations and the decline of rates,
affecting both the outstanding with floating-rate loans and the new
loan production. Fees and commissions income remained unchanged
this quarter, with fees and commissions on assets under management
(life insurance and securities management) up by +10%, offsetting
the banking fees and commissions that practically stopped in March
2020. Expenses were down by -1.9% bringing the underlying
cost/income ratio excluding SRF to 62.7%. Thus, underlying gross
operating income held up well this quarter, down only -2.2%. The
cost of risk increased by +23.5% to -€82 million, including -€24
million recorded in buckets 1 and 2 primarily as provisions for
COVID-19. The cost of credit risk on outstandings annualised stands
thus at 74 basis points. The quality of CA Italia’s
assets remained good, with an NPL ratio of 7.6%, down by -70bp
year-on-year, and coverage ratio stable at 60.1%. Lastly,
underlying net income Group share for IRB - Italy was down -19.4%
in first quarter 2020 to €34 million.
Crédit Agricole Group
in Italy
The Group’s results in Italy were €109 million
in first quarter 2020, i.e. a -35% decrease from first quarter 2019
due to the increase in the cost of risk.
IRB – excluding Italy
Underlying revenues were unchanged (+0.7%) with
net interest margin slightly up (+1%) and unchanged fee and
commission income. Expenses rose further, by +6.1%, notably in
Poland, which led to a 2.5 point decline in underlying cost/income
ratio excluding SRF for IRB excluding Italy, standing at 63.3% in
first quarter 2020. Underlying gross operating income thus
decreased by -6.1% and, in relation to the COVID-19 provisioning
policy, the cost of risk increased by 51% to -€33 million in first
quarter 2020. Lastly, underlying net income Group share was
€21 million, i.e. a decrease of -42.3%.
By country:
- CA Egypt(13): underlying gross operating income was down by
-19% Q1/Q1 with underlying revenues hit by the drop in rates and
trade finance revenues. The risk profile remained unchanged with a
low NPL ratio of 2.7% and a high coverage ratio of 154%.
- CA Poland(13) : underlying revenues were slightly down (-1%)
despite the increase in fees and commissions revenues. Underlying
gross operating income (-14%) was, however, hit by the increase in
expenses (regulatory tax, IT and fixed asset impairment)
- CA Ukraine(13): underlying revenues were unchanged, cost of
risk was nil, and the NPL ratio improved (3.8%, -290bp as compared
to the first quarter 2020)
- Crédit du Maroc(13): revenues were up by +4%, the coverage
ratio was high at 93%.
Specialised financial
services
In first quarter 2020, the underlying net income
Group share of the Specialised financial services division was €109
million, down -44% from first quarter 2019, notably due to a
substantial increase in the cost of risk related to provisioning
notably in response to the COVID-19 crisis.
Consumer finance
In first quarter 2020, the
underlying revenues of CA Consumer Finance were
€518 million, down -4.2%, as was underlying gross
operating income (-12.5%), amid a slowdown of revolving
loan activity and an increase in the acquisition costs in relation
to the development of partnerships. The underlying cost of
risk recorded an increase of 70.3% related to an increase
in buckets 1 & 2 provisions (+€37 million). Lastly, the
underlying net income Group share
of CA Consumer Finance was €97 million (-40.2% from first quarter
2019).
Leasing & Factoring
In first quarter 2020, the
underlying revenues of CAL&F were
€129 million, down -8%, as was underlying gross
operating income (-21.3%), the COVID-19 crisis having
started to affect CAL&F’s activity since March. The underlying
cost of risk recorded an increase (x2.3) related
to the prudent measures in place. Lastly,
CAL&F’s underlying net income Group share was
€12 million, down by 62.6% from first quarter 2019.
Large customers
In first quarter 2020, the underlying
net income Group share of the Large customers division was
€208 million, down -10.4% from first quarter 2019, notably due
to a substantial increase in the cost of risk with a provision of
-€160 million in the first quarter 2020 vs a net reversal of €10
million in the first quarter 2019 related to provisioning notably
in response to the COVID-19 crisis.
Corporate and investment
banking
In first quarter 2020,
underlying revenues increased by
+4.8% to €1,202 million, thanks to the good performance of capital
markets and investment banking in a highly volatile financial
market environment. Underlying
revenues of capital markets and investment banking
were up +13.7% to €603 million, while those of financing activities
were slightly down (-2.9%) to €600 million. Expenses excluding SRF
remained under control and rose by €19 million to €668 million,
i.e. +2.9%. SRF increased by 5.3% to €178 million. The
underlying cost/income ratio excluding SRF
improved by 1 point due to this positive jaws effect to 55.6%.
Underlying gross operating income increased by
+8.1% to €355 million reflecting a good operational efficiency. The
cost of risk rose sharply this quarter due to the
provisioning of performing loans, to €157 million, while it had
posted a reversal of €15 million for the same period in 2019.
Finally, tax was sharply down this quarter and
partially offset the increase in the cost of risk. Lastly, the
business line contribution to underlying net income Group
share was down by -13.5% to €185 million.
Asset servicing
In first quarter 2020,
underlying revenues rose by
+28.9% to €281 million due to the effect of the integration of the
fee and commission income of Kas Bank and S3, the increase in the
volume of transactions and flow activities due to high volatility,
and good treasury results. Expenses excluding SRF rose to €212
million, i.e. +24.9%, in relation to the commercial development.
SRF increased by 32% to €21 million. The underlying
cost/income ratio excluding SRF improved by 2.4 points due
to this positive jaws effect to 75.4%. Underlying
gross operating income was sharply up, (by almost
+49% to €48 million) while the tax was up. In all,
the contribution of the asset servicing business line to
underlying net income Group share was up +27% to
€23 million, despite the creation of non-controlling interests this
quarter for the benefit of Santander for €11 million.
Corporate Centre
An analysis of the negative contribution of the
Corporate Centre looks at both the “structural” contribution and
other items. The “structural” contribution includes three types of
activities:
- the activities and the role of the corporate centre of Crédit
Agricole S.A. holding. This negative contribution reached
-€293 million in first quarter 2020, slightly down
(-€5 million) compared to the first quarter 2019 due to the
effect of a measured increase in operating expenses and an increase
in the cost of risk, despite improved revenues linked to the
continuous decrease in the cost of debt;
- the business lines that are not part of business lines, such as
CACIF (private equity) and CA Immobilier: their contribution was
down -€13 million in first quarter 2020 compared to the first
quarter 2019, in relation to a negative impact in revenues of the
market valuations of securities in the private equity entities and
a negative impact in cost of risk in the Foncaris entity;
- the Group’s support functions: first quarter 2020 recorded a
positive impact of +€4 million, a slight improvement compared to
the first quarter 2019 (+€5 million). Their contribution, however,
remains essentially nil over a rolling 12-month period, as their
services are reinvoiced to the other Group business lines.
The significant improvement in this division is
mainly attributed this quarter to the “other elements” which
recorded an improvement of +€126 million compared to the first
quarter 2019, related to the positive effect this quarter of
intragroup eliminations in a volatile market context.
Philippe Brassac,
Chief Executive Officer, commented on the
first quarter 2020 results and activity of
Crédit Agricole S.A. as follows: “Our results are good,
and allowed us, this quarter, to absorb a multiplication of cost of
risk by three. We are solid, we are prudent in our assumptions, and
we are very committed vis-à-vis the economy to successfully deliver
with success a scenario that we believe to be quite
manageable”.
Financial
solidity
Crédit Agricole Group
Over the quarter, the
Crédit Agricole Group maintained a high level of
financial strength, with a Common Equity Tier 1 (CET1)
ratio of 15.5%, down -0.4 percentage
points from end-December 2019. This decline can be
attributed mainly to the increase in risk-weighted assets, the
effect of market valuations on unrealised gains and/or losses on
securities portfolios (-18 basis points) but also the modest level
of retained earnings (+11 basis points), the changes in negative
fair value generating unrealised capital losses in the results of
Crédit Agricole Assurances and the Regional Banks. The ratio
also recorded the impact of a new regulatory methodology on
securitisations (-15 basis points) over the quarter. In addition,
the increase in risk-weighted assets over the period generated an
unfavourable effect on the CET1 ratio of ‑34 basis points. In fact,
the risk-weighted assets of the business lines increased by +€12.5
billion, this increase being specifically attributable to the Large
customers division (+€7.5 billion, including respectively +€6.5
billion for CACIB and +€1.0 billion for CACEIS) and the Retail
banking division (+€2.0 billion, including +€1.2 billion in the
Regional Banks).
At the same time, the measures put in place by
regulators to deal with the COVID-19 crisis have led to a decrease
in regulatory requirements, thanks on the one hand to the immediate
application of Article 104a which implies a decrease in P2R CET1
requirements by -0.66 percentage point and, on the other hand, a
relaxation of several counter-cyclical buffers, which as at 2 April
202014 represented a -0.18 percentage point decrease in the CET1
requirement. Combined, these two effects generated an overall drop
of -0.8 percentage points in CET1 SREP requirements for first
quarter 2020, a more significant drop than that of the CET1 ratio
of the Crédit Agricole Group.
In the end, these Crédit Agricole Group posts a
substantial buffer of 6,6 percentage points between the level of
its CET1 ratio and the 8.9% SREP requirement for
Crédit Agricole Group (at 2 April 202014), compared with 6,2
percentage points at 31 December 2019.
The phased-in leverage ratio
came to 5.3% at end-March 2020.
TLAC
The 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 elements that could absorb losses consist of
equity, subordinated notes and debts to which the Resolution
Authority can apply the bail-in.
The TLAC ratio requirement has been transposed
into European Union law via CRR2 and has been applicable since 27
June 2019. As from that date, Crédit Agricole Group must
comply with the following requirements at all times:
- a TLAC ratio above 16% of risk-weighted assets (RWA), plus – in
accordance with CRD5 – 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). Considering the combined capital buffer requirement,
Crédit Agricole Group will have to adhere to a TLAC ratio of above
19.5% (plus the counter-cyclical buffer)
- a TLAC ratio of above 6% of the Leverage Ratio Exposure
(LRE).
As from 1 January 2022, the minimum TLAC ratio
requirements will increase to 18% of risk-weighted assets – plus
the combined buffer requirement at that date – and 6.75% of the
leverage ratio exposure.
At 31 March 2020, the
Crédit Agricole Group’s TLAC ratio stood at
22.6% of RWAs and 7.3% of leverage ratio exposure,
excluding eligible senior preferred debt. The TLAC
ratio is stable compared to 31 December 2019, despite the increase
in risk-weighted assets over the quarter. It exceeded the required
19.5% of RWAs (according to CRR2/CRD5, plus, at 2 April 2020, the
counter-cyclical buffer of 0.02%) and 6% of the leverage ratio
exposure, respectively, despite the fact that it was possible at
that date to include up to 2.5% of RWAs in eligible senior
preferred debt.
Achievement of the TLAC ratio is supported by an
annual TLAC debt issuance programme of around €5 to €6
billion in the wholesale market. At 31 March 2020,
€2.5 billion equivalent had been issued in the market; the
amount of the Crédit Agricole Group senior non-preferred debt
taken into account in the computation of the TLAC ratio was €19.6
billion. Note that mid-April 2020, Crédit Agricole S.A. issued €1.5
billion TLAC debt in senior non-preferred debt.
MREL
The 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 of providing the resolution
authorities with shared instruments and powers to pre-emptively
tackle banking crises, preserve financial stability and reduce
taxpayer exposure to losses.
The ACPR, the national resolution authority,
considers the “single point of entry” (SPE) resolution strategy as
the most appropriate for the French banking system. Accordingly,
Crédit Agricole S.A., as the central body of Crédit Agricole Group,
would be this single point of entry in the event of a resolution of
the Crédit Agricole Group.
The MREL ratio corresponds to the minimum
requirement of own funds and eligible liabilities that must be
available in order to absorb losses in the event of resolution. It
is calculated as the amount of own funds and eligible liabilities
expressed as a percentage of the institution’s total liabilities
and own funds, after certain prudential adjustments (TLOF), or
expressed as risk-weighted assets (RWA). Regulatory capital, as
well as subordinated notes, senior non-preferred debt instruments
and certain senior preferred debt instruments with residual
maturities of more than one year are eligible for the numerator of
the MREL ratio.
In 2018, Crédit Agricole Group was notified of
its first consolidated MREL requirement, which was already
applicable at the time and has been met by the Group since then.
This requirement could potentially change when the ratio for the
year is set by the SRB and in connection with the changes in the
European regulatory framework. The MREL Policy, published by the
SRB in January 2019, describes the general framework of the
requirements that will be set by the SRB and that will apply in
2020 after notice, including a subordinated MREL requirement (from
which senior debt will generally be excluded in line with the TLAC
standards).
Crédit Agricole Group’s target is to
reach a subordinated MREL ratio (excluding eligible senior
preferred debt) of 24-25% of the RWA by the end of 2022 and to
maintain the subordinated MREL ratio above 8% of TLOF.
This level would enable recourse to the Single Resolution Fund
(subject to the decision of the resolution authority) before
applying the bail-in to senior preferred debt, creating an
additional layer of protection for investors in senior preferred
debt.
At 31 March 2020, the Crédit Agricole
Group posted an estimated MREL ratio of 12% of
TLOF (total liabilities and own funds, equivalent to the
prudential balance sheet after netting of derivatives) and
8.1% excluding eligible senior preferred debt. Expressed
as a percentage of risk-weighted assets, the Crédit Agricole
Group’s estimated MREL ratio was approximately 32%
at end-March 2020. It was 22.6% excluding eligible senior
preferred debt.
Maximum Distributable Amount (MDA)
trigger
The transposition of Basel regulations into
European law (CRD4) has established a restriction mechanism of the
distributions applicable 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. As from 12 March 2020 and
considering the impact of the COVID-19 crisis, the European Central
Bank brought forward the effective date of application of Article
104a of CRD5 and allowed institutions under its supervision to use
Tier 1 and Tier 2 capital to meet the additional Pillar 2
requirement (P2R). Overall, the P2R can now be met with 75% Tier 1
capital including as a minimum 75% CET1 capital. The CET1
requirement of Crédit Agricole SA and Crédit Agricole Group has
thus decreased by 66 basis points over Q1 2020.
At 2 April 2020, Crédit Agricole
Group posted a buffer of 579 basis points above
the MDA trigger, i.e. €33 billion in CET1 capital.
At 2 April 2020, Crédit Agricole
S.A. posted a buffer of 325 basis points above the
MDA trigger, i.e. €11 billion in CET1 capital.
Crédit Agricole S.A.
At end-March 2020, Crédit Agricole S.A. retained
a high level of solvency, with a Common Equity Tier 1
(CET1) ratio of 11.4%. This quarter it was down
-0.8 percentage points, -0.4 percentage points of
which can be attributed to the unwinding of 35% of
the Switch mechanism. Excluding this effect, the CET1
ratio benefited this quarter from the 2019 dividend reserves,
generating a positive impact of +60 basis points, as well as from
the positive impact of the retained earnings for the first quarter
of 2020 (+7 basis points, which includes a dividend provision of
€0.08). Conversely, it recorded a negative impact of -33 basis
points over the quarter linked to the effect of negative market
valuations on the unrealised gains and/or losses of the securities
portfolios, as well as a negative impact of -41 basis points linked
to the increase in risk-weighted assets, especially in the Large
customers division (including +€6.4 billion for CACIB notably
linked to drawdowns of credit lines for +€2.1 billion, to
downgrades in ratings for +€0.4 billion as well as market effects
for +€4.4 billion and +€1.0 billion for CACEIS linked to the
increase in liquidity portfolio investments). The ratio also
recorded the impact of a new regulatory methodology on
securitisations (-19 basis points) over the quarter.
At the same time, the measures put in place by
regulators to deal with the COVID-19 crisis have led to lower
regulatory requirements, thanks on the one hand to the immediate
application of Article 104a which implies a decrease in P2R CET1
requirements by -0.66 percentage point and on the other hand, an
easing of several counter-cyclical buffers, which as at 2 April
202015 represented a -0.15 percentage point decrease in the CET1
requirements. Combined together, these two effects generated a
total decrease of -0.8 percentage point in CET1 SREP requirements
for first quarter 2020, a more significant drop than that of the
CET1 ratio of Crédit Agricole S.A.
In the end, these two effects allow Crédit
Agricole S.A. to have a substantial buffer of 3.5 percentage points
between the level of its CET1 ratio and the 7.9% SREP requirement
(at 2 April 202015), compared with 3,4 percentage points at 31
December 2019.
The phased-in leverage ratio
was 3.9% at end-March 2020. The intra-quarter
average measure of phased-in leverage ratio16 stood at 3.7% in the
first quarter of 2020.
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 as
they appear in the next table and whose definition is commonly
accepted in the market place. It relates to the banking scope, with
insurance activities being managed in accordance with their own
specific prudential 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 €64 billion at end-March 2020. Similarly,
€88 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 relate to derivatives, margin calls,
adjustment/settlement/liaison accounts and to non-liquid securities
held by the Corporate and investment banking business line,
included in the “Customer-related trading assets” section, for an
amount totalling €205 billion at end-March 2020.
It should be noted that deposits centralised
with CDC are not netted in order to build the cash balance sheet;
the amount of centralised deposits (€57 billion at
end-March 2020) 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
issues 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 “Long-term market
funds”, are reclassified as “Customer-related funds”.
Note that for Central Bank refinancing
operations, outstandings related to the TLTRO (Targeted Longer-Term
Refinancing Operations) are included in “Long-term market funds”.
Indeed, the TLTRO II and TLTRO III operations do not allow for
early redemption at the ECB’s discretion; given respectively their
four-year and three-year contractual maturity, they are deemed
equivalent to long term secured refinancing, identical in liquidity
risk terms to a secured issue.
Medium/long-term repos 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.
Despite the COVID-19 health crisis, the Crédit
Agricole Group’s liquidity position remains solid. Standing at
€1,411 billion at 31 March 2020, the Group’s banking cash balance
sheet shows a surplus of stable funding resources over
stable application of funds of €132 billion, up €6 billion
compared to December 2019 and up €11 billion compared to March
2019.
This surplus of €132 billion, known as stable
resources position, allows the Group to cover the LCR deficit
generated by long-term assets and stable liabilities (customer,
tangible and intangible assets, long-term funds and own funds). It
is in line with the Medium Term Plan target of over
€100 billion. The ratio of stable resources over long
term applications of funds was 112.1%, up
by 0.3pp compared to the former quarter.
The COVID-19 health crisis, which led to
corporate customers in particular taking precautionary measures,
resulted in the corporate customers of the Group’s financing
activities increasing the drawdowns of credit facilities (amounting
to €9 billion at 31 March 2020), partly converted into demand
deposits (for an amount of €5.5 billion at 31 March 2020), as well
as new facility commitments (for an amount of €2 billion at 31
March 2020). In addition, to support households and corporates,
Credit Agricole Group has adopted an accommodating commercial
policy (extension of loan maturity, among other things). At the
same time, modified savings behaviours by corporates, asset
managers and households resulted in reduced maturity for term
deposits but also in an increase in liquid savings and centralised
savings, mitigating the impact on the Group’s surplus of stable
resources. Also, in this context, the Group took part in the
“T-LTRO III” medium-long-term refinancing transactions of the
European Central Bank for €15 billion euros in a more significant
way than budgeted, helping to maintain its level of stable
resources and thus preserving its financial strength. The increase
in short term market funds is mainly explained by central bank
drawdowns for €38 billion euros.
Medium-to-long-term market funds amounted to
€228 billion at 31 March 2020. They included senior
secured debt of €100 billion, senior unsecured preferred debt
of €89 billion, senior non-preferred debt of €20 billion and
Tier 2 securities amounting to €19 billion. The
significant increase in senior secured debt can be explained by the
Group taking part in the T-LTRO III transactions of the European
Central Bank.
Medium-to-long-term market funds have increased
by €18 billion compared to end-December 2019.
At 31 March 2020, the Group’s liquidity
reserves, marked-to-market and after haircuts, amounted to
€338 billion, up by €40 billion compared with
end-December 2019 and up by €64 billion compared with 31 March
2019. They covered short-term debt more than twice over and HQLA
securities covered short-term debt net of Central Bank deposits
more than five times over.
In the context of the COVID-19 health crisis, to
prevent any need for liquidity requiring the use of central bank
facilities, and thanks to the large portfolio of liquid assets and
the low level of encumbrance of those assets (17.5% at end 2019 vs
28% on average in Europe), the Group was able to react quickly. In
fact, the Group significantly increased its central bank purchasing
power thanks to an increase in immediately available reserves (use
of eligible receivables to generate more than €50 billion in
central bank purchasing power at 31 March 2020 before the measures
taken by the ECB on collateral and applicable in April which will
significantly help to increase the Group purchasing power in
central bank). The Group encumbrance ratio is thus up significantly
compared to end 2019.
At the end of March 2020, the numerator of the
LCR ratio (including the portfolio of HQLA securities, cash and
central bank deposits, excluding reserve requirements), calculated
as an average over 12 months, stood respectively at 232.6 billion
euros for the Crédit Agricole Group and € 199.9 billion for Crédit
Agricole SA The denominator of the ratio (representing net cash
outflows), calculated as an average over 12 months, stood
respectively at € 179.2 billion for the Crédit Agricole Group and
150.5 billion euros for Crédit Agricole SA.
The average LCR ratios over 12 months for the
Crédit Agricole Group and Crédit Agricole SA were respectively
129.8% and 132.8% at end of March 2020. They exceeded the
Medium-Term Plan target of around 110%. Credit institutions are
subject to a threshold for this ratio, set at 100% from 1 January
2018.
In the context of the COVID-19 health crisis,
the maintenance of the level of LCR ratios of the Crédit Agricole
Group and Crédit Agricole S.A. was ensured in particular by the
recourse of the Group, and in particular of Crédit Agricole S.A.,
to central bank facilities.
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.
At 31 March 2020, the Group’s main issuers
raised the equivalent of €12.1 billion in
medium-to-long-term debt on the markets, 38% of which was issued by
Crédit Agricole S.A. In addition,
€1.5 billion was also borrowed from national and
supranational organisations, placed in Crédit Agricole Group’s
Retail banking networks (Regional Banks, LCL and CA Italia) and
other networks at end-March 2020.
At the end of April 2020,
Crédit Agricole S.A. had completed 67% of its
medium-to-long-term market funding programme for the year.
The bank had raised the equivalent of €8.1 billion, of which
€2.8 billion equivalent in
senior non-preferred debt and €1.2 billion
equivalent in Tier 2 debt, as well as €4.1 billion
equivalent in senior preferred debt and in senior secured
debt.
Note that, until March 2020, Crédit Agricole
S.A. had issued (included in the amounts above):
- In January, an EMTN issue in senior non-preferred debt for
€1.25 billion and a USMTN Tier 2 issue for USD 1.25 billion)
- In February, a CAHL SFH senior secured debt issue in the amount
of €1 billion and a Residential Mortgage-Backed Securities (RMBS)
issue in the amount of €1 billion.
In April, despite the impact of the coronavirus,
Crédit Agricole S.A. issued CAHL SFH senior secured debt in the
amount of €2 billion, followed by an EMTN issue of senior
non-preferred debt for €1.5 billion.
Note that, in April, Crédit Agricole S.A.
proceeded with a partial buyback of two Legacy Tier 1 notes for a
total eq. amount of €91m (26% of the residual amount) to optimise
debt management while providing investors with liquidity.
Corporate Social and Environmental
Responsibility of the Company
After the creation in 2018 of a fund focused on
access to education, CPR AM – a subsidiary of Amundi – launched, in
early 2020, CPR Invest Social Impact, the first global equity fund
to place reducing inequalities at the centre of its investment
process. It combines the securities of the most virtuous companies
in terms of involvement in the effort to reduce inequalities. The
fund provides investors with an unprecedented solution to, on the
one hand, measure and incorporate the financial risks associated
with inequality, and, on the other hand, contribute, through their
investments, to reduce the latter.
In January 2020, LCL introduced its first full
range of investments in the fight against global warming. “LCL
Placements Impact Climat” offers a variety of investments in all
major asset classes and comprises, among other things, equity or
bond funds of companies that reduce their CO2 emissions, reinforced
by a carbon offsetting mechanism. This range is aimed at LCL’s high
net worth customers who are concerned with contributing to the
fight against global warming through their investments.
The Group’s CSR sector policies dealing with
thermal coal (mines, coal-fired power plants and transport
infrastructure) have been updated to incorporate Crédit Agricole’s
commitments to gradually exclude thermal coal from its portfolios.
These policies embody Crédit Agricole’s desire to support and
encourage its customers to initiate the transformation of their
business model. The Group’s climate strategy has recently been
recognised as the strongest among the 35 largest banks in the world
(Banking on Climate Change 2020 study, conducted by environmental
NGOs).
At the end of March 2020, Crédit Agricole S.A.
published its Statement of Non-Financial Performance (Déclaration
de Performance Extra-Financière, DPEF) within the Universal
Registration Document. The Statement of Non-Financial Performance
presents all of the Group’s achievements relating to social,
environmental and societal challenges in 2019, and aims to inform
internal and external stakeholders about the management of the
risks related to those challenges. A real strategic management tool
for the Group, it includes a chapter on climate which follows, for
the first time, the 11 recommendations of the Task Force on
Climate-related Financial Disclosures (as well as the Group’s coal
exposure). For more information:
https://www.credit-agricole.com/pdfPreview/180684
Conclusion: An up-and-running Group
with structural strengths enabling to support
clients through the crisis
Crédit Agricole Group relies on several
structural strengths, offering leeway to implement public measures
and assist clients through the crisis: its business model, its
operational efficiency, its prudent risk management, the solidity
of its capital and its strong liquidity position.
Its universal customer-focused banking model
provides to the Group a range of specialised business lines that
have demonstrated their profitability (underlying ROTE17 of Crédit
Agricole S.A. reaching 11.9% end 2019). Crédit Agricole S.A.’s
revenues are thus balanced among business lines and geographically
diversified: one-third of Crédit Agricole S.A.’s revenues in 2019
was generated outside France and Italy. In addition, Crédit
Agricole S.A. has carried out operational efficiency actions
allowing it to improve its cost/income ratio by 7.6 points between
2015 and 2019. Crédit Agricole S.A.’s underlying cost/income ratio
excluding SRF was low in first quarter 2020, at 62.2%, improving vs
the first quarter of 2019.
The Bank also relies on its conservative risk
management. In 2019, Crédit Agricole S.A. and the Crédit Agricole
Group presented a low cost of risk, with fourth quarter 2019 cost
of risk on outstandings18 at 32 basis points and 20 basis points
respectively, enabling today to fully implement public measures and
support customers through the crisis. It is worth recalling that
Crédit Agricole S.A. relies on a very diversified loan portfolio in
terms of type of customers and sectors (no sector represents more
than 4% of CASA’s total exposure19); and 73% of Corporate exposures
are rated20 Investment Grade. The lessons learned from previous
crises have led the Bank to significantly reduce its exposure to
market risk. Crédit Agricole S.A. thus had a regulatory VaR (60
days average) of only €11.4 million in first quarter 2020.
The solvency of the Group is moreover very
strong: 15.5% Common Equity Tier 1 for the Crédit Agricole Group
and 11.4% for Crédit Agricole S.A. in first quarter 2020, as well
as 16.3% in Tier 1 (phased-in) for the Crédit Agricole Group and
12.9% for Crédit Agricole S.A. over the same period. The Group
presents higher levels of capital than those presented in previous
crises. In fact, Crédit Agricole Group and Crédit Agricole S.A.’s
Tier 1 were respectively 11.2% and 11.9% in fourth quarter 2011,
and 9.1% and 9.4% in fourth quarter 2008. In addition, the SREP
requirement buffer remained comfortable in first quarter 2020: 6.6
pp for the Crédit Agricole Group and 3.5 pp for Crédit Agricole
S.A.
Lastly, the Crédit Agricole Group’s liquidity
position is strong. The Group presents large eligible claim book
and low asset encumbrance ratio (17.5% at end 2019 versus European
average of 28%). Liquidity reserves amount to €338 billion in
liquidity reserves in first quarter 2020, i.e. an increase by 40
billion euros from 31/12/2019. Lastly, stable resources position
stand at 132 billion euros.
Appendix 1 – Specific items, Crédit Agricole
S.A. and Crédit Agricole
Group
Crédit Agricole S.A. - Specific items, Q1-20 and
Q1-19
|
|
Q1-20 |
Q1-19 |
In €m |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
DVA
(LC) |
|
(19) |
(14) |
(8) |
(6) |
Loan
portfolio hedges (LC) |
|
123 |
81 |
(19) |
(14) |
Home
Purchase Savings Plans (FRB) |
|
(11) |
(7) |
(8) |
(5) |
Home
Purchase Savings Plans (CC) |
|
(29) |
(20) |
(13) |
(8) |
Total impact on revenues |
|
63 |
40 |
(48) |
(33) |
Santander/Kas Bank integration costs (LC) |
|
(4) |
(2) |
- |
- |
Donation Covid-19 (AG) |
|
(38) |
(38) |
- |
- |
Donation Covid-19 Covid-19 (IRB) |
|
(8) |
(4) |
- |
|
Donation Covid-19 Covid-19 (CC) |
|
(10) |
(10) |
- |
|
Total impact on operating expenses |
|
(60) |
(54) |
- |
- |
Total
impact of specific items |
|
3 |
(14) |
(48) |
(33) |
Asset
gathering |
|
(38) |
(38) |
- |
- |
French
Retail banking |
|
(11) |
(7) |
(8) |
(5) |
International Retail banking |
|
(8) |
(4) |
|
- |
Specialised financial services |
|
- |
- |
- |
- |
Large
customers |
|
100 |
66 |
(27) |
(20) |
Corporate
centre |
|
(39) |
(30) |
(13) |
(8) |
* Impact before tax and before minority
interests |
|
|
|
|
|
Crédit Agricole Group - Specific items, Q1-20 and
Q1-19
|
|
Q1-20 |
Q1-19 |
In €m |
|
Gross impact* |
Impact on Net income |
Gross impact* |
Impact on Net income |
|
|
|
|
|
|
DVA (LC) |
|
(19) |
(14) |
(8) |
(6) |
Loan portfolio
hedges (LC) |
|
123 |
83 |
(19) |
(14) |
Home Purchase
Savings Plans (LCL) |
|
(11) |
(8) |
(8) |
(5) |
Home Purchase
Savings Plans (CC) |
|
(29) |
(20) |
(13) |
(8) |
Home Purchase
Savings Plans (RB) |
|
(75) |
(51) |
(78) |
(51) |
Total
impact on revenues |
|
(12) |
(9) |
(126) |
(85) |
Santander/Kas
Bank integration costs (LC) |
|
(4) |
(2) |
- |
- |
Donation Covid-19 (AG) |
|
(38) |
(38) |
|
|
Donation Covid-19 (IRB) |
|
(8) |
(4) |
|
|
Donation
Covid-19 (RB) |
|
(10) |
(10) |
- |
- |
Donation
Covid-19 (CC) |
|
(10) |
(10) |
- |
- |
Total
impact on operating expenses |
|
(70) |
(64) |
- |
- |
Total impact of
specific items |
|
(82) |
(73) |
(126) |
(85) |
Asset gathering |
|
(38) |
(38) |
- |
- |
French Retail banking |
|
(96) |
(68) |
(87) |
(57) |
International Retail banking |
|
(8) |
(4) |
|
- |
Specialised financial services |
|
- |
- |
- |
- |
Large customers |
|
100 |
67 |
(27) |
(20) |
Corporate centre |
|
(39) |
(30) |
(13) |
(8) |
* Impact before tax and before minority interests
Appendix 2 – Crédit Agricole S.A.:
Results by business line
Crédit Agricole S.A.: Contribution by business line
Q1-20 & Q1-19
Q1-20 (stated) |
€m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
1,320 |
877 |
670 |
647 |
1,587 |
99 |
5,200 |
Operating expenses excl. SRF |
(806) |
(585) |
(430) |
(352) |
(884) |
(198) |
(3,254) |
SRF |
(7) |
(35) |
(16) |
(20) |
(200) |
(83) |
(360) |
Gross operating income |
507 |
258 |
225 |
275 |
503 |
(182) |
1,586 |
Cost of risk |
(19) |
(101) |
(115) |
(190) |
(160) |
(36) |
(621) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
14 |
- |
- |
72 |
2 |
3 |
90 |
Net income on other assets |
4 |
0 |
1 |
0 |
(0) |
0 |
5 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
505 |
157 |
111 |
157 |
345 |
(216) |
1,060 |
Tax |
(122) |
(56) |
(37) |
(29) |
(56) |
39 |
(261) |
Net income from discontinued or
held-for-sale operations |
- |
- |
(0) |
- |
- |
- |
(0) |
Net income |
383 |
101 |
74 |
128 |
289 |
(176) |
799 |
Non controlling interests |
(65) |
(5) |
(22) |
(19) |
(16) |
(34) |
(161) |
Net income Group Share |
318 |
96 |
52 |
109 |
273 |
(210) |
638 |
Q1-19 (stated) |
€m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
1,469 |
861 |
677 |
681 |
1,339 |
(171) |
4,855 |
Operating expenses excl. SRF |
(753) |
(593) |
(420) |
(342) |
(819) |
(177) |
(3,104) |
SRF |
(5) |
(30) |
(15) |
(18) |
(186) |
(78) |
(332) |
Gross operating income |
711 |
238 |
241 |
320 |
334 |
(425) |
1,419 |
Cost of risk |
4 |
(44) |
(89) |
(107) |
10 |
2 |
(225) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
13 |
- |
- |
78 |
(0) |
(6) |
85 |
Net income on other assets |
0 |
1 |
0 |
0 |
3 |
19 |
23 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
728 |
194 |
153 |
291 |
346 |
(410) |
1,302 |
Tax |
(199) |
(69) |
(44) |
(64) |
(129) |
111 |
(394) |
Net income from discontinued or
held-for-sale operations |
(0) |
- |
- |
- |
- |
- |
(0) |
Net income |
530 |
125 |
109 |
227 |
217 |
(299) |
908 |
Non controlling interests |
(77) |
(6) |
(29) |
(33) |
(4) |
4 |
(145) |
Net income Group Share |
453 |
119 |
79 |
194 |
212 |
(295) |
763 |
Appendix 3 – Crédit Agricole Group:
Results by business line
Crédit Agricole Group: Contribution by business line
Q1-20 & Q1-19
|
Q1-20 (stated) |
€m |
RB |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,160 |
877 |
696 |
1,334 |
647 |
1,589 |
64 |
8,366 |
Operating expenses excl. SRF |
(2,263) |
(585) |
(450) |
(806) |
(352) |
(884) |
(208) |
(5,548) |
SRF |
(94) |
(35) |
(16) |
(7) |
(20) |
(200) |
(83) |
(454) |
Gross operating income |
803 |
258 |
230 |
521 |
275 |
505 |
(228) |
2,363 |
Cost of risk |
(307) |
(101) |
(117) |
(19) |
(190) |
(160) |
(37) |
(930) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
3 |
- |
- |
14 |
72 |
2 |
- |
91 |
Net income on other assets |
0 |
0 |
1 |
4 |
0 |
(0) |
0 |
5 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
499 |
157 |
114 |
519 |
157 |
347 |
(264) |
1,530 |
Tax |
(238) |
(56) |
(38) |
(126) |
(29) |
(56) |
63 |
(481) |
Net income from discont'd or
held-for-sale ope. |
- |
- |
(0) |
- |
- |
- |
- |
(0) |
Net income |
261 |
101 |
76 |
393 |
128 |
290 |
(202) |
1,048 |
Non controlling interests |
(1) |
(0) |
(17) |
(62) |
(19) |
(10) |
(30) |
(140) |
Net income Group Share |
260 |
100 |
59 |
331 |
109 |
280 |
(232) |
908 |
|
Q1-19 (stated) |
|
€m |
RB |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,411 |
861 |
1,461 |
702 |
681 |
1,338 |
(257) |
8,196 |
Operating expenses excl. SRF |
(2,192) |
(593) |
(753) |
(439) |
(342) |
(819) |
(139) |
(5,277) |
SRF |
(90) |
(30) |
(5) |
(15) |
(18) |
(186) |
(78) |
(422) |
Gross operating income |
1,129 |
238 |
703 |
248 |
320 |
333 |
(474) |
2,497 |
Cost of risk |
(56) |
(44) |
4 |
(88) |
(107) |
10 |
1 |
(281) |
Cost of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
4 |
- |
13 |
- |
78 |
(0) |
- |
95 |
Net income on other assets |
(0) |
1 |
0 |
0 |
0 |
3 |
7 |
10 |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
- |
- |
Income before tax |
1,077 |
194 |
720 |
160 |
291 |
345 |
(466) |
2,321 |
Tax |
(463) |
(69) |
(197) |
(46) |
(64) |
(129) |
119 |
(848) |
Net income from discont'd or
held-for-sale ope. |
- |
- |
(0) |
- |
- |
- |
- |
(0) |
Net income |
614 |
125 |
523 |
114 |
227 |
216 |
(346) |
1,473 |
Non controlling interests |
(0) |
(0) |
(73) |
(24) |
(33) |
0 |
7 |
(123) |
Net income Group Share |
614 |
125 |
450 |
90 |
194 |
216 |
(339) |
1,350 |
Appendix 4 – Methods used to calculate earnings
per share, net asset value per share
Crédit Agricole S.A. – data per
share
(€m) |
|
Q1-20 |
Q1-19 |
|
Q1/Q1 |
Net income
Group share - stated |
|
638 |
763 |
|
-16.4% |
- Interests on AT1, including issuance
costs, before tax |
|
(157) |
(141) |
|
+11.5% |
NIGS attributable to ordinary shares - stated |
[A] |
481 |
622 |
|
-22.7% |
Average
number shares in issue, excluding treasury shares (m) |
[B] |
2,883.1 |
2,863.3 |
|
+0.7% |
Net earnings per share - stated |
[A]/[B] |
0.17 € |
0.22 € |
|
-23.2% |
Underlying net income Group share (NIGS) |
|
652 |
796 |
|
-18.1% |
Underlying NIGS attributable to ordinary
shares |
[C] |
495 |
655 |
|
-24.5% |
Net earnings per share - underlying |
[C]/[B] |
0.17 € |
0.23 € |
|
-25.0% |
(€m) |
|
31/03/2020 |
31/12/2019 |
31/03/2019 |
Shareholder's equity Group share |
|
62,637 |
62,921 |
61,800 |
- AT1 issuances |
|
(5,128) |
(5,134) |
(6,109) |
- Unrealised gains and losses on OCI -
Group share |
|
(1,255) |
(2,993) |
(2,757) |
-
Payout assumption on annual results* |
|
- |
(2,019) |
(1,976) |
Net book value (NBV), not revaluated, attributable to
ordin. sh. |
[D] |
56,254 |
52,774 |
50,958 |
-
Goodwill & intangibles** - Group share |
|
(18,006) |
(18,011) |
(17,784) |
Tangible NBV (TNBV), not revaluated attrib. to ordinary
sh. |
[E] |
38,248 |
34,764 |
33,174 |
Total
shares in issue, excluding treasury shares (period end, m) |
[F] |
2,881.7 |
2,884.3 |
2,863.7 |
NBV per share , after deduction of dividend to pay
(€) |
[D]/[F] |
19.5 € |
18.3 € |
17.8 € |
+ Dividend to pay (€) |
[H] |
0.00 € |
0.70 € |
0.69 € |
NBV per share , before deduction of dividend to pay
(€) |
|
19.5 € |
19.0 € |
18.5 € |
TNBV per share, after deduction of dividend to pay
(€) |
[G]=[E]/[F] |
13.3 € |
12.1 € |
11.6 € |
TNBV per sh., before deduct. of divid. to
pay (€) |
[G]+[H] |
13.3 € |
12.8 € |
12.3 € |
Alternative Performance
Indicators
NAVPS Net asset value per share – Net
tangible assets per share
One of the methods for calculating the value of
a share. NAV per share is net equity Group share restated from AT1
issues divided by the number of shares outstanding at the end of
the period.
Net tangible assets per share is tangible net
equity Group share, i.e. restated for intangible assets and
goodwill, divided by the number of shares outstanding at the end of
the period.
NBV Net Book Value
Net book value is net equity Group share,
restated for AT1 issues, HTCS hidden reserves and proposed
dividends on annual earnings.
EPS Earnings Per Share
Net income Group share (excluding AT1 issues
interests) divided by the average number of shares outstanding,
excluding Treasury shares. EPS indicates the portion of profits
attributable to each share (not the portion of earnings paid out to
each shareholder, which is the dividend). It may decrease, assuming
net income Group share remains unchanged, if the number of shares
increases (see Dilution).
Cost/income ratio
The cost/income ratio is calculated by dividing
expenses by revenues, indicating the proportion of revenues needed
to cover expenses.
Cost of risk/outstandings
Calculated by dividing cost of risk (over four
quarters on a rolling basis) by outstandings (over an average of
the past four quarters, beginning of the period). The cost of risk
on outstandings can also be calculated by dividing the annualised
cost of risk of the quarter by the outstandings as of beginning of
the period.
Since the first quarter 2019, loans
outstanding considered are only loans to customers, before
impairment
Impaired loans ratio:
This ratio compares the gross impaired customer
loans to total gross customer loans outstanding.
Coverage ratio:
This ratio compares the total loans loss
reserves to the gross impaired customer loans outstanding.
Net income Group share attributable to
ordinary shares – stated
Net income Group share attributable to ordinary
shares is calculated as net income Group share less interest on AT1
instruments, including issue costs before tax.
Underlying net income Group
share
Underlying net income Group share is calculated
as net income Group share restated for specific items (i.e.
non-recurring or exceptional items).
ROE Return on Equity
Indicator measuring the return on equity,
calculated by dividing a company’s net income by its equity.
RoTE Return on Tangible
Equity
Measures the return on tangible equity (the
bank’s net assets restated to eliminate intangibles and
goodwill).
Disclaimer
The financial information for
first quarter 2020 for Crédit Agricole S.A. and
the Crédit Agricole Group comprises this press release,
the attached results slides and the appendices to the slides,
available at
https://www.credit-agricole.com/en/finance/finance/financial-publications.
This presentation may include prospective
information on the Group, supplied as information on trends. This
data does not represent forecasts within the meaning of EU
delegated regulation 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 three-month period
ending 31 March 2020 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. This financial
information does not constitute a set of financial statements for
an interim period as defined by IAS 34 “Interim Financial
Reporting” and has not been audited.
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. 2019
Universal Registration Document and its 2019 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.
Since 30 September 2019, KAS Bank has been
included in the scope of consolidation of the Crédit Agricole
Group as a subsidiary of CACEIS. SoYou has also been included in
the scope of consolidation as a joint-venture between Crédit
Agricole Consumer Finance and Bankia. Historical data have not been
restated on a proforma basis.
Since 23 December 2019, CACEIS and Santander
Securities Services (S3) have merged their operations. As of said
date, Crédit Agricole S.A. and Santander respectively hold 69.5%
and 30.5% of the capital of CACEIS.
Financial agenda
13 May 2020
Shareholders’ meeting in
Paris6 August 2020
Publication of second quarter and first half 2020 results4 November
2020
Publication of third quarter and first nine months 2020
results
Contacts
CREDIT AGRICOLE PRESS
CONTACTS
Charlotte de
Chavagnac + 33 1 57
72 11
17
charlotte.dechavagnac@credit-agricole-sa.frOlivier
Tassain
+ 33 1 43 23 25
41
olivier.tassain@credit-agricole-sa.frBertrand
Schaefer
+ 33 1 49 53 43
76
bertrand.schaefer@ca-fnca.fr
CREDIT AGRICOLE S.A INVESTOR
RELATIONS CONTACTS
Institutional
shareholders |
+ 33 1 43 23 04
31 |
investor.relations@credit-agricole-sa.fr |
Individual
shareholders |
+ 33 800
000 777 (freephone number – France only) |
credit-agricole-sa@relations-actionnaires.com |
|
|
|
Clotilde
L’Angevin |
+ 33 1 43 23 32
45 |
clotilde.langevin@credit-agricole-sa.fr |
Equity
investors: |
|
|
Toufik
Belkhatir |
+ 33 1 57 72 12
01 |
toufik.belkhatir@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 |
Emilie
Gasnier |
+ 33 1 43 23 15
67 |
emilie.gasnier@credit-agricole-sa.fr |
Ibrahima
Konaté |
+ 33 1 43 23 51
35 |
ibrahima.konate@credit-agricole-sa.fr |
Vincent
Liscia |
+ 33 1 57 72 38
48 |
vincent.liscia@credit-agricole-sa.fr |
Annabelle
Wiriath |
+ 33 1 43 23 55
52 |
annabelle.wiriath@credit-agricole-sa.fr |
|
|
|
Credit investors and rating agencies: |
|
Caroline
Crépin |
+ 33 1 43 23 83
65 |
caroline.crepin@credit-agricole-sa.fr |
Marie-Laure
Malo |
+ 33 1 43 23 10
21 |
marielaure.malo@credit-agricole-sa.fr |
Rhita Alami
Hassani |
+ 33 1 43 23 15
27 |
rhita.alamihassani@credit-agricole-sa.fr |
|
|
|
|
|
|
|
|
|
|
|
|
See all our press releases at: www.credit-agricole.com -
www.creditagricole.info
|
Crédit_Agricole |
|
Crédit Agricole Group |
|
créditagricole_sa |
1 In this press release, the term “underlying” refers to
intermediary balances adjusted for the specific items described on
p.23 onwards
2 Based on SREP requirement of 8.9% at 02/04/2020 (including
France’s counter-cyclical buffer, applicable from 02/04/2020).
3 Based on SREP requirement of 7.9% at 02/04/2020 (including
France’s counter-cyclical buffer, applicable from 02/04/2020).
4 Underlying, excluding specific items. See p.23 and onwards for
more details on specific items.
5 Cost of risk on outstandings (in annualised basis points)
6 12-month average ratio
7 Underlying, excluding specific items. See p.23 and onwards for
more details on specific items.
8 Excluding the Corporate Centre.
9 Cost of risk on outstandings (in annualised basis points)
10 See p.23 for more details on specific items related to Crédit
Agricole S.A.
11 Equipment rate: percentage of individual banking customers
holding at least one insurance product (Pacifica estimates). Scope:
auto, home, health, life accidents and legal protection
insurance.
12 Excluding foreign exchange impact.
13 Excluding forex effect
14 Including the relaxation of France’s counter-cyclical buffer,
as from 02/04/2020.
15 Including the relaxation of France’s counter-cyclical buffer,
as from 02/04/2020.
16 Intra-quarter leverage refers to the average of the end of
month exposures for the first two months of said quarter.
17 Return on Tangible Equity
18 Cost of risk on outstanding (in basis point over a rolling
four quarter period)
19 Exposure at Default
20 Internal methodology, 03/2020
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