Crédit Agricole’s results at their highest for over ten years

Posted Feb 14 2020 at 7:00 am

Year without major hitch for the Crédit Agricole group. Crédit Agricole SA (CASA), the group’s central body and listed entity, posted a group share of net income of 4.84 billion euros (+ 10.1% year-on-year) and the Crédit Agricole group (CASA +
the 39 Regional Banks that make up the group

   ) totaled € 7.2 billion (up 5.2% year-on-year). In either case, you have to go back to 2006 to find results at this level.

Our profitability growth is solid “Commented Philippe Brassac, CEO of CASA. ” It is driven both by the dynamism of revenues and by the improvement of operational efficiency, without obstructing

“.

The group will have gone through a new year of low rates by a “positive scissors effect”, a simple expression to designate a reality that is less so: succeeding in increasing revenues faster than expenses. In fact, the revenues published by CASA increased by 420 million euros over one year, to 20.1 billion euros. At the same time, expenses increased from 170 million euros – almost half the speed – to 12.7 billion euros.

Two exceptional effects

All business lines contributed to this performance, in particular retail banking (both at LCL and in the 39 regional banks) driven by large volumes of credit and savings collection. The savings and so-called “large clientele” banking sectors (CACIB) nevertheless stood out, respectively, with strong commercial momentum and a significant revival of activity in the fourth quarter.

One point to watch, however, the cost of risk – understanding the losses suffered by a bank due to arrears – has risen significantly, starting from a historically low point: all trades combined, it has increased by 25.5% over a year, at 1.25 billion euros.

Beyond this mechanism, the accounts were marked by two major exceptional effects, which ultimately neutralized each other: on the one hand, the group was finally able to move into its results
1 billion euros recovered from the tax authorities

   , after years of litigation dating back to the eurozone crisis. On the other, Crédit Agricole
depreciated its LCL subsidiary by 642 million euros

   , a movement announced last December.

CASA, finally, presents a “hard” equity ratio (CET1) of 12.1%, the group as a whole reaching 15.9%.