Financial results of Credit Agricole Group for first nine months of 2018

Credit Agricole Group 

Solid results that show growth 

Crédit Agricole Group made a net profit Group share of €1,815 million in the third quarter, posting high profitability and further growth in relation to the same quarter last year. Commercial momentum remained strong across all business lines thanks to the capture of new customers by the Group’s retail banks and cross-selling. All the business divisions generated revenue growth over the quarter, including Retail Banking France, the Regional banks and LCL, which seem to have reached the point where the decrease in interest margin is offset by growth in volumes and commission income. Tight cost control enabled a positive jaws effect of nearly one percentage point on an underlying6 basis and an improvement in the cost/income ratio to 62.8%.

Consequently, all the Group's business divisions posted growth in gross operating income, including Retail Banking France. There are some mixed developments behind the apparent stability of the cost of risk: credit quality continued to improve in Retail Banking in Italy and remained excellent for Corporate and Investment Banking, LCL and the Regional banks, even if the latter saw a doubling of their cost of risk as a result of reversals of collective provisions in the third quarter of 2017. As in the previous quarter, the strong level of results and related growth can be fully attributed to higher revenues and cost control. The fully-loaded Common Equity Tier 1 ratio at end-September 2018 increased by +12 basis points compared to end-June at 14.9%, 540 basis points above the required regulatory level7.

In line with the "Strategic Ambition 2020" medium-term plan (MTP), the Group’s stable, diversified and profitable business model drove organic growth in all its business lines, largely through synergies between the specialised business lines and the retail networks, and ensured a high level of operating efficiency while generating leeway to invest in development.

Crédit Agricole S.A. 

Solid growth in Q3/Q3 and 9M/9M results, despite difficult markets in Q3

- Underlying net income above €1bn: Q3-18 €1,133m, the highest third-quarter level since the financial crisis; +17.3% Q3/Q3, 9M-18 €3,338m, +9.5% 9M/9M despite an increase in the SRF;

- Contribution by all of the business divisions to growth (SFS stable), with a particularly high level of growth and profitability in CIB/Financing;

- Underlying annualised ROTE15 13.1%; RONE Corporate and Investment Banking 13.1% after tax and AT1 costs;

Strong activity, growth in revenue Q3/Q3 in all business lines

- Strong growth in lending for the Retail Banks, good resilience in savings inflows in a difficult market environment;

- Underlying revenues up +5.9% Q3/Q3, contribution by all the business divisions, strong increase in Insurance (+27.1%) and Large Customers (+5.5%), notably for the CIB/Financing activities (+25.5%);

Confirmed cost control and further fall in the cost of risk

- Further improvement in operating efficiency: underlying expenses +3.6% Q3/Q3, strong jaws effect (>+2pp Q3/Q3) in all business lines (+1.7pp 9M/9M), further improvement in the underlying C/I ratio 1.4pp Q3/Q3 and 1.0pp 9M/9M;

- Further decrease in the cost of credit risk: -16.5% Q3/Q3; cost of risk relative to outstandings: 26bp;

Financial solidity: increase in CET1 ratio Q3/Q2 and upgrade by S&P

- Fully-loaded CET1 ratio 11.5%, above the MTP target of 11%, +11bp in Q3;

- Capital generation through retained earnings (+16bp, including a 9M dividend provision at €0.53);

- RWA stable: +€0.5bn/end-June; impact from reserves booked under OCI: -7bp, of which -2bp related to the widening of spreads on Italian sovereign yields;

- Long-term rating by S&P raised to A+ (stable outlook), rating raised by each rating agency in the past three years (Moody’s to A1/positive outlook and Fitch to A+/stable outlook);

- Settlement of OFAC litigation: definitive discharge from criminal prosecution at the end of the three-year probationary period.

In third quarter 2018, stated net income was €1,101 million versus €1,066 million in the third quarter of 2017.

About Credit Agricole:

PJSC «Credit Agricole Bank» is a modern universal bank owned by the leading financial group in Europe – Credit Agricole Group (France). The Group is a major partner of the French economy and one of the largest banking groups in Europe. It is a leading retail bank in Europe, having the largest portfolio of assets under management, being first in the field of ban insurance and third - in project financing in Europe. Credit Agricole has been operating in the financial market of Ukraine since 1993 and renders the entire range of banking services to private individuals, including premium-clients, and business. The Bank pays special attention to cooperation with agricultural enterprises. Reliability and business reputation of Credit Agricole in Ukraine is confirmed by the highest possible FITCH ratings, leading positions in bank sustainability, bank deposit reliability and bank profitability rankings, as well as by 300 000 active private and 18 000 corporate customers, including international corporations, large Ukrainian companies and representatives of small and medium business.

Contacts:

Viktoriia Torianyk, Head of PR and corporate communications Credit Agricole Bank. 

E-mail: Viktoriia.Torianyk@credit-agricole.ua