Crédit Agricole Bank financial result in 2022

Year 2022 for Ukraine and for the whole world has been the year of the russian invasion of Ukraine, the first large scale war in Europe has experienced since the end the World War II. In such dramatic context that hit the Ukrainian population hard and, consequently, the Ukrainian economy (with a GDP loss of around 30% in 2022), the activity of Credit Agricole Ukraine and of the Credit Agricole Group has been driven by the strong sense of responsibility.

1)Responsibility towards the Ukrainian society

As soon as the war began, Crédit Agricole Group stopped all new financing for russian companies and all commercial activity in the country. The Group has expressed and demonstrated complete solidarity with its employees and the Ukrainians. It has launched a €10 million solidarity fund to meet the needs of employees and Ukrainians affected by the war.

Credit Agricole Ukraine has taken an active social stance and focused on supporting its customers, its employees and society. In total, the bank allocated UAH 21 mln to various charitable projects, for the most part, to purchase medical equipment for hospitals with the help of the charity foundation “Your support”. The biggest initiatives are as follows: nearly UAH 8 mln for the purchase of medical equipment and generator for the National Institute of Pediatrics, Obstetrics and Gynecology; UAH 5.65 mln for medical equipment for the Zaporizhzhia Regional Clinical Children’s Hospital; UAH 5 mln for the Red Cross in Ukraine, UAH 1 mln for the purchase of a vehicle for humanitarian aid transportation; UAH 500 thousand of aid for the wounded military and civilians, etc. More details here. Credit Agricole Brie Picardie and Credit Agricole Ukraine purchased 21 diesel generators worth nearly UAH 11 million for 14 social institutions of Zhytomyr region. Crédit Agricole Nord Midi-Pyrénées gifted 18 generators worth nearly UAH 3,500,000 to orphanages. UAH 35.5 mln of aid for the Ukrainian Armed Forces and charity foundations was contributed by Credit Agricole customers via the CA+ mobile app.

Furthermore, Credit Agricole Ukraine made advance payment of taxes for around UAH 100 million.

2) Responsibility towards the customers of Credit Agricole Ukraine

Since the beginning of the war, Credit Agricole Ukraine never ceased its activity for the sake of the customers’ businesses and customers’ lives. Thanks to the incredible commitment of our colleagues, the bank managed to keep around 90% of its branches open, allowing private customers and enterprises to have their needs met even in these hard times.

In addition, to enable the customers who could not reach branches (mostly the ones who moved abroad) to manage their accounts, several new features have been released in CA+, the mobile application of Credit Agricole, remote video customer identification was launched. For our corporate customers, the new Internet bank for legal entities and entrepreneurs – CORPEX and CA+ Pro for private entrepreneurs were launched in 2022.

Credit Agricole Bank understood the difficulties customers were facing due to the war, and thus made the decision to ease the financial conditions: monthly service fees were immediately canceled in February 2022 for all card packages of Private Individuals and the Bank decided to waive penalties in case of late payments of monthly installments for credit products as well as to automatically prolong the validity of plastic cards.

Credit Agricole Ukraine continued providing financing, contributing to the resilience of Ukrainian economy: financing of customers under the State program “Affordable loans 5-7-9%”in the amount of UAH 2.4 billion, also the new financing under risk sharing program with the government has been offered. In addition, Credit Agricole Ukraine signed an agreement with the European Bank for Reconstruction and Development (EBRD) on risk sharing program with 50 m EUR envelope (the equivalent of around UAH 2 billion) with the objective to support critically important sectors of the Ukrainian economy. During 2022, the bank continued granting loans for car purchases for the total amount of 470 mUAH, confirming its positioning as a market leader even in such tough context.

Credit Agricole has always supported Ukrainian agribusiness, agri customers constitute more than 50% of the bank’s portfolio. The bank has continued providing financing and support to agribusiness since the beginning of the war, agri-financing is 73% of the financing under the state program “Affordable loans 5-7-9%”.

Still, in order to help customers facing financial difficulties to go through the war, Credit Agricole Ukraine, thanks to its sound capital, strong liquidity and low risk profile, was able to restructure UAH 5.6 billion of credit, enabling the customers to reduce the debt burden.

Finally, to ensure that the operations would continue even in the prolonged black-out scenario, the bank equipped more than 40% of its branches with generators, with a double internet connection as well as with Starlink.

The customers reiterated their trust in Credit Agricole Ukraine and appreciation for the reliability and professionalism of the bank, in fact, since the war started, they placed deposits for the total amount of around UAH 10 billion, both in UAH and in foreign currency.

3) Responsibility towards the employees of Credit Agricole Ukraine

Safety of the employees is the first priority of the Group Credit Agricole. In this regard, the Group arranged:

• the evacuation of employees and their families from danger zones to safer locations in Ukraine and abroad
• the accommodation of up to 400 colleagues and families, in Poland and other countries.  

Fully aware of the difficulties that employees in Ukraine are facing, not only the Credit Agricole Group decided against activating any layoff plan, but it also set up a fund of 5 million euros for the financial support of the Ukrainian colleagues.Finally, as training and improvement of employees’ skills is key even in the wartime, during the year, several employees had the possibility to do internships within International Mobility program in various entities of the Credit Agricole Group in Europe (France, Switzerland, Poland, Germany, Czech Republic, Italy, Romania), firsthand experiencing the solidarity of the Credit Agricole family.

In terms of financial results, deposits increased significantly throughout the whole year, reaching in December a stock of 38 billion in UAH (+33% vs December 2021) and more than the equivalent of USD 700 million (in foreign currency, +11% yoy).

In terms of loans, despite a 30% drop in GDP, as Credit Agricole Ukraine decided to stand by its customers and to continue granting loans to its core segment of activity (agri-agro and car loans), the stock of credit at the end of December 2022 rose to UAH 33 billion (equivalent), just -6% compared to December 2021.

The bank adopted an extremely prudent approach on loan assessment, with around UAH 4.5 billion of provision reported in 2022, which allowed Credit Agricole Ukraine to reach a level of coverage on loans of 20% at the end of 2022 (excluding multinational, whose risk profile is almost zero) and a level of coverage on NPL of 87%.

From P&L point of view, despite the significant level of Cost of Risk (due to the extremely prudent approach in the wartime), a sustained level of revenue associated with a strict cost control, enabled the Bank to report a positive net profile even in such an extraordinary year.

Credit Agricole Bank was in fact able to ensure notable growth of Net banking income (NBI is 6.4 b UAH or +60% vs. 2021). Main sources of the increase are: strong liquidity position in local currency that enabled the bank to benefit from the new interest rate structure; higher FX spreads.
Total Costs were kept under strict control: despite war-related expenses, charity and donations and the high level of CPI, cost base remained stable at the level of 2021.

This great performance in terms of efficiency is certified by the Cost-to-income ratio, which reached the low level of 32% at the end of 2022 and led to a Gross Operating Income, which is more than double the 2021 number.

Considering extremely prudent and careful risk approach mentioned above (the Bank formed 4.5 b UAH of provisions) the Net result of Credit Agricole Bank is 31 million UAH or 1.1 million EUR.

   Annex 1 Summary Income Statement*   

(UAH million)

Annex 2 Short Balance Sheet*   (UAH million)

* Credit Agricole Bank’s Interim Financial Statements are prepared according to the IFRS. Additionally, the detailed quarterly financial statements will be published on the bank's website.