Crédit Agricole Bank confirms its resilience even in crisis scenario, reporting positive net result of 396 million UAH in the first half of 2020.

In the first half of 2020, Credit Agricole Bank generated net financial result of 396 M UAH. A positive financial result confirms the solvency and stability of the bank even during the crisis. The decrease in the net financial result compared to 2019 (-52%) is due to the COVID-19 crisis and the consequent very prudent approach in provisioning (333 M UAH of provisions done during 6 months 2020).

“COVID has affected all countries and their finances sectors and is a real-time test of the banking’s model effectiveness. Thanks to a well-balanced model of universal banking, a conservative approach to risk management, Crédit Agricole Bank faced this challenge without any particular impact, confirming its role of “safe heaven” for clients and supporting Ukrainian economy and society. Despite the crisis, Bank maintained its investment plan, going on with its digital transformation (just in June the new Bank Mobile Application “CA+” has been released), and confirmed its social responsibility (CA Ukraine supported the fight to COVID-19 in Ukraine donating 6.3 M UAH for medical equipment to hospitals incl. artificial lungs ventilation machine). We believe that side by side with our customers we will resist new challenges and get through the shocks and, in the end, we’ll be stronger than before!” - Giorgio Sopranzi, Member of the Management Board, Financial Director of Crédit Agricole Bank commented.

Macro-economic scenario of the first 2 quarters of 2020 Ukrainian is characterized from one side by COVID-19 crisis, with the quarantine measures decided by Governments (that led to a drop of GDP, FY-20 forecast is -8.1% in EU, -5.5% in USA and -5% in Ukraine) and on the other side by the easing of monetary policy by NBU (with a key-policy rate at 6% at the end of June, -7,5% vs Dec-19 and -11,5% vs Jun-19).  

In a context of slump in economic activity and freeze of household consumption, loans (net of provisions) dropped in Q2-20 to UAH 21.9 billions (-UAH 2.8 billion or -11% vs Jun-19). Before the start of quarantine restrictions, Bank showed a very good pace of growth in particular on private individuals’ side of car and consumer loans – overperformed the Q1-19 results (resp. by +30% and +13%), strengthen its market position as well.

Positive signals are registered since end of June and Crédit Agricole Bank is ready to support the recovery thanks to its sound capital and liquidity position (Capital adequacy - N2 – remains above 20%, 2X more the regulatory minimal level and significant excess of liquidity – LCR at 252% vs 100% minimum).

Deposits portfolio continued to growth to UAH 35.2 billion at the end of June 2020 (+13% in comparison with end of June 2019). Both corporate customers and private individuals continue to drive this growth, confirming the preference to Crédit Agricole Bank as an international reliable partner.

Despite the crisis, in first half 2020 Crédit Agricole Bank remained profitable and registered +UAH 396 million of Net Result, more than 13 million euro. Compared to 1H-19 of course the result is lower, due to the freeze of the economy (which lead to a decrease in revenues) and a very prudent approach in provisioning.

Net banking Income is +UAH 1.7 billion, just -6% below the same period of last year despite the crisis.

• Net interest income, notwithstanding the narrowing in margins, is almost in line with the first 6 months of 2019 and continues to be the major share in NBI structure (69%).
• Quarantine-related restrictions led to a strong decrease in the Ukrainian economy, with and influence Bank’s Commission income (-22% in comparison with the end of June 2019).

Operating expenses of the Bank increased in comparison with end of June 2019 by +11% mainly on staff charges (labor market pressure continues). Growth of other expenses by +UAH 19 million or +6% reflects the investment plan in the scope of Medium-Term Plan 2022 (which the Bank didn’t stop even in a crisis context, to be ready to hook immediately the recovery). It also highlights the effort of the bank to take care of the health of its clients and employees in COVID-19 times: Smart Working on large scale has been launched (allowing more than 90% of head office employees to work from home during the crisis), more than 180 thousands masks have been bought, together with other medical protection.

Bank is a reliable partner for the clients, so have provided an opportunity for loans restructuring and rental holidays for borrowers affected by pandemic-related difficulties.

Nevertheless, the NPL ratio remains one of the lowest among banks in Ukraine (6.4%) and the coverage ratio remains sufficient (90%). From Cost of Risk point of view, Bank maintained a very prudent approach reacting to the deterioration in the macroeconomic scenario in accordance to IFRS Standard. Thus, Crédit Agricole Bank actualized estimates of expected credit losses & provisions Total impact on Cost of Risk (CoR) of first half 2020 is UAH 341 million.

Annex 1
Summary Income Statement*
(UAH million)

Annex 2 
Short Balance Sheet^*
(UAH million)

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

About Credit Agricole: 

JSC “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 280 000 active private and 17 000 corporate customers, including international corporations, large Ukrainian companies and representatives of small and medium business. Credit Agricole Bank is a socially responsible bank that confirms its status by the large number of projects implemented under the Corporate Social Responsibility Program “We Care!”. 

Contacts:

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

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