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First quarter 2019 results of Credit Agricole Group

17 May 2019

Credit Agricole Group     

Good performance in all business divisions

In the first quarter of 2019, Credit Agricole Group’s results reveal a very good level of operational efficiency (positive jaws effect of +2 points) thanks to brisk activity in all Group entities and very good operating cost control. The cost of risk also declined substantially, reaching a very low level with no sign of short-term deterioration. Stated net income of the Group for the 1Q 2019 reached 1,350 million euros, which is down -5.5% compared to the first quarter of 2018 due to specific items, which were slightly negative this quarter but which had been positive in the first quarter of 2018. Excluding specific items, underlying net income stood at 1,435 million euros, up +6.1%. Excluding the contribution to the SRF, underlying net income was up +8.1%. The Regional Banks posted very good performance this quarter, with a contribution to net income up +13.4% for the period, thanks to excellent operational efficiency (positive jaws effect of +4.2 percentage points) and a sharply lower cost of risk (-46.1%). The Group’s financial position was further strengthened this quarter, with the CET1 ratio up 0.3 point to 15.3% as of 31 March 2019.

First quarter 2019 is yet another demonstration of the relevance of the strategy put in place as part of the “Strategic Ambition 2020” Medium-Term Plan (MTP). All business lines were able to demonstrate the strength of the diversified universal banking model thanks to a high level of activity and continuing customer acquisition as part of an efficient operational framework.

Since the beginning of 2019, the Group has announced the following transactions:

- CACEIS plans to launch a friendly public bid for all of the capital of KAS Bank; CACEIS is confirming its pan-European ambition by strengthening its position in the Netherlands and its ability to serve the customers of insurance companies and pension funds; this acquisition will create value thanks to the strong potential for synergies; the completion of this takeover bid is expected to occur in the third quarter of 2019;

- Credit Agricole S.A. and Santander have announced the merger of their custody and asset servicing operations; after this merger, Credit Agricole S.A. and Santander would hold 69.5% and 30.5% respectively of this new entity that will keep the name CACEIS and combine the activities of CACEIS and Santander Securities Services (“S3”) in Spain and Latin America (Brazil, Mexico and Colombia); this new entity would benefit from greater scale and a stronger competitive positioning; the enlarged group would be better placed to capture growth in high potential markets (Latin America and Asia) and new opportunities. This transaction is expected to be completed before then end of 2019;

 - CACIB completed the disposal of a 4.9% stake in Banque Saudi Fransi (BSF) to a consortium headed by Ripplewood, thereby reducing its stake in Banque Saudi Fransi to 10% and, subject to the exercise of a warrant on 6% of the equity, to 4% by the end of the year; the impact of this agreement will be booked in the second quarter of 2019.

Credit Agricole S.A.  

Good performance in all business lines

  • Increase in underlying net income, up +1.0% Q1/Q1, all business divisions excl. CC*  up +8.2%
  • Favourable market environment and profitable growth in CIB: risk-weighted assets (RWA) +2.5% March/Dec., revenue/RWA ratio in Financing: +5bp Q1/Q1
  • Excellent Retail banking business performance in France: underlying net income up +17.7%, positive jaw effect of +4.5 percentage points, falling cost of risk: -12.4%
  • Increase in the contribution to the SRF: +10.5%/-€30m to -€308m in net income

Continued improvement in business performance and cross-sellings

  • High level of net inflows in life insurance driven by euro-denominated policies, continued strong growth of premium income and higher equipment rates in property & casualty insurance
  • Growth in loans outstanding in all retail banking networks
  • Higher levels of origination in Specialised Financial Services, in particular with respect to automotive partnership consumer finance

Good cost control

  • Stable expenses excl. SRF: +0.1% Q1/Q1, cost/income ratio excl. SRF was stable at 63.3%

Cost of risk still at a very low level

  • -28.4% Q1/Q1, cost of risk relative to outstandings at 21bp (-7bp Q1/Q1)
  • Improvement in the NPL ratio: 3.3% (-0.9 pp March/March) and NPL coverage ratio: 73.6% (+1.2 pp)

Financial strength confirmed: CET1 stable March/Dec.

  • CET1 ratio: 11.5%, still well above target of 11%
  • Year-on-year increase in risk-weighted assets (+4.5%), in particular this quarter for CIB, which benefited from favourable market conditions.

* Corporate centre

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 300 000 active private and 18 000 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!». 


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