Results for the 3rd quarter and 9 months of 2019 of Credit Agricole Group

Credit Agricole Group

In the third quarter, underlying net income Group share of Crédit Agricole Group was €1,924 million, up +6.0% compared with the third quarter of 2018. In the first nine months of 2019 the underlying net income Group share of Crédit Agricole Group reached €5,205 million, stable compared with the first nine months of 2018.

This performance was achieved thanks to very strong activity in all business lines and the implementation of the customer project. Digital interaction with customers has strengthened, with an increase of +2.5 percentage points in the use of the Regional Banks’ MaBanque mobile app and +3 percentage points in the use of the LCL mobile application since the beginning of the year. The weight of online transactions increased by +6 percentage points at CA Italia. Customer satisfaction improved in 2019, with a positive individual customer NPS in the Regional Banks, compared to the market average of -1 in France. There was a sharp rise in the individual customer NPS in the Regional Banks (+5) and LCL (+8). Customer relations are intensifying for the Regional Banks, with an increase in the proportion of “active” DAVs. There was strong momentum in acquisition once again, with +210,000 additional individual customers, including 156,000 for Regional Banks, 40,000 for LCL and 15,000 for CA Italia since the beginning of the year. Since its launch a year ago, 342,000 customers of the Regional Banks’ have been met in the context of “Trajectoires Patrimoine”. Finally, customer equipment continues to grow, with a +1.5 percentage point increase in property and casualty insurance for the Regional Banks, 1.2 percentage point for LCL, and 1.6 percentage point for CA Italia.

The Regional Banks’ revenues were stable in the third quarter of 2019 compared with the third quarter of 2018, thanks to a good level of growth in fee and commission income (+3.4%), particularly in banking and insurance. Expenses were up +3.4% in the third quarter of 2019 compared with the third quarter of 2018, mainly due to IT investments, but underlying net income Group share was up sharply over the period (+2.7%), notably due to the significant decrease in the cost of risk in third quarter 2019, compared to a third quarter 2018 which was impacted by collective provisions.

The Group’s underlying revenues reached 8,331 million euros in the third quarter of 2019, up +2.9% year on year, reflecting the strength of the Universal Customer-focused Banking model, stable and diversified, and which generates organic growth in all the business lines, thanks in particular to revenue synergies between specialized business lines and distribution networks. Operating expenses excluding SRF are well controlled (+2.7% increase in third quarter 2019), while incorporating IT investments in the Regional Banks and investments to develop Casa’s business lines, especially in the Asset Gathering business line. A positive year-on-year jaws effect of 20 basis points is recorded. The cost/income ratio improved by 0.1 percentage points compared with the third quarter of 2018, reaching 62.7% this quarter, reflecting the Group’s high level of operational efficiency.

The Regional Banks’ cost of credit risk relative to outstandings remained stable, at 12 basis points, with the NPL ratio at 2.0% and NPL coverage ratio at 97.3%. The Group’s cost of credit risk increased by +18.9% compared with the third quarter of 2018 as a result of the reversal of the cost of risk in CIB, but remained very low, and the NPL coverage ratio reached 83.5%.

The Group’s Common Equity Tier 1 ratio was 15.5% at end-September 2019, an increase of 0.1 percentage points compared with end-June 2019, and 580 basis points above the required regulatory level.

Finally, the Group is continuing to roll out its social project, with the issuance in October of a non-preferred senior Green bond of €1 billion.

In the third quarter of 2019, Crédit Agricole Group’s stated net income Group share was €1,849 million, versus €1,769 million in the third quarter of 2018. The specific items recorded this quarter generated a negative net impact of -€76 million on net income Group share.  

Excluding these specific items, underlying net income Group share was €1,924 million, up +6.0% compared with the third quarter of 2018.

Crédit Agricole S.A.

Strong increase in underlying quarterly net income Group share 

- Underlying net income Group share: Q3-19 €1,226 m, +8.2% Q3/Q3, increase in business line results (excluding Corporate Centre) (+6.8% Q3/Q3, +2.4% 9M/9M);

 - Solid contributions from the Asset Gathering division, GOI still strong in French Retail Banking, and strong growth (+24%) in the contribution of CA Italia, good cost control and strong contribution from automotive partnerships in Specialised Financial Services, and solid performance in capital markets, with an increase in the contribution from Large Customers despite the reversal of the cost of risk in the division;

- Over 9M-19, underlying net income Group share high (€3,264 m) despite the CC’s contribution being penalised by a high H1-18 base, the +2.0 pp increase in the corporate income tax rate, and the measured increase in the cost of risk, due to the normalisation in CIB;

- Annualised underlying ROTE 11.3%, good profitability in all business lines.

Increase in underlying revenues Q3/Q3 (+4.9%) and 9M/9M (+1.8%), as a result of dynamic commercial activity 

 - Strong inflows in Asset management, Insurance, Wealth management and Asset servicing. Record net inflows for Amundi;

- Property and casualty insurance outperforming the French market (6.8% increase in premiums Q3/Q3), increase in customer equipment rates (+1.5 pp for the Regional Banks Sept./Sept., +1.2 pp for LCL);

- Continued growth in loans and customer savings, increase in equipment rates, and continuing momentum of customer capture in Retail Banking (+210,000 individual customers since the end of 2018 (+156,000 at the Regional Banks, +40,000 at LCL, +16,000 at CA Italia);

- Strong performance of the automotive partnerships, generating equity-accounted income;

- Commercial activity strong in capital markets, commercial banking positions maintained in a slowing syndicated loan market in the eurozone.

Very positive jaws effect (+340 bp) and improvement in the cost/income ratio

 - Underlying costs: +1.5% Q3/Q3, due in particular to the development of international and corporate insurance. Positive jaws effect in the Retail banking and Large customer business lines. Costs stable in Specialised financials Services.

- Underlying cost/income ratio at 59.6% (-2.0 pp) in Q3, and 60.5% over 9M (-0.4 pp);

- Cost of risk low, at 29 bp, normalisation in CIB, down at CACF and at CA Italia.

Financial strength confirmed this quarter

 - CET1 ratio at 11.7%, +0.1 pp Sept/June, risk-weighted assets stable in the business lines;

Continuing implementation of the 2022 Medium-Term Plan

 - Increase in NPS in Retail banking, digital interaction with customers strengthened, customer capture buoyant in France and Italy (+210,000 individual customers since the end of 2018).

 - Issuance of a non-preferred senior Green bond for €1 billion in October.

- Upgrade by Moody’s of Crédit Agricole S.A.’s long-term credit rating to Aa3.    

Read more about Group financial results via link https://www.credit-agricole.com/en/news-channels/the-channels/newsflash/q3-and-9m-2019-results 

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:

PR and corporate communications division of Credit Agricole Bank.

E-mail: Communications@credit-agricole.ua