Credit Agricole SA · EURONEXT:ACA
Credit Agricole SA — Exane BNPP Conference 2013
30 slides from Credit Agricole SA's conference presentation, Jun 12, 2013
Slide 1: Exane BNPP Conference
Exane BNPP Conference Xavier Musca Deputy CEO Crédit Agricole S.A. 12 June 2013
Slide 2: Disclaimer
DISCLAIMER This presentation was prepared for a dedicated conference. It may include prospective information on the Group, supplied as information on trends. This data does not represent forecasts within the meaning of European Regulation 809/2004 of 29 April 2004 (chapter 1, article 2, §10). This i
Slide 3: Contents
CONTENTS 1 Counter-crisis actions: from summer 2011 to Q1-13 2 Focus on our 2 main geographies: France & Italy 3 An industrial approach 3 Exane Conference – 12 June 2013
Slide 4: Contents: Counter-crisis actions
CONTENTS 1 Counter-crisis actions: from summer 2011 to Q1-13 A significant reduction in risks Credit Agricole Group & Crédit Agricole S.A.: back to basics Improvement of solvency - From Basel 2.5 to Basel 3 - Management of risk weighted assets - Internal flexibility: Switch guarantee Improve
Slide 5: Crédit Agricole adaptation measures: a significant reduction in risks
CRÉDIT AGRICOLE ADAPTATION MEASURES A significant reduction in risks Emporiki (including Cyprus)* sold to Alpha Bank 1 Crédit Agricole S.A. has exited from Greece No residual funding Adjustment plan achieved ahead of targets Reduction in funding needs and in risk 2 weighted assets Funding
Slide 6: Crédit Agricole Group: Q1-13 back to basics (1/2)
CRÉDIT AGRICOLE GROUP: Q1-13 – BACK TO BASICS (1/2) Retail banking businesses predominant Contribution to revenues (€bn) Contribution to NIGS (€bn) Contribution to RWAs (€bn) €8.6bn in Q1-13 €1.8bn in Q1-13 €480bn in Q1-13 12% 14% 23% 1% 10% 6% 7% 14% 11% 55% 6% 65% 65% 8% 3% Retail banking Insuranc
Slide 7: Crédit Agricole S.A.: Q1-13 back to basics (2/2)
CRÉDIT AGRICOLE S.A.: Q1-13 – BACK TO BASICS (2/2) No exceptional items High base of recurring income from core businesses Net income Group share (€m) Cost of risk remains moderate ( ) Operating efficiency: continued gradual ( 232 ) reduction in costs (25) 726 No exceptional items other than
Slide 8: Improvement of solvency: from Basel 2.5 to Basel 3
IMPROVEMENT OF SOLVENCY From Basel 2.5 to Basel 3 December 2012, March 2013 and December 2013 target (195 bps) +38 bps (87 bps) +40bps +30bps 11.8% RWAs: residual impact of CDO after Risk disposals, CVA & risk-weighting of weighting the exemption (250%) of the >10.0% Equity: impact of deductions, eq
Slide 9: Improvement of solvency: management of risk weighted assets
IMPROVEMENT OF SOLVENCY Management of risk weighted assets €bn Change in risk weighted assets - CA Group +€25bn RWAs on the rise due to regulatory CRD3 Management action changes, offset by management action 511 490 493 522 to downsize risks (adjustment plan, etc.) 480 RWAs (excl. CIB) CIB Margin
Slide 10: Improvement of solvency: internal flexibility, Switch guarantee
IMPROVEMENT OF SOLVENCY Internal flexibility: Switch guarantee Initial target: Switch 1 (Dec. 2011): Switch 2 (H2-2013): - Repayment to the Regional - Repayment: €4.1bn hybrids - Completion of Switch 1 + transfer of additional Banks of €5.5bn hybrids no - RWAs transferred : €52.7bn risks to the Regi
Slide 11: Improvement of balance sheet structure: stabilisation of funding structure
IMPROVEMENT OF BALANCE SHEET STRUCTURE Stabilisation of funding structure €bn Surplus of LT funding sources: Assets Liabilities €47bn 1,032 1,032 Solid liquidity reserves surplus well above ST debt €47bn 171 218 -246 Group B/S -496 154 43 -234 Cash €bn 2,008 B/S 1,032 71% of 60% of 729 623 custo
Slide 12: Leverage ratio: impact of internal financing mechanisms
IMPROVEMENT OF BALANCE SHEET STRUCTURE Leverage ratio: impact of internal financing mechanisms Leverage ratio at 31/12/2012 Total assets / Tangible Shareholders’ Equity 33 34 35 35 29 29 26 23 19 19 20 20 HSBC ISP BBVA Unicredit Crédit BNPP Santander Société Natixis Crédit Suisse Crédit Barclays Agr
Slide 13: Contents: Focus on France & Italy
CONTENTS 2 Focus on our 2 main geographies: France & Italy France - French macro - Retail banking: a solid franchise - Leading positions in a sound real estate market Italy - Italian macro - Cariparma: a retail bank located in the richest part of Italy - Agos: a business under restructuration 13
Slide 14: France: some factors of resilience
FRANCE: SOME FACTORS OF RESILIENCE France: margin rate and corporate Contrib. France: household purchasing power Our forecast for 2013: -0.1% YoY 20 %, y/y 33 % investment y/y, % and its components 16 3,0 A recession… 2,5 32 12 2,0 1,5 Households: drop in employment and increase in 8 31 1,0 ta
Slide 15: French retail banking: a solid franchise
FRENCH RETAIL BANKING: A SOLID FRANCHISE Regional Banks and LCL: strong activity and results Customer business (€bn) Loans/Customer assets ratio: 68% Loans Customer assets 734.3 LCL Deposits: up 3.6% YoY 481.1 483.1 708.8 77.1 Off-balance 75.3 sheet 87.4 89.0 81.9 - On-balance sheet deposits: up
Slide 16: French retail banking: sound real estate market (1/2)
FRENCH RETAIL BANKING: SOUND REAL ESTATE MARKET (1/2) Crédit Agricole: leader in home finance Crédit Agricole Group is the unchallenged leader Resilient homeowners market in French home loans A slow and gradual decrease expected over the next € 274.7bn in home loans outstanding at end-March
Slide 17: French retail banking: sound real estate market (2/2)
FRENCH RETAIL BANKING: SOUND REAL ESTATE MARKET (2/2) Stringent home loan lending practices Favourable home lending practices 80 % share of guarantees and mortgages 89% of home loans are fixed rate to maturity; almost all 70 60 floating rates capped* (2011 data) 50 40 Loans granted according t
Slide 18: Italy: austerity fatigue
ITALY: AUSTERITY FATIGUE % of VA Italy : profit rate and corporate % of VA % of Italy : Households Savings and Our forecast for 2013: -2% YoY disposable Investment investment rate 50 24 18 income A recession… 48 24 17 46 44 23 16 Households: high unemployment and tax hikes 42 23 15 will contin
Slide 19: Cariparma (1/3): a bank in the richest regions of Italy
CARIPARMA* (1/3) A bank located in the richest regions of Italy GDP per capita by region Cariparma Group market shares Year 2009 (a) (Index numbers annual base Italy=100) VB 1 BL UD CO PN VA L BG 2 54 13 41 NO 12MB C 9 BS < BI 6 MI 53 2 6 4 VI TV 25 GO 7 VC LO TO 2 TO PV 8 CR VR 9 PD VE 39 1 TS 41 A
Slide 20: Cariparma (2/3): resilience of business
CARIPARMA (2/3) Resilience of business A retail bank with strong positions on LOAN/DEPOSIT 2012 Loan/deposit ratio 2012 OFF-BALANCE SHEET/DEPOSIT Off-balance sheet/deposits 2012 2012 savings 153% Loan to deposit ratio: 97% 118% 99% 102% 105% 106% On-balance sheet deposits: €36bn (and 90% 94% 9
Slide 21: Cariparma (3/3): cost of risk monitored
CARIPARMA (3/3) Cost of risk monitored Cost of credit risks on loans outstanding (%) 4 Coverage ratios (%) 60.5 60.5 58.6 57.9 2.0 56.4 54.9 55.3 55.8 1.9 49.5 49.7 1.8 1.6 44.8 42.7 42.2 42.6 1.4 1.5 41.1 39.1 40.2 1.3 1.3 36.8 35.0 34.3 34.3 1.1 0.9 26.8 26.0 24.4 0.7 0.4 Compared to the Italian
Slide 22: Agos: a business under restructuring
AGOS A business under restructuration & agreement reached with Gruppo BP A JV with Banco Popolare (61% Crédit Agricole S.A. and 39% Banco Popolare) Corrective actions have been taken in several areas: New management appointed (CEO and CRO) Slowdown in production and, when considered risky, a
Slide 23: Contents: An industrial approach
CONTENTS 3 An industrial approach Amundi: most efficient asset management platform in Europe and a well- positioned worldwide player Insurance: efficient and comprehensive approach to clients’ needs Cross management of costs throughout the Group 23 Exane Conference – 12 June 2013
Slide 24: Savings management and insurance (1/3): Amundi
SAVINGS MANAGEMENT AND INSURANCE (1/3) Amundi: most efficient asset management platform in Europe and a well-positioned worldwide player 2,869 June 2013: No.9 worldwide and No.2 in Europe Acquisition by Amundi of in terms of AUMs (€bn) at end-2012 Smith Breeden, a US asset manager offering an expert
Slide 25: Savings management and insurance (2/3): insurance
SAVINGS MANAGEMENT AND INSURANCE (2/3) Insurance: efficient and comprehensive approach to clients’ needs Our model: integrated bankinsurer An insurance group which belongs to a banking group 1st bankinsurer And distributes its products through the banking and 2nd insurer in France networks C
Slide 26: Savings management and insurance (3/3): profits maintained
SAVINGS MANAGEMENT AND INSURANCE (3/3) Profits maintained despite narrowing margins and market crisis Net income Group share by business line (€m) and market indexes 4.81% 3.66% 3.36% 3,909 1.74% 5,550 10 yr bond rate (OAT) CAC 40 Index 3,667 2,581 481 Colonne1 443 428 448 446 415 414 430 412 406 40
Slide 27: Cross management of costs (1/3): operating efficiency
CROSS MANAGEMENT OF COSTS THROUGHOUT THE GROUP (1/3) Operating efficiency: continued gradual reduction in costs Adjustment plan: reduction in workforce (FTEs) in Crédit Agricole S.A. operating Q1-13 YoY: expenses (€m) CIB: down 11% 2,984 (5) +25 (125) SFS: down 5% 2,879 MUST programme on IT,
Slide 28: Cross management of costs (2/3): MUST programme
CROSS MANAGEMENT OF COSTS THROUGHOUT THE GROUP (2/3) MUST programme MUST programme (€m) MUST: cost reduction programme relating to Crédit Agricole S.A. (parent company) ~ €650m total savings between 2012 and 2016 330 Optimisation and enhancement of efficiency - Improvement of cost/income ratio
Slide 29: Cross management of costs (3/3): age pyramid
CROSS MANAGEMENT OF COSTS THROUGHOUT THE GROUP (3/3) Age pyramid Crédit Agricole S.A. headcount at end-2012: 79,282* i.e. a decrease of 10.3% YoY Projected number of employees turning 60 and 65 in France FTEs* Crédit Agricole S.A. 2013-2016 Retiring at 60 5,904 Retiring at 65 547 Total 6,451 Sou
Slide 30: Crédit Agricole is in marching order
CRÉDIT AGRICOLE IS IN MARCHING ORDER Crédit Agricole is in marching order to deliver a sustainable performance Significant reduction in risks and funding needs Solid underlying results in a difficult economic environment Strengthening solvency of Crédit Agricole S.A. Development of a new med