Montrouge, 14 February 2018 |
Results for the fourth quarter
and full year 2017
Q4 and 2017: very good results
despite the tax surcharge
Crédit Agricole Group* |
Stated net income Group
share
Q4: €922m
+37.4% Q4/Q4
2017: €6.536bn
+35.5% 2017/2016 |
Stated revenues
Q4: €8.045bn
+1.8% Q4/Q4
2017: €32.108bn
+5.5% 2017/2016 |
Fully-loaded CET1 ratio
14.9%
540bp above the P2R[1] |
-
Continued organic growth in all
business lines
-
Targeted acquisitions finalised
in Q4: three Italian banks, private banking business in
Asia
-
Progress on the Strategic
Ambition 2020 plan: early synergies, innovations and
operational effectiveness efforts
-
Underlying NIGS[2]
Q4: €1.692bn, -7.5% Q4/Q4 (2017
underlying2: €7.123bn,
+8.9% 2017/2016)
-
Cost of credit risk down to 17 bp[3] compared
with 28 bp3 in Q4-16
* Crédit Agricole S.A. and Regional Banks at
100% |
Crédit Agricole S.A. |
Stated net income Group
share
Q4: €387m
+32.9% Q4/Q4
2017: €3.649bn
+3.1% 2017/2016 |
Stated revenues
Q4: €4.651bn
+1.6% Q4/Q4
2017: €18.634bn
+10.6% 2017/2016 |
Fully-loaded CET1 ratio
11.7%
(MTP target of 11%) |
-
Q4 results negatively impacted by the tax surcharge: -€336m "exceptional" corporate tax
expense, -€134m from the revaluation of deferred tax assets and
liabilities, €384m on NIGS[4]
-
Decision to neutralise the tax surcharge in the
dividend proposed to the Annual Shareholders'
Meeting: €0.63 per share
-
2017 stated NIGS higher
than 2016, which included Eureka gain for €1.27bn; improvement in
business lines' profitability despite the tax surcharge
-
Q4 underlying
NIGS2: €878m, -8.4% Q4/Q4 (20172: €3.925bn, +23.0% 2017/2016), EPS2: €1.22
-
Underlying revenues2
+5.4% Q4/Q4 (20172:
+7.2%), integration of Pioneer and organic growth
-
Underlying costs2 still well under control: +7.5%
Q4/Q4, +2.8% on a like-for-like basis[5],
cost/income ratio improvement of more than 2 pp2 , continued
investment in business development
-
Simplification of the Group
structure: Acquisition of the remaining 15% in CACEIS,
cancellation of the loyalty dividend
-
Underlying ROTE2 :
11.1%
|
Disclaimer
The financial
information for the fourth quarter and full-year 2017 for Crédit
Agricole S.A. and the Crédit Agricole Group comprises this press
release and the attached quarterly financial report and
presentation, available at
https://www.credit-agricole.com/en/finance/finance/financial-publications.
This press release 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 information was developed
from scenarios based on a number of economic assumptions for a
given competitive and regulatory environment. Therefore, these
assumptions are by nature subject to random factors that could
cause actual results to differ from projections.
Likewise, the financial statements
are based on estimates, particularly in calculating market value
and asset impairment.
Readers must take all these risk
factors and uncertainties into consideration before making their
own judgement.
The figures presented for the
nine-month period ending 30 September 2017 have been prepared in
accordance with IFRS as adopted in the European Union and
applicable at that date, and with prudential regulations currently
in force. This financial information does not constitute a set of
financial statements for an interim period as defined by IAS 34
"Interim Financial Reporting" and has not been audited.
Note: The scopes of consolidation
of groups Crédit Agricole S.A. and Crédit Agricole have not changed
materially since the registration with the French market watchdog
AMF of the 2016 Registration Document of Crédit Agricole S.A. on 21
March 2017 under the registration number D.17-0197 and the A.01
update of this 2016 Registration document including all regulatory
information about Crédit Agricole Group.
The sum of values contained in the
tables and analyses may differ slightly from the total reported due
to rounding.
Unlike publications for previous
quarters, the income statements contained in this press release
show non-controlling interests with a minus sign such that the line
item "net income Group share" is the mathematical addition of the
line item "net income" and the line item "non-controlling
interests".
On 1 January 2017, Calit was
transferred from Specialised financial services (Crédit
Agricole Leasing & Factoring) to Retail banking in Italy. No
pro forma has been made on historical data.
Since 1 July 2017,
Pioneer has been included in the scope of consolidation of
Crédit Agricole Group as a subsidiary of Amundi. No pro forma
has been made on historical data. Pioneer Investments integration
costs in both the first and second quarter have been restated in
specific items, contrary to the treatment applied in both
publications made previously. Underlying net income Group
share for those two quarters has been adjusted accordingly.
Since 26 September 2017, Banque
Saudi Fransi (BSF) has been excluded from the scope of
consolidation of Crédit Agricole Group further to the disposal of a
majority of the holding (16.2% out of the 31.1% held prior to
disposal). This subsidiary was consolidated using the equity
method. No pro forma has been made on historical data.
Since 21 December 2017, Cassa di
Risparmio (CR) di Cesena, CR di Rimini and CR di San Miniato have
been included in the scope of consolidation of Crédit Agricole
Group as subsidiaries of Crédit Agricole Italy. No pro forma has
been made on historical data.
This press
release comments on the results of Crédit Agricole S.A.
and those of Crédit Agricole Group, which comprises the
Crédit Agricole S.A. entities and the
Crédit Agricole Regional Banks, which own 56.6% of
Crédit Agricole S.A. Please see p. 18
(Crédit Agricole S.A.) and p. 19 (Crédit Agricole Group)
of this press release for details of specific items, which are
restated in the various indicators to calculate underlying results.
A reconciliation between the stated income statement and the
underlying income statement can be found on p. 23 onwards for
Crédit Agricole Group and on p. 20 onwards for
Crédit Agricole S.A.
Crédit Agricole Group
In 2017, Crédit
Agricole Group's net income Group share was
6.5 billion euros, up +35.5% on 2016. 2017 performance
was penalised in the fourth quarter by a tax surcharge (net impact
of 671 million euros, recorded as a specific item).
Adjusting for this expense and for other specific items in 2017,
underlying net income Group share amounted to
7.1 billion euros, an increase of +8.9% from 2016. This
includes six months of Pioneer, but also the consolidation losses
on Eurazeo and BSF following their disposal (partial in the case of
BSF) and deconsolidation. Excluding these scope effects, these
results reflect strong business momentum in the Group's various
components - retail banks, specialised businesses and the Large
customers business line - coupled with tight cost control enabling
the Group to invest in new business activities. The underlying
cost/income ratio stood at 63.4%. 2017 marks an important step
toward achieving the objectives of the Strategic Ambition 2020
medium-term plan (MTP): revenue synergies reached
8.2 billion euros (increase of +5%) and the Group
launched and implemented innovations to improve its customers'
digital experience as well as its range of products and services.
In addition to the scope changes already mentioned, the fourth
quarter also saw the finalisation of external growth operations
aimed at strengthening the business lines in a profitable way: the
three Italian banks, Natixis' 15% residual stake in CACEIS and the
private banking business of CM-CIC in Asia; the acquisition of
Banca Leonardo is expected to be finalised in the first half of
2018. These acquisitions were self-financed, and the financial
position remains very strong: at end-December, the fully-loaded
Common Equity Tier 1 ratio was 14.9%, among the best
in the sector and more than 5 percentage points above the
regulatory minimum.
In line with the "Strategic
Ambition 2020" medium-term plan (MTP), the Group's stable,
diversified and profitable business model drives healthy organic
growth in all its business lines, largely through synergies between
the specialised business lines and the retail networks, and ensures
a high level of operating efficiency while generating capacity to
invest in business development.
The fourth quarter saw
several major achievements under the "Strategic Ambition 2020"
plan:
-
On 21 December, Cariparma finalised the
acquisition of 95% of the capital of three savings
banks in Italy (Cassa di Rispamio (CR) di Cesena, CR Rimini and
CR San Miniato), which operate in regions bordering the Group's
core territories in Italy. This transaction increased the Group's
distribution capacity in Italy by about 20% (220 branches);
-
Crédit Agricole S.A. acquired Natixis'
15% residual stake in CACEIS,
Crédit Agricole's asset servicing subsidiary. This operation
gives the Group full control of a rapidly-growing business line,
helping improve its profitability;
It is important to underscore that
these operations only add to the long list of accomplishments made
in 2017 toward meeting the objectives of the Strategic Ambition
2020 plan.
-
The acquisition of Pioneer
Investments, finalised on 3 July, made Amundi-Pioneer the ninth
largest asset manager in the world and the largest in Europe, with
top ranking positions in France, Italy, Austria and Germany;
-
On 31 October, Indosuez Wealth Management signed
an agreement to acquire 67.67% of Banca
Leonardo; this company provides wealth management services and
has 5 billion euros in assets under management.
-
Insourcing by Crédit Agricole Assurances of
new creditor insurance business for the
Regional Banks began in September and will be completed in H1
2018; CNP will continue to co-insure 50% of in-force business until
extinction. The Insurance business line also continued to roll out
its group insurance offering;
-
Refocusing on core
businesses continued with the disposal of 16.2% of the Group's
31.1% stake in Banque Saudi Fransi (BSF), finalised on 26
September, and of the entire 15.4% stake in Eurazeo, finalised on
6 June. These operations reduced the Group's dependence on the
contributions of equity-accounted entities, advantageously replaced
by acquisitions of majority-controlled activities in line with the
Group's core business focus;
-
There was further growth in cross selling, with new instances of collaboration
among the Group's entities in the areas of consumer finance,
leasing, group insurance, home protection and security, employee
savings and group pensions, private equity funds, etc.;
-
According to D-Rating[6],
Crédit Agricole is ahead of all the other banking networks and
the majority of online-only banks when it comes to "digital performance", especially in digital fingerprint
identification and processing capacity. This is evidenced by
increased usage and reflected in the share of transactions that are
carried out online or in fully paperless format: 15% in the case of
the Regional Banks' home loans business, 27% in property and
casualty insurance and at least 20% of LCL's insurance and savings
sales;
-
Numerous innovations have
already been successfully launched, with more on the way: a new
account access solution with EKO by the Regional Banks, a 100%
digital factoring solution by CA Leasing & Factoring (Cash in
Time), a tool that helps farmers take out property and casualty
insurance by CA Assurances (GEOPLAN), a bank card rewards programme
by LCL (Avantages+, 615,000 customers, +120% in one year), a new
version of Cariparma's mobile app (Conto
Adesso) and more;
-
The Group also expanded its incubation initiatives (including Villages by CA),
launched new innovation investment funds (total allocation of
100 million euros) and developed new in-house innovation
labs (in-house start-up studio "La Fabrique by CA" and CA [CACD2],
a "digital hive");
-
Finally, projects were
undertaken to improve the Group's operational efficiency,
including "Save" (purchasing optimisation, targeted savings of
210 million euros), "Transforming Together" (savings
across the support functions of Crédit Agricole S.A.
(corporate entity), targeted savings of
300 million euros) and the creation of a joint IT
production entity for all of Crédit Agricole Group (targeted
savings of 185 million euros over five years).
In the fourth
quarter 2017, Credit Agricole Group's stated net income Group share came to 922 million euros versus
671 million euros in the
fourth quarter 2016.
This result includes a net
negative impact of -671 million euros from a tax
surcharge. This net impact is attributable to four elements
recorded as specific items:
-
The exceptional contribution
and additional contribution corporate tax surcharges introduced in
France in late 2017 and applied to the largest companies had
the effect of increasing Crédit Agricole Group's corporate tax rate
by 10 percentage points, with a financial impact of -343 million euros;
-
In addition, Crédit Agricole CIB may be obliged
to reallocate to clients the corporate tax
savings made as part of the tax consolidation of Crédit
Agricole Group owing to deficits on lease financing vehicles in
client investments; the impact of the exceptional corporate tax
increase for 2017 on this reallocation is estimated to be 39.9 million euros, bringing the total impact of the "surcharge" to
-383 million euros;
-
As a reminder, these contributions are meant to
mitigate the budgetary consequences of the refund of France's 3%
tax on dividend distributions, which companies had been paying
since 2012 and which was ruled unconstitutional in October 2017.
The Group is thus eligible for a refund of
+90 million euros (+79 million euros on net income Group
share) for dividends for Crédit Agricole S.A., Amundi and CACEIS
distributed between 2012 and 2017;
-
Finally, the planned corporate tax cuts in
legislation passed in France[7] and the
United States entail the revaluation of deferred
tax assets and liabilities in accordance with their provisional
maturity dates. This revaluation had a negative impact of -407 million euros on net income Group
share. It should be noted that this rate cut will have a favourable
effect on future annual tax expenses paid by the Group, at least in
France.
The balance of these four items is
negative, amounting to a -671-million-euro impact on
net income Group share. Given their non-recurring
nature, all these impacts were recorded as specific items in order
to better reflect the Group's underlying profitability.
This quarter, specific items[8] had a
negative impact of -770 million euros on stated
net income Group share, a result largely
attributable to the aforementioned tax impacts. Other items were
the penalty associated with the Check Image Exchange
(-98 million euros), integration costs for Pioneer and
the three Italian banks (57 million euros), issuer
spread (-62 million euros), goodwill impairment on the
Polish entities (222 million euros), as well as badwill
on the three Italian banks (+353 million euros) and other
less significant items (-13 million euros).
As a reminder, in
the fourth quarter of 2016, specific items had a negative
impact of -1,159 billion euros,
including the goodwill impairment of LCL
(-540 million euros), the revaluation of deferred tax
assets and liabilities at the new French corporate tax rate as
foreseen in the new finance law for 2020 (28%)
(453 million euros), the Cariparma adjustment plan
(-30 million euros) and recurring volatile accounting
items (including issuer spread for +52 million euros,
debt valuation adjustment (DVA) for -2 million euros, the
hedging of loan portfolios (-1 million euros) in the
Large Customers division and the home purchase savings provision
for -182 million euros).
Excluding these specific items,
underlying net income Group share was
1,692 million euros, a decrease of -7.5% compared with the same
quarter 2016.
Underlying
revenues were 8,235 million euros, an increase of
+1.6% relative to the fourth quarter of 2016.
This result was obtained despite the positive impact from the
integration of Pioneer, as this was more than offset by the decline
in the Regional Banks' revenues. At constant scope[9], revenues
were down -1.0% compared with the fourth quarter of 2016.
Underlying
operating expenses increased by +4.0% year-on-year in the
fourth quarter 2017, driven by the consolidation of
Pioneer coupled with investment in MTP projects, mainly for the
Regional Banks. On a like-for-like basis, the underlying expenses
rose by +1.3%9. The underlying cost/income ratio stood at 64.9%.
Cost of risk was
423 million euros, down -7.6% compared to the same period
of 2016. Cost of risk relative to outstandings[10]
improved significantly to 17 basis points versus 28 basis points in
the fourth quarter of 2016. This is substantially lower than the
Medium-Term Plan assumption of 35 basis points.
In €m |
Q4-17
stated |
Q4-16
stated |
Q4/Q4
stated |
Q4-17
underlying |
Q4-16
underlying |
Q4/Q4
underlying |
|
|
|
|
|
|
|
Revenues |
8,045 |
7,904 |
+1.8% |
8,235 |
8,109 |
+1.6% |
Operating expenses
excl.SRF |
(5,459) |
(5,187) |
+5.2% |
(5,342) |
(5,136) |
+4.0% |
SRF |
- |
- |
n.m. |
- |
- |
n.m. |
Gross operating income |
2,586 |
2,716 |
(4.8%) |
2,893 |
2,972 |
(2.7%) |
Cost of risk |
(423) |
(457) |
(7.6%) |
(423) |
(457) |
(7.6%) |
Cost of legal
risk |
- |
- |
n.m. |
- |
- |
n.m. |
Equity-accounted
entities |
49 |
111 |
(55.7%) |
68 |
111 |
(38.4%) |
Net income on other
assets |
5 |
(6) |
n.m. |
8 |
(6) |
n.m. |
Change in value of
goodwill |
186 |
(540) |
n.m. |
0 |
- |
n.m. |
Income before tax |
2,404 |
1,824 |
+31.8% |
2,547 |
2,620 |
(2.8%) |
Tax |
(1,294) |
(1,091) |
+18.7% |
(704) |
(724) |
(2.9%) |
Net income from
discont'd or held-for-sale ope. |
(23) |
20 |
n.m. |
(23) |
20 |
n.m. |
Net income |
1,087 |
753 |
+44.4% |
1,821 |
1,915 |
(4.9%) |
Non
controlling interests |
(165) |
(82) |
x
2 |
(129) |
(85) |
+51.5% |
Net income Group Share |
922 |
671 |
+37.4% |
1,692 |
1,830 |
(7.5%) |
Cost/Income ratio excl.SRF (%) |
67.9% |
65.6% |
+2.2 pp |
64.9% |
63.3% |
+1.5 pp |
In 2017,
underlying net income Group share[11] increased by +8.9% compared to 2016 thanks to a strong
performance in the first half (underlying net income Group
share up +27% versus the first half of 2016).
In €m |
2017
stated |
2016
stated |
2017/2016
stated |
2017
underlying |
2016
underlying |
2017/2016
underlying |
|
|
|
|
|
|
|
Revenues |
32,108 |
30,428 |
+5.5% |
32,315 |
31,600 |
+2.3% |
Operating expenses
excl.SRF |
(20,626) |
(19,944) |
+3.4% |
(20,450) |
(19,852) |
+3.0% |
SRF |
(285) |
(282) |
+1.2% |
(285) |
(282) |
+1.2% |
Gross operating income |
11,197 |
10,201 |
+9.8% |
11,580 |
11,465 |
+1.0% |
Cost of risk |
(1,536) |
(2,312) |
(33.6%) |
(1,536) |
(2,312) |
(33.6%) |
Cost of legal
risk |
(115) |
(100) |
+15.0% |
(115) |
(100) |
+15.0% |
Equity-accounted
entities |
732 |
499 |
+46.8% |
527 |
499 |
+5.7% |
Net income on other
assets |
5 |
(25) |
n.m. |
16 |
(25) |
n.m. |
Change in value of
goodwill |
186 |
(540) |
n.m. |
0 |
- |
n.m. |
Income before tax |
10,470 |
7,723 |
+35.6% |
10,472 |
9,527 |
+9.9% |
Tax |
(3,479) |
(2,582) |
+34.8% |
(2,912) |
(2,662) |
+9.4% |
Net income from
discont'd or held-for-sale ope. |
20 |
31 |
n.m. |
20 |
31 |
n.m. |
Net income |
7,010 |
5,172 |
+35.5% |
7,580 |
6,896 |
+9.9% |
Non
controlling interests |
(474) |
(347) |
+36.7% |
(457) |
(355) |
+28.4% |
Net income Group Share |
6,536 |
4,825 |
+35.5% |
7,123 |
6,541 |
+8.9% |
Cost/Income ratio excl.SRF (%) |
64.2% |
65.5% |
-1.3 pp |
63.3% |
62.8% |
+0.5 pp |
Underlying
revenues rose +2.3%, but on a like-for-like basis they were
stable[12].
Underlying operating expenses excluding SRF rose +3.0% (+1.6% on a
like-for-like basis) while cost of credit risk fell by -33.6%,
excluding the 115 million euros unallocated legal
provision charge recognised in the first and third quarters of 2017
(40 million euros and 75 million euros
respectively) versus 100 million euros in the second and
third quarters of 2016 (50 million euros
each).
In the
fourth quarter 2017, the Regional Banks enjoyed
sustained business momentum. The loan book increased by +6.3%
year-on-year at end-December, including +8.1% for home loans and
+9.0% for consumer finance (including +15.6% for the loan book
managed by CACF, which now represents 59% of total consumer finance
loans booked in the balance sheet of the Regional Banks).
Customer savings increased by +4.2% year-on-year, driven by demand
deposits (+13.4%). Life insurance assets under management increased
by +2.2%, but the proportion of unit-linked inflows rose by
+7 percentage points year-on-year to 25.1% in the
fourth quarter 2017. Lastly, the number of property and
personal insurance contracts increased by +6.7% compared to
end-December 2016, of which +8.1% in comprehensive
household.
This commercial performance made a
significant contribution to growth in Credit Agricole S.A.'s
business lines, whose products are distributed by the
Regional Banks as the Group's leading distribution channel and
leading retail bank in France.
The contribution of the Regional
Banks to Crédit Agricole Group's underlying
net income Group share came to 764 million euros, a decrease of -15.2%
compared with the fourth quarter 2016. Underlying
revenues, which declined -2.9% compared to the fourth quarter of
2016, amounted to 3,364 million euros. Fee income was
strong and stable year-on-year. By contrast, low interest rates in
the fourth quarter put pressure on the interest margin, which
remained contracted. Underlying costs excluding the contribution to
the Single Resolution Fund (SRF) were near-stable (-0.3%) at
2,153 million euros, a result obtained despite
investments in IT (regulatory requirements, digital transformation)
and the branch refurbishment programme scheduled in the MTP.
Unlike in previous quarters, cost
of risk rose. However, this rise is relative to a very low level
recorded in the fourth quarter in 2016, and cost of risk
nonetheless remained quite low at 86 million euros.
Furthermore, overall cost of risk fell for the year, amounting to
18 basis points.
In 2017, the
Regional Banks contributed 3,075 million euros, a decrease of -4.6% due
mainly to the costs and loss of revenue related to the Eureka
operation, which did not impact results before their implementation
date on 3 August 2016. Thus, underlying revenues fell by
-3.7% to 13,313 million euros, while underlying costs
excluding the SRF contribution rose in connection with the IT
investments scheduled under the MTP. Meanwhile, cost of risk
dropped sharply (-64.8%) to 218 million euros, which
amounts to 5 basis points over the second half of the year,
annualised.
The performance
of the other Credit Agricole Group business lines is described in
detail in the section of this press release on Credit Agricole
S.A.
In the quarter,
Crédit Agricole Group's financial solidity remained
robust, with a fully-loaded CET1 ratio of
14.9%. This result was stable relative to the end of September
2017, despite the acquisitions of the three Italian banks and the
private banking business of CM-CIC in Asia. The ratio provides a
substantial buffer (540 basis points) above the
distribution restriction trigger applicable to Credit Agricole
Group as of 1 January 2019, confirmed in December 2017 at 9.5% by
the ECB.
The TLAC ratio stood at 20.6% at
31 December 2017, excluding eligible senior preferred debt. It
is unchanged from 30 September 2017 and compares with a ratio of
20.3% at the end of December 2016, excluding eligible senior
preferred debt. It exceeds the minimum requirement of 19.5% from
2019, which can include up to 2.5% of eligible senior preferred
debt. In 2017, the Group issued the equivalent of
6.2 billion euros in senior non-preferred debt. The TLAC
ratio target of 22% by 2019, excluding eligible senior preferred
debt, is confirmed. To meet this target, in a context of strong
credit activity in France in 2016 and 2017, which is likely to
continue into 2019, the Group may adjust the TLAC
issuance programme by 2 to 3 billion euros cumulative
over the two years 2018 and 2019.
The phased-in leverage ratio came
to 5.6%, stable compared with end-September 2017.
Credit Agricole Group's
liquidity position is solid. Its banking cash balance sheet, at
1,148 billion euros at 31 December 2017, showed a surplus
of stable resources over long term applications of
122 billion euros, up +1 billion euros compared
with end-September 2017 and +11 billion euros over the
year. The surplus exceeded the MTP target of over
100 billion euros. The surplus of stable resources
finances the HQLA (High Quality Liquid Assets) securities portfolio
generated by the LCR (Liquidity Coverage Ratio) requirement for
customer and customer-related activities. Liquidity reserves, at
market value and after haircuts, amounted to
248 billion euros at 31 December 2017. Short-term debt
net of Central Bank deposits (24 billion euros) was
covered more than four times by HQLA securities
(113 billion euros). The Group's average LCR ratio over
twelve months stood at 133% at end-December 2017, above the
Medium-Term Plan target of over 110%.
Over the course of 2017, Crédit
Agricole Group issuers raised the equivalent of
36.1 billion euros of medium-to long term debt, of which
46% was issued by Crédit Agricole S.A. (the equivalent of
16.6 billion euros), compared to
33.1 billion euros equivalent raised over 2016. Besides,
3.4 billion euros were also placed in Crédit Agricole
Group's retail networks (Regional Banks, LCL, CA Italia).
As regards the implementation of
IFRS9 as from 1 January 2018, the
negative impact of -30 basis points on
Crédit Agricole S.A.'s fully-loaded CET1 ratio,
disclosed in March 2016 along with the
Medium Term Plan, is confirmed, corresponding to a First
Time Application (FTA) impact of approximately
-1.2 billion euros at 1 January 2018. The
impact for Crédit Agricole Group will be similar, at
approximately -30 basis points or
-1.4 billion euros in FTA impact. The impact on the TLAC
ratio is expected to be -24 basis points.
CA Assurances (insurance business line) will adopt IFRS9 as
from 1 January 2018, and will apply the "Overlay" method
to align the profit and loss impact with IAS39 rules, so as to
ensure a better comparison with its peer insurers. The full
financial statements under IFRS9 will be disclosed along with the
first quarter 2018 earnings, full FTA details along with second
quarter earnings.
* *
*
Dominique Lefebvre, Chairman of
SAS Rue La Boétie and Chairman of Credit Agricole S.A.'s
Board of Directors, commented: "The Crédit Agricole Group, with the quality of its results,
once again demonstrates the relevance of its business model, which
knows how to take advantage of its unity, but also the diversity of
its skills at the service of its customers and the financing of the
economy which it is the leader in France."
Crédit Agricole S.A. Q4 results hampered by a one-off tax surcharge
in France
-
Exceptional corporate tax rate in France: 44.43%
instead of 34.43%, resulting in an additional corporate tax expense
of -336 million euros
-
Stated NIGS up +32,9% Q4/Q4, underlying
NIGS[13] down
(-8.4% Q4/Q4) but +3.8% before taxes
-
Continued strong business momentum, very low
cost of credit risk, effective cost control
-
2017: excellent results driven by strong
operational growth underlying NIGS of
3,925 billion euros, up +23.0% 2017/2016
-
Improvement in underlying ROTE: 11.1% in 2017,
+2.3 percentage points 2017/2016, and in the underlying
cost/income ratio: 62.8%, -2.1 percentage points 2017/2016
Dividend of €0.63 per share proposed to the Annual Shareholders'
Meeting: decision to neutralise the tax surcharge in the
calculation
Finalisation of targeted external growth operations and continued
simplification of the Group's structure in Q4
-
Finalisation of the acquisition and initial
contribution of 95% of the capital of three Italian banks: CET1
impact of -10 basis points
-
Acquisition of the remaining 15% in CACEIS: CET1
impact of -9 basis points
-
Cancellation of the loyalty dividend as of 2018
results[16]
Further improvement in financial solidity
-
Fully-loaded CET1 ratio: 11.7%, impact of
acquisitions (-20 basis points)
-
Confirmation by the ECB of the CET1
SREP[17] of Crédit
Agricole Group: 9.5% and of Crédit Agricole S.A.: 8.5%, MTP target
of 11% for CASA reaffirmed
Crédit Agricole S.A.'s
Board of Directors, chaired by Dominique Lefebvre, met on 13
February 2018 to examine the financial statements for the
fourth quarter and full year 2017.
In the
fourth quarter 2017, stated net income Group share for
the business line was 387 million euros versus
291 million euros in the fourth quarter 2016.
The results for the fourth quarter of 2017 were penalised by a high
tax burden in connection to changes in tax rules in France and, to
a lesser extent, the United States (see section above on Crédit
Agricole Group). These factors had a negative impact of
-384 million euros on net income Group share. The impacts
of these changes were recorded under specific items. Specific items
were quite significant this quarter; that was also true (albeit to
a lesser degree) of the same period of 2016.
Specific
items[18] in the
fourth quarter had a net impact of -490 million euros on net income Group share,
including a -384-million-euro impact attributable to tax
adjustments: -326 million euros from the exceptional
surcharge in France, -128 million euros from the
adjustment of future tax rates in France and the United States, but
also a +69 million euros impact from the refund of
France's 3% tax on dividend distributions. The quarter also saw the
recognition of negative goodwill linked to the consolidation of the
three Italian banks for +312 million euros
(408 million euros before non-controlling interests) and
full goodwill impairment on the Polish entities, reflecting
slower-than-expected profitability from the deployment of the
retail banking model due to fierce competition on an attractive
market and the recent tightening of the regulatory environment and
interest rates, for -222 million euros. Other specific
items recorded for the quarter include the integration costs of
Pioneer and the three Italian banks (total impact of
-54 million euros on
net income Group share), the impact of changes in
the issuer spread (-62 million euros), the penalty
associated with the Check Image Exchange
(58 million euros) and changes in provisions for home
purchase savings plans (+3 million euros), with
miscellaneous items comprising the rest
(-25 million euros). In the fourth
quarter of 2016, specific items had an impact of
-667 million euros on
net income Group share, mainly comprising the
goodwill impairment of LCL (-491 million euros).
Excluding these specific items,
underlying net income Group share for the
fourth quarter 2017 came to 878 million euros, a decrease of -8.4% compared
with the fourth quarter 2016. As in the third
quarter, this decrease stemmed mainly from the return to a more
normal effective tax rate, which rose from 25.2% in the fourth
quarter of 2016 to 28.9% in the fourth quarter of 2017 (excluding
the impacts of the aforementioned specific items). The resulting
increase in the tax charge (+24.4% versus the fourth quarter of
2016) more than offset the decrease in credit risk provisions
(-15.1% versus the fourth quarter of 2016) and the slight increase
in gross operating income (+1.6%). It should be noted that the
contribution of equity-accounted entities fell significantly due to
the disposal of the 15.4% stake in Eurazeo (June 2017) and the
deconsolidation of BSF following the sale of a 16.2% interest
(September 2017).
In €m |
Q4-17
stated |
Q4-16
stated |
Q4/Q4
stated |
Q4-17
underlying |
Q4-16
underlying |
Q4/Q4
underlying |
|
|
|
|
|
|
|
Revenues |
4,651 |
4,579 |
+1.6% |
4,810 |
4,563 |
+5.4% |
Operating expenses
excl.SRF |
(3,268) |
(2,981) |
+9.6% |
(3,150) |
(2,930) |
+7.5% |
SRF |
- |
- |
n.m. |
- |
- |
n.m. |
Gross operating income |
1,384 |
1,598 |
(13.4%) |
1,659 |
1,633 |
+1.6% |
Cost of risk |
(335) |
(395) |
(15.1%) |
(335) |
(395) |
(15.1%) |
Cost of legal
risk |
- |
- |
n.m. |
- |
- |
n.m. |
Equity-accounted
entities |
50 |
125 |
(59.9%) |
69 |
125 |
(44.6%) |
Net income on other
assets |
13 |
(6) |
n.m. |
16 |
(6) |
n.m. |
Change in value of
goodwill |
186 |
(491) |
n.m. |
0 |
- |
n.m. |
Income before tax |
1,299 |
832 |
+56.2% |
1,410 |
1,358 |
+3.8% |
Tax |
(703) |
(461) |
+52.4% |
(387) |
(311) |
+24.4% |
Net income from
discont'd or held-for-sale ope. |
(23) |
20 |
n.m. |
(23) |
20 |
n.m. |
Net income |
573 |
390 |
+46.8% |
1,000 |
1,066 |
(6.2%) |
Non controlling
interests |
(186) |
(99) |
+87.6% |
(123) |
(108) |
+13.2% |
Net income Group Share |
387 |
291 |
+32.9% |
878 |
958 |
(8.4%) |
Earnings per share (€) |
0.09 |
0.06 |
+62.2% |
0.26 |
0.30 |
(12.0%) |
Cost/Income ratio excl.SRF (%) |
70.2% |
65.1% |
+5.1 pp |
65.5% |
64.2% |
+1.3 pp |
Underlying
earnings per share came to 0.26 euros, down -13.2% compared with the fourth quarter 2016,
in line with the decrease in
attributable net income Group share (after
deduction of AT1 coupons, that are directly charged to the net
equity Group share, but are deducted for the calculation of the
earnings per share, see page 26).
Business momentum
remained strong in all Crédit Agricole S.A.'s business
lines and distribution networks, as well as the
Regional Banks which distribute the products of its
specialised business lines. The acceleration of the economic
recovery has led to improved demand for corporate credit and strong
savings flows in the countries where the Group is active. These
trends have been amplified by cross selling in line with the
customer-focused universal banking model, a core component of the
"Strategic Ambition 2020" plan.
Like the rest of the year,
business activity this quarter was strong
across all the business lines:
-
Insurance recorded 12.7
million property & casualty contracts, an
increase of 683,000 net of terminations (+5.6% year-on-year).
Revenue from property & casualty insurance rose +4.8%
year-on-year in the fourth quarter. In life
insurance, net inflows amounted to +1.1 billion euros
in the fourth quarter of 2017, with 1.0 billion euros
attributable to unit-linked (UL) inflows. Unit-linked accounts
represented 21.4% of savings and retirement outstandings, an
increase of +1.9 percentage points year-on-year;
-
In Asset Management
(Amundi), assets under management rose to 1.426 trillion euros,
an increase of +31.7% relative to the end of 2016 (+7.3% on a
like-for-like basis[19]). This
result can be attributed to a positive market effect and, most
importantly, strong net inflows of +73.1 billion euros
over the year, including the six-month contribution by Pioneer
(+70.6 billion euros using combined approach),
+13.1 billion euros in the fourth quarter, driven by the
Retail segment (+50.3 billion euros in 2017,
+14.2 billion euros in Q4) and medium/long-term assets
(36.2 billion euros in 2017,
+10.4 billion euros in Q4);
-
The Retail Banking in
France and Italy posted strong momentum in credit and inflows. The
quarter saw a slowdown in real estate lending offset by lending to
businesses and strong consumer credit production. Loans outstanding
for LCL rose +8.4% year-on-year (including
+7.4% for home loans, +11.7% for business loans). The total number
of property & casualty insurance contracts increased by +7%
year-on-year, while the market penetration of non-life insurance
rose by 2 percentage points in two years. Retail
Banking in Italy continued to outperform the local market in
home loans (+9.4%[20] versus
+2.2%), while off-balance sheet customer assets grew by +5.7%20
over one year;
-
Specialised Financial
Services saw +6.9% growth in the managed loan book in consumer
finance compared to 31 December 2016 (+10.5 billion euros
of new managed business in the fourth quarter, with the Regional
Banks driving much of the performance in December),
+4.4%[21] in new
leasing business thanks to excellent levels of new lending in
Poland and in renewable energies in the fourth quarter, and a +9.0%
increase in factored turnover in the fourth quarter of 2016;
-
The Large Customers business
line continued its heightened selectivity policy toward
financing amidst growing pressure on lending conditions in favour
of borrowers while expanding its development on the credit market:
Crédit Agricole CIB remains the world leader in green financing
(green bonds), all currencies combined[22], and was
second in 2017 in bonds issued by public agencies in
euros[23]. Financing Activities ranked second in the world in
syndicated loans in Europe, the Middle East and Africa (EMEA) in
2017[24]. Lastly,
illustrating its Distribute to Originate risk distribution policy,
Crédit Agricole CIB's average primary syndication rate in the
twelve months to end-December 2017 was 39%,
+4 percentage points more than in the twelve months to 31
December 2016 and +12 percentage points more than in
2013, when the policy was first introduced. In Asset servicing (CACEIS), assets under custody
increased by +5.3% and assets under administration by
+12.4% compared with end-December 2016.
Thanks to this dynamic performance
and the integration of Pioneer, underlying
revenues rose +5.4% compared to the fourth quarter
of 2016, or +0.7%/+34 million euros
on a like-for-like basis[25]. The
quarterly growth results were impacted by three items that
influenced the basis of comparison: (i) the initial consolidation
of what was formerly a loss-making subsidiary[26]
within the Corporate Centre, which had a non-recurring impact of
-23 million euros on revenues (but no impact net income
Group share) for the quarter, (ii) the sharp decline
(-30 million euros) in renegotiation fees and prepayment
fees for LCL and (iii) the decision not to offset the cost
associated with deferred tax assets in insurance revenues, unlike
in the fourth quarter of 2016 (the expense was
80 million euros; insurance revenues fell by
-23 million euros between the two periods). Nonetheless,
underlying revenues grew considerably for Asset Management (+12.0%
on a like-for-like basis25 compared with the fourth quarter
of 2016), boosted by an increase in assets under management
and strong results in performance fees and financial income, and
for the Large Customers business line (+4.9%) thanks to strong
growth in Asset Servicing (+14%) and the recovery in Commercial
Banking (11% despite low volatility on the interest rate/forex
markets; increase of only 1% in Capital Markets).
Underlying
operating expenses increased by +7.5%
year-on-year in the fourth quarter and by +2.8%/85 million euros on a like-for-like
basis25. This increase (in underlying
terms, so excluding the integration costs for Pioneer and the three
Italian banks) is attributable to non-recurring IT depreciation
expenses in the Insurance business (32 million euros) and
investments in business and digital development in various business
lines. A significant share of these investments is financed through
cost savings programmes in line with the Strategic Ambition 2020
plan. Thus, despite these investments, many of the business lines
have some of the best underlying cost/income ratios in their
sectors: 33.1% for Insurance, 52.9% for Amundi, 51.2% for SFS,
53.4% for BFI and 76.3% for Asset Servicing.
The underlying
cost/income ratio excluding SRF was 65.5%.
Cost of risk fell
-15.1% (-60 million euros) to
335 million euros, compared to
395 million euros in the fourth quarter of 2016. This
decrease was entirely attributable to the financing business of the
Large Customers business line (-66.5%/-59 million euros
compared to the fourth quarter of 2016). The other business
lines were stable overall, with the exception of Consumer Finance,
which dropped -18.6%/-20 million euros compared to the
same period of 2016.
Cost of risk
relative to outstandings amounted to 29 basis points[27], in line the past year's trend of consecutive quarterly
declines (-12 basis points compared to the same quarter of
the previous year, -2 basis points versus the preceding quarter)
and still below the Medium-Term Plan assumption of
50 basis points.
The underlying contribution from
equity-accounted entities was down -44.6%
(-56 million euros) to 69 million euros,
reflecting the loss of the Eurazeo contribution
(33 million euros in the fourth quarter of 2016)
following its disposal in the second quarter of 2017, and the
deconsolidation in the third quarter of 2017 of the Group's
interest in BSF following its partial disposal (decrease from 31.1%
to 14.9%), amounting to 29 million euros in the fourth
quarter of 2016. The contribution from other equity-accounted
entities is growing, especially Amundi's joint ventures in Asia and
consumer loan partnerships with Fiat-Chrysler and Chinese
automobile maker GAC.
Underlying
pre-tax income before discontinued operations and non-controlling
interests increased by +3.8% to 1,410 million euros.
The underlying effective tax rate was 28.9% versus 25.2% in the
fourth quarter of 2016, which had benefited from a reduced rate of
tax on several transactions during the quarter, particularly for
Consumer Finance and Asset Servicing. This rate is significantly
lower than the standard corporate income tax rate in France due to
the generation of earnings in countries with a lower tax rate and
to the tax credit available on Additional Tier 1 debt instruments
(interest payments are deducted directly from equity, for
-136 million euros in the fourth quarter),
representing an impact of -2.5 percentage points on the
underlying effective tax rate. The underlying tax
charge was therefore up +24.4%
year-on-year in the fourth quarter, to
387 million euros.
Net income attributable to
non-controlling interests was up
significantly, by +13.2% to 123 million euros, due to the
decrease in the Group's interest in Amundi to 68.5% as of the
second quarter of 2017 versus 74.1% in the fourth quarter of 2016
and up to and including the first quarter of 2017, but also this
quarter due to the consolidation of Pioneer Investments, which
contributed to the +65.2% growth in Amundi's net income at 100%.
Net income for Amundi attributable to non-controlling interests
rose by 39 million euros. If excluding Amundi, there
would be a decline for non-controlling interests due to the initial
consolidation, within the Corporate Centre, of Fireca, a
loss-making subsidiary 50% owned by Crédit Agricole S.A.[28].
Consequently, underlying net income Group share came to 878 million euros, a decrease of -8.4% compared with the
fourth quarter 2016.
For 2017 as a
whole, stated net income Group share totalled 3,649 million euros. This result amounts to a
+3.1% increase over the 3,541 million euros recorded for
2016, even though the 1,272 million euro gain on the Eureka
operation had been recorded that year. Strong organic growth by the
businesses, and, to a lesser extent, the integration of Pioneer
Investments were therefore able to offset, in one year, the
non-recurrence of this gain in stated net income Group share:
In 2017, specific
items[29]
had a negative impact on net income Group
share of -276 million euros. In
addition to the specific items of the fourth quarter mentioned
above, the most significant specific items were the gains on
disposal of the Group's interest in Eurazeo
(+103 million euros) in the second quarter and BSF in the
third quarter (+99 million euros). The other specific
items saw their effects offset relative to the fourth quarter, most
notably issuer spread (-131 million euros on net income
Group share), the debt value adjustment
(42 million euros) and loan portfolio hedges
(-36 million euros).
In 2016, specific items had an impact
on net income Group share of +351 million euros, and in particular
comprised the aforementioned Eureka gain
(1,272 million euros), the Visa Europe capital gain
(+327 million euros), the dividends earned from the
Regional Banks prior to the disposal of the interest in their share
capital as part of the Eureka operation
(+285 million euros), the goodwill impairment of LCL
(491 million euros), considerations on debt repayment
operations (-448 million euros) and macro-hedging
adjustments for LCL (-187 million euros), the revaluation
of deferred tax assets in accordance with French finance law
(-160 million euros) and other miscellaneous items for a
total of -247 million euros (see table in Appendix
p. 18).
Excluding these specific items,
underlying net income Group share came to
3,925 million euros, an increase of +23.0% compared
with 2016.
Underlying ROTE
(return on tangible equity) amounted to 11.1%,
which is above the Medium-Term Plan's 11% target for 2019.
Underlying
earnings per share came to 1.22 euro, an increase of +26.8% compared with 2016.
In €m |
2017
stated |
2016
stated |
2017/2016
stated |
2017
underlying |
2016
underlying |
2017/2016
underlying |
|
|
|
|
|
|
|
Revenues |
18,634 |
16,855 |
+10.6% |
18,772 |
17,506 |
+7.2% |
Operating expenses
excl.SRF |
(11,961) |
(11,454) |
+4.4% |
(11,785) |
(11,362) |
+3.7% |
SRF |
(242) |
(241) |
+0.5% |
(242) |
(241) |
+0.5% |
Gross operating income |
6,431 |
5,160 |
+24.6% |
6,745 |
5,904 |
+14.3% |
Cost of risk |
(1,307) |
(1,687) |
(22.5%) |
(1,307) |
(1,687) |
(22.5%) |
Cost of legal
risk |
(115) |
(100) |
+15.0% |
(115) |
(100) |
+15.0% |
Equity-accounted
entities |
728 |
518 |
+40.4% |
523 |
518 |
+0.9% |
Net income on other
assets |
6 |
(52) |
n.m. |
14 |
(52) |
n.m. |
Change in
value of goodwill |
186 |
(491) |
n.m. |
0 |
- |
n.m. |
Income before tax |
5,929 |
3,348 |
+77.1% |
5,859 |
4,583 |
+27.9% |
Tax |
(1,733) |
(695) |
x
2.5 |
(1,433) |
(989) |
+44.8% |
Net income from
discont'd or held-for-sale ope. |
20 |
1,303 |
n.m. |
20 |
31 |
n.m. |
Net income |
4,216 |
3,956 |
+6.6% |
4,447 |
3,624 |
+22.7% |
Non controlling
interests |
(568) |
(415) |
+36.6% |
(521) |
(434) |
+20.0% |
Net income Group Share |
3,649 |
3,541 |
+3.1% |
3,925 |
3,190 |
+23.0% |
Earnings per share (€) |
1.12 |
1.12 |
+0.3% |
1.22 |
0.99 |
+23.0% |
Cost/Income ratio excl.SRF (%) |
64.2% |
68.0% |
-3.8 pp |
62.8% |
64.9% |
-2.1 pp |
The various aggregates in the
underlying income statement illustrate excellent momentum in
business activity, operational efficiency and risk management and
control: a significant rise in revenues (+7.2% versus 2016),
effective cost control (+3.7% excluding SRF) and a significant drop
in cost of credit risk (-22.5%), slightly offset by higher legal
provisions (115 million euros versus
100 million euros in 2016) and a higher effective tax
rate (from 24.3% in 2016 to 26.8% in 2017). As in the fourth
quarter, the tax credit on Additional Tier 1 coupons decreased the
effective tax rate by 3 points (4 points in 2016).
Underlying
revenues were 18,772 million euros, a year-on-year
increase of +7.2% or +4.8% like-for-like[30]. All the
divisions contributed to the increase except Retail Banking, which
continued to be affected by the low interest rate environment and
the impacts of the devaluation of the Egyptian pound on the local
subsidiary's revenues. Particularly strong performance was recorded
in Asset Gathering (following the integration of Pioneer
Investments and organic growth in Asset Management), Large
Customers and the Corporate Centre, thanks to the Eureka impact and
a decrease in funding costs.
Underlying
operating expenses were up slightly to
11,785 million euros or +3.7%, excluding the SRF
contribution, which remained relatively stable (+0.5% to
242 million euros). On a constant scope30, operating
expenses excluding SRF increased by only +1.3%, reflecting
excellent cost control. All business contributed to this cost
control. The most substantial jaws effect[31] came from
LCL (+2.5 percentage points excluding SRF), Specialised
financial services (+1.2 percentage points excluding
SRF), and Large customers (+1.6 percentage points
excluding SRF), particularly Asset financing
(+4.2 percentage points excluding SRF).
The underlying
cost/income ratio excluding SRF improved by 2.1
percentage points to 62.8% compared with 2016.
Lastly, cost of
credit risk excluding unallocated legal provisions fell by
-22.5% to 1,307 million euros versus
1,687 million euros in 2016 (or
-380 million euros). As in the fourth quarter, the
main contributor to the improvement was the Large customers
division (-55.5% or -254 million euros) and Specialised
financial services (-21.1% or -118 million euros). At
LCL, cost of credit risk increased by +12.1%
(+22 million euros to 204 million euros),
mainly due to non-recurring reversals in the
first quarter 2016 which lowered the base for comparison,
and the provisions in the third quarter 2017 related to
Hurricane Irma, but the cost of risk nonetheless remains very low
in this business line. In Retail Banking in Italy, provisions
increased slightly due to the transfer of Calit's contribution as
of 1 January 2017 and the subsidiary's significant third quarter
credit losses. The impaired loans ratio of IRB-Italy (excluding
Calit) was down -1.6 percentage points to 11.5%[32]
(versus 13.1% at end-December 2016 and 12.4% at
end-September 2017) thanks to the improvement of the portfolio
and the integration of the three Italian banks, for which the
impaired loans ratio was under 10% further to the disposal of
3 billion euros of impaired loans ahead of the
acquisition. The coverage ratio also improved, reaching 50.1%32
(versus 46.5% at end-December 2016 and 48% at end-September
2017).
Crédit Agricole S.A.'s solvency
situation remained solid at the end of December 2017, with a
fully-loaded CET1 ratio of 11.7%, a decrease
of -30 basis points from 30 September 2017, which is attributable
to the integration of the three Italian banks and the private
banking business of CM-CIC in Asia, with a net impact of
-18 basis points. In view of the decision not to include the
tax surcharge in the dividend calculation, net income (excluding
negative goodwill on the three Italian banks, included in the
impact of this operation) allocated to retained earnings net of the
dividend proposed to the Annual Shareholders' Meeting and
Additional Tier 1 interest payments contributed negatively to the
ratio's performance in the fourth quarter (-5 basis points); the
other items had a net negative impact of -9 basis points.
Risk-weighted assets totalled 296 billion euros at
end-December 2017, compared to 301 billion euros at
end-December 2016 and 293 billion euros at end-September,
with the growth in the fourth quarter mostly attributable to the
integration of the three Italian banks
(+4.1 billion euros).
The phased-in leverage ratio was 4.4% at
end-December 2017 as defined in the Delegated Act adopted by the
European Commission.
Crédit Agricole S.A.'s
average LCR ratio over twelve months stood at
137% at end-December 2017, above the Medium-Term Plan target of
over 110%.
At the end of
2017, Credit Agricole S.A. had completed 104%
of its medium- to long term market funding programme of
16 billion euros for the year:
16.6 billion euros equivalent were raised on the
markets, of which 10.4 billion euros equivalent of senior
preferred debt and of senior secured debt, as well as
6.2 billion euros equivalent of senior
non-preferred debt. The MLT market funding programme is set at
12 billion euros, including 4 to
5 billion euros of Tier 2 or senior non-preferred debt.
At 31 January 2018, 20% of this programme was completed,
including the issuance at end-January of 1.25 billion USD
of Tier 2 instrument.
In view of this financial
strength, the Board of Directors decided not to include the tax
surcharge that impacted the fourth quarter's results and to shield
shareholders from this expense by offering the Annual Shareholders'
Meeting a dividend of 0.63 euro per share, entailing a 56% payout
ratio on stated attributable net income Group share, which is
significantly higher than the 50% target payout ratio in the
Medium-Term Plan.
* *
*
Philippe Brassac, Chief Executive
Officer, commented: "In 2017, Crédit Agricole S.A.
demonstrated a real ability to innovate to serve its customers by
investing in its digital transformation and the development of its
businesses while maintaining a high level of operational
efficiency: revenues increased, at constant scope, at twice the
rate expected by the 2020 Strategic Ambition Plan, the cost /
income ratio improved by more than two points, and the return on
tangible capital exceeded 11%."
Compensation for shareholders eligible for the loyalty dividend
On 20 December 2017, Crédit
Agricole S.A. announced it would submit a proposal to the General
Meeting of Shareholders to be held on 16 May 2018 to remove the
loyalty dividend clause from its articles of association.
The European Banking Authority
(EBA) has ruled that the payment of a loyalty dividend constitutes
a "preferential distribution" in breach of the Capital Requirements
Regulation (CRR). This ruling has been upheld by the European
Central Bank (ECB).
To compensate beneficiaries,
Crédit Agricole S.A. will award eligible shareholders one new
ordinary share for 26 registered shares entitled to a loyalty
dividend in respect of the 2017 fiscal year*. Given the weighted
average price of the Crédit Agricole SA share observed over a
60-day trading period completed on the evening of 12 February 2018
(€ 14.55), the value of the compensation amounts to approximately
56 cents per share.
The compensation amount was
determined in an independent appraisal by Ledouble, which
calculated the amount payable to compensate eligible shareholders
for the removal of the loyalty dividend based on three main
factors: projected future dividends, the estimated average holding
period of loyalty shares, and discounted cash flows. At its meeting
on 13 February, the Board of Directors set the compensation amount
within the price range proposed by Ledouble at between €0.45 and
€0.63 in order to achieve a balance between the interests of
eligible shareholders and other shareholders.
The removal of the loyalty
dividend clause and the terms of compensation for beneficiaries is
subject to approval by a special meeting of eligible shareholders
that will be held on 4 April 2018 and by the Extraordinary Annual
General Meeting to be held on 16 May 2018.
* Only Crédit
Agricole SA shares held in registered form continuously from 31
December 2015 through to the dividend payment date for the 2017
financial year are eligible for the loyalty dividend for
2017.
Corporate social responsibility
Climate
commitments
Two years after the Paris
Agreement on climate change, Crédit Agricole Group has decided to
extend and clarify the commitments it made in 2015 on the sidelines
of the COP21 by increasing green financing, including climate
issues in risk assessments, excluding hydrocarbons that cause the
most damage to the environment and offsetting its entire direct
carbon footprint until 2040:
-
To arrange 100 billion euros in green
financing around the world by 2020. Crédit Agricole is extending
the commitment it made at the COP21 to arrange
60 billion euros in green financing by 2018.
-
With the Regional Banks and LCL, to finance one
in three renewable energy and energy efficiency projects in France
by 2020. With this measure, Crédit Agricole intends to double
financing for renewable energies in France.
-
To take into account climate issues in our risk
assessments of large clients and their projects, as of the end of
2017. We will gradually extend this process to other client
categories.
-
To exclude the least energy efficient
hydrocarbons and those that pose the greatest threat to the
environment, because these are incompatible with the goal of
combating climate change and they represent an economic risk for
investors. This means turning down projects and companies that do
the majority of their business in:
- Oil sands production,
- Oil extracted from the Arctic
region (off-shore and on-shore production),
- Shale gas or oil production
involving excessive flaring or venting,
- Infrastructure projects mainly
intended for schemes covered by the exclusion criteria set out
above,
FReD
Index
Crédit Agricole S.A. publishes the
results of its "FReD Index", which measures the yearly progress
made by Crédit Agricole S.A. Group across a wide range of
CSR-related actions (around 180). The 2017 index reading was 1.7
and was audited by PricewaterhouseCoopers, compared to a target of
1.5. Fifteen entities have joined the FReD initiative, including
three International Retail Banking subsidiaries.
Leveraging the FReD equity
portfolios and all of the other initiatives established as part of
its CSR policy, Crédit Agricole S.A. is moving forward in
overall ISR performance. In 2017, it reaffirmed its place on the
major international ISR indexes: NYSE Euronext Vigeo Eiris France
20, Europe 120, Eurozone 120 and World 120, FTSE4Good, ESG STOXX
Leaders (best rated bank by Sustainalytics) and Oekom Prime. Crédit
Agricole S.A. was also among the best-rated French banks in 2017 by
CDP (Carbon Disclosure Project) and MSCI (Morgan Stanley Capital
International) ESG Ratings.
Ethics
Charter
In May 2017, Crédit Agricole Group
distributed its Ethics Charter to all the Group's entities: the
Regional banks, Fédération Nationale du Crédit Agricole, Crédit
Agricole S.A. and its subsidiaries. The Ethics Charter lays down
the standards to follow in terms of actions and behaviour in our
everyday interactions with clients, managers, directors, employees,
suppliers, society at large and all of our stakeholders.
Appendix 1 - Specific items, Crédit Agricole S.A. and
Crédit Agricole Group
|
|
Q4-17 |
Q4-16 |
|
2017 |
2016 |
En €m |
|
Gross
impact* |
Impact on NIGS |
Gross
impact* |
Impact on NIGS |
|
Gross
impact* |
Impact on NIGS |
Gross
impact* |
Impact on NIGS |
Issuer
spreads (CC) |
|
(95) |
(62) |
103 |
66 |
|
(216) |
(131) |
(139) |
(84) |
DVA
(LC) |
|
(5) |
(4) |
(3) |
(2) |
|
(66) |
(42) |
(38) |
(24) |
Loan
portfolio hedges (LC) |
|
(4) |
(2) |
(1) |
(1) |
|
(57) |
(36) |
(25) |
(16) |
Home
Purchase Savings Plans (FRB) |
|
2 |
1 |
(17) |
(11) |
|
65 |
40 |
(17) |
(11) |
Home
Purchase Savings Plans (CC) |
|
3 |
2 |
(66) |
(43) |
|
156 |
103 |
(66) |
(43) |
Eureka
transaction-fees (CC) |
|
- |
- |
- |
- |
|
- |
- |
(23) |
(18) |
Liability
Management (FRB) |
|
- |
- |
- |
- |
|
- |
- |
(300) |
(187) |
Liability
management upfront payment (CC) |
|
- |
- |
- |
- |
|
39 |
26 |
(683) |
(448) |
Capital
gain on VISA EUROPE (CC) |
|
- |
- |
- |
- |
|
- |
- |
355 |
327 |
Regional Banks'
dividends (CC) |
|
- |
- |
- |
- |
|
- |
- |
286 |
285 |
Check
Image Exchange penalty(1) |
|
(59) |
(58) |
- |
- |
|
(59) |
(58) |
- |
- |
Total impact on revenues |
|
(158) |
(123) |
16 |
9 |
|
(138) |
(100) |
(652) |
(220) |
LCL network
optimisation cost (FRB) |
|
- |
- |
- |
- |
|
- |
- |
(41) |
(26) |
Adjustment plan
Cariparma (IRB) |
|
- |
- |
(51) |
(25) |
|
- |
- |
(51) |
(25) |
Pioneer integration
costs (AG) |
|
(77) |
(32) |
- |
- |
|
(135) |
(60) |
- |
- |
Integration costs 3
Italian banks (IRB) |
|
(41) |
(21) |
- |
- |
|
(41) |
(22) |
- |
- |
Total impact on operating expenses |
|
(117) |
(54) |
(51) |
(25) |
|
(176) |
(82) |
(92) |
(51) |
Eurazeo
sale (CC) |
|
(4) |
(4) |
- |
- |
|
103 |
103 |
- |
- |
Disposal of
BSF (LC) |
|
(15) |
(15) |
- |
- |
|
102 |
99 |
- |
- |
Total impact on equity affiliates |
|
(19) |
(19) |
- |
- |
|
205 |
203 |
- |
- |
Change of value of goodwill (CC) (2) |
|
186 |
91 |
(491) |
(491) |
|
186 |
91 |
(491) |
(491) |
Total
impact on change of value of goodwill |
|
186 |
91 |
(491) |
(491) |
|
186 |
91 |
(491) |
(491) |
Tax surcharge |
|
|
(326) |
|
- |
|
|
(326) |
|
- |
3% dividend tax
refund |
|
|
69 |
|
- |
|
|
69 |
|
- |
Deferred tax
revaluation |
|
|
(128) |
|
(160) |
|
|
(128) |
|
(160) |
Total
impact on tax |
|
|
(384) |
|
(160) |
|
|
(384) |
|
(160) |
CA Italy acquisition
costs (IRB) |
|
(3) |
- |
- |
- |
|
(8) |
(4) |
- |
- |
Total impact on Net income on other assets |
|
(3) |
- |
- |
- |
|
(8) |
(4) |
- |
- |
Eureka
transaction (CC) |
|
- |
- |
- |
|
|
- |
- |
1,272 |
1,272 |
Total impact on Net income from discounted or held-for-sale
operations |
|
- |
- |
- |
|
|
- |
- |
1,272 |
1,272 |
Total impact of specific items |
|
(111) |
(490) |
(526) |
(667) |
- |
70 |
(276) |
38 |
351 |
Asset
gathering |
|
(77) |
(147) |
- |
(80) |
|
(135) |
(176) |
- |
(80) |
French Retail
banking |
|
(19) |
(118) |
(17) |
(35) |
|
44 |
(79) |
(358) |
(247) |
International Retail
banking |
|
(44) |
(23) |
(51) |
(25) |
|
(49) |
(26) |
(51) |
(25) |
Specialised
financial services |
|
- |
43 |
- |
(3) |
|
- |
43 |
- |
(3) |
Large
customers |
|
(24) |
(108) |
(4) |
(4) |
|
(21) |
(67) |
(63) |
(41) |
Corporate
centre |
|
51 |
(136) |
(454) |
(520) |
|
231 |
29 |
510 |
747 |
* Impacts before
tax (except line« total impact on tax ") and before minority
interests
(1) Including -€38m in Corporate Centre and -€20m
for LCL (before tax and minority interests) (2) Including +€408m
for three Italian banks badwill and -€222m of goodwill impairment
in CA Polska (before minority interests, no tax effect)
|
|
Q4-17 |
Q4-16 |
|
2017 |
2016 |
In €m |
|
Gross
impact* |
Impact on NIGS |
Gross
impact* |
Impact on NIGS |
|
Gross
impact* |
Impact on NIGS |
Gross
impact* |
Impact on NIGS |
Issuer
spreads (CC) |
|
(104) |
(62) |
83 |
52 |
|
(249) |
(153) |
(160) |
(103) |
DVA
(LC) |
|
(5) |
(4) |
(3) |
(2) |
|
(66) |
(43) |
(38) |
(25) |
Loan
portfolio hedges (LC) |
|
(4) |
(2) |
(1) |
(1) |
|
(57) |
(37) |
(25) |
(16) |
Home
Purchase Savings Plans (LCL) |
|
2 |
2 |
(17) |
(11) |
|
65 |
43 |
(17) |
(11) |
Home
Purchase Savings Plans (CC) |
|
3 |
2 |
(66) |
(43) |
|
156 |
103 |
(66) |
(43) |
Home
Purchase Savings Plans (RB) |
|
15 |
10 |
(194) |
(127) |
|
220 |
144 |
(203) |
(133) |
Eureka
transaction-fees (CC) |
|
- |
- |
(6) |
(4) |
|
- |
- |
(34) |
(27) |
Liability
Management (LCL) |
|
- |
- |
- |
- |
|
- |
- |
(300) |
(197) |
Adjustment
on liability costs (RB) |
|
- |
- |
- |
- |
|
(218) |
(148) |
- |
- |
Liability
management upfront payment (CC) |
|
- |
- |
- |
- |
|
39 |
26 |
(683) |
(448) |
Capital
gain on VISA EUROPE (CC) |
|
- |
- |
- |
- |
|
- |
- |
355 |
337 |
Check Image
Exchange penalty |
|
(98) |
(98) |
- |
- |
|
(98) |
(98) |
- |
- |
Total impact on revenues |
|
(190) |
(152) |
(205) |
(136) |
|
(207) |
(164) |
(1,172) |
(666) |
LCL network
optimisation cost (LCL) |
|
- |
- |
- |
- |
|
- |
- |
(41) |
(27) |
Adjustment
plan Cariparma (IRB) |
|
- |
- |
(51) |
(30) |
|
- |
- |
(51) |
(30) |
Pioneer
integration costs (AG) |
|
(77) |
(33) |
- |
- |
|
(135) |
(58) |
- |
- |
Integration
costs 3 Italian banks (IRB) |
|
(41) |
(24) |
- |
- |
|
(41) |
(24) |
- |
- |
Total impact on operating expenses |
|
(117) |
(57) |
(51) |
(30) |
|
(176) |
(83) |
(92) |
(56) |
Eurazeo
sale (CC) |
|
(4) |
(4) |
- |
- |
|
103 |
103 |
- |
- |
Disposal of BSF
(LC) |
|
(15) |
(15) |
- |
- |
|
102 |
102 |
- |
- |
Total impact on equity affiliates |
|
(19) |
(19) |
- |
- |
|
205 |
205 |
- |
- |
Change of value of
goodwill (CC) |
|
186 |
131 |
(540) |
(540) |
|
186 |
131 |
(540) |
(540) |
Total
impact on change of value of goodwill |
|
186 |
131 |
(540) |
(540) |
|
186 |
131 |
(540) |
(540) |
Tax surcharge |
|
|
(343) |
|
|
|
|
(343) |
|
|
3% dividend tax
refund |
|
|
79 |
|
|
|
|
79 |
|
|
Deferred tax
revalorisation |
|
|
(407) |
|
|
|
|
(407) |
|
|
Total
impact on tax |
|
|
(671)
|
|
|
|
|
(671)
|
|
|
CA Italy acquisition
costs (IRB) |
|
(3) |
(2) |
- |
- |
|
(11) |
(6) |
- |
- |
Total impact on Net income on other assets |
|
(3) |
(2) |
- |
- |
|
(11) |
(6) |
- |
- |
Total impact of specific items |
|
(143) |
(770) |
(796) |
(1,159) |
|
(2) |
(587) |
(1,804) |
(1,715) |
Asset
gathering |
|
(77) |
(153) |
- |
(80) |
|
(135) |
(178) |
- |
(80) |
French Retail
banking |
|
(42) |
(427) |
(211) |
(464) |
|
8 |
(400) |
(561) |
(693) |
International Retail
banking |
|
(44) |
(26) |
(51) |
(30) |
|
(51) |
(30) |
(51) |
(30) |
Specialised
financial services |
|
- |
43 |
- |
(3) |
|
- |
43 |
- |
(3) |
Large
customers |
|
(24) |
(111) |
(4) |
(4) |
|
(21) |
(68) |
(63) |
(42) |
Corporate
centre |
|
43 |
(95) |
(530) |
(578) |
|
198 |
48 |
(1,129) |
(867) |
* Impacts before tax (except
line« total impact on tax ") and before minority
interests
Appendix 2 - Crédit Agricole S.A.: Stated and underlying
income statement
In m€ |
Q4-17
stated |
Specific items |
Q4-17
underlying |
Q4-16 stated |
Specific items |
Q4-16
underlying |
Q4/Q4
underlying |
|
|
|
|
|
|
|
|
Revenues |
4,651 |
(158) |
4,810 |
4,579 |
16 |
4,563 |
+5.4% |
Operating expenses
excl.SRF |
(3,268) |
(117) |
(3,150) |
(2,981) |
(51) |
(2,930) |
+7.5% |
SRF |
- |
- |
- |
- |
- |
- |
n.m. |
Gross operating income |
1,384 |
(275) |
1,659 |
1,598 |
(35) |
1,633 |
+1.6% |
Cost of risk |
(335) |
- |
(335) |
(395) |
- |
(395) |
(15.1%) |
Cost of legal
risk |
- |
- |
- |
- |
- |
- |
n.m. |
Equity-accounted
entities |
50 |
(19) |
69 |
125 |
- |
125 |
(44.6%) |
Net income on other
assets |
13 |
(3) |
16 |
(6) |
- |
(6) |
n.m. |
Change in value of
goodwill |
186 |
186 |
0 |
(491) |
(491) |
- |
n.m. |
Income before tax |
1,299 |
(111) |
1,410 |
832 |
(526) |
1,358 |
+3.8% |
Tax |
(703) |
(316) |
(387) |
(461) |
(150) |
(311) |
+24.4% |
Net income from
discont'd or held-for-sale ope. |
(23) |
- |
(23) |
20 |
- |
20 |
n.m. |
Net income |
573 |
(427) |
1,000 |
390 |
(676) |
1,066 |
(6.2%) |
Non
controlling interests |
(186) |
(64) |
(123) |
(99) |
9 |
(108) |
+13.2% |
Net income Group Share |
387 |
(490) |
878 |
291 |
(667) |
958 |
(8.4%) |
Earnings per share (€) |
0.09 |
(0.17) |
0.26 |
0.06 |
(0.24) |
0.30 |
(12.0%) |
Cost/Income ratio excl.SRF (%) |
70.2% |
|
65.5% |
65.1% |
|
64.2% |
+1.3 pp |
In €m |
2017
stated |
Specific items |
2017
underlying |
2016
stated |
Specific items |
2016
underlying |
2017/2016
underlying |
|
|
|
|
|
|
|
|
Revenues |
18,634 |
(138) |
18,772 |
16,855 |
(652) |
17,506 |
+7.2% |
Operating expenses
excl.SRF |
(11,961) |
(176) |
(11,785) |
(11,454) |
(92) |
(11,362) |
+3.7% |
SRF |
(242) |
- |
(242) |
(241) |
- |
(241) |
+0.5% |
Gross operating income |
6,431 |
(314) |
6,745 |
5,160 |
(744) |
5,904 |
+14.3% |
Cost of risk |
(1,307) |
- |
(1,307) |
(1,687) |
- |
(1,687) |
(22.5%) |
Cost of legal
risk |
(115) |
- |
(115) |
(100) |
- |
(100) |
+15.0% |
Equity-accounted
entities |
728 |
205 |
523 |
518 |
- |
518 |
+0.9% |
Net income on other
assets |
6 |
(8) |
14 |
(52) |
- |
(52) |
n.m. |
Change in value of
goodwill |
186 |
186 |
0 |
(491) |
(491) |
- |
n.m. |
Income before tax |
5,929 |
70 |
5,859 |
3,348 |
(1,235) |
4,583 |
+27.9% |
Tax |
(1,733) |
(300) |
(1,433) |
(695) |
294 |
(989) |
+44.8% |
Net income from
discont'd or held-for-sale ope. |
20 |
- |
20 |
1,303 |
1,272 |
31 |
n.m. |
Net income |
4,216 |
(230) |
4,447 |
3,956 |
332 |
3,624 |
+22.7% |
Non
controlling interests |
(568) |
(46) |
(521) |
(415) |
19 |
(434) |
+20.0% |
Net income Group Share |
3,649 |
(276) |
3,925 |
3,541 |
351 |
3,190 |
+23.0% |
Earnings per share (€) |
1.12 |
(0.10) |
1.22 |
1.12 |
0.13 |
0.99 |
+23.0% |
Cost/Income ratio excl.SRF (%) |
64.2% |
|
62.8% |
68.0% |
|
64.9% |
-2.1 pp |
Appendix 3 - Crédit Agricole S.A.: Income statement by
business line
Table 9.
Crédit Agricole S.A. - Income
statement by business line, Q417 and Q416 |
|
- |
In €m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
1,560 |
827 |
617 |
671 |
1,305 |
(329) |
4,651 |
Operating expenses
excl. SRF |
(830) |
(613) |
(449) |
(372) |
(816) |
(188) |
(3,268) |
SRF |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
730 |
215 |
168 |
299 |
489 |
(517) |
1,384 |
Cost of credit
risk |
(24) |
(55) |
(104) |
(102) |
(37) |
(13) |
(335) |
Cost of legal
risk |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted
entities |
9 |
- |
- |
58 |
(15) |
(1) |
50 |
Net income on other
assets |
4 |
6 |
(4) |
(0) |
10 |
(3) |
13 |
Change in value of
goodwill |
- |
- |
0 |
- |
- |
186 |
186 |
Income before tax |
719 |
165 |
60 |
255 |
447 |
(347) |
1,299 |
Tax |
(242) |
(144) |
(19) |
(25) |
(263) |
(9) |
(703) |
Net income from
discontinued or held-for-sale operations |
(8) |
- |
(0) |
(15) |
- |
- |
(23) |
Net income |
468 |
21 |
41 |
216 |
184 |
(356) |
573 |
Non controlling
interests |
(67) |
(1) |
(12) |
(30) |
(9) |
(67) |
(186) |
Net income Group share |
401 |
20 |
28 |
186 |
174 |
(423) |
387 |
- |
In €m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
1,293 |
863 |
611 |
683 |
1 248 |
(120) |
4,579 |
Operating expenses
excl. SRF |
(555) |
(604) |
(452) |
(365) |
(786) |
(220) |
(2,981) |
SRF |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
739 |
260 |
160 |
318 |
462 |
(340) |
1,598 |
Cost of credit
risk |
(1) |
(52) |
(106) |
(124) |
(103) |
(9) |
(395) |
Cost of legal
risk |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted
entities |
8 |
- |
(0) |
56 |
29 |
33 |
125 |
Net income on other
assets |
1 |
1 |
(1) |
(0) |
0 |
(7) |
(6) |
Change in value of
goodwill |
- |
- |
- |
- |
- |
(491) |
(491) |
Income before tax |
747 |
209 |
53 |
249 |
388 |
(815) |
832 |
Tax |
(274) |
(66) |
(14) |
(56) |
(109) |
58 |
(461) |
Net income from
discontinued or held-for-sale operations |
22 |
- |
(3) |
- |
0 |
0 |
20 |
Net income |
496 |
143 |
36 |
193 |
279 |
(756) |
390 |
Non
controlling interests |
(48) |
(7) |
(13) |
(23) |
(8) |
(1) |
(99) |
Net income Group share |
448 |
136 |
24 |
170 |
271 |
(757) |
291 |
AG: Asset gathering and
Insurance; RB: Retail banking (FRB French retail banking, IRB
International retail banking); SFS: Specialised financial services;
LC: Large customers; CC: Corporate centre
Table 10.
Crédit Agricole S.A. - Income
statement by business line, 2017 and 2016 |
|
2017 |
In €m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
5,263 |
3,492 |
2,482 |
2,721 |
5,332 |
(656) |
18,634 |
Operating expenses
excl. SRF |
(2,706) |
(2,427) |
(1,547) |
(1,393) |
(3,099) |
(789) |
(11,961) |
SRF |
(3) |
(15) |
(10) |
(14) |
(139) |
(61) |
(242) |
Gross operating income |
2,555 |
1,050 |
924 |
1,314 |
2,094 |
(1,505) |
6,431 |
Cost of credit
risk |
(25) |
(204) |
(429) |
(440) |
(203) |
(6) |
(1,307) |
Cost of legal
risk |
- |
- |
- |
- |
(115) |
- |
(115) |
Equity-accounted
entities |
33 |
- |
- |
241 |
277 |
177 |
728 |
Net income on other
assets |
4 |
6 |
(12) |
(1) |
13 |
(4) |
6 |
Change in value of
goodwill |
- |
- |
0 |
- |
- |
186 |
186 |
Income before tax |
2,567 |
851 |
483 |
1,114 |
2,065 |
(1,152) |
5,929 |
Tax |
(647) |
(338) |
(152) |
(230) |
(710) |
344 |
(1,733) |
Net income from
discontinued or held-for-sale operations |
21 |
- |
0 |
(1) |
- |
- |
20 |
Net income |
1,942 |
513 |
331 |
883 |
1,355 |
(808) |
4,216 |
Non controlling
interests |
(222) |
(25) |
(97) |
(118) |
(48) |
(58) |
(568) |
Net income Group share |
1,720 |
488 |
234 |
766 |
1,307 |
(865) |
3,649 |
2016 |
In €m |
AG |
FRB (LCL) |
IRB |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
Revenues |
4,744 |
3,118 |
2,505 |
2,646 |
5,190 |
(1,348) |
16,855 |
Operating expenses
excl. SRF |
(2,153) |
(2,520) |
(1,546) |
(1,371) |
(3,038) |
(825) |
(11,454) |
SRF |
(2) |
(19) |
(10) |
(13) |
(149) |
(47) |
(241) |
Gross operating income |
2,588 |
578 |
949 |
1,262 |
2,003 |
(2,220) |
5,160 |
Cost of credit
risk |
(9) |
(182) |
(454) |
(558) |
(457) |
(27) |
(1,687) |
Cost of legal
risk |
- |
- |
- |
- |
(100) |
- |
(100) |
Equity-accounted
entities |
28 |
- |
- |
207 |
211 |
71 |
518 |
Net income on other
assets |
2 |
1 |
(0) |
(2) |
1 |
(54) |
(52) |
Change in value of
goodwill |
- |
- |
- |
- |
- |
(491) |
(491) |
Income before tax |
2,609 |
397 |
494 |
910 |
1,658 |
(2,721) |
3,348 |
Tax |
(773) |
(110) |
(157) |
(210) |
(370) |
925 |
(695) |
Net income from
discontinued or held-for-sale operations |
23 |
- |
(3) |
- |
11 |
1,272 |
1,303 |
Net income |
1,858 |
287 |
335 |
701 |
1,299 |
(523) |
3,956 |
Non-controlling
interests |
(169) |
(14) |
(102) |
(91) |
(44) |
4 |
(415) |
Net income Group share |
1,690 |
273 |
233 |
610 |
1,255 |
(520) |
3,541 |
AG: Asset gathering and
Insurance; RB: Retail banking (FRB French retail banking, IRB
International retail banking); SFS: Specialised financial services;
LC: Large customers; CC: Corporate centre
Appendix 4 - Crédit Agricole Group: Stated and underlying
income statement
Table 11.
Crédit Agricole Group - Reconciliation between stated and underlying
results, Q4 17 et Q4-16 |
In €m |
Q4-17
stated |
Specific items |
Q4-17
underlying |
Q4-16 stated |
Specific items |
Q4-16
underlying |
Q4/Q4
underlying |
|
|
|
|
|
|
|
|
Revenues |
8,045 |
(190) |
8,235 |
7,904 |
(205) |
8,109 |
+1.6% |
Operating expenses
excl.SRF |
(5,459) |
(117) |
(5,342) |
(5,187) |
(51) |
(5,136) |
+4.0% |
SRF |
- |
- |
- |
- |
- |
- |
n.m. |
Gross operating income |
2,586 |
(307) |
2,893 |
2,716 |
(256) |
2,972 |
(2.7%) |
Cost of risk |
(423) |
- |
(423) |
(457) |
- |
(457) |
(7.6%) |
Cost of legal
risk |
- |
- |
- |
- |
- |
- |
n.m. |
Equity-accounted
entities |
49 |
(19) |
68 |
111 |
- |
111 |
(38.4%) |
Change in value of
goodwill |
186 |
186 |
0 |
(540) |
(540) |
- |
n.m. |
Income before tax |
2,404 |
(143) |
2,547 |
1,824 |
(796) |
2,620 |
(2.8%) |
Tax |
(1,294) |
(591) |
(704) |
(1,091) |
(366) |
(724) |
(2.9%) |
Net income from
discont'd or held-for-sale ope. |
(23) |
- |
(23) |
20 |
- |
20 |
n.m. |
Net income |
1,087 |
(734) |
1,821 |
753 |
(1,162) |
1,915 |
(4.9%) |
Non
controlling interests |
(165) |
(36) |
(129) |
(82) |
4 |
(85) |
+51.5% |
Net income Group Share |
922 |
(770) |
1,692 |
671 |
(1,159) |
1,830 |
(7.5%) |
Cost/Income ratio excl.SRF (%) |
67.9% |
|
64.9% |
65.6% |
|
63.3% |
+1.5 pp |
Table 12.
Crédit Agricole Group- Reconciliation between stated and underlying
results, 2017 et 2016 |
|
In €m |
2017
stated |
Specific items |
2017
underlying |
2016
stated |
Specific items |
2016
underlying |
2017/2016
underlying |
|
|
|
|
|
|
|
|
Revenues |
32,108 |
(207) |
32,315 |
30,428 |
(1,172) |
31,600 |
+2.3% |
Operating expenses
excl.SRF |
(20,626) |
(176) |
(20,450) |
(19,944) |
(92) |
(19,852) |
+3.0% |
SRF |
(285) |
- |
(285) |
(282) |
- |
(282) |
+1.2% |
Gross operating income |
11,197 |
(383) |
11,580 |
10,201 |
(1,264) |
11,465 |
+1.0% |
Cost of risk |
(1,536) |
- |
(1,536) |
(2,312) |
- |
(2,312) |
(33.6%) |
Cost of legal
risk |
(115) |
- |
(115) |
(100) |
- |
(100) |
+15.0% |
Equity-accounted
entities |
732 |
205 |
527 |
499 |
- |
499 |
+5.7% |
Change in value of
goodwill |
186 |
186 |
0 |
(540) |
(540) |
- |
n.m. |
Income before tax |
10,470 |
(2) |
10,472 |
7,723 |
(1,804) |
9,527 |
+9.9% |
Tax |
(3,479) |
(567) |
(2,912) |
(2,582) |
80 |
(2,662) |
+9.4% |
Net income from
discont'd or held-for-sale ope. |
20 |
- |
20 |
31 |
- |
31 |
(34.9%) |
Net income |
7,010 |
(569) |
7,580 |
5,172 |
(1,724) |
6,896 |
+9.9% |
Non
controlling interests |
(474) |
(18) |
(457) |
(347) |
9 |
(355) |
+28.4% |
Net income Group Share |
6,536 |
(587) |
7,123 |
4,825 |
(1,715) |
6,541 |
+8.9% |
Cost/Income ratio excl.SRF (%) |
64.2% |
|
63.3% |
65.5% |
|
62.8% |
+0.5 pp |
Appendix 5 -
Crédit Agricole Group: Income statement by business line
Table 13.
Crédit Agricole Group - Income statement
by business line, Q417 and Q416 |
|
Q4-17 |
In €m |
RBs |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,341 |
827 |
647 |
1,560 |
671 |
1,302 |
(303) |
8,045 |
Operating expenses excl. SRF |
(2,153) |
(613) |
(470) |
(830) |
(372) |
(816) |
(206) |
(5,459) |
SRF |
- |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
1,188 |
215 |
177 |
730 |
299 |
486 |
(509) |
2,586 |
Cost
of credit risk |
(86) |
(55) |
(104) |
(24) |
(102) |
(37) |
(14) |
(423) |
Cost
of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
2 |
- |
- |
9 |
58 |
(15) |
(4) |
49 |
Net
income on other assets |
(8) |
6 |
(4) |
4 |
(0) |
10 |
(2) |
5 |
Change in value of goodwill |
- |
- |
0 |
- |
- |
- |
186 |
186 |
Income before tax |
1,095 |
165 |
69 |
719 |
255 |
444 |
(343) |
2,404 |
Tax |
(635) |
(145) |
(21) |
(242) |
(25) |
(262) |
36 |
(1,294) |
Net
income from discont'd or held-for-sale ope. |
- |
- |
(0) |
(8) |
(15) |
- |
- |
(23) |
Net income |
460 |
20 |
48 |
468 |
216 |
182 |
(307) |
1,087 |
Non
controlling interests |
0 |
(0) |
(12) |
(63) |
(30) |
(6) |
(54) |
(165) |
Net income Group Share |
460 |
20 |
36 |
405 |
186 |
176 |
(361) |
922 |
- |
In €m |
RBs |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
3,271 |
863 |
639 |
1,293 |
683 |
1,249 |
(95) |
7,904 |
Operating expenses excl. SRF |
(2,160) |
(604) |
(469) |
(555) |
(365) |
(786) |
(250) |
(5,187) |
SRF |
- |
- |
- |
- |
- |
- |
- |
- |
Gross operating income |
1,112 |
260 |
170 |
739 |
318 |
463 |
(345) |
2,716 |
Cost
of credit risk |
(61) |
(52) |
(107) |
(1) |
(124) |
(103) |
(10) |
(457) |
Cost
of legal risk |
- |
- |
- |
- |
- |
- |
- |
- |
Equity-accounted entities |
1 |
- |
- |
8 |
56 |
29 |
18 |
111 |
Net
income on other assets |
(0) |
1 |
(1) |
1 |
(0) |
0 |
(7) |
(6) |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
(540) |
(540) |
Income before tax |
1,051 |
209 |
62 |
747 |
249 |
389 |
(884) |
1,824 |
Tax |
(646) |
(66) |
(16) |
(272) |
(56) |
(109) |
75 |
(1,091) |
Net
income from discont'd or held-for-sale ope. |
- |
- |
(3) |
22 |
- |
0 |
0 |
20 |
Net income |
405 |
143 |
44 |
497 |
193 |
280 |
(809) |
753 |
Non
controlling interests |
(0) |
0 |
(11) |
(44) |
(23) |
(3) |
(1) |
(82) |
Net income Group Share |
405 |
143 |
33 |
453 |
170 |
277 |
(810) |
671 |
AG: Asset gathering and
Insurance; RB: Retail banking (FRB French retail banking, IRB
International retail banking); SFS: Specialised financial services;
LC: Large customers; CC: Corporate centre
Table 14. Crédit Agricole Group - Income statement by
business line, 2017 and 2016 |
|
|
2017 |
In €m |
RBs |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
13,277 |
3,491 |
2,594 |
5 255 |
2,721 |
5,328 |
(558) |
32,108 |
Operating expenses excl. SRF |
(8,487) |
(2,427) |
(1,624) |
(2 706) |
(1,393) |
(3,099) |
(890) |
(20,626) |
SRF |
(43) |
(15) |
(10) |
(3) |
(14) |
(139) |
(61) |
(285) |
Gross operating income |
4,746 |
1,049 |
960 |
2 546 |
1,314 |
2,089 |
(1,509) |
11,197 |
Cost
of credit risk |
(218) |
(204) |
(433) |
(25) |
(440) |
(203) |
(12) |
(1,536) |
Cost
of legal risk |
- |
- |
- |
- |
- |
(115) |
- |
(115) |
Equity-accounted entities |
6 |
- |
- |
33 |
241 |
277 |
175 |
732 |
Net
income on other assets |
(5) |
6 |
(7) |
|
(1) |
13 |
(4) |
5 |
Change in value of goodwill |
- |
- |
0 |
4 |
- |
- |
186 |
186 |
Income before tax |
4,529 |
851 |
520 |
2 559 |
1,114 |
2,060 |
(1,164) |
10,470 |
Tax |
(1,772) |
(338) |
(159) |
(647) |
(230) |
(709) |
375 |
(3,479) |
Net
income from discont'd or held-for-sale ope. |
- |
- |
0 |
21 |
(1) |
- |
- |
20 |
Net income |
2,758 |
513 |
361 |
1 933 |
883 |
1,352 |
(788) |
7,010 |
Non
controlling interests |
(0) |
(0) |
(80) |
(209) |
(118) |
(21) |
(47) |
(474) |
Net income Group Share |
2,757 |
513 |
281 |
1 724 |
766 |
1,331 |
(835) |
6,536 |
2016 |
In €m |
RBs |
LCL |
IRB |
AG |
SFS |
LC |
CC |
Total |
|
|
|
|
|
|
|
|
|
Revenues |
13,627 |
3,118 |
2,610 |
4,740 |
2,646 |
5,195 |
(1,509) |
30,428 |
Operating expenses excl. SRF |
(8,337) |
(2,520) |
(1,612) |
(2,153) |
(1,371) |
(3,039) |
(911) |
(19,944) |
SRF |
(38) |
(19) |
(10) |
(2) |
(13) |
(148) |
(52) |
(282) |
Gross operating income |
5,252 |
578 |
988 |
2,585 |
1,262 |
2,008 |
(2,472) |
10,201 |
Cost
of credit risk |
(619) |
(182) |
(458) |
(9) |
(558) |
(457) |
(28) |
(2,312) |
Cost
of legal risk |
- |
- |
- |
- |
- |
(100) |
- |
(100) |
Equity-accounted entities |
6 |
- |
- |
28 |
207 |
211 |
46 |
499 |
Net
income on other assets |
27 |
1 |
(0) |
2 |
(2) |
1 |
(54) |
(25) |
Change in value of goodwill |
- |
- |
- |
- |
- |
- |
(540) |
(540) |
Income before tax |
4,666 |
397 |
529 |
2,606 |
910 |
1,663 |
(3,048) |
7,723 |
Tax |
(1,877) |
(110) |
(165) |
(772) |
(210) |
(372) |
923 |
(2,582) |
Net
income from discont'd or held-for-sale ope. |
- |
- |
(3) |
23 |
- |
11 |
0 |
31 |
Net income |
2,789 |
287 |
361 |
1,857 |
701 |
1,302 |
(2,125) |
5,172 |
Non
controlling interests |
(1) |
(0) |
(83) |
(157) |
(91) |
(18) |
3 |
(347) |
Net income Group Share |
2,789 |
287 |
278 |
1,700 |
610 |
1,284 |
(2,122) |
4,825 |
AG: Asset gathering and
Insurance; RB: Retail banking (FRB French retail banking, IRB
International retail banking); SFS: Specialised financial services;
LC: Large customers; CC: Corporate centre
Appendix 6 - Calculation methods of data per share
(In €m) |
|
Q4-17 |
Q4-16 |
2017 |
2016 |
Net income
Group share - stated |
|
387 |
291 |
3,649 |
3,541 |
-
Interests on AT1, including issuance costs, before tax |
|
(125) |
(136) |
(454) |
(474) |
NIGS attributable to ordinary shares - stated |
[A] |
262 |
155 |
3,194 |
3,067 |
Average
number shares in issue, excluding treasury shares (m) |
[B] |
2,844,0 |
2,736,9 |
2,843,6 |
2,736,9 |
Net earnings per share - stated |
[A]/[B] |
€0.09 |
€0.06 |
€1.12 |
€1.12 |
Underlying net income Group share (NIGS) |
|
878 |
958 |
3,925 |
3,190 |
Underlying NIGS attributable to ordinary shares |
[C] |
752 |
822 |
3,471 |
2,716 |
Net earnings per share - underlying |
[C]/[B] |
€0.26 |
€0.30 |
€1.22 |
€0.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In €m) |
|
31/12/2017 |
31/12/2016 |
|
|
Shareholder's equity Group share |
|
58,361 |
58,277 |
|
|
- AT1
issuances |
|
(5,011) |
(5,011) |
|
|
-
Unrealised gains and losses on AFS - Group share |
|
(3,500) |
(3,779) |
|
|
- Payout
assumption on annual results* |
|
(1,792) |
(1,716) |
|
|
Net book value (NBV), not revaluated, attributable to
ordinary sh. |
[D] |
48,059 |
47,771 |
|
|
- Goodwill
& intangibles** - Group share |
|
(17,672) |
(15,479) |
|
|
Tangible NBV (TNBV), not revaluated attributable to
ordinary sh. |
[E] |
30,387 |
32,292 |
|
|
Total
shares in issue, excluding treasury shares (period end, m) |
[F] |
2,844.0 |
2,843.3 |
|
|
NBV per share , after deduction of dividend to pay
(€) |
[D]/[F] |
16.9 € |
16.8 € |
|
|
+ Dividend to pay for the year (€) |
[H] |
0.63 € |
0.60 € |
|
|
NBV per share , before deduction of dividend to pay
(€) |
|
17.5 € |
17.4 € |
|
|
TNBV per share, after deduction of dividend to pay
(€) |
[G] = [E]/[F] |
10.7 € |
11.4 € |
|
|
TNBV per share, before deduction of dividend to pay
(€) |
[G]+[H] |
11.3 € |
12.0 € |
|
|
* dividend proposed to the Board meeting to be
paid |
|
|
|
|
|
** including goodwill in the equity-accounted
entities |
|
|
|
|
|
(€m) |
|
2017 |
2016 |
Net income
Group share attributable to ordinary shares |
[H] |
3,194 |
3,067 |
Tangible
NBV (TNBV), not revaluated attributable to ordinary sh. -
avg*** |
[J] |
31,184 |
31,054 |
Reported RoTE (%) |
[H]/[J] |
10.2% |
9.9% |
Underlying
NIGS attributable to ordinary shares (annualised basis) |
[I] |
3,471 |
2,716 |
Underlying ROTE (%) |
[I]/[J] |
11.1% |
8.7% |
*** including assumption of dividend for the
current exercise |
|
|
|
NB: Increase in goodwill related
to the integration of Pioneer Investments (goodwill from Pioneer:
€2,522m)
This page is left intentionally
blank
Financial calendar
-
4 April
2018
Special Meeting for beneficiaries of the loyalty dividend
-
15 May
2018 Publication of
2018 first quarter results
-
16 May
2018 Annual
Shareholders' Meeting in Paris
-
3 August
2018 Publication of second
quarter and first half 2018 results
-
7 November 2018 Publication of 2018
third quarter results
Contacts
Crédit Agricole press contacts
Charlotte
de Chavagnac |
+ 33 1 57
72 11 17 |
charlotte.dechavagnac@credit-agricole-sa.fr |
Olivier
Tassain |
+ 33 1 43
23 25 41 |
olivier.tassain@credit-agricole-sa.fr |
Caroline
de Cassagne |
+ 33 1 49
53 39 72 |
Caroline.decassagne@ca-fnca.fr |
Crédit Agricole S.A. investor relations
contacts
Institutional investors |
+ 33 1 43
23 04 31 |
investor.relations@credit-agricole-sa.fr |
Individual shareholders |
+ 33 800
000 777 (toll-free number France only) |
credit-agricole-sa@relations-actionnaires.com |
Cyril
Meilland, CFA |
+ 33 1 43
23 53 82 |
cyril.meilland@credit-agricole-sa.fr |
Letteria
Barbaro-Bour |
+ 33 1 43
23 48 33 |
letteria.barbaro-bour@credit-agricole-sa.fr |
Oriane
Cante |
+ 33 1 43
23 03 07 |
oriane.cante@credit-agricole-sa.fr |
Emilie
Gasnier |
+ 33 1 43
23 15 67 |
emilie.gasnier@credit-agricole-sa.fr |
Fabienne
Heureux |
+ 33 1 43
23 06 38 |
fabienne.heureux@credit-agricole-sa.fr |
Vincent
Liscia |
+ 33 1 57
72 38 48 |
vincent.liscia@credit-agricole-sa.fr |
Annabelle
Wiriath |
+.33.1.43.23.55.52 |
annabelle.wiriath@credit-agricole-sa.fr |
All our press releases are available at:
www.credit-agricole.com - www.creditagricole.info
|
Crédit_Agricole |
|
Groupe Crédit
Agricole |
|
créditagricole_sa |
[1] Pro forma P2R for 2019 as confirmed by the ECB in December
2017
[2] In this press release, "underlying" refers to figures
adjusted for the specific items described on p. 18 onwards
[3] Average over last four rolling quarters, annualised
[4] Impact after non-controlling interests and the 3% dividend
tax refund
[5] Aggregate of the contributions to underlying
net income of Amundi and Pioneer Investments and taking into
account the amortisation of distribution contracts in 2017 and
2016
[6] Source Les Echos article published on 25/01/18 on D-rating
study regarding digital performance of retail banks
[7] Reduction of the standard corporate income tax rate,
excluding the 3.3% social contribution applicable at the standard
rate, to 33.33% in 2017 and 2018, 31% in 2019, 28% in 2020, 26.5%
in 2021 and 25% in 2022. It should be noted that France's finance
law for 2016 had already anticipated a rate cut to 28% from
2020.
[8] See p. 18 for
details of specific items for Crédit Agricole Group and
p. 23 for a
reconciliation of stated and underlying results.
[9] Aggregate of the contributions to underlying
net income of Amundi and Pioneer Investments and taking into
account the amortisation of distribution contracts in 2017 and
2016
[10] Average over last four rolling quarters, annualised
[11] See p. 18 for
details of specific items for Crédit Agricole Group and
p. 23 for a
reconciliation of stated and underlying results.
[12] Aggregate of the contributions to underlying
net income of Amundi and Pioneer Investments and taking into
account the amortisation of distribution contracts in 2017 and
2016
[13] In this press release, "underlying" refers to figures
adjusted for the specific items on the P&L accounts described
on p. 18 onwards
[14] Excluding any floor applied
[15] Calculated on the stated net profit
[16] Subject to approval by the Special Shareholders' Meeting
called for 4 April 2018 and by the Extraordinary General Meeting
called for 16 May 2018, see p. 16 for details
[17] SREP targets at 1/1/2019 as informed by the ECB and 7.875%
at 1/1/2018
[18] See p. 18 for
details of specific items for Crédit Agricole S.A. and
p. 20 for a
reconciliation of stated and underlying results.
[19] Including the assets under management of Pioneer at
end-2016
[20] Excluding the integration of the three Italian
banks
[21] Excluding the transfer of Calit to Retail Banking in Italy
on 1 January 2017
[22] Bookrunner all currencies combined (source: Thomson
Financial at 30/09/17)
[23] Bookrunner (source: Thomson Financial at 30/09/17)
[24] Mandated Bookrunner (source: Thomson Financial at
30/09/17)
[25] Aggregate of the contributions to underlying
net income of Amundi and Pioneer Investments and taking into
account the amortisation of distribution contracts in 2017 and
2016
[26] Crédit Agricole S.A.'s holding in Fireca had been subject
to impairment. As such, initial consolidation entailed the full
consolidation of deficits accumulated since the equity position was
taken, in revenues, net of the impairment recognised on the
ownership interest (50%). Accordingly, the outstanding balance was
allocated to non-controlling interests, with an impact of zero on
net income Group share.
[27] Average loan loss reserves over last four rolling quarters,
annualised
[28] Crédit Agricole S.A.'s holding in Fireca had been subject
to impairment. As such, initial consolidation entailed the full
consolidation of deficits accumulated since the equity position was
taken, in revenues, net of the impairment recognised on the
ownership interest (50%). Accordingly, the outstanding balance was
allocated to non-controlling interests, with an impact of zero on
net income Group share.
[29] See p. 18 for
details of specific items for Crédit Agricole S.A. and
p. 20 for a
reconciliation of stated and underlying results.
[30] Aggregate of the contributions to underlying
net income of Amundi and Pioneer Investments and taking into
account the amortisation of distribution contracts in 2017 and
2016
[31] Difference between growth in revenues and growth in
operating expenses
CASA Q4 Results 0214
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: CREDIT AGRICOLE SA via Globenewswire
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