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Carbon offsets: real progress for the environment – or window-dressing?2020/07/08
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First quarter results 2020
Crédit Agricole absorbs the Covid-19 impact and is mobilised for the economy
Crédit Agricole Group*
Underlying revenues Q1: €8,378m +0.7% Q1/Q1
Underlying net income Group share Q1: €981m -31.6% Q1/Q1
CET1 ratio 15.5% -0.4pp Mar/Dec +6.6pp above the SREP
- Q1 stated net income Group share: €908m (-32.8% Q1/Q1); stated revenues €8,366m (+2.1% Q1/Q1);
- Strong momentum across all business lines in Q1, production impacted by the crisis in March: increase in outstandings (+7% retail loans in France and Italy, +2.1% consumer finance managed loans, +2% life insurance, +3.5% asset management); gross retail customer capture France and Italy: 416,000 customers since the start of 2020;
- Increase in cost of risk (at €930m, x3.3 Q1/Q1), driven primarily (61% of the increase) by provisioning on performing loans (€398m in Q1). Annualised cost of risk on outstandings 40bp (x3.1 Q1/Q1); Stable NPL ratio (2.4%), increase in coverage ratio (84.3%, +1.7pp vs. Dec. 19). Loan loss reserves: €19.5bn;
- Very strong solvency (buffer to SREP requirements increased from 6.2pp to 6.6pp);
- Mobilisation of the Group’s structural strengths to assist its clients through the crisis: all services fully operational (9 out of 10 branches are reachable), acceleration of technological innovations (remote claims management), strong social commitment by the Group (>€70m in donations via solidarity funds);
- Voluntarily supporting public authorities' strategy over the crisis: €3.6bn loan moratoria granted to corporates and more than 81,000 applications (€13.5bn) in state-guaranteed loans processed as at 21/04; €10bn aid programme at CA Italia; €210m cooperative support mechanism for professional multi-risk insurance policyholders;
- Regional Banks: underlying net income under French accounting standards €583m (-22.3% Q1/Q1), underlying net income €321m (-51.7% Q1/Q1). Strong underlying activity revenues. Increase in cost of risk (x5.5) linked to 68.5% of the performing loans provisioning; annualised cost of risk on outstandings still low (23bp).
* Crédit Agricole S.A. and 100% of Regional Banks.
Crédit Agricole S.A.
Underlying revenues Q1: €5,137m +4.8% Q1/Q1
Underlying GOI Q1: €1,583m +7.9% Q1/Q1
Underlying net income Group share Q1: €652m -18.1% Q1/Q1
CET1 ratio 11.4% -0.7pp Dec/Sept, +3.5pp above the SREP
- Stated result: €638m (-16.4% Q1/Q1); stated revenues: €5,200m (+7.1% Q1/Q1), stated GOI: €1,586m (+11.7% Q1/Q1);
- Increase in underlying GOI (+7.9% Q1/Q1), thanks to revenue resilience (+4.8%), despite the decrease in the fair value through profit and loss in insurance, and to control of expenses excluding IFRIC 21 (+2.5%);
- Increase in cost of risk (at €621m, x2.8 Q1/Q1), driven primarily (56% of the rise) by provisioning on performing loans (€223m in Q1). Annualised cost of risk on outstandings 61bp (x2.6 Q1/Q1); Stable NPL ratio (3.1%), increase in coverage ratio (72.4%, +2.3pp vs. Dec. 19); loan loss reserves: €9.6bn;
- CET1 ratio down (-0.7pp) to 11.4%, including the unwinding of 35% of the Switch mechanism (-44pb), the impact of the allocation of the 2019 dividend to reserves following the ECB’s recommendation (+60bp) and the impact of adverse market effects on OCI reserves on securities portfolios (-33bp). Buffer to requirements in Q1 at 3.5pp;
- Underlying EPS: Q1-2020 €0.17, -25.0% Q1/Q1;
- Liquidity indicators up (€338bn in reserves at 31/03/20, increase by €40bn vs. 31/12/20).